Good morning. Welcome to Immunic's fourth quarter and year-end 2022 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 the Zoom platform, there are two ways to submit questions. You can either submit your questions 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 of 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. Such statements involve a number of risks and uncertainties that could cause Immunic actual results to differ materially from those discussed here. Please note that these forward-looking statements reflect Immunic opinions only as of the date of this presentation and it undertakes no obligation to revise or publicly re-release the results of any revision to these forward-looking statements in light of new information or future events.
Please refer to Immunic SEC filings for a more detailed description of the risk factors that may affect Immunic results and these forward-looking statements. I would now like to turn the presentation over to our CEO and President, Dr. Daniel Vitt, to begin the presentation. Daniel?
Thank you, Jessica. I also would like to welcome everybody to Immunic year end 2022 earnings call. Earlier this morning, we announced our financial results for the fourth quarter and year ended December 31st, 2022, and highlighted recent activities as well as upcoming milestones related to our clinical development pipeline. During today's call, we will talk through our fourth quarter, 2022, and subsequent highlights, year-end financial and operating results, as well as anticipated upcoming milestones. As Jessica noted, after the presentation, you will have the opportunity to ask questions. Let's start with a review of our fourth quarter, 2022, and subsequent highlights. In October, we have bolstered our balance sheet with a closing of $60 million PIPE financing, which extended our runway through several value infection points into the fourth quarter of 2024.
In October, we conducted a preplanned interim analysis of our phase 1b clinical trial of IMU-935 in patients with moderate to severe psoriasis. Unfortunately, the group level mean data did not show a benefit of the 2 active doses tested compared to placebo, which both disappointed and surprised us. Although the active arms performed in line with our prior expectations, the trial experienced a greater decrease than expected in PASI in the placebo arm. Administration of IMU-935 and placebo were safe and well tolerated, and no new safety signals were observed. Given these were only the first two dose levels of IMU-935 tested in psoriasis patients, and also based on drug's very favorable pharmacokinetic safety and tolerability profile to date, we have the flexibility to explore different parameters in future clinical testing, including via dosing and longer treatment periods.
We plan to provide further updates and guidance on potential next steps for this program towards the end of this quarter. Switching to our vidofludimus calcium program in multiple sclerosis. Throughout the year, we continued the development of our lead asset, vidofludimus calcium, in our ongoing MS program. In November, we hosted a virtual MS R&D webcast, which featured three excellent renowned key opinion leaders. Dr. Fred Lublin from Icahn School of Medicine at Mount Sinai Hospital, Dr. Larry Steinman from Stanford University School of Medicine, as well as Dr. Heinz Wiendl from the University of Münster in Germany. The experts discussed recent scientific findings and their effect on the MS treatment landscape. Immunic provided an update on the scientific, preclinical, and clinical progress of vidofludimus calcium in multiple sclerosis.
In conjunction with the MS R&D webcast, we reported new data from the blinded and open label extension part of our phase II EMPhASIS trial of vidofludimus calcium in relapsing-remitting MS. The data was highly encouraging, showing that long-term treatment with vidofludimus calcium was associated with a low rate of confirmed disability worsening over time, which compares favorable to historical trial data for currently available MS medications. This data nicely underlines vidofludimus calcium's neuroprotective potential in addition to its already established anti-inflammatory and antiviral effects. In February of this year, we held a celiac disease R&D webcast, including two renowned experts to discuss the dynamics of this multifactorial complex autoimmune disease. Dr. Joseph Murray from the Mayo Clinic in Rochester.
Michael Schumann from the Charité, Berlin, as well as Immunic management team, focused on 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. We also touched on the preclinical and clinical development status of IMU-856. There remains a continued unmet medical need for new effective therapeutics for this disease, and we are excited about the potential of IMU-856. As referred to a moment ago, in November of last year, we reported the promising new data from the blinded and open-label extension parts of our phase II EMPhASIS trial of vidofludimus calcium in relapsing-remitting MS.
This data is being presented today at the prestigious ACTRIMS Forum 2023 by Dr. Bob Fox from Cleveland Clinic, who is also the coordinating investigator of our ENSURE and CALLIPER programs.
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 with vidofludimus calcium was associated with a low rate of confirmed disability worsening over time. That concludes our summary for the fourth quarter of 2022 and recent subsequent highlights. I would now like to turn the call over to Glenn to provide financial overview. Glenn.
Thank you, Daniel. I will now review the financial and operating results for the year ended December 31st, 2022. Let me start with the cash overview. As Daniel mentioned, after raising $60 million during the fourth quarter, we ended the year with $116.4 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 $71.3 million for the 12 months ended December 31st, 2022, as compared to $61.1 million for the 12 months ended December 31st, 2021.
The increase was mainly driven by external development costs related to the ongoing clinical trials of vidofludimus calcium, IMU-935, and IMU-856, and was partially offset by a decrease in external development costs related to the phase II clinical trials of vidofludimus calcium in ulcerative colitis, relapsing-remitting MS, and COVID-19. General administrative expenses were $15.3 million for the 12 months ended December 31, 2022, as compared to $13.3 million for the same period ended December 31, 2021. This increase was mainly driven by personnel expense, of which $0.6 million was related to non-cash stock compensation. We recorded a non-cash goodwill impairment charge of $33 million in the fourth quarter of 2022, which represents a full write-down of our previous goodwill balance.
The impairment resulted from the announcement of interim group level data of the phase I-B clinical trial of IMU-935 in psoriasis on October 20, 2022. Other expense was -$0.9 million for the 12 months ended December 31, 2022, as compared to -$1.3 million for the same period ended December 31, 2021. The decrease in expense was primarily attributable to interest, increases in interest income and R&D tax incentives for clinical trials in Australia, which was partially offset by a decrease in grants. Net loss for the 12 months ended December 31, 2022, was approximately $120.4 million, or $3.78 per basic and diluted share, based on approximately 31.8 million weighted average common shares outstanding.
Compared to a net loss of approximately $92.9 million, or $3.93 per basic and diluted share, based on approximately 23.7 million weighted average common shares outstanding for the same period ended December 31, 2021. With that, I'll turn the call back over to Daniel for an outlook on our upcoming clinical milestones. Daniel.
Thank you, Glenn. I would now like to provide an update on our anticipated upcoming data readouts. Our phase II CALLIPER trial in progressive MS and our phase III ENSURE trials in relapsing MS continue to enroll patients. Our current expectation is to report data from the interim biomarker analysis of the CALLIPER trial in the second half of 2023, and to read out top-line data at the end of 2024. For the ENSURE program, we added new guidance that we expect to report data from the interim analysis in late 2024 and as previously announced, to read out the first of the ENSURE trial end of 2025.
As we have noted previously, based on the strong clinical activity observed so far and vidofludimus calcium's placebo-like safety and tolerability profile, we believe that the design of the ENSURE program gives us a direct path towards potential regulatory approval in relapsing MS. The CALLIPER trial adds additional potential in progressive MS to our MS program beyond RMS. Vidofludimus calcium could represent a unique treatment option targeted to the complex pathophysiology of MS, differentiated by its combined anti-inflammatory, antiviral, and potential neuroprotective effects. As already mentioned earlier, we plan to provide an update on potential next steps of IMU-935's development in psoriasis towards the end of this quarter. Of note, IMU-935 recently received the proposed international nonproprietary name, izumerogant, from the World Health Organization.
Our next clinical milestone will be met this year, where we plan to report top-line data from the double-blind randomized placebo-controlled part C of our phase I clinical trial of IMU-856 in celiac disease patients. Part C is designed to assess safety and tolerability of IMU-856 during 28 days of treatment with 80 and 160 milligrams of IMU-856 or placebo once daily during periods of gluten-free diet and gluten challenge. Secondary objectives include pharmacokinetics as well as acute and chronic disease markers, including those evaluating acute response on the biomarker IL-2 and gastrointestinal architecture and celiac disease symptoms. IMU-856 is an orally available and systemically acting small molecule modulator from preclinically to regulate intestinal barrier function and regenerate bowel epithelium.
It appears to influence the tightly regulated network of genes and proteins associated with intestinal epithelial cell interaction and adhesion, restoring intestinal barrier function while maintaining immunocompetency. These characteristics indicate that IMU-856 could represent an entirely new and innovative approach for the treatment of a number of gastrointestinal diseases, including celiac disease, IBD or IBS-D, without the serious consequences associated with immunosuppressive therapies. This brings us to the end of our formal presentation. Jessica, please open the call for Q&A session.
Thank you, Daniel and Glenn, for walking us through the fourth quarter, 2022 and subsequent highlights as well as upcoming value inflection points. We will now begin the question and answer session. As a reminder, if you joined the webcast via the Zoom platform, there are two ways to submit questions. You can either submit your questions 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 of the Zoom portal to queue your question. Our first question today comes from Yasmeen Rahimi at Piper Sandler. Yas, welcome, and please unmute yourself.
Good morning, team, and thank you so much for all the great updates. Few questions for you. Team, we're very excited to look at the full data of IMU-935 as you're gonna be reporting at your end. Not your end, sorry, end of this quarter. Could you maybe help us understand again, like why has it taken quite a bit of time to really gather the data? How fulsome is that data release gonna be for us so that we can actually step and decide, you know, what the opportunity is? When you say next steps, that kind of makes us think that there is a next step involved and that the data or the analysis looks encouraging. If you could, you know, provide some color around there, and then I have also some questions on ASSURE.
Sure. Thank you, Yas. I know that's an important question. Maybe start with the time for data analysis. This is still ongoing. It's a big package of biomarkers. We're looking at collecting tissue samples and so forth. Remember, what we reported was group level unblinded data. This was really much before database lock and so forth. These things take time, and sorry for that, but it's the nature of what we're doing here. Regarding expectations of that, I think, we want to really deliver a rationale for decision-making and make proper decision at that time point. I hope that we have things in the right way together at the end of the quarter to give the right guidance on that.
As you know, we always try to be very mindful of the science behind it, the data, and then based on that, make smart decisions to go forward.
Maybe a clarification question for you, Daniel. Given that you guys have been very thoughtful around really analyzing the data in the most comprehensive manner and figuring out also next steps, can we conclude that you're seeing very encouraging signals that move forward? Or is that, is that not proper? That's one. Then the second question I had is, a lot of investors will be looking very eagerly into the interim analysis of ENSURE in late 2024. Are you starting to see sort of the event rate and progression of disease as you expected so that, you know, like on a confidence level basis, like how confident are we that that data is gonna fall into late 2024 and does not slip into 2025? Thank you so much, and I'll jump back into the queue.
Yeah. First of all, once again, on IMU-935, I think I know that everybody wants to learn more, but, I would like everyone to ask to be patient until end of the quarter to get the update there. It's just it's our job to decide what's, what should we do. It has a couple of implications. For example, if we continue the trial, what is the right design for that? What would be the right design for that? As I said in the presentation, duration of treatment is one thing one should look, dose strengths and so forth. There are lot of things to really take into account for decision-making here.
On the timing of the interim of ENSURE, I think we're pretty confident we can deliver an interim analysis end of 2024. Of course, I don't see on data coming out from this ongoing trial. This is really just. We said in the past it's an event of readout, what we know so far, we should be able to have the interim data available around end of 2024 as we said in the call.
Great. Thank you, Yas. Our next guest is Thomas Smith from SVB Securities. Tom, please unmute yourself and go ahead.
Good morning. This is Natsai Sri-Kanjanakorn for Thomas Smith.
Oh, hi, Nat.
Congrats, congrats on the progress during the quarter. We have a few questions. First one, with the initial phase I select data of IMU-856 expected in mid-2023, what are your expectations on the data, and when do you plan to review the MOA of IMU-856? I have a follow-up.
Yeah. Good question. Expectations, I think we had this R&D day call. Not everybody on this line here had a chance to listen to that so far. It's available as a recording on the homepage, by the way. We think that in that design, we're treating for four weeks and half of the time without gluten challenge, and then we follow in the second half of the trial for another 14 days with a gluten challenge. I think the most robust expected readout would be to look whether to what extent we can block the IL-2 signal after starting the gluten challenge. This is typically done four hours after starting the gluten challenge. You measure then the serum-based IL-2 levels.
If you, if we are able to restore barrier function and block basically the signaling of gluten and the derivatives of gluten to the immune system, then we should see a reduced amount of IL-2. Not MOA. Yeah, there was a second question, the MOA. As you know, we have been very quiet on it and just to make sure we have a little bit of, we maintain our advantage over potential competitors on the knowledge of the target and how it works. We plan to disclose the target during this year. Of course, we would like to do that in the context of a scientific presentation or conference so that it has the right surrounding of a scientific environment.
Likely after the release of the data, we will not too long after that, we'll come out with a target and maybe more details on the mode of action. Despite we have, I think, shown some aspects of the mode of action, for example, gene regulation affecting loading proteins, cell adhesion, and the tier assay system where we have shown that the drug is able to restore barrier function in quite important in vitro models.
Got it. That makes sense. With the interim data from the CALLIPER in PMS expected in second half, like what would a great data set look like from your perspective? What data gives you the most confidence in the potential of the vidofludimus calcium in this indication?
I think that it's important to… Thank you for that question. It's important to know what are we reading on. I think the focus of this readout is clearly on biomarkers. We will have a couple of those, and, as you know, progressive MS is something where not a lot of things worked so far. It's a huge unmet need. Seeing a difference between placebo and the different subsets of PMS in this trial would be a success from my point of view. This is not a interim analysis which is proper for any statistical readouts. It's really just looking, do we see a signal here? Is a typical more important question is here, is it medically meaningful signal we see there? The focus is clearly here on the biomarkers.
To remind you the primary endpoint of the trial will be, change in brain atrophy between placebo and active, that is then expected to be read out, end of 2024. All of these pieces are, I think are important to at the end judge about if, to what extent the potential of vidazulum goes beyond, the RMS phase III program which we're running it parallel.
Got it. Thank you, and congrats again on the progress. I'll hop back on.
Yeah.
I'll hop back on the queue.
Thank you, Nat.
Thank you, Nat. The next one is Matthew Kaplan from Ladenburg Thalmann. Matt, please unmute yourself and welcome.
Hi. Good morning. Thanks for taking the questions. Just some follow-ups on your kinda near-term milestones, clinical milestones. Just first with IMU-935, as you analyze that data there from the psoriasis cohort, what are your expectations in terms of looking at the drug's impact on IL-17 and reductions there, that would get you excited about moving the drug forward?
Yeah, I think it's not only IL-17, it's also looking on overall biomarkers impact on gene regulations we are looking at. I think what I would like to see is kind of like a difference between the groups to guide us forward and to be able to conclude some ideas on potential dosing and so forth going forward. That would be my expectation. Yeah. That's all I can tell you right now, I think. I can't dig into more details on the ongoing work here. Sorry for that.
No, perfect. That's helpful. Thank you. Then in terms of just a follow-up on the ENSURE interim analysis, what are the potential outcomes of the interim? Is this a futility analysis or what type of analysis that will go on there?
That is not per se a futility analysis. It's more looking on what do we see when we reached half of the events and giving us the ability to do sample size adjustment at that time point. That's the preplanned plan here. It will not be handled as a termination reason or something like that. It's really looking on where are we.
It's more of.
Yeah.
More of a powering.
Yeah.
sizing analysis.
Right.
Okay. Okay. Very helpful. Now I think some of the other questions have been covered already, but thanks and congrats on the progress.
Thank you, Matt.
Thank you, Matt. Just to remind everybody, please use the raise hand function of the Zoom portal or use the Q&A tool to queue a question. The next one is Andreas Argyrides from Wedbush. Andreas, it's your turn. Please unmute yourself.
Yeah, good morning, thanks for taking our question. They've actually more or less all been asked at this point, maybe a quick follow-up on just IMU-935. Do you see any potential to dose higher in the phase I or extend the treatment period? Are there gonna be any changes to the patient population that could be implemented in terms of modifying exclusion, including criteria? Thank you.
Yeah, thank you. Yes, all of those are things on the table. When we started this trial, for the first 2 dose strengths, we were limited on the dosing for 28 days because of the preclinical package. We meanwhile completed the 3-month safety package and are able to, in principle, prolong the treatment for 6-12 weeks, which is something which we would consider doing. As, once again, it's not multi-sided, but it's some of the options on the table. Second thing is dosing high, I guess, of course. That is something we can do, which we have the ability to increase doses. On the other parameters, of course, that's an important exercise. You have to understand what is... what was the reason for the high placebo activity we have seen.
That, of course, is something we need to look on the patient characteristic at baseline, and what is different there and where are potential risks on getting a bias in or a wrong placebo activity. That's something we are looking on every stone and flipping every stone we have here. It also is part of the reason why the team needs to spend some time on really carefully evaluating all of these things.
Okay, great. Congrats on all the progress. Thank you.
Thank you, Andreas. We have one more person in the queue, which is Mayank Mamtani from B. Riley. Mayank, please unmute yourself and go ahead.
Hi, this is William Wood on for Mayank Mamtani today. Really nice to see the continued great work here. Congrats on everything. I've got a couple of questions on more follow-ups on what others have asked. For the interim look, for CALLIPER, you stated that you'll be providing some biomarker data. I believe you've mentioned NFL, GFAP before. We'll probably also get safety. Maybe if you could just provide a little extra color on what we might be expecting, if it's just gonna be those two biomarkers, are we gonna get any functional data? And then also just to verify, will these same biomarkers be provided also in the top line full data set, sort of to give us an idea of mid and then end of term, progression?
Yeah, thank you. You're absolutely right. These are the two major markers we are looking at. NFL, you may remember that from the phase II, we had very promising activity there. Also some newer biomarkers have been added to the readout package, for example, GFAP and others. Of course, I think in this trial, we may look on some functional readouts, but that will not be the an advanced set of data at that time point. I think it's the interim is done, will be done when 50% of the patients have reached 24 week treatment. This is early in the treatment, and therefore, we think the biomarkers are the best suitable readout for such an interim analysis.
It's really just to check, do we see a difference here between the active and the placebo patients? Just a reminder, we have the two different kinds of placebos. We have primary and secondary progressive patients in this trial. That's of course, also an information we want to extract from the trial, whether, for example, is one subgroup benefiting substantially better than the other, which may give us the opportunity in the completion of the trial to consider that and to maybe enrich more patients from the one or the other kind.
Thank you. Will we get the same data, the same biomarkers, et cetera, at the end of the trial also?
Yeah, sure. Sure. I forgot to mention it. Yes, of course, this is an important part of the story to also look on the evolving biomarkers over time and changes there. That may be a very interesting readout on a lot of the different parameters over time, right?
Yeah. Excellent. Just sort of taking that a step further, following this readout, you had just mentioned that, you know, there might be some wiggle room or some, you know, some adjustments based on demyelinating, SPMS. Do you have any plans to meet with the FDA on how they may receive this the biomarkers, and then to potentially adjust for both ENSURE or CALLIPER if needed? I'm just trying to understand the path forward following this interim readout.
No, this is more for internal decision making. I think, there's no plan right now to talk with the FDA on the interim analysis. Of course, that will influence our strategy going forward and the, and the discussions we will then have with the complete data set later. That's more the formal way of looking on this. For us, it's really important to understand the science and that's why we're doing these things, as interim readouts. I think we are all excited to see what's coming out there because it's a, it's a totally underserved area, and not so many things worked so far. It's not, it's not a low-hanging fruit here.
Great. Makes sense. Then one last one, if I may. With... You, you've mentioned that the ENSURE interim readout is currently a little to be determined. It's gonna be based on an event-driven, primarily assuming enrollment. Could you just give us any details on how enrollment is proceeding for ENSURE but also for CALLIPER? Maybe commenting on if anything's been slowing it down or even speeding it up.
Yeah. I think as you know, we, in the past, we really never gave guidance on enrollment status. If you start that race, then it's something where we have every week other questions on that. We stick to our current guidance on readouts. That means we are still somehow satisfied with what we see on recruitment in both trials. As soon as we figure out that expectations are changing, we need to give an update on that, of course, and we will do that.
Excellent. Thank you so much. That's it. We'll jump in queue. Congratulations again.
Yeah. Thank you so much.
Thank you, William, and also thank you to all our other guests today. This concludes our question and answer session. I would like to turn the conference back over to Daniel for any closing remarks.
Yeah. Thanks, Jessica, and thank you to today's attendees for your insightful questions. To summarize, we very much look forward to reporting clinical data from our vidofludimus calcium and IMU-856 programs this year. Data from the Part C portion of our phase I clinical trial of IMU-856 in celiac disease patients is expected to be available mid-year. Moreover, we expect to report data from the interim analysis of our phase II CALLIPER trial of vidofludimus calcium in progressive MS in the second half of this year. We remain well-funded with $116.4 million on our balance sheet, providing us runway through multiple clinical milestones into the fourth quarter of 2024. With that, I would like to close today's call. Again, thank you very much for joining, and we are very happy to answer any additional questions one-on-one.
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