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

Great. Welcome to this teleconference with Immunovia in relation to this morning's press release, where we announced the transition of the CEO position. I will just give you a short background, and then Mats will give -- say a few words, and then we open for question, which is really the reason we're here. So as you know, we started some 7 years ago with an idea from academia, CREATE Health, the translational cancer center, which has now grown into a full-fledged and one of the most advanced diagnostic companies based on multiplex diagnosis of complex disease. And Mats has really built this company from the idea we had some years ago into this company we have today and with help of staff and Board, of course, into something we all think is quite successful. And very much looking forward to the launch of the first product in Q4. I've been working with succession for quite a while because it's -- finding an experienced and seasoned successor to Mats is -- has been a challenge partly because, in Scandinavia, it's quite difficult to find someone who has taken a diagnostic company into a business phase, commercial phase. So with the entire network and a lot of help from people, we have been scouting around for quite a while and trying to see what we can do and come up with a successor. So I'm very happy to say that I think we found a perfect match for this company. Patrik Dahlen is really an experienced and seasoned business CEO in -- from a diagnostic company; has vast experience both for Scandinavia, U.S., U.K.; has been CEO of Dako, for example, with a couple of thousand employees and also from smaller diagnostic companies; have experience in pretty much all the features of an organization from leadership to HR, from IR and so on and so forth, financial experience as well. And we very much like to welcome Patrik. You might not know this, but he was actually part of the Board of Immunovia, not really from the start but almost from the start and then for a few years when we were building the company. So he knows us from the beginning, and we know him quite well. And it was almost too much to hope that he will actually take on this because, as I said, he can pick any job in the world, and he picked Immunovia, which we are very pleased. So with that background, I'll leave the word to Mats, who also know Patrik from way back.

Yes. I had the pleasure to work with Patrik as the CEO when I worked at Dako, in the management there. And that's been a great experience. I spent 30 years in this business and worked with many CEOs and many leaders. And actually, Patrik I regard as the one I have the highest respect for in this long line of people I met. So that's great. One aspect of Patrik's leadership that fits particularly well with Immunovia is that we have built a very strong company culture with very, very talented people that work excellently together in a very transparent, open way and so forth. And I know from fact from Dako days that Patrik has a strong, strong interest in development of the company in organization ways and company culture ways. And that's -- it's very important to maintain that and grow that structure -- these structures with the company as it grows into a very large company. So that's one of the aspects. Of course then, the strong experience from 30 years in diagnostics industry that Patrik has is extremely important, not only Dako but before that, he actually built up the whole life science division of Perkin Elmer, working in U.S. for 5, 6 years there, actually even in the Boston area where we are located. So he's an excellent leader, excellent experience from his leadership. I'm very, very happy that we managed to attract Patrik to this position. And also one thing that triggers Patrik is that he gets the opportunity to lead a company that's in the forefront of the modern multiplex diagnostic technology that is revolutionizing the whole industry these years. So he gets a real leading-edge company to move through the -- into the commercialization phase. And for myself, I really look forward to work for the Board level, my interest with strategy and maintaining and developing that further. That's going to be great for me. Thanks.

Super. And I'm particularly happy that we engaged Patrik at this phase of Immunovia, of the company because we're now transitioning really into a full-fledged commercial company. And I can think of no better than Patrik to take the lead at this point of time. We will have him full time starting November 1, and we will, of course, phase him in slowly. So he knows he's 100% committed at November 1. And also, we will have an extra Board meeting -- AGM, sorry, where we also will elect Mats as our new Board member, which the Board is very happy with. So with that, I think we can open for questions. We've given you a short background. I'm sure that there are perhaps question regarding this because this is a rather big event for the company, as you can imagine. And although -- we are very pleased with this, and we can answer question if you have any regarding Patrik or Mats or myself. So please open up for questions.

Great. Thank you, both. This is Julie, Director of Investor Relations. I will be monitoring the questions coming in. Feel free to type in your questions and turn them in, and I will be sure to ask them. We had a couple of questions that came into me earlier via e-mail today. And I'm going to start off with those. Mats, what will you do next? Are you going to take another CEO position? What's going on?

Okay. No, I'm not moving over to any other operational role. I will focus on the Board work at Immunovia. That's my top priority moving forward. I have, of course, during the Immunovia years, said no to many Board opportunities because it's a 150% day-by-day work, and it's really full time. But I may take on some other opportunities in that area, but the primary focus will be my Board work for Immunovia.

Great. Thank you. So here's the next question. With the launch only a few months away, it appears to be quite late in the process to be looking for a new CEO. Why now? Was there something specific in the launch process that you needed to strengthen?

Well, I can start -- do you want to answer? I don't know if you've been trying to do these recruitment yourself some time, but it takes time. With -- as I said, I started a year ago. So I just want to have this press release well before the launch so we can have Patrik joining in that moment. So there was nothing operational from the company point of view that decided that this is the perfect time. I actually wanted him to start maybe 1 or 2 months earlier as we go forward, but this is also a very good timing. So then -- yes.

And I assure you that the team is extremely well prepared, as you have heard from the Investor Day that we had earlier on. Or if you haven't, it's recorded and available on our homepage. So it's all moving forward as planned, and we will deliver on that one. So looking forward to that. And I mean the timing is more related, of course, to the general transition from a development company into a commercial company, and that's why timing is right. We have the financing -- very strong finance company that's in place. So it's ready to really accelerate in the commercial area.

The table is set.

Yes.

Thank you. Our next question is could you perhaps elaborate a little bit more on Patrik's experience in launching products in the U.S.?

Yes. Well, Patrik can...

And then maybe also expand a bit on his experience in building up the sales...

You're cutting off a little bit, Julie, but I understand your question, experience there from many companies. But Patrik started at a company called Wallac, a Finnish company that were acquired by a company called EG&G that then changed name to Perkin Elmer. And he initially, many, many years ago, started in R&D, developing product, moved over to do product management and thereby introducing products to market on the marketing organizations, taking it further to leading sales teams, to leading whole divisions and building up the whole business of Perkin Elmer life science that launched many products. One key element of the Perkin Elmer work in the '90s there was that they developed the diagnostic division that actually cornered the prenatal diagnostics area completely and owns that. It's a very large market with the company now only in their diagnostic area having, I don't know, 10,000, 12,000 people employed. So it's a huge global launch of a completely new area where there was nothing left, very similar to what we are doing here in that time. So that's one. And Dako was a different story, and that was an established company with many, many products, but with the offering that was not ideally positioned. And he did a major repositioning, which I took part in as well, turning into selling pieces and devices to selling complete systems and tying up customers for a long time through rental contracts, protecting from competition and so forth and giving customer value and more valuable solutions for them. So there has been various aspects of anything you can think about commercially in introducing new -- completely new things in a big scale to turning around established companies in his background. It's all focused on commercial penetration of the markets or creation of markets in the prenatal area and so forth. So it's just -- we can go on and on with that, but these are the most important aspects.

Can you elaborate a little bit on his experience in building a sales force within diagnostics?

Well, in Perkin Elmer, there was not much -- it was pieces from some companies bought together and Wallac had the sales force and so forth. And that has been moved over the years to something that covers the whole world. In Dako, there was also sales force, but it was without guidance really in terms of the central marketing and so forth. And that was transformed into selling packages, selling much larger solutions, transforming the people you have to be able to do that. And that was done on a scale with a company that at that time had up to 2,000 people, so...

And this is actually one of the features that were particularly attractive -- attracting the Board to Patrik. Having this experience is exactly what we're now looking for.

Great. Was this transition planned in advance that Mats would leave the CEO position before commercialization?

I think it's more of which phase is the company in rather than Mats as a person. I've been doing this in other companies as well, and it's very clear that through the phases of the different -- the company goes through different phases and we need different expertise and leadership and CEOs. So that was actually the main driving force. Then this -- I tried to have this in -- well in advance of the sale start. We have it now somewhat in advance, but to have him be part of the launch, which I think is important so he feels that he's part of this growing sales company. So that was really the driving force. And of course, as I said 2 times now, it takes time. So the final commitment and the signing of the agreement with the new CEO, you never know exactly when that happens. I mean Patrik is also resigning from a CEO position in Denmark.

Great. Here's a follow-up to that. Could you elaborate a little bit on what Patrik adds in terms of experience in relation to what Mats' experience has been in as far as commercializing diagnostic products?

Well, I can compare myself there a little bit. We have somewhat similar backgrounds. Of course, we have developed products, systems and did marketing concepts that has been new or transforming markets. What he has that I haven't done that much is to lead sales forces and build large sales forces. So there, Patrik has a lot more experience than I have. We have very similar views how to run a company in general terms, how to build on companies based on expertise in each position, how to grow a company by maintaining and developing the company culture and have long-term views on things and so forth. But just the fact that now it's time to build a sales force to get the sales force effective to manage that in not only one geography, but remember, we are starting U.S. but there's a whole world out there for the coming years, there, he has much more experience than I have.

And this can be illustrated by what Mats just said about Perkin Elmer division and also about Dako, which are 2 rather major organizations. So it fits very well with the demands we have for the new CEO.

Okay. The next question is will Patrik be based in Sweden?

Yes. He will work from Lund office as a whole. He lives in Denmark, but we are in Lund, in Skåne. It's really close to Denmark. So it's like living in a suburb of Stockholm when you work in the center, basically.

It's a 30-minute commute. He will be here 100% and commute from Copenhagen, which is just across the south.

The next question is any risk that Patrik will revise -- yes. Can you hear me?

No.

No, you're disappearing. Could you try again?

The next question is -- am I ...

We can't hear you.

Okay.

Go again.

Okay. The next question -- can you hear me now? Okay. Great. The next question is, is there any risk that Patrik will revise the short-, mid- or long-term goals?

You mean -- I'm not sure I understand the -- rather, for the sales goal or the operation?

I think the question is -- well -- the follow-up to that is they're thinking about what happened at Centogene with the new CEO changing something.

Yes. These are 2 absolutely different companies. So there is no comparison. And Patrik is well aware of our goals, our penetration and so on and so forth. So I don't foresee any change in that.

Okay. The next question is along the same line. Has he made any comments about tweaking the current business model?

No.

No. He thinks it's an excellent business model, and he is very excited to fulfill the goals we set up.

Great. So the one more question that just came in is can we look at this transition at this time as symbolic of there being no more risks with the technology?

Well, I think you should look upon this as Immunovia going into a new, more mature phase. And obviously, Patrik is well aware of what we're doing and the platform and so on and so forth. This is the message we want to send to you.

Yes. But anyway when a CEO with that experience takes on a job, it's obvious that the understanding of the strength of the company, the technology is also there. But -- and I would just like to mention, we have 30 of the world's leading clinicians and pancreatic specialists in this area. I don't -- I think we have quite a lot of substantial support for what we're doing on a technical level. So that question is maybe not relevant in that sense. But of course, a guy that has this experience and a long track record knows what he's doing. And he actually has a PhD in the area from the beginning as well and worked in a lot of technology in this area and doesn't make many mistakes, no.

Okay. The next question is are there any more planned recruitments that will be announced in Q3 or Q4, which, of course, we can...

We, of course, press release -- or as soon as something happens, that should be press released going forward. We'll not -- any comments on something like that in general.

Okay. I have a question here on verification process. Can you explain a little bit as to why the technical risks will be removed?

The clinical risks or...

Technical. What level of risk -- I guess my interpretation is derisking. What would be the level of derisking?

I think the -- I mean today, we talk about the transition of the CEO. There will be a webinar in September 2 or something...

On the CTMS, yes.

On the CTMS. So I don't want to go into any discussions, except for the CEO.

We can say just shortly, very, very quickly, in general. The CTMS study, which we concluded at the end of the year and that we discussed in detail on the 2nd of January show that the test was very robust also when samples came from 8 different hospitals at that site. So the verification study is done now on all production processes, all lab processes are -- as they will be commercially very tightly done, of course. And then they will come in samples from other places compared to the CTMS. So -- but we also -- most of it, we took away already at that stage. So this is, let's say, the final proof that the whole system works and gives the similar results. So that's why it's -- we already had even prospective collected samples for the controls, for example, in CTMS. So we have been ahead of the line in that aspect in the last studies. So that's why we strongly believe that we will have successful results, as we said before. But we don't know until we show them, of course, but -- yes.

Great. I have 2 questions here. One is when can we expect -- and these are on our pipeline products, so I can already -- yes, when can we expect any update on lung cancer? And when can we expect an update on RA?

When we have results. We focus on Pancoast cancer since that's a huge opportunity for the company right now. And we are really focused on the launch and all the activities that needs to be completed, and that's what we prioritize at the moment. And as always, as soon as we have any results in that area or other areas, we'll press release.

As we are a listed company, so we cannot really give any information here that we should press release. So again, I'd be happy to answer the question about our super successor, Patrik, which is the main topic today. And the other ones -- the other questions are very relevant, but we have to take them a bit later.

Well, the last question today is when can we expect to meet the new CEO?

That's a good question.

Yes. Well, he starts on the 1st of November. And he has a CEO job right now, so he has to finish that one off, I guess, first.

Yes. We'll -- for sure, November 1. We'll -- now when it's public, we will have a discussion with Patrik to see if we can do something in between. But for sure, November 1.

Yes. We just have to, of course, respect his current obligations to his current assignment.

Well, that seems to be all the questions we have for today.

All right. Super. Then, we just conclude that the Board and myself, we are all very happy with this recruitment. And we're also very pleased that we can have Mats and his experience in the Board. That will be a very important feature for us. So I'm very much looking forward to welcoming Patrik and to continue building the success that we initiated in 2007 or whatever it was.

Yes, the first step.

Okay. So thank you for listening, and we'll keep in touch.

Great. Thank you.

Thank you.

Thank you.