Immunocore Holdings plc (NASDAQ:IMCR) Q4 2023 Earnings Call Transcript
Immunocore Holdings plc (NASDAQ:IMCR) Q4 2023 Earnings Call Transcript February 28, 2024
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Operator: Greetings. Welcome to the Immunocore Fourth Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note this conference is being recorded. I'll now turn the conference over to Clayton Robertson, Head of Investor Relations. Thank you. You may begin.
Clayton Robertson: Thank you, Darryl. Welcome everyone to our Q4 and full year 2023 financial results call. Before we begin, I would like to remind you that this call will contain forward-looking statements within the meaning of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. These include expectation, plans, concerning future events, prospects and performance, including with respect to commercialization, clinical development and trials, regulatory approvals and financial results. Actual events may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those disclosed in our filings with the SEC. And such statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date.
We specifically disclaim any obligations to update such statements. With that, I'm now pleased to introduce Immunocore CEO, Dr. Bahija Jallal.
Bahija Jallal: Thank you, Clay. Hello, everyone. With me today are Ralph Torbay, our Head of Commercial; David Berman, our Head of R&D; and Brian Di Donato, our Chief Financial Officer. We will be happy to take your questions at the end. At Immunocore, we are driven by a clear mission to bring transformative immunomodulating medicines to patients. In 2023, we continue to advance our three strategic pillars of maximizing the potential of KIMMTRAK, advancing our clinical portfolio, and continuing to innovate for sustainable growth. Let's look at the first one. On KIMMTRAK, last year, we achieved $239 million in net KIMMTRAK sales. Going into 2024, we see three growth opportunities. First, continued commercial growth driven by the U.S.; second, mid-term growth driven by Q4 data from TEBE-AM trial; and third, long-term growth with the ATOM trial expected to start recruiting this year.
The second pillar on the portfolio, we continue to advance our clinical portfolio with the announcement of our first PRAME Phase 3 trial in first line advanced cutaneous melanoma. We intend to randomize the first patient in Q1. PRAME clinical data updated melanoma, ovarian and lung will come throughout 2024. In reflecting our enthusiasm for the PRAME targets, we are advancing two new candidates into the clinic this year. In December, we submitted the CTA for a first-in-class candidate targeting PIWIL in colorectal and GI cancers. And we continue to pursue a potential functional cure in HIV with Phase 1 data for the first half or second half of 2024. The third pillar is an innovation. And last month, we announced that we had added two novel tissue targeted autoimmune programs, one for type 1 diabetes and the second for dermatology indications.
You will hear more about each of these exciting programs from David. These additions expand the therapeutic areas we aim to treat to three. And now, I'm happy to hand over to Ralph to share more information about KIMMTRAK. Ralph?
Ralph Torbay: Thank you, Bahija. Hello, everyone. 2023 was a catalyst year for KIMMTRAK. In less than two years, from our first approval, we have transformed medical practice in metastatic uveal melanoma and established its pioneer in TCR medicine as the first line standard of care across all launch markets. We have treated over 2,000 patients globally since the start of our first clinical trial and I'm very proud of this team's achievements and commitment to patients. KIMMTRAK is currently approved in 38 countries and launched and reimbursed in 12. With the publication of KIMMTRAK's long-term three-year overall survival in the New England Journal of Medicine, we continue to raise the bar of survival and I look forward to the impact the team will have in 2024 leveraging the statement.
I will now take you through the figures and financial performance in more detail. For the full year 2023, KIMMTRAK generated $238.7 million in net revenues, which represents a 70% year-on-year growth. In the fourth quarter, we reported $67.6 million in net revenues, which represents an 8% increase from the prior quarter. This growth was primarily driven by continued commercial progress in the United States. In Europe, we launched in six new countries and reached pricing agreements with Italy and Germany. In France, we have been recognizing revenue since day one and have been accruing for an expected negotiated price. In the international region, we signed pricing agreements with Canada and Australia, which we are launching through the first half of the year.
Our goal in 2024 is to continue our growth momentum in the United States and reach more patients globally, including our next country Spain. We're also excited to potentially expand the benefit of KIMMTRAK through additional indications with our clinical program, which I will take you through in the next slide. We believe KIMMTRAK has significant potential for additional growth in the medium and long-term, driven by two registrational clinical trials. The TEBE-AM study builds on the KIMMTRAK Phase 1/2 cutaneous melanoma data that has shown a 76% survival rate at one year with an acceptable safety profile. Enrollment is going well and we expect top-line results from the Phase 2 portion in the fourth quarter of this year. All of the evidence with KIMMTRAK points to our platform being potentially transformative in the early disease settings.
We were honored to work with EORTC to launch the only ongoing registrational adjuvant study in uveal melanoma the ATOM trial. We anticipate randomization to start in the second half of this year. Now, let's bring it all together in the next slide, please. Today, we're only at the beginning of the KIMMTRAK journey where the benefit is focused on 1,000 patients with metastatic uveal melanoma. With the TEBE-AM trial, we see the potential to help 2,000 to 4,000 additional patients with second line plus metastatic cutaneous melanoma. With the ATOM trial, we could be unlocking the early stage uveal melanoma potential and bringing the benefit of KIMMTRAK to up to 6,000 patients across all three indications. On a personal note, I am excited about our future because of this past year.
I had the privilege to meet one of the first patients in our clinical trial, a parent of four that has been taking KIMMTRAK for seven years and is doing well. I also met our first patient in our early access program who remains well and on treatment, and a physician who expanded their practice to handle the volume of patients who are now surviving. These people remind us every day of why we need to persevere in helping patients and advancing the science. I'll now hand it over to David to talk more about our pipeline.
David Berman: Thank you, Ralph. I'm happy to share an update on our clinical stage portfolio and let's start with PRAME. Our PRAME opportunity spans across multiple solid tumors including melanoma, ovarian, lung and endometrial carcinoma. By the end of this year, our franchise will include three clinical programs targeting PRAME including a program for HLA-A02 with a half-life extension, and a program for patients who are HLA-A24 positive. Today, I will focus on the leap program F106C. Across the four major tumor types we are studying with F106C, the melanoma data matured first and provided confidence to launch the Phase 3 PRISM-MEL301. We will share the melanoma monotherapy and anti-PD1 combination data in second quarter. After melanoma, the ovarian monotherapy and chemotherapy combinations have been maturing.
And we are on track to share this data by third quarter. For lung, we are currently enrolling monotherapy and combinations. Unlike ovarian and melanoma, where we enrolled all comers; for lung, we have focused on select subsets where we would expect to see initial signals before expanding more broadly. This data will continue to mature in first half and will be shared by fourth quarter. Additional exploration continues, including endometrial, contract combinations and dose confirmation. Several data points led to the initiation of the Phase 3 trial in first line melanoma, including F106C monotherapy activity in heavily pretreated patients, the ability to combine with anti-PD1 and insights that our platform works best in early stage disease. We have opened clinical sites for the Phase 3 trial and expect to start randomizing patients in the near future.
We are pleased to have a clinical trial collaboration and nivolumab supply agreement with BMS for this trial. I will now turn to highlight the power of our target discovery engine with a novel first-in-class target against PIWIL1. R117C is the first immunotherapy to target PIWIL1, a protein which is expressed in colorectal carcinoma, a tumor that has historically been insensitive to checkpoints. PIWIL is an attractive target since it is not expressed in normal vital tissues, is a negative prognostic marker, and has broad expression in about a quarter of colorectal cancer patients. The CTA in Europe was submitted in December of last year and we are on track to start the trial by the second half of this year. Turning now from oncology to HIV.
In addition to redirecting T cells to kill cancer cells, we believe that technology can be used to redirect T cells to kill virally infected cells. For HIV, the current standards of care of antiretroviral therapy block replication that cannot eliminate the virus, which hides it as a reservoir in CD4 T cells. In the single ascending dose portion of the M113V trial, we demonstrated safety and biomarkers indicating target engagement. The goals of the ongoing multiple ascending dose portion are to demonstrate antiviral activity, including one, reducing the reservoir in blood and two, delaying the viral rebound. As we round out the clinical pipeline, I will transition to highlighting further the versatility of our platform. We validated that our ImmTAC technology can recruit and activate T cells against cancer.
We are using the same T cell activation approach to target HIV and chronic HPV. Today, I will share the third platform called ImmTAAI, which has a different goal of turning off inflammation and is intended to treat autoimmune and inflammatory diseases. The current standards of care for ANI are systemic immune suppression, which can lead to systemic toxicity. Our vision for the future is down modulation of the immune system focused only in the organ or tissue, which is under immune attack. As part of our cancer peptide discovery work, we have been mapping the normal human peptidome. Therefore, when we want to develop a program to downmodulate the immune attack in a specific organ, we have a large preexisting library of peptides that we know are tissue specific.
On Slide 20, you can see our ImmTAAI molecule. The blue targeting end tethers the ImmTAAI to the target tissue. The purple effector end is a PD-1 agonist, which presses on the PD-1 brake to turn off the T cell. There is also an Fc fusion, which prolongs the half-life and enables less frequent dosing. Our first application is for patients with type 1 diabetes, which remains a large unmet need. Type 1 diabetes results when auto reactive T cells kill pancreatic beta cells, which normally secrete insulin. To protect the pancreatic beta cells, we designed an ImmTAAI that binds to a peptide from the preproinsulin protein, which is only expressed in beta cells. The PD-1 agonist effector in will turn off these autoreactive T cells. As seen in the data on the right, we see protection against autoreactive T cell killing only when using an ImmTAAI that tethers to the beta cells.
Our second candidate is for skin inflammatory diseases, including atopic dermatitis and psoriasis among others. We designed an ImmTAAI that binds specific lead to a target that is only expressed on antigen presenting cells in the skin. In a T cell stimulation assay, we observed inhibition of T cells only for an ImmTAAI that tethers to the antigen preventing cell. This candidate has another exciting feature. It is universal and not HLA restricted. This is an example of how our technology can be broadened to all populations. This is certainly an exciting and productive period at Immunocore as we continue to pioneer TCR bispecifics for cancer, for infectious diseases, and now for autoimmune diseases. I will hand over to Brian.
Brian Di Donato: Thank you, David. Good morning, everyone. Earlier today, we released our financial results for the fourth quarter and year-end of 2023. Please refer to the press release and our latest SEC filing on Form 10-K for our full financial results. This is the first time that we report financials as a U.S. domestic filer and the comparisons I will discuss are now all in U.S. GAAP. The accounting difference between U.S. GAAP and IFRS is not significant, less than $1 million net in each of the last three years. I will now share some of the key highlights. In our second year of launch, 2023 has been an impressive year of KIMMTRAK sales, with net revenues growing to $67.6 million in Q4 from $62.6 million in Q3, primarily driven by the 13% growth in the United States.
Total sales for the year at $238 million were an increase of 70% over 2022. As Ralph mentioned, we continue to make best estimate revenue recognition assumptions and associated accruals for France until we achieve final price agreement. In line with the expansion of our portfolio, we have seen R&D and SG&A expenses increase marginally throughout 2023 with a net loss for the year of $55 million or $1.13 per share. We expect expenses to marginally increase in 2024 as clinical development for late-stage PRAME and KIMMTRAK programs accelerate. On Slide 25, you see our net cash position increased to $443 million in 2023. Additionally, in February, we completed a six-year $402 million convertible bond offering with a 2.5% interest rate and net proceeds of $389 million.
We intend to use $50 million of these proceeds to repay our Pharmakon Loan in November, which has a rate of 9.75%. Taken together, after this financing, we estimate a pro forma cash position of $782 million. Our KIMMTRAK sales and current cash put us in an excellent position to transform outcomes for patients by accelerating this portfolio with multiple clinical opportunities across three therapeutic areas. I will now pass back to Bahija.
Bahija Jallal: Thank you, Brian, David, and Ralph. As you have seen, we have multiple data readouts and study starts planned for the remainder of 2024. It will be a very busy year. Reflecting now on the pipeline, Immunocore has an industry-leading bispecific TCR pipeline that now spans three therapeutic areas and reflects the large potential of our impacts platform. In the last five years, Immunocore has evolved from a research organization to a revenue generating, sustainable company. We look forward with excitement to the next five years when we will maximize the value of KIMMTRAK, expect to launch our PRAME targeted therapy, and advance our other programs in oncology, infectious disease and autoimmune disease. Now, the full team will be happy to answer questions. Thank you.
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