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

Ladies and gentlemen, thank you for standing by, and welcome to the Immunovia webinar to introduce our new CEO, Patrik Dahlen. We will also take some time to further discuss the results from the verification study. [Operator Instructions] As a reminder, this webinar is being recorded. Joining us today from Immunovia are Board Chair, Carl Borrebaeck; and Patrik Dahlen, CEO. Before we begin, a quick reminder to our listeners. During today's webinar, management may make forward-looking statements involving known and unknown risks, uncertainties, 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 the results or timing predicted or implied by such 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 is being webcast and is also available through our Investor Relations website within 24 hours after the live performance. The webcast of this webinar will also be archived and the teleplay will also be available on our website and YouTube channel. With these formalities out of the way, I'd like to now turn the call over to Carl.

Thank you, Julie, and welcome to this webinar, which I think is very exciting because it's opened up a new phase in Immunovia, where we're looking at new management and also the commercialization phase. The agenda today is that we focus on Patrik, our new CEO, a seasoned CEO, who's been leading international companies, much larger than Immunovia to great success. And it's also, as I said, significant. It shows a new era, basically. Sorry for that. So I leave the word to Patrik. And after that, I will comment on the recent development of the company. And then we open up for questions. Okay? Patrik, please.

Thank you very much, Carl. First of all, let me say I'm extremely happy to be here. Obviously, I've been waiting for this day since August when we announced my becoming a new CEO of Immunovia. So what I thought I would do today is to tell a little bit about myself, my background, the type of career that I've had and then talk a little bit about how I see Immunovia today and some sort of early thoughts about Immunovia going forward. In terms of me, I'm a Finnish citizen. I speak Swedish as my mother tongue. I do sound like I would come from Mumindalen. I sound like the Moomin dad when I speak Swedish with my Finnish, Swedish. I live in Denmark. I lived in Denmark since 2001 when I moved there. And in terms of education, I'm a biochemist by training. I have a master's degree from Åbo Akademi in Turku, and I have a PhD from Turku University in biochemistry. My career started back in 1985 in a company that first was called LKB Wallac, then [ Pharmacia ] Wallac, then EG&G Wallac, and then later on PerkinElmer. I spent 16 wonderful years with PerkinElmer in different capacities. I started off obviously in R&D and then moved over to product marketing and then later to business management. A very typical career development where you change positions every year, every second year, and in ever bigger roles. My last 2, 3 years with PerkinElmer, I was in charge of the life science business unit, which we took from a business size of roughly $150 million to almost $500 million pro forma when I left in 2001. A very exciting journey. And certainly, PerkinElmer was an immensely good business school for me. And I really developed a lot of leadership capabilities during my time at PerkinElmer. One of the things we did at PerkinElmer was to develop new and better tools for neonatal and prenatal screening. Already in the '90s, we had the view that we would, as a company, touch people at multiple stages of their lives. So hence, we did prenatal screening before birth. We did neonatal screening at birth. And then the idea was to touch people throughout their lives with various screening methods in order to detect diseases early, such that we could prevent the disease from breaking out. And the company today has developed immensely successful in this field and continues to do very well in the screening field in many aspects at PerkinElmer, certainly since I left them developed immensely positively. In 2001, I had moved back and forth 3x between Finland and the U.S. and I was intrigued by the idea of becoming a CEO. And I was headhunted to a position to lead a company in Denmark called BioImage. So from 2001 to 2005, I was CEO of a start-up company, called by BioImage. We sold the company to Fisher and now known as Thermo Fisher in 2005. And at that stage, I moved on and became the CEO of Dako. In fact, it wasn't called Dako at the time when I took over, it was called DakoCytomation. But I very quickly changed the name to -- back to Dako, which is really the primary name and a brand that's known in the area of cancer diagnostics amongst the pathologists. I spent 4 wonderful years at Dako, left in 2009. I completely revamped the company. Got it focused on cancer diagnostics as the main focus. We sold off the microbiology business. We sold off the cytomation business, which was a flow cytometry business, and really streamlined the company to focus purely on cancer diagnostics. We developed a workflow strategy for the pathology businesses, not only with hard-core reagents and systems, but also with software solutions to aid in the accuracy of cancer diagnostics. We improved the bottom line significantly, et cetera. We also changed the ownership structure at the time in 2007, that the family -- Harboe family sold the business to EQT, a Swedish private equity company that later on, in 2012, sold the company to -- the Dako company to Agilent. So I had a really, really good time at Dako. In terms of development with regards to working with pharma companies. We also instigated already back in 2005 and '06, a strategy approach pharma companies to work on companion diagnostics. So we established a small group that exclusively worked with big pharmas and biopharmas to set up on commercial terms, a collaboration with companies developing cancer treatments to aid in developing companion diagnostics during the clinical studies as well as then subsequently for launching commercial products to pathologists, products that worked as companion diagnostics. So that was hugely successful already during my time at Dako, but then as you may be aware, it's become even more successful in the more recent years, and it's still one of the key drivers of growth for the Dako business now being a part of Agilent. In 2010 to '12, I was the CEO of a NeuroSearch, a small biotech public company in Denmark. It taught me a lot about communication and how to communicate with the public markets. I then moved on to become CEO of a U.K.-based diagnostics company called Immunodiagnostics and spent 2.5 years there living in Denmark, but working every Monday through Friday, from the U.K. or being out meeting customers. Again, taught a lot about communicating with public markets and also taught me about working in the U.K. Since 2016, I've been the CEO of a company called SSI Diagnostica, a company that was privatized in 2016. A private equity firm by the name of Adelis Equities, acquired the company. I was an adviser during the due diligence period of that. And we very successfully carved out the business from starting Statens Serum Institut, or SSI, and have developed over the last 4 years a very, very successful business. SSI Diagnostica recently acquired a company called CTK, with headquarters in San Diego and in Beijing. And as we were doing that acquisition, it became obvious that this was, for me, not the position going forward to be the CEO of SSI Diagnostica. So basically, we agreed that we would have a succession at SSI Diagnostica which then happened in August. So as you can tell, I've have had the CEO ship of many different companies, some being venture capital owned, some being private equity owned, some being public. Some being family owned. So I think I've been CEO in many different companies, very many different ownership structures. And I've also worked in many different geographies. I worked in Finland. I worked in the U.S. on 3 occasions. I've worked in Denmark. I worked in the U.K. and now also in Sweden. So from an international background point of view, I've been baked also in many different cultures. So that's about my career and my background. In terms of Immunovia and why coming to Immunovia. Obviously, I have a big heart for cancer diagnostics and for early detection of these disorders. I think this is one of the keys of what we can do as executives in life sciences arena is to bring tools that detect diseases early, and detect diseases at the time when you can still do something about the disorder. And this is the big attraction with Immunovia. Obviously, the PanCAN test is a tool to detect pancreas cancer already at Stage I and II, and thus, being able to do the right treatment for the patient that improves the likelihood of survival. As you know, pancreas cancer is one of the most challenging cancer areas with regards to survival. As few as 5% of the diagnosed patients actually survive over a period of time of 5-plus years. And by detecting early at Stage I and II, we will improve the likelihood of success and of treating the patient. And many studies show, including a study from Japan, that earliest -- when you detect the disease at an early stage, the survival rate significantly improves and goes above 50% survival rates. And this is kind of why it makes sense to work at Immunovia. And this is why all of our employees basically are motivated to work here at Immunovia. So that's obviously a key reason for joining Immunovia. Then, of course, as you would know, I've been a part of Immunovia before in the Board. So I know Carl, I know Mats, in fact, many of the employees who work here at Immunovia have a past with Dako. So it is a bit coming back to home, if you want. So in that sense, it's a very safe step for me to come to Immunovia. And then obviously, Immunovia, for many years, 7, 8 years, has been very focused on R&D. And it is one thing to do R&D, and it's yet another thing to commercialize. And given my background, given my international commercial background, obviously, this is a good time for Immunovia to bring in new leadership to prepare for the commercialization and to drive the commercialization from now on. It's obviously a big task, and I certainly look very much forward to the task of commercialization and then subsequent development of new tests. Speaking about commercialization, obviously, we're slightly delayed, not a lot. From where I sit, the key, obviously is to get to market, but the key is also to be able to address bigger populations. So being able to address and help persons who have a family history of pancreas cancer is obviously important, but it's equally important to be able to help patients that have early symptoms that are -- have these vague symptoms as we talk about, that maybe go to gastro centers to be examined, being able to help those -- that step is very important. And then the next step after that, obviously, being able to help diabetics or subgroups of diabetics, which is a -- that's an even bigger population that needs a test like our test in terms of an early diagnosis of pancreas cancer. And then, of course, looking beyond the U.S. because the U.S. is obviously the main focus in the short period of time. But looking beyond U.S., it's going to be very important. Obviously, we have a big task here in Europe to introduce the product around the European countries. It demands slightly different QA and regulatory route, but it's important that we get that done. And then looking beyond U.S. and Europe, we need to look at Asia. We need to look at Japan, which is a very interesting market for a test like ours as well as considering and looking at China, I have a lot of experience working with the Chinese market. And I think, again, we should not underestimate the potential in China either. So there's a lot to do there. Obviously, in the background, there is work going on with lung cancer, where we are collecting samples and sort of doing early discovery work. And we're also doing early discovery work in RA where we've received some samples, we're still collecting more samples. But -- and these are important developments, but we're obviously very early in the discovery phase. And therefore, at this stage, not much to report, but it's obviously something that for the longer term, we will be focusing on going forward. But be very clear from my chair, the next many months, priority #1, #2 and #3 is definitely pancreas cancer and the launch of the test in the United States, which is the key. So that's really where we're going to focus going forward. That's basically my introduction of myself and my background and my career, but also some of my very early thoughts with regards to how I see Immunovia and how I -- how we think that we should be working not only in the next many months, but also over the next many years because, as I said, I think we have a lot of opportunities for Immunovia in many different aspects, both geographically, markets as well as new disorders and opportunities going forward. So with that, I would like Carl to comment on some of the more recent events.

Thank you very much, Patrik. As you can understand, this is why the Board and I are completely confident that Patrik will take us into the next phase, which is heavily focused on commercialization. Before we open up for questions, I'd just like to comment on the press release we had last week, which, to us, was -- well, the core focus was that we are the first company in the world being able to detect a Stage I and II pancreatic cancer early and with a sensitivity and specificity that is outstanding, I would say, and surpasses any of our potential competitors. Unfortunately, there was some wording in that and also previously communicated that took the focus away from the main results of the verification study. And I like to just briefly, since we had another -- other press release enlightening what we meant. But I'd like to briefly just state that when running a clinical study, we and all other companies and academic organizations collect samples from all over the world, as we did. As you can see, we had a number of sites in Europe and U.S. We then biobank them in the company. And when we do a study like the verification study, we withdraw samples, it's like a library. You go in and pick out your samples. You then look at the samples and see if they fulfill the inclusion or exclusion criteria, which is standard procedure. In our case, we had a number of samples, not a big number, but maybe [ 20, 30 ] samples but didn't fulfill the inclusion criteria. They were removed, which is also standard procedure. And we follow the protocol of the study, obviously. Then we do the test and analysis. And we came up with the figures that we now communicated yesterday evening, which is if you look at specificity, sensitivity, NPV and so on, I must say we are quite pleased with that. And what we don't do, which is extremely important to realize is to change or exchange or add in new samples after the test because that would be basically -- well, in academia, it would be scientific fraud. The word outliers, which has been used by some -- in the company and also some analysts is defined by test results after the test is run as being outside the normal scope. We have no outliers in our clinical study. We haven't changed anything because of outliers. It's super important that everybody understands that we don't do any exchange or add in samples after the test is done to increase statistic significance. That would be a super confounding factor and actually not correct at all. However, when we do the inclusion, it's a standard procedure that we look at the samples and say, well, this patient was under treatment. This has the -- has some other -- for other reasons that they don't -- will be included in the study. That said, which unfortunately, it was picked up as a misunderstanding and unfortunate wording from us. I'd like to just take the next step and say that yesterday evening, Patrik and I very quickly put together another press release because otherwise, we can't talk about it today, as you understand. And we now show specificity, sensitivity, NPV, and also how many, of the different cohorts we have, normally, you have twice as many controls as you have cases in a clinical study. And also, if you look at our specificity at 99% and what NPV and sensitivity that gives. The reason we show that is that we will, in some cases, at least use this test as a rule out test, not in all cases, but in some cases. And then you have to have a very high specificity. That specificity again can be compared to any global company and also the sensitivity, which is 81% for healthy versus PDAC. It's the -- in our mind, at least extremely competitive to any company that you can come up with. That said, also the NPV, which is important. And unfortunately, there was a few wording in the Swedish text that was missing, and you can blame, Patrik and I, who wrote them at the press release because it was very tight with time and also to get it out before this morning for all of you to have a chance to look at it in details. I will stop there. I can take questions, and Patrik can take questions anything about the technical details, cohort size, Patrik's past and why he joined us and so on, I will be happy to take that.

We do have quite a few questions lined up.

Super.

The first question is, did you combine IMMray with CA19-9 in the verification setting?

Yes, we've added CA19-9 some time ago, quite some time ago. And it contributed to some degree. You have to remember that CA19-9 is, at least in 10% of the patients, not present. So with that limitation, we still use it because we see a positive contribution to the biomarker signature. And it's an easy test for us to run. So yes.

Great. Are these results from the verification study significant across all subgroups? And are there confidence intervals?

I'm not sure exactly what the question is. But obviously, we gave you data on PDAC versus healthy and also again versus the order controls. We looked at all the controls because subdividing them into subgroups, we need bigger subgroups. And really, the way we're going to use this is showing that we can identify in the high-risk groups, which one who would need to take -- be taken further into the care process and that would be PDAC versus healthy. And then with the symptomatic ones, which we also are going into that market, we need to see the difference between healthy and symptomatic initially. And this is also the data we showed you, and I think that, although they are somewhat lower than healthy versus PDAC, which is quite normal because this is a tricky and much more diverse group of patients, we still show high values on both specificity and specificity -- specificity and sensitivities, sorry. I'm not sure I answered the question, but yes.

We'll get a follow-up if there's more to that.

Yes.

The next question is, do you expect a validation study to -- results to match those of the verification study?

It's a good question. You have to remember that the verification study is around using a locked frozen signature. We don't do any retraining. We don't do anything. It's real work. This is actually exactly how we will use it. The only difference with the validation study is that it's blinded. And so if we have a performance with this verification, with the factors I just told you about specificity and sensitivity, I don't see any reason why the validation would end up. We've already done the really tricky part.

A follow-up to that is, do you see the impact of the blind samples making any kind of difference versus the known samples in verification?

I think I just answered that. No, we don't.

Great. The next question is, were any tests excluded based on inclusion/exclusion criteria? And if so, how many?

I think I just answered that question as well. Before you run the study, we look at the inclusion/exclusion. And we excluded around [ 20, 30 ]. I don't have the exact number, but that's not so important because we have hundreds of cases and controls. The real take-home message for all of you is to understand we don't do anything after the test has been run and analyzed. That's not allowed in clinical studies.

Great. The next question is, is it fair to assume that compared to only symptomatic controls, the results are a bit lower in terms of specificity and sensitivity?

Yes, that's insightful. That's exactly so because, as I said, it's a more tricky cohort of patients. They suffer for a variety of different symptoms. And so normally, you get a little bit lower. But again, I have to emphasize that what we got now is not low in any sense. And I -- we obviously compare us to academic institutions, to other companies in the world and I know that we are among the best.

Great. The next question is, what was the positive predictive value for all subgroups? Can you discuss this?

The reason we showed the negative predictive value and the specificity and sensitivity is that the way we're going to use it in the first studies. We have positive predictive values around -- a bit over 70 and that for us is perhaps, at this moment, not the most important one. But we have calculated. And if I remember correctly, it's a bit over 70. So that's, again, in comparison, you should look at this not as an absolute figure, but as a comparison with what you can achieve with other types of approaches.

Great. The next question is, will the inclusion/exclusion criteria be the same for the validation study?

Well, it's basically always the same. You cannot take samples from patients that are being under some sort of therapy, has been [indiscernible] or like that. So this is, again, standard procedure. And this is also how the test will be used in real-life when we sell it as a commercial test product.

And the follow-up to that question is, do we have a list of the criteria? And can we share that?

We have a list of that. And I mean, obviously, we can show it. But I doubt it will make big sense to anyone. It is, as I said, we remove samples for obvious reasons. And this is done in every clinical study. And if someone is particularly interested in our inclusion criteria, I'm sure we can show them.

Great. The next question is, how and who is handling the blinding of the samples for the validation study?

That's a good question, which I can't really answer.

No. I think we'll have to come back to that, I think.

It's the development department who treats them as blinded. I'm sorry, I don't know. As Chairman, I don't know that. I will be certainly blinded according, again, to clinical practice.

Great. The next question is, how should we compare the results with Grail?

Oh, please do. Well, I mean, Grail is a fantastic company and a financial success could be, absolutely. And you also have Exact and you have Thrive. And I mean, very exciting developments. And if you look at the -- what's been communicated from several of these companies, specificity/sensitivity, you can see that we have improved, and we have better test performance than any of those. But then you have to remember that we are targeting different groups. Thrive, Exact and Grail are screening for cancers in thousands of patients. We are targeting a group of high-risk patients with much lower prevalence. So it's difficult to compare. But if you just look at the figures and you can take other companies as well, with a 99% specificity and a sensitivity of 81%, we are very pleased.

Great. Okay. So the next question is directed to Patrik, and I'm not sure you can answer this. But Patrik, what is your opinion about the revenues of Immunovia in the next years?

I think in the next couple of years before we get to reimbursement in the United States, before we get broadly accepted in Europe, and we're only doing self-pay, I think one needs to be rather modest with regards to the expectations of revenue development over the next year, 1.5 years, 2 years. After that, obviously, there is great potential for revenue generation, just focusing on the hereditary part of the population. In Europe, U.S. being 200,000 patients that needs to be tested twice a year, you go to symptomatic or the order symptoms group of 1 million patients that should be tested and then potentially moving on to diabetics with -- and subgroups of diabetics being more than 3 million patients just in Europe, U.S. alone. I think it goes without saying that the future expectations of revenues are really, really high. And our ambition, as you know, is to capture at least 30% of the market share for that. So from that point of view, I think we should expect really, really, really significant revenues for Immunovia on a sort of a 3-year perspective. And here, we're talking billions of Swedish kronas in terms of revenues as in the American word, billions. So I think this is kind of where we're at. And this is, again, to put a little bit in perspective, what has happened over the last month or so of year at Immunovia and sort of the reactions from investors, et cetera, that obviously, the value creation and the sort of the reasons for being at Immunovia is to really help patients, and it will take us a couple of years to get there where it really becomes significant in terms of helping patients as in also significant revenues.

Great. Thank you. So in the last press release, the test was -- it was stated that a test was optimized to rule out pancreatic cancer not to detect the disease in early stage. How is this going to help and raise the mean survival rate of early detection?

I'm not sure we actually said that. But I would say that if you look at the high-risk group, which has hereditary disease in family with 2 siblings, you have a significant higher risk of attracting pancreatic cancer. In those cases, it would be a rule out. You would say that you would test and say that you don't have this. And that should actually be done twice a year. So that would help, obviously. In the other settings, there could be other criteria for testing. But also with symptomatic patients, it's important to have a filter to see who are at high risk and who are not at high risk. And this is what the test can do, if I understand the question correct, but...

There's an add-on to this question. By testing early onset of diabetes to rule out pancreatic cancer, how is this helpful from a clinical point of view?

Well, I mean, it's extremely helpful also from the patient point of view. As you know, the risk for newly onset diabetics in patients over 50 years is up to 8x higher to attracting PDAC over the first 2, 3 years. So obviously, it would help both society, the patient and the payers if we can single out who actually have a beginning pancreatic cancer. That would be only amendable the first couple of years. But again, it would be a multiyear testing strategy for those patients. So that's -- with over 3 million of those, it's a tremendous market, obviously, and very significant from a clinical point of view, I would say. So the clinical utility is tremendous.

Great. I just wanted to add something to this, actually, because I'm reading the question and I'm seeing that it's not an either/or scenario. And as the question was asked, it's not a rule out or something that detects cancer in the early stages, it's both. So I think maybe that also adds to the answer.

Okay. Yes.

The next question is, is the result is as good as expected and good enough to be a game changer in the early diagnosis for pancreatic cancer?