Invivyd, Inc. (IVVD) Earnings Call Transcript & Summary

Welcome to the Invivyd Third Quarter 2022 Update Call. I will now turn the call over to Kyra Faircloth, Vice President of Government Affairs, Advocacy and Corporate Communication.

Thank you for joining us today. Before we get started, I wanted to attend to a few housekeeping items. I invite you to review our press release and the Q3 financials included within, both of which can be found on the Investors section of our website. I would like to remind you that during today's discussion, we will be making several forward-looking statements. Forward-looking statements include statements concerning, among other things, the future of the COVID-19 landscape, including the expectation of continued evolution and emergence of new variants and subvariants, our ongoing research and clinical development plans, including the timing of set plans, technology and resources to develop therapeutic or preventative options for other infectious diseases, our expected cash runway and other statements that are not historical facts. Other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements are described under the heading Risk Factors in our filings made with the U.S. Securities and Exchange Commission, including our most recent quarterly report filed today. It is now my pleasure to welcome the Invivyd management team to the call. I'm joined by David Hering, CEO of Invivyd; Laura Walker, Chief Scientific Officer; and Fred Driscoll, Interim Chief Financial Officer. With that, I'd like to turn the call over to Dave.

Good afternoon, and thanks for joining the Invivyd third quarter call. It happens to be our first quarterly earnings call as a public company, and my first call as Chief Executive Officer. So our agenda will be just a little different than it may be going forward. Specifically, I'd like to start by sharing my enthusiasm for Invivyd in our future. Then our CSO, Laura Walker, will describe our unique capabilities, pipeline and ongoing activities. I will then come back and talk a bit about near-term opportunities. Finally, our interim CFO, Fred Driscoll, will walk you through our financial results, after which, we are happy to open the line for any questions. As always, we will be glad to follow up with analysts or investors one-on-one following this call. As you may recall, prior to joining Invivyd, my role at Pfizer was the Global Franchise Head for the mRNA portfolio. Essentially, I have the operational responsibility for the COVID vaccine in the U.S., which included worldwide production allocation and the sale of the vaccine, which is now the market-leading mRNA vaccine for the prevention of COVID-19 and future mRNA products in development. Being involved in that effort was a great privilege, given the urgency of the medical situation and the ability to make an important vaccine broadly available. At the same time, it was made clear that there would always be practical limits to the benefit of SARS CoV-2 vaccine could provide, especially for vulnerable populations such as the immunocompromised or other people who may not respond well to vaccination. After all, neutralizing antibody titers in response to natural SARS-CoV-2 infection weighing relatively quickly, rendering all humans vulnerable to repeat infection. Over the past year, we, alongside the broader scientific community, have learned that bioevolution can challenge even the most thoughtfully discovered therapeutic and prophylactic antibodies. The past 3 years have seen the rise of this new human pathogen, first moving through naive human immune systems in a series of distinct dominant area, then evolving to adapt to experienced human immune system and now presenting a diverse variants form. As pointed in the public commentary, this form, or so-called scrabble set of Omicron lineage viruses is aspiring somewhat predictable convergent mutation in the face of human immune pressure inserted by vaccination and prior infection. These convergent mutations are increasingly immuno-evasive relative to vaccine-induced antibody titers and increasingly challenged all prior and currently commercially available antibody therapeutics. We are pleased that to date, our candidates in late-stage discovery have shown retained in-vitro activity against all current and emerging variants of concern. Previously, the company attempted to meet the pre-Omicron COVID-19 challenge largely with a single molecule. The redesigned company by contract has been created with a mission to meet the challenge of this viral evolution through ongoing innovation and use of our proprietary platform. Our integrated discovery platform offers us the possibility for high potency, beneficial pharmaceutical properties and meaningful resistance to viral escape, as we aim to make quality antibodies that occur at very low or 0 frequency in natural human immune responses. In this way, such engineered antibodies makes it outside the pressure that drives viral escape. Further, we, as a company, anticipate being able to use our platform to position ourselves for the potential obsolescence of our antibodies and believe that what is most important about Invivyd is the expected productivity and efficiency of our overall discovery and development platform rather than the particulars of any one single antibody developed going forward. We believe our proprietary underlying discovery technology licensed from Adimab to be utilized in our new corporate laboratories will allow for unparalleled speed and molecular diversity in engineering. Our plan, broadly speaking, is to continue deploying our technology over the coming years as viral evolution requires and to innovate with the intent to keep pace with and indeed get ahead of COVID-19. I will ask Laura to review our recent progress and ongoing discovery and development activities.

Thanks, Dave. It's an exciting time in Invivyd. Recently, we announced that we've nominated our proprietary combination SARS-CoV-2 receptor binding domain or RBD study for clinical development, which we are calling NVD200. We look forward to describing the properties of these antibodies further as we advance towards clinical development. But of note, one member of that combination is indeed a reengineered version of adintrevimab, our former lead molecule. This reengineering is an important subtlety as our ability to evolve in adintrevimab to rescue effectivity against Omicron and its sublineages with relatively few amino acid changes supports our founding hypothesis that there are indeed spikes on the SARS-CoV-2 RBD that one can target with a monoclonal or multiple monoclonals and exert broad neutralization both forward through emerging variants of concerns as well as backwards to prior SARS-CoV-2 variants and even more divergent [ for beta ] viruses, such as SARS-CoV-1. As Dave mentioned, our plan is to utilize our integrated discovery platform against the threat of ongoing SARS-CoV-2 viral evolution towards ongoing novel antibody discovery and engineering as well as to develop a best-in-class fleet of early stage candidate antibodies that anticipate potential emerging variants. Our vision, which we look forward to engage in global health authorities on in the coming weeks to months, is to have a steady stream of viable antibody therapy for patients in the face of anticipated viral variations. To that end, we are pleased to announce today that we have multiple candidates in late-stage discovery on track for planned preclinical activities in the first half of 2023. Each of the 2 components within our lead NVD200 combination as well as our other candidates represent unique molecules that have been shown in vitro to target distinct immuno-resistant vitamin type on SARS-CoV-2 type patient. In addition, all have shown in vitro variants and sometimes subtle but perhaps important differences in neutralizing potency across sublineages and [ as such with strains ]. But simply, they appear to be different and to interact with the RBD in different ways that embrace the storm of SARS-CoV-2 variants we currently see. Our view is that those differences may turn out to be important in unpredictable ways going forward in both development candidates, along with what we hope will be additional broadly active way of studies, represents our anticipated growing and unique tool kit for investing viral variation. As SARS-CoV-2 continues to evolve, each of these antibodies, rather like adintrevimab, which is reengineered into VYD-222, is a potential backbone for continuous rapid engineering as evolution demand. In conclusion, our strategy, which follows uniquely from our integrated discovery platform, is not to rely on a single molecule targeting a single epitope that they experience escape. Our strategy instead is to continuously discover an engineer antibody with sufficient neutralization breadth and potency to stress patients who need have access to continuous high-quality protection, even in the face of rapid viral evolution. We believe our integrated discovery platform offers a unique competitive advantage in this effort and the potential to provide a distinct benefit for patients in need, caregivers and global health authorities searching for a durable solution to the ongoing burden imposed by COVID-19.

Thanks, Laura. As you all heard, we are firm believers in the potential for our integrated development platform to generate high-value antibody candidates that have a high probability of providing protection to populations in need. Regarding antibody protection, very recently a medRxiv and currently out for review is the paper by Laura and other colleagues that describes a very tight relationship between the protection from symptomatic COVID-19 disease, mediated by both varying levels of vaccine-induced polyclonal antibody neutralizing titers and varying levels of monoclonal antibody neutralizing titers. This paper draws on sampling from vaccine recipients and participants in our recent EVADE pivotal clinical trials. EVADE had the scientifically fortuitous timing of studying adintrevimab in a press setting across 2021. The study included patients and outcomes across both pre-Omicron and post-Omicron virus, which have different adintrevimab neutralization potency in a controlled study with corresponding clinical outcomes. That EVADE study data, along with companion work on vaccine-elicited titers, all performed in a consistent assay, provide a unique natural experiment for assessing the relationship between protection from disease mediated by vaccination and protection from disease mediated by monoclonal antibody. Obviously, a vaccine engages the immune system broadly, whereas a monoclonal antibody is highly specific in its target biology. What is unusual about the observations found within our post-hoc analysis is that they underline an intuitive result. The vaccine correlation of protection neutralizing antibody titers turns out to be mechanically replicable by neutralizing monoclonal antibody titers. The analysis found within the paper also shows that the degree of protection from symptomatic disease afforded by a neutralizing monoclonal falls nicely on the curve described by the degree of protection afforded by vaccination. It is our belief that these data suggest that monoclonal antibody neutralization potency, combined with associated dosing and pharmacokinetic information for any one antibody is a fascinating potential surrogate marker of protection from symptomatic disease. Further, as many of you have [ dealt with me ], the FDA has routinely stopped distribution of antibodies under EUA based on neutralization potency against changing viral variants without corresponding clinical data. Our EVADE data represents the first data from a prospective controlled clinical trial of a monoclonal antibody against COVID-19, which provide consideration that a reverse pathway using neutralizing titers has the potential to be a correlator protection. The finding is consistent with observations of high protection generated from antibodies produced by other leading companies, implying that at least in the case of IgGs directed against RBD such as ours at Invivyd, a consistent biophysical principle is at work was a consistent clinical core list. Our belief is that patients, caregivers and global regulatory authorities are all seeking more rapid and efficient approaches to antibody development in COVID-19. And we look forward to sharing these data and our perspectives more broadly. We are not yet able to share specifics on our planned clinical program, but we look forward to doing so in the near future. In the big picture, our goal is to rapidly demonstrate the potential protective and therapeutic benefits of our current and anticipated future molecules and to create a platform and industrial process that allows us to serve patients through continuous innovation as viral evolution requires. While some have declared the pandemic over, we feel that SARS-COV-2 represents an unacceptable perpetual toll on human health and well-being. According to the CDC, right now, each day, approximately 300 people in the U.S. are dying from COVID-19. That is nearly 110,000 mothers and fathers, grandparents, spouses and other beloved family members, we will lose each year unless we do something. How can we move forward as a nation in a world accepting that as our continuous fate? It is imperative that we think differently about our approach to managing COVID-19 if we are to reduce the toll of this disease for the future. Invivyd is committed to being an important part of this solution in reducing death from this virus among those. From a business perspective, we see tremendous opportunity to create value for our shareholders as we innovate for the state of those most vulnerable. Annually, prevention and treatment of COVID-19 represents an $80 billion to $100 billion market. Our goal is to capture a portion of those revenues on an ongoing basis with our iterative platform approach in which we strive to develop best-in-class antibody solutions for COVID-19 and beyond. With that, I will turn the call over to Fred to discuss our financial results.

Thanks, Dave, and good afternoon, everyone. For the quarter, with respect to operating expenses, R&D was $34.1 million for the third quarter of 2022 compared to $49.4 million for the comparable period of 2021. The decrease is attributable to the wind down of adintrevimab clinical trials and manufacturing-related activities. This decrease was partially offset by increased contract manufacturing expenses related to the production of materials for use in the nonclinical studies and planned NVD200 clinical trials. Our SG&A expenses were $13.2 million for the third quarter of 2022 compared to $11.1 million for the comparable period of 2021. This increase is attributable to higher public company costs, professional services and personnel-related expenses. The net loss for the third quarter of 2022 was $45.1 million compared to $60.4 million for the comparable period in 2021. Basic and diluted net loss per share was $0.42 for the third quarter of 2022 compared to $0.98 for the comparable period in 2021. We exited the third quarter in a strong balance sheet position with cash, cash equivalents and marketable securities of $419 million. Based on our current operating plans, we expect our cash will enable the company to fund its operating expenses into the second quarter of 2024. With that said, we are currently working on a 2023 zero-based budget approach, looking for cost-efficiency opportunities and plan to update our cash runway guidance once we complete our budget and close out fiscal year 2022. With that, operator, please open the call for questions.

[Operator Instructions] Our first question comes from the line of Michael Yee with Jefferies.

This is [ Julie ] on for Mike Yee. Just 2 quick questions. One, when kind of thinking about the clinical path moving forward for NVD200, what kind of clinical trial design are you planning given that may be challenging to find patients with new infections COVID, they're going to be highly vaccinated? So talk a little bit about that. And then my second question is, how are you thinking about your guidance moving forward to 2023 in terms of clinical trial ramp-up, et cetera?

Yes. Great. Thanks for the question. As you know, it's a very dynamic space, one that didn't even exist 3 years ago. And what we've been doing here, in Invivyd, is really looking at what recent sponsors have done, how they've partnered with global regulators and seeing how they bring past programs forward, knowing that it's not a one size fits all. So as it relates to where we are as we guided, we have NVD200, which will be entering the clinic in Q1 of next year. And what we've seen is these Phase I studies can be done rapidly. And while we haven't provided guidance yet on the specific clinical designs, we do anticipate ongoing data throughout calendar year 2023. And our goal is to apply the learnings that we've had over the last few years as well as learnings we've seen from other companies in this space and to do this as quickly as possible given the urgent unmet need.

Our next question comes from the line of Stephen Willey with Stifel.

Guys, can you hear me?

Yes.

This is Tuuli on for Stephen Willey at Stifel. Congrats on the quarter. So I just have a very quick question regarding NVD200. So given that there are newly emerging variants as we all know, so like XBB -- BQ.1 and XBB, et cetera, you name them. So I know that you can -- you guys cannot comment with exclusive details, but like can you guys just qualitatively comment on neutralization activity of NVD200 against these newly emerging variants at least just in a qualitative manner?

Yes, of course. And thanks for the question. As we've seen it's becoming an incredibly pressing need once again seeing the reduced activity that both Evusheld and vedolizumab antibodies that are left on the market for prevention and treatment are showing. And so for us, it really validates our approach, this focus that we have on our platform. And as you've asked specifically about NVD200, and as I mentioned in our upfront commentary, we're pleased that so far an in vitro testing that NVD200 as well as candidates beyond that we have in late-stage discovery have all shown retained activity against these current and emerging variants as you mentioned, the ones that are there. And it's a really fascinating space because previously, what we saw was this sort of singular virus change from alpha to beta to gamma. Now what we're seeing has been put in the press is the swarm of scrabble variants. And so it's really even more critical that we utilize our underlying technology focused in engineering, not just searching for new antibodies and mining for new antibodies. And that is one of the areas that we feel is critically differentiated for us and why we're so excited for where we are today.

Okay. And my second question would be more related to the [indiscernible] platform. So I know you guys have been just like observing the current evolution of variance? And I mean, it's been changing, so kind of, rapidly. So with your current capability how can you say back next maybe 3 months if there is more novel variant emerges, how quickly can you guys actually come up with new potent candidates if you guys have any idea on timing?

Yes. I mean listen, speed is definitely the name of the game, right? And what I would say is to date, the company has been incredibly successful, focused on that key determinant. So the company is not even 2.5 years old. We already have demonstrated our ability to put forward candidates, generate clinical data with meaningful clinical results, manage the curveball of Omicron, create new candidates and have them slated to go into the clinic, again, in less than a year from that change. And so the whole company is now built and focused on that instability that has been observed from the virus, right? I mean, you've seen the evolution and how fast this virus changes. And so what we're targeting is with this platform not just NVD200, but planning for the probability that it as well as other antibodies will eventually have obsolescence, right, that the virus will move past them. And so that's where we're focused to continue to do this as rapidly as possible. And more to come. We will certainly showcase that speed as we move forward, but that is how Invivyd was set up with that in mind to make sure that we can get ahead and stay ahead of the variant.

[Operator Instructions] Our next question comes from the line of Boran Wang with Guggenheim.

Interesting work for Laura. Have you guys discussed the surrogate marker with FDA and other regulatory agencies, just wondering how the conversation with the regulators has gone recently?

Yes. So we don't comment specifically on conversations that we've had with global regulators, but what we can say is that this approach is certainly something that we're hearing and seeing in the broader scientific community. We all have noted the need for increased speed, and we are now generating this data. This paper is available on that archive. We'll be posting it as well on our website. We're looking for it to eventually get published, but it is available in preprint. And we think it really covers a lot of these critical components that we're talking about, which is how do we continue to have products that can meet the speed of the virus, knowing that these huge populations and immunocompromised, in particular, et cetera, are being left underserved with the current situation that we have. So we are really excited about this recent scientific work that we've done with this paper, and we look forward to having conversations both with global regulators in the weeks and months to come as well as with the broader scientific community.

Great. And I had one follow-up. How should we be thinking about prioritization of prevention versus treatment opportunities, particularly just given the lack of available options for certain patients on the prevention side?

Yes. No, we certainly see prevention as the most critical opportunity, in particular, as I mentioned, for populations like immunocompromised. This is a group that even if the vaccines were working perfectly, which they are not, they would still be left underserved given their immune systems and their lack of being able to create really meaningful immune responses. And so for us, that is the key area. It's certainly one that we've seen with Evusheld and the uptick, which continued even with their Q3 numbers this announcement today that just continues to grow and the necessity there continues to grow. And so what we've seen over time is a shift in antibodies being utilized for treatment into prevention, and we anticipate that continuing and it's certainly our highest priority.

That concludes today's question-and-answer session. I'd like to turn the call back to David Hering for closing remarks.

Thank you so much, and thank you all for joining us for our first quarterly earnings call. It concludes our meeting for today. As always, we're happy to follow up with analysts or investors one way -- one-on-one after the call tonight and tomorrow, but thank you all for joining.

This concludes today's conference call. Thank you for participating. You may now disconnect.