May 4, 2018
Executives
Sarah Kiely - Director, IR Mark Enyedy - CEO Anna Berkenblit - Chief Medical Officer Dave Johnston - CFO
Analysts
Jessica Fye - JPMorgan Andy Hsieh - William Blair Debjit Chattopadhyay - H.C. Wainwright Biren Amin - Jefferies Mara Goldstein - Cantor Fitzgerald
Operator
Good day everyone and welcome to ImmunoGen First Quarter 2018 Financial Results Conference Call. Today’s call is being recorded.
At this time, for opening remarks and introductions, I would like to turn the call over to today’s host, Sarah Kiely, Investor Relations. Please go ahead.
Sarah Kiely
Good morning and thank you for joining today’s call. Earlier today, we issued a press release that includes a summary of our recent progress and third quarter 2018 operating results.
This press release and a recording of the call can be found under the Investors section of our website at immunogen.com. On the call today are our President and CEO, Mark Enyedy, our Chief Medical Officer, Anna Berkenblit; and our CFO, Dave Johnston.
Rich Gregory, our Chief Scientific Officer will join the team for the Q&A session. During today’s call, we will highlight key recent accomplishments, review first quarter financial results and outline milestones for the remainder of the year.
During the call, we will use forward-looking statements and our actual results may differ materially from such statements. Descriptions of the risks and uncertainties associated with an investment in ImmunoGen are included in our SEC filings.
With that, I will now turn the call over to Mark.
Mark Enyedy
Thank you, Sarah. Good morning, everyone and thank you for joining us today.
Building on the momentum we generated in 2017, we started this year with a number of important milestones, highlighted by significant progress with our lead candidate, mirvetuximab, soravtansine for the treatment of women with ovarian cancer. As a reminder, our efforts at ImmunoGen focused on four strategic priorities.
First, completed the development and launched mirvetuximab by 2020. Second, accelerate our pipeline of novel IGN programs.
Third, build on our leadership position in ADCs through continued innovation. And fourth, expand the reach of our innovation and maintain financial strength through high-value partnership.
Over the first four months of 2018, we’ve made significant progress towards each of these objectives. With mirvetuximab, we were pleased to report last week that we've completed patient enrolment in FORWARD I, our Phase 3 registration trial designed to support full approval of mirvetuximab and platinum-resistant ovarian cancer, well ahead of schedule.
This accelerated and accrual reflects the increased interest in mirvetuximab from the ovarian cancer community and the need for new treatments for women with platinum-resistant disease. We also successfully completed the pre-specified interim futility analysis, following 80 progression-free survival events in FORWARD I.
The study will continue as planned without modification based on the recommendation of the Independent Data Monitoring Committee and we’re on-track to report top-line results from this study in the first half of 2019. In addition to advancing mirvetuximab as a single-agent therapy, we’re evaluating combination regimens to expand the eligible patient population and move into earlier lines of treatment for ovarian cancer in our FORWARD II trial.
At SGO in March, we presented additional positive data from the cohort extracting mirvetuximab in combination with Keytruda, Anna will review these data with you in more detail shortly. We also look forward to sharing, maturing efficacy and safety data from the mirvetuximab plus Avastin expansion cohort in roughly 50 patients this June at ASCO.
Moving to our earlier-stage portfolio, accrual continues in a nice pace in dose escalation studies for IGN programs and we expect to report data from both programs at ASH later this year. In addition, earlier this this month, we presented three posters at AACR, highlighting our ongoing innovation in ADCs, including advancements and payloads for enhanced anti-tumor activity as well as insights into factors that determine the clinical efficacy of ADCs.
So overall, sound execution across the business to start the year. With that I will turn the call over to Anna to provide more detailed update on our clinical programs.
Anna Berkenblit
Thank you. As Mark mentioned, we are very pleased to have passed in interim analysis for futility and FORWARD I and that the independent data monitoring committee recommended to continue the study as planned.
The primary endpoint in FORWARD I is progression free survival or PFS in both the entire study population or the intensive treat population that includes both medium and high folate receptor alpha expressors and in the subset of patients with high folate receptor alpha expressions. Lastly, we also completed full enrollment in FORWARD I two months ahead of schedule.
We are on track to report topline data in the first half of 2019. The readout is event driven and will be based on 236 PSF events.
Based on the encouraging and consistent safety and activity observed in clinical studies today, we believe that mirvetuximab has the potential to displace chemotherapy as a single agent treatment in the platinum resisting setting. Beyond FORWARD I, we are conducting the FORWARD II trial evaluating mirvetuximab in multiple combination cohort to expand its benefits into platinum sensitive disease and position it as an earlier line therapy.
Today, we have shown that full dose mirvetuximab can be combined safely with full doses of Avastin, Carboplatin and Keytruda with favorable tolerability consistent with immune safety profiles of each agent. Over the course of this year, we will have multiple data readouts from FORWARD II culminating in data reported in more than 100 patients who have received mirvetuximab demand in combination with Avastin or Keytruda.
We believe this growing body of clinical data will support further development of mirvetuximab demand in combination regimen and lay the foundation for mirvetuximab's expanded use in ovarian cancer. More recently, at FDL we presented data on 14 patients from the Keytruda dose escalation cohort.
As a reminder, these are heavily pretreated patients with platinum resistant ovarian cancer. Patients in this cohort have received a median of 4.5 prior lines of therapy with 64% of patients receiving four or more prior lines.
For all patients, the confirmed overall response rate was 43% with a median progression free survival of 5.2 months and the duration of response or DOR or 30.1 week. Notably, in the subset of patients with medium or high folate receptor alpha expression level, the confirmed overall response rate was 635 with a median PSF of 8.6 months and a DOR of 36.1 week.
This is just eight patients, but is very encouraging and based on these data, we are now enrolling an additional 35 patients with medium or high folate receptor alpha expression level in an expansion cohort in the FORWARD II study. These data show early evidence of anti-tumor activity and durable responses and we are pleased with the tolerability profile of the combination of these two agents.
We are particularly encouraged by the data in the subset of patients with medium or high folate receptor alpha expression and is when we saw the greatest activity. The consistency of our findings with mirvetuximab underscores its potential to treat ovarian cancer both as monotherapy and in combination with other treatments in earlier lines of care.
As we look ahead, we will be presenting maturing safety and efficacy data from mirvetuximab plus Avastin expansion cohort in over 50 patients as a poster at ASCO in June. We look forward to sharing more details on this cohort in the weeks ahead.
We also plan to submit an abstract for presentation at ASMO in October, to report initial data from the Keytruda expansion cohort, which will include 35 patients with medium or high folate receptor alpha expression. Earlier this year we also expanded the FORWARD II study to include an additional expansion cohort, evaluating a triplet combination of mirvetuximab plus carboplatin and Avastin in patients with recurrent platinum-sensitive disease.
Given the relatively high response rate observed in mirvetuximab plus carboplatin and the durability of responses, we think it will be into 2019, before we would have initial data on this triplet combination. Beyond our internally sponsored mirvetuximab study, there are several investigator sponsored trials ongoing with the National Comprehensive Cancer Network to evaluate mirvetuximab in other tumor types expressing folate receptor alpha, including triple negative breast cancer and the other Gynecologic malignancies.
We are also co-sponsoring this study with Clovis, which evaluate mirvetuximab in combination with Rubraca in ovarian cancer. We expect data from these studies to help guide the broader development of mirvetuximab to reach as many patients as possible who may benefit from treatment.
I’ll also briefly touch on our IGN program. IMGN779 and IMGN632 which are both in Phase I dose finding evaluation.
As a reminder the IGN our novel class of DNA acting payloads that we developed. We demonstrated preclinically that they are just as active in terms of killing tumor cells as other DNA acting agent fit cross link, for example, PVDs.
But because the IGN's alkylate or damage one strand of DNA, it is easier for normal cells to repair and therefore there is a potential for a better therapeutic window. The ability to repeat dose and to dose higher, and thus far in our clinical evaluation, we have not seen any dose limiting toxicity.
IMGN779 is an ADC directed at CD33, which we are assessing in relapsed refractory AML. We are continuing to dose escalate with both our biweekly and weekly dosing schedules.
Our goal for this year is to get to a recommended Phase II dose, and we plan to submit an abstract for presentation at ASH this December. In addition to IMGN779, we are also developing an ADC that target CD123, which we call IMGN632.
IMGN632 is being assessed in AML and blastic plasmacytoid dendritic cell neoplasm, or BPDCN. We dose the first station in January and are progressing with a standard three plus three dose escalation design.
We expect to have the first date of this program which would include safety PK, PD, and whatever activity data we’ll have also at ASH in December. In closing we are very encouraged by the progress with our mirvetuximab program in an ovarian cancer.
With enrollment complete in FORWARD I, we are working to a top line data in the first half of next year and we look forward to sharing additional FORWARD II with you in the coming months. We’ll also be keeping you updated on the progress with IMGN779 and IMGN632 with data planned for both at ASH.
Now I’ll turn the call over to over to Dave, to review our financials.
Dave Johnston
Thanks, Anna. Our financial results were detailed in this morning's press release, so I’ll review just the highlights.
We continue to operate with financial discipline and remain focused on executing against our strategic priorities related to mervituximab, our earlier stage IGN program, our research portfolio and our and our partners. Revenues for the quarter were $19.8 million, which were largely non-cash as detailed in the press release.
Operating expenses in the first quarter of 2018 were approximately $56.6 million and this included $45 million in R&D expenses driven by an increased clinical trial and drug supply costs related to the mirvetuximab, FORWARD I Phase 3 clinical trial. Operating expense in the first quarter also included a $1.7 million restructuring charge due to the workforce reduction related to the decommissioning of our Norwood facility.
The increase in operating expense again driven by R&D costs associated with our late-stage clinical trial along with lower milestone payments from our partners in this quarter, resulted in cash used in operations of a bit less than $50 million. We ended the first quarter with $218 million of cash and cash equivalents.
We’re updating out guidance a bit for the year and for the year 2018, we expect revenues to be between $60 million and $65 million, which is no change to previous guidance. Operating expenses we expect to be between $200 million and $205 million, which represents an increase of about $15 million driven largely by non-cash stock compensation and accelerated depreciation, once again associated with our Norwood [phase out].
And lastly, our year-end cash guidance remains unchanged at $115 million to $120 million. We expect that our current cash combined with expected cash revenues from partners and collaborators will fund our operations into the fourth quarter of 2019, which will take us through a number of important milestones, including top-line FORWARD I results.
So, with that let me now hand the call back over to Mark.
Mark Enyedy
Thanks, Dave. With a strong start to the year, we’re also looking forward to a number of meaningful milestones for the remainder of 2018.
Anna highlighted the upcoming data readouts in our mirvetuximab program, including plan presentation at both ASCO and ASMO from FORWARD II. Beyond mirvetuximab, we plan to report data from the two Phase 1 studies with 779 and 632 at ASH in December.
In addition, our internal preclinical pipeline partner programs are continuing to progress and strengthen our leadership position in the ADC space. We expect to initiate IND-enabling activities for our novel ADAM9 program in collaboration with MacroGenics toward the end of the year and anticipate that Takeda will dose its first patient this quarter with TAK-164, a GCC directed ADC being evaluated in gastric and colorectal cancers.
This will be the first ADC using our IGN payloads to move into a solid tumor indication. We also continue to add world class talent to lead various functions for ImmunoGen during this moment in the company’s evolution, we were pleased to recently announce the appointment of Blaine McKee to our management team in the new role of Chief Business Officer.
Blaine and I have worked together for over the last 20 years in roles at Genzyme and Shire and he joins us from Shire where he most recently served as Head of Corporate Development. He brings 25 years of experience, building successful biotechnology companies and has extensive strategic, transactional and market access experience.
In this role, Blaine will be instrumental in leading our transition to a fully integrated company as well as advancing our corporate development activities. We also recently announced the appointment of Stuart Arbuckle to our Board of Directors.
Stuart’s international and ontology commercial experience at Vertex and Amgen will contribute significantly to the launch of mirvetuximab and as we more generally evolve into a business with marketing products. In sum, we entered 2018 from the position of strength.
Our lead program is on track with multiple data readouts and operational milestones plan this year. Our earlier-stage portfolio was accelerating with programs integrating our latest innovations and we are operating from a solid financial base.
With a benefit of this momentum in a number of near-term catalyst we anticipate another exciting and productive year in 2018 at ImmunoGen. We look forward to seeing you all at ASCO and keeping you updated on our progress throughout the remainder of the year.
That concludes our prepared remarks and I will now open the call for any questions.
Operator
Thank you, sir. [Operator Instructions].
And we will take our first question from Jessica Fye with JPMorgan.
Jessica Fye
Hey guys, good morning. Just a couple of questions, you mentioned a collaboration with Clovis, can you talk about when we’re going to expect to see human data in combination with PARP and then I know you’re talking about the potentially entertaining a partnership with mirvetuximab say in Europe.
As you get closer to data, would you still entertain partnering this asset prior to data or at this point would you want to wait until after they capture more value? Thank you.
Anna Berkenblit
Hi Jess, I’ll take the first question and then turn the second one over to Mark. So, we are cosponsoring an investigator sponsor trial with Clovis, they are providing Rubraca and we are providing mirvetuximab.
This is an IFT that’s being performed at Ohio State University and since it's an IFT we are having the investigators conduct the study and the timing of the study in terms of enrollment and the data completion is up to them. But they will be providing updates to us on a regular basis.
Mark Enyedy
Hey Jeff. I mean I think predicate to your question is right which is that if we were to partner mirvetuximab in Europe the likelihood highest value from that partnership will come post the data readout from FORWARD I.
So we do have inbound interest, it's our responsibility to monitor the market that I agree with you that the likely outcome here if we were to partner it would be post the data read out and as we’ve discussed previously from our perspective, we would need to be able to convince ourselves and our shareholders that you know anything that we did with the partner would enhance the value of the program which means that the partner would need to subscribe to a broad vision of the program and enable us to do things that we may not have as the highest priority at the current time. So, for example you know potential expansion into other indications such as lung cancer.
So, I would just say stay tuned to that, we’ve done a benchmarking exercise that supports our ability to launch this product in the European market and that said, you know we would be prepared to entertain potential partner in discussions to begin those likely be post readout.
Operator
And we would take our next question from David Huang with Canaccord Genuity.
Unidentified Analyst
Hi this is Peter [indiscernible]. Thanks for taking my question.
So just quickly can you talk about the difference in prior lines of therapy for mirvetuximab plus Avastin data at ASCO versus the prior data and do you expect that most of the patients at ASCO will have received Avastin previously?
Anna Berkenblit
So, the data we presented previously was just on 14 patients and they had a median number of prior therapies of six with a range of two to eight. In the expansion cohort, we allowed up to five prior lines of therapy, so it will be less heavily pre-treated population.
In addition, we had some patients who had prior mirvetuximab and some who didn’t. So, we will be presenting the data at ASCO accordingly.
Operator
And we will take our next question from Andy Hsieh with William Blair.
Andy Hsieh
Yeah thanks for taking the question. I have two, first is for Anna.
Based on what you have seen from the FORWARD II study with mir plus pembro. Do you think that make sense going forward to limit the number prior lines of therapy, kind of like what you guys had done with FORWARD I?
Anna Berkenblit
So, certainly that is an option for us, right now we are in the midst of finishing enrollment really in pembrolizumab combination and we’ll be presenting data at as now. So, based on those data we will make further decisions around the best registration strategy for that combination.
Certainly, could be in later line on the other hand we may decide that earlier lines makes more sense, we’ll just have to wait and see how the data mature, Andy.
Andy Hsieh
Okay, great. Thank you.
So, the second question has to do with milestone, so Dave in terms of Takeda starting dosing, do you expect any milestone payments and secondarily in terms of severance do you foresee another round of one-time payment just housekeeping modeling question?
Dave Johnston
Yeah, to answer the first one, yes there will be a milestone that’ll be, it's not disclosed how much that is, it's not going to be earth shattering, put it that way. But, it will be a cash small milestone and I expect we will see it in the next quarters call.
In terms of severance, you are talking about associated with the Norwood shut down, I am assuming.
Andy Hsieh
That’s correct.
Dave Johnston
Yeah so, that’ll be spread a bit over the year, the bulk of it was in the first quarter, you saw a $1.7 million restructuring fee, but there are other payments like retention for our key in place which will be show enough over the remaining quarters, but it won't be as large.
Operator
And we will take our next question from Debjit Chattopadhyay with H.C. Wainwright.
Please proceed.
Debjit Chattopadhyay
Well, thank you. Thanks for taking the questions.
So, for the CD123 program, CD123 expression seems to correlate with MDM1 and I think [FLT] as well. And now that you have a FLT3 agent approved, is that changing a thought process around the development equation for that?
Anna Berkenblit
Hi Debjit. Certainly, we are thinking ahead in terms of combination, but this year right now we are focused on identifying really the maximum tolerated dose as monotherapy.
As you may recall, we just started dosing in January in the three plus three dose escalation design and we’ll be presenting initial data from CD123 at ASH this year. But we are always from a preclinical perspective thinking about what data package we need to support combinations in the clinic.
Debjit Chattopadhyay
Well the reason I ask is because given that CD123 is a fairly active target, there is some early data from peers, it looks like it works, but there's also this precedent set by FDA with GlycoMimetics asking for an overall survival, end point in the Phase 3, not a CR plus CRi. So, one, it was that primarily because GM-1271 was trying to make the induction regimen more tolerable so you wouldn't really see the effect in the response rate, but in the overall survival whereas in case of CD123, it could be still CR plus CRi based approval in the relapsed refractory setting and then in the combos scenarios do you -- I know it's out there, but in a combo scenario, does it have to be CR/CRi or does the FDA really insist on an overall survival kind of an end point?
Anna Berkenblit
So, Debjit, we at ImmunoGen have not yet engaged the regulators on the registrational pass options for our CD123 compound. What I can say is in the relapsed refractory setting overall survival has had typically been the appropriate end point for approval and certainly the ODACs that occurred around event-free survival, there the focus was on what an end point would be in the first line setting.
We will certainly follow the regulatory trends as our programs pass through, develop through the clinic and proceed accordingly.
Debjit Chattopadhyay
Okay, great. And then one final one, in terms of the Keytruda combo, I assume there is a steering committee with Merck, collaborator Merck rather.
How often does that committee meet and - in terms of as this program expands, what’s the next step forward for the collaboration with Merck, I mean do you have an internal champion based on fairly encouraging data that you presented this year at the SGO. Thank you so much.
Anna Berkenblit
So, you may recall that the collaboration we have with Merck is a drug-only collaboration and I believe, we’re one of probably 200-ish studies that Merck has arranged in this format to supply drug-only. That being said the data that we presented at SGO from the escalation cohort are quite interesting and certainly the expansion cohort data at ASMO as they continue to hold up, should garner continued enthusiasm broadly for this doublet and potentially there are other options even in terms of combining with carboplatin agents as the triplet and that triplet could have opportunities in other diseases including lung cancer.
So, all I’d say is that if the data hold up, I think the interest will as well.
Mark Enyedy
Yeah, I mean, just to add to Anna’s comments. We do meet regularly with Merck to review the data in the study and they share our encouraging perspective on the data, it looks quite good and we will continue to monitor it as we complete enrolment in the expansion cohort and look to report out this data later this year daily at ASMO.
Operator
[Operator Instructions] And we'll take our next question from Biren Amin with Jefferies.
Biren Amin
Hi, guys, thanks for taking my questions. On FORWARD I, I know that the trial is fully enrolled, do you plan to provide us with the baseline characteristics prior to data readout in the first half, and I guess, can you just talk about if the enrolled in FORWARD I were similar to the Phase 2 trial on baseline?
Anna Berkenblit
Hi, we do not plan to disclose any data from the Phase III FORWARD I study until we have top line data from the final analysis. That being said, we’ve been very clear that the key demographic on baseline characteristics for eligibility are platinum resistant disease, one to three prior lines of therapy and full receptor alpha expression medium or high and we have defined that in the Phase 3 trial exactly as we defined it in the pooled analysis where we basically define the population we will go into Phase 3 with and we’ve been monitoring the patients characteristics as they have been enrolling and we have enrolled the patients who we anticipated we'd enroll.
Biren Amin
Got it and then on FORWARD II, now that you have 50 patients with data with combo bev, what do you anticipate are the next steps for this combo?
Anna Berkenblit
So, there are a couple of options and you know from a registration strategy perspective, we can certainly entertain a Phase III trial. Alternatively, since Avastin is already proved in the US in combination with chemotherapy and platinum resistant disease, another viable strategy would be to continue to gather patient data in platinum resistant population and if it continues to hold up, then compendia listing in NCCN guidelines would be an option to support reimbursement in the US.
So, we have a couple of different options that we’re considering internally.
Biren Amin
And have you discussed with the FDA on potential next steps?
Anna Berkenblit
Not at this point but certainly that’s part of our plan.
Operator
[Operator Instructions]. And we will take our next question from Mara Goldstein with Cantor Fitzgerald.
Mara Goldstein
Thanks so much for taking the question. I had a question on the data that’s been generated thus far on the mirvetuximab plus pembro data and in that subgroup of medium to high expressors for folate alpha.
There were some differences between sort of the medium expressors and the high expressors and I know the patient numbers are really small in that cohort but I’m wondering if there is any rationale for why you would see that difference between medium and high in terms of those responses that were observed?
Anna Berkenblit
Thank you, Mara. So, at SGL we presented initial efficacy data from 14 patients in dose escalation and the overall response rate in those 14 patients was 43%.
When we look at the subset of eight patients with medium or high FR alpha expressions that was 63% as a response rate. So, five out of eight patients had a confirmed response.
Given the small number, I would not speculate on the difference between medium or high in that subgroup.
Mara Goldstein
Okay. Thank you.
And then just on with mirvetuximab I believe there were some IFT studies, one in triple-negative breast cancer, are there any expectations around any data for those from a timing perspective?
Anna Berkenblit
Again, these are investigator sponsored trials and the investigators are responsible for enrollment, so you know they share data with us and what I can tell you is the triple negative breast cancer trial is enrolling and when they have data they will share it.
Operator
Okay and it appears there are no further questions at this time. I like to turn the call back to our presenters for additional closing remarks.
Mark Enyedy
Great. Well, thanks everyone for your time today, and we look forward seeing you at ASCO and keeping you updated on our progress throughout the remainder of the year.
Thanks.
Operator
And ladies and gentlemen that does conclude today’s conference, like to thank everyone for their participation. You may now disconnect.