IMV Inc.
Q4 2018 Earnings Call Transcript

Published: 22 Mar 2019

[Operator:]

Good day, ladies and gentlemen, and welcome to the IMV 2018 Earnings Call. At this time, all lines are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, today’s conference call is being recorded. I would now like to turn the conference over to Pierre Labbé, Chief Financial Officer. Please go ahead.

[Pierre Labbé:]

Thank you, Candice. Thanks everyone for joining our conference call today. My name is Pierre Labbé, I’m CFO at IMV. And joining me on the call today, we have Fred Ors, our CEO. And also joining the Q&A session, Stephan Fiset, our VP, Clinical Research, will be available to answer your questions. Before we begin, I would like you to remind that except for historical information, this presentation contains forward-looking statements, which reflects IMV's current expectations regarding future events. These forward-looking statements involve known and unknown risk and uncertainty that could cause IMV’s actual results to differ materially from those statements. Those risks and uncertainties include but are not limited to our ability to access capital, the successful and timely completion of clinical trials, the receipt of all regulatory approval and other risks detailed from time to time in our ongoing quarterly and annual information form. This forward-looking statement is also based on a number of assumptions which may prove to be incorrect. Forward-looking statements contained in this presentation represent views only as of the date of this presentation and are presented for the purpose of assisting potential investors in understanding IMV's business, and may not be appropriate for other purposes. IMV does not undertake to update forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation. Investors are cautioned not to rely on these forward-looking statements and are encouraged to read IMV's continuous disclosure documents, including its current annual information form, as well as its annual consolidated financial statements which are available on SEDAR and on EDGAR. I will now turn the call over to Fred Ors, CEO.

[Fred Ors:]

Thanks, Pierre. Good morning all and thank you for joining us this morning. I will start with a clinical update and expected milestones, cover the year end review and our clinical development programs and other business highlights and then I will hand you back to Pierre for a review of our financial results. Let me start first by providing a clinical update on our main programs. The first 13 patients with advanced recurrent ovarian cancer have been enrolled in the phase 2 portion of the phase 1b/2 DECIDE trial. Six patients were randomized on DPX-Survivac monotherapy and seven on the DPX-Survivac/epacadostat combination. The seven patients in the epacadostat [indiscernible]] were enrolled before the company decided to stop the dosing with epacadostat. The company is planning to provide an update on the preliminary clinical data by the end of Q1 2019 and enrollment of at least 15 additional patients in the subpopulation with lower tumor burden is ongoing and the company is planning to provide another clinical update on this cohort in Q2 2019. In the phase 2 combination with KEYTRUDA in relapsed/refractory DLBCL, seven patients have been enrolled and treated across four different clinical sites in Canada. Additional patients are being screened and IMV expects to report updated clinical data in Q2 2019. Finally in the phase 2 basket trial, in combination with KEYTRUDA in multiple solid tumors, screening and enrollment of patients is ongoing at multiple clinical sites across the US and Canada for patients with bladder, liver, ovarian, or non-small cell lung cancers as well as tumors shown to be positive for the microsatellite instability high biomarker. The first patients have been dosed in ovarian and lung cancer cohorts. And IMV expects to report preliminary clinical results on several of the solid tumor indications before the end of 2019. Now, moving to fourth quarter and 2018 review, it was a busy year for the company, both clinically and operationally. In our clinical programs, we updated DECIDE phase 1b data in advanced ovarian cancer via an oral presentation at the 2018 ASCO Meeting and top line data at the 2018 ESMO-IO Meeting. Based on these data, we opted to develop DPX-Survivac as a monotherapy in certain ovarian cancer patients defined by baseline tumor burden. Additional analyses were conducted that correlated DPX-Survivac’s novel T cell mechanism of action with clinical responses. We met with the U.S. Food and Drug Administration and submitted an updated DECIDE trial protocol. In addition, IMV discussed with the FDA the need for accelerated approvals in advanced ovarian cancer and received guidance on clinical design considerations for different lines of therapies and platinum-sensitive and resistant patients. We obtained first clinical data from the combination of DPX-Survivac and mCPA with KEYTRUDA in the SPIREL Trial, which came from an investigator-sponsored phase 2 trial in patients with persistent or recurrent/refractory DLBCL; data from the combination signaled significant anti-cancer activity in three of the first four evaluable patients as well as a tolerable safety profile. Finally, we announced a collaboration with Merck in a phase 2 basket trial evaluating DPX-Survivac combination with KEYTRUDA in patients with select advanced or recurrent solid tumors across five different indications. Now, moving into the operational highlights. We’re also pleased to have made some significant advancement on that front. We completed two public offerings in February 2019 and March 2019 for a total of approximately $43.9 million. We’re listed on Nasdaq and commenced trading on Nasdaq on June 1, 2018. We changed the name of the company to IMV to better reflect the true mechanism of action of our platform and potential -- and the potential of our therapeutic candidates. We added two seasoned biotechnology executives to our Board of Directors, Julia Gregory and Dr. Markus Warmuth. And finally, we continued to expand the management team, opened a new facility in Dartmouth, Nova Scotia, and that's nearly tripling the functional workspace. And we’ve upgraded facility and equipment as well as increasing the laboratory size to support long term growth of the company. With that as an update, I will now have Pierre review our financial results. Pierre?

[Pierre Labbé:]

Thank you, Fred. Please keep in mind that all the numbers that I will be discussing are in Canadian dollars. The net loss and comprehensive loss for 2018 was 21.9 million or $0.50 per share. That is 9.9 million higher than the net loss and comprehensive loss for 2017. It is mainly explained by the increase in R&D expenses for 6.9 million in 2018. And these increases are mainly due to higher enrollment in the phase 1b/2 for the Incyte trial in ovarian. We also had milestone payment for the phase 2 study in DLBCL and expenses related to the initiation of the basket trial. The increase is also attributable to manufacturing activities to support the increased clinical activities in 2018, which includes purchasing of raw materials and CMO costs. G&A expenses increased by 2 million in 2018 compared to 2017. And this increase is mainly due to the various expenses related to the Nasdaq listing that are non-recurring expenses, we also have a filing of a shelf prospectus, and we also have an increase of our insurance premiums for the DNO, following the Nasdaq listing. BD and IR expenses increased by 0.8 million for the year ended December 31, 2018 compared to 2017. And this is mainly explained by the fact that we hired at the beginning of 2018 year, Joe Sullivan, as our Senior VP, Business Development and we also added Marc Jasmin as our Senior Director of Investor Relations and Communications in November 2018. As at December 31, 2018, we had cash of 14.9 million which in fact is exactly the same amount that we had at the end of 2017, but it does not include the $29.5 million financing that was closed in March this year. For 2018, our cash burn rate was 18.4 million and cash burn rate for us is defined as the net loss adjusted for operations that are not involving cash and we expect that R&D expenditure will increase over time due to the continuing development of product candidates and other clinical, preclinical, and regulatory activities. And we expect our cash burn to be around $25 million for 2019. As of March 21, 2019, the number of issued and outstanding common shares was 50.6 million shares and we also had 2 million stock options, warrants, and deferred shared units outstanding. And just as a reminder, Corporation's audited annual consolidated results of operations, financial condition and cash flows for the year ended December 31, 2018 and the related MD&A are available on SEDAR and also on EDGAR. I will now turn the call back over to Fred for his closing comments. Fred?

[Fred Ors:]

Thanks, Pierre. 2018 was a transformative year for the company. Importantly, we made great progress clinically and now we better understand DPX-Survivac mechanism of action and where it can be best applied for the greater benefits of the patients. With our strong financial situation, we believe that we are better than ever positioned to realize the value of our best in class T cell therapy for cancer patients, our employees and our shareholders. We think the next nine months should be pivotal for IMV and we look forward to updating you on these additional events. Thank you for being on today's call. We are now ready to take your questions. Operator?

[Operator:]

[Operator Instructions] And our first question comes from David Novak of Raymond James.

[David Novak:]

Good morning, folks and thanks for taking the questions. Just a couple really simplistic ones for me, I just want to make sure I'm on the same page as you guys for everything here. The first 13 patients enrolled in the DECIDE trial prior to the protocol amendment. The patients in the epacadostat are -- were they treated with 100 mgs or 300 mgs?

[Fred Ors:]

Good morning, David. It was 300 mgs.

[David Novak:]

300. Perfect. And the six patients in the monotherapy arm, these were not selected for baseline tumor burden, but do we have any indication at this point in time as to how many might have had a BTB of less than five centimeters at first dose?

[Fred Ors:]

Yes. We do and it's going to be in the upcoming update.

[David Novak:]

And finally on the post protocol amendment group, the 15 patient enrolled, what is the actual target enrollment here for this group post protocol amendment?

[Fred Ors:]

It's actually 16 patients in the subpopulation.

[David Novak:]

Perfect. That's it for me guys. Thanks so much and great job last year.

[Fred Ors:]

Thanks, David.

[Operator:]

And our next question comes from Andre Uddin of Mackie Research Capital.

[Andre Uddin:]

Good morning, everyone. So I just was wondering, I was looking at your recent presentations and particularly in the infectious disease programs over there. And I was just wondering if you could provide an update on your ISV [ph] vaccine, if you're developing [indiscernible] and what happened to your Leidos partnership for your malaria vaccine, if you could just provide an update on those if you're dropping them or if you're moving those forward? Thank you.

[Fred Ors:]

Good morning, Andre. Thanks for this question. No, we have not dropped any of these programs. So, all those programs are still ongoing. It’s the updated business strategy that we implemented back in 2017 was really to focus the company effort and resources in immune-oncology, especially in terms of clinical trial, but at the same time, look for potential partners and collaborators that could continue the development of the infectious disease program that we have and this is what we have been doing since then. And the Leidos collaboration and the ISV program, we're still making progress with collaborators and the goal of the company remains the same, is being in a position at some point to enter into a fully meaningful partnership for the company in all or some of these programs down the road.

[Operator:]

[Operator Instructions] And our next question comes from Endri Leno of National Bank.

[Endri Leno:]

Hi. Good morning and thanks for taking my question. Just a couple for me, first on the lymphoma trial, how many patients are being targeted as an overall enrollment for that one?

[Fred Ors:]

The size of the phase 2, total size of the phase 2 is 25 patients.

[Endri Leno:]

Okay. And is it possible -- do we know how many have been enrolled so far? I mean, is that something you can share with us?

[Fred Ors:]

Yeah, we have seven patients enrolled so far.

[Endri Leno:]

Okay. 7. Thank you. And the next one is just kind of more of a general description. If you can talk a little bit about the DPX Neoepitope program and that's it for me, in terms of progress and what is the outlook for that?

[Fred Ors:]

So the DPX neo program, as you may remember, is really a collaboration we have here with University of Connecticut. They are using our technology DPX to run a clinical trial with their technology of designing neoepitopes. They started a trial and it's a trial that IMV is not involved in this trial older than providing the technology. So, updates will happen when University of Connecticut will be ready to do those updates. It's really something that's not in the control of IMV. But hopefully, we are expecting that in 2019, we should have some results coming out from the first patients that will be treated with this technology.

[Operator:]

And our next question comes from Doug Loe of Echelon Wealth Partners.

[Doug Loe:]

Yeah, thanks, operator and good morning, gentlemen. I just wanted to focus on the basket trial just for a second here, just for common conception. I know we've talked about that trial before, but as we all know, survivin over expression is pretty ubiquitously observed in a number of different cancer forums and you’ve specifically focused on five solid tumor markets in basket, can you just walk us through the rationale for why those specific cancer indications were selected in the trial? I'm guessing that a sizable proportion of them are either in active testing for KEYTRUDA itself or in fact KEYTRUDA is approved for those markets? And there's just some interest from you and Merck to explore the additive or synergistic impact of DPX-Survivac in those markets, but maybe is there any other scientific underpinnings that sort of justify the indications in the trial that might be relevant for us to understand DPX-Survivac’s broad spectrum critical prospects, that would be helpful and I'll leave it there.

[Fred Ors:]

Thanks, Doug for the question. Yeah. It was a combination of different things, as you can imagine, but definitively, first and foremost, the potential role of survivin in the cancer and how many patients are actually over expressing survivin and I can let Stephan explained how we do select patients for some of those indications where it's not 100%. I'll just remind you that ovarian cancer, it's 100% of patients are expressing survivin, so we don't need to screen for patients, but that's a bit different from indication in the basket trial. So, the main consideration outside of the potential role of survivin and the percentage of patients were related to, obviously discussions with Merck on the level of interest in different markets, considering the trends, level of activity of KEYTRUDA in those markets and the potential for being challenged by other combinations. And for us, on our side was also some market consideration. We very much like the fact that we have lung in this basket trial. As you may be aware, lung is by far the largest indication for checkpoint inhibitors and for KEYTRUDA. So very significant market and another consideration was also to look at a broad spectrum of activity of PD1, so, you have low level of activity like ovarian and you have high level of activities like MSI high. And the goal for us is really to understand what is the best path really for DPX-Survivac going into a combination with checkpoints and getting from that first trial in combination, a good understanding of where we can best apply our product and technology. And maybe Stephan, if you could just explain for Doug, what’s in place for survivin for [indiscernible]

[Stephan Fiset:]

Well, thank you, Fred. Actually we do have developed an assay in collaboration with a vendor to screen for survivin expression and I just want to remind that the survivin expression that has been reported is mainly at the time of diagnosis. But when the patient is progressing, more and more tumors are over expressing survivin, and still we are screening for survivin expression, old patients by entering the trial.

[Operator:]

Thank you. And that concludes our question-and-answer session. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.