ImmunoGen, Inc. (NASDAQ:IMGN) Q2 2023 Earnings Call Transcript

ImmunoGen, Inc. (NASDAQ:IMGN) Q2 2023 Earnings Call Transcript July 31, 2023

ImmunoGen, Inc. misses on earnings expectations. Reported EPS is $-0.24 EPS, expectations were $-0.14.

Operator: Good morning and welcome to ImmunoGen’s second quarter 2023 financial and operating results conference call. Today’s conference is being recorded. At this time, I’d like to turn the call over to Anabel Chan, Head of Investor Relations. Please go ahead.

Anabel Chan: Good morning and thank you for joining today’s call. Earlier today, we issued a press release that includes a summary of our recent operating progress and second quarter financial results. This press release, a recording of this call, and an updated corporate deck can be found under the Investors and Media section of immunogen.com. With me today are Mark Enyedy, our President and CEO, Isabel Kalofonos, our Chief Commercial Officer, Anna Berkenblit, our Chief Medical Officer, and Renee Lentini, our interim CFO. Michael Vasconcelles, our EVP of Research, Development and Medical Affairs will also join us for Q&A. During today’s call, we will review recent progress for the business, our financial results, and highlight upcoming anticipated events.

We will be making forward-looking statements based on our current expectations and beliefs. These statements are subject to risks and uncertainties and our actual results may differ materially. Please consult the risks outlined in our press release issued this morning in the Risk Factors section of our most recent annual report on Form 10-K and quarterly report on Form 10-Q, and in our other SEC filings which are available at SEC.gov and immunogen.com. With that, I’ll turn over to Mark.

Mark Enyedy: Thanks Anabel. Good morning everyone and thank you for joining us today. You will have seen this morning’s press release announcing that Anna will be stepping down from her position as ImmunoGen’s Chief Medical Officer to take a well deserved professional hiatus prior to pursuing new opportunities. I would like to take a moment to personally acknowledge and thank her for the essential role she has played in the transformation of this company. We have encountered no small amount of adversity as we navigated the last four years at ImmunoGen. Through it all, Anna rose to the challenge with intellect, grit and good humor. Of particular note, she led the design and execution of the pivotal development program for Elahere that culminated in an FDA accelerated approval late last year, and the unprecedented survival data shared at ASCO in June that has transformed the treatment landscape for patients with FRα+ ovarian cancer.

In parallel, under her leadership, we have also advanced our broader clinical pipeline, including a second pivotal program and built a highly talented development organization. Anna, I value you as a colleague and wish you the very best in your future endeavors. On behalf of ImmunoGen, our collaborators and most importantly patients in need of more good days, thank you. Moving to our second quarter results, since our last call, we’ve made great progress on multiple fronts and achieved a significant milestone for patients and our organization with our confirmatory Phase III MIRASOL trial meeting not only the primary end point of progression-free survival but also objective response rate and most importantly overall survival. This is an unprecedented result in platinum-resistant ovarian cancer, making Elahere the first novel therapy to demonstrate an overall survival benefit versus chemotherapy in a Phase III trial.

With these results now in hand, we anticipate submitting an MAA in Europe and the SBLA in the U.S. both in the fourth quarter of this year. Turning to our commercial performance, we delivered a strong quarter with Elahere generating over $75 million in net sales, more than doubling our Q1 results with increasing breadth and depth of adoption. Isabel will provide more detail on our progress with the launch in a moment. As an initial point, given that this is just our second full quarter on the market coupled with recent developments with both Elahere and the broader ovarian cancer landscape, we have elected not to provide full year guidance for Elahere revenue today. The basis for this decision is this: we simply have not yet accumulated sufficient data and experience to confidently project the trajectory for Elahere over the back half of this year.

The key variables underlying this decision include: evolution of treatment rates, given the compelling efficacy of Elahere, we believe treatment rates may be increasing over historical benchmarks, particularly for later line patients; shifting from prevalent to incident populations which may potentially affect the growth rate of new patient starts; duration of therapy, the claims data, which lagged the market by 90 days or more, are not mature enough for us to provide a reliable forecast of how long patients are remaining on therapy at this time; mix of testing at initial diagnosis versus testing to initiate treatment; and finally, monotherapy versus combination use. We are tapping multiple data sources to assess the percentage of combination use which have yield somewhat disparate outputs up to this point.

Our clinical data suggest the combination use tends to generate higher response rates and longer durations of response, so an accurate assessment of this use is important. You will appreciate that each of these variables can have a significant impact on adoption and adherence. To better assess the evolving market here, we have commissioned a demand study with the goal of increasing our confidence and assessing trends and the growth trajectory for the product. In addition, our existing vendors are updating their databases and we are evaluating additional sources to gather more insights into the market. We look forward to updating you on our progress on these activities during subsequent calls. In terms of ongoing development, we are advancing our efforts to move Elahere into broader patient populations and to position it as the combination of choice in ovarian cancer.

We look forward to our next milestone for the Elahere program with ORR data from our PICCOLO trial expected before the end of the year. Moving to our PVEK program, we’ve completed enrolment in the pivotal de novo patient cohort of the CADENZA trial and expect top line data in 2024. In addition, we progressed our 802 trial of PVEK in combination with VEN/AZA for newly diagnosed AML patients and look forward to reporting data from these frontline cohorts at ASH later this year. Looking at the rest of the pipeline, IMGC936 and IMGN151 are progressing and we remain focused on reinvesting in our research capabilities and expanding our pipeline. Together with a strong balance sheet bolstered by our follow-on offering, our progress over the first six months of the year has positioned us well to create meaningful value for our patients and our shareholders in the second half of 2023 and well beyond.

With that, I’ll turn the call over to Isabel to cover our commercial progress. Isabel?

Isabel Kalofonos: Thank you Mark. We continue to successfully execute across the four launch imperatives as we work to position Elahere as the standard of care for folate receptor alpha-positive ovarian cancer. In the second quarter, we generated $77.4 million in net sales. We are very pleased with another strong quarter of performance and believe this is due to the combination of factors, including the solid execution of the commercial teams, [indiscernible] engagement by our medical team, increased breadth and depth of adoption driven by recognition of the benefits this novel treatment brings to patients with advanced ovarian cancer, and the compelling MIRASOL data increasing awareness and interest from both patients and physicians.

Uptake in the quarter continues to be broad and deep with a significant percentage of accounts with repeat orders complemented by consistent ordering from new accounts. While academic institutions comprise our largest customer, roughly 55% of orders during the quarter came from non-academic institutions and community-based oncology groups versus 70% in first quarter. We anticipate the mix of orders to continue to shift with an increasing percentage coming from academic accounts as satellite centers or major academic institutions start infusions. Regarding testing in response to the continuous strong demand for the folate receptor diagnostic test, additional labs are actively being certified to run the test. As of the end of the quarter, we had 33 labs comprised of 16 centralized labs and 18 in-house labs fully certified, with 15 additional labs in the process of evaluation.

Of note, as testing becomes more decentralized, we’ll have decreased visibility into the number of tests performed. Based on the information visible to us, we estimate that roughly 11,800 tests have been performed launch-to-date through the end of June, with a significant percentage of these tests being for newly diagnosed patients. In addition, the folate receptor alpha-positive rate remains between 35% and 40%, in line with our expectations. Moving onto access, we continue to be very pleased with how [indiscernible] payors have included Elahere in coverage policies aligned with our label. We ended the quarter with roughly 95% of both Medicare and commercial lives covered. Lastly, our customer [indiscernible] remains highly active. As at the end of June, our commercial team has engaged roughly 90% of the priority targets and our medical affairs team continues to provide a full suite of support to ensure positive physician and patient experiences.

Reports from the field consistently relay into [indiscernible] feedback from clinicians regarding their experience with Elahere, which is a testament to our customer and health professional sales organization. In summary, we are very pleased with our performance and look forward to carrying this momentum into the second half of the year. With that, I would like to turn the call over to Anna to provide additional color on the MIRASOL data and our ongoing development program. Anna?

Anna Berkenblit: Thanks Isabel. Before I get into my update, thank you Mark for your kind words at the top of today’s call. It has been a pleasure and a privilege to serve this organization. I take immense pride in having been part of this leadership team and having built a clinical development team comprised of top talent that executed effectively during a global pandemic, leading to the accelerated approval of Elahere with a broader than anticipated initial label and the first-ever overall survival benefit for a novel therapy in platinum-resistant ovarian cancer. What we have done together is remarkable. Thank you for the opportunities you have given me and for your leadership. Now moving onto our review of the clinical programs, we were thrilled that shortly after we press released the top line data on May 3, Dr. Kathleen Moore was able to present the key efficacy and safety results from the confirmatory MIRASOL trial in a late breaker oral presentation at ASCO in early June.

Since then, we have continued to engage with stakeholders across the ovarian cancer community, and the enthusiasm for these data and the broader mirvetuximab program is high. As a reminder, MIRASOL is the randomized confirmatory Phase III trial of mirvetuximab versus investigators choice of chemotherapy, weekly paclitaxel, peglyated liposomal doxorubicin, or topotecan in patients with platinum-resistant ovarian cancer whose tumors express high levels of folate receptor alpha and who have received up to three prior regimens. The trial was a resounding success and we are pleased that our compelling efficacy data with an unprecedented overall survival advantage were complemented by a consistent safety profile aligned to our prior clinical trial experience.

Starting with safety, the AE profile continues to consist of predominantly low grade ocular and gastrointestinal events with no new safety signals identified. Notably, compared with chemotherapy, mirv was associated with lower rates of grade three or greater treatment-emergent adverse events, serious adverse events, and importantly a lower rate of treatment-emergent adverse events leading to discontinuation of study drug. On the primary efficacy end point of progression-free survival by investigator, MIRASOL achieved a hazard ratio of 0.65 and a P-value of less than 0.0001, representing a 35% reduction in the risk of progression of death for the Elahere treated population compared with chemotherapy. The key secondary end point, objective response rate, was also highly statistically significant.

On the mirv arm, ORR was nearly triple compared to chemotherapy at 42.3% with 12 complete responses, compared with 15.9% and no complete responses on the chemotherapy control arm, as reported by investigators. PFS and ORR results by blinded independent central review were concordant with investigator assessment. Turning to the most meaningful clinical end point, overall survival, with 204 events reported Elahere demonstrated a statistically significant improvement in survival compared to chemotherapy with a hazard ratio of 0.67 and a P-value of 0.0046. This corresponds to a 33% reduction in the risk of death with Elahere compared to chemotherapy. The median overall survival with Elahere was 16.46 months compared with 12.75 months on the chemotherapy control arm.

As Mark noted earlier, Elahere is the first drug to demonstrate an OS benefit in a Phase III trial in platinum-resistant ovarian cancer. Quite simply, these data are practice changing. Let me now turn to the broader mirvetuximab development program, which has the potential to meaningfully expand the Elahere label by moving into platinum-sensitive disease and positioning mirv as the combination agent of choice in ovarian cancer. Specifically, we are progressing three studies. The first is PICCOLO, a single arm Phase II trial evaluating mirv monotherapy in folate receptor alpha-high platinum sensitive ovarian cancer. Enrolment was completed in January and we anticipate sharing ORR data by the end of this year with duration of response data expected in 2024.

The second is GLORIOSA, our Phase III trial evaluating mirv plus bevacizumab maintenance versus standard of care bevacizumab maintenance in the second line platinum-sensitive setting. This study levers our robust mirv plus bev data in the treatment setting, which led to NCCN Compendium listing for mirv-bev in platinum-resistant ovarian cancer into the platinum-sensitive maintenance setting, where patients may stand to benefit from even longer durations of therapy. The third is Trial 420, a single arm Phase II trial evaluating mirv plus carboplatin, followed by mirv continuation in platinum-sensitive ovarian cancer patients with low, medium or high levels of folate receptor alpha expression. Both combination trials, GLORIOSA and Trial 420, are enrolling in the U.S. and are getting going in Europe.

Moving to our second pivotal program, we presented data from an interim analysis of the Phase II CADENZA trial of PVEK in patients with frontline and relapsed refractory BPDCN at the EHA conference in June. PVEK demonstrated encouraging clinical activity and tolerability, especially in light of the toxicities of available therapies. In the frontline setting, we observed a composite CR rate of over 70% and a median duration of response of over 12 months. In the relapsed refractory setting, which included patients previously treated with tagraxofusp, we observed a CCR rate of 20% and a median duration of response of over seven months. Commensurate with the increasing awareness of the potential of PVEK in this ultra-rare indication, we are pleased to share that we have completed enrolment in the pivotal frontline de novo BPDCN cohort of CADENZA and anticipate top line data in 2024.

For our 802 trial of PVEK in combination with venetoclax and azacitidine in frontline AML, we have enrolled 25 patients in both the venetoclax 14-day plus and the 28-day minus triplet cohort. These data will help us optimize the duration of venetoclax for the triplet and guide pivotal development in frontline AML. We look forward to reporting data from these cohorts at ASH later this year. As for our earlier stage assets, on IMGC936, our first-in-class ADAM9 targeting ADC in co-development with MacroGenics, enrolment progressed in our non-small cell lung cancer expansion cohort and we plan to provide an update after the protocol-specified interim analysis is completed, which we expect later this year. Lastly, we are progressing our Phase I trial of IMGN151, our next generation anti-folate receptor alpha targeting ADC, to address a broader range of folate receptor alpha expressing tumors.

Initial exploration is in ovarian and endometrial cancers and dose escalation is proceeding as anticipated. In closing, I want to thank all my ImmunoGen colleagues for their ongoing commitment to delivering more good days for patients with cancer. I will cherish my time with this business both professionally and personally. As to what’s next, I look forward to spending time with my family, continuing my board work, and pursuing consulting in the coming months while I watch ImmunoGen’s bright future unfold. With that, I’ll turn the call over to Renee to cover our financials. Renee?

Renee Lentini: Thanks Anna. For the second quarter of 2023, we generated $83.2 million in revenue, including $77.4 million in net product sales of Elahere and the remainder from non-cash royalty revenues. Operating expenses were $86.4 million, comprised of $50.1 million of R&D expenses and $36.4 million of SG&A expenses. In May, pursuant to an equity offering, we further strengthened our balance sheet, generating approximately $351 million in net proceeds. We ended the second quarter with $572 million in cash on the balance sheet. Our financial guidance for 2023 has been updated and we now expect operating expenses between $350 million and $355 million. This increase reflects greater spending in support of Elahere, including preparations for a launch in Europe in addition to expanding our research capabilities and pipeline.

Revenue guidance excluding Elahere sales remains unchanged at between $45 million and $50 million. We expect that our existing cash and cash equivalents together with anticipated future product and collaboration revenues will fund operations for more than two years. With that, we’ll open the call for questions.

Q&A Session

Operator: [Operator instructions] The first question comes from John Newman with Canaccord. Your line is open.

John Newman: Hi guys. Thanks a lot for taking my question. Anna, first I just wanted to say congrats on all the great work at ImmunoGen. You’ll certainly be missed, and they say that the best companies in biotech are the ones that can execute the clinical studies near perfect, and ImmunoGen is certainly included in that bucket. Just had one question, which is we know that mirvetuximab in MIRASOL was tested in patients with FRα-high confirmed by three-plus expression level. Just curious if you can talk about whether you expect mirv, or I should say Elahere now, will be used in patients with two-plus expression levels, and perhaps if we’re seeing that at the moment. Thanks.

Anna Berkenblit: Thanks John. Thank you for your kind words. Just to clarify the definition of FRα-high expression by our companion diagnostic is at least 75% of tumor cells at least two-plus positive by immunohistochemistry staining, so two-plus and three-plus. That comprised between 35% and 40% of all ovarian cancer patients and the commercial testing has performed as we’ve seen in clinical trials. We have previously explored mirvetuximab in patients with lower levels of FRα expression as monotherapy – you can recall from FORWARD 1, and we know from that study that patients with medium levels of FRα expression, which is at least 50% of cells, so median is between 50% and 75% of cells with at least two-plus expression by immunohistochemistry, and that encompasses about another 20% of ovarian cancer patients.

We know that they do about as well with mirvetuximab as with investigator choice chemotherapy, based on a post hoc exploratory analysis, and certainly based on that data as well as some preclinical data that we have showing synergy with various agents, we are exploring patients with lower levels of FRα expression in our combination strategies. We also know that when we combine mirvetuximab with bevacizumab across a broad range of FRα expression, so low, medium and high, low being at least 25% to 50% of cells with at least two-plus expression, that we get very nice data that were published earlier this year in the Gyn Onc Journal, and that led to Compendium listing for mirv plus bev for patients with low, medium or high FRα expression, and that encompasses about 80% of ovarian cancer patients.

Looking to the future, we’re also combining mirv with carboplatin in patients with low, medium and high FRα expression in our 420 study, so our initial approval in patients with high FRα expression for mirv monotherapy is just the beginning.

John Newman: Great, thank you. If I could ask one quick additional question, on combination with bevacizumab, just curious if you’re seeing anything at the moment from your data with regard to, perhaps, uptake there in combination with [indiscernible]. Thanks.

Mark Enyedy: Yes, the answer is yes. When we look at the claims data, and I’m sure we’ll have lots of questions on that, it’s early days, but we absolutely do see combination use as part of the claim set, and the feedback that we get anecdotally certainly supports that.

John Newman: Thank you.

Operator: Please stand by for the next question. The next question comes from Michael Schmidt with Guggenheim. Your line is open.

Michael Schmidt: Hey guys, thanks for taking my questions, and congrats on another very strong quarter. Let me just add my congratulations to Anna for all the success at ImmunoGen. You will be missed obviously by many. The question on the evolving testing paradigm. [Indiscernible] we’ve heard that many of the large academic institutions prefer in-house testing over using the centralized labs that you have established, and I was wondering if you can confirm that and how many of the big centers are not yet certified for in-house testing in the U.S.

Isabel Kalafonos: Thank you. As you know, we had a very strong demand for testing so far, and in the second quarter we surpassed 11,400 tests, and now we are over 13,000 tests – we can confirm that as of today. When it comes to the labs, we have 33 labs that are operational, of which 15 are academic centers. In those centers, we had less visibility about the data that we have. In process, we have another 15 labs that are in the process of being certified, so we continue to see very strong testing, as I just mentioned.

Michael Schmidt: Okay, thank you. Regarding the PICCOLO study, how should we think about the regulatory bar for response rate in that platinum-sensitive setting? Is the bar similar to that that was applied to the SORAYA study, for example, or is it higher or lower?

Anna Berkenblit: I think the bar is to be determined, Michael, because the landscape has evolved with the incorporation of PARP-inhibitor maintenance, particularly now in the frontline setting, and we know from multiple studies that unfortunately PARP maintenance therapy seems to induce resistance to subsequent DNA damaging agents, particularly things like platinum, as well as topotecan and doxo, which also are DNA-damaging agents. But what that means is that patients who are technically platinum sensitive post a PARP inhibitor, in other words they’ve recurred greater than six months after the last dose of their last platinum, may not be as sensitive to platinum as they were previously. That coupled with the fact that there are no robust randomized Phase III level one evidence studies in later line platinum-sensitive disease to begin with, even in the pre-PARP days, we don’t really know what the benchmark is.

That said, more studies are coming out, again showing that more platinum for these post-PARP patients may not be in their best interests, so the way we’re thinking about it is that the higher the response rate, the longer the duration of response in PICCOLO, the easier the conversation will be with regulators about what an appropriate bar would be for us to beat. At this point, we’re really excited about the PICCOLO study, we’re on track for ORR data before the end of the year. We know these patients are doing well and so we will anticipate having DOR data next year.

Michael Schmidt: Okay, thank you. Then last question, just regarding the 802 study of PVEK in AML, can you just remind us of the two cohorts that you’re running in frontline and what you’re looking for here in the ASH data that would support initiation of Phase III trials? Is it a primary look at safety or are certain efficacy measures important as well for you?

Anna Berkenblit: Just as background, ven-aza has become the new standard of care for unfit frontline AML patients, which is about all of–about half of AML patients, although even the definition of unfit is being evolved so that more patients do get ven-aza. That said, it’s a tough regimen in and of itself at the labeled doses and schedule. Many compounds have tried to combine with ven-aza and have failed because of just excess toxicity of the triplet. Ours is not one of those. We are one of the few that has been able to combine successfully, and so we started out, I would say in an appropriately conservative manner to protect patient safety with what’s called a 14-day plus regimen of venetoclax in the relapsed refractory setting.

We proved safety of that regimen and moved it up into the frontline setting, where we had 10 patients’ worth of data we presented at ASH last year with a 14-day plus regimen. In conversation with FDA, FDA made it clear their expectation is that we combine with a standard or a labeled dose and schedule of ven-aza, and venetoclax is generally given per label up to 28 days in a row. But the problem is many patients can’t tolerate that extended duration of venetoclax because of profound myelosuppression, and so we have basically completed accrual now in 25 patients using what we call the 14-day plus and 25 patients in the 28-day minus regimen. What happens is for each of these, patients do get a bone marrow around 14 days in the 14-day plus, or later in the 28-day minus regimen, and if patients have residual blasts, they continue with the venetoclax.

If the bone marrow showed no blasts, then they stop the venetoclax because, at that point, venetoclax would just be adding toxicity. We’re going to combine the data from those sets to understand the safety of the triplet, understand the efficacy both in terms of CR rate as well as MRD, or measurable residual disease rate, and both safety and efficacy will guide how we’re thinking about a frontline pivotal triplet AML registrational trial, so stay tuned for ASH.

Michael Schmidt: Great, super. Thanks for all the detail, Anna.

Operator: Please stand by for the next question. Our next question comes from Peter Lawson with Barclays. Your line is open.

Peter Lawson: Great, thank you so much. Just wanted to offer my congratulations, and also wanted to mention it’s been a pleasure talking to you, Anna, and best of luck with the next steps. Just as we think about the duration of use, I wonder if you could kind of provide some color. It sounds like there’s a range you’re getting from your estimates, but if there’s anything you can give around that range for the duration of use, kind of the line of therapy and whether you’re mostly seeing it in combination with bev.

Mark Enyedy: It starts with the claims data, right, and so it trickles in. As we gather those data, so for example if you look at–you know, the last claims data I saw was earlier this month, we had four patients reported, right, and so it’s a little hard to think about extrapolating that over the back half of the year when you sort of have to back up the 90 days and try and accumulate the totality of the experience and then project that forward. The duration of therapy falls exactly into that bucket, which is it’s difficult to ascertain at this point when we look at the accounts versus the claims data, to assess what’s happening commercially with the brand at this point. Our experience that we’ve related is with the SORAYA data, where it’s complete, where we saw a mean number of cycles of seven in that population.

That population certainly was the most heavily pre-treated that we’ve observed in our clinical experience, and so I think that’s a baseline for duration of therapy. What we can say, Peter, generally is that in the initial stages of the launch, the claims data indicate that we were starting in later line patients. Particularly with the MIRASOL data, what we see is movement into earlier line patients, which we think will correspond with longer durations of therapy generally. In addition to that, what we see are combination use. The results from that, as we shared in the prepared remarks, for today are disparate across the databases, so we’re making a concerted effort to try and reconcile those databases and supplement that with a demand study in order to get a better assessment of what’s going on.

But it was those factors–you know, as we think about this, the commercial team here has put together essentially a matrix, and on one axis is the impact that it has on revenue and on the other is our confidence level, so when we look at things that have high impact and high confidence, we include there our FRα positivity rate because we’ve run the experiment on over 13,000 tests and have a pretty high degree of confidence in terms of the positivity rate. In terms of duration of therapy, we simply have an incomplete data set when we look over the claims data, and similarly we just see an evolving picture in terms of lines of therapy. Again, it’s something that we are working on aggressively in order to have a very clear view of the market that we could articulate to the investment community.

Peter Lawson: Got you. Your conversations with physicians, does that point into mostly combination use or is it, again, kind of a broad range?

Mark Enyedy: We see a significant percentage. We have physicians report to us in their practices that a significant percentage of the use is in combination.

Peter Lawson: Okay, thanks so much. I’ll jump back into the queue.

Operator: Please stand by for the next question. The next question comes from Etzer Darout with BMO Capital Markets. Your line is open.

Etzer Darout: Great, thank you, and congrats on the quarter, and also would like to echo my colleagues’ sentiments on the contribution, Anna, that you’ve had to ImmunoGen’s story. First question from me, I just wondered if you can maybe talk a little bit about some of the major differences in ovarian cancer treatment or practice, I guess in the U.S. versus some of the major countries in the EU, and what impact maybe those differences could have on the launch trajectory or maybe your overall strategy in Europe versus what we’ve seen early on here in the U.S. Then I have a follow-up, thanks.

Anna Berkenblit: Sure, so I’ll start with practice pattern differences and then turn it over to my colleagues to discuss how that influences our launch strategy in Europe. The one real difference, Etzer, is how and when physicians use bevacizumab, or Avastin. We’ve known that – you know, it was approved in 2014, 2015, it has three approvals in the U.S. and Europe. It’s approved in combination with chemotherapy in platinum-resistant disease, it’s approved in combination with chemotherapy in recurrent platinum-sensitive disease and then continued as maintenance, and in the frontline setting in combination with chemotherapy and continued as maintenance. The problem with bev is that it’s never shown an overall survival advantage in any of these settings except in a core prognosis, high risk subset in the frontline setting, so these are patients who present with stage 4 disease, or parenchymal metastases – they have ascites, they’re sub-optimally de-bulked.

In that subset, the addition of bevacizumab does improve overall survival, so particularly in Europe, oftentimes bevacizumab is only reimbursed, or the patients only have access to bevacizumab in that frontline poor risk setting, and in fact that kind of bore out in our SORAYA study where the majority of patients were enrolled in the U.S.–excuse me, in Europe, and that study had a higher percentage of stage 4 patients than is typically seen in a relapsed or recurrent ovarian cancer study. Because of that, in Europe a higher percentage of patients in the platinum-resistant setting get single agent chemotherapy, and that’s important for how we’re thinking about Elahere when we get it approved.

Isabel Kalafonos: Yes, and the way this translates for the launch is that the unmet need there is even higher, and the number of patients that would be eligible for Elahere is also higher. Our goal therefore is, as mentioned by Mark, is to file by the end of this year, and we are making significant progress towards the launch. First, we are working on [indiscernible] here on pricing and payors in Europe tend to value overall survival data, so we feel very confident that that will give us a strong initial position there. Second, we are really pleased that we have very solid engagement with [indiscernible] there. As you remember, over 70% of our patients in the clinical studies were enrolled ex-U.S., so those very strong relationships, we’re leveraging that.

We’ll be having two oral presentations at ASCO in Istanbul at the end of September, and also we will present at ESMO, so we’ll continue to have this one-on-one engagement and we’re also partnering with the community in preparation for the launch. Finally, we are ramping up the team towards preparing for execution, and we feel very confident that we will have a successful launch in Europe as in the U.S.

Mark Enyedy: Maybe the only other thing to add there, Etzer, is it’s just a very highly concentrated market, so when we do the market research across both the five largest markets and expanding that into 16 markets, that we see a relatively consistent pattern, which is a small number of centers treat a high percentage of the patients, so when we look at the five key markets, for example, 60-odd centers are treating 80% of the market. This is something that we can address with a modest incremental commercial investment, and particularly given the data that we have and, as Isabel mentioned, the relationships that we have, we expect a very robust launch there.

Etzer Darout: Great, thank you. Then the follow-up was on IMGC936. The market here is paying a lot of attention to another ADC mechanism, the TROP-2, in non-small cell lung cancer. At the interim analysis that you have maybe in the back half of this year, how are you thinking about what the go, no-go is? Is it going to be on response rate, duration of response? Is it maybe PFS? If you could maybe provide a little bit of color on how you’re thinking about the go-forward strategy on that asset. Thank you.

Anna Berkenblit: Sure. IMGC936 is our ADAM9 targeting ADC that–you know, ADAM9 is expressed across a broad array of solid tumors, and we’ve prioritized non-small cell lung cancer based on what we saw early in development, and so we have expanded the first stage of a two-stage design, if you will, to understand the activity of IMGC936 in non-small cell lung cancer. I think the initial hurdle, Etzer, would be just overall response rate or objective response rate in the initial cohort of patients, and at that point that data would guide further expansion into the second stage, at which point we would have a larger data set where we would look at ORR and DOR to assess how we’re thinking about further development. Just in terms of single arm studies and PFS data, typically it’s hard to make robust decisions based on PFS, so it’s typically ORR and DOR data that will guide further decision making.

Etzer Darout: Great, thank you.

Operator: Please stand by for the next question. The next question comes from Boris Peaker with Cowen. Your line is open.

Boris Peaker: Thank you, and I’d like to add my congratulations to Anna specifically and the entire management team for the excellent progress. Maybe my first question is on the testing centers – you obviously mentioned that there has been increasing testing centers being brought online, but how much do you estimate maybe the current revenue being potentially limited, based on the existing testing infrastructure in the second quarter?

Mark Enyedy: Not at all. I mean, we just–testing is simply not a barrier to entry. We do know that the institutions at present have a preference for in-house testing, but that didn’t prevent them from sending tests out to–you know, so before their centers were open, we could see ordering from accounts and testing from accounts that didn’t have in-house testing, and as we’ve mentioned, as time progresses, a number of those institutions are taking it in-house. What I’ll also say, Boris, is we’ve actually had some interesting conversations about this phenomenon as it related to PD1, PDL1 testing, and what we hear is that initially there was great enthusiasm among the academic institutions to take that testing in-house; however, over time that enthusiasm waned to some degree and they began sending their tests back out to centralized labs.

As we’ve discussed, we see the migration in-house over time. Whether that’s a sustainable phenomenon, I think is an open question at this point. But just to be very clear, we’ve done over 13,000 tests launch-to-date, and it has simply not been a barrier to entry.

Boris Peaker: Great, and my second question is in terms of the NCCN guidelines, do you anticipate any future updates incorporating maybe MIRASOL or any other data in the near future?

Anna Berkenblit: Yes, so we anticipate with MIRASOL being the only study to show an overall survival advantage in a randomized Phase III setting for a novel agent. We anticipate MIRASOL could move our Elahere Compendium listing from 2A to category 1, and it would be the only medication in the NCCN platinum-resistant treatment guideline that would have that level of evidence. We also are anticipating that the PICCOLO data could support NCCN compendia for later line platinum-sensitive ovarian cancer for mirv monotherapy, and also we are generating three data sets at this point for mirvetuximab plus carboplatin, the 420 study that is our sponsored study in low, medium and high FRα expressing patients, as well as we are supporting two investigator sponsored trials, a neoadjuvant study and a randomized Phase II study in Germany, led by Philipp Harter, and those data could absolutely support a compendia listing as well.

Isabel Kalafonos: Yes, we also hope that we can move the compendia listing of the combination from 2B to 2A–

Anna Berkenblit: For mirv-bev.

Isabel Kalafonos: –for mirv-bev.

Boris Peaker: Do you have a sense of timing for that?

Isabel Kalafonos: Well, we are aiming to make some changes for the listing of Elahere monotherapy in October, and similarly for the combination of mirv-bev from 2B to 2A.

Anna Berkenblit: Yes, we will work with NCCN around their scheduled meetings.

Boris Peaker: Great, thanks for taking my questions, and congratulations once again.

Mark Enyedy: Thanks.

Operator: Please stand by for the next question. The next question comes from Andy Hsieh with William Blair. Your line is open.

Andy Hsieh: Congrats on another blowout quarter, and it’s been a pleasure working with you, Anna, and wish you the best of luck. I have a question about the strength of the community in non-academic centers. I’m curious if you have a view on that, or any sort of market dynamics you’re seeing there. I also have a follow-up in terms of the R&D in your P&L. Obviously strength from Elahere could fuel your R&D. I was just curious about maybe the near and midterm vision about R&D, what’s in store, what do you expect R&D to look like in the next three years. In terms of P&L, obviously you’re pretty close to breakeven this quarter. I’m just curious if that’s the goal, how do you think about your income statement as Elahere continues to ramp at this just incredible pace. Thank you.

Mark Enyedy: Sure, thanks Andy. I’m going to ask Isabel to start and then Mike to talk about R&D, and then some combination of Renee and I can tackle the P&L.

Isabel Kalafonos: Sure, so we’re very pleased with the strong adoption in both the community and academic centers, and if you remember early in the launch, we thought that the academic centers would start first and community would follow. What we have seen is a very strong adoption in community, and that’s testament to the unmet need and the target profile of the drug. We also see that academics have to follow their normal process – they have to wait for the [indiscernible] committees, they have to wait for [indiscernible] centers, the testing in-house, but they have now started to test and we are very pleased that pretty much all the major institutions are already ordering Elahere. We have additional events that will create additional growth in both.

We have the J-code as of July 1, we have been included in [indiscernible], and we think that that’s going to continue driving the growth in both academic and non-academic institutions. In terms of the mix, we think it will remain relatively similar with more–65% to 75% with more growth maybe coming from academic institutions in the second quarter.

Michael Vasconcelles: Andy, this is Mike. Regarding your question about continued investment in R&D, just to remind you, as Anna’s nicely summarized, we have a broad ongoing lifecycle management program with mirvetuximab. It’s important for us to think about every woman with ovarian cancer that expresses folate receptor alpha to have the right medicine at the right time. That will include investigation of Elahere in platinum-sensitive ovarian cancer – you already heard about that, but I wanted to also remind you of that. IMGN151, which we continue to move through Phase I development and has the potential to broadly impact FRα expressing cancers, not only ovarian cancer but beyond in cancers such as endometrial, non-small cell lung cancer and others.

You’ve also heard about the continued investment of PVEK in frontline AML, and we look forward to those data informing continued clinical development there, and then importantly as a reminder, we have three broad classes of payloads with associated linkers that form the basis of our portfolio – the maytansinoids, the IGN [ph], and importantly acanpathesin [ph] group of compounds that have yet to be formally tested in clinical development, so we look forward to work that’s already ongoing with collaborators to bring forward novel antibodies linkers and test those payloads in a broad swath of cancers. We’re really very committed across the spectrum and look forward to sharing this earlier progress of molecules and research as we move forward, closer to IND.

Mark Enyedy: Andy, as Mike just articulated and we’ve also talked about the expansion globally of Elahere with labeled indications, we do expect to invest heavily in the business in the coming years, so we’ve given cash guidance to say that we’ve got more than two years’ worth of cash and that is a reflection of both the existing balance sheet as well as the strength of the Elahere launch. We aspire to be a fully integrated oncology company. We’re fortunate to have one marketed product and three additional clinical candidates, but our goal is again to expand our preclinical capabilities. We’ve done so incrementally with a number of partnerships, and we look to continue that activity and also rebuild some in-house capabilities as it relates to our core areas of expertise, as Mike has outlined.

The focus is again international expansion for the business supporting the launch, lifecycle management, and rebuilding our preclinical pipeline, so again areas of investment on a go-forward basis.

Andy Hsieh: Great, that’s very helpful. Thank you so much.

Mark Enyedy: Sure.

Operator: Please stand by for the next question. The next question comes from Kelly Shi with Jefferies. Your line is open.

Kelly Shi: Congrats on another great quarter, and also please allow me to add my congrats to Anna. My first question is for the PICCOLO trial, what kind of treatment duration could we expect, and also in the platinum-sensitive setting, is the propulsion of FRR for high patient stain as in the platinum-resistant setting around 35% to 40%?

Anna Berkenblit: Thanks Kelly. Let me address your second question first. The vast majority of patients who have participated in mirvetuximab trials and who are receiving commercial Elahere do so based on archival tumor tissue testing, so patients generally have debulking surgery at the time of diagnosis and that’s when their FRα–that’s when they have tumor taken for FRα testing. The 35% to 40% is true regardless of what setting the patient is in. Going back to your first question about treatment duration for PICCOLO, these are later line platinum-sensitive patients, but we know that platinum-sensitive patients in general do better than platinum-resistant patients, regardless of therapy, although again that does seem to be possibly changing for the subset of platinum-sensitive patients post-PARP who get more platinum.

That said, we anticipate the treatment duration for the PICCOLO study is going to be appreciably longer than, for example, in MIRASOL or SORAYA, so stay tuned.

Kelly Shi: Okay, great. Thanks. Also, for 936 in non-small cell lung cancer cohort, just curious, is it [indiscernible] by the interim analysis applied to a post PD1 setting?

Anna Berkenblit: It’s not specifically in the post PD1 setting, but this is a Phase I study where patients with non-small cell lung cancer have had the appropriate prior therapies and the vast majority, if not all of them, have had a checkpoint inhibitor.

Kelly Shi: Okay, great. Thank you.

Operator: Please stand by for the next question. The next question comes from RK with HC Wainwright. Your line is open.

Swayampakula Ramakanth: Thank you. Congratulations, and Anna, congratulations, and nothing like signing off on a high note. I will certainly miss you, especially on all the helpful conversations that we have had in the last few years. Additionally, both my daughter and I am going to miss you on our Zoom calls, you know, future Zoom calls with ImmunoGen. In terms of expectations at the ESGO, what additional analyses could we see at that conference?

Anna Berkenblit: Yes, ESGO is in Istanbul this fall, I think it’s the end of September, and we have two abstracts that have been accepted for oral presentation in terms of additional subset analyses from MIRASOL. The ones that we’ll be focused on this initial array of [indiscernible] are the subsets based on number of prior lines of therapy, as well as patients who have or have not had a prior PARP inhibitor, so those are the key subsets because physicians are quite interested to understand where to position Elahere in the treatment paradigm. I think these subset data will be very informative for them.

Swayampakula Ramakanth: Thanks Anna. Also, as you plan to file the MAA in Europe during the next six months, what–how should we think about the commercialization there? Would this be directly by yourselves or would you–are you seeking a commercial partner there? I’m just trying to understand the commercial structure that could be set up in Europe.

Mark Enyedy: Sure RK, so we plan to go direct in the five largest markets, and there’s a pretty leveraged approach that one can take by clustering, so we can add 11 additional markets, so we expect to be direct in 16 markets in Europe. Of course, that takes place over time just given the cadence of reimbursements in those markets, and then we would use distributors outside of what we’d call the EU16.

Swayampakula Ramakanth: Thanks Mark. Thanks for taking my questions.

Mark Enyedy: Sure.

Operator: Please stand by for the next question. The next question comes from Asthika Goonewardene with Truist. Your line is open.

Asthika Goonewardene: Hey guys, good morning – Asthika from Truist here. Thank you for taking my questions. I’m going to also offer my congratulations on a very elegant execution to the team, and on a personal note to Anna. We only launched coverage nine months ago, but in that limited time, it’s been a pleasure to get to know you, Anna, and appreciate your discipline. Wish you the best in your next adventure. Just a couple of quick mop-up questions for us here. You’re clearly getting a nice boost from what one might call off-label use in the U.S., but in general in oncology, do you think off-label use in Europe can be as strong as you do get in the U.S, or do you think the doctors over there in Europe are going to stick to the script a bit more?

Second question is I’d like to test and see if we can get any sort of color on timelines for GLORIOSA. I know that’s one of the next things that people are going to be looking at as well here after PICCOLO. Then lastly, Mark, when do you feel confident that you’ll get enough of a sample from the claims data to give us some guidance on a product level basis for Elahere? Thanks guys.

Mark Enyedy: Sure, so as to the first question, it’s not so much the physicians that make the decisions with respect to the use outside the label in Europe as just the reimbursement there, and it’s very stringent. There are very limited instances where you can see off-label coverage there, and that’s distinct from what we see in the U.S. market, particularly where drugs are listed in the compendia, as we’ve seen with Elahere both in terms of no restriction on prior lines of therapy and the combination with Avastin. They’re fundamentally different markets as it relates to reimbursement, and that’s what drives it, so the expectation should be that use there will be within the label approved by EMA. In terms of GLORIOSA, early days, so we haven’t given any guidance there. Then sorry, your third question was–?

Asthika Goonewardene: [Indiscernible]

Mark Enyedy: Yes, yes. I think it needs to be driven by two things. The two key factors that are most opaque at this point are duration of therapy and, really importantly, discontinuations, which of course are related to duration of therapy. I think it’s going to be some time before we get to that. I certainly would expect that by the beginning of next year, when we all get together at JP Morgan or in conjunction with our year-end earnings call, to have a reasonably clear-eyed view on that. As I say, we’ve got this demand study going and we’ll see what that tells us as well.

Asthika Goonewardene: Great, thanks for taking my questions, guys.

Operator: Please stand by for the next question. The next question comes from Joe Catanzaro with Piper Sandler. Your line is open.

Joe Catanzaro: Hey guys, thanks for squeezing me in. Congrats on the nice quarter, and congrats to you, Anna, on a nice tenure here. Maybe just two from me. I’m wondering if you had a sense around the cadence of new patient starts in 2Q and whether it was evenly distributed or not, and relatedly, whether you saw an uptick in usage in June and July following the MIRASOL presentation at ASCO. Then my second question, Mark, you mentioned the difficulty in modeling prevalent to incidence. I’m wondering where you think you are in that curve and what metrics you’re looking at, that will give you an indication that you’re shifting to majority usage in the incident population. Thanks.

Isabel Kalafonos: Okay, so when it comes to the incidence versus prevalence population and how we are looking at the patient data, we have longitudinal data on claims and the issue with that, frankly, is that it’s lagging 90 days, so we have very few patient data at this point. We get it back from DRG by lines of therapy, and we are tracking that and we think we need additional time before we can tell you what is happening there. We have seen, though, that the MIRASOL data does have an impact in terms of uptake of more patients, as you saw in the second quarter, and we also can see early signs from the claims that patients are moving to treat in earlier lines of therapy, pretty much at signs of first resistance.

Joe Catanzaro: Okay, thank you.

Operator: Please stand by for the next question. The next question comes from Jonathan Chang with Leerink Partners. Your line is open.

Jonathan Chang: Thanks for taking my question. Congrats on the quarter and best wishes, Anna, on next steps. Just one question from me. How are you guys thinking about potential business development opportunities for Elahere and strategic interest broadly? Thank you.

Mark Enyedy: Yes, so what we’ve done with Elahere is we’ve decided to go direct in the largest markets, where we can with modest investment support a robust launch, so starting here in the U.S., as we’ve talked a bit on this call, going to Europe. In markets where that’s not feasible, for example in China, we’ve elected to go with partners, and we’re exploring partnerships for Japan in a similar vein. Outside of that, I think we plan to use distributors because we think that with a time-limited distribution agreement, we can call back those when we’re ready to move to a direct model. In terms of more broadly business development, as we’ve talked, we want to rebuild the front end of the pipeline, and some of the deals that we’ve done – OBT and more recently a very small deal with ImmunoBiochem, again to build the front end of the pipeline, so.

We’re very excited about this business. We love the momentum that’s been generated this quarter in the marketplace, and that’s paired very nicely with data, progress with the pipeline, so we’re excited about our long term prospects here.

Jonathan Chang: Got it, thank you.

Operator: I show no further questions at this time. I would now like to turn the call back to Mark for closing remarks.

Mark Enyedy: Great, well thanks to you all very much for joining us today. We had a very strong first half. We do expect to carry this momentum for the remainder of the year as we look to deliver more good days for our patients, and importantly create value for our shareholders. We look forward to keeping you updated on our progress as we move through the second half. Thanks again for your time today.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.