Immunocore Holdings plc (IMCR) Earnings Call Transcript & Summary

Welcome to the Morgan Stanley Global Healthcare Conference. I'm Jeff Hung, one of the biotech analyst. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have Immunocore with CEO Bahija Jallal; CFO, Brian Di Donato, and CMO, Mohammed Dar. Welcome.

Thanks for having us, Jeff.

So for those who may not be familiar with Immunocore, can you provide a brief introduction?

Yes, sure. It would be my pleasure. First of all, thank you for having us. And Immunocore is a TCR company, a T-CELL receptor company, we are very -- we have a technology that has been validated in the clinic and now on the market, we're very happy to be the first ones to have really pioneered this area. It's -- just to describe the technology very quickly. In one hand, we're using the power of the T-cell receptor to the tech tumors and would bring -- in one hand, we have the TCR that binds to the tumors. And on the other hand, is the T cells that come and kill the tumor cells. So we can talk more about the technology. But suffice to say that it is the first TCR to have shown activity in solid tumors, also in overall survival in solid tumors, and we have the first product on the market. The pipeline is increasing now with the second product that showed activity in multiple tumor types with PRAME and we have one coming [indiscernible]. So a very robust pipeline in oncology and also the technology is modular. So we can -- we are also have -- we have in the clinic 2 products in HIV and HBV, where we look for a functional cure. And the -- with the robust capitalization of the company.

Great. Maybe before we talk about your programs, can you just talk about how your platform and your approach is differentiated from other bispecifics?

So this is basically the -- on the one hand, as I said, is the TCR, so the T cell receptor and what makes it different from the antibody bispecific for instance, is the TCRs have the ability to see and to bind to targets that are intracellular targets, which opens up the whole possibilities and the wide range of targets we can go after. And this is important because in solid tumors, especially in solid tumors, that most of the targets that drive oncogenesis happened to be intracellular. So that's one very big and main differentiation. The second one is -- this is one of the bispecifics from the antibody side of things have shown great activity in heme in solid tumors, it's not the case yet. However, TCR here, we have been able to show the first proof of concept and actually validation all the way to the market with the first product where we're seeing overall survival.

Great. Maybe let's start with KIMMTRAK. Sales remained robust in 2Q. What's been driving growth recently?

Great. I'll ask Brian to respond to that.

Yes. Jeff, we had $58 million of net sales in Q2. Just to take a step back, KIMMTRAK is approved for metastatic uveal melanoma in HLA-02-positive patients. We all have different HLA types. HLA-02 is about 50% of the metastatic uveal melanoma market. So it's about 1,000 patients a year between the U.S. and Europe. We launched the product ourselves in the United States, France, Germany and now Italy, Finland, Israel, adding other European countries every month. So excited about where we are about 15 months into launch. We still don't know what the peak sales opportunity will be. It's too early, but we're about 60% penetrated in the United States. And we're about 80% penetrated in France and Germany. As I mentioned, we just added Italy, so more to come there. And about 4 more European countries we expect to add around before year-end. So we think the sales growth from here will be incremental, but really pleased with the capital that provides the company to reinvest in this pipeline.

You've had strong uptake, not only in academic centers, but also in the community setting. Can you just talk about the dynamics here and what you're doing to drive further growth in the community?

Yes. It's a great question. So traditionally, the community would send metastatic uveal melanoma patients being an ultra-rare disease and treated by ocular oncologists to academic centers. We had about 25 on our clinical trial in the United States as an example. Now with the launch of KIMMTRAK over the last 15 months or so, we want to go directly to the community. So that's what the team is focused on our MSL team and our sales team is focused on. And we still have more to go there to get the community comfortable with the new modality, this bispecific and how to treat with it.

Maybe shifting to metastatic melanoma. Can you just talk about how advanced melanoma compares to uveal melanoma, both clinically and commercial opportunity?

Sure. In terms of [indiscernible]. Yes. So the opportunity in both in terms of the mechanism, gp100 is a target for KIMMTRAK, and that's expressed equally uniformly across both uveal and cutaneous melanoma. And the data that we've generated to date and we've presented shows that the activity of KIMMTRAK in cutaneous melanoma seems very similar to uveal melanoma, where we see some degree of tumor shrinkage, but a lot of disease control and impact on survival benefit. In terms of the number of targetable patients, it's about 2x to 4x the size of the uveal melanoma.

So basically uveal is 1000 and on cutaneous, is around 2,000 to 4,000 patients.

And just to clarify, when you said that the expression is uniform. So then like the gp100 expression vary between metastatic uveal melanoma and advanced melanoma.

They're very comparable. Uveal is actually even higher than cutaneous, but the target gp100 is a protein that's normally expressed in melanocytes and both cutaneous and uveal melanoma arise from the melanocyte cell. So it's very common in both north of 80%.

Now you're planning to report dual ctDNA data next year. Can you just talk about the predictive power of ctDNA reduction and why this could be better than standard RECIST criteria?

Go ahead, Mohammed.

Yes, happy to do that. We've reported starting very early in KIMMTRAK development when we were running the second-line, third-line metastatic uveal melanoma population that measuring circulating tumor DNA very early, as early as week 9, seem to be a better predictor than RECIST response for long-term survival outcome. Since then, we've now also reported in our pivotal frontline trial, very similar phenomenon at the week 9 ctDNA measurement. If we see reductions even in patients who have best response to progressive disease they have a significant survival benefit. So that -- based on that, we've now incorporated ctDNA as a co-primary endpoint in the Phase II portion of the advanced melanoma trial, looking at either KIMMTRAK alone or KIMMTRAK plus pembrolizumab as an early readout. The other co-primary endpoint is survival, which is obviously the gold standard.

And you have the option of dropping one of the arms in the Phase III portion. Any updates on this or any changes to your thinking?

The trial is now open and actively recruiting in the United States, and we will be expanding to Europe. And based on the current trajectory and projections, we anticipate we'll be able to accrue to the Phase II by mid next year. And then based on the data, the trial has the ability to be adjusted, as you said, we can drop one of the arms. And also based on the effect size, since we will be looking at the data, if the effect size is larger than what we anticipated, we can adjust the sample size in the Phase III down to adjust for that. So we anticipate late next year, early in '25, the data readout from the Phase II.

Okay. Great. Let's shift to PRAME. Can you just talk briefly on PRAME and why the program is attracting a lot of attention.

Well, I think there's a lot to like about PRAME. So PRAME is a negative prognostic marker in tumor genesis. So, that means the tumors don't like to get rid of it. It's -- when it's expressed, it's highly expressed. It's one of these cancer-testis antigen. That means it's highly expressed in tumors, but not in normal cells. So -- and it's -- whenever it's expressed, it's also homogeneously expressed. So a lot of things to like about it, actually in melanoma, especially in uveal melanoma 50% of patients will go on to develop metastasis and 50% won't. Having a PRAME is one indicator that they're going -- they have the chance of developing metastasis is high. So we like targets this does have something to do with the tumor genesis. And also, I think the excitement we've seen in the clinic, actually, we have shown in ESMO data that we have activity in multiple tumors in cutaneous melanoma, uveal melanoma, we've shown in ovarian carcinoma, and we've shown a reduction of ctDNA in lung. It's early days. But so it has the possibility to have activity in a wide range of tumors.

Now within the F106C Phase I/II, you're exploring multiple indications. And given that PRAME is most highly expressed in certain cancers, are these likely to be prioritized? And can you just remind us what gives you confidence outside of melanoma?

Yes. So I think there's a lot that gives us confidence in -- outside of melanoma. There is our data in ovarian, other people's data that confirms that actually, that activity is there. I think when we look at T cells. T cell mechanism in general has worked like for checkpoint inhibitors or others who worked also in lung. So there is no reason -- so there is a lot of reasons for it to work because we also are about the T cell mechanism as well. So we prioritized the [ targets ] the tumors to go into expansion, tumors that we don't select for PRAME because PRAME expression is high and wide. So that's basically cutaneous uveal, ovarian and lung and endometrial cancer. So when these expansions are ongoing right now as well as the combination therapies.

Now last month, you reported updated melanoma data from the Phase I study. Can you just remind us of what you saw?

Great. Mohammed, you can.

Sure. The update that we provided was from the original ESMO presentation, where we saw a very promising activity in late line cutaneous melanoma. These were patients who had basically failed all available therapy. And we saw both tumor reductions, i.e., resist responses, but also tumor or disease control. So the update we provided just a few weeks ago was a 6-month additional follow-up of that cohort. And what that showed was continued durability both in terms of response as well as disease control. And those are 2 very important components of PFS, which is a primary endpoint in frontline cutaneous melanoma study. So it certainly helps build confidence to move into the frontline setting.

And you saw durability of responses ranging from 6 months to 17 months. I know this is a slice in time, but what would be clinically meaningful in terms of durability for these patients?

Yes, just to provide context, typically in the late line cutaneous melanoma, the sort of average time to progression is basically 3 to 4 months. So the fact that we're seeing durability between 6 months -- and this is 17 months. It's quite remarkable, in fact, in the frontline cutaneous melanoma setting, the historical monotherapy checkpoint median PFS is between 5 to 7 up to 8 months. So this is actually quite remarkable that we're seeing this type of disease control in late line setting.

Great. And you expect data for Phase I/II study, including expansion in multiple indications. What should we expect to see from that data? And what do you need to see to consider positive results?

Yes. So the -- as we mentioned last fall, the original trial was designed as a Phase I trial. Historically, most of the trial sites were legacy KIMMTRAK investigators. So majority of the patients that were enrolled were cutaneous melanoma patients. Since then, we pivoted, we've now expanded the trial footprint to focus on Phase II investigators that can focus on both lung as well as [indiscernible] in tumors. And so we're quite happy with the trajectory in terms of enrollment. And what we've said is that we're on track to share data in the first half of next year. And the data that we'll share is going to be really driven in terms of the maturity of the data and the ability to interpret the data. So that's the current plan.

Great. And you also announced a new Phase III study recently, PRISM ML-301. Can you just talk about the rationale for cutaneous melanoma? And what does the opportunity look like relative to uveal melanoma?

Sure. So just as a reminder, the trial that we announced is a frontline trial. So patients who are previously untreated in the metastatic setting. It's a randomized trial that looks at [ train ] combined with nivolumab, which is a global standard versus either nivolumab or opdualag, and that's not investigator choice that's going to be driven by global territory approval where it's fully approved, reimbursed for the unrestricted population. The primary endpoint will be PFS. So that's the high level trial [ design ]. In terms of the rationale that moved us to trigger the execution of [ this trial ], as I mentioned before, the fact that we've seen very promising clinical activity in late line cutaneous melanoma that appears to be durable. And as I mentioned, the Permian point in the frontline trial was PFS is the fact that we're seeing both durable responses, but also durable disease control contributes to the confidence in a PFS endpoint. In addition, we've shared additional data. So the data that we shared is a very limited subset since fall of last year. But since then, we've enrolled additional melanoma patients because most of the trial sites are melanoma. And while the follow-up is not as long, the overall picture that's emerging supports the PFS endpoint. We've shared this data with the FDA and global KLs and all of them are supportive for us to move into the frontline setting. And then the last point I'll make is that we are also applying the lessons from our overall platforms that we've seen with KIMMTRAK when we move from late line to front line, we see significant improvement in the clinical benefit. So the fact we're seeing benefit in late line, we expect that we'll see even greater benefit in the front line.

Now in the study, you will discontinue one of the doses after reviewing the first 60 patients, randomized the drug. What was the decision -- what will the decision be based on? And then why wasn't an intermediate dose chosen?

Yes. So this is a discussion that we had with the FDA. The -- just to remind you what we saw in the Phase I trial is that we saw clinical activity starting at 20 micrograms all the way up to 160 micrograms. So almost a sevenfold dose range. And this is, again, as a reminder, this is not unusual. We saw with checkpoint development that there were comparisons of 3 versus 10 for ipi, 3 versus 10 for pembrolizumab. So this is not uncommon. In terms of the trial design, the agreement that we have with the FDA to compare the 160, which is what we feel like based on modeling, it's likely the best dose. With a lower dose, but not the lowest dose because 20 is the start of clinical activity and good drug development principles are you want to have a little bit of cushion. So that's the rationale for the 40 versus the 160 and ultimately, doing randomization is the best way to assess clinical activity and safety. So those are the 2 general categories. But ultimately, we have to agree on a plan with the FDA, so we have to submit that, and we haven't gotten that agreement.

Now given potential for added PK variability at lower doses for some patients. What is your expectation on response rates with the 2 different doses.

So, based on what we've seen to date, we do not see any major differences in response as well as safety across this dose range. And that's something that we've seen with this platform that there tends to be a threshold effect. They want to get above the threshold you see -- you begin to see clinical activity. And when we keep escalating while the PK modeling supports more consistent exposure, at least in the numbers that we've done in our Phase I dose escalation, we don't see any clear differences across that dose range.

Great. Maybe moving on to a couple of housekeeping questions, including 1 for -- 1 of your other pipeline programs. For 113V and HIV, can you just remind us of your plans for that program and where that stands?

Yes. So I can start. So the goal for the HIV is really not to go after reducing the viral load. I think the antiretroviral do that very well, but the problem is that when you stop the antiretroviral that the virus takes over again. And this is because of that reservoir. And that reservoir where basically the virus hides and it's a low transcription happening, if you will, or translation happening at the same time. so that we believe because of the high potency that we can have with this platform that we can basically, in vitro, we can show that we can kill cells as low as 5 to 10 copies per cell. So we have the best tool to go after this reservoir, but it is uncharted territory. So we are doing the experiment to see. So we've done the first -- the single ascending dose, and we presented the data. We were very happy to see the drug is doing what it's supposed to do. We saw an IL-6 elevation and things like that which we were supposed to -- that basically target engagement, we've seen that in single ascending dose. So what we're doing now is really a proof of concept. So we are treating patients for 12 weeks with antiretroviral and the ImmTAC, our products at the same time for 12 weeks, then we stop everything. And then we look for the rebound basically. And so we are enrolling the multiple ascending dose. Our goal right now, and it's recruiting pretty well. Our goal is to finish the multiple ascending dose by the end of the year. I say by the end of the year, the team says maybe beginning of next year. But we definitely will bring data whatever is next year in the first half.

Okay. And can you just remind us how much cash you have and the runway that, that gets you?

Yes, we have $435 million of cash. We're on a run rate for net sales of around $235 million, $240 million, which is pretty consistent with our burn rate right now. So have we -- our cash has actually been accumulating over the last several quarters. Yes, 3-plus years of runway with randomized trials for PRAME.

Great. Maybe one last question. what aspect of the Immunocore story, if any, do you think that the Street most misunderstands?

I don't if they misunderstand. I think this is a new area. And I think us and everybody else is -- and the Street are getting to know the TCR world. I think this is opening up a really new chapter in oncology, and we've seen it with other technologies at the beginning to see the -- that we are just scratching the surface, I really do believe it. I think the power of this technology is not going to be only in oncology. I think in oncology, we have -- it's amazing for me to see something like [indiscernible] getting an overall survival of point, there has a ratio of 0.53. I think what we have is really remarkable. So what we're trying to do with this technology is transformed meaningfully the outcome for patients. And I think with just scratching the surface, I really believe it, I think, where people are starting to see the possibility in infection cities. And I think we have to demonstrate its uncharted territories for us, for the Street, for everybody. And if we can do it or not, but we're doing the experiment. And then there is an area that, again, it's not misunderstood. It's just we don't talk about it as much, and people will get to know it at the right time, is autoimmune. I think we have, again, with this pipeline, we have a pipeline. It's going, and hopefully, we'll bring candidates at least this year and hopefully, in CTA or IND next year. And there, the whole mechanism is different. It's trying to go very much organ-specific down modulation of the immune system instead of having a sledgehammer, if you will. So that is really exciting. And I think this is just the start.

All right. Great. Well, look so we'll leave it there. Thanks so much for your time.

Great. Thank you. Thank you .