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Edited Transcript of IMUC earnings conference call or presentation 9-Mar-17 10:00pm GMT

Thomson Reuters StreetEvents

Q4 2016 ImmunoCellular Therapeutics Ltd Earnings Call

Woodland Hills Mar 10, 2017 (Thomson StreetEvents) -- Edited Transcript of ImmunoCellular Therapeutics Ltd earnings conference call or presentation Thursday, March 9, 2017 at 10:00:00pm GMT

TEXT version of Transcript


Corporate Participants


* Jane Green

ImmunoCellular Therapeutics Ltd. - IR

* Anthony Gringeri

ImmunoCellular Therapeutics Ltd. - President and CEO

* Steve Swanson

ImmunoCellular Therapeutics Ltd. - SVP of Research

* David Fractor

ImmunoCellular Therapeutics Ltd. - VP Finance and Principal Accounting Officer


Conference Call Participants


* Jason McCarthy

Maxim Group - Analyst




Editor [1]


+++ presentation


Operator [2]


Good afternoon, everyone, and welcome to the ImmunoCellular Therapeutics fourth quarter and full year 2016 financial results conference call. This call is being recorded. (Operator Instructions)

I would now like to turn the call over to Mrs. Jane Green in ImmunoCellular Investor Relations Group. You may begin.


Jane Green, ImmunoCellular Therapeutics Ltd. - IR [3]


Good afternoon, and welcome to ImmunoCellular Therapeutics' conference call to discuss the Company's fourth quarter and full-year 2016 financial results and corporate update. Today's call is being recorded and is also available via webcast. Participating in today's call are President and Chief Executive Officer, Dr. Anthony Gringeri; Senior Vice President of Research, Dr. Steve Swanson; and Vice President Finance and Principal Accounting Officer, David Fractor.

Following this introduction, Dr. Gringeri will discuss the company's performance and future outlook. Dr. Swanson will provide an update on the Stem-to-T-Cell program, Mr. Fractor will review the Company's financial results and then the Company will take questions. If you've not received a copy of today's press release, you can obtain one by visiting the company's website, www.imuc.com.

ImmunoCellular would like to remind everyone that during the conference call, members of the management team will make certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Examples of these statements may include statements about our plans, objectives, expectations, and intentions with respect to the potential and timing for success of our scientific approaches to cancer immunotherapy; our product candidates and research programs; clinical development efforts, operations, financial condition; and other statements that are not historical in nature. Our actual results may differ materially from those projected in these forward-looking statements. Important factors known to us that could cause actual results to differ materially from those expressed in such forward-looking statements include those set forth in our most recent annual report on Form 10-K, quarterly results on Form 10-Q, and other reports filed with the SEC. Please review these and the Company's other filings. We undertake no obligation to update any forward-looking statements after this call


Now, I'd like to turn the call over to ImmunoCellular President and CEO, Tony Gringeri.


Anthony Gringeri, ImmunoCellular Therapeutics Ltd. - President and CEO [4]


Thank you, Jane. Thank you all for joining our call today. We welcome the opportunity to provide an update on our company and to review upcoming events. This is the first quarterly call I'm hosting as ImmunoCellular's Chief Executive Officer. I plan to keep my prepared remarks brief today and I will look forward to taking your questions later in the call.

If you've been a longtime stockholder or you've been watching our progress, you know that these are challenging times for our company. Over the last several months, our board of directors, together with our management team, have been working diligently to pursue strategy designed to advance our programs and to enable our company to secure the resources we need to continue to move forward.

We have also continued to explore strategic options through partnering and other collaborative structures that could potentially strengthen our standing in the Immuno-Oncology arena and enable us to continue to advance towards creating a leading cancer immunotherapy company.

We will continue to pursue these various avenues and acknowledge that these pursuits can often take some time to evolve. We remain firm in our commitment to seek opportunities to deliver value to all of our stakeholders, including patients and families affected by cancer, the medical and scientific communities whose interest in our immunotherapy approaches remains strong and our stockholders.

And now I'll provide a brief update on our ICT-107 and ICT-121 program, and then ask Steve Swanson to discuss the advances we have announced earlier this week in the Stem-to-T-Cell program. As previously noted, ImmunoCellular is one of a small number of companies in the cancer immunotherapy arena that is in the late stage of clinical development. We continue to think that what differentiates our ICT-107 Phase 3 program from any other in newly diagnosed glioblastoma is that it is the only trial designed on the basis of data and insight from a placebo-controlled Phase 2 trial, which use overall survival as the primary endpoint.

As of the first week of March 2017, 376 patients have been screened for this trial, which is on track with our original projections. 21 patients have been randomized. Clinical site activation is continuing with a total of 68 sites actively screening patients to date.

This includes almost 100% of the target sites in the US and more than half of the approximately 120 sites targeted overall. We're also pleased to report that our first European site has been initiated in Austria and that four sites have been initiated in Canada. All the credit for this progress goes to the members of our extraordinary team who are working tirelessly to move this program forward.

As we noted in November, to address certain challenges that were affecting the pace of randomization in the Phase 3 trial we amended the protocol to modify some element of the patient screening process and to accelerate both the pace and efficiency of our patient randomization efforts. The protocol amendment addresses issues that will shorten the time required between initial screening and randomization.

You will recall that in the original protocol randomized patients were treated approximately 90 days following initial inclusion in the trial to allow time for chemoradiation and screening for tumor progression. The protocol amendment moves randomization significantly earlier, to 30 days after commencing screening procedure, thus accelerating the time to randomization by approximately two months.

Patients with clear progression at this point will still be discontinued from the trial before treatment with ICT-107, but we expect a very large proportion of patients to continue to treatment under the amended protocol. As we announced earlier this week, the amendment is currently being implemented at US sites and amended protocol submissions are underway in Europe and Canada.

As we also noted, and as anticipated, the special protocol assessment, or SPA, which was based on the original protocol is no longer in effect for the amended protocol. We plan to engage in further discussions with FDA concerning a SPA for the amended protocol in the future, however. We do not expect the change in the status of the SPA to materially impact the execution of the Phase 3 trial and a successful Phase 3 study can still be used as primary evidence to support our marketing application.

We are pleased that the amendment protocol process is underway, as we believe that this is a major enhancement to the Phase 3 program. During the amendment preparation and submission process, we have continued to screen and randomize patients and expect the addition of new sites and the streamlining of the apparatus and manufacturing process to accelerate the rate of randomization overall.

As we noted previously, and as a consequence of these changes, we now plan to randomize 542 patients instead of the 414 patients originally planned. Regarding our timeline, we continue to expect to randomize all patients by mid-2019 and an additional two to three years from then to achieve the number of events required to complete the trial.

There will be points within that interval, however, where we will assess valuable data. We plan to conduct an interim analysis for futility upon reaching 30% of the event which should be and about the time of full randomization, and a second interim analysis for efficacy upon reaching 67% of the event, which should be about six months later.

We continue to believe that ICT-107 is at the forefront on immunotherapy development in this indication. We have confidence in the value and quality of our Phase 3 program and the therapeutic and commercial potential of ICT-107.

Regarding ICT-121, as we previously noted, the Phase 1 open-label trial in patients with recurrent glioblastoma has completed enrollment after reaching a target of 20 patients. The trial is being conducted at six sites in the US. We're pleased to report that we have now closed this trial and are in the process of locking the database and commencing the final collection and analysis of the data.

We're also pleased to report that we have submitted an abstract to ASCO with the goal of presenting the preliminary results at the conference which takes place at the beginning of June. Because we want to preserve the integrity of the data in the trial and comply with ASCO data disclosure policies, we are going to refrain from providing an update on our observations in the trial at this time.

The observations we have presented in the past were not scrubbed or validated by our CRO and that process is taking place now. We were encouraged by the preliminary unvalidated results we have seen and we will look forward to sharing the data publicly once we know the status of our ASCO abstract.

Now I would like to ask Steve Swanson -- who heads our research activities -- to provide an update on our Stem Cell Program progress. Steve?


Steve Swanson, ImmunoCellular Therapeutics Ltd. - SVP of Research [5]


Thanks, Tony. Good afternoon. Earlier this week we were pleased to announce a key milestone in our Stem-to-T-Cell program. The successful sequencing of a target T cell receptor gene, which is a key step in advancing toward identification of a potential clinical candidate in our Stem-to-T-Cell program. The sequence T cell receptor or TCR will be utilized in our proof-of-concept evaluation for the Stem-to-T-Cell program.

By way of background, recall that the isolation selected T cells and identification of the genetic sequence of the receptor was performed in the laboratory of Dr. Cassian Yee at the University of Texas MD Anderson Cancer Center. In November 2015, we entered into a sponsored research agreement with MD Anderson, with Dr. Cassian Yee as principal investigator, which focused on identifying T cells that find and kill tumor cells expressing a target antigen. The ultimate goal of this work is to establish a clinical program based on hematopoietic stem cells that are isolated from the patient, then modified with the TCR gene sequence and returned to the patient.

These modified stem cells would self-replicate and also continually produce antigen-specific killer T cells to target and kill the tumor. The critical starting point for this novel therapeutic strategy was to isolate and identify T cells that can selectively attack and destroy target tumor cells.

The genetic sequence of unique receptor on that population of T cells is what is transferred into a hematopoietic or blood stem cells. When inserted into a blood stem cell expression of this TCR gene is expected to drive patients' immune systems to produce killer T cells programmed to attack tumors. This Stem-to-T-Cell therapeutic strategy has the potential to provide a safer, sustainable and more specific immune treatment for cancer.

Achieving this milestone required completion of several critical steps -- the collection and analysis of multiple clones of cells containing the target TCR genes, harvesting the plasmas with the TCR gene and then sequencing that gene. Now that we have the genetic sequence of the receptor in hand, we can proceed with the next phase of this research.

This next phase will focus on packaging the T cell receptor sequence into a lentivirus vector.

This packaged lentivirus is the vehicle that will be used to transfect human and hematopoietic stem cells. The transfected stem cells will then be monitored for any phenotypic changes. These hematopoietic stem cells could become, in essence, an internal factor producing antigen specific killer T cells in the patient.

Once these fundamental elements are in place, a product candidate for testing in cell lines and suitable preclinical models could be generated. Successful testing would potentially lead to human clinical trials. We anticipate having data to evaluate from this next phase by the fourth quarter of this year. Our collaboration with the University of Maryland, established in January 2016, which should help us better understand the leverage than [vernic] cell immunotherapies, is also moving forward and we'll look forward to reporting on our progress in that future.

Back to you, Tony.


Anthony Gringeri, ImmunoCellular Therapeutics Ltd. - President and CEO [6]


Thanks, Steve. And now, I'd like to describe the upcoming milestones we're anticipating in the near term. In the ICT-107 Phase 3 program, we plan to continue to implement the protocol amendment in all of our US sites and pursue regulatory approval in Europe for the protocol changes.

As I noted earlier, we now anticipate randomization of all patients by mid-2019, and additional two to three years from then to achieve the number of required events to complete the trial. We plan to conduct a futility analysis upon reaching 30% of events, which should be at about the time of full randomization, and an interim analysis for efficacy upon reaching 67% of events, which should be about six months later.

In the ICT-121 program, we look forward to completing the data analysis of the Phase 1 trial and learning the status of our ASCO abstract submission sometime in the second quarter. In our Stem-to-T-Cell program, as Steve noted, our next phase will focus on packaging the T-Cell receptor sequence into a lengthy virus vector -- the vehicle that will be used to transfect human hematopoietic stem cells.

The transfected stem cells will then be monitored for any phenotypic changes. These are important next steps toward identifying a product candidate for testing in cell lines and generating suitable pre-clinical models. And, we are continuing to make progress in our collaboration on the University of Maryland projects that have application to our existing dendritic cell immunotherapies and their Stem-to-T-Cell technology platforms.

The board and management team are committed to taking the necessary steps to enhance our ability to keep our company funded and operational, and to enable us to continue to advance our development programs and expand our cancer immunotherapy platform. We plan to continue to evaluate opportunities to license or acquire new technology that can further complement and expand our immunotherapy platform.

And, we remain interested in working with pharma companies to explore combination approaches with checkpoint inhibitors and potentially other immunotherapeutic approaches. We are grateful for the continued support of the medical and scientific cancer community and the confidence placed in our company by our collaborators.

We are also appreciative of the continuing interest and support of our stockholders. I personally look forward to having opportunities to meet and interact with you in the coming months.

Now, I'd like to ask David Fractor to review our financial results for the fourth quarter and full year 2016 and then we'll open up the call for questions. David?


David Fractor, ImmunoCellular Therapeutics Ltd. - VP Finance and Principal Accounting Officer [7]


Thank you, Tony. For the year ended December 31, 2016, we incurred a net loss of $22.1 million, or $7.89 per basic and diluted share, compared to a net loss of $12.8 million, or $5.87 per basic and diluted share, for the year ended December 31, 2015.

During 2016, we incurred $19.1 million of research and development expenses compared to $10.9 million in 2015. The $8 million increase reflects the additional expenses associated with the implementation of the phase 3 trial of ICT-107.

During 2016, the company accrued $1.3 million of interest expense related to the California Institute of Regenerative Medicine award, compared to $134,000 in 2015. For the quarter ended December 31, 2016, we incurred a net loss of $6.3 million, or $1.36 per basic and diluted share, compared to a net loss of $4.8 million, or $2.13 per basic and diluted share for the quarter ended December 31, 2015.

We also reported that cash used in operations in 2016 was $19.9 million compared to $19 million in 2015. During 2015, we purchased $2.2 million of supplies and incurred $3.7 million in vendor deposits. During 2016, we utilized $2 million of vendor deposits. As of December 31, 2016, we had $11.4 million in cash and cash equivalents.

In August 2016, we entered into an underwriting agreement with Maxim Group, pursuant to which we received net proceeds of approximately $6.6 million, after deducting the underwriting discount and offering expenses from the initial sale of 863,750 shares of our common stock, base warrants to purchase 881,250 shares of common stock with an exercise price of $7.68 per share, and pre-funded warrants to purchase 311,250 shares of common stock at an exercise price of $0.40 per share. The aforementioned securities were sold at an offering price of $6.40 per unit.

The underwriters partially exercised their option to purchase additional shares and base warrants and purchased an additional 37,500 shares of common stock at a public offering price of $6 per share and base warrants, to purchase 111,965 shares. The pre-funded warrants were substantially paid for at the time of the offering and have an exercise price of $0.40 per share. As of December 31, 2016, we had 3.4 million shares of common stock issued and outstanding.

During 2016, the CIRM award was modified such that ImmunoCellular received an additional $1.5 million in August 2016 as part of the initial award received from CIRM. The total amount of the award and other award conditions remain unchanged.



Anthony Gringeri, ImmunoCellular Therapeutics Ltd. - President and CEO [8]


Thank you, David. Operator, would you please now open up the call for questions?


Questions and Answers


Operator [1]


(Operator Instructions) And our first question comes from the line of Jason Kolbert from Maxim Group. Your line is open.


Jason McCarthy, Maxim Group - Analyst [2]


Hi, guys. It's actually Dr. McCarthy for Jason Kolbert. Two questions. One financial and one related to the ICT-107 study. On the financial side, could you review with us the remaining funding that's available from CIRM? I know it's a significant amount of money, but it is milestone based and if you could review with us what enrollment milestones you need to hit to receive those funds and when you might expect each milestone in terms of enrollment?

And on the clinical side, now that you have a larger study and you've reduced the screening process time, what was different about the prior protocol, was that the longer screening time reduced the ratio of unmethylated to methylated MGMT, from 70-30 down to, it was speculated to be around 50-50. Can you tell me how this new screening process might skew those numbers in terms of enrolling more patients that might progress sooner? Thanks guys.


David Fractor, ImmunoCellular Therapeutics Ltd. - VP Finance and Principal Accounting Officer [3]


Okay. This is David Fractor. I'll review the CIRM question first. Let me just recap what the CIRM award is. It's a total of $19.9 million and it is milestone-driven as you described, based upon patient enrollment. We initially received $4.5 million from CIRM and that was the initial funding. And then, the remaining funds would come in as we achieved milestone-related to patient enrollment.

We went back to CIRM this year and they were kind enough to modify the award such that we received an additional $1.5 million in August of 2016 which was considered to be part of the initial award from CIRM. So we have approximately $14.5 million left to come from CIRM, and that is all will be received as we enroll patients, as we achieve the various milestones that CIRM has established for us.

Right now, we don't have timing on that, because it's all dependent upon specific randomization. I think I said enrollment earlier, but it's really randomization of patients that drives the CIRM award.


Jason McCarthy, Maxim Group - Analyst [4]


Okay. Thank you. And on the clinical side?


Anthony Gringeri, ImmunoCellular Therapeutics Ltd. - President and CEO [5]


Yes. So you're asking about the modifications of the -- included in the protocol amendment, and how they affect the ratio of patients, so let me just say that, we're actually quite confident in the original design of the protocol and the amendment did not change end points or major aspects of our analysis.

However, we did have some logistical issues. And one of the problems was, at the end of this 90 days of screening, we were doing an MRI, which was being used to assess progression and what we learned was that MRI was too close to the chemoradiation treatment to accurately assess whether patients were progressing or not.

And so, two things happened. One was, we were able to move the point of randomization up earlier, which helped us on the manufacturing side and also helped the patients get some confidence that they would be included in the study, and left the assessment of progression to a little bit later in the protocol. It really was progression and not the distribution of patients between MGMT methylated and unmethylated that was the cause of the long screening process previously.

Now having said that, it's obvious that since we're really assessing progression accurately a little bit later, that we will have some patients at randomization who will be progressors. And so that was the reason that we had to increase the number of patients in the trial to compensate for potentially having some progressors early on.

And our estimates were that this would be a relatively low percentage. I won't quote you the exact numbers, but we boosted the number of patients overall in the study by 20% to 25% to account for that increased number of progressing patients. And that really was the entire basis for the protocol amendment. Does that answer your question?


Jason McCarthy, Maxim Group - Analyst [6]


It does. Thank you very much. Very clear. Thank you.


Operator [7]


(Operator Instructions) At this time, I'm showing no further questions.

I would like to turn the call back over to Dr. Gringeri for closing remarks.


Anthony Gringeri, ImmunoCellular Therapeutics Ltd. - President and CEO [8]


Thank you so much. I want to thank everyone again for participating in today's call and webcast. We look forward to continuing to communicate with you investors in the coming weeks and months and to providing you with additional updates on our progress. Thank you very much.


Operator [9]


Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect.