Invivyd, Inc. (NASDAQ:IVVD) Q4 2022 Earnings Call Transcript

Invivyd, Inc. (NASDAQ:IVVD) Q4 2022 Earnings Call Transcript March 25, 2023

Operator: Thank you for standing by and welcome to the Invivyd 2022 Year End Financial Results Update Call. As reminder, today’s call is being recorded. I would now like to turn the conference to your host, Kyra Faircloth, Vice President, Advocacy and Corporate Communications. Please go ahead.

Kyra Faircloth: Thank you for joining us today. Before we get started, I wanted to attend to a few housekeeping items. I invite you to review our press release discussing our full year ended December 31, 2022 financial results, which can be found on the Investors section of the Invivyd website. I would like to remind you that during today’s discussion, we will be making several forward-looking statements. Forward-looking statements include statements concerning, among other things, the future of the COVID-19 landscape including the expectation of its continued evolution and emergence of new variants and sub-variants, our ongoing research and clinical development plans, including the timing of these plans as well as the technology and resources to develop therapeutic or preventative options for COVID-19 and other infectious diseases our regulatory and commercialization plans and opportunities and our expected cash runway and other statements that are not historical fact.

Forward-looking statements are subject to a number of risks and uncertainties and that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements, including those described under the heading Risk Factors in our filings made with the U.S. Securities and Exchange Commission including our most recent 10-K filed earlier today. It is now my pleasure to introduce the Invivyd management team to the call. I am joined by Dave Hering, CEO of Invivyd, Dr. Pete Schmidt, Chief Medical Officer; Dr. Lukas Dillinger, Interim Head of Discovery and Preclinical and Fred Driscoll, Interim Chief Financial Officer. With that, I will turn the call over to Dave.

Dave Hering: Good afternoon and thanks for joining the call. We are looking forward to sharing with you financial results from this past year, along with highlights of significant progress we made during this past quarter. For those who maybe new to the Invivyd story, we are on a mission to rapidly and perpetually deliver antibody-based therapies designed to protect vulnerable people from the devastating consequences of circulating viral threats. Beginning with SARS-CoV-2. The foundation of our mission is based on three key factors: one, COVID is here to stay and represents an unacceptable medical burden on human kind. Two, the medicine cabinet to protect humanity from COVID is alarmingly limited; and three, we are uniquely positioned to keep pace with viral evolution and provide therapeutic options to people who urgently need them.

We have reached a stage where SARS-CoV-2 is circulating unchecked amongst the broader population with as many as 85% of people in the U.S. having been infected. The vaccination rate for boosters is exceedingly low compared with rates of the primary series. Recent reports highlight that only 28% of the eligible people have now received the most recent COVID-19 booster. People are being infected and reinfected while the virus continues to evolve. Every day, 250 to 400 families in the U.S. lose a loved one to COVID-19, and COVID remains the third leading cause of death behind only heart disease and cancer. While most of society has accepted the status quo and are trying to live with COVID, we would argue that all are not living well, particularly vulnerable populations.

Although the immediate impact of COVID-19 on many healthy adults appear mild the long-term consequences remain unknown. Preliminary data reported by the Mayo Clinic show that COVID-19 infections are linked to long-term complications that impact numerous body systems, including pulmonary, renal, neurological and gastrointestinal complications. Additionally, vulnerable populations remain at an increased risk of severe disease, resulting in hospitalization and even death. Immunocompromised patients alone in the U.S. represent between 8 million and 20 million individuals, depending on how their status is classified. The threat we are facing from COVID-19 is constantly changing as viral evolution has continued through Omicron sub-lineages. In fact, hundreds of new variants have been identified in the U.S. in the last 5 months.

This continual viral evolution mandates that drug discovery and development must keep pace. However, as of January 2023, there are no longer any monoclonal antibodies for the treatment or prevention of COVID-19 authorized in the U.S. We consider this market an open opportunity for Invivyd to target near term. For reference, the last full quarter with all antibodies authorized in the U.S. and/or approved globally, represented approximately $1.1 billion in revenue. Importantly, we see this category growing because although many populations have been served by vaccination and treatment with antiviral medication as we referred to, there are many populations who have not benefited from these approaches and which will require ongoing protection and treatment outside of the major options.

Monoclonal antibodies for COVID-19 alone generated almost $8 billion in revenue in 2022. While the bad news is, there are no monoclonal antibodies available for treatment or prevention and an ongoing high burden of disease, the good news is we believe Invivyd uniquely positioned to respond to this need, having generated a pipeline of multiple next-generation engineered antibody candidates for COVID-19 designed to keep pace with viral evolution. Our pipeline assets are engineered to be broadly neutralizing antibodies effective across multiple members of the coronavirus family to support their prolonged utilities. Earlier this month, we announced plans to advance VYD-222, our next pipeline candidate into the clinic for SARS-CoV-2. VYD-222 is one of the components of NVD200, a mAb combination candidate that Invivyd previously elected to advance in development.

The company chose to prioritize the clinical development of VYD-222 monotherapy instead of NVD200 combination products because we believe this strategy will enable us to provide patients with a much needed therapeutic option as quickly as possible in a capital-efficient way. Importantly, we had selected a combination drug candidate prior to the emergence of potential expedited regulatory pathways, which may allow Invivyd to develop multiple new antibodies staggered in time to take advantage of data from new SARS-CoV-2 variants. We see VYD-222 as a highly attractive candidate for clinical advancement for several reasons. VYD-222 targets the Spike protein of SARS-CoV-2, a well-understood mechanism with a safety profile established by multiple FDA-approved antibodies, which we feel reduces clinical risk.

Additionally, VYD-222 is an engineered version of our first monoclonal antibody product called adintrevimab which demonstrated clinically meaningful results across its three primary endpoints and large global Phase 3 trials. Our strong data package from adintrevimab has the potential to support accelerated development of VYD-222. Importantly, in standardized in-vitro assays, VYD-222 showed neutralizing activity against multiple currently circulating variants of concern, including those that led to the obsolescence of products previously authorized in the U.S. that has since been told from the market. We continue to plan to initiate a Phase 1 clinical trial in Q1 of 2023 and assuming positive Phase 1 data, we anticipate rapidly initiating the Phase 3 pivotal trials that could support regulatory filings globally.

Recently, there have been several positive external developments that indicate momentum for faster development of next-generation COVID treatments, including VYD-222. We are often asked about the White House’s decision to end the COVID-19 public health emergency and how this could impact the FDA’s emergency-use authorization for COVID and the development of monoclonal antibodies like VYD-222. We do not see this impacting our development strategy. Soon after the Biden administration announced that the public health emergency will end on May 11, and the FDA confirmed that existing EUAs for vaccines, tests and treatments will not be affected and confirms that it may continue to issue EUAs for new products that meet the required criteria. Additionally, the industry remains hopeful that alternative efficient regulatory strategies to support the development of novel monoclonal antibody therapies will be utilized for this critical unmet need.

While we are optimistic about VYD-222’s potential to serve the critical need for therapeutic options for COVID-19, continued viral evolution dictates that we also continue to evolve our assets and further add to our pipeline. Leveraging our proprietary discovery platform approach, we are perpetually monitoring emerging viral threats, discovering, engineering and evaluating new monoclonal antibodies for their ability to neutralize SARS-CoV-2. In addition to VYD-222, we have three other COVID-19 candidates in our pipeline at the preclinical stage. The message is clear. There remains a large persistent medical and commercial opportunity. Outside of COVID, I am not aware of any other opportunity in biotech that is larger, offers a faster path to authorization and has a higher probability of meaningful clinical results given our mechanistic understanding of the virus.

We believe we are well positioned to capitalize on this opportunity time and time again with our proprietary discovery technology. I will now turn it over to our Chief Medical Officer, Pete Schmidt, to review our recent pipeline progress and ongoing discovery and development activities.

Photo by National Cancer Institute on Unsplash

Pete Schmidt: Thanks, Dave. As Dave mentioned, we recently nominated VYD-222 to advance to the clinic as a new monoclonal antibody candidate or mAb, against SARS-CoV-2. As you know, VYD-222 will be our second mAb candidate to enter clinical testing. After a Phase 1 dose ranging trial to evaluate safety and pharmacokinetics, or PK, we intend to initiate what we expect to be a larger registrational Phase 3 clinical trial to assess the efficacy of VYD-222 to prevent COVID-19, specifically in immune-compromised individuals. VYD-222 has demonstrated in-vitro neutralizing activity against SARS-CoV-2 variant of concern or VOCs, including the current dominant Omicron sub-lineage XBB.1.5. VYD-222 is an engineered version of adintrevimab, our first investigational mAb. And adintrevimab has a robust safety data package and has demonstrated clinically meaningful results in global Phase 3 clinical trials for both the prevention and treatment of COVID-19 during the Delta and Omicron BA.1 waves of SARS-CoV-2, but subsequently lost in-vitro activity against Omicron BA.2. Utilizing our expertise in protein engineering, we were able to restore in-vitro neutralization activity against BA.2 and other Omicron VOCs while maintaining activity against previous VOCs. Our precision engineering resulted in VYD-222 different from adintrevimab by only 8 amino acids in the variable region.

The regulatory landscape around COVID-19 is advancing. And there has been considerable movement with the U.S. Food and Drug Administration and the European Medicines Agency as they work to establish regulatory frameworks that consider the rapidity of viral evolution. The agencies are looking for ways to accelerate development of mAbs as well. On December 15, 2022, and a joint EMA, FDA workshop entitled, efficacy of monoclonal antibodies in the context of rapidly evolving SARS-CoV-2 variants was held to discuss alternative strategies for the development of novel mAb therapies, including those based on prototype products that have demonstrated safety and efficacy in clinical trials. Invivyd was asked to present alongside Eli Lilly and Regeneron at this workshop to discuss ways of accelerating mAb development against COVID-19.

As part of the joint industry presentation and utilizing data from our adintrevimab prevention trial, EVADE, neutralizing antibody titers were proposed as a surrogate marker of protection. It is our belief that these neutralizing antibody titers, combined with associated PK and safety information, could be used for a streamlined development pathway in the prevention of COVID-19. Encouragingly, we have seen other companies in the COVID-19 mAb space refer to the use of biomarker surrogate endpoints to expedite their clinical development, which may suggest that the FDA and other major regulatory bodies have agreed in principle to such a trial design for a next-generation mAb product. We see this as an important advancement not only for VYD-222 ,a but also for future mAbs, we anticipate generating against SARS-CoV-2 to allow us to rapidly shift from 1 mAb to another as the virus mutates.

After demonstrating clinical development success with adintrevimab by generating clinically meaningful results, we are leveraging and applying this expertise to new therapeutic candidates. Furthermore, targeting the SARS-CoV-2 receptor binding domain, or RBD, is a well-validated mechanism of action for mAbs with robust safety and efficacy data generated across the class. We expect that these data supporting the broader class of RBD targeted antibodies will also enable regulatory authorities, including the FDA and EMA to apply surrogate endpoints as correlative protection in future clinical trials. I know many of you want more details about our clinical trial design and time lines. For VYD-222, we are planning a standard Phase 1 PK and dose rating trial.

This trial, which will be conducted in Australia is on track to dose the first patient this quarter. Consistent with the adintrevimab program, we are planning to initiate Phase 3 pivotal trials that could support global regulatory filings rapidly on the heels of completing this Phase 1 trial. With regards to CMC, to support manufacturing of our clinical materials and commercial drug product, we have the partnership with WuXi which has FDA-approved manufacturing facilities and has delivered 100% of our drug substance lots on time. Through this relationship, we have already manufactured the drug substance needed for clinical trials of VYD-222 in support of an EUA. I am confident in our ability to work with speed, agility and efficiency to reduce traditional clinical time lines and to get to top line data as quickly as possible.

I will now pass the call over to Lukas Dillinger, Invivyd’s Interim Head of Discovery and Preclinical, who will discuss our ongoing surveillance and antibody discovery, screening and engineering effort.

Lukas Dillinger: Thank you, Pete, for that update on our near-term outlook. As Dave discussed at the beginning of the call, Invivyd’s approach to R&D for COVID-19 is one of perpetual innovation. Invivyd was created to continually develop candidates and not rely on any one candidate. The pace of viral evolution demands that our candidates need to keep pace and have the potential to address emerging modern threats. This unique perpetual discovery engine is fueled by cutting-edge viral epidemiological surveillance, identification of broadly neutralizing monoclonal antibodies and industry-leading B cell mining protein and antibody engineering as well as screening capabilities through our internal expertise and collaboration. With regards to monitoring viral resolution, we continuously maintain and improve our in-house surveillance system for new and upcoming SARS-CoV-2 variants before these become variants of concern.

Furthermore, by pinpointing dominant spike glycoprotein sites targeted by human antibody repertoires and netting common mutational escape routes. We aim to predict and target future SARS-CoV-2 variants. We have industry-leading antibody mining, engineering and developability screening capabilities built with our internal expertise and enhanced with our fully operational facility that we moved into in December. This is further supported by our partnership with Adimab, our industrial and academic collaborators and the council of our world class scientific advisory board, comprised of leading researchers and key opinion leaders in immunology, virology, epidemiology and the COVID-19 space. Our innovation engine leverages B cell mining capabilities to assess broadly neutralizing antibodies, followed by antibody engineering to improve the potency, breadth, biophysical properties and developability of our candidates we seek to advance into non-clinical development and IND-enabling studies.

For example, where applicable we specifically engineer our antibodies to extend the half-life, modify the assimilated innate immune effective function or to introduce alternative formats, such as single domain or bispecific molecules. Our established platforms and key learnings from our work with our adintrevimab helped to accelerate our path to the clinic and beyond. Through this approach, we are generating not just VYD-222 but the robust pipeline of discovery-stage candidates with potential for use in both, prevention and/or treatment of serious viral diseases, starting with COVID-19. From there, we are expanding discovery efforts into high need indications, including influenza. Beyond VYD-222, we have already initiated new antibody campaigns, the target reengineering and affinity maturation of our current molecules against the most recent COVID 19 variants of concerns, such as XBB.1.5. We are currently evaluating several of these candidates in preclinical studies to support nomination of additional candidates for IND-enabling and clinical development.

We envision further product development opportunities emerging from SARS-CoV-2 discovery efforts for the prevention and/or treatment of COVID-19. We believe the discovery of additional broadly neutralizing monoclonal antibodies that target new viral epitopes, both within and outside the RBD will support durable products for COVID-19 as new variants of concern continues to arise. In conclusion, our strategy is to predict and respond to variance before they become variants of concern and continuously discover and engineer antibodies with neutralization breadth and potency such that patients in need may have access to high-quality protection even in the face of rapid viral evolution. We do not rely on a single molecule targeting a single epitope that may experience viral case.

We believe our integrated discovery platform linked to our drug development and manufacturing expertise offers a unique competitive advantage in this effort and the potential to provide a distinct benefit to patients in need, caregivers and global health authorities searching for durable solutions to the ongoing burden imposed by COVID-19. With that, I will turn the call over to Fred Driscoll, Invivyd’s Interim Chief Financial Officer, who will discuss our financials.

Fred Driscoll: Thanks, Lukas and good afternoon everyone. Let me begin by providing an update on our 2022 fiscal year P&L as compared to the comparable 2021 period and an update on cash guidance. With respect to operating expenses, R&D, including in-process R&D, was $183.6 million for the year ended December 31, 2022, and compared to $190.4 million for the comparable period of 2021. This decrease is attributable primarily to wind down of adintrevimab clinical trials partially offset by an increase in contract manufacturing, including adintrevimab commercial supply for a potential EUA and to support our pipeline programs, including VYD-222. This decrease in R&D was further offset by an increase in personnel-related expenses. Our SG&A expenses were $47 million for the year ended December 31, 2022, and compared to $36.5 million for the comparable period of 2021.

This increase is attributable to higher personnel-related expenses, professional fees and costs to support our operations as a public company. In the fourth quarter of 2022, the company incurred a $17.4 million expense attributable to a one-time charge associated with warrants issued to Population Health Partners, or PHP, as compensation for consulting services to be provided by PHP to the company. The net loss for the year ended December 31, 2022, was $241.3 million compared to $226.8 million for the comparable period in 2021. Basic and diluted net loss per share was $2.23 for the year ended December 31, 2022, compared to a net loss of $5.32 for the comparable period in 2021. The net loss of $241.3 million for the year ended December 31, 2022, included a one-time charge of $17.4 million related to the fair value of the warrants issued to PHP.

We finished 2022 in a strong balance sheet position with cash, cash equivalents and marketable securities of $372 million. Based on our current operating plans, which reflect the completion of a bottoms-up departmental analysis that we highlighted on the Q3 earnings call, our cash guidance has improved from our previous guidance. And we now expect our cash will enable the company to fund its operating expenses, excluding any potential revenue associated with VYD-222 into the second half of 2024. With that, operator, please open the call for questions.

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Q&A Session

Operator: Thank you. Our first question comes from the line of Evan Wang of Guggenheim. Your line is open.

Evan Wang: Hi, guys. Thanks for taking my questions. Can you tell us what’s remaining before the VYD-222 trial start and then expand a little bit more in terms of how you guys are thinking about trial design, both dosing, time lines, etcetera?

Dave Hering: Yes. Thanks, Evan. Pete, do you want to talk a little bit about what remains as we’re getting ready towards the end of this quarter?

Pete Schmidt: Yes. As we stated previously, we’re still anticipating dosing our first in-human study this quarter. We haven’t released a lot of details about that study. But as you heard from the call, it’s a pretty traditional dose-ranging PK and safety study. Beyond that, we will continue to release details as appropriate on our subsequent studies.

Dave Hering: Yes. And you asked, Evan a little bit about timing, right? And so €“ as Pete mentioned, we still anticipate the first study starting by the end of the month, just getting clinical trial material to the sites, getting the recruitment done, etcetera. And then our plan is to continue to have ongoing data releases throughout the year.

Evan Wang: Got it. Thanks. And then in terms of a Phase 3, I know you guys put up a paper in terms of correlates, how are you guys thinking about primary endpoints? And secondly, VYD-222 adapted from ADG20, how does that kind of benefit in terms of if you can provide some maybe a framework in terms of how that may reduce the trial size? And what kind of scope of trial are we looking at here?

Dave Hering: Yes, I’ll take the first part and then Pete, you can take the second. So as we’ve said and shown before, ADG20, our original antibody we went from IND to pivotal clinical data in 16 months, and we utilize both treatment and prevention studies that use event-driven clinical endpoints. And what we continue to look at as a possibility is whether there is an opportunity to use coreless surrogates, immunobridging etcetera. And so those discussions continue. As Pete mentioned, as a part of the upfront on the call, this was really articulated during the December 15 joint FDA EMA meeting, and we, alongside academics and other stakeholders really commented about the need for these types of approaches, especially given the dynamic environment that we’re in, really going against a virus that continues to evolve at such a rapid pace.

And so we continue to have those conversations and as we previously mentioned, as soon as we have outlined and confirmed exactly what those clinical parameters would be for pivotal studies we plan to share more details about that. Pete, any other comments?

Pete Schmidt: Yes. Great question about the relationship to ADG20, the molecular relationship. And we’re still in conversations with global regulators around this, of course. But we do believe that it is an advantage to have a robust safety data set and also efficacy data from our previous Phase 3 studies in a molecule that was generated on the same manufacturing platform and is so closely structurally related to VYD €“ to ADG20, I’m sorry. So lots of potential there.

Evan Wang: Great. Thanks, guys.

Operator: Thank you. Our next question comes from the line of Sidharth Mehta of Jefferies. Your line is open.

Sidharth Mehta: Hi, this is Sid on for Michael Yee, Jefferies. So two quick questions. First one being, AstraZeneca, another big company, while they made a lot of money in 2022 and antibodies, have noted that they see the market going significantly down in €˜23 and beyond as we move to an endemic market. So how do you guys think about that as you move your antibody forward? And my second question is although you’ve mentioned having these kind of correlates of protection for Phase 3 studies, has there been any discussion or definitive answers from the FDA on whether or not you can use that as a part of your Phase 3 studies? Thank you.

Dave Hering: Yes, I’ll take the first question. And so our estimates that in 2022, the sort of overall market across vaccines, oral anti-virals, monoclonal antibodies was almost $100 billion. And yes, I think that a lot of folks are predicting that, that will come down. But it’s still an incredibly sizable market, monoclonal antibodies did $8 billion about in revenue in 2022, and that was with predominantly bebtelovimab and Evusheld. And Evusheld did $500 and some million in Q3 of last year. And what we see is with a similar indication, really targeting immune compromised vulnerable populations, they only touched really a fraction of that population, and we continue to work with €“ these groups talk to patient advocacy groups, speak with these individuals, and they still are really clamoring for products.

In particular, I spoke to a physician who works at the Mayo Clinic and said he had never been in a position that these types of patients come in and ask for products, and there is nothing available. And so based on that, we see the market for monoclonal antibodies continuing to be incredibly significant and a huge unmet need in this patient population. As it relates to your other question in terms of where regulators are and what the status is, we will provide updates, additional updates when we get them. We continue to be in dialogue with the FDA and other global regulators. And as I said, as soon as we have confirmed what that trial design will look like, we plan to provide that information.

Sidharth Mehta: Thank you.

Operator: Thank you. Our next question comes from the line of Matthew Harrison of Morgan Stanley. Your line is open.

Unidentified Analyst: Hi, this is an for Matthew. Thanks for taking our questions. I have two questions. One is €“ is there any update on adding kind of regulatory thresholds for new antibody therapy for COVID given the change of the pandemic setting. Could there be any flexibility in potential approval? The second is, do you have any updates on your potential progress on flu antibodies therapy development?

Dave Hering: Sure. No, thank you for the question. So on the first one, in terms of regards to thresholds, as you’re likely aware, at least in the U.S., none of the antibodies have been fully licensed and gone through BLA, they have all been authorized through EUAs and there currently are no monoclonal antibodies on the market. And so we have not seen any specific changes in thresholds. In particular, what we continue to look at is in-vitro data ahead of time and as what we’ve seen on VYD-222 is consistently strong activity against a variety of variants, including the most recent on .1.5 and so we see that, that is really important information as it relates to getting products into clinical trials, etcetera. And as I mentioned through the presentation, while the public health emergency is ending, that does not remove the potential for the FDA to utilize the EUAs. And so, we still see that as an open possibility for VYD-222 or our additional other candidates that we have in the pipeline.

As it relates to the flu component, I’ll turn it over to Lukas. You can provide an update on the status of what €“ of where we are with the flu program.

Lukas Dillinger: Yes. Thank you, Dave. So we’ve identified several interesting molecules in the flu program already. These molecules are currently being further characterized in in-vitro assays and other studies, and we will be releasing the data as soon as we have them available.

Unidentified Analyst: Okay, thank you.

Operator: Thank you. I’m showing no further questions at this time. I turn the call back over to Dave Hering for any closing remarks.

Dave Hering: Thank you so much. So thanks, everyone, for joining. It was a fantastic quarter and a great 2022. So I’m very excited for where we are. And as I alluded to at the start of this discussion, I’m extremely pleased with our progress in the fourth quarter and our start to this year. We have multiple monoclonal antibody candidates that have shown in-vitro neutralizing activity against multiple current lineages of Omicron. I believe in the company’s ability to bring to market a product for COVID-19 as fast and efficiently as possible to meet this continued large unmet need in patients and to capitalize on the significant market opportunity and create value for shareholders. Given the rapid pace of viral evolution and the ongoing regulatory environment, we are positioning the company to pivot as necessary to deliver on that goal time and time again.

So that concludes our meeting for today. And as always, we will be happy to follow up with analysts or investors one-on-one after the call tonight and tomorrow. Thank you.

Operator: Thank you. Ladies and gentlemen, this does conclude today’s conference. Thank you all for participating. You may now disconnect. Have a great day.