ImmunoGen, Inc. (NASDAQ:IMGN)
Goldman Sachs 34th Annual Global Healthcare Conference Call
June 13, 2013 12:20 p.m. ET
Gregory Perry - Executive Vice President and Chief Financial Officer
Navdeep Singh - Goldman Sachs
Navdeep Singh - Goldman Sachs
Good morning everyone and thank you for attending our annual global healthcare conference. I am Navdeep Singh, one of the biotech analysts at Goldman Sachs, and it's my pleasure to introduce our next presenter Greg Perry, Executive Vice President and CFO of ImmunoGen. We encourage questions from the audience after Greg has finished with his presentation. For those on the webcast, if you have any questions, please feel free to email me at firstname.lastname@example.org, and I will ask the quarter on your behalf.
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So with that, it's my pleasure to introduce Greg from ImmunoGen.
Thank you, Navdeep. I would like to just start by thanking Navdeep and Goldman Sachs for giving this opportunity to talk to you about ImmunoGen. Just as a quick reminder, there are certainly risks associated with investing in ImmunoGen. I will be making a series of forward-looking statements, and I would encourage each of you to read more about the risks associated with investing in ImmunoGen as we have disclosed more fully in our Form 10-K.
This is a very exciting time for ImmunoGen. If you think about what's happened in this past calendar year with the approval of Kadcyla, it is now commercial and selling in the U.S. This is an incredibly important event for patients, but also certainly for ImmunoGen employees and ImmunoGen shareholders. Tremendous validation of our TAP technology and ADC approach, and certainly a potential for significant economics in the form of royalties going forward.
In addition to that, what management has been spending most of its time on for the past three years is aggressively developing a proprietary pipeline. We have three programs in the clinic, soon to be four. They are all wholly-owned, and we think this represents a significant opportunity for value creation. In terms of the company itself, we are in a good financial position. Most recent financial disclosures were, we had cash of $206 million, we have no debt, and we are partnered with some of the leaders in the field of oncology, and I will talk about that in a bit.
First, I will talk about Kadcyla. Kadcyla employs ImmunoGen's proprietary TAP technology, and it's an ADC, which means it's an antibody that is linked to a highly potent cytotoxic agent. In this case here, the antibody is Genetech's Herceptin or trastuzumab antibody. It accomplished a number of firsts with its approval in the U.S. in February first, it's a first ADC approved for such a prevalent indication. In addition to that, it is a solid tumor and it's the only ADC to gain full approval in a large, randomized study.
As I mentioned, this is really a tremendous event for patients. We will talk a little bit about the efficacy and safety profile of it in a moment, but certainly for ImmunoGen's shareholders, this represents a great validation of our approach and our TAP technology and also a potential for a cash stream going forward with this royalty. And for Roche, this has turned out to be a tremendous product for them, and we believe they have positioned it to replace Herceptin, and it really epitomizes the concept of personalized medicine as we are targeting cancer cells that express a specific antigen.
So, commercialization has begun for Kadcyla. The label was pretty much as expected. Patients no longer responsive to Herceptin plus chemo, on the right hand side in the table you can see a recent publication from Roche that talked about the number of patients in the U.S., second line and later with some 14,250 and some first line about 8,000 patients. So, a very significant market. Again, Kadcyla really demonstrated the promise of Immunogen's TAP technology and that is to be more efficacious than standard of care, but with an improved side effect profile, so more tolerable, and I think that that’s really been one of the dramatic outcomes from the study and then in the approval.
Looking at the registration program and development program for Kadcyla, certainly we expect to see approvals expanding rapidly geographically. We are anticipating an approval in Europe later this year and Japan next year, and there is certainly even potential for more indication approvals. We see it being used longer in the metastatic setting given its performance, and I think really the price speaks to the value that’s perceived in Kadcyla. It was priced at some $9800 per months as compared to Herceptin at $4500 per month.
Now looking at Immunogen's technology and looking at the power behind Kadcyla, basically our TAP technology comprises a portfolio of highly cytotoxic agents, and it seems odd at first but it's actually quite difficult to identify and create agents that are as toxic as needed in an ADC format. We also have a portfolio of linkers designed specifically to ensure stability, while the ADC travels through the plasma but yet to have certain release properties inside individual cancer cells. And lastly in terms of unique experience that ImmunoGen has from being in this area for so long, we have developed a lot of insight into what makes an outstanding ADC target as well as what makes an interesting antibody as a targeting vehicle as well as a lot of insight in terms of the design of experiments to step-through to develop and optimize a product candidate for a specific cancer cell.
Taking a look at our proprietary program, TAP compounds in general are being developed for a vast array of cancers, so not only solid tumors but also liquid tumors. Certainly Kadcyla in metastatic breast, but we are also seeing development in areas of lung, B-cell malignancies, gastric, ovarian, multiple myeloma, and the list is quite extensive. So, we think the opportunities for ADC is to have a meaningful impact on treating cancer are quite significant. Turning to our wholly owned program, and as a I mentioned, we have three programs in the clinic today with a fourth expected to enter later this year.
And here on this graph here, you can see 853 in terms of anticipated events. First clinical data was presented at ASCO just recently. I will have an opportunity to step you through that. And then we are anticipating expansion cohorts accruing with data reporting on that mid next year. In terms of 901, that’s currently in Phase II. We are anticipating completing of enrollment in that Phase II in the second half of 2013 with an opportunity for presentation of data in mid-2014. In 529, which I will talk about in more detail, first clinical data is expected at the back half at the end of this year. 289 is targeting EGFR and that’s again an anticipated IND submission in mid-2013, so eminently in first clinical data in 2014.
So let's talk about 853. So IMGN853 is being developed with a focus on ovarian as well as other over expressing folate receptor alpha cancers. So, this is an ADC that’s targeting folate receptor alpha. It has a fully binding antibody to which we are attaching DM4. And in this case here, the linker has been specifically engineered to try to confound multidrug resistance that is seen over time in most cancer cells. Some of the folate over expressing cancers include ovarian where there are some 22,000 diagnoses each year and some 14,000 deaths. So, a significant unmet medical need. As well as endometrial with about 8,000 diagnoses and some 8,000 deaths each year, and then non-small cell lung cancer where we see a much higher incidence of some 90,000 diagnoses per year. This is also a cancer that’s often prevalent in women as well as people under 45.
So we have designed that trial to be basic dose escalation phase. That was the data that we reported at ASCO, and then moving into what will be four expansion cohorts. And those expansion cohorts are designed to deliver a signal that if the signal is strong enough, it could potentially move this program into pivotal trials quite rapidly. The first expansion cohort is in platinum-resistant ovarian cancer, and this is again looking for an efficacy signal via RECIST criteria. The second cohort is relapse refractory. We are also going to be incorporating a number of different aspects in this trial associated with biomarkers, assessments, as well as looking for signals of activity. And the third cohort is looking at relapse refractory adenocarcinoma non-small cell lung cancer. It will also be an element of biomarker study there. And then lastly, given some of the signals we saw recently in the dose escalation phase, we will be looking at relapse refractory endometrial.
Of importance here as well is those expansion cohorts will be focused on high expressers, so three plus expressers of folate receptor alpha. So, turning to the data that we just reported at ASCO and just as a reminder, this was data from the dose escalation phase. So, we had a variety of cancer types as noted here. We had 11 ovarian patients, 5 endometrial patients, and we had 2 renal cell patients. And target expression was, as displayed here, three-plus expressers were 11 of those patients, two-plus expressers were 6 of those patients, and we had one zero- or one-plus expresser. And then in the dose escalation phase, which began at 0.15 mg/kg and achieved 7.0 mg/kg, we had a range of patients dosed at a variety of levels.
Dose limiting toxicity was seen at 7 mg/kg. It was [ocular]. And just as a comparative, it's actually quite a significant dose, Kadcyla's dose on an equivalent basis, about 4.8 mg/kg. We saw activity in three patients. Those who were 3 plus expressers, hence the focus on high expressers and we saw those at some of the higher doses. The first signal that we saw was in an ovarian cancer at 3.3 mg/kg and we saw a confirmed CA125 response there which had stable disease for some six cycle. That was a heavily pretreated patient with some 12 prior treatment regimes three of which were platinum. We started signaling in endometrial cancer patient at 5 mg/kg with a [non-confirmed] PR after four cycles with the CA125 decrease and two prior taxane platinum regimens.
And we saw the third signal in ovarian cancer patient which was started at 7 mg/kg and that dosed reduced to 5 with a non-confirmed PR after cycle and the CA125 decrease as well. So very exciting data for an early stage dose escalation trial with lot of anticipation to moving to the expansion cohorts.
Turning to 901. So 901 is a product candidate that’s focused on CD56 expressing cancers. In this case here we are very much focused on small cell lung cancer in frontline. It's also expressed on Merkel cell carcinoma, a small-cell cancer of the cell, and multiple myeloma as well as a number of other cancers. It comprises of a CD56 binding antibody along with DM1 as the cytotoxic agent. And it's in Phase II testing for small cell lung cancer in the frontline. And we think it's a good candidate for a combination with Etoposide Carbo as it hasn’t been associated with significant myelosuppression
Small cell lung cancer is a prevalent cancer with some 59,000 diagnoses per year. About 100% of these cancer is expressed CD56. And you can see here it's a very significant unmet medical need with less than one year of survival of diagnosis of metastatic disease. The current frontline generates responses but not durable responses and folks just have a PFS of just 5.5 months and overall survival of 9 to 11 months. So a real need and real opportunity we think for 901 in this setting.
So taking a look at some of the activity that we have seen with CD56. And we saw some activity as a single agent. We saw some durable remissions in Merkel cell carcinoma which were quite remarkable, which caught a lot of attention. We also saw activity in small cell lung cancer in second line and later therapies. And this was quite significant to clinicians who reviewed the data because of the difficulty of getting any type of response in these relapsed patients. In terms of the dose ranging portion of the study of ['07], we also saw with the Etoposide Carbo, responses we would expect in chemo naïve patients who we start 2 PRs. But interestingly we also saw responses in platinum resistant and refractory patients where we saw 2 PRs with N of 7.
The graph down below demonstrates that some level of activity here as in the cancerous cells that we would expect to see some activity. Those expressing CD56 often or where we would expect to see CD56 expressed, for instance small cell lung cancer, we did see some definite activity. So a quick word about the trial. So the trial itself is called NORTH. It's a Phase II trial. We will have a total of about 135 patients accrued. Two for one randomization between 901 plus Etoposide Carbo compared with the standard of care which is Etoposide Carbo only. The primary endpoint is progression free survival and other endpoints include overall survival. The expectation is we will complete accrual in second half of this year and we will have data readout mid next year.
Turning to 529. 529 is a product candidate that’s targeting CD37 antigen, which is principally found on B-cell malignancies. So we are focused on non-Hodgkin’s lymphoma, CD37 and CD20 are fundamentally found on same NHL subtypes. It's a fairly prevalent disease with some 70,000 and 16,000 [COL] diagnoses each year. On the graph on the right you can see that the antibody itself which is depicted in red, is actually more active than Rituxan. And then this synergistic effect in the ADC format. So you can see 529 is significantly stronger killer than the naked antibody. And this is currently in a Phase I trial and NHL, open to the most prevalent subtypes with an expectation for data at the end of this year.
289 is the program that we are anticipating an IND mid this year and the start of Phase I later this year. This is targeting EGFR over expressing cancers. Primarily we are going to be focused on head and neck and non-small cell lung cancer based on the expression patterns that we see in those diseases. Current EGFR targeted therapies work via EGFR inhibition only. Of course with an ADC format we will be able to achieve that with the antibody but we will also pack the cytotoxic punch from the attached cytotoxic agent.
The preclinical data was demonstrated at AACR in 2013. And we actually demonstrated in that preclinical data that our antibody, that the conjugate had greater potency than naked EGFR antibodies. Then we also saw activity against tumors resistant to EGFR inhibition. And yet we had the same tolerability profile in a preclinical setting that we saw with Kadcyla. So we are quite excited about this program as we saw and designed the naked antibody to provide the potency of (inaudible) with actually less skin tox.
So just a quick word on financials. So on page 22 you can see that what we have done for, what we have expressed for guidance in terms of net losses, $76 million to $80 million. That compares for the nine months ended March 31, just over $50 million in net loss -- net cash provided by operations. We are looking at a usage of $65 million to $69 million for fiscal year '13. And on a guidance basis we are targeting cash guidance at about $186 million to $190 million at the end of this year, and we think that that’s sufficient cash to move each of our proprietary programs through to proof of concept.
Just a quick word on partners. As I mentioned, we are working with some of the leaders in oncology, of course Roche with Kadcyla, but also Amgen has three programs. Bayer recently reported data on their mesothelin ADC which incorporates our technology. We are working with Biotest who have a program in multiple myeloma. And then, of course, we have a pretty extensive series of programs with Sanofi. Our most recent partners were Novartis and Lilly. They took multi-target agreements in the past couple of years and they have been very aggressive in working programs towards the clinic and we are anticipating to see some announcements there as well in the coming year.
Taking a quick look at anticipated events. As we look at partner compounds, certainly Kadcyla continues to provide news flow for ImmunoGen's shareholders. The U.S. approval and launch was in February of this year. Expectations around EU approval in the second half of 2013 and Japan approval in 2014. Kadcyla's next big indication of course will be from the readout of the MARIANNE study. Roche has guided to first line there in the first half of 2014 and then expected submission in 2014. We also have seven other partnered programs that are in the clinic. And Bayer just recently reported on mesothelin. W would expect to see some news flow from our other partners in the coming year.
On the proprietary side, as I mentioned 289, the expectations will be filing an IND mid this year. We will start clinical testing in the back half of this year. 853, we are wrapping up the expansion cohorts and then we would expect to see some data mid-next year. On 529, first clinical data at the end of this year and then 901 anticipating completing enrollment in the back half of this year with a data readout mid-next year.
So as I said, a very exciting time for ImmunoGen as we get the validation and the economic benefits from Kadcyla and the proprietary program progresses rapidly towards proof of concept. Thank you.
Navdeep Singh - Goldman Sachs
Are there questions in the audience? Well, I have one. Can you just walk us through how your TAP technology differs from, let’s say genetic ADC technology? What are the -- maybe some of the disadvantages and advantages of yours versus theirs?
I would be happy to. As a backdrop for that, I have been in similar situations where there is a close comparator in terms of approach, and so I think it's always an interesting question to kind of compare and contrast the approaches of the different technologies. But I think from a competitive standpoint, what we are seeing in general is that there seems to be more and more available targets or addressable targets for ADC technology. And so although we have similar technology approaches, I see less and less of competitors. But turning to the actual technology comparison, there are probably more similarities than dissimilarities. So, we both use the cytotoxic agents, microtubule inhibitors. We both use linker format which differs in the sense that we link via lysines which we think is a better approach to what they link versus cystine. Generally, with their technology, you seem to see very similar dose limiting toxicities of neutropenia.
With our technology, you generally see more target derived dose limiting toxicities. So, I think those were kind of the principal same and differences of the approaches. From our perspective, we really spend time on developing a portfolio of linkers, couple of different (inaudible) linkers, as well as an effort that we have underway with the DNA alkylators, and then focused on our portfolio of engineered linkers to basically achieve different results in a variety of cancer cells.
Navdeep Singh - Goldman Sachs
Okay. Can you describe to us like how -- is the TAP technology and the ADC technology a lot more difficult to replicate, so when you start to go off patent or biosimilars for these products is going to be more difficult than just replicating a regular antibody.
No, I think that’s an interesting question because I do think that because there are more variables in terms of an ADC, that there are certain addition layers of complexity but also opportunities to patent additional layers of the technology, so certainly around the antibody itself, but also around the linker or the cytotoxic agent, but then the conjugation process itself. So, there are opportunities to basically develop what we call a picket fence IP approach to the ADC in addition to composition and matters say on the compound itself. And we think that just as you see the difficulty of biosimilars or biobetters or whatever in just the large molecule space, whether it be protein replacement or whether it be antibodies, we do think that this will be another step beyond in terms of complexity and difficulty for folks that are trying to think about going down that path against an ADC if you will.
Navdeep Singh - Goldman Sachs
And then you gave a great overview of your pipelines, which one of your pipeline candidates are you most excited about and when is the next material data catalyst from them?
So I think the ones that are more exciting to me are the ones that have the most advances and to some extent the most de-risked. So, I look at 901 that’s in a Phase II that will complete accrual in the back half of this year, and we will have a data read out in the mid next year. And then I think 853, where we have got some very interesting efficacy signals. It looks like it's got a pretty good side effect profile, so that we can move into these expansion cohorts finishing accrual there really next year with a readout again mid-next year. I would say those are the two most de-risked programs that we have.
Navdeep Singh - Goldman Sachs
Okay. Any other questions from the audience? Okay. Greg, thanks so much for coming.
Great. Thank you.
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