Immunocore Holdings plc (IMCR) Earnings Call Transcript & Summary

Greetings, and welcome to the Immunocore conference call and webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ryan Baker, Vice President, Investor Relations. Ryan, please go ahead.

Good morning, and good afternoon. Thank you for joining us on our Q2 and first half 2026 earnings call. During today's call, we will make some forward-looking statements, which are qualified by our safe harbor provision under the Private Securities Litigation Reform Act of 1995. Please note that actual results can vary materially from those indicated by these forward-looking statements, including those discussed in our filings with the SEC. On today's call, I am joined by Dr. Bahija Jallal, CEO of Immunocore, who will share achievements from the first half of 2026. Ralph Torbay, Chief Commercial Officer, will review our Q2 first half KIMMTRAK results and recently published 5-year overall survival data. Dr. Mohammed Dar, our Chief Medical Officer, will provide a pipeline update; and Travis Coy, our CFO and Head of Corporate Development, will provide some key highlights from our financial results reported earlier this morning. I will now turn the call over to Dr. Bahija Jallal.

Good morning, and good afternoon, and thank you for joining us today. Before I start, I would like to welcome Ryan Baker, who joined us last week as our new Vice President of Investor Relations. So welcome, Ryan. Guided by our mission, we have continued to execute as planned across the business. We remain focused on our 3 strategic priorities: maximizing the value of KIMMTRAK, advancing our melanoma portfolio and expanding into other tumor types and realizing opportunities in infection and autoimmune diseases. Starting with KIMMTRAK, we generated $223 million in net revenue in the first half of the year, representing 16% growth compared to the first half of 2025. At AACR in April, we presented the 5-year overall survival data that showed that KIMMTRAK doubles the likelihood of being alive at 5 years for patients with HLA-A*02:01-positive metastatic uveal melanoma. For a disease once measured in months, 5 years is extraordinary. And some of those patients are alive today because of this medicine. This is why we come to work every day. In melanoma, we are advancing 3 ongoing Phase III trials: TEBE-AM, ATOM and PRISM-MEL-301, an important differentiator for a company of our size. Beyond melanoma, we expect to present updated PRAME data in additional tumor types by the end of the year and to provide initial pivot data in 2027. In autoimmune diseases, the first patient is to be dosed with our first autoimmune candidate in type 1 diabetes in the coming weeks. We also remain on track to submit the CTA for our second autoimmune candidate by the end of 2026. Finally, in HIV, we have completed enrollment of additional patients at higher dose cohorts up to 1.2 mg as part of the multiple ascending dose part of the Phase I/II trial. We are analyzing the new data and plan to share results early next year. Overall, we are continuing to execute across our commercial portfolio and pipeline with multiple opportunities to create value for patients and shareholders. And now ask Ralph to share details about our commercial performance. Ralph?

Thank you, Bahija. Today, I will cover KIMMTRAK's continued commercial momentum, our landmark 5-year OS data and our ongoing growth opportunities across melanoma. We delivered $223 million in net sales during the first half of 2026, representing a 16% year-on-year growth and reflecting the sustained strength of KIMMTRAK across our global markets. In the second quarter, we generated $116 million in net sales with the U.S. contributing $75 million and serving as the primary growth driver. The strong performance was supported by continued demand growth in the community as well as $6 million in inventory stocking by a U.S. distributor. This increase in inventory will create a headwind in Q3. The fundamentals of the business remain very strong across our 30-plus launch countries. We continue to see over 70% penetration across our major markets and a stable duration of therapy of 14 months. In our fifth year on the market, we expect moderating growth driven by continued commercial excellence, geographic expansion and deeper penetration in the U.S. community setting. The body of evidence supporting the long-term survival benefit for patients treated with KIMMTRAK continues to build. We presented French real-world evidence showing a median overall survival of 28 months and more recently presented the 5-year survival data from our registrational trial, which I will discuss in Slide 8. KIMMTRAK's landmark 5-year data sets the bar for overall survival in HLA-A*02:01-positive first-line metastatic uveal melanoma. It is also the longest OS follow-up ever reported in a randomized metastatic uveal melanoma trial and for any T cell engager in a solid tumor. This data shows that treatment with KIMMTRAK doubles the likelihood of survival at 5 years with a 16% OS rate compared with 8% for investigator's choice. Importantly, the survival curve separated early and remained separated over time. In the active arm, 44% of patients alive at 5 years received KIMMTRAK as their only treatment. In the control arm, 87% of patients alive at 5 years crossed over to KIMMTRAK. Remarkably, only a single patient that did not cross over to KIMMTRAK was alive at 5 years. The 5-year OS benefit of KIMMTRAK was observed across key subgroups, including those with poor prognostic features such as high tumor burden, elevated LDH and extrahepatic disease. These results clearly demonstrate that starting with KIMMTRAK in first line gives patients the best chance at extending long-term survival. I'm excited about the opportunity to potentially extend this benefit to more patients through our life cycle management program, which I will discuss on the next slide. Today, we're serving approximately 1,000 patients per year in metastatic uveal melanoma. Our focus now is on scaling this momentum with the potential to expand the number of patients sixfold through our 2 Phase III life cycle management trials. TEBE-AM could transform the lives of up to 4,000 patients with advanced cutaneous melanoma. The data is expected as early as the end of 2026. Our ATOM trial in adjuvant uveal melanoma could help up to 1,200 patients live without their disease. I am confident in our ability to execute on this growth trajectory, and I'm excited about what's ahead for KIMMTRAK and the patients we serve. I'll now hand over to Mohammed to discuss these trials in more detail. Mohammed?

Thank you, Ralph. I'm pleased to be able to share the progress we've made across our pipeline. I will now begin with our 3 registrational melanoma trials, starting with TEBE-AM on Slide 12. Our lead registrational opportunity is in advanced cutaneous melanoma, where there is high unmet need. No therapy has proven to extend survival in second-line plus cutaneous melanoma following checkpoint inhibitors and targeted therapy, with 1-year overall survival in this setting remaining unchanged at approximately 55%. TEBE-AM is the first Phase III trial aiming to demonstrate an overall survival benefit, the gold standard in this setting. If TEBE-AM is positive, KIMMTRAK would be the first new therapy with an overall survival benefit in second-line plus CM. As a reminder, first-line patients typically receive either anti-PD-1 with or without additional checkpoints or BRAF-targeted therapy. In second line, patients can switch between these classes where appropriate. Beyond second line, retreatment with prior therapy, chemotherapy and clinical trials remain the primary option. The only recently approved therapy under accelerated approval in this setting is TIL therapy based on response rates, not overall survival. As a reminder, TEBE-AM is a randomized Phase III trial for melanoma patients who have progressed on checkpoint and if applicable, targeted therapy. Patients are randomized to KIMMTRAK monotherapy, KIMMTRAK plus pembrolizumab or a control arm with the primary endpoint of overall survival. Our confidence in this program is based on multiple considerations, including the promising Phase Ib data showing a 75% 1-year survival rate compared to the historical benchmark of 55% Beyond efficacy, KIMMTRAK is an off-the-shelf therapy with a predictable and manageable safety profile that is already familiar to the melanoma community. Enrollment is nearing the target of 540 patients with the number of patients left to enroll now in the teens, with top line data still expected as early as the end of this year. Now turning to our second KIMMTRAK-LCM registrational trial. To date, ATOM is the only uveal melanoma registrational trial actively enrolling in the adjuvant setting, where there is currently no approved standard of care. High-risk patients are randomized to either KIMMTRAK or observation with relapse-free survival as the primary endpoint. The study sponsored by ERTC has been enrolling patients across multiple European countries and is now enrolling in the U.S. Our goal is to bring the benefit of KIMMTRAK to uveal melanoma patients earlier, potentially delaying or even eliminating the onset of metastatic disease. Our third registrational opportunity is also in melanoma, this time with brenetafusp, our TCR targeting PRAME. The PRISM-MEL-301 trial is a randomized Phase III trial in first-line cutaneous melanoma, comparing brenetafusp plus nivolumab versus either nivolumab monotherapy or nivolumab plus relatlimab with progression-free survival as the primary endpoint. We have now successfully activated over 200 sites globally and are targeting enrollment completion by late 2027. Next, I will briefly cover the Phase I/II trial with brenetafusp in heavily pretreated patients with advanced melanoma presented recently at ASCO. These data reinforce our belief in the potential of brenetafusp plus nivo in first-line advanced melanoma. The data demonstrated a 17% overall response rate and a 67% disease control rate with brenetafusp monotherapy at the 160-microgram dose in heavily pretreated patients with advanced melanoma. Relative to the 40-microgram dose, the higher efficacy observed with the 160-microgram dose despite this cohort having less favorable prognostic factors supports selection of this dose for the ongoing Phase III trial in first-line advanced melanoma. The median overall survival for brenetafusp monotherapy in this late-line melanoma population reached 14.3 months. This compares favorably to other Phase I/II trials of combination therapies in heavily pretreated patients with advanced melanoma, including recent studies with autologous cell therapies. I will now turn to the remainder of our oncology pipeline, starting on Slide 18. Beyond cutaneous melanoma, we are focused on expanding the PRAME franchise into other tumors, specifically ovarian and non-small cell lung cancer. In ovarian cancer, we're building on the monotherapy activity observed in late-line settings by moving into earlier lines of treatment. This includes evaluating brenetafusp in combination with chemotherapy in platinum-resistant ovarian cancer and in combination with bevacizumab in platinum-sensitive maintenance setting. For lung cancer, our efforts remain focused on signal detection of monotherapy across various molecular subsets as well as evaluating combinations with multiple standards of care. We expect to present data from these ovarian and lung cohorts later this year, which will inform next steps. In parallel, we are advancing our PRAME half-life extended candidate, which is currently in a Phase I dose escalation trial. Our hypothesis for this molecule is twofold. First, to provide patient convenience through less frequent dosing; and second, to potentially increase the overall response rate. As data become available, we will determine the best next steps for the franchise. The modular nature of our Impax platform allows us to expand our reach beyond oncology and potentially unlock significant growth opportunities in infectious disease and autoimmunity. Last year, we shared preliminary data from an ongoing multiple ascending dose study in people living with HIV. The data demonstrated a delay in viral rebound after treatment interruption in a small number of patients at higher doses. Since then, we have completed enrollment of additional patients at higher doses, including 1,200 micrograms. We are now in the process of analyzing these data and plan to share an update in the first half of 2027. Now turning to our third therapeutic area, autoimmunity. Our Phase I trial in type 1 diabetes is now open and actively screening patients, and we expect the first patient to be dosed in the coming weeks. This will be an important milestone, representing our first tissue-specific autoimmune candidate to enter clinical testing. There is high unmet medical need in type 1 diabetes with 50,000 HLA-0201 positive patients newly diagnosed every year. Our candidate, S118AI is designed to bind to pre-proinsulin, which is expressed exclusively on beta cells of the pancreas. In April, our preclinical data was published and made the cover of science advances, validating the science behind our clinical candidate. We are now turning our focus to our Phase I study that is designed to provide both early evidence of target engagement as well as immune modulation, leveraging a clinically validated endpoint of C-peptide levels. To recap, we continue to advance a diversified pipeline across all 3 therapeutic areas, anchored by our 3 ongoing Phase III trials in melanoma and a maturing early-stage portfolio. We remain focused on execution as we approach several important data milestones over the coming months. I will now hand the call to Travis to discuss our financial results.

Thank you, Mohammed. Good morning, good afternoon, everyone. Earlier today, we released our financial results for the second quarter and first half of 2026. Please refer to the press release and our latest SEC filings for our full financial results. Let me share some of our key financial highlights from the quarter and provide some commentary on expectations for the remainder of the year. We are pleased to report continued strong performance for KIMMTRAK, with second quarter net sales reaching $116 million. This represents an 18% increase over Q2 of 2025. Looking at the geographic breakdown for the quarter, the U.S. contributed $75 million, up 17% year-over-year, while Europe reached $34 million and our international regions grew to $7 million. As Ralph mentioned, it is important to note that Q2 sales in the U.S. were partially influenced by wholesaler stocking of approximately $6 million. If you normalize for the stocking, our underlying quarterly sequential growth was 3%. This is in line with our expectations for moderating sales growth moving forward given our high market penetration. Moving to expenses. Our R&D spend for the quarter was $74 million compared to $69 million in the prior year. This increase was primarily due to advancement of our clinical programs, including our 3 Phase III trials. As we look ahead, we continue to expect R&D expenses to modestly increase year-over-year, although at a slower rate than in 2025. Turning to SG&A. This quarter's expenses were $44 million, up marginally from $43 million in Q2 of last year. We will continue to be disciplined with our SG&A spend and may incur incremental increases in these investments as we prepare for the potential expansion of KIMMTRAK into cutaneous melanoma. This quarter, we had a net loss of just under $1 million, an improvement versus the $10 million loss in the same period of last year. Our balance sheet remains exceptionally strong. As of June 30, we held $880 million in cash and marketable securities. This is an increase of $16 million since the beginning of the year. One last item to note is we expect to pay approximately $120 million in sales-related rebates during the second half of this year. This amount is higher than in prior years due to our revenue growth in Europe and the completion of the pricing agreement with France in early 2025, which resulted in rebates from revenue generated in the prior 5 years being payable this year. As a reminder, these rebates impact cash only. Moving forward in 2027, we expect these rebate payments to return to similar amounts as paid in 2025. Our strong balance sheet provides the flexibility to support near-term commercial execution and pipeline advancement while continuing to invest in longer-term growth opportunities across our business. I'll now turn the call back to Bahija.

Thank you, Travis, and thank you, team. The 5-year overall survival data with KIMMTRAK confirms that what it can deliver for HLA-A2-positive patients with MUM, while also confirming the potential of our Impax platform. We look forward to sharing the TEBE-AM data as early as the end of 2026, which could offer a much needed treatment option for patients with advanced cutaneous melanoma. Our teams are working to enroll our multiple ongoing clinical trials to deliver data for our other candidates through 2026 and beyond. Behind all of this work are patients, the one alive today because of KIMMTRAK and the many more we intend to reach. Thank you to all our patients, their families and our employees. Thank you for your support. And now we'll be very happy to take your questions.

[Operator Instructions] Our first question today is coming from Tyler Van Buren from TD Cowen.

For the TEBE-AM trial, can you please review the study plan for us with respect to the potential interim or interims and a final analysis? Specifically the potential top line readout that is possible by year-end, I assume that must be the first interim OS analysis considering that enrollment is not completed? Or am I wrong there? And can you help us understand how that is powered? And if there is an interim in the final, how that's powered relative to the final?

Mohammed, do you want to take that?

Yes. So just as a reminder, we don't usually get into the specifics of the stat plan, but it's not unusual in a trial like this to have interim analysis designed into. But just because there is an interim analysis written to the protocol doesn't mean that you have to actually execute on it. And you're correct, the way the trial was designed, we don't do any data analysis until enrollment is complete. And we are still on track, as we've said before, that the earliest possible readout of the headline data can be as early as the end of this year. So we remain on track for that.

Our next question is coming from Michael Yee from UBS.

This is Dina on for Mike. I know that you guys are not yet enrolling the second-line melanoma trial, and I think guidance is first half, so maybe just getting maybe a month or so behind. But just thinking about the timing is still reiterated for year-end. I mean, is there any risk that this can fall into 2027? And if it does, can we presume that the KIMMTRAK arms are potentially doing better versus the control arm? I guess on the control arm also, what percent of the patients do you think would be on a clinical trial versus chemo or IO retreatment?

Okay. Since you have 2 parts, I think you can take it, Mohammed.

Sure. Happy to take those 2 questions. So with regards to your first question, it's important to remember that regardless -- especially for the patients that are being enrolled now, they typically have very minimal impact on the primary endpoint, which is event-driven and its overall survival. So that's the reason why we're still reiterating that -- the earliest possible readout can be as early as the end of this year. With regards to the control arm and the possibility of clinical trials, both based on our real-world evidence and sort of the experience so far in the composite trial, not by any specific arm, the use of clinical trials is very low, typically in the single-digit percentage.

Our next question today is coming from Eric Schmidt from Cantor Fitzgerald.

This is [ Imogen ] on for Eric. For the shape of the enrollment curve for TEBE-AM, could you just provide a little bit more color on that and how that could lead to the event rates being hit maybe for an interim or a final analysis later this year? And then as we think about the half-life extended PRAME data coming, could you help us think about expectations there and which data sets from would be reasonable to compare that to?

Happy to take that. So with regards to the TBM enrollment curve, once we reach -- this is -- I'm just giving you sort of a general experience, right? Once you reach sort of all the sites are activated, then you basically have steady-state enrollment, and that's been our experience with the ongoing TEBE-AM trial. And as I mentioned a little bit earlier, these last patients, even though there's a few weeks delay, these last patients typically don't have any impact. The impact usually comes from patients that have enrolled much earlier on the PRAME endpoint. So that's why we're reiterating that the headline data could be as early as the end of this year. With regards to the PRAME+HLE study, this is -- as a reminder, this is a Phase I trial that's been ongoing. So escalation continues. And so depending on where we get to, we always have said that we share data once we have a complete story. So depending on how that data evolves, we look forward to sharing that. With regards to comparisons with brene, so many of the sites that are on the half-life extended were on the brene trial and many of the patient types that were enrolled in brene are being enrolled in the PRAME+HLE, namely melanoma and ovarian. So that's -- so those are probably the tumor types that you'd look forward to trying to compare across the 2 trials.

Yes. And I will just add that the molecule is almost exactly the same, except for the Fc portion basically for extended half-life and it's the same peptide. So that's why.

Our next question today is coming from Jessica Fye from JPMorgan.

This is on [ Tanmay ] on for Jess. I had a couple of questions on KIMMTRAK. In terms, so we saw KIMMTRAK U.S. revenues grew 17% year-on-year to $75 million. So does that 17% growth rate fall under your definition of moderate growth that you have repeatedly referred to? And where does the U.S. and Europe penetration stand today for KIMMTRAK? And if you could provide additional color on split between the academic centers and community-driven penetration in the U.S., that would be great.

Great. So you were cutting off. So I hope we understood the question. I think there are several parts of the question. So one is on the 17% in the U.S. is just the moderation, and then you can take the next one.

Yes, I'm happy to start, and apologies if I don't answer your question directly, you were breaking up, but I'm going to do my best to interpret what you asked. I think you asked about the 17% growth being considered moderate. I think one of the things that look, that's year-on-year growth. So one of the things to consider is given we're on the fifth year on the market and have very high penetration across all major markets, we've seen our quarterly sequential growth moderate, and that's what we mainly refer to when we're seeing moderating growth.

The penetration in the U.S. versus Europe?

Just a comment on the 17%, Travis. The part of that what contributed to the 17% is a stocking -- unusual stocking event that we had in the U.S. of about $6 million. So this is why you're seeing also this higher number than what we expect to be moderating. With regard to penetration and the reason why we believe this is moderating is because we're above 70% penetrated in the U.S. That includes 70% of our prescriptions coming from the community. And in countries in Europe, we're about 75%, 80%. So very well penetrated across all major markets.

Our next question is coming from Jack Allen from Baird.

I wanted to ask on TEBE-AM. I appreciate that you're still enrolling the final patients in the study and that they might not have an impact on the analysis that could occur as early as late '26. I did want to ask how you're coming up with the late '26 kind of comment here. Are you looking at any blinded event rates in the study? And how are those trending? Any qualitative comments would be helpful.

Mohammed, do you want to take that?

Yes. Happy to take that question. So you're correct. I mean that's very standard as you get close to enrollment completion and looking forward to potential analysis, but there is a separate independent stats group that's looking at the combined event rate. And so based on that information, that's how we're guiding to that we could have headline data as early as the end of '26. As we get closer to that, we can certainly provide an update because the zone of uncertainty becomes more narrow.

Our next question is coming from Sean Laaman from Morgan Stanley Investment Management.

Just looking ahead on TEBE-AM and advanced cutaneous melanoma to the commercial opportunity. So what proportion of the estimated HLA-positive patient base do you think you could realistically access, say, within the first 3 years of launch?

Sean, the opportunity here is up to 4,000 patients across U.S. and EU, and this is HLA-021 positive patients. I think from a modeling perspective -- and this is obviously very much dependent on the data itself because this is an area of high unmet need. There's little too therapies approved in this setting. And we would be the first off-the-shelf OS-driven therapy. So I expect a good uptake, especially since we're building from our base where currently 50% of patients with cutaneous melanoma are being treated by physicians experience with KIMMTRAK. So we expect a good uptake based on our incremental impact today.