Good morning, and welcome to Immunic's 1st quarter 2023 earnings call. My name is Jessica Breu, Head of Investor Relations and Communications at Immunic. I will also be the moderator on today's call. Speaking on the call are Dr. Daniel Vitt, our Chief Executive Officer and President, as well as Glenn Whaley, our Chief Financial Officer. Please note that all participants will be in listen-only mode and that 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 in the Zoom portal to queue your question.
Before we begin, I would like to remind you that this presentation may contain forward-looking statements. Such statements can be identified by words such as may, will, expect, anticipate, estimate, or words with a similar meaning. Such statements involve a number of risks and uncertainties that could cause Immunic's actual results to differ materially from those discussed here. Please note that these forward-looking statements reflect Immunic's opinions only as of the date of this presentation and it undertakes no obligation to revise or publicly release the result of any revision to these forward-looking statements in light of new information or future events. Please refer to Immunic's SEC filings for a more detailed description of the risk factors that may affect Immunic's results and these forward-looking statements. I would now like to turn the webcast over to our CEO and President, Dr.
Daniel Vitt, to begin the presentation. Daniel?
Yeah. Thank you, Jessica. I would like to welcome everybody to Immunic's first quarter 2023 earnings call. This morning we announced our financial results for the first quarter ended March 31st, 2023, and provided an update on our technical development progress and upcoming clinical milestones. During the webcast today, we will walk through our first quarter 2023 and subsequent highlights, financial and operating results, as well as anticipated clinical milestones. As Jessica noted, after the presentation, you will have the opportunity to ask questions. Let's start with a review of our first quarter 2023 and subsequent highlights. As a reminder, in February, we hosted a celiac disease R&D webcast, which included two renowned experts, namely Dr. Joseph Murray from Mayo Clinic in Rochester and Dr. Michael Schumann from the Charité Berlin.
Topics discussed included the dynamics of this multifactorial complex autoimmune disease, including the characteristics of celiac disease, immune stimulation and its connection to clinical symptoms, the role of the epithelium barrier in the pathogenesis of the disease, as well as current and potential treatment options. The R&D webcast was intended to lay the groundwork of our clinical phase Ib read out of IMU-856 in celiac disease patients. As most of you know, the data set finished later on in May, provided excellent clinical proof-of-concept data for IMU-856, which I will get to in a few moments. Also of note, in February, Dr.
Robert Fox from Cleveland Clinic, who is also the coordinating investigator of our ENSURE and CALLIPER programs in multiple sclerosis, presented data from the blinded and open label extension parts of our phase II EMPhASIS trial of vidofludimus calcium in relapsing-remitting MS at the prestigious ACTRIMS Forum 2023. I would like to point out again that the data was favorable compared to historical data for current MS treatments, and showed that long-term treatment with vidofludimus calcium was associated with a low rate of confirmed disability worsening over time. This data nicely underlined vidofludimus calcium's neuroprotective potential in addition to its already established anti-inflammatory and antiviral effects. Last month, we reported positive data from the maintenance phase of our phase IIb CALDOSE-1 trial of vidofludimus calcium in patients with moderate to severe ulcerative colitis or UC.
These results are extremely encouraging as they demonstrated statistically significant activity of vidofludimus calcium as compared to placebo, while confirming the very favorable safety and tolerability profile observed in other trials. It is important to note that we believe the maintenance phase data confirms vidofludimus calcium's activity in the absence of corticosteroids co-administration. As previously announced, based on this encouraging outcome, we are exploring a variety of value-creating points options for the UC program and other inflammatory bowel disease indications. I also once again would like to welcome Dr. Richard Rudick to our board of directors. Rick has a stellar background, including decades spent as an expert in multiple sclerosis and as a clinical trialist who has overseen multiple successful pivotal studies.
We are delighted to have Rick on our board and look forward to working with him as we continue to progress the development of vidofludimus calcium in multiple sclerosis as well as our other pipeline programs. I also want to thank Dr. Vincent Ossipow, who is stepping down from our board at the end of June, for his dedication to Immunic and his valuable guidance over the past seven years. I speak for our entire team when I say we wish him well in his future endeavors. As many of you are aware, on May 4th, we announced highly positive results from the Part C portion of our phase I clinical trial of IMU-856 in patients with celiac disease. This data significantly exceeded our expectations.
IMU-856 demonstrated consistent and meaningful clinical improvements over placebo in four key dimensions of celiac disease pathophysiology, specifically protection of gut architecture, improvement of patient symptoms, biomarker response, and enhancement of nutrient absorption. IMU-856 was also observed to be safe and well-tolerated in this trial. Most importantly, the observed protection of the lining of the gut and intestinal villi from gluten-induced destruction, independent of targeting immune mechanisms involved specifically in celiac disease, appears to be unique among proposed therapeutic approaches, which for the first part target either the immune response or antigen processing. We believe this impressive data set provides first clinical proof of concept that this oral first-in-class molecule, IMU-856, represents an entirely new therapeutic approach, which could be a game changer in the way we treat gastrointestinal disorders such as celiac disease, but also ulcerative colitis, Crohn's disease, or irritable bowel syndrome with diarrhea.
We are extremely enthusiastic about the potential for this program. Just last week, we published additional news on our IMU-856 program. In an e-poster presentation at Digestive Disease Week in Chicago, we were pleased to have unveiled for the first time IMU-856 mode of action as a potent modulator of SIRT6, a protein which serves as a transcriptional regulator of intestinal barrier function and regeneration of bowel epithelium. Through its effect on SIRT6, IMU-856 has shown the ability in animal and early test studies to restore intestinal barrier function and bowel wall architecture. That concludes our summary of the first quarter 2023 and recent subsequent highlights. I would now like to hand over to Glenn to provide a financial overview. Glenn.
Thank you, Daniel. I will now review the financial and operating results for the first quarter ended March 31st, 2023. Let me start with the cash overview. In the first quarter, $97.1 million in cash investments, which we expect will be sufficient to fund operations into the fourth quarter of 2024. Regarding the operating results, research and development expenses were $23 million for the three months ended March 31st, 2023, as compared to $17.4 million for the three months ended March 31st, 2022. The increase was mainly driven by external development costs related to the ongoing clinical trials of vidofludimus calcium and IMU-856, was partially offset by decrease in external development costs related to the phase II clinical trials of vidofludimus calcium in ulcerative colitis and the IMU-935 program.
General and administrative expenses were $4.3 million for the 3 months ended March 31, 2023, as compared to $4 million for the same period ended March 31, 2022. The slight increase was chiefly driven by travel expenses and was partially offset by a decrease in non-cash based stock compensation. Other income was $2 million for the 3 months ended March 31, 2023, as compared to $0.6 million for the same period ended March 31, 2022. The increase was principally attributable to an increase in German tax incentives and the interest income, and was partially offset by reductions in foreign exchange gains and R&D tax incentives for clinical trials in Australia.
The net loss for the three months ended March 31st, 2023, was approximately $25.3 million or $0.58 per basic and diluted share, based on 43.7 million weighted average common shares outstanding, compared to a net loss of approximately $20.8 million or $0.74 per basic and diluted share based on approximately 28.1 million weighted average common shares outstanding for the same period ended March 31st, 2022. With that, I'll turn the call back over to Daniel for an outlook on upcoming clinical milestones. Daniel?
Thank you, Glenn. Let me provide an update on our anticipated upcoming clinical milestones. During the first quarter, we continued to progress vidofludimus calcium for the treatment of multiple sclerosis. Our ongoing studies include the twin phase III ENSURE trials in relapsing MS and the phase II CALLIPER trial in progressive MS. Our current expectation is to report data from the interim biomarker analysis of the CALLIPER trial in progressive MS in the second half of 2023, and to read out top line data at the end of 2024. The CALLIPER trial is designed to corroborate the neuroprotective potential of vidofludimus calcium in a progressive patient population, and if successful, could be an important additional differentiator for the vidofludimus calcium in this market.
Additionally, we look forward to reporting data from the interim analysis of our phase III ENSURE program late next year, and to read out the first of our phase III ENSURE trials in relapsing MS at the end of 2025. As we have stated before, based on the strong clinical activity observed thus far, the solidly established safety and tolerability profile to date, and vidofludimus calcium combined anti-inflammatory, antiviral, and neuroprotective effects, we continue to believe that it has the potential to be a unique treatment option targeted at the complex pathophysiology of multiple sclerosis.
With regards to our IMU-856 program, as a result of the overwhelmingly positive data generated from our phase IIb clinical trial in patients with celiac disease, we have begun preparing for a phase IIb clinical trial of IMU-856 in ongoing active celiac disease patients. We are at the same time considering additional potential clinical applications for this oral first-in-class molecule in other gastrointestinal disorders. As stated earlier, we are very excited about this program and believe that IMU-856 could present an entirely new and innovative oral treatment approach for a number of gastrointestinal diseases without the serious consequences associated with immunosuppressive therapies. This brings us to the end of our first quarter 2023 overview. Jessica, please open the webcast for the Q&A session.
Thank you, Daniel and Glenn, for walking us through the first quarter 2023 and the subsequent highlights and also our upcoming technical milestones. 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 Zoom portal, or if you would like to speak with us, please use the raise hand function of the Zoom portal to queue your question. Our first question today comes from Andreas Argyrides at Wedbush. Andreas, hello and please unmute yourselves.
Hello and good morning, and thanks for taking our questions. We'll just ask two here. To our knowledge, this is the first drug targeting SIRT6. Can you just provide additional insight into what gives you confidence IMU-856 could work in this indication? Along the same lines, do you see IMU-856 being beneficial in other indications? If so, which ones? Thanks.
Sure. Thank you, Andreas, for that question. A lot unexpected. If you're a first mover in an interesting area, of course, the challenge is, does it work or not. I'm very glad that the clinical trial really more or less exactly showed what we have seen in preclinical work before. Looking on the phase Ib data, we have recently shown it exactly what we have seen. We have seen, for example, protection of villi. We have even seen increase in villi size in some of the patients, despite gluten challenge design of that study. Pretty impressive data on the histology and the functions as well.
Just to remind you that we have seen an increase in vitamin B12, for example, already, despite being a short trial. That is a wonderful confirmation of what we have seen preclinically. On top of that, as I said, we have done a lot of preclinical work, including D SS model and so forth, where we have exactly seen those findings. This is, I think the nice thing on this mode of action. It's very different from what else is there, and it's not including any kind of immunosuppression. We think this really could be the start of a very broad activity. To the second question, for other indications, we have done most of the preclinical work in colitis models.
We believe that the holistic view of the data we have really makes us believe that Crohn's disease and ulcerative colitis are indications where clearly patients should benefit as well from such a treatment. Given that it's a completely different approach from everything out there, it could really be a very nice synergistic effect for patients to achieve higher rates of remission and protecting patients from relapses down the road.
Okay, great. Thanks for taking our question. We'll hop back in the queue.
Thank you, Andreas.
Thank you, Andreas. Our next guest today is Lauren Andrea from Piper Sandler. Yes, please unmute yourself and welcome.
Hi, guys, this is Lauren Andrea. A few questions from us. First, when are you planning or if you are planning to tighten the guidance to the interim CALLIPER in 2H3? Can you remind us of the utility of this key data? Our second question, when do you expect to have the meeting with the FDA for the phase IIb design details? Do you think that 2024 will be an opportunity to share data from the study? What work is being done in regards to evaluating 556 in other GI diseases? Thanks.
Thank you. Did you remember the first.
The first one was interim CALLIPER.
All right. Again, guidance for second half of the year. As it is right now, if we have more knowledge about precise timing, we will come out with that.
What is included.
What is included. Yeah. Just on biomarkers, and I think that was not earlier, that I think the key readouts were, which we have done in the for the interim were looking on NfL and GFAP for the patients. That we have the state-of-the-art pair of biomarkers, which should give a little insight to what is happening on the treatment response, the modifications on placebo, and also potential differences in the subset of patients with primary and secondary progressive. That's what we so far have mentioned in the public. On the FDA, of course, that's an important point. I think the team is kind of working on...
We just recently got the data, we try to be very quick now in including the findings in the phase II protocol and design, then as quickly as possible, submit our IND filing in the U.S. and use that as a starting point for the discussion with the regulators. Because we think we really want to make sure we have some proper feedback on design of the trial. You may be familiar that the FDA released a draft guideline for celiac disease phase III studies last year, and I think that that's a good starting point for any discussions between the company and the regulators. The third question?
Was other GI diseases, IMU-856.
Yeah. I think that's more in the making. I think we definitely for time and resource reasons, we'll definitely focus first on celiac, given I think outstanding data we got from the very small Part C of the phase I study, encouraging us really to fill that space. Also, I think the medical need is very high in celiac. There's no treatment approved, so these are all forces driving excitement here towards celiac as a first indication. Of course, the value gets much bigger if you consider Crohn's and colitis, for example, as indication. More I think I don't wanna make here a pre-decision on what we will do as next indication, but from the biology point of view, for example, Crohn's should be one of those prioritized indications in the future.
Great. Thanks so much, guys.
Thanks, Lauren.
Thank you.
Just as a reminder, if you have a question, please use the Raise Hand function of the Zoom portal or the Q&A tool. Our next guest is Matt Kaplan from Ladenburg Thalmann. Matt, please unmute yourself and hello.
Hi. Good morning.
Good morning.
-taking the questions. Just continuing on, IMU-856 a little bit. I guess based on the recently announced, you know, mode of action, mechanism of action for IMU-856 and, you know, combined with the positive data that you had in celiac disease, what are your thoughts, I guess, given the results for IMU-838 in ulcerative colitis on how you're thinking about moving these two programs forward in the clinic, given kind of their overlap in potential indications, ulcerative colitis, Crohn's disease, et cetera?
As I think there's a synergy between the concepts. As I said, IMU-856 is not just another shot on the same goal. It's really an orthogonal mode of action. If you look on what the current treatment landscape's delivered and how patients are treated, for example, if you look on UC, how often patients switch therapies, what they run through, how still low the clinical remission rates for many trials are. Despite all success, it looks like a little bit of a ceiling of effects. There is a demand for new mode of actions on the inflammation side, IMU-856 really comes from a very different place. I think we can add more than just another approach. It's something which can...
Fundamentally, my thought is can be combined with all of the current treatments. Of course, it makes most sense to combine something like IMU-856 in UC and Crohn's disease with maybe the safest treatments which are currently available. There's a lot of potential. I think in a perfect world, I would just combine the both. That's, that's more a funding and resource question. You can't do every trial, maybe first delivering simulation activity and then you're looking beyond makes a lot of sense. Look, being just, as I said, coming from Chicago from DDW, I see that we have something really important here and which goes beyond the normal piece of innovation and stepwise approach. IMU-856 can really be a game changer.
This is not just an over-optimistic CEO statement here. It's something where I feel really excitement among the experts we talk to, for example.
Okay. That's helpful. Then, you spoke about the interim re-look on the CALLIPER study. How could the interim results impact the conduct of the CALLIPER study going forward?
I think, as I said, we have two different kind of populations. Secondary progressive and non-active, the majority is in active and primary progressive patients. We don't know recent yet what we see because they all these diseases are a little bit different, and the statistics is different. We will as I said, we will compare not just with the active ones, but also between the different active ones to see more effects on one or the other subpopulation. Therefore, we, for example, may prioritize specific set of sub-indications during completion of the trial to increase the information content of the study for the full readout.
Okay. Thanks. Thanks for taking the questions.
Thank you, Matt.
Thank you, Matt. We have two more which came in from an anonymous attendee in writing. The first one, for IMU-856, will you continue to follow the phase Ib patients and provide a subsequent update?
Actually, this is not planned. A good point. I would love to have that, but when we planned this, it was just intended to demonstrate proof of concept. As you know, we, all of the phase II studies we are running, we have these follow-ups. Here in this phase I, we don't have that.
Okay, thank you. The second one also, I think the target disclosure was a nice surprise to a lot of folks. It does seem quite novel, can you talk a bit more about the target and are there other companies working on this target?
Yeah. Thanks for this. This is really a new target, therefore there's not a lot ongoing there. There's by much one other company in Israel working on the target but in a different context. Here in this, our work, we originated from scientific observations of phenotypes, it's an epigenetic regulator. It looks like that the molecule IMU-856 finds a way to search this as a protein which is causing a couple of different things which then lead to a specific phenotype. The specific phenotype is really renewal of intestinal lining. You may know that the renewal is a normal physiological process. In a healthy human, intestinal cells are replicating once a day on average.
This is a normal process, but in patients with these GI disorders, they really this process is not sufficient enough to heal the gut and to renew it, and therefore damage goes on. It's more a structural effect, which we achieve by repairing that mode of action. Yeah, it's, I think the key is here really that intestinal renewal leads then to restored barrier function and therefore, as a consequence, also should lead to less symptoms and ongoing disease. This was nicely shown in this phase I study. Yeah.
Thank you. We have one more in the queue here. Tom Smith from SVB Securities. Hey, Tom, please unmute yourself.
Hey, guys. Good morning. Thanks for taking the questions. Just a couple on our end. First on, business development, can you, can you comment on whether there's been any uptick in inbound interest on the celiac disease data? Can you just remind us how you think about partnership opportunities broadly across IMU-838 and IMU-856? Secondly, we noticed on the pipeline side you've added a new program, this, IMU-381 for GI diseases. What can you tell us program, how you think about development timelines, and, when can we expect to hear more on this? Thanks.
Yeah, I think, thank you, Tom, for the question. As I said, I had the pleasure that close to the day we out and released all the mode of action data, we had attended DDW and also took the opportunity to speak to players in industry and academia care also, but also companies. I think the concept of IMU-856 is somehow my feeling is we have somewhat what is missing there and something which is not another solution for the same problem, but a different way to approach it. My feeling is this is appreciated among industry and the players we talk to. Of course, we can't tell you more details here publicly about discussions with any pharma companies, my feeling is that that is really resonating well.
maybe you get the same feedback if you had the opportunity to speak to some of those. From the general BD perspective, I think as I always said, we on that end, we are open-minded people. We are executing trials because at the end BD is driven by data and the potential of molecules and how they fit into the company's strategy and maybe also needs on the commercial side. Therefore, we are open on both ends. Decisions here will be based on what is available, what's on the table and what is attractive on the value perspective for the company. It's maybe too very to give more details on that, but I think this is something where I feel personally very excited about.
On IMU-351, you mentioned this is the newest thing, newest addition to the pipeline. As you know, we're working broadly in GI, and we have also achieved quite positive data here in the maintenance study for IMU-838. We think it deserves more resources and focus for preclinical work to come up with something where we make benefit of all the learnings and our technical capacities here to optimize molecules. We have developed a series of very potent molecules and just decided that one of those should now be brought into a preclinical development process. No guidance on that, how quickly that goes.
This is preclinical work, and we need some time to complete the package, but it's something which nicely will complement the portfolio in the GI space.
Got it. That's helpful. Thanks for taking my questions.
Thank you, Tom.
Thank you, Tom. Good. Thank you to all the questions. This concludes our question and answer session. I would like to turn the webcast back over to Daniel for any closing remarks.
Yeah, thanks, Jessica. Thank you today the participants for your great questions and good discussion. In summary, we look forward to revealing data in the second half of this year from the interim analysis of our phase II CALLIPER trial of vidofludimus calcium in progressive MS. We also look forward to providing an update on our IMU-856 program, hopefully very soon. We remain well-funded with $97.1 million on our balance sheet, providing us runway into the fourth quarter of 2024. With that, I would like to close today's call. Again, thank you very much for joining, and as always, we are more than happy to answer any additional questions one-on-one.
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