Immunic Q1 2024 Earnings Call Transcript

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May 8, 2024

There are 7 speakers on the call.

Operator

Good morning, and welcome to Munich's First Quarter 2024 Earnings call. My name is Jessica Brew, Vice President, Investor Relations and Communications here at EM Munich. I will also be the moderator today. Speaking on the call are Doctor. Daniel Fitt, our Chief Executive Officer and President as well as Glenn Whaley, our Chief Financial Officer.

Operator

Please note that all participants will be in listen only mode and this event is being recorded. After today's presentation there will be an opportunity to ask questions. If you join the webcast via the Zoom platform there are 2 ways to submit questions. You can either submit your questions in writing via the Q and A tool of the Zoom portal or if you would like to speak with us directly, please use the raise hand function in the Zoom portal to queue your question. Before we begin, I would like to remind you that this presentation may contain forward looking statements.

Operator

Such statements can be identified by words such as may, will, expect, anticipate, estimate or words with a similar meaning. And such statements involve a number of risks and uncertainties that could cause Munich's actual results to differ materially from those discussed here. Please note that these forward looking statements reflect Munich's opinions only as of the date of this presentation and it undertakes no obligation to revise or publicly release the result of any revision to these forward looking statements in light of new information or future events. Please refer to Munich's SEC filings for a more detailed description of the risk factors that may affect the Munich's results and these forward looking statements. I would now like to turn the call over to our CEO and President, Doctor.

Operator

Nernij Fitt to begin the presentation. Daniel?

Speaker 1

Yes. Thank you, Jessica. I would also like to welcome everybody on today's earnings call. Earlier this morning, we announced our financial results for the Q1 ended March 31, 2024, in our press release. During the call today, we will walk through our Q1 2024 achievements and subsequent highlights, financial and operating results as well as our clinical development programs, including anticipated upcoming milestones.

Speaker 1

As Jessica noted, after the presentation, you will have the opportunity to ask questions. Let's start with a review of our Q1 2024 and subsequent highlights. With our early January announcement of the completion of the 3 tranche private placement of up to $240,000,000 we are well capitalized into the Q3 of 2024. This nicely covers the readout of our Phase 2 CALIBRE trial of our potentially groundbreaking lead asset, beta fludinous calcium, in progressive multiple sclerosis, which is anticipated in April 2025. The round led by BVF Partners included participation from a group of top tier new and existing investors including Avidity Partners, Janus Henderson Investors, Cellius Capital, RTW Investments and Adedge Capital Partners.

Speaker 1

As a reminder, we received a total of $80,000,000 in the first tranche, which closed on January 8, 2024. The second tranche is a purchase of $80,000,000 which is conditioned on the announcement of Phase 2 top line data for the CALIBRE trial. The 3rd $80,000,000 tranche is to occur no later than 3 years after the 2nd tranche. All in all, this financing completed in a difficult capital market environment and with such a strong group of investors affirms the enormous potential inherent in our clinical programs. In February, Doctor.

Speaker 1

Bob Fox from Cleveland Clinic, who is the coordinating investigator of our INSUURE and CALIBRE programs, presented extremely positive data from an interim analysis of our Phase 2 CALIBRE trial of filoflumus calcium at the ACTROMS Forum 2024. From the interim analysis, we saw a clear separation of filophilumous calcium from placebo in serum neurofilament light chain levels across all PMS patients as well as all subtypes. We believe that this dataset provided biomarker evidence that video prodigious calcium's activity extends beyond the previously observed anti inflammatory effects, further reinforcing its neuroprotective potential. This strong signal also points to a more likely positive outcome for the overall CALIBRE trial as well as clinically relevant key secondary endpoints like prevention of disability worsening. Also at ACTROMS Forum 2024, Doctor.

Speaker 1

Alexander Herman, Manager, Translation Pharmacology at IMMUNIC, presented a poster in our previous Phase 2 CALVID-one trial. Because of Idaflutinib was calcium's broad spectrum antiviral activity and potential ability to prevent the reactivation of the Epstein Barr virus, it may also contribute to the reduction of fatigue in MS patients. While fatigue is one of the most dominant symptoms among MS patients, greatly influencing their quality of life and ability to participate in social activities, which remains largely unsolved from the clinical perspective. Our clinical trial in COVID-nineteen patients showed an initial signal that patients treated with ileofremus calcium exhibited the post COVID symptom of fatigue less frequently than the patients in the placebo arm. Recent third party data in post COVID patients identified EBV reactivation as a potential cause for fatigue in this patient group.

Speaker 1

Our goal is to confirm the ability of adafludimus calcium to influence fatigue and ABV reactivation in our ongoing Phase III insured trials in relapsing mitibosclerosis patients as this could result in yet another key differentiating feature for this medication candidate. In March, we had the opportunity to further extend the visibility of our program with a presentation of data at both the annual meeting of the Society for virology in in frontiers and medicine chemistry highlighting medofludimus calcium's potent activation of the neuroprotective transcription factor NO1 as well as its potent broad spectrum antiviral activity in vitro. As a reminder, last year, we confirmed in preclinical testing that beta fludimos calcium acts as a potent inhibitor in addition to its known mode of action as inhibitor of DHODH. We believe that the activation of NOVAN could be responsible for the drug's postulated neuroprotective effects and may contribute to the reduction of confirmed disability worsening events in MS patients as previously reported from our Phase 2 EMFISIS trial in patients with relapsing MS. Also in March, we received notice of allowance from the U.

Speaker 1

S. Patent and Trademark Office for a patent covering the composition of matter of a specific polymorph for beta thalamus calcium and related method of production of the material. This patent provides another layer of proprietary intellectual property protection around our lead asset. Importantly, we currently have 8 patent families protecting gliophilimus calcium. We remain deeply committed to protecting the technology behind this Phase 3 asset, which has been made that much stronger by the addition of this 4th U.

Speaker 1

S. Patent directed to the use of edipremus calcium in mitigosclerosis. As a result, our extensive patent portfolio is expected to provide protection into at least 2,041 in the United States and 2,039 internationally unless extended further. Just last month, we hosted a multiple sclerosis R and D Day, highlighting the latest developments in the MS landscape, as well as our highly encouraging preclinical and clinical data supporting the neuroprotective potential and reduce disability worsening associated with filoflumus calcium, which present important distinctions compared with currently available MS therapies. We also shared our strong belief that filoflumus calcium could elevate today's standard of care by providing a holistic solution for the full spectrum of MS patients, given that it is designed to selectively manage all the three components of smoldering in MS with its neuroprotective anti inflammatory and antiviral effects.

Speaker 1

Thank you to everyone who was able to join us for this event in person or who were able to listen to the recording. That concludes our summary of the Q1 of 2024 and most recent highlights. I am very pleased with the scientific and clinical achievements we have made across our programs. As it relates to medium flumus calcium, we continue to advance both our Phase 2 CALLEPA trial in patients with progressive MS and our twin Phase 3 insured trials in relapsing mitigosclerosis. Based on the strong clinical evidence to date, we continue partnering discussions with both global and regional pharmaceutical companies.

Speaker 1

There's also a lot going on with our IMU 856 program, which could become a game changer for the treatment of a broad range of gastrointestinal disorders. I will provide more detail on this existing program later in this call. I would like now like to turn the call over to Glen to provide financial overview. Glen?

Speaker 2

Thank you, Daniel. I will now review the financial and operating results for the Q1 ended March 31, 2024. Let me start with a review of our cash position. We ended the Q1 of 2024 with $97,300,000 in cash and cash equivalents. As Daniel noted, with these funds, we expect to be able to fund our operations in the Q3 of 2025.

Speaker 2

Regarding the operating results. R and D expenses were $18,700,000 for the 3 months ended March 31, 2024, as compared to $22,900,000 for the 3 months ended March 31, 2023. The decrease was mainly driven by reductions in clinical development costs. This was partially offset by an increase in personnel costs. G and A expenses were $5,100,000 for the 3 months ended March 31, 2024, as compared to $4,200,000 for the same period ended March 31, 2023.

Speaker 2

The slight increase was primarily related to personnel expenses. Interest income was $1,200,000 for the 3 months ended March 31, 2024 as compared to $800,000 for the same period ended March 31, 2023. This increase was due to higher interest rates. We also reported a change in fair value of the tranche rights for the 3 months ended March 31, 2024. The charge of $4,800,000 was a non cash charge related to the change of the value of the tranche rights associated with the future tranches 23 of our January 2024 financing.

Speaker 2

These tranches were initially classified as liability upon the closing of tranche 1 on January 8, 2024 but were reclassified to equity on March 4, 2024 when shareholders approved an increase in the company's authorized shares from 130,000,000 to 500,000,000 shares of common stock. Therefore, the tranche 2 and tranche 3 rights needed to be revalued to fair value as of March 4, 2024 upon the reclassification to equity. Other income was negative $2,100,000 for the 3 months ended March 31, 2020 4 as compared to $1,200,000 for the same period ended March 31, 2023. The decrease was primarily attributable to $1,700,000 expense related to the portion of costs from the January 2024 financing related to the tranche rights that were established at the time of the closing of tranche 1 as well as the timing of recognizing the German Federal Ministry of Finance Grant. The 3 months ended March 31, 2024 was approximately $29,600,000 or $0.30 per basic and diluted share based on approximately 97,300,000 weighted average common shares outstanding compared to a net loss of approximately 25,300,000 dollars or $0.58 per basic and diluted share based on approximately 43,700,000 weighted average common shares outstanding for the same period ended March 31, 2023.

Speaker 2

With that, I will turn the call back over to Daniel for a review of our development pipeline and upcoming milestones. Daniel?

Speaker 1

Thank you, Glenn. I would now like to provide an update on our clinical development programs and anticipated upcoming milestones. We very much look forward to reporting top line data from our Phase 2 catapults trial in progress FMS in April 2025. This readout could be a transforming value inflection point for Immunic. Additionally, we expect to report an interim futility analysis of our Phase III INSUUR program later this year and to read out the first of our identical twin Phase 3 INSUURED trials in relapsing MS in the Q2 of 2026 with a readout of the 2nd INSURE trial expected in the second half of twenty twenty six.

Speaker 1

It appears repeating based on the strong clinical evidence observed thus far, the vedafolimus calcium's unrivaled safety and tolerability profile observed in multiple clinical trials, we believe that the design of our Phase 3 InSure program will provide a straightforward path to potential regulatory approval in relapsing MS. On top of this, if the top line CALIBER data continues to show a neuroprotective effect in PMS patients, we may be able to position beta fulminous calcium as the first oral treatment for non relapsing secondary progressive MS as well. The progressive MS subtypes with the highest unmet medical need. We also expect that the drug's potential first in class ability to activate NUR1 will meaningfully benefit the ongoing clinical trials in MS. As we have noted before, if approved, we believe that medial fumor calcium has the potential to be a unique treatment option targeted to the complex pathophysiology of MS based on its combined neuroprotective anti inflammatory and antiviral effects.

Speaker 1

Turning to our 2nd program, IMU856, an orally available and systemically acting 1st in class molecule modulator of Serturn 6. We are very excited about this program and believe that its innovative mode of action is uniquely suited to treat a broad range of serious gastrointestinal disorders by targeting physiological intestinal epithelial regeneration, achieving gut wall healing with the absence of broad immunosuppression. As a reminder, data from our Phase 1b clinical proof of concept trial of IMU-eight fifty six in patients with celiac disease during periods of gluten free diet and gluten challenge demonstrated meaningful improvements over placebo in 4 key dimensions of clinical outcomes in celiac disease: protection of gut architecture, protection of patients regarding celiac disease symptoms, enhancement of nutrient absorption and also a strong biomarker response. We believe this data provides initial clinical proof of concept for a potentially new oral therapy approach to a multitude of gastrointestinal disorders through the physiological regeneration of gut wall barrier function, utilizing a new innovative targeted mechanism, while avoiding the immunosuppression seen in many gastrointestinal indications today. As previously reported, we have begun preparing our Phase 2 clinical testing of IMUH56.

Speaker 1

Based on its potential paradigm shifting potential for the treatment of GI diseases in addition to celiac disease, we are also exploring multiple additional clinical applications where the renewal of the gut wall is important, including, for example, inflammatory bowel disease or short bowel syndrome. This brings us to the end of our formal presentation. Jessica, please open the call for the Q and A session.

Operator

Yes. Thank you, Glenn and Daniel, for walking us through the Q1 and subsequent highlights as well as our clinical development pipeline and upcoming value inflection points. We will now begin the question and answer session. As a reminder, if you join the webcast via the Zoom platform, there are 2 ways to submit questions. You can either submit your questions in writing via the Q and A tool of the Zoom portal.

Operator

Or if you would like to speak with us directly, please use the raise hand function of the Zoom portal to queue your question. Our first guest today is Matt Kaplan from Ladenburg Thalmann. Matt, please unmute yourself and go ahead.

Speaker 3

Hi, good morning guys and congrats on the progress. A few questions on the program, I guess, how was the impact on the NFL that you observed in the caliber study interim analysis? How was that received at the actions meeting when you presented that?

Speaker 1

Yeah. Thank you, Matt. I'm happy to share some feedback here. Generally, I would say what we have seen here is very much appreciated from experts broadly, I would say, because I think so far we are not aware of any other comparable data with such a strong reduction on NFR reduction. And so we take that as a positive feedback here from all the conferences we attended.

Speaker 3

Okay, that's helpful. And then in terms of the interim futility analysis for the Insure program, what are the potential readouts from this analysis that we're you're expecting to announce and later this year?

Speaker 1

Yeah. Good that you asked because this is really since this is really a phase 3 program, we will rarely get any data. We will get just a response to the questions to the, to the, from the committee from the safety monitoring committee. Basically on either to go ahead as planned or to suggest some sample size adjustment. That's all we can read out there.

Speaker 1

So we will not see any medical results or any biomarkers from that fertility analysis. So it's really more reconfirming our estimates when we started the study. And since this trial is an event driven trial, it's important to have an eye on do we have enough events based on our statistical assumptions we made initially.

Speaker 3

Okay, that's very helpful. Thank you.

Operator

Thank you, Matt. The next one in the queue here is Yasmeen Rahimi with Piper Sandler. Yas, please unmute yourself and go ahead.

Speaker 4

Hey, good morning team. This is Jung Woo on for Yas. Thanks for taking

Speaker 3

the questions.

Speaker 4

The first question we had was, if you could comment if you had any visibility on a blinded basis to event rates across insurer trials. If you do, are these like event rates in line with expectations? And secondly, have you had a chance to meet with the agency in regards to 856? Could you provide any color where you are in terms of Phase 2 prep and study design?

Speaker 1

Okay. Thank you for the questions. Let me first start with the ongoing studies. No, we don't have the current event rates on disability worsening so far. So I can't comment on that anyhow.

Speaker 1

But I can tell us, so far, the study is on track. And we may have an eye on that, maybe coming closer to the futility analysis time and also to have some blinded data updates we can share with the public. Regarding 856, further plans and regulatory interactions, we are working on those. We are planning for a meeting with U. S.

Speaker 1

Regulators. We are preparing several phase 2 studies, several indications, as I said in the presentation. So it's, of course, given the very good proof of concept in celiac disease that's the number one indication we're looking at. But I mentioned also that also looking on the preclinical data, we think this drug makes a lot of sense beyond celiac disease and other indications. And the team here is actively working on a couple of different concepts.

Speaker 1

And we will look how what is the best way to develop it further and also to get the appropriate funding for all of the ideas we have with that wonderful molecule.

Speaker 4

Thank you so much.

Operator

Thank you, Jungro. Again, as a reminder, you have a question please use the raise hand function of the Zoom portal or the Q and A tool. The next one here is Mayank Montani with B. Riley. Mayank, please unmute yourself and go ahead.

Speaker 5

Good morning, team. Thanks for taking our questions and congrats on the updates. Just quickly on the Phase 2 CALIFAR study, could you talk to the functional endpoints being evaluated there and which ones you think can be attributed to VITAC as dual NERD1 DH or DH mechanism based on, you know, what you've seen in the prior Phase 2. And then secondly, remind us of the brain volume changes kinetics, noted relative to NFL, which maybe other studies that are out there of, say, B cell depleting agents? And then I have a quick follow-up.

Speaker 1

Yeah. Good morning, Mayank, and thank you for the questions. So, the CALIBRE study is an important study. And since this is really limited to non relapsing patients, we think that the mentioned functional analysis make a lot of sense here and that the data the set of patients here can really give good answers to all of or a lot of these questions. The first thing, of course, is that the classical established EDSS course, where the change in confirmed disability worsening is the key secondary endpoint of the study, I think the most important medical secondary endpoint.

Speaker 1

On top of this, and this also was also seen from other studies and other companies that functional readouts play more important role. And they're not completely covered in EDSS. So one thing is the 25 foot walk test, which is pretty established, cognition testing and the 9 hole pack test specifically. So those 3 are the established sets which are also recorded during this study. So we will also expect data on those endpoints on top of just the EDSS clinical readout.

Speaker 5

Got it. And any comment on the volume changes kinetics relative to NFL, given, you know, your interim at 24 week and then obviously the final analysis at 72 week?

Speaker 1

Yeah, I think brain volume change is believed to be a robust and sensitive measure of neurodegeneration in MS patients specifically if it comes to the long timeline. We have a 120 week photo uptime in the GATEBR study. So, brain volume change should be a strong signal here. And we know that this is they are traditionally is expected to correlate with disability and also then with NFL changes. There's to my knowledge not too many publications on the direct correlation between brain volume change and publications on the direct correlation between brain volume change and NfL.

Speaker 1

But they all refer usually to disability change in the patients. And specifically, I think in the recent months, I think there were a couple of good publications where the authors nicely separated inflammatory from non inflammatory patients, which is I think very important to quantify. Any signal on in progressive FMS in contrast to relapsing because as we all know, if there is an overlaying relapse activity from the NfL side usually has a high risk of overlaid a signal of NfL.

Speaker 5

Yeah, makes sense. Thank you. And then on the Phase 3 sample size reassessment or futility were insured later in the year, could you just remind remind us of the different scenarios in terms of how high you have to increase the patient number or, you know, vice versa. Could you, you know, if given what you're seeing versus placebo, because you don't have an active competitor here, could you also maybe go, you know, if you're seeing the event rates that you expect or better than that, is there a positive scenario where you could expedite the program? So maybe just bookend the scenarios there from the reassessment.

Speaker 1

Yeah. Thank you for that question. It's important that you asked that. I think we need to repeat these things a couple of times. The FDA does not allow any acceleration of the program for stopping for early response signals because that is due to the statistical planning of such a study that they exclude this option.

Speaker 1

So we can't do that. What we did is we so it's a futility analysis. So we can most likely or we hope to get a procedures planned feedback from the committee. What could also be we have we will have a couple of scenarios of sample size adjustment, but only such ones which make sense. I think it doesn't make sense to make sample size adjustment if it's getting a huge number of patients to that.

Speaker 1

So only these viable approaches could be an answer to that analysis and else we will maybe then have an answer that we should stop the study.

Speaker 5

Okay. Thank you for taking our question.

Operator

Thank you, Mayank. We have one more in the queue, Tom Smith with Learin Partners. Tom, please unmute yourself and welcome to the call.

Speaker 6

Hey, guys. Good morning. Thanks for taking the questions. Just a couple on our end. I guess first for the Phase 2 CALIFR study, can you and this extends, I guess, across your entire MS program, but can you just remind us how you're measuring neurofilament light chain, what assay you're using and how much variability there is with measuring this marker?

Speaker 6

And then with respect to life cycle management, can you comment on whether you're working on any additional IP for vidaflutinib is calcium or preclinical NER1 activator compounds that could help extend the franchise? Thanks very much.

Speaker 1

Yeah. Thank you, Tom, for the good questions. First of all, I think we in the past, we commented a lot on the technologies here. I think what we are using is more or less state of the art. See more technology by Contourix.

Speaker 1

We use also the newest dual antibody test system there as far as the forest technology. So that is I think really with a goal to reduce the signal noise ratio as much as possible. Another thing is that we do we measure all the batches in parallel and in one. So we really try to avoid any operational variability in testing that. So I think the data on NfL will be as precise as possible from a technology point of view right now.

Speaker 1

But to remind you, I think every technology has its own absolute level. So we just need to look always on relative changes on NfL at the reload. So that's on the technology side. On more on the strategic side on IP and lifecycle management, we don't talk too much about it, but of course, we're doing that. And if you read between the lines what we're telling you, I think what we last year when we identified that Lidaflutimus calcium is a potent activator of NOK1.

Speaker 1

And this is potent means also we see in the gene regulation an up to 500 percent increase of gene regulation. This is really at the upper end of what you can get at all. And to my knowledge, really the only molecule in the clinics, which has shown something like that. This makes it an attractive platform. So, it's not only that video Fudimos has another trick, which is wonderful because this opens up the avenue towards neuroprotection.

Speaker 1

It also gives us at IMMUNIC, more as a platform of NO1 modulation. And we are working here internally, but also in collaboration with researchers at different universities on, on the one hand on the biology and the other hand also on the chemistry to broaden what we're doing here. We have some IP filed on this. We have some interesting derivatives of erythematous calcium in research. Yeah, I think absolutely.

Speaker 1

So we think there's a this is a great platform. And just think about a great biology which was published and very lot of work was done on Parkinson's disease and other newer degenerative diseases where no one is believed to play a major role. And this opens up a lot of potential for further preclinical and clinical work later.

Speaker 6

Got it. Super helpful. I appreciate you guys taking the questions.

Speaker 1

Thank you, Tom.

Operator

Thank you, Tom. This concludes our question and answer session. I would like to turn the conference back over to Daniel for any closing remarks.

Speaker 1

Yeah. Thank you, Jessica. And thank you to today's attendees for your insightful questions today. To summarize, we have a well differentiated advanced clinical pipeline in various stages of development with top line data from our Phase 2 CALIBER trial executed in April of next year and the ongoing enrollment of our Phase 3 ENSHOUR trials, we continue to make meaningful progress on the clinical development of VDFLU. We also continue to strengthen our intellectual property position and remain committed to that effort.

Speaker 1

Further, the successful 3 tranche pipe financing 20 which is expected to fund the company into the Q3 of 2024.

Speaker 4

5.

Speaker 1

5, sorry. As progress is made, we expect to also provide an update on our preparations for a Phase 2 clinical trial of IMU-eight fifty six and its potential for the treatment of a broad array of serious gastrointestinal disorders. With that, I would like to close today's call. Thank you very much for joining, and we are very happy to answer any additional questions 1 on 1.

Operator

Thank you for joining Immunoxt First Quarter 2024 Earnings Call. The call has now concluded. You may now disconnect.

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