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Edited Transcript of IMV.TO earnings conference call or presentation 9-Aug-19 12:00pm GMT

Q2 2019 IMV Inc Earnings Call

HALIFAX Sep 2, 2019 (Thomson StreetEvents) -- Edited Transcript of Imv Inc earnings conference call or presentation Friday, August 9, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Frederic Ors

IMV Inc. - President, CEO & Director

* Gabriela Nicola Rosu

IMV Inc. - Chief Medical Officer

* Pierre Labbé

IMV Inc. - CFO

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Conference Call Participants

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* David Novak

Raymond James Ltd., Research Division - MD & Healthcare Research Analyst

* Joseph Pantginis

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Mayank Mamtani

B. Riley FBR, Inc., Research Division - Research Analyst

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Presentation

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Operator [1]

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Good morning, ladies and gentlemen, and welcome to the IMV Second Quarter 2019 Earnings and Operational Update Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Mr. Pierre Labbé, Chief Financial Officer.

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Pierre Labbé, IMV Inc. - CFO [2]

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Thanks, Ian. Good morning, ladies and gentlemen. My name is Pierre Labbé, and I'm CFO at IMV. And I am happy to welcome you at our second quarter results conference call. Joining me today for the formal portion of the call is Fred Ors, our President and CEO. And afterwards, Ms. Gabriela Rosu, Chief Medical Officer; and Ms. Marianne Stanford, VP, R&D, will be available to answer questions.

Fred will begin with his comments, and I will then carry on with the financial highlights.

Before we begin, I would like to remind you that except for historical information, this presentation contains forward-looking statements, which reflects IMV current expectations regarding future events. These forward-looking statements involve known and unknown risks and uncertainties 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 approvals and other risks detailed from time to time in our ongoing quarterly filings and annual information form. The forward-looking statements made on this call are based on several assumptions which may prove to be incorrect, and they represent views only as of the date of this call 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 audited annual consolidated financial statements, which are available on SEDAR and on EDGAR.

The press release, the MD&A, the consolidated financial statements and a copy of today's presentation are all posted in the IMV's website at imv-inc.com. If you wish to receive a copy of either of these documents, please do not hesitate to contact us.

Finally, take note that we will take questions only from sell-side financial analysts. Fred will now start with his comments. Fred?

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Frederic Ors, IMV Inc. - President, CEO & Director [3]

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Thank you, Pierre, and good morning, everybody. The DPX-Survivac program continues to be a major revenue driver for IMV with its unique mechanism of action providing significant industry differentiation and the potentially much-needed innovation for hard-to-treat cancers, both as monotherapy and in combination with other agents.

Supporting these cases, in the second quarter, we reported important clinical updates on 2 Phase II studies. And I will start with the Phase Ib/II DeCidE1 clinical study in advanced recurrent ovarian cancer. In early June, we presented at the American Society of Clinical Oncology, ASCO Annual Meeting and updated data in relation to safety and efficacy of DPX-Survivac and intermittent low-dose cyclophosphamide with and without epacadostat. These results expanded on previously reported data, which exhibited activity in our target population with non-bulky disease and long duration of responses.

Highlights from available patients in the Phase II monotherapy arm of the trial included 5 out of 7 patients showing signs of treatment benefits, including a reduction of target lesions in 2 patients; 3 out of 4 patients with low tumor burden showed stable disease, including 2 tumor regressions at the first CT scan; of the 5 available patients for T cell responses, all showed survivin-specific T cell activation in the blood; and treatments were well tolerated, supporting our views of the favorable safety profile of our approach.

Additionally, longer-term follow-up data from the Phase Ib portion of this study continued to demonstrate the prolonged duration of clinical benefits, surpassing 2 years of progression-free survival from previous treatments, including platinum-based chemotherapy.

Looking ahead, I'm pleased to confirm that we have now enrolled 16 additional patients of the expanded monotherapy arm, and that time, we expect to provide a top line clinical results from this study before the end of 2019.

We anticipate having both monotherapy, and in combination with Keytruda, preliminary readouts by the end of the year. And we believe that comparing both datasets will allow us to make an informed decision on the best clinical path forward and longer-term strategic options.

I will now continue with an update on the Phase II SPiReL study in relapsed/refractory diffuse large B-cell lymphoma or DLBCL, which assesses DPX-Survivac in combination with intermittent low-dose cyclophosphamide and Merck's Keytruda.

We are very pleased of the results made public in June. At the first on-treatment interim assessment, 5 of the first 6 patients demonstrated clinical benefits, including 4 patients with tumor regressions. Out of the 5, 2 patients reached a complete radiological response, 1 exhibited a partial response and 2 were considered stable disease. In addition, the study continued to demonstrate an acceptable safety profile for the 2 therapies in combination.

Looking forward, based on this promising data, IMV has agreed with the principal investigator and Merck to increase the number of sites recruiting patients for the study from 5 to 9.

As of August 6, investigators had enrolled 12 patients across 4 different clinical sites in Canada. As a reminder, the study targets enrollment of 25 patients. We are confident that this preliminary promising results will draw attention to the study and help accelerate enrollment.

As we speak, additional patients are being screened, and IMV expects to provide another update on this trial before the end of 2019 and report top clinical data from this study in the first half of 2020.

I will now provide an update on the Phase II basket trial of DPX-Survivac in combination with Keytruda in multiple solid tumor indications, which covers 5 cohorts of patients with either bladder, hepatocellular carcinoma, ovarian, non-small cell lung or solid tumors shown to be positive for the microsatellite instability high biomarker, MSI-H.

Considering all cohorts, as of August 6, 9 clinical sites were opened and 15 patients have been enrolled across the 5 indications. There are also 9 sites initiation, visits are already scheduled that will bring the total active sites to 18 in the short term.

It is also noteworthy to mention that we have successfully passed the safety reading, and that the plan [falls] for the Data Safety Monitoring Board review has occurred, and that the trial can now recruit without any restriction.

Patients are being treated in every cohort and highly expect to report preliminary clinical results on several of the solid tumor indications, including in the basket trial before the end of 2019. This concludes my review. I will now turn the conference over to Pierre and be back with my closing statements and for the question period. Pierre?

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Pierre Labbé, IMV Inc. - CFO [4]

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Thank you, Fred. Before reviewing the quarterly and year-to-date figures, I first would like to mention that on the Investor Relations front, we recently hired Stern IR out of New York City to help us optimize our reach in the U.S. Stern brings years of experience to the table and has a specific understanding and focus in the immuno-oncology space. This should prove to be very valuable identifying and targeting new investors and drawing additional attention to IMV, and we look forward working with them in the future.

Moving to the financial review. First, you need to keep in mind that all the numbers I will be discussing are in Canadian dollars. The net loss and comprehensive loss of $5 million per share for the 3 months period ended June 30, 2019, was $200,000 lower than the net loss and comprehensive loss for the comparative period in 2018. This decrease is mainly explained by a $400,000 decrease in G&A expenses and a $900,000 increase in government assistance before partly compensated by a $1.2 million increase in R&D expenses for the 3 months period ended June 30, 2019.

For the 6-month period ended June 30, 2019, the net loss and comprehensive loss of $11 million was $2.7 million higher than the net loss and comprehensive loss of the period ended June 30, 2018. The increase since the beginning of the year relates mainly to a $3.3 million increase in R&D expenses and a $0.2 million increase in G&A expenses that were partly compensated by a $1 million increase in government assistance in the 6 months period ended June 30, 2019.

The increase in R&D expenses compared to 2018 is mainly attributable to increased clinical activity, including expenses relating to the basket trial and the increase in manufacturing activities to support the increased clinical activity.

As of June 30, 2019, the corporation had cash and cash equivalent of $26.9 million and a working capital of $28.3 million compared to $14.9 million and $12.2 million, respectively, as of December 31, 2018. Management believes that the Corporation's cash resources of $26.9 million and its additional potential cash resources of $3.1 million will be sufficient to fund operations up to Q4 of 2020.

For the 6 months period ended June 30, 2019, IMV's cash burn rate that is defined as the net cash flow used by operating activities before changes in noncash working capital items was $10.4 million as per the statement of cash flows. Based on the current business plans and the corporation forecasts the quarterly cash burn rate to be between $5 million and $6 million for the remaining of 2019.

And with respect to the capital structure, I want to mention that during the quarter, we successfully renegotiated the terms of the $5 million loan with the province of Nova Scotia. Before this recently signed modification, this loan was entirely payable on August 9, 2020. We will now pay this loan over 5 years by doing monthly payments starting in January 2021 with all other terms remaining the same. This new repayment schedule provides us with a greater financial flexibility and will allow us to devote our cash resources towards development of our clinical program. And we want to take this opportunity to thank the government of Nova Scotia for their continued support.

And finally, as of August 7, 2019, the number of issued and outstanding common shares was 50.6 million, and there was a total of 2 million stock option warrants and DSU are outstanding at that date.

And as a reminder, you can find the corporation's unaudited interim condensed financial statements and the MD&A on SEDAR and on EDGAR.

And thank you for attention, and I will now turn the call back over to Fred for his closing comments before the question period. Thank you. Fred?

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Frederic Ors, IMV Inc. - President, CEO & Director [5]

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We are pleased at the steady progress we have made this far in 2019 across all our clinical programs, and we look forward to reaching significant clinical milestones by the end of the year. With multiple Phase II ongoing in 6 different indications, both as monotherapy and in combination with Merck's Keytruda, we have successfully developed one of the most advanced and comprehensive clinical pipeline in immuno-oncology. We have valued and promising preliminary clinical results highlighting the potential of our targeted T cell therapy and hard-to-treat solid and blood tumors, and we are approaching Phase II inflection points. Our teams are now focusing on preparation for the next stage of growth, which is to be ready in 2020 to move into pivotal trials to support our first market approvals. We believe our first-in-class targeted T-cell therapy has the potential to offer an unprecedented combination of favorable safety/tolerability profile with long-lasting clinical benefits. And we are committed to bring this new treatment option to cancer patients with a sense of urgency.

We are grateful for the continued support of our shareholders and partners and look forward to a very productive remainder of 2019.

Thank you for your attention. Operator, we are now ready to take questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question is from Joe Pantginis from H.C. Wainwright.

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Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [2]

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Obviously, you put out a lot of encouraging data in June, and we're looking forward to the year-end updates from few studies here, so it should be interesting. So what I wanted to focus on is as you're expanding these studies right now with additional patient, can you describe or discuss your experience with patient screening? For example, in the ovarian study, how is it going screening patients for the baseline tumor burden? And then maybe any other comments for screening in the other studies? Is it going according to plan? Are you happy with what you're seeing? And are you seeing any potential bottlenecks?

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Frederic Ors, IMV Inc. - President, CEO & Director [3]

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Thanks for being on the call and the question. Well, what you can see from year-to-date that we've managed to enroll all the patients we needed to have in the final portion of the Phase II study with nonbulky disease. We -- there were some lead time to amend the trial at the beginning because it was not something that was anticipated, it's something that we discovered along the way, but we're very happy we discovered it. And our experience with screening those patients is in line with the number of patients we had before, which was more than 30% of the patients showing nonbulky disease.

And as we said before also, we want to make sure people understand that the nonbulky disease is also a fact of how far are the patients in treatment. So everybody, every patient, at some point, had nonbulky disease and really it's a question for us of applying immunotherapy where it has the greatest chance of providing benefits to patients, so it's pretty much in line with our expectation.

As for the other solid tumor and the basket trial and the DLBCL trial, we have been positively surprised by the number of patients showing survivin expression based on the literature that was anticipated to be around 60% for DLBCL, but it's much higher at this point. And we'll have to see when we have more patients in the basket trial if we sign the same situation where we end up having a higher number of patients with survivin expression. I don't know if Gabriela, you want to add something.

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Gabriela Nicola Rosu, IMV Inc. - Chief Medical Officer [4]

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Yes. So regarding the basket trial enrollment, we have 15 patients that are enrolled. And we -- according to the protocol, the enrollment was stopped at one point in time for the safety assessment, and I had a very positive meeting with the DSMB, with the Data Safety Monitoring Board 2 weeks ago. And after that meeting, we restarted the enrollment and we have got about 6 patients in screening. We have 9 sites also for the basket trial, and in September only, we have 6 site initiation visits planned. So we will have another 6 sites added in a very short time plus probably another 3 or 4 sites that will be added in the next 6 weeks. So we are on track. And in terms of SPiReL, we also plan to increase the number of sites as well. So that will bring -- will enlarge the pool of the patients to be enrolled.

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Operator [5]

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The next question is from Mayank Mamtani from B. Riley.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [6]

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Congrats on the progress. I think my follow-up to the previous comment -- I think the question that really comes is that there are 18 patients you were able to enroll pretty quickly. And for the Phase II basket study, there has been 15. I'm just curious -- I think you mentioned somewhere there were some restrictions in the basket study, maybe because it's a combination therapy regimen. Could you maybe talk about what those restrictions were? And how that may have changed after the positive DSMB meeting you had 2 weeks ago?

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Frederic Ors, IMV Inc. - President, CEO & Director [7]

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Gabriela?

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Gabriela Nicola Rosu, IMV Inc. - Chief Medical Officer [8]

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So you -- I just want to summarize the question. You are mentioning some restrictions in enrollment? Can you be a little more clear?

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [9]

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Yes. I think a comment was made that basket study may have had restrictions for enrollment. So I was just curious, like, if that is the case, what were they relative to the monotherapy study? And then how did the DSMB meeting help or hold that, if at all?

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Gabriela Nicola Rosu, IMV Inc. - Chief Medical Officer [10]

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Sure. So according to the protocol, we had to stop enrollment because this is a new combination in this indication. We wanted to make sure that the safety profile is better. So we stopped enrollment after 15 patients. The Data Safety Monitoring Board assessed the safety profile of the treatment so far, and they considered it positive. So we restarted the enrollment 2 weeks ago after the positive results with the Data Safety Monitoring Board. And right now, we're enrolling as normal.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [11]

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Okay. Great. And then on the sites, the geography for some of these sites, I mean could you comment on which ones are in -- for trials that you have going on, the 3 trials, which are focused exclusively on Canada versus which have sites in the U.S. also?

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Gabriela Nicola Rosu, IMV Inc. - Chief Medical Officer [12]

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So we do have sites in the U.S. and in Canada, probably more sites in U.S. than in Canada. And I don't have the list in front me. But if you're interested, I can certainly give you a list for the site. But for now, we are focusing in U.S. and in Canada.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [13]

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Okay. Excellent. And I understand you don't want to be more specific with the data time line guidance, but could you point to any medical conference that we should be looking out for? And there are a number of oncology conferences, as you know, in the coming months, any color there?

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Gabriela Nicola Rosu, IMV Inc. - Chief Medical Officer [14]

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Yes. So we have been -- we -- sorry, we have the poster accepted at ESMO at the end of September with preliminary results in the basket trial. And we are -- sorry, you're asking only about the basket trial or for the whole programs?

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [15]

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For all the programs. Yes.

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Gabriela Nicola Rosu, IMV Inc. - Chief Medical Officer [16]

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Yes. So the basket trial, we will have a poster and we already got the answer that it was accepted at the end of September, and we have submitted an abstract for ASH with the data from SPiReL. And ASH will take place at the beginning of December. And we don't have yet the answer if the poster was accepted or not, but the deadline in application was, again, 2 weeks ago or a week ago, August 3, so it's quite early.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [17]

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Great. We look forward to that. And Pierre, last question for you. The cash run rate, what would you say is the most recent guidance and where the current run rate takes you?

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Pierre Labbé, IMV Inc. - CFO [18]

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Yes. Like I mentioned in the call, it hasn't changed. We have cash up to Q4 of 2020.

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Operator [19]

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The next question is from David Novak from Raymond James.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [20]

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Really just looking to get a feel here for enrollment run rate. So starting off with the DeCidE1 monotherapy expansion cohort, you've now fully enrolled the 16 expansion patients. Could you just clarify whether these 16 patients are all with lower baseline tumor burden?

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Frederic Ors, IMV Inc. - President, CEO & Director [21]

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Yes, they are.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [22]

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They are. Okay. Great. So at ASCO, of the 7 monotherapy patients that we got data from, only 4 of them had lower baseline tumor burden, does that mean 3 had switched over from an epacadostat arm?

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Frederic Ors, IMV Inc. - President, CEO & Director [23]

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No, it was a different. So the patient that were presented at ASCO were coming from the first part of the Phase II study, which was originally designed to compare our product as monotherapy with our product in combination with epacadostat. And I know this -- as you know, this comparison was stopped because we couldn't find any benefits coming from epacadostat. And at that time, we met with FDA and amended the trial to include an additional arm that would be only monotherapy, only low tumor burden. So those are the 16, and there were no data on the 16 at ASCO. This will be all new additional data coming, and this was the kind of the agreement that we had with FDA that we needed to confirm the results that we saw in the low tumor burden with an additional 16-patient arm.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [24]

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Got you. So if we're looking in aggregate patients that have been treated with DPX-Survivac monotherapy, we then would have a cohort of 23 patients in total, is it correct?

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Frederic Ors, IMV Inc. - President, CEO & Director [25]

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Correct. Yes.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [26]

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Okay. Got you. Good. Okay. Moving onto the SPiReL trial, it's looking like only 1 additional patient's been recruited since early June. Could you maybe provide some color around when these additional 4 sites were brought online?

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Frederic Ors, IMV Inc. - President, CEO & Director [27]

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We want to be careful commenting on that because there is many factors that's -- are influencing opening of the sites, especially the review board, their availability and all of that. The only thing I can repeat is that which -- there's a very strong willingness and motivation from all partners on this trial, all which are principal investigator at Stony Brook Hospital and Merck. And together, we are really doing everything we can, obviously, within the perimeter of the clinical protocol to get those sites open as soon as possible. But we do believe that, like I said in my comments that the excellent results that we got is going to also generate interest from patients and will increase the number of patients we are screening.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [28]

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Okay. Great. And just lastly on the basket trial. So when did you guys actually stop enrollment? I'm just trying to understand whether or not these 15 patients mentioned in today's prepared remarks are actually the same-sized cohort as of the Q1 update?

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Frederic Ors, IMV Inc. - President, CEO & Director [29]

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So I don't remember that we mentioned the number of patients in the Q1 update. But it was just a question of like Gabriela explained, it's a -- it was a new combination in those indications. And it's just a normal practice to have a safety reading. And as soon as we reach those -- the minimum number of patients treated to have the DSMB review, it was done. And now all the trial is -- all the sites are open, and we're opening new sites, like we said, without any restriction on the enrollments for safety reading.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [30]

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Fair enough. Could you give us any idea as to sort of the duration of that period of time when patients were not being enrolled? Is it a matter of days, weeks, months, and like how should we be thinking about that?

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Frederic Ors, IMV Inc. - President, CEO & Director [31]

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Gabriela, can you give some color on the process...

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Gabriela Nicola Rosu, IMV Inc. - Chief Medical Officer [32]

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Yes. If they were -- I think it was a couple of weeks, 2 or 3 weeks.

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Pierre Labbé, IMV Inc. - CFO [33]

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Yes. And just to add on that, in the Q1 update, I think there was -- I am looking for the numbers, but I think, we added almost 10 patients since Q1 update, David.

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Operator [34]

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Thank you. And I'm showing no further questions at this time. I would like to turn the conference back to Mr. Fred Ors.

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Frederic Ors, IMV Inc. - President, CEO & Director [35]

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I don't have any sort of comments. I just want to thank everyone for attending us on this call today.

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Operator [36]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating and have a wonderful weekend. You may all disconnect.