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

Okay. Great. I'm Max Skor, Biotech Analyst with Morgan Stanley. And before we get started, I have to read a quick disclosure. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. So great. I would like to welcome William Duke, CFO of Invivyd, to the stage. Thank you very much for joining me today. It's been an exciting year for Invivyd. For those in the audience who are not familiar with the story, can you provide some background leading up to the company's first emergency use authorization granted in March '24 for PEMGARDA?

Sure. So first off, thanks for having me today. So Invivyd is focused on delivering protection for important viral infectious diseases. And so the first disease that we're focusing on is SARS-CoV-2. So with regards to our authorization, we submitted the application for EUA in December of last year. We received our EUA for our first mAb, which we expect to be a part of a serial effort to deliver antibodies for these patients as the disease takes different directions. And so PEMGARDA was issued its EUA in March. We were able to launch with a commercial team in Q2, and we are now working our way through even more rapid launch efforts as we enter the important fall viral season for respiratory diseases.

Great. So before we dive into the launch, can we just touch on new management? There's a new management team in place and their relevant experience.

Sure. So we've had some departures at the management level team. The most critical new hire that we've made is a Chief Commercial Officer, Tim Lee. So Tim Lee joined the company in June and was really focused on bolstering our commercial launch activities. Tim's experience with Amylyx and Biohaven with very successful launches under his belt really made him a very attractive candidate. He knows the rare disease space as well as general medicine space very well. And given the fact that COVID is not a rare disease in and of itself, but we are focused on the immunocompromised, and those people often have rare disease underlying afflictions. And so our sales efforts are towards those prescribing physicians in those key centers that kind of treat these patients. So as a result, that really made him a very ideal candidate for us.

Great. So now getting into the launch, we're talking about PEMGARDA here. It's a monoclonal antibody in the preventive setting for immunocompromised individuals. So previously, in the second quarter, you reported PEMGARDA net product revenue of $2.3 million and reiterated year-end cash, cash equivalents of, let's say, $25 million. This is based on anticipated 2024 net product revenue of $150 million to $200 million. So could you just lay out basically your strategy, the team strategy for meeting these goals at the end of the year?

Sure. So we're really focused on this key season coming up right now with regards to the launch. Again, we look at -- for the immunocompromised, COVID is a concern throughout the entire year, but their care teams are oftentimes very much focused once activity starts moving indoors. The fact that we have kind of laid the groundwork to be receiving and helping patients receive doses has really kind of exponentially increased as we moved through Q2 and into early Q3. So we've been reaching out to these care facilities, making sure that we get through formularies and also working with commercial payers to make sure that reimbursement is available. With regards to our overall efforts, we feel like we are well positioned as we enter the season. From the revenue guidance perspective, that contemplates roughly 30,000 to 40,000 doses being sold throughout the year for the remainder of this year. And so we still feel very confident with regards to that, given that where we're positioned now, the underlying mechanics that we put in place that we can get product to those in need in this important viral respiratory disease season.

So let's touch first on coverage, payer coverage. Could you just talk about the mix there, covered lives? Any sort of color around that?

Sure. So we were fortunate in we received our Medicare Medicaid reimbursement right out of the gates with [indiscernible] codes being issued early in Q2, following our EUA. So that covered approximately 50% of the targeted population. So the rest of -- the other 50% is made up of a variety of commercial payers. We have seen really good uptake with regards to national coverages as well as large regional coverages. And so we're feeling quite confident at this point that we have -- people in need are able to get our product reimbursed.

Great. And then diving in a bit deeper on the patient profile, when you say immunocompromised, what does this include? Are these just transplant patients, patients receiving chemotherapy? What is the broader identity?

So immunocompromised patients by -- in U.S. standards, we approximate that there's 9 million patients in the U.S. We're focused on a subset of those. And we said that our target is approximately just under 500,000 of those immunocompromised, and that is stem cell and solid organ transplant patients as well as those suffering from hematological cancers. And so that comprises approximately just under 500,000 patients in the U.S. So that is the subset that we are currently targeting.

And is there a path to maybe including other groups under this umbrella? Let's say, patients who are multiple sclerosis patients who are receiving medication or other sort of patient identities?

We're definitely looking to expand that. We have talked about what we have in terms of doses available. As we kind of think through that, we are definitely expanding to other patients who could potentially benefit and can kind of fall under that domain of the immunocompromised, that vaccines really don't take effect for or don't benefit from. And so as that -- as we get further into launch, we will definitely be looking at that. We also have that in mind as we ultimately transition to our next-gen product as well.

Great. And then in regards to the treating physicians. These are mostly hematologists, surgeons. How -- what is your sales force really targeting?

So we're targeting those centers where these patients visit most and where their care teams reside. So there's approximately 1,200 in the U.S. centers that we are predominantly focused on. And so because of that footprint, we're able to do so with a relatively modest sales force. As we expand that population and as we expand to other immunocompromised sets, that's where you can see sales force may start to diversify.

Okay. And then in regards to marketing, educating both physicians and potential patients, I know there's limitations when you have an EUA, but could you just walk us through what efforts you're undertaking now and you hope to do in the future?

Sure. So education is a big part of the commercial effort as well. So just making sure that people have disease awareness, but also what the benefits PEMGARDA can offer to these immunocompromised. So with regards to -- we have educators that we've hired that can work with prescribers, but also infusion clinics, so that they can get more and more comfortable with PEMGARDA and understand how this can impact the patients that are under their care.

Okay. And then in regards to ordering and you have a great infusion center finder website. But how does the ordering dynamic work? And are you building up supply? What do the numbers look like right now?

Sure. So we have a sell-through model. So we are actually -- we sell into major distributors, the Cardinals, McKesson. And so we sell through those distributors to -- ultimately to the prescriber/infusion centers where the product will then be dispensed. So when we recognize revenue, we're recognizing revenue as it's sold to -- ultimately to get them in the hands of the end patient not through those distributors, so to speak. Because of our inventory volumes that we're going to have on hand, we are not stocking the channel. We're not having our distributors sit on product. We have a relatively very fast turnaround where we can get product to the end facility in a matter of 24 to 36 hours in most cases.

Okay. And could you give us any color or insights into the third quarter? How are orders looking? I imagine they're tracking with overall infection rates in the country, if you can speak to either of those.

Sure. So one thing that we've highlighted on our Q2 call was the progression that we've had with accounts that have ordered. So we exited Q2 with approximately 113 accounts that had ordered. We disclosed that, as of the end of July, that number was up to 208. So we've seen nice traction. That's to the extent that we've actually said publicly, but we continue to see that good traction in which heading into this key respiratory disease season. We always looked at the post-Labor Day season through Christmas as a real critical point for all of these patients in need.

Great. And so, basically, could you just provide some takeaways in regards to gating factors or potential risks to your year-end guidance?

Sure. I think that any time that you're looking at a commercial launch, it's always about commercial uptake and how you can actually deliver on that need. For us, it had to do with laying that initial groundwork so that we could kind of facilitate the process for getting the patient the end product. One of the things that we've kind of really put a lot of effort into is making sure that there are more infusion centers available, where could -- the product could be delivered. So we're continuing that efforts, but we've seen nice trajectory there. As far as risks to overall, again, if a new variant came up and we were not showing efficacy against, it might derail. The good thing is that since PEMGARDA has been on the market, we've been able to show that we've been able to deliver sustained results against the variants that have been most dominantly in circulation.

Great. So I think that's a good segue into talking about what variants are currently circulating and what trends you're seeing in the COVID landscape in the endemic setting? Could you just speak to the parental strain, the sub lineages that are currently merging and PEMGARDA's activity?

Sure. So dominant streams today, the most dominant one right now is KP.3.1.1. We just, earlier this week, released the fact that we were showing -- that we showed strong activity against that variance stream in pseudovirus assays. So it's a positive for us because, right now, as that -- estimates are saying that, that's approximately 42% of variants in circulation right now. There are other variants as well. LB.1, and so we're feeling very good about PEMGARDA's continued activity against these strains. We are constantly monitoring for what is the next variant that could potentially take on a sizable percentage of that share. So we have a very strong system in place where we monitor and surveil these variants and watch for our continued activity. And then we directly relay that information to the FDA as well.

Okay. That's helpful. Yes, I would like to get into a bit of the interactions between Invivyd and the FDA regarding the fact sheet, monitoring these variants. How often are you interacting with the FDA? And what is the requirement in regards to whether PEMGARDA is still active against potentially an emergent variant?

Sure. So our FDA fact sheet right now says that we would retain authorization provided that we can deliver results against at least 10% of the variants in circulation. And so if you're showing that you are not delivering against more than 90%, that is where you could be at risk of losing authorization. For right now, given where we are, we are showing that against all dominant variants in circulation that we've already -- that we've tested that we continue to show activity, which has been a very good thing for us. As far as what's next? We are constantly monitoring wastewater results in testing our PEMGARDA, again -- as well as our 2311, which is a next-generation against these variants, and then we are reporting that information to the FDA. So part of our authorization does require that we kind of provide results on a regular basis to the FDA against variants in circulation, so there is a regular form of communication.

Is it quarterly? Is it monthly? Or is it dependent on what's circulating?

Dependent upon what's circulating.

Okay. That's helpful. You also noted on your 2Q call potential vendor contamination event, if I remember correct. If you can elaborate on the potential implications of this and what it means more broadly?

Yes. So what we had alluded to was that we had a vendor, a lab that was doing authentic assay work for us that had a potential contamination event that meant that the data that had been reported may not be reliable. So what that data was, was related to the GN1 variant. And so the positive side of this for us was that we actually had exploratory clinical data with our CANOPY study during the same time that, that was -- that, that variant was dominant in circulation. So we did release that information publicly and showed that we had strong protection against GN1 during that period of time. And that information is now in our fact sheet. So for the first time, we were able to get that exploratory endpoint data into the fact sheet, and that is now something that our sales team is actually able to speak to prescribers and infusion centers very much about.

Yes. That was impressive. If you -- maybe you can give us the highlights in regards to -- basically, this is -- falls under the treatment paradigm of what PEMGARDA could potentially do with regards to lessening severity of disease, et cetera. But if you can give us the highlights and summary there, that would be great.

Yes. So we were able to show that, for protection, that we were able to protect patients to the order of 84% reliability against variants that were in circulation during the 180-day follow-up period. So we look at that as very strong results, especially when you compare against what vaccines are able to offer and other forms of therapy are able to offer. So that is something that, obviously, we are quite pleased to be able to educate people about. And then, again, we are constantly monitoring future variants and currently circulating variants, and we do so in pseudovirus assays.

pseudovirus assay. So are you contracting this work out? How does that work in regards to...

Yes. So the pseudovirus assay work is being done by a large-scale lab, very well-known laboratory. And so we actually have been able to develop our assays with them. We are able to actually review their work on a regular basis, and we're able to produce strong results as a result.

Okay. That's very helpful. And I guess circling back just briefly. There are 2 preprints that are out there in regards to describing PEMGARDA's activity against some of the variants we have discussed. KP.3.1.1, LB.1. Can you speak then -- there seems to be a disconnect between what some of these groups are actually seeing and what you guys are reporting?

Yes. So these are third-party laboratories that are not associated with Invivyd at all. They've made their own [indiscernible] and tested it in their own assay. And so as a result, we can't really comment on the quality of product that they tested or the quality of their assay. So when those results came in, we actually -- we advised that we will have our own pseudovirus assay work within a matter of weeks, and we were able to release that information earlier this week. And we've been able to show that we've had continued activity against these very variants in question. We'll get more specifics, hopefully, in the coming days, weeks with regards to an updated fact sheet because we've already relayed that information directly to the FDA and are now working towards fact sheet revision.

So the fact sheet would then include a quantitative analysis of neutralizing antibody titer?

That would be the expectation because that's what we have for our other assay -- for other variants. So that would be my continued expectation.

Okay. Great. And last thing on the preprints. They do note this S31 deletion as potentially being related to decreasing efficacy of PEMGARDA. Any thoughts around that deletion and the implications around that?

Based on what we've seen in our assay work, we don't see that it's causing a problem for us.

Okay. That's very helpful. So now moving on to -- there's a lot of things going on at Invivyd. You also have a treatment EUA that you submitted. Could you provide a bit of background on what led to this submission and any insights in the timeline?

Sure. So we had dialogue with the FDA once we had already been issued the prevention EUA. And so at -- the suggestion after conversations with the FDA, we submitted for treatment as well, thinking that we could actually show via bridging of results in the clinical studies that have been done that we could show a benefit for treatment in the immunocompromised once they are afflicted with COVID as well. So that EUA has been submitted. As far as timelines go, there's no set timeline when we will hear, but we are in regular conversations with the FDA about it. Now that we have information on more currently circulating variants, I would expect that, that -- those conversations to enhance.

And the dynamic here, I understand immunocompromised patient who is going to pursue PEMGARDA in the preventive setting, they can go to an infusion center. But if they're sick already, how does that change that dynamic?

I mean, it would be very similar. They would still be looking for an infusion because that is what PEMGARDA is set up for right now, is an infusion. As we migrate to our next pipeline program, we are looking for -- right now, we think that we're seeing strong results in the potential to reduce dose and maybe change form of administration. So whether that means a shortened IV cycle or if it means intramuscular/subcu, that will be determined, and that's why we're conducting the trials right now.

How long is the infusion right now?

The infusion for PEMGARDA is a 60-minute infusion, 1-hour infusion, followed -- with a 2-hour follow-up. Now these patients that we are targeting right now are in the -- receiving IV therapies for other indications, for other disease states. So this would be something that they are accustomed to already.

Okay. That's helpful. In regards to follow-up from the Phase III CANOPY trial, should we be on the lookout for a publication or additional data in the near term?

I believe that is under works, yes.

Okay. And then the last question regarding PEMGARDA launch, manufacturing capacity. I know we touched on it, but I think you quoted on the second quarter call over 100,000 doses. What are the implications of the treatment EUA? Will you expand manufacturing? And is your guidance for year-end net sales include the treatment?

So we did not break out where the -- we have not altered our guidance and we have not refined it to -- publicly to state what percentage is treatment versus prevention. What we're authorized for right now is prevention. So -- and we issued that guidance with prevention in mind. So we look at treatment as a potential opportunity to further enhance our overall penetration rate with regards to PEMGARDA. As far as the guidance goes -- the guidance assumes, as I think I said before, between 30,000 and 40,000 doses this calendar year. We will have -- we have publicly stated that we have 100,000 doses available between now and year-end. And then we will have an additional doses come Q1, and that will add approximately another 25,000 to 30,000 doses in totality. With regards to our manufacturing plans, we have already started -- we've manufactured clinical supply for 2311, our next product candidate, and will begin shortly thereafter the commercial manufacturing as well.

Okay. That's helpful. Before moving on to the next generation, let's just touch on the competitive landscape. I know AstraZeneca, they have a program out there. It didn't seem to be as efficacious against currently circulating variants. But any comments around AstraZeneca's effort to develop a monoclonal antibody?

Not at anything other than what they publicly stated. So again, we know that they submitted their EUA shortly before we submitted ours. They haven't been issued the EUA to date. And to be quite honest, we are focused on our launch activities and our future product development as well. But right now, we're the only monoclonal antibody on the market for prevention.

And they did receive authorization in Europe, if I'm correct. Any thoughts on Invivyd expanding into Europe?

Right now, we are focused in the U.S. That being said, we will look at other opportunities as we progress further. Whether it be for PEMGARDA versus our future pipeline program still remains to be seen.

And would that be a big lift for the company in regards to supply or sales force? How would that look?

Right now, we have an external sales force. So we would definitely be looking at the sales force structure at the appropriate times. But again, our immediate plans are -- remain in the U.S.

Okay. That's helpful. Okay. Now let's move on to the next-generation monoclonal antibody that's VYD2311. I believe you reported this week that the first patient has been dosed in this study. Before we get into that, basically, how is this second-generation antibody changed versus PEMGARDA? And what is it -- is it targeting a similar binding domain? Any insights there would be helpful.

Yes. It's targeting similar binding domain. It is an evolution from PEMGARDA, pemivibart, with slight modifications to it. What we're seeing is that we believe this has enhanced potential for dosing. Lowering the dose and remaining efficacious against variants in circulation. So every time that we -- any time that we're testing PEMGARDA, we're also testing 2311, in these pseudovirus assays. We've been pleased with the results that we've been seeing. We are excited to have received -- got the first patient dosed. Again, we're following a very similar pathway with what we've done with PEMGARDA. So first in-human trial, we will obviously analyze those results. We'll speak to the FDA about it, and then we'll look at how to advance that product to what would lead to a study that could be used for an EUA submission.

So the initial patient that was dosed is a healthy volunteer study correct? Would you imagine another study being required a larger study similar to what was required for PEMGARDA?

Right now, we envision a similar regulatory pathway that we did for PEMGARDA. As far as the number of patients, that will really be driven off of discussions with the FDA. We think that, as a baseline, we're looking at the pathway in the study sizes that we used for PEMGARDA, but thinking there might be some efficiencies that can be gained.

Okay. And you're running the study in Australia.

Correct.

The reason behind that?

Just speed to be able to get it done. We actually had very good interactions with the Australian sites and the fact that we are able to utilize the same clinics, et cetera, that we have done with PEMGARDA with positive results.

Will the FDA require you to run this in the U.S. before an EUA?

The secondary study would be done in the U.S.

Okay. And I mean, you've made efforts, I think, to try and streamline the regulatory process to maybe reflect closer to what vaccines and vaccine boosters are going through. What -- could you explain that process? What would be the goal, the long-term goal in regards to the regulatory?

Yes. I mean, we continue dialogue with the FDA. We continue to work on the most expeditious way that we can get future programs to patients in need and trying to collaborate with the FDA on exactly what that looks like. Right now, we're utilizing the EUA pathway to do so, and that is going to be a continued effort. There may be a world in which down the line that we're able to go to full approval in a more expedited manner that wouldn't be currently available. And those are the discussions that we're going to continue to have with the FDA and see if we can kind of bridge that gap.

So in the best case scenario, 2311, could you see being approved next year, the year after? What does that look like?

Yes. So the best proxy that we have is the pathway that we did for PEMGARDA. So PEMGARDA first in-patient study was done in March of 2023. We actually moved to EUA submission at the -- in December of 2023, and we're authorized in March of 2024. So we think that there are some efficiencies that can be gained from that cycle. That being said, we have PEMGARDA on the market now, and we have product available. So we're very much focused on that, but actually also wanting to continue that development of that next-generation product because we think that it can be benefit -- very beneficial for patients as well as a benefit for our investors as well.

So best case scenario, you would fall into something similar to the COVID booster dynamic where you identify potentially an emergent variant, change the formulation or identify a different monoclonal antibody and then potentially get it on the market in time to actually treat it.

Absolutely.

And what the timeline you think, again, in the best case scenario, I don't want to push you. But 8 to 12 months would...

I think that is a reasonable estimate. Yes.

Okay. That's helpful. Great. So in regards to just the key catalysts over the next 6 to 12 months, can you highlight what Invivyd -- we can expect from Invivyd?

Sure. I mean we're going to continue to deliver on the commercial side with regards to our PEMGARDA sales. We have the treatment EUA that's under consideration now with the FDA. So hopefully, we're going to be able to speak more about that in the near future, as well as launching our -- once we have our first in-human trial results, we'll be into discussions with the FDA on 2311 and be able to give an update as to what EUA pathway looks like on that.

In the 2311 patients who are being dosed, the healthy volunteers, you're starting with IV and then other administrations?

Right. So we'll be -- we start with IV. We'll be looking at intramuscular as well. And once we have that, those results, we'll then ascertain whether or not it makes sense to also look at something potentially like subcu.

And how many patients are going to be enrolled in the healthy volunteer part?

Believe it's [ 3 ], but I have to check for you.

Okay. That's helpful. I guess, just kind of summing up in the last few minutes, what do you think investors should focus on? Really, if they were to dive into the Invivyd story and gain conviction, what do you think either investors are missing or you'd like to highlight as something they can do some work on?

I think the thing that we are most focused on is the fact that there is a percentage of the population that really needs another element of protection from COVID. We are sitting here today in a public forum, having conversations. These immunocompromised folks are not comfortable in that environment. Look at it as they're putting themselves severely at risk of hospitalization or something worse. And so we're looking to provide them that benefit so that they can go about normal activities themselves. And I think that understanding that, despite the fact that we are continuing our activities on a normalized basis during COVID, they are not able to do so, so they're feeling a bit left behind, and we're trying to provide them with the opportunity to go about normal -- more normalized activities. So I think that there's a real need out there. We're very pleased to have PEMGARDA on the market in being able to help these patients. We work a lot with patient advocacy groups and are hearing really positive responses from them, and we want to make sure that they can get this product.

Should we expect any marketing efforts? Should -- I know the U.S. Open or the NFL starting now, but anything in that regard?

We are going to be doing things on a -- we're working on that, and we're starting to roll it out. Definitely some social media campaigns. Definitely more getting out in front of -- not only for these immunocompromised patients, but their care teams and making sure they understand the benefits and that this product is available. So yes, I'd say stay tuned.

Great. Well, thank you very much, Bill.

Great.