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Edited Transcript of IMV.TO earnings conference call or presentation 22-Mar-19 12:00pm GMT

Q4 2018 Imv Inc Earnings Call

HALIFAX Mar 27, 2019 (Thomson StreetEvents) -- Edited Transcript of Imv Inc earnings conference call or presentation Friday, March 22, 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

* Pierre Labbé

IMV Inc. - CFO

* Stephan Fiset

IMV Inc. - VP of Clinical Research

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Conference Call Participants

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* Andre Uddin

Mackie Research Capital Corporation, Research Division - MD of Healthcare Research

* David Novak

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

* Douglas W. Loe

Echelon Wealth Partners Inc., Research Division - Analyst of Healthcare and Biotech

* Endri Leno

National Bank Financial, Inc., Research Division - Associate

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the IMV 2018 Earnings Call. (Operator Instructions) And as a reminder, today's conference call is being recorded. I now like to turn the conference over to Pierre Labbe, Chief Financial Officer. Please go ahead.

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Pierre Labbé, IMV Inc. - CFO [2]

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Thank you, Kendall. Thanks everyone for joining our conference call today. My name is Pierre Labbe, I'm CFO at IMV. Joining me on the call today, we have Fred Ors, our CEO; and also during the Q&A -- answer session, Stephan Fiset, our VP Clinical Research will be available to answer your questions.

Before we begin, I would like you to remind that except for historical information, this presentation contains forward-looking statements, which reflects IMV 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 and annual information form. This information -- this forward-looking statement in this -- is also based on a number of assumptions, which may be proved to be incorrect.

Forward-looking statements contained in this presentation represent views only as of the date of this presentation and are presented for the purpose of assisting potential investors in understanding IMV's business and may not be appropriate for other purposes. IMV does not undertake to update forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation.

Investors are cautioned not to rely on these forward-looking statements and are encouraged to read IMV's continuous disclosure documents, including its current annual information form as well as annual consolidated financial statements, which are available on SEDAR and on EDGAR. I will now turn the call over to Fred, our CEO.

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

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Thanks, Pierre. Good morning all, and thank you for joining us this morning. I will start with a clinical update and expected milestones, cover the year-end review and our clinical development programs and other business highlights. And then I will hand it back to Pierre for a review of our financial results.

Let me start first by providing a clinical update on our main programs. The first 13 patients with advanced recurrent ovarian cancer have been enrolled in the Phase II portion of the Phase 1b/2 DECIDE trial. Six patients were randomized on DPX-Survivac monotherapy and 7 on the DPX-Survivac /epacadostat combination. The 7 patients in the epacadostat arm were enrolled before the company decided to stop the dosing with epacadostat. The company is planning to provide an update on the preliminary clinical data by the end of Q1 2019. Enrollment of at least 15 additional patients in the subpopulation with lower tumor burden is ongoing and the company is planning to provide another clinical update on this call in Q2 2019.

In the Phase II combination with Keytruda in relapsed/refractory DLBCL, 7 patients have been enrolled and treated across 4 different clinical sites in Canada. Additional patients are being screened and IMV expects to report updated clinical data in Q2 2019.

Finally, in the Phase II Basket Trial in combination with Keytruda in multiple solid tumors, screening and enrollment of patients is ongoing at multiple clinical sites across U.S. and Canada for patients with bladder, liver, ovarian or non-small cell lung cancer as well as tumors shown to be positive for the microsatellite instability high biomarker.

The first patients have been dosed in ovarian and lung cancer cohorts and IMV expects to report preliminary clinical results on several of the solid tumor indications before the end of 2019.

Now, I'm moving to fourth quarter and 2018 review. It was a busy year for the company both clinically and operationally. In our clinical programs, we updated DECIDE Phase Ib data in advanced ovarian cancer via an oral presentation at the 2018 ASCO meeting and topline data at the 2018 ESMO-IO meeting.

Based on these data, we opted to develop DPX-Survivac as a monotherapy in certain cancer patients defined by baseline tumor size. Additional analyses were conducted that correlated DPX-Survivac's novel T cell mechanism of action with clinical responses. We met with the U.S. Food Drug Administration and submitted an updated DECIDE trial protocol. In addition, IMV discussed with the FDA the need for accelerated approvals in advanced ovarian cancer and received guidance on clinical design considerations for different lines of therapies and platinum-sensitive and resistent patients.

We obtained first clinical data from the combination of DPX-Survivac and mCPA with Keytruda in the SPIREL trial, which came from an investigator-sponsored Phase II trial in patients with persistent or recurrent/refractory DLBCL, data from the combination signaled significant anti-cancer activity in 3 of the first 4 available patients as well as tolerable safety profile.

Finally, we announced collaboration with Merck, the Phase II basket trial evaluating DPX/Survivac combination with Keytruda in patients with select advanced or recurrent solid tumors across 5 different indications.

Now, moving into the operational highlights. We are also pleased to have made some significant advancement on that front. We completed 2 public offerings in February 2018 and March 2019 for a total of approximately $43.9 million. We are listed on NASDAQ and commenced trading on NASDAQ on June 1, 2018. We changed the name of the company to IMV to better reflect the true mechanism of action of our platform and the potential of our therapeutic candidates. We added 2 seasoned biotechnology executives to our Board of Directors, Julia Gregory and Dr. Markus Warmuth. And finally we continued to expand the management team, opened a new facility in Dartmouth, Nova Scotia and that nearly tripling the functional workspace and with upgraded facility and equipment as well as increasing the laboratory size to support long-term growth of the company.

With that as an update, I will now have Pierre review our financial results. Pierre?

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Pierre Labbé, IMV Inc. - CFO [4]

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Thank you, Fred. Please keep in mind that all of the numbers that I will be discussing are in Canadian dollars. The net loss and comprehensive loss for 2018 was $21.9 million or $0.50 per share. This is $9.9 million higher than the net loss and comprehensive loss for 2017. It is mainly explained by the increase in R&D expenses for $6.9 million in 2018 and this -- these increases are mainly due to higher enrollment in the Phase 1b/2 for the Incyte trial in ovarian. We also had milestone payments for the Phase II study in DLBCL and expenses related to the initiation of the basket trial.

The increase is also attributable to manufacturing activities to support the increased clinical activity in 2018, which includes purchasing of raw materials and CMO cost.

G&A expenses increased by $2 million in 2018 compared to 2017 and this increase is mainly due to the various expenses related to the NASDAQ listing that are nonrecurring expenses. We also have filing of a shelf prospectus and we also had an increase of our insurance premiums for the D&O following the Nasdaq listing.

BD and IR expenses increased by $0.8 million for the year ended December 31, 2018 compared to 2017 and this is mainly explained by the fact that we hired at the beginning of 2018, Joe Sullivan as our Senior VP Business Development and we also added Marc Jasmin as our Senior Director of Investor Relations and Communication in November 2018.

As of December 31, 2018, we had cash of $14.9 million, which in fact is exactly the same amount that we had at the end of 2017 but it does not include the $29.5 million financing that was closed in March this year. For 2018, our cash burn rate was $18.4 million and cash burn rate for us is defined as the net loss adjusted for operations that are not involving cash.

And we expect that the R&D expenditure are -- will increase over time due to the continuing development of product candidates and other clinical, preclinical and regulatory activities

and we expect our cash burn rate to be around $25 million for 2019.

As of March 21, 2019, the number of issued and outstanding common shares was 50.6 million shares and we also had 2 million stock options, warrants and deferred shares units outstanding. And just as a reminder, that our corporation's audited annual consolidated results of operations, financial condition and cash flows for the year ended December 31, 2018 and the related MD&A are available on SEDAR and also on EDGAR. I will now turn the call back over to Fred for his closing comments. Fred?

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

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Thanks, Pierre. 2018 was transformative year for the company. Importantly, we made great progress clinically and now we better understand DPX-Survivac mechanism of action and where it can be best applied for the greater benefits of the patients.

With our strong financial situation, we believe that we are better-than-ever positioned to realize the value of our best-in-class T cell therapy activity for cancer patients, our employees and our shareholders. We think the next 9 months will be viable too for IMV and we look forward to updating you on these additional events.

Thank you for being on today's call. We are now ready to take your questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from David Novak of Raymond James.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [2]

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Just a couple, really simplistic ones for me, I just want to make sure I'm on the same page as you guys for everything here. The first 13 patients enrolled in the DECIDE trial prior to the protocol amendment, the patients in the epacadostat arm, were they treated with 100 mg or 300 mg?

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

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David, it was 300 mg.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [4]

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300, perfect. And the 6 patients in the monotherapy arm, these were not selected for baseline tumor burden. But do we have any indication at this point in time as to how many might have had BTB of less than 5 cm at first dose?

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

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Yes, we do. And it's going to be in the upcoming update.

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David Novak, Raymond James Ltd., Research Division - MD & Healthcare Research Analyst [6]

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

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

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It's actually 16 patients in the subpopulation.

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Operator [8]

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

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Andre Uddin, Mackie Research Capital Corporation, Research Division - MD of Healthcare Research [9]

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Fred, I just was wondering -- I was looking at your recent presentations and you've taken the infectious disease programs out of there. And I'm just wondering if you can provide an update on your RSV vaccine? If you're developing a bull at all? And what happened to your Leidos partnership for your malaria vaccines? If you could just provide an update on those if you're dropping number of your moving this forward?

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Frederic Ors, IMV Inc. - President, CEO & Director [10]

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Thanks for this question. No, we've not dropped any of these programs. So all those programs are still ongoing. It's the -- the updated business strategy that we implemented back in 2017 originally to focus the company cash flows and resources in immuno oncology especially in terms of clinical trial. But at the same time, look for a potential partners and collaborators that could continue development of the infectious diseases program that we have and this is what we have been doing since then. And the Liedos collaboration and the RSV program, we are still making progress with collaborators and the goal of the company remains the same, it's being in a position at some point to enter into a fully meaningful partnership for the company in all or some of these programs down the road.

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Operator [11]

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(Operator Instructions) And our next question comes from Endri Leno of National Bank.

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Endri Leno, National Bank Financial, Inc., Research Division - Associate [12]

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Just a couple for me. First on the lymphoma trial, how many patients are being targeted as an overall enrollment for that one?

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Frederic Ors, IMV Inc. - President, CEO & Director [13]

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The size of the Phase II -- total size of the Phase II is 25 patients.

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Endri Leno, National Bank Financial, Inc., Research Division - Associate [14]

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Okay. And is it apart from -- do we know how many have been enrolled so far? Is that something you can share with us?

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Pierre Labbé, IMV Inc. - CFO [15]

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Yes. We have 7 patients enrolled so far.

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Endri Leno, National Bank Financial, Inc., Research Division - Associate [16]

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

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Frederic Ors, IMV Inc. - President, CEO & Director [17]

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

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Operator [18]

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

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Douglas W. Loe, Echelon Wealth Partners Inc., Research Division - Analyst of Healthcare and Biotech [19]

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Just wanted to focus on the basket trial just for a second here. I just -- may be just for common consumption I know we've talked about that trial before, but as we all know your survivin over-expression is pretty ubiquitously observed in number of different cancer forms and you've specifically focused on 5 solid tumor markets and basket. Can you just walk us through the rationale for why those specific cancer indications were selected in the trial? I'm guessing that sizable proportion of them are either in active testing for Keytruda itself? Or in fact Keytruda is approved for those markets? And it's just some interest from you and Merck to explore the additive or synergistic impact of the DPX-Survivac in those markets? But if I may, is there any other scientific underpinnings that sort of justify the indications in the trial that might be relevant for us to understand DPX-Survivac's broad spectrum clinical prospects? That will be helpful and I will leave it there.

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Frederic Ors, IMV Inc. - President, CEO & Director [20]

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Thanks Doug for the question. Yes it was a combination of [different things] as you can imagine but definitively first and foremost, the potential role of survivin in the cancer and how many patients are actually over-expressing survivin. And I can let Stephan explain how we do select patients for some of those indications where it's not 100%. I'll just remind you that in ovarian cancer, it's 100% of patients are over-expressing survivin. So we don't need to screen for patients but that's a bit different from the indication in the basket trial. So the main consideration outside of the potential role of survivin and under the percentage of patients were related to obviously discussions with Merck and their level of interest in different markets considering that the current level of activity of Keytruda in those markets and the potential for being challenged by other combinations. And for us, on our side was also some market consideration. We have very much liked the fact that we have lung in this basket trial. As you may be aware lung is by far the largest indication for checkpoint inhibitors and for Keytruda. So a very significant market and another consideration was also to look at a growth spectrum of activity of PD-1. So you have low level of activity like ovarian and you've got -- you have higher level of activity like MSI-high and the goal for us is really to understand what is the best path really for DPX-Survivac going into combination with checkpoints and getting from our first trial in combination a good understanding of where we can best apply our products and technology. And maybe Stephan if you could just explain for Doug what's in place for survivin for some indication on how we select...

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Stephan Fiset, IMV Inc. - VP of Clinical Research [21]

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Yes. Well, thank you, Fred. Actually, we do have developed an assay collaboration with the vendor to screen for survivin expression, and I just want to remind that the survivin expression that has been reported is mainly in the latter time of diagnosis. But when the patient is progressing, more and more tumor are overexpressing survivin and still we are screening for survivin expression on all patients that are entering the trial.

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Operator [22]

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