IMV Inc. (NASDAQ:IMV) Q2 2022 Earnings Conference Call August 11, 2022 8:00 AM ET
Company Participants
Brittany Davison – Senior Vice President of Finance
Andrew Hall – Chief Executive Officer
Jeremy Graff – Chief Medical Officer
Conference Call Participants
Operator
Good day, and thank you for standing by. Welcome to the IMV Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.
I would now like to turn the conference over to Brittany Davidson, Head of Finance at IMV.
Brittany Davison
Thank you, operator, and good morning, everyone. I’m pleased to welcome you to IMV’s second quarter 2022 clinical and operational update conference call. I’m joined today by Andrew Hall, our CEO; and Dr. Jeremy Graf, our Chief Scientific Officer.
During this call, we will discuss our business outlook and make forward-looking statements. Any forward-looking statements made today are pursuant to and within the meaning of safe harbor provisions of applicable securities laws. These comments are based on current expectations of management regarding future events and operating performance and should not be seen as guarantees of future performance or results. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks are discussed in our continuous disclosure documents filed in compliance with applicable securities law in Canada and the United States. The press release, MD&A and financial statements have all been posted on our website at imv-inc.com. If you wish to receive a copy of these documents, please do not hesitate to contact us. Please note that we will only take questions from sell-side analysts.
I will now turn the call over to Andrew to provide an overview of our recent highlights and progress. Andrew?
Andrew Hall
Thank you, Britney, and welcome, everyone to the IMV Q2 2022 operational update. I’ll begin today’s call with an overview of our business, our near-term clinical milestones and a refresh on our execution focus and strategic plan to ensure cash optimization. Jeremy will then provide additional color on our clinical programs, and Brittany will provide an overview of the financial results for the second quarter ended June 30. I will then wrap up before we take questions.
I would like to begin the call by restating our strategic priorities as these inform near-term significant value-creating milestones. We are accelerating mabropepment towards registration trials by completing Phase IIb clinical proof-of-concept studies that will validate, a, that the DPX delivery platform uniquely makes vaccines in oncology viable; and b, that Mavropepmanes has a derisked path to registration in DLBCL and ovarian cancer. We have already demonstrated clinical benefit in DLBCL, ovarian and metastatic bladder cancer with Mavrepepmin-S. These promising results now require the robustness of a company-sponsored FDA-endorsed multicentered Phase IIb study. In quarter 3 of this year, we will provide the first insight into these data with an early look at the VISA study in DLBCL. In the first half of next year, we expect to complete enrollment of the first stage of the study and then 6 months following, we will also complete enrollment of the first stage of our Phase IIb of Varian cancer trial, EVAL.
In summary, in the next 12 months, we will complete enrollment and provide preliminary data at the first stage of 2 Phase IIb FDA-endorsed multicenter company-sponsored trials. Strategic priority number 2 is the DPX platform. We are investing in the scientific foundation of IMV, the DPX technology to drive platform-based business development opportunities. The IMV research focus is to confirm that DPX technologies overcome many of the drivers of previous failures in the area of immuno-oncology. In a moment, Jeremy will give more details about the capability of our technology platform compared to other cancer vaccines and how the first results of our clinical trials should validate the broad applicability of DPX and create excitement about our delivery platform amongst the industry.
Executing on our clinical and BD milestones in the context of the current market conditions is the right true-pronged strategy. We recognize that we have a finite amount of capital resources and are prudently allocating capital to those opportunities that have the greatest value-creating potential. At the same time, we have been carefully eliminating nonstrategic spend. Having initiated enrollment in the Vitalize trial earlier this year, we now have sites in the EU, North America, New Zealand and Australia. These additional sites have bolstered the pace of enrollment, and we remain on track to give the first results on early patients in the third quarter of this year. We will also plan to complete enrollment of Stage 1 in the first half of 2023. Regarding Avalon, our Phase IIb trial for women with platinum-resistant ovarian cancer.
I am pleased to announce today that we have dosed our first patient, and we are targeting enrollment completion of Stage 1 in the summer of 2023. Based on the data presented at AACR in April and discussions we’ve had with thought leadership, we believe there is also a compelling opportunity for mabrapatiman in patients with advanced metastatic bladder cancer. However, for financial prudence, we will not pursue a bladder program alone and are seeking partners who have expertise in this space to advance the program whilst delivering the right economics to IMV. Finally, our clinical study in non-muscle invasive bladder cancer evaluating mabripepmen and the dual targeted DPX-S continues to progress rapidly through recruitment. This study aims to confirm the versatility of our platform to safely deliver multiple targets in a durable and effective way.
A feature of DPX that is extremely informative to business development conversations we are having. We expect to have preliminary results from this study by the end of the year with the mebrapebment arm and in the first half of 2023 with the DPX Cement.
Now, I’m turning the call over to Jeremy to provide an overview of our scientific and clinical programs. Jeremy?
Jeremy Graff
Thank you, everyone. Thank you, Andrew, and good morning, everyone. I want to spend a few moments reviewing our clinical program, the basis for our clinical trials, what we expect to learn from each and the progress we’ve made in Q2.
First and foremost, our clinical trials. Our lead indication, as you well know, is the relapsed/refractory diffuse large B-cell lymphoma space. Here, we’re combining mabropepamune dense with pembrolizumab and low-dose intermittent cyclophosphamide. This enthusiasm is based upon this byREL Phase IIa study, wherein we showed a 75% response rate in PD-L1 positive patients. That eye-popping number demands confirmation. We are now confirming in the vitalized Phase IIb trial, where we will extend on SPIREL data, but now in a multinational, multicenter way. I’ll remind you, this is an open-label study, so we’re able to see data as the data come in. With early results, we expect to be able to report out by the end of Q3.
We’re very pleased to announce this quarter that we have secured as our principal investigator, Dr. Matthew Matasar from Memorial Sloan Kettering Cancer Center. I’m also very pleased to announce that we are enrolling patients in a very accelerated way. We have begun enrolling in fact, in 3 different countries and have activated in a handful of additional countries. This allows enrollment to accelerate. This allows us to live up to what we projected for the end of the year, enrolling most, if not all, of the Stage 1 Vitalize trial. The second indication, as Andrew indicated before is the platinum-resistant ovarian cancer space. This trial is different in that we are only combining mavripepemute as a single immunotherapeutic agent with low-dose intermittent cyclophosphamide.
Our enthusiasm is based upon a Phase IIa study decide that closed last August. We saw a benefit across multiple clinical measures, including response rate, median overall survival and OS rate to our overall survival rates at 2 years. That allowed us very quickly to work with the panel of exceptional KOLs to devise what we now call Avalon, the Phase IIb study in platinum-resistant patients. This is a signing 2-stage design. It is an open-label trial again, and so we will be able to understand what the data look like as they roll in. We’re very pleased that our principal investigator for this trial is Dr. Oliver Dorigo from Stanford University. Dr. Dorigo has long been an advocate for our therapy. He has been deeply involved in our ovarian cancer trials to date.
And as Andrew indicated as well, we are pleased to announce that the first patient has enrolled in his dosing on the Avalon study. The last registration-oriented efficacy trial that we’ll talk about is the metastatic bladder cancer trial. This came from a basket trial wherein we combined mebropepamute, pembrolizumab and low-dose intermittent cyclophosphamide. We did this in many different tumor types. And while we saw activity and clinical benefit across multiple tumor types, the activity was most obvious in eye-popping in the metastatic bladder cancer cohort. What we saw in this cohort were complete responses that were durable out beyond 600 days, even in patients who had progressed on prior immune checkpoint inhibitor therapy. That’s really remarkable.
In addition, the data showed us that we saw responses not just in patients with lymph node metastasis but also in patients with much harder to treat liver metastases. This now presents for us an opportunity to seek multiple registration opportunities across the entire bladder cancer treatment landscape. As Andrew indicated, we will be seeking a partner to finance and drive these opportunities. Let’s go to the next slide, please. The second grouping of trials that we have in our clinical program are neoadjuvant clinical studies. — neoadjuvant clinical studies present for us an opportunity to interrogate tissue, both the pretreatment tumor tissue and tumor tissue after or on treatment.
Getting these tumor biopsy samples is extraordinarily valuable to us as we seek to validate the molecular and cellular proof of concept for a molecule. We have a study in breast cancer in hormone receptor positive HER2-negative breast cancer patients with our partners at Providence Cancer Center in Portland, Oregon. In this study, we will be combining matropebamute and the aromatase inhibitor letrozole — the first patients in fact, the first half of the first cohort has enrolled and all of them are beyond surgical resection meaning we have the pairs of tumor tissue to begin to interrogate. We have begun intrigetting that, and we have submitted abstracts to upcoming scientific conferences, both SITC and San Antonio Breast.
The second neoadjuvant trial in a similar way is also designed to allow us to interrogate prenon-treatment tissue, but this is in the non-muscle invasive bladder cancer setting in the MIBC. We’re doing this with our partners at the Shook in Quebec. The first patients have enrolled on the first cohort of this study. That is a cohort treated singularly with nevropepmuds. Preliminary data we expect to be able to present perhaps next year’s ASCO GU at the beginning of the year. Importantly, the second cohort of this study will allow us to begin to understand the activity and the safety for our second clinical product, DPX Serge. This product is designed to inspire an immune response to 2 different cancer antigens, survivin and MAGE-A9 simultaneously. It helps us not only interrogate this new clinical product, but it helps provide the basis for understanding the entire reach of the DPX platform.
So we’re looking very much forward to being able to verify that dual targeted activity in the clinic across the next few months. Let’s go to the next slide, please. The last bit that I’d like to review is really based upon our platform. As Andrew said, we are adamantly interested in engaging multiple strategic partners around the platform, a platform that we think is really revolutionary and may allow cancer vaccines for the first time to truly be effective. As we look at the historical cancer vaccine efforts, we can recognize efficiencies that have existed. And I think primarily, those deficiencies include the fact that those formulations could not in a single formulation, package the information to educate a specific response. In most cases, those were peptides or antigens as well as specific activators about the immune system.
In addition, those formulations were incapable of protecting this immune-educating cargo, allowing that cargo after injection to leach into surrounding tissues and ultimately even systemic circulation that limits the ability of the immune system to appropriately interact with that specific information. DPX is different. It is an immune educating technology that in a single platform and a single formulation can package a wide variety of cargo. We package the educators for the immune response, the antigens, whether those antigens are peptides, messenger RNAs, whole proteins or virus-like particles, with very specific activators of the innate immune system and the other components of the anticancer immune response, including pattern recognition receptor agonists like Poly IDC, perhaps like STING like CPGs. This is a very unique chemistry, a lipid and oil formulation, unique to IMV.
As an oil-based formulation, this DPX packaging allows for that cargo to remain at the site of injection for a protracted period of time. It prevents the leaching of that cargo into tissue. As a consequence, it can only be actively consumed and traffic by the very specific immune cells of the immune system that take that cargo to the lymph nodes to educate an immune response as the immune system is used to doing. It’s much more physiologically relevant. Our lead product, our lead DPX product is MAVROopands. MABR company us with the depth in the clinical studies that we’ve achieved so far is an exemplar for this game-changing plug-and-play technology. Marcus was born from the in-licensing of peptides originally designed and originally developed by Merck KGaA. In conventional formulations, those peptides were not very effective at eliciting a robust survival specific immune response and fail to show clinical benefit. In the DPX platform, those very same peptides now show clinical benefit in multiple cancer types, both hematologic and solid cancers. They show that in concert with survivin specific immunity that can persist out beyond 2 years.
We reported in multiple indications, and we just reviewed that we see complete and durable responses in both DLBCL and bladder cancers. We see durable partial responses and very long-term stable disease as well in those cancers and in advanced ovarian cancers. These are the data that help us appreciate exactly what the potential for the DPX platform may be, and we’re very much looking forward to leveraging that potential as we cascade through the rest of the year.
With that, I will turn the presentation over to our Head of Finance, Brody Davidson.
Brittany Davison
Thank you, Jeremy. As reported, during the second quarter of 2022, we incurred a net loss and comprehensive loss of $9.9 million or $0.12 per share, which compares to a net loss of $7.4 million or $0.11 per share for the 3 months ended June 30, 2021. The loss increase is mainly driven by an increase of $1.2 million in G&A expenses and $800,000 in R&D expenses as we execute our Phase IIb trial in DLBCL and advanced ovarian cancer. The increase in R&D expenses of $800,000 can be further explained by cost for the vitalized Phase IIb trial in DLBCL as we continue to activate sites globally in order to accelerate enrollment. This increase was partly offset by a decrease in cost for the basket trial following completion of enrollment in 2021.
The increase in G&A expenses in Q2 2022 is mainly driven by an increase in headcount and executive leadership changes as well as loan interest associated with our non-dilutive debt with Horizon Technology Finance Corporation. As of June 30, 2022, the company had cash and cash equivalents of $31.1 million and cash used in operations in the first half of the year was $16.9 million. Sources of cash from financing activities included the drawdown of the remaining $10 million under our debt facility with Horizon, which was made available following the activation of our Avalon Phase IIb study in ovarian cancer.
As a reminder, this debt is interest-only until January 2024, and this can be extended to mid-2024 upon meeting a second predetermined clinical milestone. As we don’t expect to incur significant manufacturing costs in the back half of the year, we continue to expect that our cash position will be sufficient to fund operations through our near-term milestones and into the second quarter of 2023.
I will now pass it back to Andrew for wrap up and to start the Q&A.
Andrew Hall
Thanks, Britney. The expected news flow for the second half of this year and into 2023 as summarized on this why. As you can see, this is an exciting time for IMV and we believe that the company is in the best position at has been from a clinical foundational science and biotech specific expertise perspective. The team here is executing on the timely clinical validation of mebrapepamat with the data from ongoing studies in DLBCL in ovarian cancer will set us on a path to registration trials. We are also seeking to further leverage the value of our DPX technology to create new therapeutics through strategic collaborations, all of which will drive near-term shareholder value. I thank you for your time this morning.
And Jason will now pass back to you to take questions.
Question-and-Answer Session
End of Q&A
Thank you, presenters. And this concludes today’s conference call. Thank you for participating, and you may now disconnect.
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