Immunocore Holdings plc (IMCR) Earnings Call Transcript & Summary

Great. Good morning, everyone. My name is Jess Fye. I'm a senior biotech analyst at JPMorgan, and we're continuing the 42nd Annual Healthcare Conference today with Immunocore. I'm joined on stage by the company's CEO, Bahija Jallal. She's going to give a presentation on the business, and then we're going to go into Q&A. If you have a question in the room you can raise your hand and someone will bring you a microphone or [Operator Instructions]. So with that, let me pass it over to Bahija.

All right. Good morning, everyone. Thank you, Jess, for having us. I would like to start with a patient story. A few days ago, we met this very vibrant CEO. She was diagnosed 7 years before with uveal melanoma -- metastatic uveal melanoma. Her doctor said, had only a few months to your daughter's graduation, but actually, you're not going to make it to that graduation. She enrolled into KIMMTRAK, and she lived 7 years to tell her story. This is always that reminds me why we come to work every day and what a privilege to be doing what we do. So let's get started. This is our forward-looking statements. Our aim is to bring immunomodulating medicines to patients. By pioneering the modality, a new therapeutic modality, an off-the-shelf bispecific soluble T cell receptor. In the last 5 years, we transformed the company from an R&D company to a fully integrated biotechnology company that brings value to patients and to shareholders, a company that the saw the first ever TCR to be approved in solid tumor with OS as an end point. The first ever product to be approved in uveal melanoma after 4 decades where nothing has worked in this indication. We have the industry-leading TCR pipeline spanning 3 therapeutic areas. And our innovation engine in the research continues to bring novel targets and expand on our technology. We are also revenue-generating company, but even with that, we continue a very careful capital allocation and watching our expenses. So how we did all that is really focusing on 3 strategic priorities. The first one is to maximize the potential of KIMMTRAK. We believe there is still growth in KIMMTRAK, and I'll share with you how we can expand even more. The second is to focus on advancing the clinical portfolio, and we announced the first Phase III from PRAME that I will share as well. And the third thing is to continue and really have a sustainable pipeline by bringing and encouraging more innovation coming from our laboratories. And today, I will -- I'm really happy actually to bring you a new -- or showing how our -- we can push the boundaries of science and our technology to get into autoimmune diseases. I'm going to talk about each one of these pillars, and I'm going to go through what have we achieved in 2023 and what we will be doing in 2024. So first, let's start with KIMMTRAK. So today, thanks to really an amazing job done by our commercial organization. It will go in history as one of the best launch in a biotech, and I'm very proud of that. And in less than 2 years, we are already approved in 38 countries. We are reimbursed and launched in 10 countries. And looking at growth -- Q-on-Q growth that culminated this year in 3 -- just from Q1 to Q3 to $160 million and still going. And KIMMTRAK, we believe, can help even more patients. So we have announced the first Phase II/III trial in cutaneous melanoma. This trial is enrolling very well, and we should be expecting to have top line data by Q4 2024. The second trial that we announced only 6 weeks ago is the adjuvant trial, and that's basically focusing on the patients that are more at risk of developing -- or highest risk of developing metastasis after the first tumor is removed. And so we are really happy that we collaborate now with the EORTC, it's an European organization that has done the last 14 to 16 trials in -- adjuvant trials in melanoma. So very happy about that. And we are anticipating to start the randomization or they start the randomization in the second half or 2024. So to actually summarize where we see KIMMTRAK and the opportunity, we see today still growth definitely in the U.S. and outside of the U.S. We are at 1,000 patients. If we add then the cutaneous melanoma and also the adjuvant, we can go from 1,000 patients to all the way to 5,000 to 6,000. So really a big opportunity and most importantly, even more patients to be helped by this fantastic drug. So the second thing is the clinical portfolio, and I'll start with PRAME. So why we believe PRAME is an exciting target. So PRAME is expressed in multiple tumors. It's a negative prognostic marker. We like that because the tumors don't like to get rid of it, if you will. And we have shown in ESMO last year that in Phase I, we've seen signal in multiple tumors. So we spend and you can see the number of patients -- like a really wider patient population that can be treated with PRAME. We spent 2023, a big portion of that to really interrogate that monotherapy and do expansion in multiple tumors in ovarian, non-small cell lung, endometrial and so on to address the monotherapy activity. At the same time, we expanded the footprint for these trials and for the combination trials, combinations with multiple chemos, with checkpoint inhibitors and so on. And the first good -- what came from that expansion. The first is what we announced is the PRISM-MEL, which is the first Phase III in cutaneous melanoma. So for this trial, we announced in July, and I'm really proud of the clinical organization because already in December, we initiated the first site and we intend to have -- to randomize the first patients in Q1 2024. There is more to come from PRAME. We have -- we decided early on to build the franchise around this important target. So we had 2 molecules that we announced last year, one of -- with the half-life extension that we believe we would like to test for patient convenience and the PRAME-A24, which is another allele that's not only present in the West, but also dominant in Asia. So these 2 molecules, the IND was filed -- will be filed in 2024. So we're on track for that. Then I move to the HIV. So in the HIV, we are -- we showed in the beginning of the year, last year in 2023, the single ascending dose, and we started then the multiple ascending dose, and as you know, the goal there is to look at for a functional cure. But I would like to go through what are the data. We are on track, it's enrolling really well, and we expect the data by the second half of 2024. I would like to just emphasize and go with you through the sets of data that we expect from this trial. So as you know, the first portion of the trial that's going to have also the data that's really important is where we put the entire retroviral -- an ImmTAV on top of the entire retroviral. And so there, we're asking the question, can we touch the reservoir? The reservoir that stays even on the presence in the antiretroviral is the reason why these patients have to take medicines all their life. They can't stop because otherwise, you get to the viral rebound. So this is really important. Are we going to bring that to 50% or 100%, we don't know because nobody has done it before to really have an impact on the reservoir. So on itself, that's going to be an important question to answer. And on the second part of the trial, that's very, very important is to answer the question, if we bring the reservoir to 50% or 100%, what does it translate to? Do we see a delay in viral rebound? Do we see a complete inhibition of the viral rebound? And so these 2 sets of data are going to be really important, and we will be sharing that with you in the second half of 2024. And then the last point is really that -- continuing that innovation and bringing more, this is a lot of efforts that went into looking at targets and other things. But today, it is something really close to my heart, is bringing the first autoimmune targets as well. So let's start with the first PIWIL. So PIWIL came from our efforts we have what we call [indiscernible] that's years of efforts of looking at targets that are expressed only in tumors or in tissues and things like that. So PIWIL is the first-in-class. We like these targets for -- you'll see there are some things that are in common with PRAME. It's -- when it's expressed, it's homogeneously expressed, is also a negative prognostic marker in multiple cancers, and it's expressed in CRC, which is really important because CRC has historically been insensitive to IO. So we announced that last year, and we said we'll file the CTA and that's exactly what we've done. We've filed the CTA in December. And we believe we are on track actually to having the Phase I start in Q3 2024. So now to something really exciting, at least for me, is the autoimmune. So here, the concept is how can we go from systemic immune suppression to down modulation of the immune system in a very specific and -- tissue specific because we know inflammation happens in certain tissues. So how we do that? I'll just walk you through that. So we take the tissue of interest, that's inflamed. And we mapped actually what are the targets that are expressed only in that tissue. So we know how to do that. So we'll have the peptide. We know how to make a TCR against that peptide, that's what we've done. And then on the effector side, here is a PD-1 agonist. This is a nanobody for PD-1 agonist. So this is the ying and yang from cancer. In cancer, we want to take the foot off the brake here. We want to go all the way to really stimulate this inhibitory receptor that then reduces the T cell activation and hopefully drives them to exhaustion. So the first application was in beta cells in type 1 diabetes. We know that beta cells are basically killed by the autoreactive T cell to the point where the disease progresses, you have to provide insulin. And so we identified a very, very good peptide from preproinsulin that's extremely highly expressed in beta cells. We have shown that it's actually -- it binds only when we do the clinical candidate. It binds completely just to the beta cells. You see it in the red there. We've done a lot of experiments to convince ourselves that it's doing what it's supposed to do. It localizes where it needs to localize into the synapses, and this is just one representative of the -- ultimately, what we saw is that basically in the purple, when you put beta cells with autoreactive T cells, you can see basically, there is a killing, there's no growth. But if you add the ImmTAAI, that's the molecule, if you add the ImmTAAI to the beta cells plus autoreactive T cells, you actually rescue these beta cells, and you can see it's going all the way as dose dependent. So really, really excited about that. This is a program that now is going into GMP CMC. The second is taking another tissue, which is the skin. And we know in the skin, this is basically the antigen, the APCs are the culprit in the skin for the skin inflammation. So we have identified a target we have not disclosed. It is a universal target. And like what I just showed you that's HLA-A2 positive restriction. This is a universal, our first one. This is antigen -- so it's expressed on antigen-presenting cells and inhibits then the autoreactive T cells on the skin. So we -- again, we can see the localization, we can see the inhibition, we've done a lot of experiments there. And suffice to say that the opportunity could be really huge here because you have anything that's inflamed in the skin, atopic dermatitis, psoriasis, scleroderma, other things as well. So this is also starting the GMP CMC, and we hope to be in the clinic by 2025 or at least do the IND by 2025. So as you can see, I hope I showed you how busy the 2023 and productive 2023 has been. And really, the goal is always to continue to bring the pipeline. So as you can see here, I think I've been the whole time while my team is doing this. And I said, I just started the talk and it's actually -- there is a delay between the computer and which slide you see. So now I got it. All right. So 2 things to see from our pipeline is, first of all, really happy about it starting, you can see almost 3 programs in late stage. We have a sustainable pipeline with more coming from the early phases. And it's now officially, I can say, it spans 3 therapeutic areas. So we have multiple milestones looking into 2024. I think I shared them with you as we were -- as I was talking. So I'm not going to go into each one of them, but suffice to say, a very data-rich 2024 to look forward to. And before I finish, I just want to say nothing really can happen without an amazing team. I'm very grateful to their dedication to really bringing and helping patients every day in and day out. And I would like to thank you all for your support and most importantly, thanking our patients. Thank you very much. Go ahead.

Great. Thanks for the presentation. Maybe starting out with the autoimmune efforts, on the recently announced IMC-S118AI. Can you talk about the encouraging data in that ICI [ inside ] paper from 2021? And just I guess, what gives you confidence in this approach, maybe compare and contrast a little bit, say, just a PD-1 agonist and kind of the advantages you've got there?

Yes. I'll let David talk about that.

Yes. So the -- Jess, the major advantage of our platform is it's tissue specific. So there are PD-1 agonists out there, some have been shown to have some preliminary data in rheumatoid arthritis, but those are systemically active and so they will systemically turn off T cells everywhere. Our approach is tissue specific, so it should only inhibit T cells in the tissue that's inflamed. That's probably the major advantage. And then as Bahija mentioned, we can use that T cell receptor approach to target almost any tissue, the lead program, the one you talked about it's for type 1 diabetes. So it is a super specific PD-1 agonist that will only be active near and around the beta cell of the pancreas.

Great. Maybe switching to KIMMTRAK. Obviously, a very successful launch, I think you highlighted. But thinking about kind of 2024, where is the growth going to come from here?

Go ahead.

Yes. So for -- just to recap 2023, we achieved over $60 million per quarter. We continue to see that in the fourth quarter, we continue to see growth. We haven't flashed the earnings number yet. Jess, you'll be happy that in 2024, we'll be a domestic filer and report everything in dollars. So we have to go back and Jess has been asking us for years to do dollars. So we'll be doing that. So yes, so we'll give earnings in February in dollars, But pleased to see growth continue in the fourth quarter. In the 2024, we expect sequential growth as well. We're still growing globally in terms of countries but from a revenue perspective, the U.S. is still a significant driver. So still more to penetrate in the U.S., Jess. We have about 65% penetration there. So the team is still expanding. And -- but I think for KIMMTRAK one of the -- what we're focused on as a team, as Bahija went through, that the existing patient opportunity is 1,000 patients a year, we think that patient population by 2030 will be 5,000 patients a year. So later this year, we'll have KIMMTRAK data, top line data in late line melanoma. And then -- so we'll see what that data is, and it will inform us to move into a Phase III. And then we also, in 2024, are starting an adjuvant trial that we mentioned that will take about 3 years to randomize. But we think that with this mechanism in this platform, we want to move earlier in the disease progression. We know that the earlier you go, the better the efficacy.

Maybe sticking with that kind of post ipi, nivo in cutaneous melanoma trial. Can you just talk a little bit more about what we should expect to learn? What we should expect to learn from the interim Phase II later this year?

Right. So the Phase II design, as a reminder, is KIMMTRAK monotherapy versus KIMMTRAK plus pembrolizumab versus the control arm. And it's an innovative control arm, which we can talk about later. The dual primary endpoints of the Phase II are circulating tumor DNA reduction. So that's going to give us our early surrogate of activity and then survival. And so those are the 2 endpoints we'll be looking at. Now to be transparent, the survival will probably likely not be fully mature at this analysis at the end of the year, but we believe it will be directional and allow us to make some early decisions about, for example, should we continue both of the KIMMTRAK arms? Or should we drop one of -- perhaps we want to drop the KIMMTRAK plus PD-1, if there's no significant difference in survival and ctDNA. So that's primarily what we're going to be doing at this end of the year analysis.

And adjusting the power of the Phase III, which for me derisks really the Phase III.

Yes, that is correct.

And I guess how are you thinking about the competitive landscape in that kind of second line plus cutaneous melanoma market? And related to that, how do you define success when Phase III eventually reads out?

Yes. So let's talk about current and future. The current is there's nothing really available for these patients. And that's why when we designed the control arm, it had to be carefully designed. Doctors did not want to be forced to use something that doesn't work. And so that's where we came up with this idea, this innovative idea of essentially randomizing to a real-world registry. So the patients randomized to the control arm. They get discharged from our study, and they go to follow-up, and that allows them to enroll on other clinical trials or get treated, however the doctor would like them to treat. So that was the design to reflect the current standards of care. Now, in every therapy, there are always new therapies that come out. The nice advantage for our trial is that everyone else who's studying therapies in this setting are doing single-arm response rate for accelerated approval. If our study reads out positive and we can talk about what positive would be, this would be the new standard of care in second plus line because it would be the only therapy to show a survival benefit in that line of therapy. And I think then your other question was about what does success look like or -- so the current survival, and I use 1-year survival as a landmark in this setting, the 1-year survival is around 50%. And that doesn't -- it's independent of what -- whether it's an observational trial, whether it was an experimental clinical trial, no one's really been able to move the needle. In our Phase I/II trial that for KIMMTRAK that -- a few years ago, that was a combination with checkpoints, the 1-year survival was about 75%, just as a comparison. So for us, success would be a statistically and clinically meaningful survival benefit versus the control arm.

And Jess, we can do that because, at least for that the control is because [ of an ] OS endpoint that you can do that, basically, great to follow up.

Right. If you had a PFS or response rate endpoint you couldn't follow them on someone else's clinical trial, but you always follow survival even if they go to another clinical trial.

What about adjuvant uveal melanoma? What gives you confidence in the ultimate success of that trial?

Yes, Jess, I think a couple of things to. One is if you look at the subset analysis from the Phase III first-line metastatic trial, patients with the smallest tumor burden, that's M1a, that's -- those are patients with tumors are less than 3 centimeters in size, had a survival hazard ratio of 0.36. And actually, that was the largest subset in the Phase III trial. And so if you have a hazard ratio of 0.36 with small tumors, then we said, imagine what this benefit would be if you don't see any visible tumor. That's the adjuvant setting. Number two is the platform observation that we've seen throughout which is as you move into earlier line of disease, we see better activity for our platform. We see that with circulating tumor DNA. You see the rate of clearance triples as you move from second line to first line, and there's probably various reasons why that's the case. And so we think in an adjuvant setting where there's no visible tumor, the immune system is going to be better. And so -- and then finally, I would say the control arm here, there is nothing -- patients do watch and worry. And so we're randomizing against just against the observation, yes. So that's an extremely low hurdle because there's no therapeutic intervention.

From the previous [indiscernible] could you explain a little bit about how the randomization works in the control arms? Like if they either go on KIMMTRAK, continue on [indiscernible].

Yes. So -- right. So -- all right. So the question was, can I explain more specifically the design of the Phase III trial in terms of the control arm in the cutaneous melanoma KIMMTRAK trial. So in a typical trial, what you would do is you would randomized control arm. In a cancer trial, we wouldn't use placebo, but you would randomized to, let's say, investigator choice or a chemotherapy. And then once the patient progresses on the experimental arm or on the, let's say, chemotherapy control arm, they then leave your study and they can get enrolled on another study, right? You progress on the current study, so you're eligible for other studies. Now when patients progress and go on to other studies, sponsors always follow them for survival. So you can follow them for survival. If they go into 10 other clinical trials, you still follow them for survival. So when we came up with a design, we said to investigators, what do you want on the control arm? Do you want us to have dacarbazine? Do you want IL-2? What do you want? And to almost everyone, they said the only thing that we want for these patients is clinical trials. So when you do this, when you have something like that, the design is, if they're randomized to the control arm, we tell them, "Okay, you're discharged from our study, you can go and get treated however you want, you can get best supportive care, you can go into another clinical trial." The only thing we ask is that we still can follow you for survival. So you can only do this type of innovative design if you follow -- if your primary endpoint is survival. Obviously, if it's PFS or response rate, you can't do it.

It could be confounding, yes.

Does that make sense?

So they're still kind of in your trial...

Yes. Yes, they're still being followed in -- it's called survival follow-up standard for every trial, which is why, by the way, we did the survival update in our Phase III first-line trial, even though they had progressed and gone on to something else. We did a survival update. That's why we came up with a 3-year survival update in the first-line uveal trial. To follow them for survival.

Are they able to -- the only question is could they try to get KIMMTRAK commercially which would kind of mess up the [ similar ] calculation.