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

Welcome to the Immunovia Audiocast with Teleconference Q4 2021. We apologize for the delay. We had a technical issue. The right phone number is on the speaker picture. [Operator Instructions] Today, I am pleased to present CEO, Philipp Mathieu. Sir, please go ahead.

Good morning, and warm welcome to Immunovia's fourth quarter 2021. My name is Tobias Bülow, and I'm heading Investor Relations. With me today here in Lund are the Immunovia President and CEO, Philipp Mathieu. When we move over to the Q&A session, he will also be joined by our Medical Director, Thomas King. [Operator Instructions] We will end at latest 11. And for your information, this session will also be uploaded as on demand on the web. With that, I hand over to Philipp.

Thank you very much, Tobias. I'm very excited to speak to you today. It is my first quarterly call as CEO of this company. And I'm also very excited to actually be at the helm of this company at a time which I think is critical as it transitions from being a development company to a commercial company. And with that, I would like to quickly walk you through the agenda of this call. Initially, I would like to give you a recap of what we've achieved in 2021 as well as also dive in a bit more detail in what we achieved in the Q4 of last quarter. I also want to give you an overview where I see the company is today after my now 4 weeks of being the CEO of Immunovia and also give you some more details on how I see the road ahead evolving. That will be followed, as Tobias said, by a Q&A session, which I'm very much looking forward to. Moving on to the next slide. Let's recap our 2021 achievements. In March 2021, we announced the successful blind clinical validation of IMMray PanCan-d in the U.S. This study showed to date unmatched performance in detection of early stages of pancreatic cancer. We also received approval for our clinical laboratory in Marlborough, Massachusetts. With that last milestone, we became an early commercial company in August 2021. Now where does this commercial launch position us as a company? This launch positioned us as the one with the first to market with a blood-based test in the U.S. dedicated to the early detection of pancreatic cancer. Another achievement in the year 2021 was progress we made on various clinical programs also targeting additional risk groups beyond just the familiar group. With that, let's move on to the next slide, focusing a bit more on the Q4 highlights. Q4 was the first full quarter of sales of IMMray PanCan-d for the familiar risk group. The feedback which we are receiving and have been receiving throughout since August 2021 from both doctors as well as patients has been very positive. We've made, as previously said, progress on various clinical programs, in particular on PanDIA-1, where we concluded sample collection in December last year; on PanCan-d (sic) [ PanFAM-1 ], where we're now in the face of analyzing the data; and also progressed to various exploratory studies in pancreatitis and IPMNs. We've conducted during the fourth quarter of last year extensive payer studies, which provide us with an informed view on what payers are looking for and what payers need to issue positive coverage decisions. Additionally, in ambition to scale our company, we hired a new CFO, Karin Almqvist, who is going to join us in April; as well as hired Tobias Bülow, who is today with me here and next to me, as Head of IR. We also celebrated grand opening of our U.S. subsidiary on World Pancreatic Cancer Day. Now let's move on to the next slide and focus a bit more on financials. During the Q4 of last year, the first full quarter as an early commercial company, we generated net sales of SEK 305,000. Of that, and I think that's probably the more interesting part, SEK 278,000 were from self-pay tests of patients. As a word of caution, and that's the same for pretty much all comparable diagnostic tests in the U.S., I wouldn't read too much into those numbers since for every test, which is early commercial and doesn't yet have reimbursement, the initial sales are by no means any indication for the full potential of the test. The net earnings amounted to minus SEK 47 million, which is pretty much the same as for the same quarter the year before. We have a solid cash position as the end -- as of the end of 2021 with SEK 287 million. And with that, I feel we are well capitalized for our current plans and executing those. Just to repeat, we expect testing to significantly increase once we have reimbursements. And our ambition is still to have reimbursement in place at least for early reimbursement decisions by the end of this year. Until then, we expect the volumes to be rather moderate. Let's move on to the next slide. Now as the company positioned today, I see the company very well positioned as a front-runner in innovative pancreatic cancer testing. Our test, and that's validated by various studies, has a specificity of 99% for both early-stage cancers but also across all stages cancers and the sensitivity of 89% for early stage cancers or sensitivity of 92% for all stages cancer. What we hear again and again from doctors as well as from patients is how much they appreciate that it's a noninvasive test and it doesn't require anesthesia. So they really appreciate the ease of use. With that, we are the first-ever diagnostic test which is purely focused on the early detection of pancreatic cancer. We are the first blood-based pancreatic cancer surveillance test available in the U.S. We also believe that we have not only a favorable performance, but we also can offer our test at a cost and at a price point which is way below currently available diagnostic methods for pancreatic cancer, mainly MRI and CT, in the U.S. Let's move over to the next slide and give you a bit more detail on some of the numbers which you already know but also some of the numbers which you cannot repeat often enough to talk about how big the unmet medical need actually is for pancreatic cancer which we are targeting. Every year, in the U.S., you have 60,000 new cases of pancreatic cancer. But also every year, you have 48,000 of death due to pancreatic cancer. If you find pancreatic cancer early, which only happens in less than 20% of all pancreatic cancer diagnosed, you actually have a survival rate of 42%. If diagnosed at a later stage, not in Stage 1 or 2, you have a survival rate of only 3%. Now that also is the mission of Immunovia to exactly change those numbers. It is our mission to make early detection of pancreatic cancer broadly available to all patients. Let's move on to the next slide and talk to all risk groups which we are targeting with our IMMray PanCan-d test. The initial risk group is the familiar risk group, which you are familiar with, where we're commercial and which has an estimated market size in the U.S. only of $500 million. For that risk group, we have extensive clinical evidence, the last one and probably the most valuable one in validating our validation study which was just announced. And the next steps for this is the full publication of that validation study as well as the PanFAM-1 results, and I'll spend a bit more time talking about where we are on those in a second. The ultimate goal for us and the ambition here is to have early positive reimbursement coverage decisions in place by the end of the year, this intended coverage for as many patients as possible as soon as possible. Moving on to the next risk group, the symptomatic risk. This is a risk group which we estimated to have a market size in the U.S. only of USD 400 million. We have a variety of studies to provide clinical evidence while we aren't yet commercial. The last study which we embarked on is PanSYM, and I'll talk about where we are on that. The last risk group is the risk group in new onset diabetes patients. The estimated market size as, we've talked about previously, is USD 3.1 billion. And the clinical evidence we have is mainly our ongoing PanDIA study, which completed collection of samples at the end of 2021. We are not yet commercial, but we target to be so in the future. And a major step on that pathway is the finalization of PanDIA-1. And here specifically, we are currently in the process of analyzing the samples and collecting the relevant patient records. Moving on to the next slide and giving you a bit more detail on the most important projects as of today, PanFAM-1. On PanFAM-1, this is a study for which we expect results to be disclosed in mid-2022. PanFAM-1 is a multicenter prospective study for early detection of pancreatic cancer in the familiar risk group. To give you some details, which you might already know, in terms of time frame, we collected samples for that study between December 2017 and April 2021 at 23 clinics in both Europe and the U.S. The aim of the study is to provide clinical performance data compared with imaging technologies, which are the current standard of care diagnostic techniques of pancreatic cancer. The latest status of the sample that currently samples are being analyzed at our laboratory in Marlborough. And as I said before, we are expecting to be able to disclose results by mid-2022. Moving on to the next slide, PanDIA-1. PanDIA-1 started in 2018 -- in January 2018 and is -- was back then the world's most comprehensive prospective study targeting that risk group. The target of that study was to collect samples from new onset diabetes patients at time of diagnosis over a 3-year period. Now in December 2021, we concluded that sample collection, and we are currently in the process of transferring those samples to Immunovia for analysis and also obtaining the very extensive patient records relevant of those samples. Again, an update on this one we expect to provide during Q2 of this year. Moving on to the next slide and to PanSYM. PanSYM is a study which is intended to target the symptomatic risk group. We started that study in November 2018 as a prospective validation study. And the sample collection was conducted purely in the U.K. at 2 hospitals, first one being University College Hospital, London and The Royal Free Hospital. At inception, the target collection size in terms of samples was 2,000. But unfortunately, we were not able to reach that goal due to mainly COVID and especially due to COVID limiting the number of patients which were able to attend the hospitals and provide samples. Instead, a part of those samples were used in the study which we announced in March 2021, which showed 80% sensitivity and 92% specificity. We are currently in the process of reassessing our options how we want to design future clinical programs which address the symptomatic risk group. Moving on to the next slide, where are we today? I see the company being very well positioned for future growth. We have the best-in-class performing tests. We also have the only dedicated test blood-based for early detection of pancreatic cancer. With that test, we offer cost-efficient alternative to currently available surveillance methods for pancreatic cancer. And also from everything I've seen, we've got a detailed plan to execute on reimbursement and attaining early positive coverage decisions by the end of this year. What I met when I joined the company was a team, and that applies to both Lund and Marlborough in the U.S., team of very passionate people who all believe in our one mission, and that mission is improving the survival rates for pancreatic cancer. I also saw professional excellence and industry-leading competence across teams on both sides of the pond. With that, I would like to move on to the next slide and spend a bit of time on the reimbursement plan, where we are today and what's the road ahead to get insurance coverage for our test in the U.S. The team has come a long way to put all the pieces in place and reach many milestones on the way there. The 2 most recent ones, being the publication of our peer-reviewed study, validation study as well as having more information gathered for the extensive payer reviews in Q4, that enables us to have a very informed view how to be successful in attaining reimbursement coverage. Outstanding on that vote are 2 things: one is results in PanFAM-1 study, which we expect to have by mid-2022; and then all is in build-up to fulfilling our vision to have initial insurance coverage towards the end of 2022. Moving on to the next slide. We are currently in the process of refining our strategic road map for the coming years. Nevertheless, because I think it is important, I wanted to give you already an overview of the strategic priorities I see for 2022. The initial priority for us is to get additional clinical validation for our test, and that applies to all risk groups. We also -- and that is critical for being successful commercially in the U.S., we want to strengthen our U.S. team. We want to execute, as talked about before, successfully on our U.S. reimbursement plan. And we want to have a very clear road map in place to capture the full potential for our ongoing discovery programs in other indications outside of pancreatic cancer. We also want to have the prioritization for market access in non-U.S. geographies. While today the U.S. is our only market where we are commercial, in the long term, we want to be present and want to be commercial in more than just the U.S. All of those priorities which I went through now are going to be key and benchmark for 2022. And my target is to be as transparent and as clear on where we are in each of those along the way. In summary, where are we today and where are we heading? Today, we have the first product launch in the U.S. I see us very well positioned for future market penetration. It is clear that we are at the forefront of addressing a large unmet medical need, the need for early diagnosis in pancreatic cancer patients. And we do that with a best-in-class test. Now how do we make that accessible to as many patients as possible? We do that by having a clearly defined pathway to reimbursement, which we truly believe we have, which we also believe we'll be successful in executing. With that, I would like to conclude that presentation, and I'm very much looking forward to Q&A.

Thank you, Philipp. With that, we conclude the presentation and move over to the Q&A session. Operator, please go ahead.

[Operator Instructions] So we have one first question from Mr. Alex Cogut from Kempen.

So I just want to understand a little bit better how does the pathway towards reimbursement look like this year, so also including the fact that you are now delayed in reporting the results from PanFAM. And then second part of the question is, you mentioned that by year-end you are aiming to achieve reimbursement coverage, but what level of coverage are you aiming for? Is that the first private contract? Now when do you expect to be able to achieve coverage for the majority of payers in the U.S.?

Thank you for your questions. First, on PanFAM, yes, there is a delay versus what was previously announced. Nevertheless, then talking about the implications, as we think about reimbursement, we've planned our path to reimbursement with or without PanFAM results, with or without confirmed results in either way. So since we don't know today what the PanFAM results will be, we will only know, as I said, in second quarter or in the middle of this year, I think, our reimbursement plans for both using validation data only. And you saw the peer-reviewed publication of the journal yesterday, which is a big step forward, as well as also using PanFAM. We see here that we can have -- moving on to your next question with regards to reimbursement, we can have early reimbursement decisions in place. I don't foresee to have the majority of pairs under contract by the end of this year. And this is due to the fact that, obviously, first of all, all of that is out of our control. And then we are going to start, after the reimbursement issues are compiled, and we can use part of the information from our payer studies, to have an informed view on who to target first to have those discussions then in Q3, in Q4. But again, to highlight, we expect to have early reimbursement coverage decisions of a positive nature by the end of this year.

Yes. And just to be clear, is PanFAM required for Medicare coverage?

Tom, do you want to take that?

No, I think it's not specifically required. We need to demonstrate clinical utility. But I think we can do that based on what exists in the literature in terms of the performance of imaging for the detection of early pancreatic cancer and our own validation data in terms of how our tests can detect early pancreatic cancer.

And have you validated that view with any sort of CMS affiliates that will be reviewing your file?

We have not at this time. We are -- have contracted with an expert in the field, and we're still going through discussions with them. We have, through them, done a number of payer studies where they've interviewed individuals, some of whom are involved with CMS, and have gotten generally favorable reviews in terms of our approach to how we will present our case for reimbursement.

Next question is from Mr. [ Michael Löfman ].

I have a few questions. What is the significance and how will you use the just-published peer-reviewed study in the Journal of Clinical and Translational Gastroenterology? And can you develop a little on how you stand and where you stand regarding the pipeline products and potential new indications? And finally, how is the work of getting a sales distribution agreement in place progressing and, I mean, also you can start selling to the large group of gastro centers?

Thank you, [ Michael ] for your questions. I think on the first one, we were very pleased to be able to announce the publication of our peer-reviewed study this morning, which came out shortly before in the journal. That is a big step forward. That is a big step forward in terms of 2 avenues. One is, as I mentioned before, it will be part of the file and the case with which we will approach payers. But also prior to getting reimbursement, I think we have a very good case with which we already now approach surveillance centers with that data as well as gastroenterologists to give them more comfort, and that's exactly what they were waiting for, and to recommend this test in a broader fashion to their patients and also maximize the potential of IMMray PanCan-d already now with reimbursement. When it comes to the pipeline, [ Michael ], I mean, I think I said that during the presentation, yes, the pipeline we have, those programs are in discovery mode. We are currently in the process of assessing which options we have to maximize the potential of each of those. I think it's premature to talk about that now, but we'll provide an update. And as you've seen, I've put that as one of the strategic priorities for 2022 not only for us but also transparently communicating that, which pathway we would take of those discovery programs going forward. And then on the last question on the sales and distribution agreement, yes, we are currently evaluating partnering options but also, while having those discussions, are very careful to assess that we can, by entering such partnership, maximize the potential and across those sales channels which we are targeting, both gastroenterologists, surveillance centers and also PCPs. And for me, it's very important that we keep control and keep upside. That means that we build our own sales and marketing organization in the U.S. And where helpful, we'll partner.

Next question is from [ Mdme. Ari Ahn ] from [ FactSet ]. So next question is from Mr. [indiscernible] from -- private investor.

Okay. My question has to do with the cash position. Are you expecting to make a rights issue along the way? Or do you think your cash position is going to be enough for bringing your product to the market?

Thanks for your question, obviously, a question of how you define along the way. I don't see any need to have a near-term rights issue. As I said, talking about the cash position of the company, I think we are well capitalized. I also think the early payer decisions and hopefully positive coverage decision by the end of the year are possible without the rights issue.

Okay. A follow-up question, when it comes to the reimbursement, are you seeing any like big obstacles for getting the reimbursement in place? Or can we really expect that will happen?

Look, I mean the only thing I can say on that one, we feel very well prepared, and we know that we've got a game-changing test which we are bringing forward to the payers. Now there are always risks by doing so, and some of those are out of our control. And the one focus for that is obviously what traction and what reactions we're getting from payers. I think we have a good view of what we'll be prepared for. We also have a good view who to approach and which sequence, but there is always a risk. And now what we are focused on is execution.

Okay. I'm not so familiar with all the reimbursement work, but can you comment anything about is it a long process to get several on board? Or I mean how many people do you need to talk to, to make this full reimbursement for the total market potential you have?

I didn't understand the question. You mean how many payers we are targeting?

Yes, I mean how many do you have to talk to on the other side to make the reimbursement happen in the U.S.? Is it one partner or, I mean, is it one company? And also, how many do you need to talk to, to get the reimbursement to be able to reach the full potential of the U.S. markets? I don't -- I'm not so familiar into the work there.

Yes. No worries. That is a very good question. And it is a whole long list of payers. And there is a variety of how many covered lives those payers serve. I mean Medicare is obviously the biggest one. And there are big private payers. There are small private payers. Each of those have their own committees to improve reimbursement. Each of those also have the technical committees to improve reimbursement for a specific product. So it's a long process. But I think if you know who to target and in which sequence, you can cause a trickle effect. And that's what we are trying to do, but it's a lengthy process. And you see that with pretty much everybody in every diagnostic test of similar fashion in the U.S., it takes time.

Yes. So are you expecting like a 1- or 2-year work to get that to happen? Or what is your time -- what is your plan there?

As I said, we are expecting early initial coverage decisions by the end of the year. And then surely, we won't have the majority of payers ready by the end of the year, but I hope we have a good-sized portfolio of payers under contract in 2023.

Next question is from Mr. [ Peter Ogan ] from -- a private investor.

Michael (sic) [ Philipp ] and Dr. King, 2 questions. Where do you stand in recruiting a dedicated U.S. CEO? And also, how will you change your communication policy going forward?

On the U.S. CEO, as I said during my presentation, scaling the U.S. both from a size perspective but especially from a skill set perspective is priority -- an absolute priority for us. We are in active dialogue and discussions with various promising candidates. And I feel quite confident that we'll be able to report on that in the coming months. And then on the communication strategy, that obviously will be my first call as a CEO, it's difficult to promise what I'd rather show you, but my approach to communication is to be as transparent as possible. That applies to both internal communication as well as external communication with stakeholders, shareholders and key opinion leaders. And I think setting those strategic priorities today for 2022 and having benchmarked against those, I think, is the first step to proactively communicate with shareholders and investors and also be accountable. That's important for me.

Thank you, sir. We have no other questions. [Operator Instructions] We have no other questions on the phone.

Okay. As there seems to be no questions left, we conclude the call. Thanks for joining today, and welcome back next quarter.

Thank you very much. And again, I appreciate the interest in the company. But also, I'm very much looking forward to have you as part of this journey, which is exciting on going forward. And today is only the first step on that journey. Thank you.