Immutep(IMMP) - 2021 Q2 - Quarterly Report

Results for Announcement to the Market Immutep reported zero revenue and a 233% increase in net loss to AUD 19.8 million for H1 FY2021, primarily due to a non-cash warrant loss, despite Net Tangible Assets per share doubling Key Financial Results | Metric | Change | Percentage | To | Amount (AUD) | | :--- | :--- | :--- | :--- | :--- | | Revenues | Down | 100% | to | AUD 0 | | Other Income | Down | 29.7% | to | AUD 2,260,333 | | Total revenue and other income | Down | 78.6% | to | AUD 2,260,333 | | Loss after tax attributable to members | Up | 233% | to | (AUD 19,844,146) | - The significant increase in loss after tax was mainly due to a non-cash expense of AUD 8.1 million from the net change in fair value of warrants and the absence of a milestone payment received in the prior period[2] Net Tangible Assets per Share | Date | Amount (cents) | | :--- | :--- | | As at 31 December 2020 | 7.22 | | As at 31 December 2019 | 3.15 | - The company did not declare or pay any dividends during the current or previous corresponding period[3] Directors' Report The report details Immutep's LAG-3 immunotherapeutic development, clinical trial progress for efti, key collaborations, and a strengthened financial position with a positive outlook Principal Activities & Review of Operations Immutep, a leader in LAG-3 immunotherapeutics, saw encouraging efti clinical results in H1 FY2021, leading to trial expansions and strengthened pharmaceutical collaborations - Immutep is a leader in developing LAG-3 immunotherapeutic products for cancer and autoimmune disease[9] - The lead product candidate is eftilagimod alpha ("efti" or "IMP321"), a soluble LAG-3Ig fusion protein in clinical development for cancer treatment, with two other candidates exclusively licensed to major pharmaceutical partners[10] - Encouraging clinical results prompted the expansion of the TACTI-002 trial and the announcement of a new Phase II trial in 1st line head and neck cancer[14][17] - The company maintained collaborations with five major pharmaceutical companies: Novartis, GSK, MSD (Merck & Co), Merck KGaA, and Pfizer, and entered a new collaboration with LabCorp[15] Clinical Trials for Eftilagimod Alpha Efti clinical trials showed promising results, including a +7.1 month OS benefit in AIPAC, 36% ORR in TACTI-002 leading to expansion, and new trials initiated for HNSCC and COVID-19 - AIPAC Phase IIb trial: Reported a promising Overall Survival (OS) trend, with a median survival benefit of +2.7 months, and a statistically significant benefit of +7.1 months seen in patients under 65[21][22] - TACTI-002 Phase II trial: Reported a 36% Overall Response Rate (ORR) in both 1st line NSCLC and 2nd line HNSCC cohorts, with some patients achieving a Complete Response, leading to trial expansion by 74 patients in the 1st line NSCLC group[27][28] - A new randomized, controlled Phase II trial in approximately 160 1st line HNSCC patients was announced[31] - Chinese partner EOC Pharma announced a new Phase II trial for efti in metastatic breast cancer following encouraging AIPAC data[34] - INSIGHT-004 Phase I trial: Showed a 41.7% Partial Response rate for the combination of efti and avelumab in various advanced solid malignancies[41] - EAT COVID Phase II trial: An investigator-initiated trial of efti in up to 110 hospitalized COVID-19 patients was initiated to prevent the development of severe symptoms[42] Efti Manufacturing & Preclinical Development Immutep is scaling up efti manufacturing from 200L to 2,000L bioreactors for commercial readiness while advancing preclinical candidate IMP761 for autoimmune diseases - The company is increasing efti's manufacturing process from 200L to 2,000L capacity bioreactors at WuXi Biologics in China[44][45] - Immutep's partner in China, EOC Pharma, is also upscaling manufacturing of efti to 2,000L for its own trials[46] - The preclinical candidate IMP761, an agonist antibody for autoimmune diseases, continued through cell line and other preclinical development stages[47][48] Partner-Led Development & Collaborations Partners advanced licensed assets, with Novartis conducting five LAG525 trials, GSK stopping a Phase II trial but maintaining collaboration, and new partnerships formed with LabCorp and Monash University - Partner Novartis has five ongoing clinical trials for LAG525 (derived from IMP701) in multiple cancer indications, involving over 1,000 patients[50] - Partner GSK stopped its Phase II clinical study of GSK2831781 in ulcerative colitis based on a planned interim analysis, but the exclusive license and collaboration with Immutep remain in place[51][53] - A new Licence and Collaboration Agreement was signed with LabCorp to support the development of immuno-oncology products or services[54] - Immutep and Monash University were awarded a AUD 671,427 grant to continue their research collaboration into LAG-3 for another three years[55] Intellectual Property Immutep strengthened its IP portfolio with four new patents, including a US patent for efti in combination with PD-1 inhibitors, and patents for LAG525 and IMP761 - A new US patent was granted protecting combined preparations of efti and a PD-1 pathway inhibitor (e.g., pembrolizumab)[57] - New US and Australian patents were granted for LAG525, a humanised form of IMP701 out-licensed to Novartis[58] - The European Patent Office granted a new patent protecting the preclinical product candidate, IMP761, for treating autoimmune diseases[59] Financial Performance & Outlook Immutep's cash balance reached AUD 54.9 million, providing a runway beyond 2022, despite a net loss of AUD 19.8 million, positioning the company for expanded clinical programs Financial Highlights | Metric | Amount (AUD) | | :--- | :--- | | Cash and cash equivalents (31 Dec 2020) | AUD 54.9 million | | Placement completed (Nov 2020) | AUD 29.6 million | | Proceeds from warrant exercises (Dec 2020) | AUD 10.66 million | | Loss after tax (Half-year) | (AUD 19.84 million) | | R&D and IP expenses | AUD 8.4 million | - Research and development expenses decreased by AUD 3.5 million to AUD 8.4 million, mainly due to the completion of the TACTI-mel trial and the winding down of the AIPAC trial[64] - The company is in a robust financial and operational position with a cash runway beyond the end of calendar year 2022 and several significant data read-outs[63][67] Auditor's Independence Declaration PricewaterhouseCoopers' lead auditor declared no contraventions of auditor independence requirements or professional conduct codes for the H1 FY2021 financial report review - The lead auditor declared no contraventions of the auditor independence requirements of the Corporations Act 2001[71][72] - The auditor also declared no contraventions of any applicable code of professional conduct in relation to the review[71][72] Half-Year Financial Report This section presents the consolidated financial statements for H1 FY2021, including the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, and Statement of Cash Flows, with detailed notes on accounting policies and financial instruments Consolidated Statement of Comprehensive Income The Group reported a net loss of AUD 19.84 million for H1 FY2021, a significant increase from the prior period, driven by zero license revenue and a new AUD 8.06 million non-cash warrant expense Consolidated Statement of Comprehensive Income | Financial Metric | 31 Dec 2020 (AUD) | 31 Dec 2019 (AUD) | | :--- | :--- | :--- | | License revenue | AUD 0 | AUD 7,366,493 | | Total revenue and other income | AUD 2,260,333 | AUD 10,579,941 | | Net change in fair value of warrants | (AUD 8,057,161) | AUD 619,854 (gain) | | Loss for the half-year | (AUD 19,844,146) | (AUD 5,950,345) | | Total comprehensive loss | (AUD 20,464,897) | (AUD 6,379,326) | | Basic and diluted loss per share (cents) | (3.83) | (1.48) | Consolidated Balance Sheet As of 31 December 2020, the Group's financial position strengthened, with total assets increasing to AUD 76.5 million and net assets rising to AUD 60.7 million, driven by a substantial increase in cash Consolidated Balance Sheet | Balance Sheet Item | 31 Dec 2020 (AUD) | 30 June 2020 (AUD) | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | AUD 54,880,156 | AUD 26,322,047 | | Total current assets | AUD 62,267,054 | AUD 31,151,874 | | Non-current Assets | | | | Intangibles | AUD 13,875,059 | AUD 15,194,807 | | Total assets | AUD 76,473,549 | AUD 46,597,252 | | Liabilities | | | | Total current liabilities | AUD 5,214,544 | AUD 3,364,245 | | Total non-current liabilities | AUD 10,568,066 | AUD 9,933,662 | | Total liabilities | AUD 15,782,610 | AUD 13,297,907 | | Net Assets | AUD 60,690,939 | AUD 33,299,345 | | Total Equity | AUD 60,690,939 | AUD 33,299,345 | Consolidated Statement of Changes in Equity Total equity increased from AUD 33.3 million to AUD 60.7 million, driven by AUD 28.1 million in equity contributions and AUD 18.7 million from warrant exercises, offsetting the AUD 20.5 million comprehensive loss Equity Movement (Half-Year to 31 Dec 2020) | Equity Movement | Amount (AUD) | | :--- | :--- | | Balance at 1 July 2020 | AUD 33,299,345 | | Total comprehensive loss for the half-year | (AUD 20,464,897) | | Contribution of equity, net of transaction costs | AUD 28,116,587 | | Exercise of warrants, net of transaction costs | AUD 18,676,142 | | Employee Share based payments | AUD 1,063,762 | | Balance at 31 December 2020 | AUD 60,690,939 | Consolidated Statement of Cash Flows The Group's cash increased by AUD 28.6 million to AUD 54.9 million, driven by AUD 38.6 million in financing inflows, despite AUD 9.0 million in operating outflows Cash Flow Activity (Half-Year) | Cash Flow Activity | 31 Dec 2020 (AUD) | 31 Dec 2019 (AUD) | | :--- | :--- | :--- | | Net cash outflows from operating activities | (AUD 9,037,013) | (AUD 5,205,594) | | Net cash outflows in investing activities | (AUD 12,128) | (AUD 15,165) | | Net cash inflows from financing activities | AUD 38,631,082 | AUD 9,178,260 | | Net increase in cash | AUD 29,581,941 | AUD 3,957,501 | | Cash at beginning of half year | AUD 26,322,047 | AUD 16,567,982 | | Cash at end of half year | AUD 54,880,156 | AUD 20,516,150 | Notes to the Consolidated Financial Statements Notes detail financial statement preparation, confirm going concern status with AUD 54.9 million cash, identify Cancer Immunotherapy as the single segment, and disclose financial instruments and equity movements - The directors have assessed the Group's financial position and are confident in its ability to pay its debts and continue as a going concern for at least 12 months[90] - The Group operates in a single operating segment, identified as Cancer Immunotherapy[94] - The convertible note liability, measured at fair value, increased to AUD 9,446,391 as of 31 December 2020[102] - During the period, US investors exercised 3,238,981 warrants, providing AUD 10.66 million in cash, with the remaining warrant liability at period end being AUD 958,449[110] - The company issued 123,216,687 shares under an Institutional Placement at AUD 0.24 per share, raising AUD 29,572,005[120] Directors' Declaration The Directors declared that the H1 FY2021 financial statements comply with the Corporations Act 2001 and Accounting Standards, provide a true and fair view, and confirm the company's ability to pay its debts - The directors declare that the financial statements give a true and fair view of the consolidated entity's financial position as at 31 December 2020 and its performance for the half-year[132][133] - The directors state there are reasonable grounds to believe that Immutep Limited will be able to pay its debts as and when they become due and payable[132][133] Independent Auditor's Review Report to the Members PricewaterhouseCoopers' review found no matters suggesting the H1 FY2021 financial report fails to comply with the Corporations Act 2001 or AASB 134, noting the review's limited scope compared to an audit - The auditor concluded that they have not become aware of any matter that makes them believe the half-year financial report does not comply with the Corporations Act 2001[135] - The review was conducted in accordance with ASRE 2410, which is substantially less in scope than an audit, and therefore no audit opinion is expressed[135][140]