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

Great. Hello, everyone. I'm Maxwell Skor, biotech analysts with Morgan Stanley. And before we get started, I need to read an important disclosure. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures, appear on the Morgan Stanley public website at www.morganstanley.com/researchdisclosures. And with that, I would like to welcome Dave Hering, CEO of Invivyd. Welcome to the conference.

Thank you.

Thank you. And for those in the audience who are either new to or revisiting the in Invivyd story, I was hoping we kind of discuss COVID in general, the current status of the pandemic, and then we can dive into the programs, if that's all right.

Yes. I mean, thankfully, I think COVID sort of introduces itself. Everyone understands the disease. We all lived at home for a while. I think the key piece here though is where COVID is going forward. There was this conversation, of course, about the pandemic. Is the pandemic going to end? Where is COVID going to go. Invivyd as a company is really focused on driving solutions for this ever-present threat from COVID disease. And so the company is focused on monoclonal antibodies, we're using a platform approach to really deal with viral evolution. We've all seen all these different variants. And in order to keep track of those and keep ahead of those, we're really focused on driving monoclonal antibodies as a platform, using them in prevention first specifically in immunocompromised populations, groups that aren't getting optimal benefits from vaccines, et cetera, because their immune systems aren't acting the same way as normal healthy adults are and so they have a critical unmet need. They are also, unfortunately, the ones who are at the highest risk of severe disease. So that's really the focus of the company. We do think the platform could be extended to other viral infectious diseases, influenza RSV, et cetera. But the first priority is COVID-19.

Okay. Great. Thank you for that background. And then broadly speaking, overall, what's your view on the variants? And I mean there's different variants that are popping up currently, EG.5, BA.2.86. We could talk about these variants first and then potentially how it applies to your lead program?

Yes. So I'll talk about the first 2 that are in the news. They are the news of the day because -- we have gone through a whole litany of different variants over the months and years. These are the ones that people are talking about now, though I can almost assure you that 3 or 6 months from now, we'll be talking about some new variants. But as it relates to EG.5 comes up because it's 1 of the most prevalent variants right now in terms of causing symptomatic disease, et cetera. It is basically 1 mutation different from XBB.1.5. That's relevant because XBB.1.5 is the variant that was used in our Phase I testing as well as the vaccines that recently just got approved this week from the FDA. And it has this 1 mutation difference called 456L. And so we haven't tested EG.5 but we've tested another variant that has that mutation in it in vitro and continued to show activity in our lead asset, which is VYD222. The other one, 2.86 has gotten a lot of news because it had a lot of mutations, a lot of change. And so whenever that happens, people kind of take a pause and take notice of, okay, what is the virus doing? That one, since it arrived on the scene there's quite a few preprint publication stating that it's sort of fitness level, et cetera, is not expected for it to continue to be any kind of major variant of concern we'll keep monitoring and taking a look at it. But again, some of these flash on the scene and [indiscernible] out and then some, of course, take a little bit more of a fire and expand globally. So we'll take a look at it. But that's the other reason that one's in the news.

Okay. So let's move on to your lead program, VYD222. If you can kind of just frame data to date, what gives you confidence in moving this program forward and then we can move into the CANOPY trial and the first patient dose.

Yes. One of the things that's really unique about our lead asset is it's actually quite associated with our first asset. So our first asset, ADG20 we took through significant clinical testing in prevention, in treatment and post-exposure prophylaxis. All of that met the endpoints in those trials. And that's important because where we are now with 222 is, we've done a Phase I study. And in that Phase I study, we started pulling what are called serum virus neutralizing titer values. And that's just a big mouthful to say, right? It's how your -- if I take your blood, what are the neutralizing titer values against a specific variant. And so we did that in our Phase I study. We put out that information. And then more critically, what we said is we have alignment with the FDA to use that type of endpoint in a pivotal study. And so that's important because it's obviously much more efficient, much faster, much easier to do titer value testing versus waiting for people to get COVID and then testing how many people got it in a placebo arm versus the actual drug arm. And so we're using that approach in our CANOPY study. We announced on Monday of this week that we had started dosing that study. And so where we are in terms of development is having started that pivotal study, and what we've continued to guide to is that we look -- we're looking at preliminary endpoint data from that study by the end of this year or early next.

Okay. Great. And so in the Phase I study, you evaluated 3 doses. You decided to move forward with the highest dose, rationale behind that? Any -- I mean, overall safety data has looked encouraging. Basically, there is no major safety concerns.

Correct.

So why go with the highest dose?

Yes, it's a little counterintuitive, right? Normally, when you're doing drug development, you say, let me use the lowest possible dose, right, because you're concerned about potential side effects, et cetera. The safety profile of monoclonal antibodies has been very strong from the beginning across a whole host of manufacturers. That's because these monoclonal antibodies are targeting the virus itself. And as such, they're interacting, right, with the spike protein of the SARS-CoV-2 virus. We decided to go with the highest dose with input from the FDA, looking at where we are to get the highest starting titer value, right? Not surprising if I give you a bigger dose, you have a higher initial titer value. And then over time, that decays, right? So we've done a half-life extension, et cetera, into the product. But over time, you're going to give that the case. So in order to give the longest possible duration of protection, as well as to give ourselves protection against potency changes that could happen from different variants. We, again, with input from the FDA, decided to go with the highest dose.

Have you tested going back to 286 have you tested 222 against 286?

Not yet. So each of those variants when they come out you have to get assays up and qualified, et cetera. And so we've done a lot of that. But 1 of the critical things that we've continued to invest in, in the company is this set of tools really looking at surveillance viral evolution, predictive modeling, et cetera. And so we have mapped and drawn out the crystal structure of our monoclonal antibody. And then when these new variants come out, we take a look at them and see are they in an area close to where we find. And when I mean close, we're looking at whether it's 5 angstroms or less. That's 1 of the areas that we look at in terms of getting a sense for whether there could be a potential challenge, et cetera. And so our preliminary look in all this continues to have us believe that we would have activity against it, and then we'll confirm it once we get the assays in place and can test them in vitro.

Okay. Great. And in regards to the design of the CANOPY study, it's -- you have 2 cohorts. Could you walk us through both cohorts and what you're looking to get out of that data?

Yes, of course. So it's a very compact clinical trial design, 750 subjects overall. Cohort A is 300. Cohort B is 450. Cohort A is immunocompromised. So that population is looking to -- that we can see the same result that we saw in the Phase I. So the endpoint there is a day 28 serum virus neutralizing titer value. And so that's what really what we're looking at for that cohort as well as safety. Cohort B is an all-comer study. That is predominantly just to build the safety database and show any potential differences between placebo and the drug.

Okay. Great. And for Cohort A, if I understand correctly, the FDA is asking for a second dose 3 months later. What rationale behind that?

Yes. So we're doing it for both cohorts, but we've added a 3-month redosing component to the protocol, really because we want to be able to show that you can boost. So intuitive that you would, but this way we can demonstrate it. So as I said, you do your first dosing. You start with a titer value, it will decay over time. You then go in at day 90 redose and see what that fold -- increase that fold rise is from where you were and showcase then that you have that data. And so when people start to think about this in real-world implications, you could think about, okay, when we get to certain titer values we have confidence that we could redose if necessary or if new variants come along, we could look at those and say, okay, we know what we can do, and we've demonstrated that in these studies.

Okay. And so best case scenario, if we look at the CANOPY study, we have the interim readout coming end of the year, early next year. What potentially is -- are the gating factors to apply for either EUA or any other strategies in regards to communicating with the FDA?

Yes. I mean to put all of this together into a package, right, you have a nonclinical, clinical and manufacturing component. We have written an EUA document before. We did 1 for our initial assets. So we're comfortable with all the different elements that are there. We're really waiting on getting the endpoint data, which is based on the State 28. We don't need the redosing as a part of the package for the EUA that we're looking to submit. But it would be pulling all of that together. And so really, the gating items include getting that data, making sure all the data is QC-ed and as you would think ready for submission, making sure all of your CMC, which is the manufacturing side, all those validation elements are in place and that you can put all that data together and submit it to the agency.

Okay. And the FDA is looking at the previous data from the monoclonal antibody that you developed before. How would this data package look overall? What would be you're using serum neutralizing antibody titers as a benchmark. What is clinically meaningful? Is there a specific number you would point to?

Yes. So we don't have a specific number in terms of like, okay, this is the absolute number that we're looking at. What we've shown in the Phase I. So we were talking about the 4,500 milligram dose, we were seeing at day 7 titer values close to 17,000, right, which is a really significant number. We're comparing that back to some of the titer values that we saw in our EVADE study. That was the prevention study we did with ADG20, and we saw different efficacy values for titer values from as low as 100 up to 3,000 something. And so we published that in a peer-reviewed journal in this curve that we did in April. But what we're really looking to do is, as I say, target some of those titer values and see how they look again over time and compare the data that we're generating from the new asset against some of those titer values that we saw before.

So what -- would there be any reason why the titer values would potentially be lower than you would anticipate?

Well, the titer values are always associated with a specific variant, right? So in terms of testing them again against XBB.1.5, which is what we did in Phase I, there isn't any reason we have to believe that they would differ even using an immunocompromised population because, again, I'm not looking for your immune system to do anything. This is passive immunity. I'm giving you an infusion and letting that work its way into the blood. So each of us have different baseline titer values to start, but looking at the fold increases and where we can go, we don't have a belief that there should be any difference.

And is there any unknowns around -- so you said you have alignment -- you've gained alignment with the FDA on potentially what an EUA data package would look like. I don't want to put words in your mouth, sorry. But is there anything -- or is there uncertainty with these novel variants that keep popping up that would change course in your mind?

I mean we'll continue -- I mean, again, the whole basis of the company is the goal to license the platform at the end goal. So we're talking about 222 as the first piece of this. Certainly, we have seen variability between assays between variants on where the potency is. That could have some implication as we're working through it. But again, the goal of the company is to start with 222 and then continue to have conversations with regulators about how do you move from 1 to the other. So we're on the third iteration of the COVID vaccines. Those aren't each going all the way back to the drawing board and starting a Phase I and going through clinical trials. They are getting licensed basically supplementing the licenses that they have. It's similar to what happens with flu vaccines every year. It's that approach that we're looking for in the long term. 222 through an EUA -- there's certainly a lot of leeway and flexibility that the FDA has when it comes to EUAs. That's both good and bad, right, because it really is then dependent on what the environment and situation looks like at that specific time. But we're very encouraged by the FDA and EMA continuing to have conversations like they did all the way back in December about how do we accelerate the development of monoclonal antibodies as they are 0 on the market and a huge continued unmet need specifically in this population.

And so overall, it seems like you've achieved a potential accelerated path to getting to the EUA step. And the 1 factor, I guess, unknown is the safety database. How much data do you need to compile and for how long before you're potentially able to lock that?

Yes, we anticipate that the safety data around the same time point of the day 28 is what we would be putting together to show that initial rate, right? Like what you're really looking at in monoclonal antibodies is a safety profile in those first couple of days, right? Do you have a reaction to the infusion, et cetera. And so we will continue to monitor it going forward beyond the 28 days, but that's really what we're looking to include as a part of the data package.

Okay. And I think I fielded questions from investors in regards to why other companies who are developing monoclonal antibodies are maybe not taking this accelerated path or it may not be an option. SUPERNOVA comes to mind, for example. I know Regeneron's also reformulating their monoclonal antibodies. Could you speak to the competitive landscape and where you fit into that?

Yes, of course. So -- the FDA was very specific to use this path and the path that we're talking about is using what they call a prototype mAb immunobridging that's sort of way that they've described it. In order to do that, you have to have a parent monoclonal antibody that has gone through double-blind, placebo-controlled, event-driven study like we had in EVADE. The new antibody has to be on the same manufacturing platform and similar in terms of how it was created. So our VYD222 is -- amino acid is different from our initial original. So we checked that box, and it has to have activity against current variants. And so that's why we continue to do the in vitro testing. So to meet all of those requirements, there is a very select few companies that have done this, right? So as I said, the big, I think, owners piece is, have you done that initial study, right? Did you do an event-driven clinical trial for prevention, which we certainly have. But AstraZeneca has, a few of us have, but we think that list is relatively small. Then you have to be targeting like we're continuing to work on this Fc region, the receptor binding domain of the spike protein, we use the same manufacturing platform. If you start to deviate and go to a different part of the virus that you're targeting then it's possible that you might not be able to use that clinical trial data that you had. So again, I think that has an implication. So if you start to look beyond RBD and spike into other areas of the virus that you're targeting, you might have to redo that. And you brought up SUPERNOVA. SUPERNOVA is AstraZeneca's trial. They do have a prevention trial, but their SUPERNOVA study was originally created before this conversation about prototypes, et cetera. SUPERNOVA really was announced sort of Q4 of last year, the meeting with FDA and EMA was December. They've made a variety of modifications and we'll see what they do. But I think that's caused why they have so many iterations to the study design.

Okay. And as you've said, you're targeting immunocompromised individuals. Can we talk about the market opportunity there and not only in the U.S., but potentially ex U.S. and what geographies you're looking to target?

Yes. So the immunocompromised population depending on how you classify it, we've looked at it, it's about 8 million to 18 million people in the U.S. alone. We've now started to sub divide it into different groups. So you can think about people who've gone through organ transplants, people who have a variety of hematological oncology disease, people cancer then you're looking at also folks on immunosuppressants, folks -- maybe multiple sclerosis, dialysis, et cetera. We've now cataloged about 41 of these different potential conditions. And so that's now what we're focused on as we're thinking and being ready. So we're doing all of those sort of commercial-ready activities now to really think through what these target populations are. Who are the ones that we can go and meet? We started doing market research on the health care providers, their receptivity. Who were the ones that were using AstraZeneca's Evusheld in 2022. And so really combining that in and looking at it. So we continue to see it as a very significant market. AstraZeneca generated about $2.2 billion of revenue in 2022 before they were pulled from the market in January of this year. And so -- we think that's just the tip of the iceberg. We really see that this group is highly motivated. They are a group of people through some of the patient advocacy work and others that we have talked to that are feeling left behind. We haven't talked about it yet, but most people have acknowledged we're in a new uptick in COVID. Just about everyone I know, know somebody who either has COVID or just recently had COVID. And so these folks are the ones who are still masking on planes, afraid to go out in public because the potential implications to them are so much more significant than to just sort of standard healthy adult.

Okay. That's helpful. And I guess 1 question I have in regards to, I think, Regeneron, when they initially developed their monoclonal antibodies, they used 2 different antibodies to target 2 different regions. And would this prevent you from applying for the immunobridging approach to get the EUA? Or have you put any thought into including another antibody in your cocktail to be able to deliver more efficacy?

Yes. Great question. I don't think it precludes it though, I think that would be a different part of the conversation. I don't think it precludes right, if you had 2 antibodies that were similar. I think the challenge you would start to have there is, again, depending what you're bridging to and the titer values, are you able to effectively suss out which antibody was contributing which? And so I think you would -- there's probably some nuances there. But conceptually, I think it seems possible. We've looked at combinations and 1 of the main reasons for doing a combination is to give yourself more insurance, right? The idea being, if you have 2 nonoverlapping antibodies and 1 gets impacted by 1 of the variants, you have the second 1 to continue to drive. I think it's a reasonable approach, but we feel that the better approach is this sort of serial monotherapy design that we're talking about, which is if you're assuming that at some point, just like the vaccines, you're going to need to update the monoclonal antibodies, then having 2 is unnecessary, right? It creates additional manufacturing challenges and the rest. It's better just to have 1 and then have the process in place to move from 1 to the next. So that's again, 1 of the big focuses of the company now is certainly the near-term priority is getting 222 on the market, protecting patients. But the longer-term piece is really how do we execute on that. Because we've added in the discovery and surveillance work and once you have that regulatory path in place, and again, whether it's every year you update the monoclonal antibody, like it seems to be what we're sort of gearing towards within the vaccines or you did it on a certain time point where you start to see something or maybe you have multiple antibodies on the market. We're still working through what that transition will be, but I think that's the better solution than necessarily doing combinations.

And in your mind, if we move into or 1 could argue an endemic phase, where we're updating the vaccines yearly -- potentially updating monoclonal antibodies yearly. Do you think the vaccines surveillance approach looking at what's moving around in certain hemispheres and then trying to design the vaccine based off of that. Is that a good idea or a good approach that you're applying to your development process?

Yes. So we have a whole host of tools really looking at the epidemiology, looking at wastewater, looking at these different variants. And we're cataloging them by family like lineage. So you've got sort of the BA.1s, the BA.2s, they all have a basic parent and lineage. The XBBs, the BQs, they all look like this. And so then we have folks looking at the specific mutations of these different variants. Someone reminded me the other day, there's more than 15 million sequences of SARS-CoV-2 right now on this GISAID database. And so we're using a variety of analytical tools to process through those. So when new ones get added, what does that look like? Where are they mapped to, et cetera. And so that's really the ability to try to be as forward looking as you can. I know a lot of people say, well, what happens if we move from Omicron to something next? That's much more difficult to predict. We're in Omicron now in all the sub-lineages of Omicron. Again, I think it's mostly a guess. But at 1 point, I read some of the top scientific experts in the country estimated that there was a 10% to 30% probability that at some point in the next 5 or 7 years, we would move from Omicron to the sort of next backbone of the virus. No 1 knows. That, like I said, would be more difficult to predict. But while we're in Omicron you do start to get a really good sense of how these different branches continue to form and what the sort of points are and where the virus can mutate and still keep its different fitness so that it can continue to do what it needs to do.

Okay. Great. So I guess final question here. You're in a strong cash position, $298 million reported with 2Q earnings, provides a runway into the fourth quarter of 2024. What do you think investors are missing here? How do you view the stock price? Is it -- do you have enough money for 1 shot on goal? Is there another iteration potentially that could be supported? Any thoughts around that?

Yes. I mean, listen, I always think that the stock is undervalued, especially at the current place where it's trading. I think it's an opportunity. We're trading below our cash value of the company like a lot of other biotechs. I think where we are and the ability to get to market with the speed that you can still in COVID is 1 of the more exciting areas in drug development right now. We're still in what I think is relatively uncharted territories. This is a disease area that didn't exist 3 years ago prior to 2020. Nobody had a model that looked at any revenue from a SARS-CoV-2 type of virus. And so that's both exciting, but I think what causes people some questions, people, especially who like Excels and spreadsheets and models, how do you put the different inputs in. And so that's really, I think, what a lot of people continue to have questions about. We think it's a relatively straightforward piece. Like do you think COVID is going to be here to stay? Most emphatically people say, yes. Do you think there's going to be a continued unmet need in these populations? The answer is yes. There are no products on the market. The opportunity is great. And so then it's figuring out from here to there, how these different integrations are going to take place. So I think that's 1 of the critical pieces that we keep communicating to people -- I don't think you need to get lost in a lot of the different -- like is it 2% or 6%? Or is it these types of different elements, but the high level order of magnitude that we're talking about is it's a huge unmet need with no products currently in the market. So that's really how we think about it, and that's what I continue to reiterate with investors.

Okay. Great. And with that, I really appreciate your time, and thank you very much.

All right. Thank you so much for having me.