Immunovia AB (publ) (IMMNOV) Earnings Call Transcript & Summary

Hello, and welcome to the Immunovia Q1 Conference Call. My name is Jeff, and I'll be your coordinator for today's event. [Operator Instructions] I will now hand you over to your host, Mats Grahn, CEO, to begin today's call. Thank you.

Yes. Good afternoon or good morning, wherever you are. It is a pleasure to welcome you to this quarter 1 report from Immunovia. And we will, today, after this slide, also go through the agenda, which is the first quarter highlights, of course. It's our response to the ongoing pandemic. We'll talk about the remaining steps to launch of IMMray PanCan-d, our test for detection of pancreas cancer. Touch on the commercial launch preparation activities, the prospective studies, and then there will be some short information about the upcoming AGM and we'll finish up with questions. So the first thing is the highlights that we have had in quarter 1. And we -- the most important thing is, of course, that the verification study of IMMray PanCan-d proceeds as planned. We did receive all the required blood samples and actually more from our Key Opinion Leader network for the verification study. The commercial team also worked hard with preparing the detailed plans for the launch, particularly during January and February. Then when the pandemic hit in March, these plans had to be adopted significantly to accommodate the situation. I will touch upon that later in the presentation. And of course, what happened was that in-person activities has had -- such as conferences and patient organization meetings, both very, very important for awareness and knowledge about the test were canceled and now has been turned into digital activities in a successful way. Furthermore, an important step in quarter 1 was that we welcomed our new Senior Vice President of Sales for North America, Mike Pettigrew, to the team. And also, we proceeded with our discovery study in lung cancer, even after the partner on pharma side decided not to continue. We have all the control of our samples and continues as planned for the -- and we'll be reporting that in quarter 2. Shortly on the -- before I move on to the COVID-19 situation in the Q1 report, you can also see that our cash flow for the quarter was about SEK 40.5 million. And most importantly, we have SEK 223 million at hand, which means we have over a year with the current business moving forward, which is great in these times of corona unrest on the market. So let's move to the response to the pandemic. This is, of course, extremely important for all companies right now. And I'm happy to say that we are pretty well off, and I'll talk about the impact that has happened. We have, of course, work home policies introduced for the employees. Even if you're healthy and you can work from home, they are doing so to minimize the risk of infections. If people have symptoms, cold and so forth, and then it's, of course, mandatory to stay at home. This leads to some reshuffling in task, of course, when people have to stay at home and so forth, but we have been able to manage that well this far. When it comes to activities that require that staff is in place, the R&D labs in Sweden, the clinical lab in Sweden and the production facility is still fully operational. So we have managed very well during this first period of the pandemic, thanks to the loyal and flexibility of the staff, which we are really happy about. The COVID-19 also for the ones who are not familiar to the local situation in South Sweden hasn't had any major impact yet as opposed to the Stockholm area, for example. So in that sense, we are also fortunate to be located here in the south of Sweden. None of our employees are infected this far here or in U.S. or elsewhere. We, of course, constantly follow the guidelines and changes or orders from authorities in the geographies where we are active. And particularly focusing on U.S. in the right corner of this slide, the clinical lab is well prepared for -- with detailed plans for the sales start. However, as we reported 1st of April, the state went into a shutdown and stay-at-home orders for all people. First to April 7, that has, during, let's say, last weeks, they've been prolonged to May 4. And that, of course, is a challenge for us, where our staff in the lab cannot -- are not allowed to go to work and has to stay at home, and we'll touch more upon this later in the presentation. When it comes to other activities to mitigate COVID-19, we were successful during Q1 to stock reagents, consumables and chemicals required for our work leading up to the launch and also having all instrumentation in place and installed last things right before things got a little bit difficult. So we are very well equipped on that side and have been able to continue to fill up with what we need. So that is fully under control. Moving forward then to our clinical collaborations with all the hospitals across the world. They are, of course, following the national guidelines and local guidelines and regulations, which means that many of our sites or most of them actually have stopped clinical trials in general, including sample collaboration. And this is because they, of course, have reallocated resources, clinicians and staff to COVID-19 care. Some places, even -- it's not even possible to get into the hospitals to pick up, for example, collected samples that are there. So -- and also individuals that are in the clinical programs, even if they would like to, they may not be able to travel or come to the hospital given the situation. That's why the sites are affected in that sense. However, there are also a good situation in us because we managed to get all the samples we needed and even more for the verification studies delivered to our site in Lund before and this shutdown. So we are in a good situation compared to many others there. And we are working hard in various ways also secured the last ones for the validation, which we'll come back to as well during the presentation. Let's move over to the remaining steps to launch and the details of some of the challenges we have and how we work with them. As you are aware, we are at the verification study that is important to verify the functionality and the performance of the lock test, the lock test in PanCan-d both the signature, algorithm and so forth. This is done on the known samples, and we are working hard to complete that one that then leads over to this next step validation study. And we have come this far, and we have, over the years, overcome numerous obstacles. And now finally, we have to overcome corona situation as well. And we will be the first to market with this test that no one else has been able to do before. So we are still on the same path here. We are working hard to overcome the last hurdles caused by the corona. And everybody else is affected by that as well. So I'm very confident that we will be the first to market. Let's look into a little bit of the details of what's happening in Massachusetts, specifically where we are located outside Boston. This is now our main time risk, so to say, for our plan for the launch in Q3. And that is because the lab, as we have stated in the press release and also in the update of 1st of April, is fully ready with the plans, what needs to be done from now until launch, including accreditation and sales starts and practical setups and so forth. However, since -- as of today, Massachusetts has extended the statewide mandatory closure of what they call nonessential to COVID-19 businesses and also stay-at-home guidelines all the way until May 4. This losing more than a month of practical work, there is a challenge which we meet by doing replanning for different scenarios. We are reallocating tasks between Massachusetts, the lab in Marlborough and our team here in Lund as far as possible. We are -- reallocation and samples that are required and everything that is possible. It is a critical activity, and we need to get the lab opened. But we are in the hands of the authorities there. Still possible to move to the targets, but it's the main risk and I want you to be aware of that. And looking a little bit into the detail here of these 2 last steps, the validation study and the verification study followed by the validation study. The validation is done on locked signature and algorithms on blinded samples. And we have most samples in-house, but specific for the U.S. launch. And we are focusing to secure transfer of some samples that are already collected, but are at hospitals where we currently can't get in. We are -- although in -- confident that we will be able to access them as soon as things ease up a little bit just in -- especially in U.S. hospitals. And then we are also getting positive feedback on collection of remaining samples mainly for the CE marking that will happen in parallel. So we also, of course, use the mitigation of excess samples for the validation, collection and reallocated as much as possible to the activities in validation. So this is important to understand, and we are working really hard to meet this. And I also want to make sure that you understand that the subset of the studies, particularly the validation has to be performed in the CLIA/CAP laboratory in Marlborough for the U.S. accreditation to CLIA/CAP. And we are, of course, doing everything we can to minimize the impact of this close down, and are ready to go as soon as possible after the opening as soon as our people get into the lab. However, we have worked hard on reallocating tasks and our team in U.S. are actually doing a great work from home, even though they can't be in the lab. Even supporting the digital tasks, the people in here in Lund facilities and vice versa. So for example, doing important work on results coming from the scanners overnight. So they are ready when the people here in Lund come to work in the morning and so forth. So it's a constant replanning, reshuffling. We've been successful this far, but it is very tight, and we really need the authorities to open up the ability to go to work in Massachusetts. Okay. Let's move over to the commercial side and talk about the commercial launch preparation activities. We mentioned -- I mentioned at the beginning here that the prelaunch activities that was planned in detail and ready to go and replanned in March because of important clinical conferences, which are really important to meet the Key Opinion Leaders, the clinicians, the gastro people and so forth to introduce the test and make them really aware in a broader sense than we have -- now when we are closing into launch. That is not possible face-to-face because the conferences have been canceled during -- for several months here after launch. Same thing we have had in last year's extensive collaborations with the patient organization and taking part in numerous, what they call walks or patient meetings in all the major cities basically in U.S. And since -- these ones were also canceled because you can't gather thousands of people in that way either. Digital plans have been put in place, and we have also increased activities in a very, very innovative way from our launch team and our commercial organizations. Example of this are net conferences where we will present are now step-by-step getting turned into digital conference. The latest example here is that the big and very important -- most important Key Opinion Leader meeting in Europe called the EPC has been decided. It was planned to be in Paris. Now will be a digital full meeting where Immunovia is presenting the test and other things. So that's now set in stone, and it will happen. Even more important in collaborations with one of the major patient organizations, the patient organization meetings that normally take place physically in different cities, there will be -- was a plan for a huge one outside U.S. in London summer. That one has now been turned into a virtual digital walk. And we have, I think, today, announced it on our home page when and how it will happen. And that means that even U.S. investors who are interested in the company, and the test will be able to take part in that one that way. So this is something we worked on our initiatives, on our team with the patient organization in U.K., and it's first of its kind ever globally, and we believe this is a great concept that we will try to move further into other countries as well in other languages. So if you are interested to take part in a virtualwalk with patient organizations, check it out on our homepage, and it will happen in June. Right. That was some examples. When it comes to the sales preparation and launch preparation activities that are maintained that relates to, for example, setting up the sales system, building the sales training packages for people they are onboarding right now; completing sales tools and do a lot of target mapping, meaning that we, in detail, continue to map up each individual in key hospitals and gastro centers that we want the sales force to pay this is to and target. So they are -- will be extremely well prepared and targeted to maximize the use of their time. So that's a short about the commercial launch preparation. There's been a lot of work to reshuffle, but we believe we're in a successful path in this area. Next slide is about the prospective studies. I mentioned in the beginning here that the sites, the hospitals that take part in this, and there are many. As you know, in the 3 studies we run, we run the PanFAM for the hereditary familiar risk group. We run the PanDIA for the people who are over 50 and gets a first diagnosis of diabetes and PanSYM for differential diagnosis and rollout of pancreas cancer. All the three ones have been running. As you know, the one that is affected by this situation the most is the PanFAM because risk people have difficulties or cannot come to the hospitals for their checkups or leave the blood sample right now, and/or the hospitals are reallocating resource to the COVID-19. That means that the PanFAM-1 will be postponed even in term -- at least to next year, 2021, Q1, Q2. That's for sure. However, PanDIA, the big study that we run here in Scandinavia and Sweden, particularly will not be affected as the sample collected -- collection is very well advanced at this stage. And actually, it's still ongoing, has not been closed down since it's running here in the south of Sweden, where the infection of corona has been very low this far. When it comes to PanSYM, we are confident that the interventional phase that will -- which is planned to start early '21 is -- will be planned accordingly and move on there. So it's really only PanFAM that is affected. This is a much, much better situation than any clinical trial for example, in the pharma side, which is very difficult if it's interrupted. So this is also under the circumstances under control. Next area, and this is just a summary, the slide of the 3 prospective studies as you have known them from before, and it's the ones we have talked about. Finally, here now, the AGM announcements and details. And for that, I will leave the word to Julie Silber, IR Director.

Hi, and thank you again for joining us. This is Julie Silber, the Director of IR. And I wanted to just do a brief announcement on our Annual General Meeting. As previously announced, the AGM will take place on Thursday, May 7, 2020, at 4:00 p.m. Details can be found for this on the press release to the AGM that was dated April 3 as well as on our website. I wanted to take this time to just assure people that we are taking every precaution necessary in accordance with COVID-19 safety requirements and that the meeting will be kept as short as possible, nor refreshments will be served and seating will also accommodate the COVID-19 safety requirements. Shareholders, agents and our assistants who feel the slightest fit ill or have relatives that are sick or belong to the COVID-19 risk group should not attend the meeting. Shareholders should consider voting by proxy. The company, if necessary, may actually take further precautions at short notice depending on what is happening with the pandemic. We urge you, all shareholders, anyone who is interested in attending this meeting to follow the company's website at www.immunovia.com for any updates to this information. And now I will turn this back for Q&A.

Right. And just before we start Q&A, I will just have a few summaries on this one. So actions taken successfully to date to combat the situation with the pandemic. We are on a critical time line, but still on the time line. And we remain focused on the launch of IMMray PanCan-d. We will be the first to market. And we have -- of course, we are ready to adjust to any unforeseen circumstances. And we know there will be more of that going forward, of course. Specifically, the Massachusetts closure is the current main risk, and we will work hard on that and update you as soon as we have a clear picture of what that means. We will be the first to market solution for early detection of pancreas cancer. And this, don't forget about it, its major market opportunities exceeding USD 4 billion over time. And this is a great place to be in, and we are sure we will take the chance to meet the remaining obstacles to get to that position. So with that, I'd like to open up for questions.

[Operator Instructions] And we have just had a question come through. This comes from the line of Mikael Löfman.

Mats, I was just wondering about the discovery studies of RA and lung. Are they still on schedule for Q2?

Right. I suspected I would get that question. So we actually prepared a slide for that as well, which you hopefully can see now. This is the general path of all studies all the way from very early stage all the way to commercialization. As you know, we are at the end of that now for IMMray PanCan-d. And when it comes to lung cancer, it's in the analysis phase, actually. We have run the samples that we did achieve from our previous collaborator and now in our ownership and use. So we will conclude that as we have announced earlier in Q2. When it comes to RA, we have the samples at hand. We have the clinical data. However -- but I can't be 100% sure when so we will announce it when it's ready. And the reason for that is that we are now really allocating all the resources we have to the PanCan-d to make sure that we meet objectives and targets on the PanCan-d side because the key value in the company right now and for the foreseeable future is to succeed and to capture the pancreas cancer diagnostic market here and really meet the time lines on this one. So we will need -- we are doing a lot of reallocation of people just to meet the effects of the corona and so forth for different tasks day by day. And at any case, we will not -- we will always prioritize PanCan-d. That's why I cannot be sure to promise when the RA data will be ready.

The next question comes from the line of Oskar Möller.

Mats, thank you for the update today. And good to hear that you're all in good health. Last year, around this time, you -- I think you estimated that Immunovia had connected with some 24,000 people via different patient organizations. Could you give an update on where you stand in numbers and so today?

Yes. 2000 -- and that was -- the figures you referred to were 2018, approximately what I can remember. And 2019, we had even more meetings. I believe it was around 35,000 people that attended these meetings in U.S. particularly. So we spent the last 2 years in close collaboration with the patient organizations, and we visited and informed and met people and took contact details of people who wanted to be on our waiting list and information list and so forth from this one. So it was about 25,000 in 2018 and 35,000 in 2019. We had planned for this year even more on these visits. And we did some of them this year as well before the corona shut all of them down. That's why we now have this initiative we're doing digital walks, and it's actually our idea that our commercial team has come up with and worked with the first patient organization here to run the one -- the big one in London. And we also hope that the U.S. side will jump on to that train, and we can continue with digital ones this year. This is important to continue to build awareness and demand from the self-pay group of -- particularly the hereditary familiar group.

Great. I have a second question. A term I hear often is golden standard when it comes to these tests. Could you speak a little bit about what that is, what that means?

Oh, yes. It's very nice to do that in this area. The problem with pancreatic cancer is that there is nothing really that functions when it comes to a blood-based test or a simple test for early detection. There is one single marker called CA19-9, you measure one thing, which is a standard also on the test. That's actually most often -- it's actually in the guidelines only used -- should only be used for recurrence monitoring, but it's anyway measured on many patients. I wouldn't call it a golden standard. It's the only thing that's there that is not really working very well by itself. The other golden standard, you can say, in this area would be imaging then, which is the current way to diagnose -- only way to diagnose pancreatic cancer and will continue to be important. And that consists not only of a CT, the standard CT, but it's more MRI and endoscopic ultrasound. So in other areas of diagnosis, there may be golden standards of other blood-based or simpler tests and so forth. But this area has been an unmet clinical need. And that's one other strategic reasons why we picked this one as a target for our first product.

There are currently no questions in the queue. [Operator Instructions]

We do have some questions that have come in via the web section of this call, and I can actually ask some of those at this moment while we're waiting for more call-in question.

Great.

The first one is, is the EU launch postponed? Or when do you expect the EU launch?

Yes. The -- as we have said before, the U.S. launch comes first, and then we will, in parallel, continue with the validation part that belongs to the CE marking, and it will come a number of months after, simply, as we have said before. So it's not postponed in that sense at all. It's just as planned as before.

Great. Here's question #2. When will Immunovia be comfortable enough to provide medium, long-term financial guidance and discussions on market penetration?

Yes. That we will do once we have got into sales and seen the uptake. It's very difficult to predict the uptake before. We have great hopes, great feedback thus far, and we will do that when we are in a sales mode.

Great. Question #3 is, in the Q1 report, it says that you increased your staff by 4 people. Can you tell us what additional positions you have built other than adding Michael Pettigrew?

Okay. It's great that someone is reading the details. I like that. Yes. We are hiring -- one of the fewer companies that are hiring in these times, I guess, but it's great because we are following our plan to increase and prepare the commercial organizations particularly. There's also been some strengthening of the -- or sorry, additions to the production to make sure we have the ample capacity needed. And we'll continue to do that as we move forward. It's actually, believe it or not, a pretty good time, especially on the commercial side to hire very qualified salespeople and commercial staff given that, unfortunately, quite a lot of other companies have issues, and there is strong interest for us then. And particularly, this is important U.S. right now that we can have great discussions with very, very strong candidates.

Great. Here's another question coming from the web. When will you be able to update on the situation in Massachusetts?

Yes. We anticipate that the governor has to, of course, come up with a decision whether to -- how to move now after the 4th of May when the current rules apply -- that apply are going out, so to say. They are the stay-at-home guidelines and also nonessential to COVID-19 business are allowed to be open until May 4. And as soon as we get that information together with our own planning, we'll be able to update what the impact is. We hope that it will mean that our staff can get back to our lab. That would be ideal, of course.

Great. And then the last question we have from the web is, how are you actually allocating the time or the use of the lab in Lund now that the lab in Massachusetts is closed?

Yes. To add to the previous question before I take this one is that, unfortunately, if you look upon what's happening in Massachusetts, it's -- the state that is right now in the center of the corona with the highest increase. So it's a risky situation. But on the other hand, there are discussions even in New York about opening up step-by-step here. So they are close to each other and following each other. So we'll see. The question you asked now was -- or was about how do we allocate the resources between the labs and the tasks? Well, there are some tasks that have to be done in a particular lab for regulatory reason, and then we can't move, of course. But we try to. As I mentioned before as well, there are activities that once you have done the wet running of the work in the laboratory running the samples, then you recreate these pictures, as you may from the scanner that scans our slides. These ones in a research mode has to be worked upon digitally. And that -- our team in U.S. is doing one when it's night here in Lund. And when the staff in Lund comes back, it's ready for further analysis work. So that's very efficient. That's what can be done from home. Of course, there is a lot of, you say, standard operating procedures and guidelines and things that are important for the accreditations and so forth that are updated and maintained and changed and adapted and some new created that are still missing. And that is work that is exchanged between the labs and also between the clinical lab here in U.S. We have introduced some and installed some new equipment before the corona, and they are, of course, validated that they work as they should, and that work can be shared between the -- how to do it and so forth between the labs. So anything that can be done from home, our team in U.S. is helping out with or doing for their own needs later on and preparing as they -- everything until they come back. But of course, the key thing, as I mentioned before, the focus is -- priority is on -- everything has to do with the PanCan-d launch. That's why, as I mentioned before, I cannot promise any RA data. We don't seem to know. We have it, and it can be run and so forth. But -- and we will do it once there is a time slot available, but PanCan-d goes first in the Lund lab.

Great. I think I will turn this back to the operator now to take any more calls -- questions from callers.

So we have another question in the queue, and this comes from the line of Lars Hevreng.

Can you just remind us about the publication strategy, et cetera? I was thinking in particular about the commercial test model study, your press released in December '19, a fairly significant one. What's the strategy behind that? And also for the upcoming test result that you will achieve.

This is a very relevant question because publications are a crucial element for the commercial process going forward. And as we talked about before, we are -- now intensely, we're working with the -- in the last part of the patenting process that became more extensive than we thought, which is a good thing from a protection point of view. So once that is finished, we will combine data also from the optimization study and the CTMS and potentially some other steps going forward with the verification. And there will be -- as much as possible when it comes to publications there, it's very important for commercial reasons moving forward. We will then, of course, also make smaller publication of activities that will happen in the lab in U.S. to have local from there and so forth moving forward. So we have a data panel of publications that we need during the year and onwards for market reasons.

Okay. And is there any opportunities to -- I mean post-launch to produce real-world data, so to say, or how will that be monitored from a public -- is that something that...

Absolutely.

Is that something that can be published, yes?

Absolutely. We have the -- the biggest things are, of course, the prospective studies, interim results of them and later on, full results as well. And that's going to be made data. We are also working with them. Some are -- quite a few of our Key Opinion Leaders define what we would call market studies that are smaller studies, but can be very important for support of the sales process that are much faster and that we may publish in publications that time-wise fits us so...

Okay.

And yes, more important is that these ones are interventional. And that is really, I guess, what you're after, of course. That's really important moving forward. Okay. Do we have other questions?

We currently have no questions in the queue over the phone. [Operator Instructions] There are no further questions over the phone lines.

Okay. Then I will just finish by -- remind you of the summary. I believe we are doing -- our team and all our staff is doing a fantastic job to mitigate the current hurdles with the pandemic. Very, very focused team on the launch of IMMray PanCan-d and all activities that needs to happen to get there. We currently have the main risk at the Massachusetts closure. We will overcome that one as well. And we'll give you update as soon as we have clarity on that moving forward. And the most important thing to remember, even though this corona is in the way right now, we will be first in the market for a solution for early detection of pancreatic cancer, addressing a huge market opportunity of over $4 billion. So it's a great time for the company, even though there are difficult times for the world at the moment. But as we all come out of this, we will have a great situation moving forward. Thanks a lot for listening, and we'll be back as soon as possible we have new updates. Thanks for listening.

Thank you for joining today's call. You may now disconnect your lines.