MORRIS PLAINS May 12, 2020 (Thomson StreetEvents) -- Edited Transcript of Immunomedics Inc earnings conference call or presentation Wednesday, May 6, 2020 at 9:00:00pm GMT

Immunomedics, Inc. - Executive Chairman

* Brendan P. Delaney

Immunomedics, Inc. - Chief Commercial Officer

Immunomedics, Inc. - Senior Director of IR

Immunomedics, Inc. - CFO & Chief Business Officer

* Nicholas M. Abbott

* Philip M. Nadeau

Good afternoon, ladies and gentlemen. Thank you for standing by. As a reminder, this call is being recorded. Today is Wednesday, May 6, 2020. At this time, I would like to turn the conference over to Chau Cheng, Senior Director of Investor Relations of Immunomedics.

Chau Cheng, Immunomedics, Inc. - Senior Director of IR [2]

Thank you, Jimmy. Before we begin, I'd like to remind everyone that during this call, we will be making forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Such statements may involve significant risks and uncertainties, and therefore, actual results could differ materially from those expressed or implied on this call. Factors that could cause such a difference include the uncertainty associated with pharmaceutical development and the regulatory approval process as well as difficulties in forecasting sales, revenues and expenses.

More information about the risks and uncertainties faced by Immunomedics, Immunomedics business contained with the caption Risk Factors under -- included in the company's periodic report filed with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the year ended December 31, 2019.

With us on the call today with prepared remarks are Dr. Behzad Aghazadeh, Executive Chairman, and Usama Malik, Chief Financial Officer and Chief Business Officer. Also on the call for Q&A are Harout Semerjian, President and Chief Executive Officer; and Brendan Delaney, Chief Commercial Officer. Following the prepared remarks, we will open the call up for questions. Thank you. Behzad?

Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [3]

Thank you, Chau. Good afternoon, everyone, and thank you for joining us. We entered 2020 with strong momentum. While the first quarter was primarily focused on completing the FDA review and executing on ongoing priorities, the last several weeks have been monumental for the company. The hard work, commitment and dedication of our colleagues at Immunomedics over the last 3 years have culminated into a series of accomplishments that establish us as a fully integrated commercial biopharmaceutical company. The approval of TRODELVY by the FDA exemplifies our commitment to deliver breakthrough therapies to help transform the lives of those with hard-to-treat cancers.

This commitment is further demonstrated by our commercial team. We were successful in making TRODELVY available to people with mTNBC shortly upon FDA approval. As noted in our press announcement this past Monday, TRODELVY was shipped to our specialty distributors last week, and the first patient was treated with commercial product exactly a week ago today, exactly one week after FDA approval.

Equally importantly, our regulatory and market access teams have already completed a National Drug Rebate Agreement with The Centers for Medicare & Medicaid Services. As a result of our teams mobilizing quickly, for Medicaid specifically, states are now generally obligated to cover TRODELVY as of July 1, 3 months ahead of our scheduled time line and a big win for Medicaid patients. The rebate agreement is also prerequisite for Medicare.

Another key event this year is the early halting of this Phase III ASCENT study due to compelling evidence of efficacy across multiple endpoints. We have begun the process of cleaning the database, which will result in database lock and ultimately the unblinding of the study. Top line readout remains on track for mid-year 2020.

We also look forward to the top line data from the first cohort of 100 patients who were previously exposed to platinum-based and PD-1 and PD-L1 inhibitor therapies in the TROPHY U-01 study of patients with metastatic urothelial cancer. As previously disclosed, these data could potentially support a BLA submission for accelerated approval to the FDA, which has recently granted TRODELVY Fast Track designation in this indication.

For the second cohort of patients who are platinum ineligible and have progressed after prior checkpoint inhibitor therapy, an abstract containing early results has been accepted for poster presentation at this year's ASCO virtual meeting. An additional abstract from the Phase I/II study of TRODELVY in patients with previously treated metastatic endometrial cancer has also been accepted for poster presentation at the same conference.

In other clinical development, we have entered into a clinical collaboration with the Dana-Farber Cancer Institute and Merck to study the combination of TRODELVY with pembrolizumab, an antiPD-1 antibody in 2 separate Phase II studies. The first study involves approximately 110 patients newly diagnosed with PD-L1 negative mTNBC. These patients will be randomized to receive the combination of TRODELVY and pembro versus TRODELVY alone. The same combination of TRODELVY and pembro will be used in the second randomized study in approximately 110 hormone treatment and chemo-refractory patients with PD-L1 positive hormone receptor, positive HER2-negative metastatic breast cancer. Both studies will have PFS, or progression-free survival, as the primary end point. Overall survival, overall response rate, duration of response and clinical benefit rate will be used as secondary end points.

Financially, the company completed an oversubscribed public offering, and we have added approximately $465 million to our balance sheet. Furthermore, the approval of TRODELVY triggered a $60 million contractual milestone payment from Everest Medicines, our partner in China, who recently announced the approval by the Chinese regulatory authority to initiate a pivotal Phase III study of TRODELVY in mTNBC in China, which they begin to plan -- which they plan to begin in the first half of 2020.

At this exciting inflection point of the company's growth, I'm also pleased to announce that Dr. John Stubenrauch has been appointed Senior Vice President, Global Head of Manufacturing. John is a seasoned executive with decades of experience with companies like AstraZeneca and Merck. He brings a strong foundational background in global commercial manufacturing. John will spearhead the initiatives that continue to scale our global supply chain, ensure supply continuity and focus of cost of goods optimization. With John's new role, Dr. Morris Rosenberg is stepping down as Chief Technology Officer with the company, which will be effective later in May.

I would like to thank Morris, who was seminal in helping us develop our initial clinical and commercial supply chain and manufacturing processes. Morris will be pursuing a new opportunity closest to his home in the Pacific Northwest that is focused on new product development. We wish him the very best in his future endeavor and will keenly follow his progress. Thank you, Morris. I know you're listening.

Usama will now go over the financials.

--------------------------------------------------------------------------------

Usama Malik, Immunomedics, Inc. - CFO & Chief Business Officer [4]

--------------------------------------------------------------------------------

Thank you, Behzad. As in the past, please refer to our quarterly filing as well as our earnings release this afternoon for additional details of our results.

Total costs and expenses were $82 million for the 3 months ended March 31, 2020, compared to $79.6 million for the comparable quarter ended March 31, 2019. The increase was primarily due to a $4.3 million increase in R&D expenses and a $0.2 million increase in sales and marketing expenses, partially offset by a $2.1 million decrease in G&A expenses.

Interest expense was $13.5 million for the 3 months ended March 31, 2020, compared to $10 million for the comparable quarter March 31, 2019. The increase was due primarily to changes in the fair value of our debt balances as a result of the agreement with Royalty Pharma. Net loss was $93 million or $0.44 per share for the quarter ended March 31, 2020, compared to a net loss of $87.3 million, also $0.46 per share for the comparable quarter ended March 31, 2019.

As of March 31, 2020, the company had $540 million in cash, cash equivalents and marketable securities. On May 1, 2020, the company closed on its previously announced underwritten public offering of common stock with net proceeds of approximately $464 million. The number of outstanding shares after the capital raise were 231 million, and the fully diluted count was 242 million.

As Behzad alluded to earlier, we expect to receive $60 million from Everest Medicines triggered by FDA approval of TRODELVY. We believe our projected financial resources are adequate to support the commercial launch of TRODELVY in the United States in mTNBC and continue to expand the clinical development programs for TRODELVY, invest in the broader clinical development of the ADC platform, continue to scale up of manufacturing and manufacturing process improvements and general working capital requirements.

This concludes our first quarter 2020 financial results, and I will pass it back to Behzad.

--------------------------------------------------------------------------------

Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [5]

--------------------------------------------------------------------------------

Before we open it up for questions, a few words to update on the impact the coronavirus pandemic is having on our business. With the shelter-in-place recommendations taking effect, we quickly move to remote access and work from home for all nonessential personnel. We have implemented stringent on-site monitoring and as much as feasible, undertaken social distancing measures for essential on-site staff, who predominantly are comprised of colleagues in our manufacturing and quality operations. As a result, thankfully, operations have been minimally impacted to date.

With respect to our ongoing clinical trials, we announced in late March that we were pausing enrollment of new patients and activation of new sites. While it is too early to assess the precise extent of disruption to the conduct of our trials, we are confident that the impact will be manageable. In particular, the pivotal Phase III ASCENT study, which completed enrollment in mid-2019, was halted following the independent DSMC recommendation. We anticipate very limited impact from the pandemic.

The pivotal 100-patient cohort of platinum eligible urothelial cancer in the TROPHY U-01 study also fully enrolled as of October 2019 and had significant follow-up already completed pre-COVID-19. So again, we do not anticipate significant impact.

And finally, following persistent requests from investigators, the Phase III TROPiCS-02 study of TRODELVY in hormone-receptor positive HER2-negative metastatic breast cancer will be resuming enrollment beginning later this month at select sites that have been carefully vetted for their ability to ensure normal clinical trial operations and patient safety.

On behalf of all of my colleagues at Immunomedics, our thoughts and well wishes are with those impacted by the coronavirus pandemic. Further, I would like to express our thanks to the workers who are providing essential services and helping mitigate the disruption to our lives as well as recognize the medical personnel who are combating this disease on the front lines. I would also like to extend my special gratitude to my colleagues at Immunomedics who continue to work tirelessly towards fulfilling our mission of delivering these breakthrough medicines to patients in need. As the lines between the days of the week, the evenings and nights and the weekends have blurred, we find ourselves often putting in even more hours than prior to the outbreak. I understand this phenomena is playing out across our sector and no doubt also beyond. May this all pass soon.

Operator, please open the call for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question comes from Phil Nadeau with Cowen and Company. Once again, our next question comes from Phil Nadeau with Cowen and Company.

--------------------------------------------------------------------------------

Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [2]

--------------------------------------------------------------------------------

Operator, we're getting e-mails from folks that are having hard time getting on the Q&A line. Is there -- can you check the lines?

--------------------------------------------------------------------------------

Operator [3]

--------------------------------------------------------------------------------

(Operator Instructions) The next question in the queue comes from Michael Schmidt with Guggenheim.

--------------------------------------------------------------------------------

Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [4]

--------------------------------------------------------------------------------

Operator, I have a note here that says there are some issues with the dial-in. All sound has dropped.

--------------------------------------------------------------------------------

Operator [5]

--------------------------------------------------------------------------------

One moment, please. Testing audio for now. The next question in the queue is -- goes to Michael Schmidt with Guggenheim.

--------------------------------------------------------------------------------

Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [6]

--------------------------------------------------------------------------------

All right. Can you hear me?

--------------------------------------------------------------------------------

Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [7]

--------------------------------------------------------------------------------

Yes, we can Mike. Well, I don't know how much of what we have to say you heard.

--------------------------------------------------------------------------------

Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [8]

--------------------------------------------------------------------------------

Yes, I don't know. I just hear the operator. Well, anyway, so why don't I just ask a question? The one I had was on TROPiCS-02. Can you -- really appreciate the comments you made on enrolling the study and the investigator enthusiasm. We've gotten some questions really on understanding the read-through to the successfully of this study from the ASCENT trial? And maybe if you could just help us understand the timing potentially of the interim analysis that you've talked about, which is based on response rate? And also help us understand how we should think about potential benchmarks here on the control arm in this trial?

--------------------------------------------------------------------------------

Behzad Aghazadeh, Immunomedics, Inc. - Executive Chairman [9]

--------------------------------------------------------------------------------

Sure, Michael. Thanks. Look, we haven't provided timing on when the interim might occur, and that was even before the coronavirus pandemic took hold. And it's really too early to judge exactly what happens from here on. Up until the time when we stalled the enrollment or stopped initiating new study sites, we were enrolling extremely well. And so once we resume here, hopefully, we can regain momentum pretty quickly, and that will then inform us when we would take that interim. And as we get closer, we'll certainly communicate the time lines. But my hope is that the delays or disruptions will be very limited and entirely manageable.

With respect to the benchmark, what we generally said is, obviously, these are distinct patient populations with triple negative, on the one hand. On the other hand, in the very late-line and refractory setting, where we're studying this drug in TROPiCS-02, we're told by the physician community that the patient population presents themselves with a very similar outlook to the triple-negative community. And the chemo options available to them, in fact, very much the same ones that they would be using in the triple-negative opportunity -- setting. And those are exactly what comprised the control arm, which is cap, gem, eribulin and vinorelbine.

So as a result, my expectation would be -- and based on some literature work that we've done, obviously, all retrospective, albeit some of them are more recent contemporaneous study, I would expect response rates on the order of high single digit, low double digit. And I would expect duration of responses of perhaps 3 or so months, very much similar to the triple-negative opportunity. Now that is, I want to heavily caveat that. It's based on literature and the feedback we're getting. And obviously, this is why we're running the study. But those are generally the benchmarks I would use, which is why I'm hopeful and encouraged by this assessment by the DSMC on ASCENT that it will hopefully also translate over into what to read it -- what TROPiCS-02 will read out as.

--------------------------------------------------------------------------------

Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [10]

--------------------------------------------------------------------------------

Great. Then maybe just a question on TRODELVY and the initial experience. Now I realize it's only been a short amount of time since the drug's been on the market. But just wondering if you could just share a little bit of initial feedback and whether the initial experience has met your expectations so far?

--------------------------------------------------------------------------------

Brendan P. Delaney, Immunomedics, Inc. - Chief Commercial Officer [11]

--------------------------------------------------------------------------------

Yes. Brendan Delaney here. Yes. So I would say in a nutshell so far so good. It's early, as you recognize. But I think we manage the launch, especially in these first 2 weeks on almost an hourly basis, and we're meeting all the tactical implementation and things from that perspective. So certainly, internally, I think we're meeting all our guidelines. I think it was important as we announced that the drug was available within days, which was an important kind of milestone that we are holding ourselves to because we know patients are waiting. And so, so far, so good I would say, I think the feedback from physicians, as you can imagine, physicians are excited for their patients, obviously, but the reaction to the prescribing information and the support services and top to bottom, what we've put out there is pretty well received so far. So it's early, as I said, but so far, so good. We're pleased.

--------------------------------------------------------------------------------

Operator [12]

--------------------------------------------------------------------------------

(Operator Instructions) Our next question comes from Peter Lawson with Barclays.

--------------------------------------------------------------------------------

Peter Richard Lawson, Barclays Bank PLC, Research Division - Research Analyst [13]

--------------------------------------------------------------------------------

Congratulations on the progress. As we think about the launch, what type of metrics do you anticipate providing going forward? And kind of the milestones you're setting yourself internally, how are you kind of viewing a successful launch? And I guess that's particularly pertinent if we think about in this time of kind of social distancing.

--------------------------------------------------------------------------------

More here:
Edited Transcript of IMMU earnings conference call or presentation 6-May-20 9:00pm GMT - Yahoo Finance

Comments are closed.