Earnings Call Transcript - IVVD Q3 2022

Operator, Operator

Welcome to the Invivyd Third Quarter 2022 Update Call. I will now turn the call over to Kyra Faircloth, Vice President of Government Affairs, Advocacy and Corporate Communication.

Kyra Faircloth, Vice President of Government Affairs

Thank you for joining us today. Before we get started, I wanted to attend to a few housekeeping items. I invite you to review our press release and the Q3 financials included with them, both of which can be found on the investor section of our website. I would like to remind you that during today's discussion, we will be making several forward-looking statements. Forward-looking statements include statements concerning, among other things, the future of the COVID-19 landscape, including the expectation of continued evolution and emergence of new variants. Our ongoing research and clinical development plans, including the timing of such plans, technology and resources to develop therapeutic or preventative options for other infectious diseases, our expected cash runway, and other statements that are not historical fact. Other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements are described under the heading risk factors in our filings made with the U.S. Securities and Exchange Commission, including our most recent quarterly report filed today. It is now my pleasure to welcome the Invivyd management team to the call. I'm joined by David Hering, CEO of Invivyd, Laura Walker, Chief Scientific Officer, and Fred Driscoll, Interim Chief Financial Officer. With that, I'd like to turn the call over to Dave.

David Hering, CEO

Good afternoon, and thanks for joining Invivyd's third quarter call. It happens to be our first quarterly earnings call as a public company and my first call as Chief Executive Officer, so our agenda will be just a little different than it may be going forward. Specifically, I'd like to start by sharing my enthusiasm for Invivyd and our future. Then our CSO, Laura Walker, will describe our unique capabilities, pipeline and ongoing activities. I will then come back and talk a bit about near-term opportunities. Finally, our interim CFO, Fred Driscoll, will walk through our financial results, after which we are happy to open the line for any questions. As always, we will be glad to follow up with analysts or investors one-on-one following this call. As you may recall, prior to joining Invivyd, my role at Pfizer was the global franchise head for the mRNA portfolio. Essentially, I had the operational responsibility for the COVID vaccine in the U.S. which included worldwide production allocation and the sale of the vaccine, which is now the market-leading mRNA vaccine for the prevention of COVID-19 and future mRNA products under development. Being involved in that effort was a great privilege, given the urgency of the medical situation and the ability to make an important vaccine broadly available. At the same time, it was made clear that there would always be practical limits to the benefits of SARS-CoV-2 vaccines, especially for vulnerable populations, such as the immunocompromised or others who may not respond well to vaccination. After all, neutralizing antibody titers in response to natural SARS-CoV-2 infection wane relatively quickly, rendering all humans vulnerable to repeat infection. Over the past year, we, alongside the broader scientific community, have learned that viral evolution can challenge even the most thoughtfully discovered therapeutic and prophylactic antibodies. The past three years have marked the rise of this new human pathogen, first moving through naive human immune systems in a series of distinct dominant eras, then evolving to adapt to experienced human immune systems, and now presenting a diverse variant swarm. As coined in public commentary, this swarm or so-called 'scrabble set' of Omicron lineage viruses is acquiring somewhat predictable convergent mutations in the face of human immune pressure exerted by vaccination and prior infection. These convergent mutations are increasingly immune evasive relative to vaccine-induced antibody titers and increasingly challenge all prior and currently commercially available antibody therapeutics. We are pleased that to date, our candidates in late-stage discovery have shown retained in vitro activity against all current and emerging variants of concern. Previously, the company attempted to meet the pre-Omicron COVID-19 challenge largely with a single molecule. So we designed this company, by contrast, with a mission to meet the challenges of this final evolution through ongoing innovation and the use of our proprietary platform. Our integrated discovery platform offers us the possibility for high potency, beneficial pharmaceutical properties and meaningful resistance to viral escape, as we aim to produce quality antibodies that occur at very low or zero frequency in natural human immune responses. In this way, such engineered antibodies escape from the pressures that drive viral escape. Furthermore, we, as a company, anticipate being able to use our platform to position ourselves for the potential obsolescence of our antibodies and believe that what is most important about Invivyd is the expected productivity and efficiency of our overall discovery and development platform rather than the particulars of any one single antibody developed going forward. We believe our proprietary underlying discovery technology licensed from a reputable organization will allow for unparalleled speed and molecular diversity in engineering. Our plan, broadly speaking, is to continue deploying our technology over the coming years as viral evolution requires and to innovate with the intent to keep pace with and indeed get ahead of COVID-19. I will ask Laura to review our recent progress and ongoing discovery and development activities.

Laura Walker, Chief Scientific Officer

Thanks, David. It's an exciting time at Invivyd. Recently, we announced that we've nominated our proprietary combination, anti-SARS-CoV-2 receptor binding domain, or RBM studies, for clinical development, which we are calling NVD 200. We look forward to describing the properties of these antibodies further, as we advance towards clinical development. But for now, I would note that one component of that combination is indeed a reengineered version of Adintrevimab, our former lead molecule. This reengineering is an important detail, as our ability to evolve Adintrevimab to rescue its activity against Omicron and its sublineages with relatively few amino acid changes supports our founding hypothesis that there are indeed sites on the SARS-CoV-2 RBD that can be targeted with monoclonal antibodies to exert broad neutralization before emerging variants of concern, as well as backwards to prior SARS-CoV-2 variants, and even more divergent beta viruses. As David mentioned, our plan is to utilize our integrated discovery platform against the threat of ongoing SARS-CoV-2 viral evolution, with ongoing novel antibody discovery and engineering, as well as to develop a best-in-class suite of early-stage candidate antibodies that anticipate potential emerging variants. Our vision, which we look forward to discussing with global health authorities in the coming weeks or months, is to create a steady stream of viable antibody therapies for patients in the face of anticipated viral variation. To that end, we are pleased to announce today that we have multiple candidates in late-stage discovery on track for planned preclinical activities in the first half of 2023. Each of the two components within our lead MBD or this combination, as well as our other candidates, represent unique molecules that have been shown in vitro to target distinct amino acid binding sites on SARS-CoV-2. In addition, all have demonstrated varying and sometimes subtle, or perhaps important differences in neutralizing potency across sublineages and inaccessible strains. Put simply, they appear to behave differently and interact with the RBD in ways that can embrace the swarm of SARS-CoV-2 variants we currently observe. Our view is that these differences may turn out to be significant in unpredictable ways going forward. Both development candidates, along with what we hope will be additional broadly applicable academic studies, represent our anticipated growing and unique toolkit for addressing this issue. We aim to continuously evolve each of these antibodies, creating a framework for rapid engineering and evolution. In conclusion, our strategy, which follows uniquely from our integrated discovery platform is not to rely on a single molecule targeting a single epitope that may experience escape. Instead, our strategy is to continuously discover and engineer antibodies with sufficient breadth and potency so that patients in need have access to continuous, high-quality protection, even in the face of rapid viral evolution. We believe our integrated discovery platform offers a unique competitive advantage in this effort and the potential to provide a distinct benefit to patients in need, caregivers, and global health authorities searching for durable solutions to the ongoing burden imposed by COVID-19.

David Hering, CEO

Thanks, Laura. As you all heard, we are firm believers in the potential for our integrated development platform to generate high-value antibody candidates that have a high probability of providing protection to populations in need. Regarding antibody protection, very recently, an archive paper currently under review describes a very tight relationship between the protection from symptomatic COVID-19 disease mediated by both varying levels of vaccine-induced polyclonal antibody neutralizing titers and varying levels of monoclonal antibody neutralizing titers. This paper draws on sampling from vaccine recipients and participants in our recent pivotal clinical trial, which coincided with the fortunate timing of studying Bebtelovimab in a prep setting across 2021. The study included patients and outcomes across both pre-Omicron and post-Omicron viruses, which exhibit different Bebtelovimab neutralization potency, in a controlled study with corresponding clinical outcomes. That study data, along with companion work on vaccine-elicited titers, all performed in a consistent assay, provides a unique natural experiment for assessing the relationship between protection from disease mediated by vaccination and protection from disease mediated by monoclonal antibodies. Obviously, a vaccine engages the immune system broadly, whereas a monoclonal antibody is highly specific to its target. What is unusual about the observations found in our post hoc analysis is that they underline intuitive results. The vaccine correlation of neutralizing antibody titers turns out to be mechanically replicable by neutralizing monoclonal antibody titers. The analysis within the paper also shows that the degree of protection from symptomatic disease provided by a neutralizing monoclonal falls nicely on the curve described by the degree of protection afforded by vaccination. It is our belief that these data suggest that monoclonal antibody neutralization potency, combined with associated dosing and pharmacokinetic information for any one antibody, serves as a fascinating potential surrogate marker of protection from symptomatic disease. Furthermore, as many of you are aware, the FDA has routinely halted the distribution of antibodies based on neutralization potency against changing viral variants without corresponding clinical data. The evade data represents the first data from a prospective controlled clinical trial of a monoclonal antibody against COVID-19, which offers consideration that a reverse pathway using neutralizing titers may hold potential as a marker of protection. The findings align with observations of high protection generated from antibodies produced by leading companies, implying that, at least in the case of IgG directed against RBD, such as ours at Invivyd, a consistent biophysical principle underlies a clinical correlate. We believe that patients, caregivers, and global regulatory authorities are all seeking more rapid and efficient approaches to antibody development for COVID-19. We look forward to sharing these data and our perspectives more broadly. We are not yet able to share specifics on our planned clinical program, but we look forward to doing so in the near future. In the big picture, our goal is to rapidly demonstrate the potential protective and therapeutic benefits of our current and anticipated future molecules and to create a platform and industrial process that allows us to serve patients through continuous innovation as viral evolution requires. While some have declared the pandemic over, we feel that SARS-CoV-2 represents an unacceptable perpetual toll on human health and wellbeing. According to the CDC, approximately 300 people in the U.S. are dying from COVID-19 each day, which is nearly 110,000 mothers and fathers, grandparents, spouses, and other beloved family members we lose each year unless we take action. How can we move forward as a society accepting that this is our continuous fate? It is imperative that we think differently about our approach to managing COVID-19 if we are to reduce the toll of this disease in the future. Invivyd is committed to being an important part of the solution in reducing deaths from this virus. From a business perspective, we see tremendous opportunities to create value for our shareholders as we innovate for the benefit of those most vulnerable. Annually, the prevention and treatment of COVID-19 represents an $80 billion to $100 billion market. Our goal is to capture a portion of those revenues on an ongoing basis with our iterative platform approach, in which we strive to develop best-in-class antibody solutions for COVID-19 and beyond. With that, I will turn the call over to Fred to discuss the financial results.

Fred Driscoll, Interim Chief Financial Officer

Thanks, Dave, and good afternoon, everyone. For the quarter, with respect to operating expenses, the total was $34.1 million for the third quarter of 2022, compared to $49.4 million for the comparable period of 2021. The decrease is attributable to the wind down of certain clinical trials and manufacturing-related activities. This decrease was partially offset by increased contract manufacturing expenses related to the production of materials for use in the non-clinical studies and planned NVD 200 clinical trials. Our SG&A expenses were $13.2 million for the third quarter of 2022 compared to $11.1 million for the comparable period of 2021. This increase is attributable to higher public company costs, professional services, and personnel-related expenses. The net loss for the third quarter of 2022 was $45.1 million compared to $60.4 million for the comparable period in 2021. Basic and diluted net loss per share was $0.42 for the third quarter of 2022 compared to $0.98 for the comparable period in 2021. We exited the third quarter in a strong balance sheet position with cash, cash equivalents, and marketable securities totaling $419 million. Based on our current operating plans, we expect our cash will enable the company to fund its operating expenses into the second quarter of 2024. With that said, we are currently working on a 2023 zero-based budget approach, looking for cost efficiency opportunities and plan to update our cash runway guidance once we complete our budget and close our fiscal year 2022. With that, operator, please open the call for questions.

Operator, Operator

Our first question comes from Michael Yee with Jefferies. Your line is now open.