Conference Transcript - IMCR 2026-09-14

Sean Larman, Analyst — Morgan Stanley

Good afternoon everyone. I'm Sean Larman, Head of US Mid-Cap Biotech Equity Research here at Morgan Stanley and welcome to Morgan Stanley's Global Healthcare Conference. Before we commence, just to make you aware of some important disclosures, please see those disclosures at the Morgan Stanley Research Disclosure website at www.morganstanley.com forward slash research disclosures. And if you have any questions on those, please reach out to your Morgan Stanley sales representative. For this session, we have Immunacore, and from Immunacore, we have the CEO, Bahisha Jalal, and CFO and Head of Corporate Development, Travis Coy. Welcome, both of you, and thanks for your time.

Bahija Jallal, CEO

Thank you for having us.

Sean Larman, Analyst — Morgan Stanley

Maybe the first couple of questions, just on the macro outlook. So, you know, how is the rise of China origin innovation changing your competitive positioning, if at all, and does it change your R&D and BD playbook?

Bahija Jallal, CEO

Sure. First of all, thank you for having us. You know, China has been fastest in areas where the biology is known. For instance, like checkpoints inhibitors, ADCs, and bispecifics against extracellular domain. So the pressure is real, and I think if your edge was to get to a known target fast, that edge is very thinning. Where we sit, we are in the TCR, and speed is not the edge that we go after because we are really dealing with something very complex inside the intracellular, and that complex of HLA and peptide and how it interacts with the TCR, that means TCR engineering and specificity is very important, so the speed is not our problem. right now, but really finding the right target is. I think where it has an impact now is definitely on the business development side of things, and I think when you look at that China definitely set the bar for what a phase one asset, for instance, is, and with that supply and demand, really when the cost is not an issue, and because of that supply and demand, the bar becomes very higher, and the scrutiny and the judgment of what assets you bring is very important. And I would say I will finish just with this one. It's not the differentiation. It's no longer how fast you can get there but how you can have something that cannot be, that's harder to copy, basically.

Sean Larman, Analyst — Morgan Stanley

Sure. Thank you. And are you implementing AI adoption across your business? And has it already changed the decision, a timeline, a cost or a POS?

Bahija Jallal, CEO

Yeah, I think it's an amazing technology. I would describe it that way. What it had already had an impact for us is the upstream. So basically what we used to do is, like I said, the complex of HLA and peptide is really, really very finicky, and how the TCR sits on that is something that we used to do, crystal structure to even know how this is happening and you can imagine that it's tedious it takes time and stuff like that we don't do it anymore thanks to AI simulation and things like that we actually do all that aspect in silico I think where I am really excited about I cannot say that we do it systematically today is when you look at the whole drug development process and if you can just focus on compressing time you know and you improve by one percent this is what I'm the challenge I'm giving my organization you can improve one percent in every single step you can imagine how we can reduce that lengthy time so things like what we do today for instance how to answer the RFIs you know would come from regulatory agencies how we automate all that and how we can put AI into work. So there is a lot, a lot to do, and I'm really excited about that.

Sean Larman, Analyst — Morgan Stanley

Wonderful. Thank you. And last question before we go, Immunocore specific. Which policy variable, FDA, Medicare negotiation, MFN, tariffs, or global pricing matters most to your economics? And what have you changed, if anything, because of it?

Bahija Jallal, CEO

Yeah, so I think I would, without hesitation, I would say FDA and predictability. I think that has the huge, huge impact. I think where we sit as a company today, we are with ChemTrack more of a rare disease with small populations. So the impact on tariffs and pricing and stuff like that doesn't fall on us the same way as most of the big companies here. Having said that, where it's really we cannot edge is with the FDA, the predictability, because we have, for instance, we have three phase three trials that are ongoing. That's millions of dollars. That's also a long time. And what you want to have is that the goalposts don't change by the time you arrive there. So I would say that that's really the big thing. So we didn't change anything, and I don't think anyone can tell you that you can change things, especially when it's in regards to policies that will change anyway. But you have to be prepared. You have to run scenarios for yourself, and that's exactly what we're doing.

Sean Larman, Analyst — Morgan Stanley

Thank you. I've got a question here on the platform, and then I'll go specific. I might put my TBAM questions closer to the front now after this morning. But on the oncology side, what still differentiates an IMTAC by specific from the growing field of TCR-based and other T-cell engager approaches, five years post the commercialization of the first one.

Bahija Jallal, CEO

Yeah, I like to say five years into it, which I really love. From being a pioneer in this area, I would say it is no longer a differentiator that the TCR-based therapies are a category of compounds or how to treat patients, which is great. What it still is, I think, is basically we have the possibility to access 90% of the proteome, the intracellular targets. We can treat more cold tumors and hot tumors at the same time. And what is true five years into it is we took a molecule from the beginning to becoming a standard of care in a disease that didn't see innovation. So that's really, for me, the five years. But I want to finish just with one point that's really important and how we differentiate ourselves is the fact that we treated more than 2,000 patients. And we have data not only in the clinic, but in the real world. And what's really important is how we take this information back to research to continue to innovate in that space and that's differentiating and that's, you know, we can basically say that we have that's unique to us today.

Sean Larman, Analyst — Morgan Stanley

Wonderful, thank you. You know, Tebby AM is a meaningful near-term catalyst, top-line OS possible by year-end and enrolment down to the teens. In your view, what would a positive result mean for how the audience should value the earlier line expansion story?

Bahija Jallal, CEO

Yeah, I think, you know, so we're very happy with the announcing that we finished a trial that will be, you know, for a company like us, the second phase three trial that we did with this team. So I'm very happy with that. And I think the answer to your question is two parts, right? So one is the commercial one, which today we treat 1,000 patients in uveal melanoma. if we are in the lucky situation where this is positive, it expands to an additional 4,000 patients. And I think that is really that expansion on the commercial level that we look forward to. And on the other story for immunocor, for some reason I think people think that uveal melanoma was a lower bar, actually was a really high bar because it was no innovation in 40 years or something like that. So that, for me, that was the highest bar for ChemTrack. But here it will expand then into cutaneous melanoma. We already showed ovarian. So I have no doubt that this platform will expand even more.

Sean Larman, Analyst — Morgan Stanley

Sure. Thank you. On the bar for success, the one-year OS benchmarking second line has been around 55%. Your phase 1b showed roughly 75%, and you've designed a study for results that's both stat-seeking and clinically meaningful. What magnitude of OS benefit do you think the community would view as genuinely practice-changing?

Bahija Jallal, CEO

Yeah, I've been saying that today that I am not, a few months before the data, put any numbers out there, right? So I'm not going to do that. Having said that, I think what's practice-changing in this population is definitely bringing... It depends on where you stand, right? And in this population, on second line plus cutaneous melanoma that have basically nothing, bringing an overall survival will be practice changing because that's basically a very solid and golden standards in oncology. So if we're lucky enough to have that as positive, I think that's practice changing and that's what we look forward to.

Sean Larman, Analyst — Morgan Stanley

Sure, and I'll ask this question, but I think you'll bat me back, but just the three arms, which do you think has the most importance for any commercial label?

Bahija Jallal, CEO

I think we can deal with the commercial any way we have that. So we have in the trial, we're really in a good position where we have Pembro plus KimTrack and KimTrack by itself. if ChemTrack by itself is the best way we know how to deal with that and it will be easy if it's Pembro Plus, ChemTrack if that's the best for the patients, we'll adapt Moving on slightly, on ATOM in the adjuvant setting you've detailed around 1200 annual patients and ATOM being the only active phase 3 in adjuvant uvial melanoma how do you think about the broader opportunity here and can you share any detail on the enrolment progress? Yeah, definitely. So I think the adjuvant trial is really a must for us to do because these patients have nothing. So once they, in uveal melanoma, 50% of the patients, after they remove the primary tumor, they basically are at high risk, what we call a high risk of developing metastasis into the liver. But they don't really know, they have nothing to prevent that, so they go through, basically, I call it wait and worry. That means control every three months, basically, if the metastasis is happening or not. So we know from our trial that, especially the ChemTrack trial in phase three, that when the tumor is very small, like the hazard ratio was 0.56 in our trial. But when we look at the small tumors around less than 3 centimeters, the hazard ratio drops to 0.36. So that's really what encourages us to go into adjuvant where you're dealing with most probably seeding cells. So the population there, the high-risk population, would be around 1,200 patients in addition. So we talked about the cutaneous, if it works, at 4,000, and so we'll be looking at above 6,000 patients in addition if the two trials are positive. So it's recruiting. Well, it's recruiting. We're doing it with the AORTC. It's recruiting in Europe, and we open sites also in the U.S.

Sean Larman, Analyst — Morgan Stanley

Okay. Just going back to Kim Track in MUM. So I think you're 70% or in excess of impenetration. And how do you think about the underlying growth rate from here?

Bahija Jallal, CEO

Go ahead.

Sean Larman, Analyst — Morgan Stanley

Happy to.

Travis Coy, CFO

Thanks, Sean. As you alluded to, something we've been really proud of now that we're in the fifth year in the launch is the penetration we've been able to achieve across all major markets is 70% or higher. That comes from being the established standard of care in those settings. And as to be expected with any mature product that's been on the market now, you do begin to see growth moderate. And we're starting to see some of that, and we'll expect that moving forward. That being said, we continue to expect growth. A few areas that we're focused on, one in the U.S. is continuing to increase that penetration into the community setting. And then outside the United States, it's about two aspects. It's one, continuing to increase market access with additional launches. But then also with the more relatively new markets that we've launched, we continue to see that duration of therapy increase beyond what we saw in the clinical setting. And that was a dynamic we saw in the U.S. And it's nice that we're seeing that OUS as well with those newer markets.

Sean Larman, Analyst — Morgan Stanley

Sure. And what's driving that duration?

Bahija Jallal, CEO

You know, it's a really, really remarkable drug because usually in the clinical trials you get much higher duration of treatment than in the real world, right? The trials are more controlled and so on. Here we see absolutely the opposite, right? So the trial we are at 10 to 11 months, and here we are at 14 plus basically. And it came to two things. One is the fact that usually in a trial you stop at the radiographic progression, if you will. The clinicians don't stop if the patient is doing very well in the real world, and that's exactly what's happening. This is a new mechanism. The investigators are the ones who told us that patients, even with pseudoprogression, I would call them, do very well with this drug and continue to do well. So they continue beyond progression. And the second thing that's really important is we brought the five-year survival for this drug that also gives more evidence for the investigators. Sure.

Sean Larman, Analyst — Morgan Stanley

Thank you. Last question on KimTrack, but as it relates to the competitive dynamics, we have some data coming up on ESMO, from IDARE, on Darrow. How do you think about KimTrack's first-line position in HLA-positive reveal melanoma being insulated versus potential of share threat over time?

Bahija Jallal, CEO

Yeah, so I think to talk about the data that's coming or the data that were published actually or talked about in a conference, it's a good news for HLA-A2 negative patients. They're not eligible for ChemTrack, and that's a good news for them. Any other data, I can't really speculate until I see the data. We have not seen the data yet. It's coming in October, so we'll reserve that. What I can say, anything, you know, here is what any compound that needs to displace or wants to displace the standards of care, which is KimTrack in first line needs to do. You know, one is basically, you know, you have to displace the standards of care. It is standards of care in every country where we went. In most of the countries where we went is standards of care. It's very well penetrated. But also the most important thing for me is the five-year OS. This is a disease that's counted in months. This is not something that takes years. It takes months once you're diagnosed with the metastatic. And what we've shown in five years, if you allow me, two things that are really important. One is if you were treated with ChemTrack, you double the chance to be alive at five years. But most importantly, 44% of the patients who are alive at five years had only ChemTrack. What that gives us is really arguing the actual sequencing, that to be alive at five years, you have to have had first ChemTrack. You can't leave it to later. And the second thing is that you have to continue taking ChemTrack. So those are backed with data, not with just what we say.

Sean Larman, Analyst — Morgan Stanley

Thank you. Thank you. That's a great discussion on Kim Tracker. So moving on to Brunetta Fuss and the Prame franchise. So just sort of measure your confidence on Prismel 301 and what's your confidence around it clearing the bar?

Bahija Jallal, CEO

Yeah, so I think there are two things that are important for Prismel. So this is basically looking at the first-line cutaneous melanoma in combination with the NIVO compared to NIVO by itself or NIVO-RELA. So from the mechanism point of view, a cutaneous melanoma has a high expression of GP100 frame. So I went into GP100. Sorry, it has a high expression of frame. And the other thing is that we have shown that PREM is active as monotherapy, and that was very important for us. If we're going to go into any combination, we have to show that we have monotherapy activity. So we show that we have monotherapy activity in cutaneous melanoma. sorry, in cutaneous melanoma, we also showed that basically we have even higher than when we compared to nevorella. So, and we have shown with our platform that if you move earlier in treatment, basically if you move into first line, you have a much better T cell fitness. So this, what the data that I talked about was a late line. So coming into first line, we believe that's going to work even better. And then combining with NEVO, these are two mechanisms, first two active agents that should be at least an additive aspect to the combination. And I believe will have also a synergistic effect because these are two complementary mechanisms or two different mechanisms that can add to each other. So we have the trial is going well, knock on wood. And, you know, we hope to finish by end of 27 the recruitment in that trial.

Sean Larman, Analyst — Morgan Stanley

Wonderful. Thank you. On IMC P115C, which is the half-life extended prime molecule, how do you think about less frequent dosing for adjuvant or early-aligned patients?

Bahija Jallal, CEO

Yeah, I think, look, always we went into the half-life extension to test the convenience. It's always important, the convenience for the patients, even if we did it differently in Prismel. So the nice thing is that the half-life extended molecule is exactly the same as the brany that's in the clinic, and what we're adding to it is just the FC to increase the half-life extended. So we have the possibility to really compare and contrast and use the data from Brenny for the half-life extended.

Sean Larman, Analyst — Morgan Stanley

Thank you. And I guess, what are you looking for in the early dose escalation data to decide whether that becomes a go-forward premacet over Brunetta Fasb in some settings?

Bahija Jallal, CEO

Yeah, so I think two things that I'll be looking forward to. One is, you know, does what we predicted for the PK, what we modeled for the PK pre-clinically, does it really translate into the clinic? That's an easy thing to do in the first dose escalation of the product. And then the second one is because we are testing it in cutaneous and in ovarian where we know Brenny is active, we can directly compare. And I think that's exactly what we're doing right now. Sure.

Travis Coy, CFO

Thank you.

Sean Larman, Analyst — Morgan Stanley

And moving on to the autoimmune and infectious disease. the the MTAI yep can you walk through why that the same platform that activates t-cells against cancer can be flipped to suppress them and and why that should be more precise than systemic immunosuppression yes so I'm really excited about that like I've maybe it shows is the fact is how the platform and that's why I came to this organization to to immunocore because they're really the excitement about the platform.

Bahija Jallal, CEO

If you think the platform has two components, all right? The first component is that HLA, TCR, complex, and peptide that binds directly into, specifically into an organ. And then the second part is what brings basically what we need to do. Do we bring the T cells? Do we activate the T cells to kill the tumor? or we use that to actually inhibit the T-cells and switch off. So I'll just talk about the mechanism in HIV, for instance, is the same as in oncology. You want to kill the cells there. But in autoimmune, it's the opposite, which is exciting. So then you would ask me, you know, what's the difference we have systemic? Why, as you asked, why is this, you know, we have the systemic? The systemic works, without a doubt. When we think about steroids, they work very, very nicely. The problem is they work everywhere, even in organs where they're healthy organs. And that's why you see the side effects are happening in the muscle, in the joint, in, you know, people having diabetes and so on. Then the second innovation that was really good in systemic was the biologics, right? But there you are actually, you have a selectivity of the target, but that selectivity, once you inhibit the target, like the TNFs, it's also in healthy tissues. So TNFs, they're known, you get also infection. So what we're trying to do is a new paradigm. Can we go specifically to the organ that is affected and only treat that organ that's affected? and that's basically in type 1 diabetes is the beta cells and that's really why I'm so excited about that.

Sean Larman, Analyst — Morgan Stanley

Awesome, thank you. And on the diabetes program, strategically, what's the readout you're watching and how quickly could seed peptide give you a real signal of whether you're preserving beta cell function?

Bahija Jallal, CEO

Yeah, that's a really great question because exactly why we went to type 1 diabetes because it allows us first to test the whole hypothesis of the T cells. The second is because we can go into patients directly, not healthy volunteers. And third is we can get in single ascending dose and multiple ascending dose, that means smaller trials, we can find out if this molecule works or not. So in the single ascending dose, we will answer one question. You know, does the product, basically the compound binds to the beta cells and only to the beta cells? We can test that. And the second, in the multiple ascending dose, we can actually address the efficacy question right there. And that's because we will be actually following the C-peptide. And we know that the C-peptide has been now accepted by the FDA as a good surrogate for activity in an accelerated approval like for anti-CD3 so we can with you know not a huge amount of money or time and everything find out if this works or not.

Sean Larman, Analyst — Morgan Stanley

Wonderful thank you and still on autoimmune and thinking about your HIV program what you know thinking to a readout next year the 2027 in 2027 obviously. What would it need to show to you that a functional cure is within reach?

Bahija Jallal, CEO

Yeah, it's really in steps. I think the bar there is much higher. We know that the bar for cure in HIV is much higher. We are dissecting, looking at the mechanism, looking at how, you know, things are working. So we have in multiple ascending dose, we presented some data showing that actually something is happening that we can at least delay some of the rebound of the virus. We showed two weeks ago or something like that the translational work and understanding the biology. So we didn't believe that we reached the dose that we can. So we are continuing to dose escalate. We did actually escalate to 1,200. Now we're looking at can we continue to see those responses and then understand more. So they're really trying to understand that mechanism and how we can tackle it with this molecule.

Sean Larman, Analyst — Morgan Stanley

Wonderful, thank you. And for Travis as head of corporate development, how important is BD for you today or are you primarily focused on internal R&D?

Travis Coy, CFO

Thanks Sean. Bheja referenced the need to continue innovation and so for us, business development is part of that, part of accomplishing that need to continue innovation. And so as we look for opportunities, and that's just as important as it is alongside internal R&D. So we look for opportunities to enhance the platform, look for opportunities that, you know, build upon our clinical capabilities and expertise. We look for opportunities to expand market access. All of those things are, you know, sort of right there alongside internal R&D while making sure we're cognizant of the fact that we don't want to jeopardize the execution of internal R&D. We don't want to distract from that while complementing it with those capabilities and expertise that we've built. So it's part of our DNA.

Sean Larman, Analyst — Morgan Stanley

Sure. And I guess, can you walk us through your capital allocation framework? You're seeing around about $880 million, I think, with three phase, three trials running. And when it comes to execution, how are you thinking about capital allocation? And can you remind us of how you're thinking about the cash runway.

Travis Coy, CFO

Yeah, yeah, happy to do so. So three key buckets for us with respect to capital allocation. One is making sure we maximize KimTrack. That includes both the current UVL indication that we have as well as the potential for upcoming cutaneous melanoma indication. The second is making sure we, you know, continue to invest and execute on the three-phase-three studies, right? And then the third is, ties back to actually what Bia and I have both highlighted, it is making sure we're not complacent around the platform and continuing to bring the platform forward, and that includes early-stage R&D as well. To your point, we are well-capitalized with $880 million on our balance sheet as of the end of Q2. That really allows us, with ChemTrack revenue, cognizant of that capital allocation and making sure we're disciplined with our SG&A, making sure we're data-driven by the R&D investments that we make, that allows us to fund the portfolio really for the foreseeable future.

Sean Larman, Analyst — Morgan Stanley

Well, thank you. And, you know, your platform now spans oncology, HIV, and autoimmune. How do you think about the balance between spend on the oncology side versus the infectious disease or autoimmune programs to focus capital? And how do you think about partnering as a corporate development lever versus doing it all in-house?

Travis Coy, CFO

Yeah, so as you break down, this is another way to break down the capital allocation question that you just asked. If you look at where we're spending today, you know, our footprint is most established in oncology, right? It's where we have a development and commercial footprint. So as we think about the HIV and infectious disease programs, and Bahesha was alluding to this a little bit, you know, we're likely to pursue a partner to maximize the value of those programs. But we want to do so at the right time and in the right way. And I think because of the relative capital efficiency that is needed in order to be able to take those programs to the next inflection point, that's when we'll begin to look for opportunities to partner those programs.

Sean Larman, Analyst — Morgan Stanley

Wonderful. Well, I have a final question, and that is, is there anything that I didn't ask that I should have, or is there a message you'd like to leave investors with, or both?

Bahija Jallal, CEO

No, I think we did a tour of what we have. I think, again, very, very much excited about ChemTrack and what it's doing with the patients. And I think these stories are really what brings us to work every day. But I think ChemTrack is not stopping there. I think we have a lot of possibilities with ChemTrack. But the platform as a whole is not only in oncology. It's just the start, frankly, but also outside of oncology. We're extremely excited about that. But right now, it's about execution. We finished the trial today. We still have two phase threes to go. So I think that's about that. And what you're going to hear from us always is execution and focus until we bring the second phase of growth of the company.

Sean Larman, Analyst — Morgan Stanley

Well, wonderful. It might be time to call close to things. Give everyone a couple of minutes back. But thank you. Thank you so much.