Transcript
Good morning. My name is Melissa, and I will serve as your conference call operator today. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. Joining me on the call today will be Dr. Pete Salzmann, Chief Executive Officer of Immunovant, and Frank Torti, Executive Chairperson of Immunovant. Before we begin, I'd like to remind everyone that today's conference call will include certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, for example, statements regarding the potential efficacy and safety of Immunovant's product candidate and Immunovant expectations regarding the timing, design and results of its clinical trial, including the timing of future data readouts and the announcement of future indications. These forward-looking statements are not guarantees of future performance and are subject to various risks and uncertainties, assumptions, known or unknown, which could cause actual results to differ materially from those indicated or anticipated. For more information, investors are encouraged to review Immunovant's most recent quarterly report on Form 10-Q filed with the SEC on August 9, 2021. Now, I'd like to turn the call over to Dr. Pete Salzmann. Thank you, Dr. Salzmann. You may begin.
Thank you, Melissa. I want to take this opportunity to thank everyone for joining the call today. I realize that we do not always do quarterly earnings calls, but because we've been more limited in our ability to interact with the investment community over the last several months than typical, we wanted to take the opportunity to have a call today to highlight the results from the quarter and engage in a dialogue around our go-forward strategy. I will start the discussion today with a brief recap of our financial results and close with some comments on our programs. With that, I'd like to begin by briefly reviewing our financial highlights for fiscal first quarter ended June 30, 2021. R&D expenses. Research and development expenses were $18.7 million for the three months that ended June 30, 2021, compared to $16.9 million for the three months that ended June 30, 2020. The year-over-year increase primarily reflected higher personnel-related expenses and increases related to clinical activities for analyzing data and the program-wide data review, partially offset by lower contract manufacturing costs. General and administrative expenses were $11.2 million for the three months that ended June 30, 2021, compared to $9.7 million for the three months that ended June 30, 2020. The year-over-year increase was primarily due to higher personnel-related expenses. The net loss was $30.5 million or $0.31 per common share for the three months that ended June 30, 2021, compared to $26.7 million or $0.38 per common share for the three months that ended June 30, 2020. Net loss for the three months that ended June 30, 2021 and 2020 included $3.9 million and $4.0 million, respectively, related to non-cash stock-based compensation expense. In addition to the first quarter results that I just briefly reviewed, we announced last week a $200 million direct investment by Roivant into Immunovant. I'm joined today by Dr. Frank Torti, the Executive Chairman of Immunovant, who is also a member of Roivant's senior leadership team. Frank, I believe you are in a unique position to put this investment into perspective, which I'd like to ask you to do.
Thank you. And it's a pleasure to join you today on the call and be able to express my excitement and support for the company in this investment, not only as the Executive Chair of Immunovant but also as a representative of the Roivant management team. As a member of Roivant's senior leadership team, I know the rigor with which Roivant investments are assessed, and this significant investment is further evidence of Roivant's continued confidence in and commitment to Immunovant, both now and, importantly, in the future. Fundamentally, we believe 1401 is a unique asset. In our view, the mechanism is validated, with successful Phase II and III trials across numerous studies and sponsors. There's a proof-of-concept in multiple indications. And we have the potential in 1401 to deliver the most flexible and patient-friendly dosing experience with the best form factor in the class. And we've always found the class, the anti-FcRn market, exceptionally attractive due to a wide range of indications that the mechanism can potentially address. Now that's something that's been said before, but if you look at the pace of new indication announcements from all the companies in the field, the interest and development intensity around the mechanism is only increasing. There are now, for example, companies targeting approximately 15 or more distinct indications with anti-FcRn therapies, with at least five of those indications being disclosed only over the last several months. And these indications are characterized by a high unmet need with a still outdated standard-of-care, often consisting of broad-spectrum immunosuppressants and IVIg. The opportunity to take share and remake multiple existing markets, as well as to create new ones is remarkable. We've now observed from the data Immunovant described in June and in other analyses that 1401 is even more potent than we initially expected, which opens up a path for us to be uniquely flexible in our dosing and dose strategies to address the myriad of diseases that can be impacted by FcRn. In particular, the flexibility in dosing does not only enable Immunovant to design programs to target the ideal level of IgG suppression in a particular disease, but we believe also will enable Immunovant to design dosage regimens where changes in albumin and LDL outside of normal limits will be mostly either modest or of short duration during an induction phase, for example. Our ability now to consider things like dose, dose interval, induction and maintenance, inclusion, exclusion criteria, baseline lipid levels, treatment with antilipid therapy, etc., and generally bring a degree of thoughtfulness to the issue is much different now than it was when this unexpected signal first emerged. So I think you'll see design elements that take advantage of 1401's flexible profile from our trials in the future. With that said, this is a landscape that is moving fast, with well-capitalized competitors pursuing indications aggressively. For example, Argenx raised about $1 billion in February to aid in the advancement of their drug in now six different indications, and they said they plan to have 15 by 2025. J&J is likewise moving aggressively post their acquisition of Momenta. A field with that degree of investment, taking a serial and stepwise approach is not the strategy we at Roivant thought to best position the company for long-term success. Our investment is designed to allow the company to move forward in an unencumbered way and let the team really be aggressive with their clinical development approach. In particular, we fully appreciate the unique features this antibody offers in terms of a very broad therapeutic window with its convenient low-volume subcutaneous injection form factor. We think Immunovant's 1401 can make a big difference for many patients. But to realize that potential, we know Immunovant is going to need to execute an ambitious clinical development plan. In some cases, Immunovant is already ready to run a pivotal trial and include design elements that will differentiate 1401 versus competing assets in the class. In other cases, Immunovant will be running first-in-class proof-of-concept studies in new indications. To be a leading anti-FcRn, which we definitely believe Immunovant can be and 1401 can be, we'll need to execute many of these trials in parallel. The incremental $200 million investment made a lot of sense to ensure we can drive long-term value creation. When you step back, drugs with validated mechanisms, with very large market opportunities and transformative potential in such large markets, just don't come around very often. With approximately $575 million now on the balance sheet, Immunovant is well equipped to focus on the execution of their trial, as well as expanding into new indications. Roivant is incredibly excited about the prospects of 1401, and we're eager to support Immunovant through this investment and broader engagement. I also look forward to personally continuing to work closely with Pete and the Immunovant team to help develop 1401 to maximize the benefits to patients and drive future value for all of our shareholders. Thanks for having me on the call today. And with that, I'll turn it back to Pete for some additional comments.
Thanks, Frank. That's a great overview. Before I get to the $200 million investment from Roivant, I'd like to discuss Myasthenia Gravis from both a strategic angle and in terms of execution. Let's start with execution. I believe we are on track to gain alignment on our pivotal MG design with the FDA in Q4 of this calendar year. In fact, we have communicated with the FDA regarding a meeting early in Q4 to review modifications to our pivotal Phase III study in MG. These modifications are based on the agency's advice and feedback obtained during our previous end-of-Phase-II meeting and are also based on our recently communicated program-wide review. Contingent upon the FDA feedback we receive in Q4, we plan to initiate our study in the early part of 2022, and we're very excited about how this program is shaping up. Gaining alignment with the FDA and getting back into the clinic will be an important catalyst for Immunovant, especially given the remaining opportunity we see for patients and for 1401 based on our understanding of patient needs and 1401's potential. I also think the strategic opportunity for 1401 is underappreciated by the market. Not surprisingly, Immunovant's market research highlights the enthusiasm that neurologists have for the anti-FcRn class generally. The rapid onset of symptom control and the percentage of deep responders have been impressive, especially given that studies reported to date have involved short-term dosing. Recently, our marketing and medical teams dug deeper with patients and with physicians who treat large populations of patients with Myasthenia Gravis. This research highlights something very important, specifically that patients strongly desire to avoid relapse. When patients with Myasthenia Gravis relapse, weakness in symptoms can occasionally get much worse very quickly. Relapse can be a crisis. So patients want study control. At the same time, physicians and patients do desire to minimize immunosuppression in the long run. I think that is why an induction and maintenance approach resonates with clinicians. 1401's broad therapeutic window is very well suited here. Our higher doses achieved the rapid and deep IgG reduction needed to maximize the initial clinical response. Then our broad therapeutic window and convenient subcutaneous dosage form enable us to design a study that steps down IgG suppression to match patients' needs without the PK/PD extremes of cyclic therapy. On June 1st, we disclosed data regarding 1401's broad therapeutic window and the insights gained from the comprehensive program review. I want to emphasize that these insights inform our enthusiasm for the potential of 1401 broadly, not just in MG. Patient needs differ by indication, severity, and stage of disease, and we believe this variability is best addressed with a therapeutic option that offers a range of treat-to-target IgG suppression levels. The flexibility in dosing not only enables us to design programs with the ideal level of IgG suppression, but as Frank said, we believe this will also enable us to design dosage regimens where changes in albumin and LDL outside of normal limits will mostly be a short-term duration during induction. What we've seen to date is that dose-dependent changes in LDL are predictable and reversible. We've also seen that the PK/PD curves for IgG differ from the PK/PD curves for albumin and therefore LDL. Our models predict that as we go from high doses during the induction phase to more modest doses during the maintenance phase, the albumin and LDL will generally return to values within normal limits, while IgG will remain suppressed at levels likely to maintain a clinical response for most patients. I expect our MG protocol and frankly our protocols in many other conditions to be unique and differentiated in this regard. Moving on to another condition, I would also like to review our approach to Thyroid Eye Disease. As previously disclosed, we had to prematurely terminate our Phase IIb study of 1401 in moderate to severe TED due to our unanticipated program-wide lipid review. Prematurely discontinuing a study is always difficult, especially for patients and investigators. In this case, even more so, as only 41 of the projected 77 subjects to be randomized completed the primary efficacy evaluation at week 13, a bit over 50%. Consequently, the question that this study was designed to answer is whether a 12-week course of 1401 improves proptosis could not be answered with any certainty. What we did observe is that 1401 in a dose-dependent manner decreases total IgG and thyroid-stimulating immunoglobulins. As previously disclosed, on review of the data from the early study visits, when approximately 85% of the enrolled patients were assessed for proptosis response at each visit, it appeared that the 680 milligram dose, and possibly the 340 milligram dose, could achieve a meaningful separation from placebo. We believe that the 1401 induced declines in total IgG and thyroid-stimulating immunoglobulins, coupled with the efficacy trends observed at the early visits when most of the enrolled subjects were evaluated for these efficacy parameters, are promising. We've also been following the evolution of the market carefully over the last couple of quarters. Roivant was an early believer in the potential of Thyroid Eye Disease as an indication, having designed studies as early as 2019. Initial enthusiasm was driven by an understanding that the unmet need is high and the addressable population was solidly in the range of other rare diseases. It might surprise people to recall that teprotumumab's Phase II data was originally published in the New England Journal of Medicine in 2017. Nevertheless, by 2019, when Roivant was designing the 1401 trial, I don't think the opportunity was fully appreciated. Today, that is certainly no longer the case, as teprotumumab's launch is clearly validating the market opportunity. Physicians and patients are enthusiastic about medical therapy for Thyroid Eye Disease, with decreased ocular symptoms and reduced need for surgery. These benefits are great for many patients. However, insulin growth factor also appears to be a foundational pathway across many organ systems. Blocking this pathway may have consequences beyond the extraocular tissue that is the target in Thyroid Eye Disease. I'm aware of a recent study presented at ENDO 2021 virtual conference that reported 65% of patients receiving teprotumumab in a small patient series experienced otologic symptoms. Hearing impairment, including deafness, is also reported in the FDA label as having a greater incidence on teprotumumab as compared to placebo. It's early days, so we'll have to see how this all plays out in terms of clinical experience and product labeling. However, I do think it highlights an opportunity for a product with a different mechanism of action and a potentially different benefit-risk ratio. Another important point regarding Thyroid Eye Disease relates to the market potential that Roivant recognized a couple of years back based on really understanding patient needs. In my experience across a wide range of autoimmune conditions with high unmet need, physicians and patients not only appreciate but also really need, medications with different mechanisms of action. Given the diversity of individual patients, it's almost inevitable that some patients will respond better to one mechanism while others will respond better to a different mechanism of action. Additionally, patients who are severely or even moderately impacted often require sequential therapy with different mechanisms of action to get close to being fully well. Bottom line, I'm excited about the opportunity for patients and for 1401 in TED. We've also been working on getting the Warm Autoimmune Hemolytic Anemia program restarted. We found the data generated prior to the clinical hold to be compelling, albeit on a small dataset of only three patients who completed 11 or 12 weeks of therapy. Experts who reviewed our data with us shared that spontaneous improvement is uncommon in these patients after failing multiple rounds of steroids and immunosuppressants. In particular, I find our observation that one of the three patients experienced a very strong response and maintained this response throughout the treatment period to be very encouraging. This large improvement in hemoglobin can be achieved with very high-dose steroids, but very high-dose steroids are not a long-term solution. Consequently, patients end up tapering down, relapsing or partially relapsing, and many of them are still getting intermittent blood transfusions. That's certainly not an ideal standard of care. I said earlier that I wanted to get back to talking about the importance of Roivant's $200 million direct investment, and this is probably a good point to do that. As Frank mentioned earlier, there are 15 indications being actively studied across the anti-FcRn class—that's remarkable. People are very excited about this class, and I agree with Frank that the right strategy is for ambitious parallel development. We're now well-positioned to pursue this strategy. Regarding the timeline for providing additional updates, I'll just reiterate that we expect to provide a meaningful update on our MG program by the end of the year, specifically that we've achieved alignment with the FDA. We expect to do the same thing for our TED and WAIHA programs in early 2022. Behind that will be announcements of our new indications later in 2022, once these are ready to go with regulatory alignment. We also plan to hold an R&D Day in the first quarter of 2022, and I'm sure that will be very interesting. In summary, we expect a steady stream of strategic and execution updates that we believe will be very exciting for investors, followed later by data across a wide range of indications. This stream of updates, and even more so the progress in Immunovant's development program, makes us very enthusiastic about our prospects. With that, I'll ask the operator to open the line for questions.
Thank you. Our first question comes from the line of Robyn Karnauskas with Truist Securities. Please proceed.
Hey, guys. Good morning. Thank you so much for taking my call. This is Trepan for Robyn. The PR mentioned a plan to initiate clinical trials in at least two indications. Maybe you can talk — you talked about all the 15 indications that FcRns are being investigated in. Can you talk a little bit about the rationale behind the selection of these indications? And just a little confused, you said that at least one of these trials will be a pivotal trial. Is that beyond MG, TED, and WAIHA? If 1401 plays out the way you expected it to in TED, how do you see the market evolve in TED? Thank you.
Thanks, Trepan. A great set of questions there. Regarding our selection criteria, I mentioned that there are 15 different indications now posted to clinicaltrials.gov across the entire anti-FcRn class. How we select which indications we're going to pursue next is a classic type of analysis. The two most important elements are the probability of technical success—how fit is the anti-FcRn mechanism for the particular disease in question—and the degree of unmet need, meaning how much opportunity is there to benefit patients. Additionally, of course, we'll consider the unique features of 1401 I discussed, including the broad therapeutic window and the simple subcutaneous form factor. Some logistical factors will also be considered, such as the clarity of regulatory endpoints. Ultimately, we want to have a set of indications, some of which we have the opportunity to be best-in-class where there has already been clinical validation, and some indications where we can be first-in-class. Regarding the statement about one of our indications beyond MG being pivotal, that could apply to WAIHA, TED, or one of the new indications. We're thinking about these four indications as a group, and we believe that one of them will begin with a pivotal trial in 2022. We will also have the previously announced pivotal trial in MG, which makes two pivotal programs in 2022. Finally, with regard to Thyroid Eye Disease, I think it's just a really interesting market. For a long time, there wasn't a good therapy. There were some therapies, and there was good surgical therapy for patients who had extreme impact, but there wasn't a good medical therapy. With new innovation and the launch of teprotumumab, physicians are experiencing a lot of unmet need in the marketplace and many opportunities for patients to benefit. Teprotumumab is indicated for relatively short-term therapy, having been studied for six months, achieving a high degree of initial proptosis response, which is great. However, some patients are still impacted after their six-month course of therapy, and other patients relapse after stopping the therapy. Over time, I see the market evolving where many patients will be treated sequentially with more than one mechanism of action to enhance their treatment and maintain responses as long as possible.
Great. Thank you so much.
Hey, guys. Good morning. Thanks for taking the questions and thanks for the update. In terms of 1401 dosing, are there any additional analyses being conducted on the previously collected data? If so, when can we expect to see these analyses communicated?
Thanks, Tom, for that question. Yes, we're taking the totality of data from all patients who were dosed with 1401 prior to the pause in dosing and continuously refining our models to understand how yet-to-be-studied dosage regimens might perform. This rationale informs our PK/PD modeling. We're evaluating many potential dosing regimens, and we expect this information to inform our protocols going forward. I would anticipate that detailed information regarding the output of our models and the design of our protocols, including new dosage regimens, would be part of our R&D Day in the first quarter of 2022.
Okay. That makes sense. Thank you. It sounds like you're close to having a good idea of the trial design for the pivotal MG study. What details about that study can you share, and what are the major outstanding factors to starting that study and gaining FDA alignment?
In terms of the protocol, I see a lot of opportunity for an induction and maintenance approach. The protocol we ultimately achieve alignment with the FDA on, which depends on their feedback, will have that flavor. In terms of gating factors, it’s just the logistics of gaining FDA alignment that we must work through at this point.
Okay, great. Thank you for taking the questions.
Hi, good morning. Thanks for taking the questions. As you think through indications and prioritization, has there been any change in thinking given the flexibility in dosing and managing albumin and LDL levels?
I think the major insight came during our final preparations for the June 1st call and 10-K. We realized that across various immunology indications, optimizing efficacy upfront using induction while minimizing long-term immunosuppression in maintenance makes sense. The induction and maintenance phases are key in optimizing the efficacy while utilizing 1401's profile effectively. The PK/PD models for IgG and albumin differ significantly, leading to a more pronounced recovery of albumin levels compared to IgG levels. This allows us to achieve effective chronic dosing with minimal side effects.
So you don't see this flexibility being a limiter for indications at this point?
I don't, particularly when we're in the induction phase, where the goal is to control symptoms. There will be a small percentage of patients for whom a medication affecting albumin or LDL, even for a short term, may not be appropriate, but many patients will find this to be a valuable option. I’d like to invite Frank to add his thoughts as well.
We're aware of others in the field thinking about these issues. For instance, J&J modified their Phase III design to add exclusion criteria for patients with specific heart conditions. Clearly, other companies are addressing similar FDA issues, and we are learning from these experiences.
Thank you.
Hey. Good morning, everyone. Thanks for the presentation. Are you able to discuss the general design and size of next studies for WAIHA and TED? Can we expect data from the Phase II study prior to next steps?
The $200 million investment from Roivant allows us a lot of flexibility in our approach to these conditions. We're considering the best way to proceed based on what we've learned to achieve differentiated approvals in those indications. I'm not able to provide more specific details yet. Regarding the Thyroid Eye Disease data, we don't plan to release more granularity before gaining alignment with the FDA on our next trial. We currently have a lot of information we're confidentially reviewing with advisers to design our next trial. At the time we announce the next trial's design will be the right time to share more details.
Got it. Thanks.
What specific steps would you take to mitigate the LDL issue in the TED trial? Is there anything beyond potential adjustments in the dosing regimen?
Thyroid Eye Disease is somewhat unique in that it's likely a shorter duration of therapy. Given this, there may not be specific interventions needed for lipid management since most patients won't experience significant lipid issues with the short-term dosing. However, we will consider dosage modifications or antilipid therapy for our Thyroid Eye Disease programs.
Are there indications or subsets of patients in the 15 FcRn indications where these lipid issues are not a big concern?
There is some variability across the 15 indications regarding comorbidities. For most autoantibody conditions, the comorbidities are not significant. Short-term changes in LDL typically aren't a concern for most patients, especially if associated with higher efficacy due to IgG reduction during induction. This approach is not uncommon across the various indications.
Got it. Thank you.
Thanks, Melissa. I appreciate everyone joining today's call. Our enthusiasm is based on a remarkable market opportunity, with 15 announced indications across the class. This is a unique situation. Our enthusiasm is also bolstered by 1401's differentiated profile with a broad therapeutic window and a simple subcutaneous injection form factor. With a strong balance sheet, we are prepared to pursue an ambitious parallel development program. Thanks, everyone. Have a good day.
Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.