Immunocore Holdings plc (IMCR) Earnings Call Transcript & Summary

Great. Good morning, everyone. I'm Jess Fye, I'm a biotech analyst at JPMorgan, and we're delighted to be continuing the conference this morning with Immunocore. As I'm sure you all know, we've got a different format this year, so you don't have to shuffle over to another room for Q&A. We're going to have Q&A in the same room when the presentation ends. If you want to ask a question, you can raise your hand, somebody will bring you a microphone or you can submit questions electronically, and I can read them off the iPad up here. So with that out of the way, let me turn it over to Immunocore's CEO, Bahija Jallal for the presentation.

Great. Thank you, and good morning. Preparing for this talk, I was trying to see how to describe the journey in Immunocore and what kept coming to my mind is the Moroccan team in the World Cup. I'm Moroccan, obviously. And that's basically they've done what they've done is -- really bring the impossible -- make the impossible possible. That's the story of Immunocore. So 4 years ago to the day, I joined Immunocore, embraced the challenges. But I really joined for one single reason, it's the excellent science. And I was absolutely delighted and lucky to have a fantastic team. Some of them are here today, that joined me in this adventure. And together, what we've done is really transform the company from a research organization to a commercial organization. We validated the platform clinically, but ultimately by bringing the product to the market, the first to differentiate the product into the market. We launched and the team has done really a great job in launching the first product. As the saying goes, you launch only once. And the numbers are here to prove it. We finished the year with 140 million net sales. And together with the solid financial situation, we can now, and we are very much focused on advancing and accelerating the pipeline. Our mission is to bring transformative medicines, and we absolutely mean it with the emphasis on transformative medicines in three therapeutic areas. Why are we confident we can do that, is because we did it already. KIMMTRAK, as I will show you, is a transformative medicine. But also its thanks to our platform. We harnessed the power of the immune system to 5 diseases, and we took the most powerful tool in the immune system, which is the T cell receptor. We made it soluble and stable, increased the affinity. And that's what binds basically to the tumor cell. In another words, I would say that we make the tumor cell or the infected cell visible to the immune system. On the other side of the molecule, we put an effector function, and that effector function is CD3 -- anti-CD3. What it does, it brings all the T cells, any T cell from the body, redirect it and bring it to the tumor cell to kill it. So we're facilitating that bridge, if you will, for the immune system to kill tumor cells or infected cells. But one thing that's really important about the differentiation of this platform, is we'll start with monoclonal antibodies where I spent most of my career, very, very successful therapeutic modality. However, it touches only 10% of the protein -- of the proteome because it binds only to surface membrane receptors or soluble receptors -- soluble proteins. With our technology, we have access to 90% of the proteome because we combine to intracellular proteins. And these intracellular proteins are important, especially for solid tumors because most of the proteins that are involved in Tumorigenesis are intracellular. So we do have a much wider target landscape. The effector function that I talked to you about is very modular. We can upregulate the immune system or we can down modulate the immune system. So I'll start with autoimmune. There, we can absolutely down modulate the immune system. But what's really will be differentiated is the fact that we can go organ-specific down modulation of the immune system. We actually have a PD-1 agonist right now that we're working with. I'm not going to talk a lot about autoimmune disease today because I'm going to focus on the clinical the clinical pipeline, but it is really an important area. So let's start with oncology. We are -- we have the privilege and we had the privilege to actually write the next chapter in cancer treatment. T cell receptor and T cell receptor therapy was the first one to be approved in as a new modality. So let's start with KIMMTRACK. This is the first approved TCR therapeutic ever. This is the first and only FDA-approved treatment for metastatic uveal melanoma. This is also the first T cell engager to show overall survival in solid tumors. And we did that with a very robust clinical trial. It's a randomized Phase III trial in uveal melanoma that had absolutely nothing for 4 decades. Nothing had worked for these patients. And as a result, what we've seen is an amazing data, I would say, with the overall -- and prolonging the overall survival for patients with a hazard ratio of 0.51. Very quickly, and I'm grateful to the team, only weeks, 1 or 2 weeks after we get the approval from the FDA we started the launch of the medicines. Patients needed that. And what we have, we announced this week that in Q4, we had $50 million net sales. That's basically $25 million -- 25% quarter-on-quarter growth for the year. We finished the year with $140 million net sales, and we are very happy how this is helping even more patients as 50% of our patients now are first line in the first year. And we're continuing. We don't want to leave any patients behind. So we have already 30-plus country approvals. We're going to continue around the globe to get the approval for KIMMTRACK and we'll be launching everywhere. We have so far more than 500 patients that are treated with KIMMTRACK. gp100 is also expressed in cutaneous melanoma. We are looking -- we know -- we showed in Phase I that it works also in cutaneous melanoma. And so we have a very innovative design that we agreed with the FDA for cutaneous melanoma, either in single agent or in combination. The trial is open and we are -- we're going to start very soon to recruit patients. So gp100, which is the target for KIMMTRACK is expressed solely in melanoma, in cutaneous melanoma and uveal melanoma. So now with our next target, we have the possibility to help even more patients and to go even wider tumor types, and that's the PRAME, and I'll talk to you about the PRAME franchise for us and why we're excited about this target. Well, as you can see, it's very highly expressed in very important tumors like ovarian, endometrial and so on. But most importantly, whenever it's expressed, is expressed at high level and at higher level and also very homogeneously expressed. That means multiple cells in the tumor express the target. It's also a negative prognostic marker, so that means it's involved in the pathogenesis of tumors. But most importantly, the way I look at it is the tumors don't like to lose a prognostic marker, like PRAME, so they keep that expression, which is important for us. For these reasons, we're pursuing this target. And we showed last year at ESMO, the first data of efficacy. This is the first -- I'll just remind everyone, this is a Phase I, a Phase I, where you take the patients that failed everything else. With that, why we're excited about the data. We've seen some really amazing data for me is 50% response in uveal melanoma. We've seen 33% and response in cutaneous melanoma, and we've seen 50% in ovarian. And we've seen also in non-small cell lung cancer, for instance, a decrease in ctDNA. So this data for our Phase I are very exciting. So what we decided now to do is really to invest heavily in PRAME. And the first very important that I don't forget is the durability of response, like you see the swim plot how this is going for a Phase I. This is again remarkable. But I would say this is also a hallmark -- becoming a hallmark of our platform. So what's next? We are expanding in 4 tumor types. It's very important to have a large number of patients, but we took a new approach or at least an approach for us is to expand the clinical trial footprint. So we're going to be globally to do the expansion and to start the combinations at the same time. So where we are, all these expansions are open, and we are actively trying to recruit patients here. So I told you we are investing in this target because we believe it's a very important target. And we everything I showed you is on the allele -- A02 allele. So the patients that have the HLA-02 allele. So what we are -- we announced that we will be bringing, hopefully, to IND in the next 18 months is a second molecule, where this is HLA-A24. And what it does, it expands potential addressable patients by 30% in Japan alone is 60% of patients express HLA-A24 -- PRAME HLA-A24. So -- and in addition, we brought another molecule. This one is for HLA-A02, but with the extended half-life. And we did that with an Fc [indiscernible], if you will. We did that for the convenience of the patients. But as we are also going into other tumors that have standards of care, if we do combination, that will be something more practical and friendly for the patients as well. So both these molecules will be coming to IND in the next 18 months. If we learned one thing from the antibody world is that once you have the technology, once you master the technology in a way, and that was definitely the case for monoclonal antibodies, what became really important are the targets. So we invested very early in the company for the last 10 years or so to really start looking at targets. We have what we call the ImmSPECT library where we identified targets that are expressed in tumors and not in normal tissue. And here, I'm delighted to present the first one that we believe so far is a first-in-class target that's a PIWIL. And you're going to hear some things that you heard already that what we like about the targets and PIWIL really represents that. It's again another negative prognostic marker for -- in multiple cancers. It's highly expressed in CRC, which is historically -- has been insensitive to immunotherapy. -- and also in pancreatic and gastrointestinal. But really for CRC, there is a high unmet medical need. As you know, the checkpoint inhibitors worked only an MSI high, which represents 5% of colon, the MSS is insensitive to immunotherapy. So I think will be a great thing for patients and for the technology as well. So total, if you think about the addressable population is around 35,000 patients per year, taking into account the expression of PIWIL and the HLA-A02. And one thing that's also important every time PIWIL is expressed, it is homogeneously expressed. So we like those characteristics. We are bringing the IND towards the end of the year and then bringing it to the clinic in the next 18 months. So to switch gears, this is really a comprehensive pipeline for us in oncology. But as I said before, this technology, the same way can also address infectious disease because instead of a tumor cell, this is an infected cells that you can get rid of. So it's amazing that we have 30 million, I think, of HIV patients that are living today with controlled HIV. However, they have to take their medicines, all their life. Same thing for HBV, it's around 6 million HBV positive patients that have to take their medicines, all their life. And the reason being is that there is a reservoir where the virus highs basically. The minute you stop the medicine, the viral load goes really high. So what we decided and we believe with our technology is we can go after that reservoir and hopefully pursue then the functional cure. So that's what we -- just to tell you where we are. We are in HBV Phase I, we presented the first data is going in the right direction at least that the drug is doing what it's supposed to do. So we are finishing the single ascending dose, and will start the multiple ascending dose. In HIV, the -- we started the trial actually midyear last year, and thanks to the enthusiasm of the patients and the investigators we already completed the single ascending dose, and we will be starting the multiple ascending dose, and we hope to show data in 2023. So just to recap and summarize information Technology talk to you about the pipeline. This is really a comprehensive pipeline. We will continue with Kimmtrak that's on the market. I think the next is the cutaneous melanoma. The PRAME franchise is an important one, and we're bringing 3 molecules -- 3 new molecules to add to the pipeline. And then the infectious disease, we hope to bring data at least this year and start a multiple ascending dose. So financially, very happy with where we are. We finished, thanks to the successful launch and also a solid financial -- with the pipe this year 2022, we finished the year with cash and cash equivalents of $400 million, which will allow us to really accelerate this exciting pipeline I talked to you about today. So looking ahead, we have -- we'll continue the launch of KIMMTRAK. I think it's very important for patients. We'll expand the global sites for PRAME-A02. We'll deliver the INDs, 3 INDs in the next 18 months and then we'll continue with the infectious disease, and I just would like to stop and where I started with the Moroccan team, right? So the Moroccan team, I think they went from underdog to now. I am pretty proud of them, and I absolutely believe they will be always taken now seriously. Well, I am really grateful you're only as good as the team you have. I'm very grateful to my team, and I know that they will not stop with Jeff's KIMMTRAK that they will go beyond the call of duty to serve patients. So with that, I want to thank you all.

Great. So as a reminder, any questions in the room, raise your hand and someone will pass you a mic or alternatively, you can submit them electronically. But I will start. So KIMMTRAK had really strong performance in 2022. What's the right way to think about growth in 2023 and beyond? And where is that growth going to come from here?

Go ahead.

I'm going to take that. So we're really pleased with the execution in 2022. Most of the growth we saw in the fourth quarter over the third quarter was in the United States. So pleased with the continued progress and the market opportunity in the United States. We feel like about 50% penetrated in the United States, so more to go in 2023. In France and Germany, the other two countries we've launched, and we're about 70% penetrated in France and Germany, so a little bit more mature in that patient population. The big drivers, and we're not going to give guidance for 2022 for a couple of reasons. We don't have negotiated prices yet for France and Germany, [ you ] do that about a year after the launch. So Germany may come around Q2, France closer to year-end. So once we have those negotiated prices, we'll be in a better position to see what the sales opportunity is. That's number one. Number two is duration of therapy. In the Phase II and the Phase III, the duration of therapy was about 9 months. So we're about 9 months into the launch, and our trend of our duration of therapy is towards that 9 months until we see what that is in the real world, we really won't have a better idea of what peak sales opportunity will be.

Any question in the room?

Steve Hughes, [indiscernible] Group. Question is, is it possible to have more than one ImmTAC in a therapy?

Yes. Go ahead.

Yes, absolutely. And in fact, the PRAME trial that you heard about for the first time ever, we're going to be dosing PRAME plus KIMMTRAK in patients with uveal melanoma.

And this is maybe outside of what you're doing, but is it possible to deliver, let's say, the DNA for this to the patient rather than deliver the protein?

I think for now, we're doing the protein. So I think it's important that for the combination trials that we talked about, the one thing that's really important in this technology is we are delivering micrograms. So for instance, ImmTAC, the [ Tevvy ] is 68 micrograms. So very, very small.

Great. You talked about for KIMMTRAK, the kind of penetration rates in the U.S. and France and Germany. How does that break down between penetration in the frontline versus second line or beyond?

I'll take that. So more than 50% of our patients are now first line. Even though this is the first approved therapy for metastatic uveal melanoma physicians, you do have in the past use, PD-1s, so it's great to see that physicians globally are now prescribing KIMMTRAK as first line, and we continue to make inroads there. And I just -- you asked about 2023 opportunity. The other thing is we expect to have another major European country by midyear, which we're going to launch and then 3 to 5 smaller European countries by year-end. So that will be another growth driver for KIMMTRAK.

I'm not sure if you can kind of answer this question or maybe you can provide a framework of how to think about it. It sounds like one of the reasons it's tough to guide is because the duration of therapy is still unfolding in the real world. At what point in time should that be kind of more established that would allow kind of you and us to maybe better predict revenue?

Yes. So around midyear, I would say like around the summer. I think there is the other, that Brian talked about, so for instance, in Germany and why it makes it really difficult for the weighting we have to wait for the negotiated price because there was a new law for instance, in Germany. I don't know if you talked about that. So there is a new law in Germany where you have to -- once you have the negotiated price, you have to go back retroactively for the -- at the 7 month of the launch and basically make that retroactive. So we had to take reserves in -- starting in November and December, and we will not know until we have that negotiated price. So that -- those are all -- makes it difficult to predict.

Maybe switching to some of the pipeline efforts. In the Phase II/III trial in previously treated advanced melanoma is like the non-uveal melanoma setting, can you remind us of the kind of how that interim works? I know you're looking at ctDNA as well as OS in that trial. But maybe tell us kind of how the study would kind of transition from the first part to the second part and when we might expect that Phase II/III interim?

Yes. So the -- I'll answer the second part first, which is where you plan to enroll and randomize the trial throughout this year and the early part of next year. And we designed the trial with that -- the Phase II part with the dual primary end point of ctDNA and survival so that we could get a very early look of a few months after the last patient is randomized. And so it's -- it's designed for that ctDNA evaluation, and then the survival will be an early survival that we'll be able to look. The Phase III will continue to seamlessly randomized as soon as the last patient in the Phase II is randomized. But the Phase II data, which we hope to publish shortly thereafter, we put out of Congress will allow us to make decisions. Perhaps we want to drop one of the two experimental arms, the KIMMTRAK plus PD-1, for example, we can also repower the study based on the survival benefit that we see. So we could potentially make it a smaller study also.

And the -- maybe switching to PRAME. Those expansion cohorts are enrolling right now. Are any kind of settings or tumor types kind of getting out in front of others in terms of pace of enrollment, maybe based on some of the data that you've already presented?

Go ahead, yes.

So most of the sites that we started with about 12 sites where melanoma focused Phase I site because they had experience with KIMMTRAK. So part of what we're doing now in the expansion, that Bahija mentioned, is broadening that expansion to get lung, ovarian, endometrial and other tumors. But clearly, the initial site for melanoma is focused.

And I think you talked about the potential for us to see more data on PRAME by the first half of '24, is there any possibility we could see something in '23 [indiscernible] by '24?

Yes, I'll take this one because we're really not trying to be coy about it. So the thing is what we decided there are two ways to go about it, right? So we had 10 sites in our Phase I. You can just hammer on those 10 sites to continue enrolling patients. What we decided because that's really what takes the longest is to start studies and increase the footprint, so we're going global with the expansion. So until we start having a real sense of the enrollment, it's very hard to project. So I think we'll have a better idea a little bit later on. But we are right now in -- since ESMO and just opening those sites.

I know there's a lot of focus in particular on the lung cancer opportunity for this asset. So what do you want to see from the lung monotherapy expansion cohort to get you comfortable or even confident that there's a signal here that supports continued development?

Yes. I think we want to see evidence of clinical activity that's durable and that will translate into something that could lead to registration. So one way to do that, obviously, is to see durable RECIST PRs and we hope to show that. But we've shown also with our platform that we can have benefit also outside of RECIST PR. So those are the two things that we're going to continue to look for. But I think the one exciting thing that we've seen about PRAME and we've continually talked about is that we do believe this is a therapy that can have a RECIST endpoint. And so we do think we have the optionality to detect signals as a monotherapy.

And just to bridge to what we've just said before, why this is important to really increase the footprint and everything. For instance, as we -- for the lung. We have to go to lung centers, right? Because lung is very heterogeneous. We've seen with the checkpoint inhibitors, it's works in PD-1 high, not a PD-1 negative, and it doesn't work where kinase inhibition and stuff. So you really have to address and actually explore where we see the activity and that's exactly what we're going to be doing.