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

Hello, and welcome to Immunovia's update call on the verification and validation studies. This is Julie Silber, Director of IR for Immunovia, and I will be the moderator for today's call. Please note, this conference is being recorded, and for the duration of the call, your lines will be on listen only. On the call with me today is CEO, Mats Grahn; and incoming CEO, Patrik Dahlen. After a brief statement, we will open up for Q&A. [Operator Instructions] Before we begin, a quick reminder to our listeners. During today's webinar, management may make forward-looking statements that involve known and unknown risks, uncertainties and other important factors beyond the company's control that could cause the company's actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Actual results and the timing of certain events may differ materially from results or timing predicted or implied by forward-looking statements. And reported results should not be considered as an indication of future performance. Please note that these forward-looking statements made during this webinar speak only as of today's date, and the company undertakes no obligation to update them to reflect subsequent events or circumstances other than to the extent required by law. This webinar today is being broadcast via webcast and is also going to be available through our Investor Relations website within the next 24 hours. Now with these formalities out of the way, I would like to turn the call over to Mats. You may begin.

Thank you, and welcome, everybody, since I'm now in my last week as CEO of Immunovia, after eight years. It's a pleasure also to have Patrik Dahlen here, who is my successor. So we are working, of course, together on the transition. And it so happens that if there is any questions, after the call, where Patrick will also be able to answer them.

Yes. Thank you very much, Mats. Obviously, delighted to be here. Looking forward to my first day, which will be a week from now on the 02nd of November. So really pleased to be here and looking forward to working with you all.

Okay. And then into the topic of today, the Verification and the Validation updates. Verification study is, as you may know, the main purpose of that one is to assess the technical performance of the locked commercial product which determines unlocked signature and algorithms by running on samples, which we have received from many sites, the cancer sites that we are working with. We already released a press release that the results took us further into the Validation preparation, and we have now a little bit more detailed information there where we show that we have 94% accuracy are under the care for the healthy and 91% for all symptomatic, including diabetics and healthy patients in stage 1 and 2 early samples, same, of course, for stage 3 and 4. So this is very nice, very good. And it's the most positive and main purpose really of the study, the technical performance. It confirms the robustness and the technical performance of the IMMray platform. So we are very happy about that moving forward now into the Validation where we have done the Validation preparation in the last weeks here. The Validation study's main purpose is clinical performance by running blinded samples, and that is the next step here before we start selling. During the preparation here and the final analysis of results and the planning of the work to commence we have now come to the conclusion that we have delay in the terms, mainly because of the need for sample collection that takes longer than anticipated. There are several reasons for this. And one is that the analysis of the results indicated that we shall add some to increase the statistical accuracy of the subgroups or some of the subgroups of the symptomatic based on the results we have seen here. We also had to use some of the samples for the Verification that we previously had allocated to the Validation and needs to replace them as well. You may remember that we had reallocated from the Verification collection to Validation. We needed to use some of these ones as well and they need to be replaced. We also, of course, have had incoming samples and that's the main reason. In the recent weeks, we have now learnt that it will take longer to get all the samples as planned from our fantastic collaborators. And the reason of this is that the increase in COVID-19, specifically last month here in all the geographies, mainly U.S., U.K., Spain and Germany, although Scandinavia has been doing better. There has been a very significant decrease of patient flow to the centers. So they haven't been able to, of course, take as many. It's been down to the level of maybe 10% in some sites are very important compared to what it should have been. And that makes it a little bit, of course, difficult. Of course, at the same time, in some of these places, the hospitals and health organizations reallocate staff and resources and re-prioritize the hospitals in terms of sampling and also putting together, of course, the clinical data for us. And that affects the rate, which we will be able to get the remaining needed samples here, including the ones that we have defined as additional. So with that, our best estimate now then is to do this as fast as possible, of course, minimize the little hiccup. And our aim is to start the sales at the end of Q1 and then, of course, continue with commercial testing thereafter into Q2. So that's the essence of the message here today, and we will spend the time on answering questions and open up for that right now.

Great. Thanks, Mats. I do have a few questions that were sent to me on this dashboard, and I'll start with them. They have to do with needing more samples. Can you give a little bit more detail on how many samples were used in Verification, how many you had to borrow from the Validation, how many you still require?

Yes. You say it was a total study of 500 -- a bit over 500 samples. And we had some outliers that you normally have in test that we had to go back and checkup the clinical data in many days. And you always have that this can be done. They behave differently and so forth. And that can be because of the patients that it be on certain medications or it could be transport screens. That's not strange, but that require us to replace some with advance we've taken. And then we looked into the sub groups. I mean, the symptomatic samples consists of very many different types. And we would not meeting here for the -- for these results of platform stability or anything so for. But for the Validation, where we move to our clinical performance, we realized we need to increase somewhat on the -- specifically on the symptomatic ones without cancer of certain types in the Validation study moving forward. But of course, the main reason is also that the planned deliveries that what is taking place here now has been delayed due to the corona situation. So in total, it pans over a couple of hundred samples that we need to get access to here during Q1.

The next question follows quite nicely. Can you explain the sample collection process? And what does it mean to have agreements with the collection centers? And then the follow-up to that would be what has changed specifically since COVID has occurred?

Okay. There were a couple of questions in one there. I'll try to address them all there. Well the agreements basically is to agree on the target number of samples after a certain period -- during a certain period or at a certain time that we would need and that the collaborators, the clinical sites could collect based on their normal average patient flow in that category. So they collect them, of course, when patients arrive at the hospital. And then also, there is a big job for the sites to make sure that the clinical information about the patients, what was the outcome, was it cancer, was it not cancer, what was it instead? Any other data, clinical data that's required that's put together and collect it in the right way. So that's -- it's a lot of job there. So it's basically a target volume agreement and then it's determined by the real flow, of course, the patients, how things go. And then it's delivered normally as one package at the end to us or at several ones, depending on how long time it takes there. So how has it changed? Well since COVID started in the spring there. First, we had a complete lockdown because hospitals simply had to reallocate all resources to taking care of sick patients. And then in general, all in the spring and during early summer, the hospitals shut down all work with studies and center collection in our case and so forth. So that was suddenly a 0 flow. On the other hand, once it's opened up again in July, August, things came back really fast and there was also a situation of a backlog of patients. So -- and it's opened up really fast again. Now it's been closing down very rapidly the last week basically, and probably before that as well, which we, of course, don't have an exact timing on that when things happen at this side. But the fact is that we don't get as fast as we now have planned for, which is not their fault because it's the situation where the patients and the decisions that the hospitals make. So that's the situation. And the changes we have been able to address this very well all the times since COVID started. This time, it came in a little bit too late for us to be able to handle it within the time frame, so we have to add the time we indicated here.

Great. Thanks. A question just came in. In previous study results, we announced higher accuracies for PDAC versus all control groups, PDAC versus the individual control group and for stages -- all stages as well as early stage PDAC. How -- what is the difference between what we showed in 2016 with 96% accuracy and what we're talking about today?

Well if you -- in general, this is very good results as we move over now well over 90%. So we have to be clear on that one. If you compare, for example, the CTMS, which was the study, Commercial Test Model Study, that we finalized and reported in early this year. There, we defined the signature and algorithms. And all the samples in that study, which were very many of 1,000. We split, as always in a training sets, where we trained the abrasions and a test set, which is independent, but to get results. However, then, of course, all the samples came from the same number of hospitals, the H1s that came for the training and the test sets. So when you do the Verification, it's -- when everything is total lock down and the samples come from independent hospitals. And you, of course, don't run any training and test it because you have it all set. So we always have some other, say, biological variation between the samples that you had on that one. So you normally or always get a little bit of a variation downwards, which we see here as well. But it's well in line. And this tells us that we really haven't managed to translate, to say the lot model to a clinical situation. So that's great. And it shows that there's robustness against biological variation and also against variations because of sampling from different places.

That's great. Well this question leads -- you just led right into this question. Can you please comment a little bit more on the scientific robustness, specifically of adding samples to the study in order to ensure statistical significance?

Okay. This becomes a little bit technical, but I'll help you for me. It is that when we talk about the systematic group here without PDAC. They are very different types. We have everything from liver diseases to reflux to abdominal pain been reasons. So there are many different reasons. That's a big variation. It means that there is -- if you average these ones out and say that gives a certain signal in reality. And it will, of course, have a real value, so to say, how you match them when you're in a commercial mode, when you have thousands of millions of applications passing through it then. So then if you have in the study, a certain number, say, 100 of these ones, you get to certain range, how close you get to the real situation. The more you have, the closer you get to this, to say, statistically relevant situation. Then we, of course, have to limit yourself because of time and because of policy, we do calculations on this statistical calculations when you design new studies. Then you get results and you see that you are within the range, but you can change -- if you increase the numbers, how narrow that variation becomes in your end results. And since we're doing in validation and clinical performance, one, we really want to make sure that we have the actually best possible situation when it comes to results. So that's where we're going to increase somewhat on some of these types of samples. I hope that was understandable.

Yes. Thank you. Can you give us some more details on the new time line now and maybe even explain a little bit more why another 3 months is needed as far as sample collection and...

Yes. It's a reprise to get the samples basic in-house and not only the samples, but also the clinical information and having that verified. And then we have seen here a dramatic drop in the sampling rate. We, of course, have part of this samples in-house, but we need the full ones to run the full study. So we have estimated together here with our suppliers that given the current situation of COVID that it will take a fair bit into the quarter -- first quarter to have everything in place to be able to run it then. So that's the best estimate we can do now in terms of this, and we are of confidence that this is the right thing to do, and we got the data now the last year and estimates from everyone. So that's why we've been able to put together the best estimate that we can do at this stage.

Great. Now will this affect the overall time line of the company with prospective study readouts or reimbursement?

Yes. That's the next steps. Well the intermediate readouts require that we finalize the validation, should be done on validated tests. So it has maybe a little impact there. And then it's more important -- and to start interventional phase that requires the data from the intermediate ones to get through the IRB so or the hospitals, of course, to get the permission to start there. So there may be some effect, I wouldn't say any major really.

Okay. Great. Can you give a little bit more -- like more detail on, will this affect the relationships with the KOLs? Or do you see any ramifications to this with your overall relationships in building the KOLs for other indications as well?

No. I have to say, we have a fantastic support and relation to our KOLs. There are many working across the U.S. and Europe. And it's -- I must make it very clear, it's not their fault, they have to drop to the patient situation, of course. And they have done -- and they're really committed and have done everything possible to help us in most of the circumstances through before and now as well. So I think we have an incredibly great network here with dedicated people that are doing their utmost to take it forward. What it's in very interest is our interest at the same time to get these clinical use as fast as possible.

Great. Now in the press release, it was -- there was a comment on the commercial testing, subsequent commercial testing in Q2. What does that exactly mean?

Okay. Well that is sales start is also regulatory, I should say, important that you can do the formal start-up promotion and selling the test once you have had the CLIA state license. And then once you've done that, of course, next steps is that the clinicians will order the tests, if they have -- when they have patients that's why it's on the test requisition, which is sent to our customer support that that takes care of the logistics of the blood sampling and then the blood sample is transported to the lab, and then we do the testing and after that you do invoicing. So it just refers to the normal step by step from sales start until we actually do your invoicing.

Great. Thanks. So one question is, how is this going to affect your cash?

Well in our Q2 report, we announced that we have, I believe, SEK 668 million, I think it was at hand. And so we are actually very well financed. So it will not have any major or much minor impact at all on our balance sheet or our own need for cash and so forth. So we are very well up in that regard.

Great. Will this free up more resources to spend on pipeline projects? Could you talk about those a little bit?

We, of course, do everything we can to minimize any impact there. Our main target is to come to market very, very, very fast with the PanCan-d because we have a fantastic opportunity to dominate the market. So we will allocate all resources we have to make sure that anything that we can do to do things that sort of this time line and put resources on that is there. So that's the top priority. So that's what I can promise today. We have focused very much, as you understand, in the last days and weeks here on this one. So I wouldn't -- I told before that we prioritized this and, therefore, the pipeline projects has to stand back a little bit. And that will continue. If there open up windows, of course, we use, and people are definitely not sitting around, I can tell you that's a really, really hard-working teams with many, many hours spent at work. So -- but the focus is and will remain to be prioritizing, getting to market with PanCan in any way or we can now as fast as possible.

And I think this is our last question, I'll give our listeners 1 more opportunity to type in some questions. The last question is, will you be able to update us regularly going forward as you have done the -- the previous this year?

Okay. For example, the COVID way of updating.

Yes.

Yes, of course, we will make sure that we step-by-step keep you informed about this. I see there's a continuation of the COVID reporting that we have taken really frequently before. And this time, we will, of course, continue to do so as well. That's a good remark and that's what we have done and we will continue to do. And well, Patrick will take that further on as well.

Absolutely.

One quick question just came in on the RA program. Can you give us a little bit of an update on what's happening with the RA study?

Yes. We -- as I said last time, we had a call, we have the first biobank that we got delivered from our Key Opinion Leader partner there. And we have not been able to prioritize this as of yet to do the detailed planning of the study and run it through the labs and so forth due to the priority we had on the PanCan-d. So that has been the status up until now. We'll see if there's an window now opens up. But in all we really put everyone on everything that can be planned to access that and to [Technical Difficulty]

Okay. Well I think that's it for questions today. Mats, Patrik, would you like to have some final comments.

Well for me, this may have been my last call with all of you after 8 years at Immunovia as CEO, which has been a fantastic time always. Had a great pleasure of presenting either in person or through the web or through telephone to all of you. So I thank you all for the time you spent with me here, even if you've been here for a short term or if you've been one of the ones that supported us for all the time. And I'm really looking forward actually to continue to work with Immunovia from the Board here and moving forward and working together with Patrik again. It is a pleasure as well. So any words from you, Patrik?

Yes. So looking forward, obviously, Immunovia has a very important task at hand and that is to provide a test for early detection of pancreas cancer. And the results show that we can indeed detect stage 1, stage 2, early stages of pancreas cancer, and that's really the key of the success for Immunovia, and this is why this is such a exciting task for me to step into this role, which I will do a week from now. And I'm really honored to take on this role and really look forward to make a difference for people with pancreas cancer. So that's words for me. And a deep thank you for -- to Mats for the past 8 years. Obviously, look forward to working together with you as a Board member and the rest of the Board. And again, also look forward to working together with the analysts and the investors of Immunovia to really continue the great work that Mats has done over the last 8 years. Thank you.

All right. Thanks, everyone, for listening today. And have a good day.

Thanks, bye-bye.

Take care.