IMV, Inc. (NASDAQ:IMV) Q3 2022 Earnings Conference Call November 11, 2022 8:00 AM ET
Company Participants
Brittany Davison – Chief Accounting Officer
Andrew Hall – Chief Executive Officer
Jeremy Graff – Chief Scientific Officer
Conference Call Participants
Brandon Folkes – Cantor Fitzgerald
Joseph Pantginis – H.C. Wainwright & Co.
Paul Stewardson – IA Capital Markets
Operator
Good day and thank you for standing by. Welcome to IMV’s Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker 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 Ms. Brittany Davison, Chief Accounting Officer at IMV. Please go ahead.
Brittany Davison
Thank you, operator, and good morning, everyone. I’m pleased to welcome you to IMV’s third quarter 2022 clinical and operational update conference call. I’m joined today by Andrew Hall, our CEO; and Dr. Jeremy Graff, 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 the 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, the MD&A and the 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.
And I will now turn the call over to Andrew to provide an overview of our recent highlights and progress. Andrew?
Andrew Hall
Thank you, Brittany, and welcome everyone to the IMV Q3 operational update. Quarter three at IMV was all about focus. We significantly accelerated the rate of site improvement and patient enrollment for both, VITALIZE and AVALON. We restructured the business to reduce spend on nonclinical investments. This is how we deliver near-term shareholder value.
I will begin today’s call with an overview of our business, a refresher on our near-term clinical milestones and a review of recent changes we have made here at IMV. Jeremy will provide details on the expectations we have in next year’s data readouts and introduce the formation of our new scientific advisory board. Then Brittany will come back to provide an overview of our financial results for the third quarter ended September 30, 2022, before I provide closing remarks and we take questions.
I want to emphasize that despite the current conditions, we remain focused on IMV’s strategic priorities. We are pushing our lead candidate maveropepimut-S towards registration trials by completing the two ongoing Phase 2b clinical proof-of-concept studies in DLBCL and ovarian cancer.
We continue to advance discussions with scientific partners as validated by our scientific advisers to improve the delivery of their own immunotherapeutics. To complement this, we continue to strengthen the scientific foundation of IMV, the DPX technology with new science, as the data presented this week as SITC confirms. With each new discovery, we are confirming that the DPX technology is both differentiated and optimized to deliver immune-educating therapies.
On the clinical side, activation of sites and enrollment in the VITALIZE Phase 2b clinical trial increased substantially during the third quarter. VITALIZE as a reminder, is designed to further evaluate the clinical benefit of maveropepimut-S in combination with Merck’s anti-PD-1 therapy in patients with relapsed and refractory DLBCL. The increased pace of enrollment despite the number of competitive trials in this space speaks to the enthusiasm amongst investigators for MVP-S as a potential treatment for patients with DLBCL. As previously committed, we will present clinical response data from the VITALIZE study of the scientific Congress early in 2023.
Recruitment and site activation also increased in the AVALON Phase 2b study. The goal of this study is to further evaluate the favorable clinical outcomes observed in our Phase 2a DeCidE study, which evaluated patients with recurrent ovarian cancer receiving maveropepimut-S, an intermittent low-dose cyclophosphamide. Full enrollment of Stage 1 AVALON is expected to complete in the third quarter of 2023.
I’ll now turn over to Jeremy, who will present the clinical and scientific highlights from the quarter. Jeremy?
Jeremy Graff
Thank you, Andrew. As Andrew indicated, quarter three for us has been a very productive quarter, both clinically and scientifically. It’s really been a quarter of execution. We are actively enrolling across all four clinical trials to date. VITALIZE continues to enroll nicely. As Andrew indicated, we have picked up enrollment in VITALIZE largely because we aggressively opened new locales in Q2. These locales included sites in Australia, New Zealand and select countries in the EU. We have been invited to speak at a conference in Q1 2023, where we will present data on our clinical programs, specifically response rate data for the Stage 1 in VITALIZE.
We’ve also had a significant uptick in our ovarian cancer trial, AVALON. AVALON opened this summer. We are activating sites aggressively, and we hope to have our lead site, Stanford, activated with our PI, Oliver Dorigo, in the next few weeks. We expect, enrollment for AVALON will be completed for the first stage by the end of summer — by the end of Q3 2023. We are also actively enrolling in the two neoadjuvant studies we described previously.
The first is an neoadjuvant study in breast cancer. These are hormone receptor positive HER2-negative patients. They are receiving our drug, maveropepimut-S plus aromatase inhibitors. We’re able to then capture both, pretreatment and on-treatment tumor biopsy materials, so we can interrogate specifically the effects that our drug with aromatase inhibitors have on the immunobiology of the tumor and at the tumor site. The first three patients’ worth of data are being presented this week at SITC, the Society for the Immunotherapeutic of Cancer. We have a very strong presence at SITC in fact.
For the breast cancer trial, we will also have a trials in progress poster at the San Antonio Breast Cancer Symposium in December 2023. The fourth actively enrolling trial is in non-muscle invasive bladder cancer, NMIBC. Patients have been enrolled already on the maveropepimut-S arms and we expect to be able to present data from that. Again, like the breast cancer neoadjuvant study, we will be able to interrogate pre and on-treatment tumor tissues so that we’ll be able to understand more deeply, the science of our lead product, maveropepimut-S.
As I said, this has also been a strong scientific quarter. We have marvelous presentations at SITC 2022 this week here in Boston, detailing deeper, richer data as we begin to understand more fully, exactly which immune cell subsets are taking up our product and trafficking our product through the immune system. These are revelations for us that will help us more strong connect with scientific community.
And to that note, we are assembling and finalizing a wonderful Scientific Advisory Board. This will be filled with folks who are recognized as the world experts in cancer vaccine technology. The exact announcement for the Scientific Advisory Board should happen in the next few weeks.
I will now turn this back over to Brittany Davison.
Brittany Davison
Thank you, Jeremy. As reported in our earnings release issued yesterday, during the third quarter of 2022, we incurred a net loss and comprehensive loss of $8.9 million or $0.11 per share, compared to a net loss of $10.4 million or $0.13 per share for the three months ended September 30, 2021. In September, we announced a workforce restructuring in order to conserve cash and focus resources on driving to near-term value-creating milestones. This quarter includes approximately $650,000 of nonrecurring costs related to this restructuring.
G&A expenses decreased by $1.2 million, compared to Q3 2021, and this decrease in G&A expenses was mainly attributable to costs related to executive leadership changes that occurred in Q3 2021, that were not replicated in the current quarter, as well as stock option forfeitures associated with our September reorganization.
R&D expenses for the three months ended September 30, 2022, were approximately $330,000 higher compared to the third quarter in 2021, primarily as a result of nonrecurring costs related to the September restructuring as well as the progression of our Phase 2b trials in DLBCL advanced ovarian cancer and our non-muscle invasive bladder cancer study. These increases were mostly offset by a decrease in basket trial costs as this trial nears completion and MVP-S manufacturing costs.
As of September 30, 2022, the company had cash and cash equivalents of $21.7 million, and cash used in operations in the first nine months of the year was $27 million. According to our current forecast and assumptions, we expect that our cash position remains sufficient to fund operations into the second quarter of 2023. As a result of our recent reorganization and cost reduction measures, we expect our 2023 average cash burn per quarter to remain consistent with 2022, despite forecasted increases in clinical costs due to the acceleration of our VITALIZE and AVALON trials.
We also know that good clinical data is a strong catalyst for institutional investment. With the acceleration of our clinical programs and the ability to see the clinical responses in real time, we believe, it could create a context favorable to improve our financial position.
I will now pass it back to Andrew to wrap up and start the Q&A.
Andrew Hall
Thanks, Brittany. The expected news flow is summarized here. In the first half of 2023, we will complete enrollment of the VITALIZE trial and present both the preliminary and the full data set at scientific meetings. Six months behind each of those milestones, we will replicate this data flow for the AVALON study.
In this environment, maybe more than ever, clinical data presented at the right forum that confirms meaningful clinical efficacy validates what we do. We look forward to sharing the details early in 2023.
Thank you for joining us today. And Jason, I’ll now pass back to you for questions.
Operator
[Operator Instructions].
Question-and-Answer Session
Operator
Our first question comes from Brandon Folkes with Cantor Fitzgerald. Your line is open.
Brandon Folkes
Hi, thanks for taking my questions and congratulations on the progress. Maybe just starting off on VITALIZE. How do you think about the bar success for that trial? Is it a 75% response rate in PD-1 positive patients? Or how have you set the bar internally, just given you have this focus on capital allocation? As well as the — I guess, the Scientific Advisory Board there, too, but just any color in terms of how you think about that internally. And then maybe secondly, how would you describe the partnering environment currently? And then with this restructuring, does that give you more flexibility in terms of when to see partners for these programs? Is that going to be data dependent? Or are these relatively well-defined internally and more about actual value inflection points than sort of bringing on additional cash? Thank you very much.
Andrew Hall
Thanks, Brandon. Nice to hear from you. So the first question was about the VITALIZE data. And I think, you’re asking, what’s our expectations on the VITALIZE data, vis-a-vis, maybe what we’ve shown previously in SPiReL? The purpose of the trial — and I think it’s important to remind you of this is — so the goal is to first replicate what we’ve seen before in a smaller study, now in a company-sponsored multicenter study that’s been validated by the agency PI-ed by [indiscernible].
Whilst the outstanding eight of 10 patients in SPiReL with PD-1 positivity as a result we certainly seek to replicate, we also need to appreciate that in the period post the study completing, and now we’re enrolling in VITALIZE, the landscape has changed significantly, and there are cell therapies that were not present when we did the first study. There are other therapeutic regimens, which in effect pushes our therapy back in the normal sequence of treatment. That’s not to say, we aren’t extraordinarily confident of the drug’s ability to perform in that space, just that we are looking forward to, I guess, a later line of therapy and the challenges that come with that.
So the real goal of VITALIZE is to show even in a very refractory population that we still have the ability to demonstrate, with an immuno-oncology agent and a mechanism that is extremely well tolerated, that we’re able to show a profound benefit. And we look forward to showing data confirming that in early 2023. Jeremy, is there anything else on the DLBCL landscape that’s pertinent?
Jeremy Graff
No, I think, you nailed it.
Andrew Hall
And then the second question is with respect to the partnering environment and the business development environment broadly. Brandon, I think you’d probably agree with me that there’s been an uptick in M&A in recent months, which is always a trigger for value across the sector. What we’re not seeing is the volume of licensing and product-related deals. And I think that’s probably a reflection of a lot of companies, very much like IMV, having depressed valuations based on the market conditions.
It doesn’t diminish our enthusiasm for business development. We still are continuing to demonstrate around our platform, terrific validation from a scientific front. This week at SITC, we in fact, we’re — Jeremy, I think it’s three separate posters we’re presenting at SITC validating — four — sorry, posters at SITC, validating the sort of value of what this platform can be. And I think, we’re realizing now the value of that in the progress we’re making with collaborative discussions around business development.
It’s clearly not an optimal market for any activities relating to partnering, but we’re certainly seeing some positive traction based on what we continue to learn about the DPX platform. And then what we will look forward to confirming in early next year, the value of the lead product that the platform has created. Did that get to your questions, Brandon?
Brandon Folkes
Good. Very helpful. Maybe one follow-up, if I may. You talked about the Scientific Advisory Board. Obviously, that’s a positive. Just any color in terms of timing sort of why now, just sort of as we head into these data readouts to get sort of additional input from how you got to people, or just any additional color there in terms of just the timing of putting in that board.
Andrew Hall
And that’s an excellent question, and I’ll have Jeremy take the meat of the question. But one of the things we’re learning, and this is very consistent with what we’re seeing this week at SITC, is that the evolution of the best scientific thinking around how to best deliver therapeutics in immuno-oncology seems to be fairly similar to the way that our DPX technology behaves as we now understand it.
And so the creation of a Scientific Advisory Board around this point is almost in the spirit of being now recognized as sort of a meaningful platform for the delivery of therapeutics in this space that are becoming much more vogue, if you will. The Advisory Board is really designed to capture some of that enthusiasm and then help us drive towards, not just scientific exploration, but collaboration opportunities. Jeremy, do you have — add to that?
Jeremy Graff
Sure. I think our scientific group has been really pushing hard in the last year, year and a half to deepen and broaden our understanding of the way the drug works. Now that we’ve got a better foothold on that, and that’s represented in some of the posters here at SITC this week, it’s easier for us to go out and capture the imagination of the best minds in academia. That’s what we’ve now done. We’ll be able to announce who these folks are.
In the next few weeks, it’s all the contracts are finalized, but we’re excited to be able to do that, share then our data as they emerge not only from the clinic, but also from the labs, and help develop a future for the technology and for product on the backs of the discussions with these notable experts.
Brandon Folkes
Great. Thank you very much. Appreciate answer for my question. Congrats on the progress.
Jeremy Graff
Thank you.
Operator
Our next question comes from Joe Pantginis with H.C. Wainwright. Your line is open.
Joseph Pantginis
Hey everybody good morning. Thanks for taking the questions. One straightforward question, one discussion question, and one data timing question. So first, the straightforward question, I’ll put that in quotations, is I want to discuss your manufacturing expertise on two fronts first. What is your current capacity to be able to deliver for your ongoing studies? And what is your maximum capacity for the number of doses that you can deliver now? And I also link that to potential BD discussions as well, the fact that you have those levels.
Andrew Hall
So Joe, nice to hear from you. The manufacturing side of our business, we manage through CMOs. And we have, I guess, successfully managed to curate enough products and because of the extraordinary shelf life and stability of maveropepimut, to see us through clinic. We are in the process of evolving that to be a commercial ready product. And that is ongoing activities as would have been reflected in our financials for the quarter. And we’re doing that mindful that, particularly on the ovarian cancer side, that the way we’re designing the development path towards registration, we need to be commercial ready in our manufacturing process sooner rather than later.
With respect to the BD element, I guess that I’m going to interpret your question around the novelty of the design and what can happen into the manufacturing to add other therapeutics maybe alongside or in addition to, or instead of survivin or the [indiscernible]. And what we’re trying to establish now truly. Yes, what we’re trying to do now through our manufacturing process is to simplify the stages in a way that we can make the technology more fit for plug-and-play. What we have with our lead product is a very thoughtful and very important sequence to make the maveropepimut product. In future efforts, we would like to simplify that process so that we can make it more simplified obviously, but to then shorten the lead time for potential collaborative opportunities. And that is something we’ve got our tech ops and CMC experts working on, as we speak.
Joseph Pantginis
Got it. That’s helpful. And then — no, very helpful, actually. So I’ll ask the timing question first. Just curious if you have any guidance with regard to the bladder cancer, neoadjuvant study potential data timing?
Andrew Hall
Jeremy?
Jeremy Graff
Yes. So that study is going to develop across time. We expect to be able to present some of the first data from the maveropepimut-only cohort early next year. And so as that data continues to roll out, these are mostly translational data with pathology at the tumor site as well, at resection, and we’ll be able to tie those things together. So we’ll expect probably a couple of presentations throughout next year as the day to evolve and expand.
Joseph Pantginis
Got it. Got it. So my discussion point really is for both Jeremy and Andrew, because you’re on the leading edge of the discussions. And I’m tying it to your comments in your prepared commentary about enrollment around DLBCL and competition for patients and the fact that you’re seeing these nice upticks. So I was hoping to get even sort of anecdotal feedback from you around the discussions and how it may be potentially tied to the renewed interest around cancer vaccines and their underlying safety?
Andrew Hall
It’s a really interesting conversation point. We are seeing, obviously, in the totality of the market, that there is an uptick in enthusiasm for mechanisms akin to ours in all spaces of oncology. I wouldn’t suggest that it’s that that’s driving the uptick in DLBCL enrollment. What I would suggest is that we have broadened our sites that are available. And as data comes in, and I think I’ve guided to this before, we see the data in a way that’s effectively live. The trial whilst randomized is unblinded, as do the PI and as do some of the sites. And as the data comes in, I think there is a growing confidence that the therapy has meaningful benefit, and that is indeed driving the willingness to put very and more patients.
And let’s never lose sight of the fact that patients in DLBCL that we’re seeing in a clinical setting are often five, six lines of therapy deep. And having progressed through those therapies, they’re on the last limit of their path through cancer. And there are patients that, obviously, physicians are going to be very thoughtful in the therapies that they introduced, just because if the therapy doesn’t work, the patient doesn’t do very well for very long. And so I think there’s some a little bit of more sites up and running, Joe, and then also having the confidence that the therapeutic indices that we’ve shown previously continuing to be validated by what we’re seeing in clinic now.
Joseph Pantginis
Got it. Appreciate the feedback guys.
Andrew Hall
Good to hear from you Joe.
Operator
Our next question comes from Paul Stewardson with IA Capital. Your line is open.
Paul Stewardson
Good morning. Thanks for taking our question. Just calling in for Chelsey. Just wondering on the smaller trials with the breast and bladder, can you give a little color on the competition for patients, what the enrollment sort of looks like there, the way you did with VITALIZE?
Andrew Hall
Yes, I’m happy to have Jeremy talk to the smaller trials. And we consider them smaller trials more because the ends are small, so we’re not talking about large patient numbers. But the trials are focused more in a neoadjuvant setting and they’re very translationally focused. So the trials require pre and post biopsies and elements such as that, that obviously complicate the types of patients that can come in. But Jeremy, do you want to give the guidance as to where we’re at recruiting wise?
Jeremy Graff
I think we’re heading in the right direction in both trials. In the breast cancer study, we have four patients now in — of the six in the first cohort that we wanted. Three of those patients are being discussed here in SITC this week. And then in the non-muscle invasive bladder cancer study, we also have four patients now into that study, and that helps us appreciate specifically in the bladder cancer study, what maveropepimut by itself is doing. All of these things, because we get the tissue pre and on treatment, we get a really good opportunity to interrogate that tissue deeply and really assess the immunobiology we’re creating in the non-muscle invasive bladder cancer setting, in particular with maveropepimut as a single agent, we get to very clearly, for the first time, provide evidence that maveropepimut is driving this immunobiology all by itself.
So important studies. They are small studies. These are early patients. The beauty of these studies for the patients is, we get to help them educate their immune system to a cancer, and hopefully, prevent that from ever coming back. But in the near-term, we get to really interrogate that tissue in a way that we’ve never had a chance to do before.
Paul Stewardson
Great for that color. And…
Andrew Hall
Does that clear your question, Paul?
Paul Stewardson
Yes, it does. And just one more from me. In terms of the VITALIZE data, in terms of the enrollment that you’re seeing, can you just give us any preliminary indication of, if this is replicating the SPiReL data in terms of how heavily pretreated and the age of these patients? Is this something you’re seeing similar enrollment patterns? Or is there a discrepancy there?
Andrew Hall
So — and thanks for the question, Paul. I don’t think I would consider it a discrepancy. But we are seeing patients post-cell therapy. We’re seeing patients post some of the new lines of treatment that have become available since we presented the SPiReL data. Obviously, I’m not going to guide as to the way we’re responding in those patient populations, but it does make the therapeutic challenge more complicated when a patient has progressed through more lines of treatment. So I would say that the landscape we’re working in a DLBCL is more complicated.
But I would also say that because of the way our mechanism seems to — well, it’s not seems to, biologically is different and separate to so many of the therapies that they’ve progressed through, we’re very confident that even in a refractory patient, with the biology of maveropepimut and therapeutic efficacy will stand up. And so yes, the landscape has changed, and this will be surprising to know on the DLBCL is that complicated environment because of the amount of therapies that are being developed in this space, that there is always going to be need to be — well, there’s always going to be a need for therapies with a tolerability profile that is injection-site only reactions, otherwise no systemic challenges and then a therapeutic index, which demonstrates durability to its efficacy.
So we feel confident that even in a competitive landscape and even in a space where patients are maybe more progressed before they see our therapy, that there is a still space for a therapeutic like maveropepimut. Jeremy, do you have any add-ons to that?
Jeremy Graff
I think it’s the essence of the trial today, now the new therapies hit the board for DLBCL patients from fracture DLBCL patients, is that we’re putting the therapy to the real test. And we’re still very confident about what the therapeutic can deliver, and we look forward to being and we’ll talk about that early next year.
Andrew Hall
Thanks for the question, Paul.
Paul Stewardson
That’s great to be aware of. Yes, thank you so much guys.
Operator
There are no further questions at this time.
Andrew Hall
Thank you, Michelle. I’d be — just before we close, I’d like to say a significant thank you to the team at IMV. What we do here matters. Just remember that every patient that responds to our therapy is a patient living a better life with cancer. I appreciate everyone’s attention this morning. And Jason, I’ll pass back to you to close. Thank you.
Operator
This concludes today’s conference call. Thank you for participating. You may now disconnect.
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