Imunon Q1 2023 Earnings Call Transcript

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Provided by Quartr
May 11, 2023

There are 5 speakers on the call.

Operator

Good morning, and welcome to the Immunon First Quarter 2023 Financial Results Conference Call. All participants will be in listen only mode. After today's presentation, There will be an opportunity to ask Please note, this event is being recorded. I would now like to turn the conference over to Kim Golodetz. Please go ahead.

Speaker 1

Thank you, and good morning, everyone. This is Kim Golodetz with LHA. Welcome to Immuneon's 2023 First Quarter Financial Results and Business Update Conference Call. During today's call, management will be making forward looking statements regarding Immunon's expectations and projections about future events. In general, forward looking statements can be identified by words such as Expects, anticipates, believes or other similar expressions.

Speaker 1

These statements are based on current expectations and are subject to a number of risks and uncertainties, including those set forth in the company's periodic filings with the Securities and Exchange Commission. No forward looking statements can be guaranteed and actual results may differ materially from such statements. I also caution that the content of this conference call is accurate only as of the date of the live broadcast, May 11, 2023. Immunon undertakes no obligation to revise or update comments made during this call, except as required by law. With that said, I would like to turn the call over to Doctor.

Speaker 1

Karen Legasse, Immunon's President and Chief Executive Officer. Karen?

Speaker 2

Thank you, Kim, and good morning, everyone. Joining me today is Jeffrey Church, our Chief Financial Officer. In addition, Doctor. Kirshid Enver, Our Chief Scientific Officer will be available during the Q and A session at the end of our prepared remarks. Today, I will provide an update on our development programs with Classyme, our prophylactic vaccine modality and with IMN001, Which was previously known as GEN-one, which is our interleukin-twelve immunotherapy for the treatment of advanced ovarian cancer.

Speaker 2

During our last conference call in March, I reminded investors of our key strategies in some detail. I'll do so again briefly today, because I believe it is important for investors to understand Where we are going as a company and our vision for the future. Then I'll provide an update on our various programs. Immunon is tightly focused on harnessing the power of the immune system by developing novel DNA based approaches I say that because nonviral DNA has the potential to help create an Unprecedented abundance and diversity of medicines that are currently beyond the reach of recombinant protein technology. Our platform does not require a device or a virus for facilitating DNA delivery.

Speaker 2

In addition, Our medicines can be easily redosed, manufacturing is straightforward and scalable And the administration to patients does not require painful electroporation. Our strategy is designed to deliver on the full scope of the nonviral DNA opportunity over the long term. Reaching patients with DNA medicines requires us to make several clear choices, Including how much capital we devote to platform and modality development, drug development and infrastructure, Which programs will advance and how? Whether we advance programs alone or with strategic collaborators? And which capabilities do we build internally and which do we outsource?

Speaker 2

To navigate these choices, we established 4 strategic principles that guide our approach Our strategy is to pursue indications characterized by a high disease burden and substantive unmet medical need, where an immunological approach can improve both the risk of progression and survival compared with the current standard of care. IMN001 is an example of one such asset. 1 is our 1st plasmid system developed from our TheraPlas modality for the expression of proteins and cytokines. 1 expresses IL-twelve. IL-twelve, as you know, is a cytokine that potentially stimulates Both natural killer cells in the innate immune system and CD8 T cells in the adaptive immune system.

Speaker 2

The in situ expression of IL-twelve activates tumor suppressing immune response with a good safety profile. Is currently in a Phase 2 study in advanced ovarian cancer. This program is a clear example of how immunon is pushing the boundaries of innovation in a difficult to treat tumor type. We are now developing a second modality For the development of personalized neoantigen cancer vaccines, this new modality is based on antigen selection and optimization, Along with the option to include a potent immune modifier on a single nucleic acid vector. It represents a promising strategy to induce a specific and long lasting immune response against tumor antigens.

Speaker 2

It also is a logical extension of our prophylactic vaccine modality. We just started a program in the melanoma model in mice, And we will keep you updated on our progress. Developing our plasine prophylactic vaccines modality as an out licensing and partnership opportunity is the 2nd prong to our business strategy. As I described last quarter, the need for new vaccine technologies is urgent, With fewer than 5% of pathogens having a commercially available vaccine, and we do discover new pathogen viruses every day. More than 80 pathogenic viruses were actually discovered since 1980.

Speaker 2

So clearly, The market for vaccines is enormous. Even before COVID, the global market for prophylactic vaccines was about $35,000,000,000 and it's expected to reach $125,000,000,000 in 20.28. The reason we are so excited about the Placinth modality is because it has several characteristics that may address the shortcomings of current vaccine technologies. For example, is engineered to be easily modified to create vaccines against a multitude of infectious diseases With benefits that include durability and breadth of protection, transmission advantage, safety and convenience, Flexible manufacturing and stability at standard refrigerated temperatures. These attributes are all sought by various health authorities.

Speaker 2

And the efficiency of a plug and play strategy is extremely valuable against emerging pathogens. Our objective is to establish the safety and efficacy of our platform in a Phase I human study and then We've had productive conversations and we will Continue to have conversations with various government agencies to ensure we are pursuing the most urgent and important pathogens. We are delighted with the reaction we have received from these agencies regarding our progress in making DNA vaccines more effective and more appealing. Our 3rd strategic principle focuses on the vertical integration of the core elements of our business. Our goal here is to attract the interest of corporate partners, while minimizing dependence on vendors So that we can control costs, timelines and quality.

Speaker 2

Our range of capabilities is impressive. For example, our scientists can select any protein from the human or pathogen proteomes to be engineered. We have R and D laboratory testing capability to support product and method development. We have GMPQC laboratory to test raw materials, finished products and to conduct our stability studies. And our labs also have the capacity and expertise to conduct testing and to run experiments in a variety of animal disease models.

Speaker 2

We also have developed in house pilot scale manufacturing capabilities The next step in our vertical integration strategy It's to build upon our pilot scale capabilities to produce Phase 1 GMP materials to allow immunon to control all aspects In addition, owing to our strategic investment in Transomic Technologies, we are now able to construct vaccines against newer variants in just weeks Using a comprehensive array of CRISPR RNA and gene expression tools and services, Our vertical integration strategy has allowed us to reduce costs and time lines by more than 75%, while trading a reliable, high quality and predictable supply chain. Lastly, our 4th pillar, Which is the bedrock of our long term business model, concerns strategic collaborations. Joining forces with partners is a great way to expand our capabilities, accelerate the development of our programs and obtain non dilutive funding to execute our strategy. All these internal capabilities Will allow us to control both the costs and development timelines in support of our goal To that end, we have formed several important collaborations in recent months. In January, we signed our 1st collaborative research agreement with the Arista Institute to develop new vaccine formulations For infectious diseases using our placid modality.

Speaker 2

Wister is a global leader in biomedical research, And our agreement is with their vaccine and immunotherapy center. This builds upon our collaboration with the biotechnology company Acuitas Therapeutics, which is focused on developing delivery systems for nucleic acid vaccines and therapeutics Based on lipid nanoparticles, an agreement we entered into in November 2022. We also formed an alliance with the Breakthrough Cancer Foundation that allows us to obtain non dilutive funding Expect the first patient to be enrolled in a few weeks in a 50 patient Phase III study with IMN001 In combination with bevacizumab, otherwise known as Avastin, in advanced ovarian cancer. 1st at the University of Texas in the Andreessen Cancer Center. Later, we expect additional participation At the Sydney Kimmel Comprehensive Cancer Center at Johns Hopkins and at Memorial Sloan Kettering Cancer Center.

Speaker 2

The Core Institute For Integrative Cancer Research at the MIT, Massachusetts Institute of Technology, will provide artificial intelligence services Throughout the trial, including biomarker and genomic analysis, which is expected to expand the company's knowledge We were delighted that our work was presented at several important conferences during the Q1. We presented very promising preclinical data for our plasine modality at the Vaccine Technology Summit 2023. Doctor. Kirshid Anwer, our Chief Scientific Officer, reviewed the company's work in advancing our pacing modality And the promising preclinical data generated to date. Among topics presented was the ability This ability is independent of virus, device or liquid nanoparticle formulations.

Speaker 2

The preclinical data presented ticked the box on many desirable features that would characterize the next generation vaccines. Robust immunogenicity and protection in SARS CoV-two models comparable protection to a commercial mRNA vaccine in a booster dose comparison, durable cellular and uro responses Detectable for more than 12 months. I want to point out that such a robust cellular response that goes out Past a year is an important advantage. We have demonstrated that our vaccine creates memory cells That provides an additional layer of protected immunity and contributes to protection against severe disease. And lastly, superior immune quality versus the mRNA vaccine in a single dose comparison.

Speaker 2

In addition, the Placine modality had important distinguishing advantages for commercial vaccine, including Based on this compelling data, in March, we applied for pre IND consultation with the U. S. FDA To receive guidance on our proposed program for our seasonal COVID-nineteen booster vaccine, we expect to submit an IND application in the Q4 of this year. Again, our objective is to establish the Safety and efficacy of our platform in a Phase I human study and then seek to license this powerful technology Subsequent to the end of the Q1 in April, Doctor. Jean Boyer, Iminon's Vice President of Preclinical Research, presented a poster at the prestigious American Association For Cancer Research, AACR Conference.

Speaker 2

Doctor. Boire reported that IMN001 demonstrated stimulation of the immune response in the ID8 ovarian tumor model. Of the 3 dosing regimens tested, the once every 2 week regimen demonstrated comparability to the weekly regimen, while showing superiority to the once every 3 week regimen, particularly with respect to mortality and tumor burden. Thus, exploring once every 2 week doses of 1 in human studies is warranted. It is an important step in developing the least cumbersome Before I turn the call over to Jeff Church for his financial review, I want to outline several value creating milestones we expect over the next 6 to 18 months.

Speaker 2

Building upon our compelling interim results with our Phase IIIIVATION II study in Stage IIIIV ovarian cancer, which reached full enrollment of 110 patients last year, we expect to report An additional set of interim, more mature data in the second half of twenty twenty three. And then we expect to report top line results by mid-twenty 24. As a reminder, interim data for this study reported a year ago showed that in 46 patients who had undergone interval debulking surgery, those treated with Moving to the first half of twenty twenty four, we'll be sharing press 1 results for SARS CoV-two study and interim results for the combination study Now I'll turn the call over to Jeff.

Speaker 3

Thank you, Corinne. Details of Immunon's Q1 2023 financial results were included in the press release we issued this morning and in our Form 10 Q, which we filed today before the market opened. Immunon ended the Q1 of 2023 with $37,300,000 in cash and investments. Cash provided by financing activities of $2,500,000 during the quarter was from an equity sales under our at the market equity facility. We also received net proceeds of $1,600,000 during the quarter from the sale of our 2021 New Jersey net operating losses, which leaves us with about $1,900,000 remaining of these NOLs to sell later this year.

Speaker 3

Including these future planned NOL sales, the company believes it has sufficient capital to fund its operation into during our Q4 conference call in late March are still relevant. Over the past few years, we have been opportunistic With respect to raising cash and this leaves us in a much better position than many other development stage biotechs. That said, our long term growth Plans do include raising funds from both equity and non dilutive sources of capital, including the collaboration and partnerships Corinne mentioned earlier in this call. We continue to monitor the public equity markets with the hope that markets will begin to improve shortly. During the Q1 of 2023, we used $4,100,000 in cash to fund operation.

Speaker 3

This compares with $8,000,000 in last year's Q1. This decrease in the use of funds was primarily due to the one time payment in the prior year quarter of $4,500,000 in interest and operating expenses resulting For the Q1 of 2023, Immune reported a net loss of $5,600,000 or $0.68 per share. This compares with a net loss for the Q1 of 2022 of $10,500,000 or $1.82 per share. Operating expenses were $5,700,000 in the Q1 of 2023, which is down 5% from the $6,000,000 in the Q1 of 2022. Breaking expenses down by line item, research and development expenses were 2.6 $1,000,000 in the Q1 of 2023, a decrease of $500,000 from the $3,100,000 from the prior year's Q1.

Speaker 3

More specifically, R and D costs associated with the development of the plastine DNA vaccine technology platform as well as the OVATION II study decreased slightly to $1,700,000 compared to $1,900,000 in the year ago. Other clinical and regulatory costs were $300,000 compared to $800,000 in the prior year. CMC or manufacturing costs increased to $700,000 from $300,000 a year ago due to higher costs related to the development of in house pilot manufacturing capabilities For DNA Plasmids and Nanoparticle Delivery Systems, general and administrative expenses were $3,100,000 in the Q1 of 2023, compared to $2,900,000 in the comparable prior year period. This increase is primarily attributed To lower non cash stock compensation expense offset by higher professional fees, including legal fees to defend various lawsuits filed after the announcement in July 2022 of the OPTIMA Phase 3 study results, Higher compensation expenses related to the CEO succession plan that we announced last July and higher overall staffing costs. Other non operating income was $93,000 in the Q1 of this year, which compared to other non Operating expenses of $4,600,000 in the prior year period.

Speaker 3

In the Q1 of 2022, The company incurred one time charges $4,500,000 which I had mentioned related to the preferred stock offering In addition, the company incurred higher interest expense on its loan facility with Silicon Valley Bank in the Q1 due to rising interest rates. This loan facility has since been assumed by First Citizens Bank under the same terms as the previous loan facility. On April 21, 2023, the company elected to repay this loan to First Citizens Bank for a total payment of $6,400,000 which included principal, interest, prepayment fees and end of term payments. The $6,000,000 collateral account, which we had classified on our balance sheet as Shrricted cash was released and utilized to pay off the loan. Interest income from the company's short term investments increased by $300,000 in the Q1 of 2023 compared with the prior year due to higher returns on our short term investments.

Speaker 3

As I indicated last quarter, we continue to expect operating expenses for the year to be approximately $20,000,000 to $22,000,000 for the full year of 2022 with the majority of expenses related to the development of our Plasine next generation vaccine medallion. I will now turn the call back over to Corinne.

Speaker 2

Thanks, Steph. We have been using the phrase vaccine of the future to describe our work, And that is exactly what our vision is, to be the provider of safe and effective vaccines of the future that are superior to current vaccines In durability and breadth of protection, stability at workable temperatures, rapid manufacturing to respond to evolving pathogens and better compliance I am delighted with our progress in support of this vision, which calls for the creation of a new category of medicines Based on our non viral plasmid DNA technology across a broad array of human diseases, We are starting in immuno oncology and infectious diseases, and we will continue to invest to fully characterize the platform and to advance The technological frontier of Plasmid DNA. We will leave large late phase clinical trials to partners with the resources to contact them, and we will view each program with an eye toward a licensing transaction. In doing so, we will also expect to create considerable value for our shareholders. So with that overview of our business and our recent financial results, we are ready to open the call to your questions.

Operator

Our first question is from Emily Bodner with H. C. Wainwright. Please go ahead.

Speaker 1

Hi there. Thanks for taking the question. I'm curious if the pre IND meeting with the FDA was scheduled already or has that Already occurred. And then maybe if you could just comment on how you think about the market opportunity for a seasonal COVID booster now that People aren't really getting vaccinated as much. So curious how you think about long term use of a COVID vaccine.

Speaker 1

And then It sounds like based on your commentary, you could potentially initiate a Phase 1 study in early 2024. Does that time line sound reasonable? Thanks.

Speaker 2

Thank you, Emily, for your questions. So regarding the pre IND meeting, so we spent, As I mentioned, our pre NDA package in March, we do not necessarily expect a meeting. We expect definitely a feedback from the FDA that will come this month, I believe, in May. As you know, the FDA does not grant a lot of pre NDA meetings anymore. So about the market opportunity for seasonal booster.

Speaker 2

So yes, there is a great demand from regulators, which has been Stressed by the FDA early this year, you might remember that the FDA had a VIA PAC meeting In January, where they specifically requested that Moving forward, that the COVID boosters be seasonal, so only once a year, not A boost every 4 to 6 months. And the process they propose is that In June, they would select the strain to be put into manufacturing for the vaccines, the boosters to be available So in that context, there is obviously a market for COVID booster That is more durable than the current commercial vaccines. And you can imagine that specifically in certain population of patients, namely The elderly population or the patients with that are immunocompromised for some reason, In the same way as the flu vaccine, a COVID vaccine will be necessary. I want to point out as well that, as I mentioned, The fact that we are looking at developing a vaccine that would demonstrate good cellular immunity would be a plus

Operator

The next question is from James Molloy with Alliance Global Partners. Please go ahead.

Speaker 4

My question is on the 4th quarter next Andy, is that a little bit light from where it had been previously?

Speaker 2

Jim, you're breaking up. I don't know if my colleagues could hear you better. Do you mind repeating?

Speaker 4

I apologize. I'm on a cell phone. Can you hear me okay?

Speaker 2

No, I can. Yes.

Speaker 4

Thank you. On the plastine development, the IND filing Q4 of this year, is that on track or has that been delayed a little bit from previous?

Speaker 2

Yes. It is on track. It is.

Speaker 4

And then when we're looking at the top line data coming out mid next year, how do you help us handicap Whether the equivocal data, good data or bad data, and what do you anticipate seeing coming out mid next year?

Speaker 2

So regarding the top line data for our Vision 2 program, we'll see the results that we get. As you might remember, Jim, that we showed early cut of data that we did back in September. So again, it was very mature data because we only had 50% of the events, right, an event being Patient progressing, right? But what we showed at that point in time is that we actually Good signals in terms of R0 rates and CRS3, Which is encouraging. But from those early data, you cannot conclude anything really.

Speaker 2

So we'll have Another cut of data this year when we reach about 75% of the events. That's what we are planning to do, which should give us another a bit more indications there as well.

Speaker 4

You mentioned partnerships. How would you characterize the partnership environment currently?

Speaker 2

The partnership environment, So we are I think the partnership environment, I don't think that I can characterize the environment of partnerships. I can only reflect on the interest that we get on our technology, And we've had the opportunity to present our data to BARDA, for Example, back in November, subsequent to this TechWatch meeting, we had further conversations With the agencies, the government agencies, even as recently as this week, in fact. And I can tell you that there is interest in this technology for the development of the next generation of vaccines, Because as I mentioned during the call, there are a number of features that are of interest in developing the future vaccine. So We see interest for sure. And the collaborative work that we have ongoing with the Western Institute She is very productive.

Speaker 2

So we are quite pleased with the partnership that we have currently in place.

Speaker 4

Great. Thank you for taking my question.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Doctor. Loughauf for any closing remarks.

Speaker 2

Thank you. Thank you all for your time this I trust we conveyed our excitement about the potential for Platform Technologies. We look forward to keeping you informed of our progress.

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Imunon Q1 2023
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