Q3 2022 Immunic Inc Earnings Call
Our Chief Scientific Officer, and Doctor Andreas <unk>, our Chief Medical Officer on the line.
Please note that all participants were the listen only mode and can see Memphis being recorded.
After todays presentation, there will be an opportunity to ask questions. If you're trying to webcast via the zoom platform. There are two ways to submit questions. You can submit your questions in writing via the Q&A two opposite portal or if you would like to speak with US directly. Please use the raise hand function at the June quarter, two quick questions.
Before we begin I would like to remind you that this presentation may contain forward looking statements such statements can be identified by words, such as May will expect anticipate estimate I'll watch with a similar meaning and such statements involve a number of risks and uncertainties that could cause actual results to differ materially materially from.
Those discussed here.
Please note that these forward looking statements reflect immune opinions only as of the date of this presentation and undertake no obligation to revise or publicly release the results of any revisions to these forward looking statements in light of new information or future events.
Please refer to our SEC filings for a more detailed description of the risk factors that may affect immunity laws. These forward looking statements.
I would now like to turn the call over to our CEO and president of <unk> and is set to open the presentation. Daniel. Please go ahead, yes. Thank you Jessica.
I also would like to welcome everybody.
Third quarter 2022 earnings call.
Earlier this morning, we announced our financial results for the quarter ended September 32022 highlighted recent activities as well as upcoming milestones related to our clinical development pipeline.
During today's call, we will walk through our third quarter 2022, and subsequent highlights financial and operating results.
Well as anticipated milestones.
Statistical noticed before we close the call you will have the opportunity to ask questions.
Let me move to a more detailed review of the recent quarter, including more deliberately operational updates.
Earlier in the quarter <unk> decided to step down from our board of directors. After six years of valuable service at the same time, we announced the appointment of a retrenching.
Our industry and industry executive with 20 years of global commercial excuse in the United States and ex U S markets to our board of directors.
Maria has become a key contributing member and we are thankful for their guidance and support.
With respect to <unk>, <unk> six or already available.
And systemically active small molecule modulator market share restoration of intestinal barrier function and regeneration.
We were pleased to have strengthened our IP to succeed by receiving notice of allowance from the U S patent and trademark office for a key patent covering composition of matter of <unk>, six and related pharmaceutical compositions.
This is expected to provide protection into at least 2038 without accounting for potential extension.
Okay.
In September 2022, we reported positive Greenlanders response from the single and multiple ascending dose part of our phase one clinical trial of <unk> hundred six in healthy human subjects. The data reveals a favorable safety tolerability and pharmacokinetic profile for <unk> six and <unk>.
Unfortunately multiple dosing.
No maximum tolerated dose was reached and investigated doses were expected to exceed the required therapeutic dosing of <unk> expenses.
The results support our ultimate vision of establishing <unk> as a potential first in class borrow celiac disease therapy.
I'm sure. It's five six Mccann some of action could present, an entirely new approach to treating a significant number of series and widely prevalent gastrointestinal diseases, and we believe it could potentially offer a clinical benefit without the serious consequences associated with many current immunosuppressive therapies.
Yeah.
Going forward, we are on sound financial footing, having significantly bolstered our balance sheet in October with a closing of a $60 million pipe financing. This financing extends our runway through multiple value creation.
Inflected.
Flexion points into the fourth quarter of 2024.
Finally last month, we conducted an interim analysis of our phase one clinical trial of <unk> 95 in patients with moderate to severe psoriasis.
Unfortunately, the group level, new data did not show a benefit of two active doses tested compared to placebo.
Although the active arms performed in line with prior expectations with trial experienced a greater decrease unexpectedly clumsy in the placebo arm.
Administration of <unk>, 95, and placebo were safe and well tolerated and no safety signals have been observed.
The trial is ongoing and remains blinded and we look forward to a full analysis, including pharmacokinetics and Biomarkers.
Which would which should allow us to better understand his early observations and to determine the best next steps for this key program. We plan to provide further updates and guidance on potential next steps in the first quarter of 2023.
I would like to reiterate as noted in today's release that these results. Both that is response, both disappointed and surprised us at the same time.
However, based on the totality of data available and the volume of evidence generated thus far.
For the potential efficacy of <unk> two five we retain a high degree of conviction that <unk> 95 has the potential to be safe and efficacious and important treatment option for patients with psoriasis and other chronic inflammatory and autoimmune diseases.
Given these were only the first two dose levels of <unk> tested in psoriasis patients and also based on the drug's very favorable pharmacokinetics safety and Tolerability profile to date.
We have the flexibility to explore different parameters and future clinical testing, including higher dosing and longer treatment periods.
That concludes our summary of the third quarter 2022, and recent subsequent products.
Yes.
Thank you Daniel I will now review the financial and operating results for the third quarter ended September 32022.
Let me start with the cash overview.
We ended the third quarter was $72 8 million in cash and cash equivalents as Daniel stated earlier. These funds combined with the $56 4 million of net cash raised in our pipe financing in October 'twenty, two should be sufficient to fund operations into the fourth quarter of 2024.
Regarding the operating results.
Research and development expenses were $16 5 million for the three months ended September 32022, as compared to $15 5 million for the three months ended September 32021.
These costs were mainly driven by external development costs related to the ongoing clinical trials. The Bureau fleet of MS. Calcium IME 93, five and <unk> 90, 856, and an increase in personnel expense in R&D.
The increases were partially offset by decreases in external development costs related to the phase II clinical trials of <unk> calcium and Youll see in our RMS.
For the nine months ended September 32022, R&D expenses were $50 5 million as compared to $42 7 million for the same period ended September 32021.
These expenses were also chiefly driven by external development costs of our three clinical programs and an increase in personnel expense in R&D.
The increases were also partially offset by decreases in external development costs related to phase two clinical trials in mid of serum calcium and you see COVID-19, and our RMS.
General and administrative expenses were $3 6 million for the three months ended September 30 of 2022.
As compared to $2 9 million for the same period ended September 32021.
The increase was driven by personnel expense and to a lesser extent by increases across numerous categories.
Nine months ended September 32022, G&A expenses were $11 6 million as compared to $10 million for the same period ended September 32021.
The increase was driven chiefly by personnel expense and to a lesser extent by increases across numerous categories.
Other expense was $1 1 million for the three months ended September 32022 as compared to.
<unk> 9 million for the same period ended September 32021.
The increase was primarily attributable to a $1 million increase in the loss on intercompany loan between Munich, Inc. And <unk> as a result of changes in currency exchange rates and partially offset by currency transaction gains and interest income due to favorable interest rates.
And tax incentives for clinical trials in Australia.
For the nine months ended September 30 of 2022 other expense remained relatively unchanged at $1 8 million as compared to one point in mind for the same period ended September 32021.
The company had a $1 2 million increase in the loss on the intercompany loan between Munich and communicate as a result of currency rate fluctuations, which was offset by gains in interest income due to favorable interest rates currency transaction gains increased tax expense for clinical trials in Australia and in increase.
And grants.
Net loss for the three months ended September 32022 was approximately $21 2 million or.
Or <unk> 69 per basic and diluted share based on approximately $30 6 million weighted average common shares outstanding.
Compared to a net loss of approximately $19 3 million or <unk> 76 cents per basic and diluted share based on $25 3 million weighted average common shares outstanding.
The same period ended September 32021.
Net loss for the nine months ended September 32022.
Approximately $64 million or $2 16 per basic and diluted share.
Based on approximately $29 7 million weighted average common shares outstanding compared to a net loss of approximately $71 8 million or $3 33 per basic and diluted share based on approximately $21 6 million weighted average common shares outstanding for the same period ended September .
32021.
With that I'll turn the call back over to Daniel for an outlook on our upcoming clinical milestones Daniel.
Thank you Glenn I would like to now provide an update on important upcoming data readouts.
With respect to our lead asset video floating was traction we continue to progress the development in multiple sclerosis, specifically, our phase II <unk> trial in progressive Ms and the phase III ensured trials in relapsing Ms continue to enroll patients.
As you will recall the clinical trial is designed to grow the rate than Europe attempted potential of video put in Wisconsin.
If successful this data along with that of the insured program <unk> cut some already proven strong safety and Tolerability profile may allow us to draw a clear clinical differentiation for the Doc versus other or isn't as medications.
Our current goal is to report data from the interim analysis of the phase III clinical trial in the second half of 2023 into the REIT, our topline data at the end of 2024.
The readout of the first quarter.
The phase III issue and short trial is currently targeted for the end of 2025.
We believe that the design of the insurer trials provide a straightforward path towards potentially potential regulatory approval of <unk> costume in arguments.
Furthermore, we plan to perform an interim read out of the open label extension part of our phase II emphasis trial in R&M as soon.
<unk> treated during this dry with EBIT 30 of 'twenty five milligram of <unk> over placebo were offered to continue in the open label extension for up to nine years.
We look forward to learning more about how many patients are continuing new in the trial and how these patients you see stable since developed.
Overall, we remain highly enthusiastic about the potential of either from Wisconsin to become best in class therapeutic for this patient population.
It has demonstrated activity in preventing these information is shown in rfps to emphasis trialling Artemis and an exceptional safety and tolerability profile demonstrated thus far.
The ongoing proxy of all phase one clinical trial of <unk> six is designed to assess safety and Tolerability. During 2008 days of treatment with AG and 160 milligram of <unk> or placebo once daily in patients with celiac disease.
During periods of gluten free diet and duty charge.
Secondary objectives comprises pharmacokinetics as well as acute and chronic disease markers, including dose evaluating gastrointestinal architecture and inflammation. We expect initial data readout in 2023.
This brings us to the industrial formal presentation Jessica Please open the call during the Q&A session.
Great. Thank you Danielle and Glenn for walking us through the third quarter. We will now begin the question and answer session. As a reminder, it's agenda webcast viable platform. There are two ways to submit a question you can submit your questions in writing via the Q&A 12 for some color or if you would like to speak with us directly Medusa right hand function.
Quarter to clear your question.
Our first guest today is Andreas <unk> of Wedbush.
Andrea please.
And then just go ahead.
Okay. Good morning, and thanks for the update and taking my questions a couple here around now.
<unk> hundred five so.
Number one what are your thoughts around abbvie decision to discontinue their more guarantee and the implications around the class <unk> class of therapies.
How are you thinking about the future development of 93 five for psoriasis do you think you would run a study.
More mild to moderate patients or do you think you might explore different inflammatory or autoimmune indications like psoriatic arthritis, and then lastly, do you find 28 days it would be too short of a time period to see change in secondary endpoints like disease markers J architecture and inflammation.
Yes, Thank you again for that.
For the questions, maybe starting with the <unk> because of course that was.
<unk>.
<unk>.
As you know we spoke a lot about the selectivity of our molecule 95 has shown in preclinical.
Preclinical models and data and we have spent a lot of time and communicating on this because we think it's important to make sure that that with 95. We believe we have solid leasing activity issue, which has been observed for other rocket much heat.
Inhibitors.
And therefore, we believe.
That does not apply for <unk> 95, and this was we talked about that before before the FDA decision and.
Just looking on data we have available I think maybe it's not a big surprise to see that decision at the end. We don't know the details about what was going on on the <unk> side and we don't know.
Secondly, what were the reasons for.
For that decision therefore, it's difficult to comment further.
Maybe Andrea as you take over the question on on the potential to go forward on Mikes Laura or.
Yes.
Hi, Andreas.
This is Andreas you on our side.
So the.
I think we strongly believe in the activity of <unk> hundred five based upon the entirety.
Of the data that we have from in vitro in vivo.
Experiments and we also believe that.
Moderate to severe psoriasis is the right population to test this drug to get a clinical proof of concept. This is a this has been a phase one trial a phase one trial always works through.
Dose escalation and it's very hard to predict sometimes where you are in the.
The dose response relationship.
And so I think we are currently assessing exactly how to continue going forward, but I don't think the population is.
It's something that we would like to change I think this is the right population to two <unk>.
First at <unk>.
<unk>.
We will as we as.
He said I think in the release today, we will announce more details about how.
How are we going forwards to show proof of concept here in the first quarter of next year, but I don't think it will be a change important populations to be studied.
And then the third question that you had was about 128 days is enough to and I think I hope because we set gastrointestinal. So this is about <unk> 95.
What do you <unk>, sorry, Andreas just to reiterate what im saying.
Got it.
<unk>, Okay, yes.
Yes. So you asked US. This last question is about five to six hour.
Our third drug candidate.
We used for the restoration of.
Yeah.
Basically about barrier function and regeneration of epithelium is.
Is 28 days enough. So this is of course. This is another phase one trial, where we have the chance now to dose for 28 days.
Based on.
And I would say I would agree with you that.
We it would be good for some of the endpoints that those longer but we have decided to include all of the endpoints that we currently have in this trial, including for example, a histology assessment.
In Australia, because previous triangles shown that you are able to show. This within 14 days of gluten challenge some change in histology, but to certain extent I would have to say that this was an exploratory endpoint is chronic influence like histology.
It is an exploratory endpoints.
We hope that that gives us some first data and understand.
The mechanism of action and also the.
The dose response relationship where we are here in this trial, but.
We also have included.
856 phase one trial acute markers like IL two on the first day of gluten challenge, which usually is an absolute nice market to show whether or not there is an acute effect.
All of our drug on the.
On the release of this new market.
For sure I think that the timing is.
You could basically lose on one day, but I think this is the right timing that we do.
So in general I would say.
We designed it so that they can find something but certainty in future trials, we would like to do dose of longer runway than the <unk> opportunity.
This is again another phase one trial will be.
<unk>, a little bit about the drugs one piece at a time to go forward and learn with each step with new information about the rights development path for <unk> hundred six.
Yeah.
Great. Thanks for taking my questions.
Thank you Andrea Thank you Andrea.
Our next guest is yes, <unk> rahimi of Piper Sandler you often Amit yourself on go ahead.
Good morning, Tim Thank you for the update two questions.
The first one and can you maybe comment on.
So when you look at and I understand the placebo sponge for lack of clients are asking us can you comment on whether that treatment effects that you're seeing are exceeding mean reductions of 40% and pasty that can be helpful. And then secondly, Mike.
Why <unk>.
You know why why is it going to take quite a bit of time to analyze this data and you're just being conservative in saying one kilo.
Can maybe towards the earlier half of that just.
At that time to analyze it and then I have a follow up question on caliber.
Sure. Thank you mean for the questions I'll try to do my very best to answer it.
Which I think I can't answer everything.
First of all I think.
We basically the disappointment is new or that there is no benefit over an observed for the two doses tested over placebo and then method our knowledge right now we only have the mean values for the groups and.
This trial is going on in and is in.
Annualized further and underline is.
Something which is more like it happened to fall into a patient and it takes time and therefore the guidance to give an update on where we want to go for next quarter is really based upon we need to first half import data digest and make them conclusions based on when the full data set and I hope.
That's something which.
It can be understood and also that for example includes measuring.
Biomarkers and so forth, which is still good.
Currently done.
On the blended.
Session.
Okay, and then Tim as.
As we head into a caliber internal laid out which is the eastern half of the population and have finished 20 weeks of treatment.
Should we be expecting like help us understand in this population what is considered a bar for success.
So this is Andreas I hope I can answer a little bit the question. So Steve the interim assessment for the caliber trial and the progressive MS population, we had planned to get some.
Some initial understanding of whether theres activity in this trial.
The primary endpoint of this trial is very natural fees as an MRI based measure or brain atrophy, where 24 weeks is not long enough to really have a reliable measure of brain atrophy. So that's why we have to go through some.
Biomarkers are some surrogate endpoints that can be measured more early so that's why we decided for an interim assessment to look at New York element light chain and also called <unk>.
And basically in the blood serum or blood plasma.
Both our biomarkers related to.
Newer protect us activity or suppression.
Suppression of.
<unk>.
Europe , each generative disease I think there is a lot more evidence of course for neuro filament light chain and EMS.
Most of the evidence is in relapsing Ms business progressive illness.
There's also some indications that.
You see it in <unk>.
<unk> therapy in Progressive Ms.
May show also a.
And inhibition.
Zero degenerative activity as measured by <unk> light chain that theres less evidenced in relapsing Ms. But there is initial data that this could be a good biomarker for progressive Ms as well, although that's still under discussions probably by some experts.
<unk> is another emerging biomarkers that is much less.
Evidence for that but it is very very much discussed as probably.
A biomarker for the progressive Ms population.
There is really no.
Major inflammatory activity.
I think.
We also wanted to get some understanding that in our patient population received difference in GE fab.
For basic to placebo in the 45 milligram of <unk> hundred eight.
So these are the two biomarkers that are more surrogate endpoints and Brian I think there is.
Emerging evidence that they are useful in the progressive as population and please understand the asset.
To progressive and ask populations under served.
Nevertheless trials done in this population done in relapsing Ms population and so.
Maybe.
The.
The entirety of the evidence for these biomarkers is not yet there as relapsing Ms. But we believe that there's a good chance that it can also be used in progressive unless these two and then we have some functional readouts that will.
Also look at.
Okay.
MS population, which also is probably a little bit more exploratory.
One of these functional outcomes.
They provide early in the trial, which I think 24 weeks is relatively early for treatment of these progressive Ms. Patients you already begin to see a trend that there is a difference in dysfunctional Readouts I think this is also more on on the exploratory side, which would give us an early indication that there is activity in this.
Trial and Thats the interim analysis.
<unk> was designed to really give us.
Initial early indication that there is activity in this trial.
And that diversity.
The purpose of this interim analysis.
Great.
Yes.
Thank you Jeff.
The next question will come from Matt Kaplan at landmark matches and just let them go ahead.
Thanks, Jessica and good morning.
Just wanted to I guess, what's your nearest term read out.
Zero in on the RMS emphasis phase two open label portion what are we looking for in that interim and what would be.
A positive sign there.
Hi, this is andreas textbook, but thanks for the question.
Thanks.
Yes, so I think.
This open label.
A portion of this phase II trial in relapsing Remitting Ms patients was really designed to look at the long term safety and it allows us to have long term safety data available with several years of treatment.
In patients with relapsing Ms. When we file for the approval.
Approval of the NDA for.
For relapsing.
And so this is the major driver of this open label.
Portion.
We're very fortunate that.
Of the patients that enrolled in the emphasis trial.
The vast majority is still on treatment and continues on treatment and so we have the luxury that we really see the long term safety data from these patients. So this is the major.
The purpose of the interim analysis.
Did the other I think possibility is to look at.
Certain outcomes of these patients so that because of for example, how visibility.
<unk> over time and this is also captured in this interim analysis.
Which would be maybe an additional.
Ah readout that we can report but.
Here you have to understand.
There is no longer a placebo control of course.
So this is all basically treatment, but you can compare to maybe.
The development of disability and other trials that you have seen in a very similar population, but I think that's the two major outputs that we expect from this interim analysis.
Okay, great. Thanks, and then just going back to APAC next year, the parks stay a cohort in celiac patients.
Uh huh.
In terms of the gluten.
Gluten challenge and what Youre looking for there.
Beyond histology can you can you help us understand in terms of some of the endpoints for the group and challenge.
And what we're what youre, what youre anticipating to see that.
Yes.
That's.
And in principle these RF.
The acute or chronic markers that are related to.
Celiac disease. So Gloopy challenge is known to have a acute.
Activation of certain immunology markets like IL, two and that can be done within hours of starting a gluten challenge. So that that's something that is a <unk>.
Reliable immunology market that has been used in many settings.
In these gluten challenge settings.
And again this is on the first day of gluten challenge and then Theres more chronic mark I said that relate more I think too.
The nature of the disease, where gluten actually.
Damages.
The <unk> <unk>.
Lining of the volatile.
Time, and that's probably also the major.
Disease issue for these patients that are.
Suffering from.
This is a little bit harder to capture maybe in a 28 day study, but I think what we're looking at is basically a biopsy at the beginning of the trial and at the end of the trial.
Where we can see the difference in the histology markers established histology markers for celiac disease.
And maybe also look at.
Some of this.
Immunohistochemistry markers in depth and a biopsy.
As I explained before I think this is something that we hope that it gives us an initial look.
A readout.
Between <unk> and placebo in the dose based on historical data I think that may be possible.
But I think for a treatment of acute treatment of celiac disease.
The 28 days is probably too short, but I think just.
This phase one B trial was really designed to look at.
A proof of concept here.
And also to understand that a little bit where we are in the dose response relationship and for that I think.
Both the combination of acute and chronic markets I think are.
Are a good choice to my mind.
Okay. Thanks, Thanks, that's very helpful.
Thank you Matt Thank you Matt.
Again, if you have a question. Please use the ranks Penn function opportune product or submit your question in writing please add the team around SPD securities.
Tom Smith some of it that questions in writing so I'm more than happy to read them. The first one is around FTE again.
Regarding the recent discontinuation of at this run gamma inverse agonist ABB. The 157 percentage of findings in our preclinical chronic tox study.
The resource the IME mindset and what are the differentiations between <unk> 95 in ABB won seven have you synthesize that compound and do you have any specific hypothesis for what the stigma may have been.
No I think.
Thank you.
As we have between four and for the questions.
Important to reiterate.
That for us.
We don't know exactly what their phone because they didn't disclose it. So we are guessing a little bit yes, there'll be a guessing that this is going to be in line with some other companies have seen and looking in more detail.
And impact off.
Those drugs on the maturation of the financings.
And <unk> already mentioned earlier.
I think we didn't see that.
In our tests. So we really should have shown 95 is superior on that and on the <unk> activity with that respect so therefore.
Conclusion is basically that's not unexpected.
And of course.
We recently sent the molecule bumped that something which you can compare here in pumping and just base.
This year.
Speculated.
That is related to.
To the data and a decision made by Abbvie.
I think that's all we can say for now I would be interested in learning more thoughts.
What they have seen in their industries.
Hey, Andy.
Second question is what are the assets that could be done.
Again, what do you suspect could be driving the outlet placebo response rate observed in the interim readout of INR five what additional data I am trying to help with the <unk> 95 update in <unk>.
Of course, and we just went over to undress its still a guessing and I think as I said, a couple of times individuals of course.
We look to will be addressed as quickly as possible, we still have only Google on the data. So we can really.
Look into detail on individual patients on sites for example.
All of the data is there specific can be.
<unk> contributes from that so we just.
So far only half the group level unblinded data, which limited our access to the to the full dataset.
Yes, I think I can only say of course, we have hypothesis.
What could contribute to this and I think we have a.
Extremely well experienced and recognized medical advisory boards for psoriasis that we also had discussions with of course now.
Let me see.
What is the latest and greatest.
And you can see everything.
Okay. So I think.
We have just trials ongoing now for the last nine months or so we have.
We have several dose cohorts.
Now uhm done and.
Basically just as in the dose escalation phase where.
B test how far we can increase the dose without reaching dose limiting tasks toxicity and so.
That's why I think it's a little bit limited in terms of what.
What we can say about this trial at the moment because it's it's it's.
It's more or less targeting the dose escalation part at the moment.
And.
Uhm.
What we have seen is that we can increase the dose without running.
In a major way without really running into dosimetry toxicity at this point, yeah, we have already announced that we completed the 600 milligram dose escalation. So weird the next level of pain.
So.
The state of the art right now.
Alright, Yeah, I think we have no more open questions that concludes our queue and especially I would like to turn the webcast tech over to Daniel for any closing remarks.
Yeah. Thank you Jessica and thank you to today's attendees for your insightful questions.
Trying to remark I would like to mention that we look forward to discussing or an S program recent.
Recent scientific findings can be unmanned medical needs with renewed key opinion leaders.
Upcoming multiple sclerosis, R&D webcast on Thursday November 17th 2022, if you have not received the date for this event. Please contact us as soon as possible. Jessica will also provide a detailed invitation with further information closer to the event.
With that I would like to close today's call again. Thank you very much for joining and we are very happy to answer any additional questions 101.
<unk>. Thank you for joining our webcast today.
Call has now concluded you may now disconnect.