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

Ladies and gentlemen, welcome to the Immunovia conference call. I am Sandra, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Tobias Bülow, Senior Director, Investor Relations and Corporate Communications. Please go ahead, sir.

Thank you, Sandra. Welcome to this Immunovia conference call on the PanFAM study results. My name is Tobias Bülow, and I'm heading Investor Relations. With me today here in Sweden, I have the Immunovia President and CEO, Philipp Mathieu. From Boston, we also have our Medical Director, Thomas King, as well as our U.S. CEO, Jeff Borcherding. After presentation, we will move over to a Q&A session. Our operator for today, Sandra, will guide you on how to ask questions. We will end at latest 2:00. And for your information, this session will also be uploaded as an on-demand on the web. With that, I'll leave over to Philipp.

Thank you very much, Tobias, and thank you very much to everybody who is joining us today at short notice. To both the ones who joined us from Europe and Sweden, in particular, and those who join us from the U.S., I appreciate it. As you know, we are fully committed in our mission to improve survival rates for pancreatic cancer. Early detection, which our test offers, is highly critical to enable that. In this context, we embarked on PanFAM-1, the prospective study comparing our test to current methods for clinical diagnosis such as MRI. Unfortunately, the results of PanFAM-1 did not deliver the tangible results we had hoped for. I would like to use today's call to provide clarity on what these results mean, the lessons we learned, and how we see the way forward. As I said in previous calls, we have planned for any outcome of PanFAM-1, and we feel very confident that this is not going to deter us in our mission. These results do not change our ambition and detailed plan, which we have, for initial commercial reimbursement as early as the end of this year. On today's call, together with Tom, who will speak to the clinical part; and Jeff, who will speak to the commercial part, I would like to cover the following topics: First, Tom will elaborate on the results. Secondly, we will provide insights on how these results should be interpreted and what lessons we learned, including what KOLs and principal investigators who participated in this study had to say. Thirdly, Jeff will outline the way forward on our way to reimbursement, which is informed by our ongoing discussion with insurances in the U.S. We are currently actively exploring multiple ways to generate additional data, taking their input into account. And lastly, I will provide an update on the progress we've made in executing against our strategic priorities since I joined in January. With that, I would like to hand over to Tom to talk you through the PanFAM-1 study results.

Thank you, Philipp. As I think most of you know, PanFAM-1 was planned as a prospective multicenter clinical trial with both an observational phase before the clinically validated PanCan-d test was available and followed by an interventional phase. Because of delays in the clinical launch of IMMray PanCan-d, the interventional phase never occurred. Enrollment began in January 2016 and closed in November 2021. The target enrollment was 2,000 subjects. We actually enrolled 1,255 qualified subjects. A somewhat larger number was enrolled, but because of lack of samples, lack of imaging or inclusion criteria violations, it was not possible to include all of those subjects. It was planned for subjects to undergo annual imaging and clinical evaluation, which is the standard of care in the surveillance programs they participated in. They were also intended to have blood samples collected at 6-month intervals during the study. And we actually collected close to 3,500 blood samples during the study. Unfortunately, COVID intervened in this so that the number of blood samples collected is actually substantially less than was intended. Also, we had substantial delays in terms of IRB ethical approval for studies at many sites and in terms of contracting. So while some sites participated for up to 5 years throughout the study, many came on board much later on. The primary end point for the study was to assess the sensitivity and specificity of the IMMray PanCan-d as compared to clinical imaging, which is the standard of care for surveillance for pancreatic cancer in high-risk individuals. Next slide, please. And we were able to achieve some of our primary end point. We were able to measure the specificity of the test. In U.S., North American participants, this came out to 98.3% with a 95% confidence interval of 98% to 99%. This is essentially identical to the results we obtained in PanFAM subjects in our published blind validation study, which was at 99%. So very importantly, we've confirmed the specificity of this test in our target population of interest for commercialization. Unfortunately for us but fortunately for the subjects in the trial, only 3 cancers were identified during the trial in qualified subjects. We identified a positive test result in 2 of these 3, but the numbers are so small that it's not possible to confirm the sensitivity of the assay, which we measured in the blind validation study. In that study, we had many more cancers so we could much more reliably estimate the sensitivity of the test. And this is the aspect of the test that's inconclusive that Philipp has mentioned and is in our press release. So why did this happen? Well, if we can have the next slide, I'll show you. And a number of things intervened. Clearly, COVID did. There were less blood samples collected than we intended. And there was delayed enrollment in imaging of many subjects. A few things about the study's design, I think, also contributed quite significantly to our inability to accurately measure the sensitivity of the assay. We allowed subjects at fairly young age to join into the study, as you can see in the upper right of this figure. The median age for pancreatic cancer development is close to 70 years old, but you can see the majority of the subjects enrolled in our study were substantially younger than this, and age is a very important risk factor for pancreatic cancer as is family history and germline mutations. So in some ways, we kind of stacked the deck so that we would find fewer cancers. Also, if you look at the bottom figure, the number of blood samples collected was much smaller than we intended. More than half of the subjects had 2 or fewer blood samples collected, and this speaks to the late enrollment of some of these centers but also to the effects of COVID. Unfortunately, one of the cancer patients that we identified and was ultimately positive in our IMMray PanCan-d test had a hiatus of 2 years between blood collections. So their first blood collection was negative, and then there was no blood collections in the intervening 2 years until they had a positive test result and the cancer was discovered. So unfortunately for us, as for many other clinical trials that happened during the COVID event, there were quite a few deviations from the plan, and this certainly adversely impacted our ability to evaluate the sensitivity of IMMray PanCan-d. Also, we probably overestimated though the prevalence of cancer in this population, when the study was designed quite a few years ago, the literature suggested that the rates of cancer and surveillance programs might be as high as 4% or even higher percentages. We estimated 2.5%, which would have given us about 50 cancers during the study period, if everything had worked out properly. Unfortunately, it didn't, and we had very few cancers. So we are really unable to accurately assess the sensitivity of the asset. And next slide, please. But what are the additional findings? One is that we confirmed the high negative predictive value greater than 99% of IMMray PanCan-d in a high-risk screening population. And I think importantly, confirmed the results from our published clinical validation study that showed a very high specificity for the assay in this high-risk population in a much smaller subset. So the numbers for that, I think, are very strong. An unexpected finding from this -- the study was the findings of results in individuals who had IPMNs, which are cystic lesions in the pancreas that can predispose to pancreatic cancer. About 1/3 of the participants in PanFAM had IPMNs, and the vast majority of these were negative. So we can conclude from the study that the individuals with uncomplicated IPMNs without cancer are negative in our test. And that opens up the possibility of utility of the test and surveillance of these individuals. When I have an opportunity to talk with our key opinion leaders, who are the principal investigators in this study last week, many of them felt that this was a very important finding, and would be useful going forward. They also confirmed the thoughts that we really have a much too young inclusion criteria age for individuals, and that we could really improve the number of cancers and the ability to measure test sensitivity if we had an older age inclusion limit in future studies. So those are some of the lessons learned going forward. Next slide, please. And I just wanted to remind you that our published study, the blinded validation study which was published earlier this year in Clinical and Translational Gastroenterology importantly showed a specificity of 99% and a sensitivity of 89% in the key population of early stage, Stage I and II pancreatic cancer, individuals with potentially resectable and potentially curable disease. And with that, I'll turn things over to Jeff.

Hello. Thanks, Tom. As Philipp mentioned, we have been preparing for a number of different potential outcomes from the PanFAM study. One of the things that we have been doing is thinking about a variety of ways to generate clinical data. Some of those efforts are under way already, and some of them are efforts that we're considering going forward. You'll see here on this slide, 5 different types of ways that we can generate additional clinical data. We may not pursue all of these, but these are options that we are either pursuing or are considering. First is our Pioneers Physician Experience program. This program has already launched in the U.S. It's a 6-month program that we are executing at 16 high-risk surveillance programs in the States. The idea is that we provide no charge IMMray PanCan-d test to providers in those centers, enabling them to get experience with 50 of their patients in using IMMray PanCan-d as part of their surveillance programs. This is a great opportunity for us to generate real-world evidence looking at IMMray PanCan-d results and comparing those to imaging because there's a condition of participating patients and physicians must agree to provide their imaging results to us, and we're seeing those imaging results come in along with the test requests. The other thing that's important about this study is that it's an opportunity for us to collect provider feedback on the clinical utility of IMMray PanCan-d. One of the things that's important for U.S. payers is that idea of clinical utility. Will this test be used? Will clinicians use the results of the test to guide their management of the patient? And there are a variety of ways to generate that data. One way to generate that data is through surveys that are conducted among clinicians that are using the test, and we will do that as part of the Pioneer's program. As I mentioned, this program is already under way. We have seen a large number of patients who have been tested through this, and we expect more in future months as we have additional centers that are coming on board just recently as we finish collecting our ability to get licensure in all 50 U.S. states. And we -- that enables us to bring on some additional centers, for example, in states like Pennsylvania. The second way that we can generate data is through investigator-initiated studies or collaborative research studies that are done with key opinion leaders in the field. We have a couple of these studies that are under way currently. An example is outlined here. So we are working with one of our thought leaders on evaluating IMMray PanCan-d's performance in patients who are undergoing surgery for IPMNs. Those are those pancreatic cysts that Tom mentioned. This is a highly enriched population. These are patients that have confirmed pancreatic cysts and may or may not have pancreatic cancer. Testing them just before surgery gives us a very clear ability to assess IMMray PanCan-d in this population of patients who have cysts. Importantly, that population overlaps quite a bit with the familial and hereditary pancreatic cancer risk population that we studied in the PanFAM study, but the number of patients with pancreatic cyst is meaningfully larger. And so this is an example of a study that gives us an opportunity to overcome one of the challenges of PanFAM, which is the low incidence of familial and hereditary risk linked pancreatic cancer by looking at other subpopulations like those with pancreatic cysts or those with pancreatitis. This is an opportunity for us to demonstrate the utility of IMMray PanCan-d in other populations. So we're looking at a variety of ways to execute the studies, but we're also looking at related and overlapping populations so that we can enrich those study populations, identify more PDACs through the study and demonstrate clinical utility in that way. I mentioned the fact that one of our challenges is the low incidence of pancreatic cancer. And that's where it's often helpful to do real-world studies. So these studies can be conducted either retrospectively or prospectively. And the idea to gather real-world evidence about the use of the test. Think of this as a larger-scale version of the Pioneer's Experience Program that I mentioned just a few minutes ago. These can be used to assess a variety of end points. And because they're often executed as database studies, they can be executed relatively quickly. One of the things that is important as we think about our path forward is that we want to have a mix of studies. There will be some studies that are prospective, well-controlled studies that require a longer time frame to execute. We also are looking at options like real-world studies that can be executed more quickly because they're retrospective in many cases and can be done simply by analyzing data that already exists without the need to generate prospective data. The next type of studies that we can execute are payer demonstration pilots. These are situations where we would partner directly with a payer in the United States. Usually, these are done with commercial payers. Some of them have dedicated programs to work with companies that are still building their evidence base. What these involved is conversations with the payer to understand what type of data would be interesting to them, what would be compelling to them, and then we execute a study within their patient population. We've had a few of these conversations already, and we'll have more of them in coming months as we start to work through -- working with these innovative payers on these payer demonstration pilots. As we do these payer demonstration pilots. In some cases, there is an opportunity to actually get paid for the tests that are used as part of the demonstration. So this is a way that we can generate data. And in some cases, we may be able to generate revenue in the meantime before we have formal positive medical policy decisions within those payer groups. And then last, the opportunity is to essentially do a large-scale clinical trial like PanFAM-1. Obviously, this is the most robust option. It's also the most expensive and the most time consuming. And so as we think about this option, we want to be very careful that we are assessing the best approach, that we're taking the lessons learned from PanFAM-1, and that we're thinking about ways to enrich the study population so that we can see more pancreatic cancers, and so that we can generate results more quickly. One last idea is that there are industry consortia. The most well-known, and probably the most robust at this point is a group called PRECEDE, which is being led out of New York University, by one of our key opinion leaders, Diane Simeone. This is a study that is very large. It spans both the U.S. and Europe. There are dozens of centers that are involved in this study, and it is intended to be a long clinical trial that enables the evaluation of a variety of different interventions along the way. IMMray PanCan-d could be incorporated as one of those interventions. So that's an opportunity where we might be able to participate in a large-scale clinical trial without funding the full cost of that clinical trial. So these are some of the options that we've got as we think about generating additional clinical data. That's important for us for 2 reasons, and it's probably obvious, but just to state it, we want to continue to build the evidence for clinicians that we are talking to about using IMMray PanCan-d. And then importantly, we'll use that to further our conversations with payers about generating medical policy decisions and securing reimbursement coverage for IMMray. If we go to the next slide, we can see our reimbursement plan. This is a slightly modified version of a slide that you've seen previously. At the top of the slide are steps that we have already completed in our efforts to secure reimbursement in the U.S. I won't go through all of these, but will hit a couple of points that have been completed relatively recently. I mentioned the initiation of our pioneers in pancreatic cancer, Physician Experience program that was started in April of 2022. Also that month, we submitted for a Proprietary Lab Analysis Code. This is the code that enables you to get reimbursed in the U.S. Once you have coverage decisions in place, it also facilitates that payment. And eases the billing process. So we have submitted for that code and have received early indications that, that code is likely to be issued, probably January of 2023. In May, we hired our Head of Market Access. Natalie Carfora comes to us with significant experience in generating reimbursement for tests like ours. She worked at Myriad Genetics as well as a smaller lab company known as Cipher, and has already come in and made a significant impact in our thinking, has also brought relationships to us that have enabled us to start having conversations with commercial payers. I mentioned that we submitted our Proprietary Lab Analysis Code in April. One of the things that, that triggers is an effort with the centers for Medicare and Medicaid services, essentially the federal payer in the U.S. to establish a price at which your test will be reimbursed. And that process has been started. We have submitted data to suggest what we believe the appropriate price is for IMMray PanCan-d once we receive reimbursement. That price is specifically for Medicare, but it also often sets the market for your price with commercial payers. So it's an important milestone as we move forward in our reimbursement efforts. Today, we're talking about the PanFAM-1 study results. I think it's important to note from a payer perspective that validating the specificity of the test is really important to payers. Because pancreatic cancer is a low incidence cancer. It's very important to payers that we do not generate false positives. Those false positives create significant anxiety for patients. They also lead to significant follow-up costs for payers, if there is unnecessary work done to confirm that, that patient does not, in fact, have cancer. So confirming the specificity that we saw in our published validation study, and doing it in a much larger PanFAM cohort is important. Obviously, we're disappointed that we didn't see enough cancers to be able to assess the sensitivity of the test. And that's why, as we outlined on the previous slide, we're looking at additional ways to generate that data so that we can share that with payers. One of the things that's really important as we start to look forward and think about the steps that are coming up that have not yet fully been completed, one of the things that's important is being able to generate advocacy among key opinion leaders for IMMray PanCan-d. These payers often listen very closely to what their clinicians say about test like ours. And so we want to make sure that we are giving them -- that we are putting in front of them, advocates who will talk about IMMray PanCan-d, its benefits, how it benefits their patients in their clinical practice. And one of the things that's really fueling that is the Pioneers program. We've also got other clinicians who are using the test, taking advantage of our cash-pay model that we can tap into as well. We will continue our efforts to secure those payer validation partnerships. Those studies where we look at individuals who are part of the membership bases of those payers. We are in those discussions now and we'll be talking through what those designs will look like, and hopefully securing contracts for those payer validation efforts. We expect that we can get our first payer demonstration project of that sort signed by the first quarter of 2022. And in parallel with that, we'll also be looking at other ways to get reimbursement. I think one of the things that's unique about the U.S. market is that it's very fragmented. You have a lot of different payers that gives us a number of opportunities to get reimbursement. Another thing that's unique about the market is that there are multiple ways to get paid. The most direct path, but the one that takes the longest, is to secure positive medical policy. This is essentially a payer saying, we fully evaluated the data that you have, and we believe that, that data is sufficient to reimburse the test in any patient who meets the general criteria for that test. That's the most stringent barrier. It's also the most lucrative way to get reimbursement. As we've discussed, it's also possible as we're doing some of these payer demonstration projects that we could get paid for the tests that are administered as part of those projects. And then finally, even before we have coverage and even before we have a payer demonstration project in place, there are opportunities for us to submit bills to payers, and to submit appeals for claims which are denied in an effort to get paid for individual patients. This is a difficult process. It is challenging, but it is an opportunity to get paid. And we do believe that through these different mechanisms of getting paid, we will see initial commercial payment for our tests in the fourth quarter of this year, or in 2023. As I mentioned earlier, we expect that the PLA code will launch in January of 2023. And then that's the point when we'd expect to get an understanding of what our pricing for Medicare is under the clinical lab fee schedule. So we'll continue to pursue all of these different activities in the coding area, in the contracting area and in the area of securing coverage by convincing payers that we have the appropriate level of clinical data to be reimbursed. And that summarizes where we are with reimbursement. So with that, I'll hand it back over to Philipp.

Thank you, Jeff, and thank you, Tom, for talking us through the results. As announced previously, we remain laser-focused on building out our existing leadership position in the early detection of pancreatic cancer, starting with the U.S. In this context, having well-regarded clinical validation for our test is critical. And while we have hoped for better results from PanFAM-1 or in the peer-reviewed study, which we published in March this year, gave a lot of confidence to both early adopters and high prescribers, which we continue to see in the value at which they substantiate when we talk with them, in particular in the context of the Pioneer program. Jeff also talked about the various additional options we actively pursue in generating additional clinical data. On this, we will keep you updated as we make progress and as we refine those plans. Commercial traction in the U.S. obviously is key. Now having an adjusted leadership, a dedicated and highly experienced commercial team in place in the U.S., is enabling to be successful there. This will ensure a successful in market execution and already the rollout of the clinician experience program, which is currently ongoing was a success. On U.S. reimbursement, as I said in the beginning, our ambition and plans remain unchanged after PanFAM-1. What gives me additional confidence are 2 things: one, the highly experienced skills we have now in-house in the person of Natalie Carfora, who is heading our Market Access team. And secondly, our ongoing discussions with payers. Expanding the Market Access for our tests into additional risk groups is key. PanDIA is currently ongoing, and we will provide an update on the status shortly. Crystal clear is our absolute commitment to pancreatic cancer. This also led to the deprioritization of discovery programs and other indications. Let me emphasize and summarize. The full team here is absolutely committed to delivering on our promise to change the paradigm for the early diagnosis of pancreatic cancer. We have a clear plan for broadening access to our test to as many individuals as possible as soon as possible. Successfully executing on our reimbursement plan is key here, and I remain fully convinced that we will deliver that. With that, I would like to open the call for questions.

[Operator Instructions] The first comes from [ Michael Loughman ]. He's a private investor.

What does this inconclusive study meaning for your reimbursement plans? And will there be a delay regarding reimbursement due to this? Also, 2 more questions. What did the KOLs say about the outcome of the study? And does the inconclusive results of the study impact your cash burn or the funding for the period until the company starts selling enough to become cash flow positive?

Thank you, [ Michael ], and thank you for the very valid questions. Let me split that up. Maybe Jeff, you first address the reimbursement one. And Tom, you can talk about what we are and have been hearing from key opinion leaders and principal investigators on the basis of that result and in our calls in the preceding weeks. And then I'll take on last question on cash burn. Over to you, Jeff.

Sure. In terms of reimbursement, I think we have recognized for a while that this was a potential outcome of PanFAM. And so we've got, as I mentioned, backup plans and ways to generate additional data that are already under way, and I think those will support our reimbursement efforts. It's important to note that IMMray PanCan-d test did meet its primary end point of test specificity being comparable to imaging in the study. We think this is really important for payers, as I mentioned, because it helps them to gain confidence that we will not be putting patients through additional workups that cause anxiety and lead to additional costs. Certainly, we were hoping that we would see the sensitivity proven in this study. However, because we did have that low incidence of feedbacks, we haven't been able to evaluate that sensitivity. We aimed for more tangible results. The COVID pandemic impacted recruitment and monitoring the patients, and we didn't have the number of blood draws and imaging for each patient. I think payers are going to understand those limitations. I think they will want to see additional clinical data. And I think that's where the data that we are generating from the Pioneers program, data that we can generate with KOLs. Closely collaborating with them going forward in investigator-initiated studies will be important. And then finally, I really do have energy for the ability to secure these demonstration projects with commercial payers. That can be a way to continue our reimbursement efforts and ensure that we are not standing still, waiting for another large-scale clinical study. So we're certainly doing everything we can to minimize any delays in reimbursement as a result of this study result.

And I'll speak to what the KOL feedback was. Certainly, I don't think anyone was surprised that we had COVID issues that really compromised the ability of the test of our study to assess the sensitivity of IMMray PanCan-d. Obviously, all of these clinicians were living through this. They knew they weren't seeing many of their patients coming in for a routine surveillance. And actually, according to WHO, the impact of this in terms of cancer surveillance in general with the COVID epidemic is probably going to be huge. We've probably haven't seen yet all the cancers that have been -- that were not found in early stage, that will be found now that people are coming back to the medical centers. So I don't think there were surprises in terms of that. I think they clearly understood the fact that we needed to have a higher prevalence population of individuals with cancer in order to answer the important clinical questions that we have. And I think they felt strongly that enrolling individuals at a somewhat higher age group was one way to push that forward. Also, I think there was very substantial interest in our results related to IPMNs in the pancreas. There were questions that they raised that we have not looked at as yet in terms of how the size of individual IPMNs may impact on results, and also the trajectory of those cysts, whether they are increasing significantly in size during the observation period. So there are a few more things that we want to look at in terms of that. Also, I think although the study has closed, our KOLs are very committed to this project. And though we won't be able to have comprehensive follow-up of all of the subjects in the programs. It's pretty clear to me that we will get information as cancers develop. So I think that as that data matures, we will be able to say more about how our tests performed in those individuals. So in general, I would say the communications with the KOLs were very positive. Certainly, they understood the limitations to the test of the -- our ability to identify cancers and the limitations in terms of collecting comprehensive blood samples throughout the COVID period. So Philipp?

Michael, on the question on the cash burn, the answer is we are and remain well capitalized before and after PanFAM-1. As I said, we have planned for any outcome of PanFAM-1. Some of the options, which also Jeff outlined, such as the Pioneer program and investigated initiated studies and others are part our cash flow planning going forward. We remain well capitalized for the foreseeable future, which means well into the next year.

[Operator Instructions] The next question is a follow-up from [ Mr. Michael Loughman ].

I heard that you are currently finishing up the PanDIA study, and that this will be presented shortly. Will there be a focus on subgroup with a higher prevalence? Or how do you plan to conduct that study?

On PanDIA, it applies what I said before. We will and we stick to the timeline, and we will shortly provide an update on PanDIA-1, where we stand, and that should all be clear in the very near future, Michael. And then we'll also elaborate about what's there to come on PanDIA, and what the implications are.

Gentlemen, so far there are no more questions.

Okay. Thank you all. As there seems to be no questions left, we will conclude the call. Thanks for joining us today.