Immunic, Inc. (NASDAQ:IMUX) Q1 2023 Earnings Call Transcript May 14, 2023

Jessica Breu: Good morning, and welcome to Immunic’s First Quarter 2023 Earnings Call. My name is Jessica Breu, Head of Investor Relations and Communications at Immunic. I will also be the moderator on today’s call. Speaking on the call are Dr. Daniel Vitt, our Chief Executive Officer and President, as well as Glenn Whaley, our Chief Financial Officer. 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 joined the webcast via this new platform, there are two ways to submit questions. You can either submit your question in writing via the Q&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. Such statements can be identified by words such as may, will, expect, anticipate, estimate, or words with a similar meaning and such statements involves a number of risks and uncertainties that could cause Immunic’s actual results to differ materially from those discussed here. Please note that these forward-looking statements reflect Immunic’s opinions only as of the date of this presentation and it undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Please refer to Immunic’s SEC filings for a more detailed description of the risk factors that may affect Immunic’s results in these forward-looking statements.

I would now like to turn the webcast over to our CEO and President Dr. Daniel Vitt, to begin the presentation. Daniel

Daniel Vitt: Thank you, Jessica. I would like to welcome everybody to Immunic’s first quarter 2023 earnings call. This morning we announced our financial results for the first quarter ended March 31, 2023 and provided an update on our clinical development progress and upcoming clinical milestones. During the webcast today, we will walk through our first quarter 2023 and subsequent highlights, financial and operating results, as well as anticipated clinical milestones. As Jessica noted, after the presentation you will have the opportunity to ask questions. Let’s start with the review of our first quarter 2023 and subsequent highlights. As a reminder, in February, we hosted a Celiac Disease R&D Webcast, which included two renowned experts, namely Dr. Joseph Murray from Mayo Clinic in Rochester and Dr. Michael Schumann from the Charité Berlin.

Topics discussed included the dynamics of this multifactorial complex autoimmune disease including the characteristics of celiac disease, immune stimulation and its connection to clinical symptoms, the role of the epithelial barrier in the pathogenesis of the disease, as well as current and potential treatment options. The R&D Webcast was intended to lay the groundwork of our clinical Phase Ib result of IMU-856 in celiac disease patients. As most of you know, the data set published later on in May, provide an excellent clinical proof-of-concept data for IMU-856, which I will get to in a few moments. Also to note in February, Dr. Bob Fox from Cleveland Clinic, who is also the co-ordinating investigator of our insured and clinical programs in Multiple Sclerosis, presented data from the blinded and open-label extension parts of our Phase II EMPhASIS trial of vidofludimus calcium in relapsing-remitting MS.

At the prestigious ACTRIMS Forum 2023, I would like to point out again that the data was favorable compared to historical data for current MS’ treatments and showed that long-term treatment of vidofludimus calcium was associated with a low rate of confirmed disability worsening over time. This data nicely underlined with vidofludimus calcium’s neuroprotective potential in addition to its already established anti-inflammatory and antiviral effects. Last month, we reported positive data from the maintenance phase of our Phase IIb CALDOSE-1 Trial of Vidofludimus Calcium in patients with Moderate-to-Severe Ulcerative Colitis or UC. These results were extremely encouraging as they demonstrated statistically significant activity of vidofludimus calcium as compared to placebo while confirming the very favorable safety and tolerability profile of observed in other trials.

It is important to note that we believe the maintenance phase data confirms vidofludimus calcium activity in absence of chronic corticosteroid co-administration. As previously announced, based on this encouraging outcome we are exploring a variety of value creating point – options for the UC program and other inflammatory bowel disease indications. I also once again would like to welcome Dr. Richard Rudick to our Board of Directors. Rick has a stellar background including decades spend as a clinical expert in multiple sclerosis and as a clinical trialist who has overseen multiple successful pivotal studies. We are delighted to have Rick on our board and look forward to working with him as we continue to progress with the development of vidofludimus calcium in multiple sclerosis as well as our other pipeline programs.

I also want to thank Dr. Vincent Ossipow, who is stepping down from our Board at the end of June for his dedication to Immunic and his valuable guidance over the past seven years. I speak for our entire team, when I say wish him well in his future endeavors. As many of you are aware, on May 4, we announced highly positive results from the Part C portion of our Phase I clinical trial of IMU-856 in patients with celiac disease. This data significantly exceeded our expectations. IMU-856 demonstrated consistent and meaningful clinical improvements or placebo in four key dimensions of celiac disease pathophysiology, specifically protection of gut architecture, improvement of patient symptoms, biomarker response and enhancement of nutrient absorption.

IMU-856 was also observed to be safe and well-tolerated in this trial. Most importantly, the observed protection of the lining of the gut and intestinal villi from gluten-induced destruction, independent of targeting immune mechanism involved specifically in celiac disease appears to be unique among proposed therapeutic approaches, which for the first part target either the immune response or antigen processing. We believe this impressive data set provides first diligent proof-of-concept that this oral first-in-class molecule IMU-856 represents an entirely new therapeutic approach, which could be a game changer in the way we treat gastrointestinal disorders such as celiac disease, but also ulcerative colitis Crohn’s disease or irritable bowel syndrome with diarrhea.

We are extremely enthusiastic about the potential for this program. Just last Saturday, we published additional news on our IMU-856 program. In e-poster presentation at Digestive Disease Week in Chicago, we were pleased to have unveiled for the first time, IMU-856 mode of action as a potent modulator of SIRT6, a protein which serves as a transcriptional regulator of intestinal barrier function and regeneration of bowel epithelium. Through its effect on SIRT6, IMU-856 has shown the ability in animal and clinical studies to restore intestinal barrier function and bowel wall architecture. That concludes our summary of the first quarter 2023 and recent subsequent highlights. I would now like to hand over to Glenn to provide a financial overview.

Glenn?

Glenn Whaley: Thank you Daniel. I will now review the financial and operating results for the first quarter ended March 31, 2023. Let me start with the cash overview. We ended the first quarter with $97.1 million in cash and investments, which we expect will be sufficient to fund operations into the fourth quarter of 2024. Regarding the operating results. Research and development expenses were $23 million for the three months ended March 31, 2023 as compared to $17.4 million for the three months ended March 31, 2022. The increase was mainly driven by external development costs related to the ongoing clinical trials of vidofludimus calcium and IMU-856 and was partially offset by a decrease in external development costs related to Phase II clinical trials of vidofludimus calcium and ulcerative colitis and the IMU-935 program.

General and administrative expenses were $4.3 million for the three months ended March 31, 2023 as compared to $4 million for the same period ended March 31, 2022. The slight increase was chiefly driven by travel expenses and was partially offset by a decrease in non-cash-based stock compensation. Other income was $2 million for the three months ended March 31, 2023 as compared to $0.6 million for the same period ended March 31, 2022. The increase was principally attributable to an increase in German tax incentives and the interest income and was partially offset by reductions in foreign exchange gains and R&D tax incentives for clinical trials in Australia. The net loss for the three months ended March 31, 2023 was approximately $25.3 million or $0.58 per basic and diluted share.

Based on 43.7 million weighted average common shares outstanding compared to a net loss of approximately $20.8 million or $0.74 per basic and diluted share based on approximately 28.1 million weighted average common shares outstanding for the same period ended March 31, 2022. With that, I’ll turn the call back over to Daniel for an outlook on upcoming clinical milestones. Daniel?

Daniel Vitt: Yeah. Thank you, Glenn. Let me provide an update on our anticipated upcoming clinical milestones. During the first quarter, we continued to progress vidofludimus calcium for the treatment of multiple sclerosis. Our ongoing studies include the identical twin Phase III ENSURE trials in relapsing MS and the Phase II CALLIPER trial in progressive MS. Our current expectation is to report data from the interim biomarker analysis of the CALLIPER trial in progressive MS in the second half of 2023 and to read our top line data at the end of 2024. The CALLIPER trial is designed to corroborate the neuroprotective potential of vidofludimus calcium in a progressive patient population, and if successful it could be an important additional differentiator for the vidofludimus calcium in this market.

Additionally we look forward to reporting data from the interim analysis of our Phase III ENSURE program late next year and to read out the first of our Phase III ENSURE trials in relapsing MS at the end of 2025. As we have stated before, based on the strong clinical activity observed thus far, the solidly established safety and tolerability profile to date and vidofludimus calcium combined anti-inflammatory, antiviral and neuroprotective effects we continue to believe, that it has the potential to be a unique treatment option targeted the complex pathophysiology of multiple sclerosis. With regards to our IMU-856 program, as a result of the overwhelmingly positive data generated from our Phase 1b clinical trial in patients with celiac disease, we have begun preparing for Phase 2b clinical trial of IMU-856, in ongoing active celiac disease patients.

We are at the same time considering additional potential clinical applications for this oral first-in-class molecule in other gastrointestinal disorders. As stated earlier, we are very excited about this program and believe that IMU-856, could present an entirely new and innovative oral treatment approach for a number of gastrointestinal diseases without the serious consequences associated with immunosuppressive therapies. This brings us to the end of our first quarter 2023 overview. Jessica, please open the webcast for the Q&A session.

A – Jessica Breu: Yeah. Thank you, Daniel and Glenn for walking us through the first quarter 2023 and the subsequent highlights and also our upcoming clinical milestones. We will now begin the question-and-answer session. [Operator Instructions] Our first question today comes from Andreas Argyrides at Wedbush. Andreas hello, and please unmute yourself.

Q&A Session

Operator: Yeah. Thank you to all the questions. This concludes our question-and-answer session. I would like to turn the webcast back over to Daniel for any closing remarks.

Daniel Vitt: Yes. Thanks, Jessica. Thank you to today’s participants for your great questions and good discussion. In summary, we look forward to reporting data in the second half of this year from the internal analysis of our Phase 2 CALLIPER trial of vidofludimus calcium in progressive MS. We also look forward to providing an update on our IMU-856 program, hopefully here soon. We remain well funded with $97.1 million on our balance sheet providing us runway into the fourth quarter of 2024. With that, I would like to close today’s call. Again, thank you very much for joining. And as always we are more than happy to answer any additional questions one-on-one.

Jessica Breu: Thank you for joining Immunic’s first quarter 2023 earnings call. The webcast has now concluded. You may now disconnect.