Immunocore Holdings plc (IMCR) Earnings Call Transcript & Summary

Great. Thank you so much. My name is Peter Lawson. I'm one of the biotech analysts at Barclays. I cover some mid-cap oncology names predominantly. And many of my names kind of making an interesting pivot as well. And so I'm really pleased to have with us Immunocore and we've got CFO, Travis Coy; and Ralph Torbay, Head of Commercial.

And I -- a series of questions I've been asking at companies are just at the kind of the macro level. How you look at like supply chain, especially with the light of tariffs and if there's any long-term or near-term, short-term impacts on the supply chain that you're kind of -- that we should be thinking about?

Yes. I think for us specifically, obviously, we're in a great position from a company perspective. And at least to date, we have not seen any disruptions. That being said, we do manufacture KIMMTRAK in Europe. So, we have to continue to make sure we closely monitor the situation, and there's been talk about tariffs from Europe. So, we obviously continue to monitor that situation because we're cognizant that there could be an impact potentially to our cost of goods sold. So, no impact to date, no disruptions to date, but still staying close to, obviously, the macroenvironment and what's going on from a tariffs perspective.

How do you kind of hedge against that on the COGS side of things? Is there a way of doing it or...?

Yes, it depends. Probably early -- too early days yet to talk about specific remediations that we may be able to make to help mitigate any downside that could potentially come from that. But we're also a bit unique in that. Our platform has such strong potency. So KIMMTRAK for example, is 68 micrograms. Our gross margins are 99% -- just over 99%, which is unique for a biotech, as particularly one of our size to be able to have gross margins at that level. So we do look at things, and we're making sure we're planning with various scenarios that may or may not happen, and we'll sort of act accordingly.

Got you. And then the other macro question I've been asking just around the FDA kind of potential cuts there. And have you seen or heard any kind of slowdown in communication? And how has that communication been for you?

Yes. So, there's a lot of changes going on in the system, which is obviously -- I think, leading to some unpredictability for a lot of people. But thus far we have not seen any changes in speed or responses or any of those elements in reaction with the FDA. We'll continue to work with them and making sure we implement things as quickly as possible and continue to stay up on top of changes that occur there. But thus far -- no impact thus far. Yes.

And any worries around these potential restrictions around biological manufacturing partnerships or these cross-border licensing agreements? Is there anything there we should be thinking through?

Yes. It's certainly -- so for us specifically as a company, we don't expect any impact. What I will say is just from the broader biotech ecosystem, we're going to be supportive of making sure we can access innovation wherever it is. So I think that's something we need to -- obviously, not just as Immunocore, but as -- again, as a biotech and pharma ecosystem, make sure we're cognizant of and hope that, that continues to be the case, particularly speaking to your cross-licensing question.

Perfect. And then I guess final kind of macro question just around NIH budgets being cut. Is there any kind of thing near term, midterm that we should kind of be thinking about, even if it trickles through to, say, clinical trial sites and universities?

Yes. Similar to -- actually similar to tariffs, we haven't seen an impact to date. We want to make sure -- obviously, the NIH plays an incredibly important role in the ecosystem. And so they, in many instances, are the source of a lot of the innovation in the United States and more broadly. So, we definitely want to keep an eye on that in some respects. We've some instances where we've approached people for positions that are good scientists, and it may provide an avenue there to actually bring some of those people over in the industry.

Got you. Perfect. And then just back to your data, the great data today with HIV. And kind of how do you look at that data? And how does it kind of inform how you're thinking about moving forward?

Yes. So really encouraged by the HIV data that we had a chance to disclose at the CROI conference yesterday. Just to orient everyone, this was initial multiple ascending dose data of 16 patients with 3 different dose cohorts. And as Peter is alluding to, we're actually really encouraged by the data. We are looking at 2 key things, that you're looking at the Phase I trial is safety and efficacy. So from the safety perspective, given our platform that, that therapy has a CD3 arm, making sure that CRS was manageable. So very pleased to see that the CRS that we did see in the highest dose cohort was upon the first dose, and it was resolved -- and it was low grade 1 fever and resolved within 4 hours of occurrence. The other aspect is then efficacy. So really pleased -- and keep in mind that this therapy's intention is to -- is for a functional cure of HIV, something we have not seen in the industry today. So, really pleased to begin to see with dose escalation some reduction in the viral reservoir in some doses and also some viral control at the higher doses, which means we're delaying rebound from patients coming off of antiretroviral therapy. So. obviously, early days, but seeing evidence in sort of those 3 patients. And we saw one evidence of that in the 120-milligram cohort and then 2 patients in the 300-milligram cohort. So that gives us the confidence to continue that dose escalation that you're alluding to, and that's what we intend to do.

Yes. Where are you for dose escalation?

Just -- we actually just started. So, we finished the data that got disclosed yesterday at CROI, was from, as I mentioned, the dose escalation up to 300 micrograms. Because of the safety profile that we're seeing, we've now amended the protocol of the trial to go even higher. So we're just beginning -- that took a little bit of time to do. So we're just now beginning the dose escalation. But hopefully, we'll have data from those -- from that dose escalation in the next 12 to kind of 18 months.

Okay. So do you think it's 12 to 18 months before we see the next cut of data or just the patients?

Probably so. That's our best estimate at this time. Like I said, we just started it. Keep in mind that the trial is designed such that it's 12 weeks of therapy -- of our therapy combined with ART, so antiretroviral therapy. Then it's another 12-week of monitoring to see that viral rebound and see if there was a delay in that viral rebound. So that's already 24 weeks. So that's way to say, by the time we do enrollment, have that monitoring period. We're probably looking at about 12 to 18 months at this point in time.

Got you. And longer-term where do you kind of want -- where do you think it could potentially get to for a sense of like viral reservoir reduction and lack of rebound? What's the kind of the right number of the physicians...

Yes. Sort of what is the target product profile, if you want to? Yes. So, as I mentioned, the objective is a functional cure. So when you talk to KOLs, and there was actually a recent paper just published on this, that sort of said the baseline of what we're looking -- we'd like to be able to achieve is delaying that -- delaying ART, so delaying -- reinitiating ART, antiretroviral therapy for about 2 years. That's sort of what we're hoping to achieve. We have some work to do. Again, this was early initial multiple ascending dose data, but we are encouraged by the fact that one of the first therapies to ever show a delay in that rebound and a reduction in virus in the reservoir as well, gives us good reasons to believe and hence why we're continuing to escalate -- dose escalate.

Got you. And I guess the read-through that we should have or you would think from HIV over the HBV studies?

Yes. Certainly, some similarities and some differences. So if you think about HIV and HBV, similarities being both, similar constructs from a platform perspective in that we're taking a bispecific and using the CD3 arm to engage T cells to bring those to help fight the virus. So that part is similar. In the case of HIV, I mentioned we're targeting the Gag protein expression. In the case of HBV, we're looking at a different protein expression called Envelope. But similarities of what we'll be looking for. So Peter is alluding to the fact that we're disclosing our single ascending dose for HBV in the second half of this year. So things we'll be looking for that are similar to HIV will be, were we able to see a dose-dependent response in cytokines. That tells us that we're getting T cell engagement and that those T cells are being brought into HBV. And ultimately, we'd like to see some evidence of HB surface antigen reduction. And so hopefully, we'll be able to provide some of that data, and we will provide some of that data in the second half of this year.

Got you. And then, are there similarities or things you've learned from the HIV program that we've seen that kind of help inform HBV and whether it's dosing or safety profiles?

Yes. Similarly -- one of the things with HBV, people that have HBV, in particular, they are a typically well-controlled patient population. I think that's one thing you need to keep in mind. The other -- and very honestly, that has led to some more challenges in enrolling that study than we had anticipated. But the other thing we're also looking at from the HBV that I could highlight from a differences perspective is, because they're so well controlled and because of the way the mechanism of action works, we are also looking at whether there's some productive transaminitis. Meaning, we expect to see some ALT and AST increases because of that mechanism of action. And therefore, we want to make sure -- we have to thread a little bit of the needles. We want to make sure we don't cause any liver tox. So that's also one of the reasons we've been more cautious with that program. And so that's one of the needles we're ultimately looking to the thread as we potentially move forward.

Okay. What's the process of like threading that needle? What do you have to do like lower doses or...

It's really a balance of safety and efficacy. Yes. And that's what -- the single ascending dose trial is just kind of the beginning of that journey.

Okay. How many patients do we -- should we expect to see?

We haven't disclosed the exact number of patients. But if you think about a sort of typical Phase I single ascending dose study, usually, you're looking at mid-teens, in that range.

Okay. Is there kind of an internal or external goal around the path for success, whether it's IL-6 increases or what's -- what are the metrics we should be looking at?

Yes. I mean, ultimately, safety, as I mentioned, because that construct is the same CD3 has -- bispecific has that same CD3 arm that I mentioned. So we need to look at CRS and safety and make sure that is manageable. I mentioned the transaminitis as well. But then looking at reductions, again, going back to -- we really want to see some reductions in that HB surface antigen and using that data as the determination for next steps.

Keep in mind, it's a single dose, right, [indiscernible] drug, so.

Yes, versus the -- as Ralph points out, that's obviously different than the multiple ascending dose data that we disclosed yesterday.

That's a good point.

Yes.

Okay. What do you need to start that multiple ascending dose in HBV?

I'd actually tie it back to exactly what I said is that safety and reduction of surface antigen. Those are the 2 things that we're really looking at.

And then remind me in the HIV population, did you see that AST, ALT elevation?

Yes.

So this is specific to...

It's specific to HBV and the biology of both the disease...

Of course, yes.

And the -- both the disease and the mechanism of action that we have.

You're killing [ him ] for the hepatocytes. So you expect change.

Yes, good point, Ralph.

Is there a way to mitigate that? I guess not.

Well, I mean, that's what you expect. That's the mechanism of action that you -- the question as Travis was saying is you want to make sure that it's the unhealthy ones or the infected ones that you're killing, not the healthy ones.

Okay. The CRS you saw, it was in -- it was minimal, resolved very quickly. But I mean, is there -- as we -- as you escalate, it's presumably going to get worse? Or do you think it just extends in time? Or do you think it goes from grade 1 to grade 2?

Yes. So if we -- it's part of what we'll continue to explore with the dose escalate. We're back to HIV. Part of what we'll explore as we continue to dose escalate. We have a lot of insight from the oncology data that we generated, both clinically and pre-clinically that we can -- we have applied and we will continue to apply to that dose escalation in the HIV program. So very encouraged by -- again, only seen grade 1 CRS so far at the highest dose. And also other thing to remember is we do a step-up dose to get to that target dose. So we'll be looking at how to optimize that as well to minimize that CRS.

Okay. Perfect. I'd love to pivot a bit just for the launch and -- the very successful launch you've had. Kind of what are the drivers left we should be thinking about in the growth opportunities for KIMMTRAK?

So Peter, we've been doing very well with KIMMTRAK establishing it as standard of care across most major markets with over 80% share of HLA-A*02:01 patients. Last year alone we delivered $310 million in revenue, and that was a 30% year-over-year growth. And to your question, I still think there are areas of opportunity. Number one is in the U.S. we still are going after the community where we -- there's still some penetration to be had. The good news is that we have half of the patients already starting in the community. About 2 out of 3 patients are being treated in the community, which speaks to the well-tolerated profile of the medicine and the efficacy. And then there's opportunity also in the duration of therapy. We're seeing something that for me is unprecedented, where you see the duration of therapy in the real world doing better than the duration of therapy in the clinical trials. And again, that speaks to patients doing well. And lastly, we are prosecuting a few launches outside of the United States. There's still some countries remaining. Most recently we launched in the U.K. and Poland. There's still a few countries where we're working on reimbursement in Europe. So that's I think, the next incremental phase of growth.

Got you. And then maybe digging into some of those duration of therapy. Do you expect -- you seem to expect that's going to continue beyond the, what, 11 months or so that it is now?

So -- I'm hoping so, right? Because the patient that's on therapy is a patient that's surviving and doing well with controlled disease. So I think this -- what we're seeing in the real world is we don't have a good guidepost from the clinical data because it's extended beyond the clinical data. So we're all learning together.

Yes.

Do you think a similar dynamic happens in ex-U.S. as well? I don't know if that's a U.S.-driven event where you're getting beyond the 11 months or if it's kind of a global event?

So interestingly, it's more pronounced in some countries outside of the U.S. What we're seeing is that physicians who are able to find patients earlier in their disease course as well as physicians who basically are very well educated on treatment beyond progression tend to have patients that do better and stay on for longer. So in Europe, it's a more centralized health care system, and therefore, you see a little bit more of those sort of experts being able to treat patients a little bit longer.

Interesting. Okay. And then the new countries that we should expect to see in 2025?

So we recently announced that we have an approval in Brazil. So we expect named patient access there. We're -- we've submitted for reimbursement across several other European countries that -- we're still working to get reimbursement, and you can expect some of those to come online this year. So last year, we had 14 launches, 24 countries in total. We're working on a few other launches this year. It's all incremental to the U.S., I would say, though.

Great. And are there particular geographies that are coming online that could move the needle? Or these are kind of diminishing returns? How should we think about those additional geographies?

Yes, I think it's incremental in the sense that the U.K. is probably the largest country that we're launching in the first quarter. Poland is actually large as well. And then there's a few other countries like the Netherlands, for instance, where we don't yet have reimbursement. And final stages of that conversation.

Got you.

Peter, if you think about the growth that we saw in 2024, we had 30% year-on-year growth, right? What led to that was quarterly sequential growth of a range of about 5% to 7%. Naturally, in any product's life cycle, you begin to see that growth moderate, and that's what we're expecting. We are expecting that growth to moderate from those kind of quarterly sequential levels that I mentioned. But we do continue to expect growth, as Ralph was articulating.

Got you. And how do you think about emerging competition in the space? So I guess idea is the obvious one. I know, it's -- they're not going after the same HLA as you and -- but how do you kind of ring-fence the existing business or if that's the appropriate way to think about it?

So first of all, I think that they're -- we're awaiting their Phase III results, of course, and which if positive would be good news for HLA-A*02:01 negative patients. For the positives, really, KIMMTRAK is standard of care across major markets. We have established 3-year overall survival. Really, the benchmark is patients are surviving. Physicians are seeing in the real world their patients surviving, as we discussed about duration of therapy. So I do expect KIMMTRAK to remain the standard of care worldwide for HLA-A*02:01 positive patients.

Got you. How should we think about, or how worried you would be about off-label use? So when they -- it is actually used in HLA-A02 positive population?

So there's 2 geographies, right? The U.S., where off-label use is more common. And there, I think it's about, again, that value proposition for the patient. And as a patient, I want -- the chance of survival, that's the most important endpoint for patients. So I think in the context of that, physicians will have to make a decision of what to use first. And so far, again, KIMMTRAK is standard of care. And then in Europe, for the most part, off-label is not a common fact. So I think that there it's not even an issue.

Got you.

Peter, the one thing I'll tie into. Ralph obviously mentioned overall survival which is clearly important. The other thing is tying back to his comments on how we've seen the duration of therapy go beyond the clinical trial setting is the safety profile. And that is something we've been incredibly encouraged by. Hence, why we're seeing the starts that we're seeing in the community and why our growth is expected to come from the community in the U.S. going forward is they're getting comfortable with that safety profile, which is absolutely terrific to see.

Okay. And then maybe in the last few minutes, if we pivot to PRAME and what should we think about kind of potentially falling in 2025 versus 2026, if it's the ovarian data, mono, combo arms or the lung data, how that falls this year, next year?

So we had very interesting single agent data and combination in the platinum refractory setting in ovarian cancer. The single therapy data was -- the monotherapy data, sorry, was, we saw disease control rates of around 60%. The combination, we saw that around 70%, like 23% overall response rate. So really very interesting data, and we're building on that signal in 2 ways. One is we're expanding our cohorts in combination with chemotherapy in the platinum refractory setting. And then we're also going into the platinum-sensitive setting to explore combinations with bevacizumab and other therapies as well. And then in lung cancer, we're building upon the signal that we have seen -- sorry, in lung cancer, we're signal searching. So well -- in ovarian cancer, we're building upon the signal. In lung cancer, we're signal searching, and that means that we're going into combinations in earlier lines and looking for -- lung cancer is a fragmented space. So we have to look at segment by segment.

And is there update -- there should be updated data in ovarian this year or is it next year?

So we expect -- we're currently enrolling patients. So we expect in 12 to 18 months as data comes, we will share. We do tend to share data at conferences because we think peer review data is very important.

Okay. And then how big a data set will that be in lung cancer? How many patients?

Yes. Honestly, it depends on the data, Peter. So it depends on the data and where that data takes us will ultimately determine how many patients we continue to expand in those cohorts.

Okay. And then in ovarian, where you -- where does that eventually fall? Is that kind of second line, third line? What line of therapy for ovarian do you think?

So in ovarian in the platinum-sensitive setting, it's probably second line plus. In the platinum refractory setting, its third line plus. Yes. And Peter, I'd be remiss if I don't mention the fact that TEBE-AM is actually doing very well.

Yes.

That's right. We've got -- still got 40 seconds, I should ask about the advanced melanoma.

So our enrollment is moving according to plan. We expect first half of 2026 to finish our enrollment data shortly after that. That's an sBLA for KIMMTRAK. And obviously, high unmet need setting, first Phase III trial that is looking at overall survival as an endpoint in this patient population. And so we have high expectations. And then we have the ATOM study in the adjuvant uveal melanoma setting. It's the only Phase III registrational trial in the adjuvant setting. And then the PRISM-MEL Phase III study. So 3 Phase III studies in melanoma that are going to be reading out over the next few years.

Perfect. Thank you so much.

Thank you, Peter.

Thank you for having us. Appreciate it.