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

All right. Thank you. Good morning. Thank you for joining us on another great session here for Jefferies Healthcare Conference. Very happy to have the CEO of Invivyd, Dave Hering up here with us. We have a nice introduction of presentation of a few slides, tell us a little bit about the story, and I certainly have lots of questions to ask, and we'll have a nice fireside.

All right. Thanks, Michael. It's great to be here. Yes, I think just starting for our legal folks, a whole bunch of forward-looking statements. All is posted on our website as well. And one of the things I think I wanted to start with is I get this question frequently about, okay, we're now into year 3 plus of COVID-19. We've got vaccines, we've got oral antivirals. What really is the unmet need? And what are you trying to solve? And really there's a multitude of patients that we still see have a huge need related to COVID therapeutics and one that is, in particular, is the immunocompromised. And so we continually meet with different patients and have found this profound need for products. They feel left behind. They feel that while the rest of the world has mostly gone away from social distancing, masking, et cetera, they still feel trapped at home. This is mainly because all the monoclonal antibodies that were previously on the market in the U.S. have all been deauthorized. How many people are they? How many are in this bucket? And from different estimates from the CDC, from other different populations you can see, 18 million people in the U.S., again, depending on sort of how you categorize immunocompromised, 14 million people in the European Union. You can see some of the different elements that lead to folks having an immune system that doesn't respond to vaccination. It makes sense, right? When I give you an administer of vaccine, I need your immune system to do something. It needs to recognize that antigen or that body and create an antibody. And there are some data that we started to pull from different folks that show the discrepancy between immunocompetent, people who have normal functioning immune systems and immunocompromised people in those population. And so on the left side of this graph is Seroconversion rates. This is do people have detectable antibodies after vaccination and what does that look like? And you can see that there's a significant drop off between immunocompetent and immunocompromised folks as you look through some of the different elements and this varies. On the right side, this is from the CDC. This is data looking at hospitalizations, so not even symptomatic disease and this was early on with the bivalent vaccines and getting an idea of, well, what type of durability, what type of protection were they providing. And you can see there's quite a discrepancy between these 2, again, between immunocompetent, immunocompromised on bivalent and some of the boosters and by day 120 to 179, so basically out to 6 months, you can see a profound reduction in vaccine effectiveness. Now we haven't seen this data for immunocompromised people against symptomatic disease. But from a variety of emerging evidence that people have been collecting and looking at this from a real-world effectiveness perspective, if you just look at people who have normally-functioning immune systems and you look at the effect of the bivalent booster against symptomatic disease, you can see that as Omicron has continued to mutate and have -- as we've gone from BA.1 into the other variants, the protection afforded or the vaccine effectiveness that we are seeing against symptomatic disease continues to go down. And the most recent number is quite alarming with a 4% at 26 weeks from the bivalent booster against HBV. So this is the reason that we continue to state the need for multiple antibodies in these different populations, not just for symptomatic disease but for hospitalizations and death. What does that translate in terms of market opportunity? Before it was the deauthorized, Evusheld was doing $2.2 billion in revenue in 2022 and had significant growth. This was on the back of an initial U.S. acquisition and not a significant amount of promotion and sales and marketing activity. Once they started to put more of their muscle behind it, you can see how this has gone in terms of growth. So we continue to see not just a huge unmet need, but a huge value proposition, a significant blockbuster category that would persist as we have this profound and ongoing need. So what are we doing here at Invivyd? So we have a Phase I study already fully enrolled across 30 patients, multiple doses that is the work that we're doing currently. We've stated that we're looking to have some of the early read data from that still this month, so for this quarter, which we're still planning to do. This is exciting because in this space, you can take tighter levels even from Phase I subjects and look to see what that might mean in terms of efficacy and predicting efficacy. We published a paper back in March, where we did a meta-analysis across both our studies, our original studies as well as some of the vaccine studies, mapping how antibody titer levels look against efficacy. So this is again symptomatic disease efficacy during clinical trials and built this curve. And so this is really the essence of what we've been looking to do in terms of what we're planning going forward, utilizing a correlative protection, a surrogate, a biomarker, however you want to characterize it in order to show that neutralizing titers will translate into efficacy. And the company is positioned well to meet this large unmet need. Again, focused on vulnerable populations and prevention, initial data readouts coming with plans for additional data readouts throughout the year and well capitalized with $333 million in cash and cash equivalents as of Q1 with an expected operating runway into the second half of 2024. So that was the quick rundown for where we are. And now I'm open to -- you and I to have this conversation.

Cool. Go back to that one prior slide there. I think that's a good summary slide.

That I have back, yes.

A couple of questions. So first, one of the things that I think investors were confused about over the last few years, both with not only your compound, but AstraZeneca's compound is the constant mutations and variations that then lead an antibody to be less effective. What remind us, what your epitope is, why you believe that, that will be relevant today, tomorrow and in a couple of years? Just remind me about that because actually, that's one of the things that people are confused about with all of these antibodies.

Yes, yes. I think the epitope itself really doesn't matter. It's really -- we're focused in the receptor binding domain. We have seen this through multiple companies who have been able to deliver antibodies into the market that have shown to be safe and effective. But what people care about is exactly what you said, which is durability, how long are they going to last. We and our approach at Invivyd is to look at this and say, okay, we have antibodies for today. We continue to do a significant amount of surveillance and predictive modeling to see where the virus is going. We have a pipeline of antibodies. And just like a flu vaccine manufacturer doesn't make one flu vaccine and expect it to be the exact same flu vaccine for years, 5 years, 10 years, we don't expect that one antibody will necessarily be the one that needs to be in place as the virus mutates. What we need to be able to do is to be able to continuously and quickly evolve as the virus evolves, similar to what we see in the vaccines and what has been done there. So we do feel that with VYD222, we have a strong antibody. It's a reengineered version of our ADG20. It is under less immune pressure. These are all things that we feel positive not in terms of the probability that it retains activity, but again, given the past and seeing how the virus has continued to reduce activity, both against antibodies produced from vaccines as well as antibodies, we're gearing up and making the company sustainable for that as we move forward.

Yes. So I would -- we definitely care about the long term, but even in the reasonable near-term 1- to 2-year time frame, if you do have an antibody that protects and, obviously, you look at every share that we're doing $2 billion, even if you got a proportion of a 1- or 2-year deal whatever, that's $1 billion and you're basically trading at or below cash, just to be clear. So over the short term or long term, you get a product -- you get $1 billion, you're trading below cash.

Right, right. And based on some of the discussions we've had, right, you have us with a sort of 5% probability of success of realizing that, which certainly we feel is below given what has happened and what's transpired in the market. But we're 100% with you, right? This is a huge market and near-term value creation that would drive an immense opportunity both for the company and for patients.

Right. Yes. I mean even again, we could care about where COVID is 10 years from now, which presumably there is an endemic proportion of that, whether you're there or other people certainly contract or deal in the next year or 2 or 3 can be billions of dollars, as your point, based on just immunocompromised for a short period. So have you tested your antibody against XBB, which is supposed to be the strain selection as of like next week?

Yes. So we have had and continue to say, right, we've had data against XBB.1.5, which is the predominant variant still in the U.S.. We can look. We continue to test and show activity against the variance of concern. And we do, as I said, a tremendous amount of monitoring, looking at new sequences that are uploaded into GISAID, et cetera, to monitor those and see. And again, good news is, you can do this with in vitro testing, and those activity levels are very predictive. I mean people have acknowledged, right? Those titers and those activity levels then translate into what we need, which is the clinical efficacy.

Yes. How does that work actually? Because obviously, we're familiar with vaccines where you do a neutralizing test. Is that not the same test here? Do you have anything in vitro or otherwise to show us? Is there a slide or anything...

I don't have a data there. All we've continued to -- again, to showcase is that we have activity against these. We will plan going forward to release some of that data in terms of titer levels. But those are exactly at the neutralizing titer levels. What we saw, it's the same from the curve if you go, I think, one more slide back, right? It's whether your vaccine or antibody at these titer levels, these neutralizing titer levels that we talked about, that have translated into clinical efficacy in studies.

Yes. So it's a little bit complicated. But if I go back, basically, the FDA and you have to look at the neutralization of the antibody and assays and then they just measure the titer level, those 2 together...

Right.

Yes. And there's like different levels of neutralization that they want to see.

Yes, you would apply it to a variance, right? So you want antibodies that are neutralizing to the current variant and you use assays in order to do that.

Right. Okay. And so let me repeat again, you believe the current antibody, I think, it's 222.

Yes.

That has strong activity against X -- being the current XBB strain that, again, is likely to be recommended shortly.

Right.

And likely Moderna was just here yesterday. So they're preparing hundreds and hundreds of millions of doses and putting to risk $1 billion to manufacture all that and your antibody retains utilization. So then what is coming this quarter? You have data this quarter. What is the data this quarter coming in the press release?

Yes. So the data coming this quarter is from our Phase I study. So we'll provide an update on high-level safety and tolerability, but as well, again, information readouts related to the titers, which we can pull from the individuals who we administered the antibodies to. And again, we have that across 3 different doses. We're looking at whether we will do this in pieces and do it once we have the first cohort or whether we'll wait, but we expect data from that study still this month.

And my job to look at all this. So in Q2, there'd be a press release saying we put this antibody in multiple healthy people in a Phase I study, and they had X level of titers.

Right. We have the baseline titers. What their titers would be after. Yes.

I'm not sure that's a percent, but argue, is it -- titers is like titer levels of hundreds.

Yes.

And that obviously is a positive result. That's an expected result, but that's a positive results.

Correct.

And Step 2 would be, okay, yes, obviously, you put in people, it's there. And then the next step is like we would need to follow that. for a period of time to look at the curve over time. What would be the next step from there?

Yes. So a couple of things. I mean, one, we've been having conversations with regulators. You can model the PK, that titer level. So once you know the half-life of the antibody, you can look and get a decay curve, right? So yes, you can track it over time. But the real key next step is with the Phase I data, you can move into a pivotal study and that pivotal study would then be used for an EUA or beyond.

So remind me, but it is definitely modeled. This is not rocket science. The half-life or, let's say, the protection level, in layman's terms, is expected to be 6 months, 9 months, a year?

Yes. I mean -- and again, you'll test that against specific variance.

Sure.

But yes...

Let's assume it's XBB, what would that be...

Yes, right. Based on that, we'd be looking at 6 months, 12 months, et cetera. And then what you're looking at is -- all right, what does that efficacy look like over time? Based on the data I showed you earlier in this presentation, we see strong efficacy potential, especially relative to what people are getting now. This is why Moderna, as you said, and others are making new vaccines because the current bivalence is producing very limited effect against symptomatic disease, which is why they're updating it. So that's what we're looking against. But right now, these folks have zero protection.

Sure. But the protection should be sufficient for 6 to 12 months, in general.

Yes, that's...

Yes, yes. Okay. So the next step would be run a "Phase III study" and like, like a number, hundreds of people. And would they be immunocompromised?

Yes. So the idea would be to include those folks in the study. We're still working on the exact final design, but the collection would be -- I mean, we've already been as a precursor in the Phase I seen the titer levels. We'll do that at a greater scale, build up the safety database, get that day 28 data, use that for modeling. We'll have the defined half-life by that period in time. And then you can use that to model it against whatever variance are circulating at that point in time.

So if I had to sort of frame what a pivotal study would look like, by the way, if you can do this all before winter, obviously, you'd be prepared for being able -- like walk us through that time line. So would you technically envision a plan where you would have treated hundreds of people and would have sufficient data such that you could negotiate for this winter?

Listen, it would be a great aspirational goal. We're still looking at how to do this. Nobody knows when the waves of COVID will peak in trough, though everyone does look at the winter months similar to influenza. That is a fantastic target. We're still looking at that once we start the study and how we could do that. But we've been doing activities both to get ready for the clinical trial as well as building commercial manufacturing supplies to be ready and have inventory so that we could meet some of those planned targets.

Yes. I mean you have to make a go decision on telling your CMO to go ahead and make millions of doses.

Right. I mean before millions, hundreds of thousands, I guess, yes, -- and again, that's -- there's a time period in that. We've already been working on all of the scale-up and all of the GMP activities that would put us in that position. And so we feel we're in a really good space to be able to meet that need should we have it.

Okay. So the next milestones would be data coming up in Q2, preparations for starting a pivotal study. And then since I don't think that would take a long time with hundreds of patients, data in second half of the year?

Haven't got yet on data there, but the goal is as quickly as possible.

Maybe by year-end. Okay. And then ongoing discussions. Now generally speaking, one of the areas that people have gotten hung up on and we cover some of the other companies that are oral pills, but that's different because you're trying to prevent infection with an oral pill. And obviously, that's going to be more like a vaccine type thing or a treatment in which case, there's not a lot of COVID cases, treatment study is pretty hard to run. You -- what would be, you believe, that the FDA framework for getting an EUA first, let's be honest, is based on their urgency to want to approve something because there's infections? That's sort of one of the hiccups that people have went into previously. It's just are they interested in improving something on an EUA? And then number two is the requirements to do that. And you basically think that if there is an urgency to go ahead and do that level -- let me ask you, can you comment on if things kind of stay the same, which is not high levels, but immunocompromised people need something, do you believe that the agency is -- has buy-in to give you an -- give anyone an EUA because we need to protect those people? And -- so that's question one. And then question two is that the framework to do that is based on basically the neutralizing titer levels that you're going to show later this year?

Yes. So first on EUAs, yes, definitely. But there are being no products on the market, we see a receptivity to do that. There was a recent EUA for a very niche extremely sick population in April, people who are on ventilators from COVID. We still see that...

What did they approve?

A monoclonal antibody, specifically if you're on a ventilator and for treatment in that population in April.

Which product was that?

I have to go back and I'll send it to you, okay? And so we continue to see that. We've had a tremendous amount of interest from patient advocacy groups, et cetera. So we see that all as possible. And as we've been talking about, this receptivity to PK as an endpoint using correlate/surrogates continues, right? Since the December FDA, EMA meeting specifically talking about this. We still see that AstraZeneca is doing a clinical trial using a similar endpoint. And so that to us is all indicative of this path and where this is going.

So that's a good segue into who else is doing this? AstraZeneca is working on a long-acting that would have protection for folks. I would say, treatment to, but for immunocompromised people for Evusheld 2.0. Are they also doing this? Where are they? And could they get a lot of market share?

Yes. So Evusheld, AstraZeneca is working on their next generation, just as you said. The original product was prevention only. It was in immunocompromised people who were contraindicated from vaccines. They had an EUA, which was pulled in January of this year. They have publicly stated goals to be on the market by the end of this year, we'll see. They started their studies a few months before us. And -- but we continue to see, as I showed earlier, a massive market, both here in the U.S. and globally in terms of just the number of patients that are in this immunocompromised bucket with a huge unmet need.

Let me push on that bill because I think it's really important. We're definitely excited and you've seen ready and prepared to embark on that path towards the data towards the EUA. I think it sounds like it's a step-wise hundreds of thousands of doses to be prepared. And then how fast can you turn the switch on to make millions of doses, how fast in that? How fast can you turn the switch on to make millions of doses? When you have that decision have to be...

Well, and that's one of the things we continue to look at. One of that, which we've talked about is looking at partners, areas that we can bring in folks to help us. Certainly, I lived this through my work on the vaccine at Pfizer. They can write $1 billion checks. You just mentioned it with Moderna. And so having folks like that would be really useful for a company like ours. And in the meantime and in the near term, we continue to do that planning and work with a good partner that we have as a CMO. And yes, so our focus there is keep moving forward with the capital we have, look at utilizing this data as catalyst to bring in partners who can help us really scale this and do it even faster.

How long does it take to make that decision to have stuff available? I'm not an expert in that. Is that months? They go from, yes, we want to make it to, yes, it's in a while.

Well, so that takes a little bit more time, right? I mean, right, I mean, the decision to make it, you still have to acquire raw materials, et cetera. But it's quarters, not years.

Quarters. Okay.

So there's a way to incorporate all that in. And so that's really the plan in terms of looking at how this could be, as you said, in the next few years.

Okay. And then last question because we just hit the time. How much cash do you have? How many shares do you have? I think you're trading at or below cash.

We are trading below cash. And we're looking to move you and others away from your $1.50 target for the company. But yes, the company has $333 million of cash as of Q1 runway into the second half of 2024.

How many shares do you have?

It's about 104 million shares...

104 million. So it's about $3 in cash today. Stock is trading at like $1 or something, churn at half the cash. There's no cash burn guidance, but we could estimate it because usually Wall Street trades on the future cash. And obviously, if this executes and you get a deal, that would be a massive upside.

100% agree.

Very good. Thank you very much for the discussion. I appreciate you being here. That was awesome. Thank you, Dave.

All right. Thanks, Mike.