Immunocore Holdings - Earnings Call - Q2 2025

Executive Summary

• Immunocore delivered Q2 2025 net product sales of $98.0M (+30% YoY), driven by 15% growth in the U.S., 71% growth in Europe/international and ongoing launches; net loss narrowed slightly to $10.3M with diluted EPS of $(0.20).
• Revenue modestly beat Wall Street consensus ($97.96M actual vs $92.55M estimate, +5.8%) and EPS was a slight beat (actual $(0.20) vs $(0.206) estimate), continuing the company’s 13th consecutive quarter of KIMMTRAK growth; management flagged sequential growth is moderating as the launch matures.
• Guidance color: R&D spending will increase vs 2024 as Phase 3 programs advance; SG&A expected to be “mostly flat” in 2025; ~$65M sales-related rebate accruals to be paid in 2H 2025.
• Strategic catalysts: TEBE-AM Phase 3 (2L+ CM) enrollment on track to complete in 1H 2026; PRISM-MEL-301 Phase 3 dose selection in 2H 2025; ATOM Adjuvant UM trial expanding U.S. sites; HBV single ascending dose data slated for AASLD Nov-2025.

What Went Well and What Went Wrong

What Went Well

• Sustained commercial momentum: Q2 KIMMTRAK net product sales $98.0M (+30% YoY), with U.S. $64.1M (+15% YoY) and Europe $33.0M (+115% YoY quarterly growth), supported by new launches and completed price negotiations in major EU markets.
• Execution across three Phase 3 programs: “Our Phase 3 TEBE-AM trial remains on schedule to complete enrollment in the first half of 2026,” and PRISM-MEL-301 dose selection is “on track” for 2H 2025; ATOM sites expanding via EORTC.
• Improving commercial durability: Management highlighted 13-month average duration of therapy in the U.S., ~68% market penetration, and 70% of prescriptions from community settings, underscoring breadth of adoption and real-world tolerability.

What Went Wrong

• Operating expenses elevated: Q2 R&D rose to $69.0M (from $51.1M YoY) on autoimmune scale-up and Phase 3 trial progression; SG&A increased to $42.8M (from $38.6M) to support global expansion, keeping the company at a quarterly net loss.
• Europe/international variability: While Europe delivered exceptional YoY growth, management noted that international regions exhibit “typical variability” quarter-to-quarter due to buying patterns, and overall sequential growth should moderate as the market matures.
• Profitability timing: CFO cautioned it is “too early” to think about breakeven given increased R&D investment across three Phase 3 trials and broader pipeline, tempering near-term margin improvement expectations.

Transcript

Speaker 9

you and welcome to the Immunocore conference call and webcast. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation, and you may be placed into the question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Clayton Robertson, Head of Investor Relations. Please go ahead, sir.

Speaker 10

Good morning and good afternoon. Thank you for joining us on our Q2 and first half 2025 earnings call. During today's call, we will make some forward-looking statements, which are qualified by our safe harbor vision under the Private Securities Litigation Reform Act of 1995. Please note that actual results can vary materially from those indicated by these forward-looking statements, including those discussed in our filings with the SEC. On today's call, I'm joined by Bahija Jallal, CEO of Immunocore Holdings plc. Ralph Torbay, Head of Commercial, will review our KIMMTRAK sales for the second quarter and first half of 2025 and discuss our lifecycle management plans for KIMMTRAK. David Berman, our Head of R&D, will provide key updates from our three phase 3 clinical trials. Travis Coy, our CFO and Head of Corporate Development, will also provide some key highlights from our financial results report earlier this morning.

Speaker 9

Thank you, Clayton.

Speaker 3

Good morning and good afternoon, everyone. Thank you for joining the call today. We are pleased to report that 2025 is off to a strong start, reflected in our robust half-year financial results and the progress of our diversified pipeline as we continue to deliver on our mission. Our strategy is anchored on three core pillars: maximizing the value of KIMMTRAK, advancing the clinical portfolio, and innovating for sustainable growth. For the first half of 2025, we generated $192 million in KIMMTRAK revenue, representing 32% growth year over year, an impressive milestone four years post-launch. These results underscore the real-world impact of our therapies and the trust that patients, healthcare professionals, and partners place in our science. Expanding global access to KIMMTRAK remains our top priority. At the same time, we are executing with discipline and urgency across three phase 3 registrational trials spanning adjuvant, first-line, and late-stage setting.

Beyond KIMMTRAK, we are progressing multiple early-stage programs in oncology and infectious diseases. We remain on track to file the CTA for our autoimmune candidates in type 1 diabetes by year-end 2025 and anticipate starting the phase 1 trial in 2026. We also expect a CTA for our second autoimmune program next year. Our pipeline is built on rigorous transformational science, always focused on addressing significant unmet medical needs. We recognize the urgency for patients and are committed to advancing our programs cost-effectively and efficiently. Finally, our strong balance sheet enables us to invest in innovating while maintaining financial discipline. This approach ensures we are well positioned to deliver long-term value for our shareholders. The team will walk you through the details of the quarter, and I'll turn it over to Ralph.

Speaker 9

Thank you, Bahija. Hello, everyone. I am delighted to share our continued momentum in bringing KIMMTRAK to patients worldwide. We have now launched in 28 countries and are approved in 39 globally, representing exceptional progress in our mission to reach more patients with this transformational medicine. I'm proud that shortly after a very successful launch in the UK, KIMMTRAK received its fourth Prix Galien, this time for Best Biotech Product. To support our growth and our mission to reach more patients globally, we have expanded our distribution of KIMMTRAK into Turkey and the MENA region through a partnership with Erkam. Now let me take you through our strong commercial performance in the next slide. We delivered $192 million in net sales for the first half of 2025, representing a 32% year-on-year growth. This exceptional performance demonstrates the continued strength of KIMMTRAK across all our markets.

In Q2 specifically, we achieved $98 million in net sales, marking our 13th quarter of consecutive growth, a testament to our team's dedication and KIMMTRAK's transformational impact. In the U.S., we delivered $64 million in net revenue during the second quarter, representing a 15% increase compared to Q2 2024. We continue to see strong duration of therapy at 13 months, with a growing market penetration now around 68%. I am pleased that 70% of prescriptions in the U.S. now come from the community, highlighting the broad acceptance and confidence physicians have in KIMMTRAK. As we enter our fourth year of launch, we continue to expect modest but meaningful growth in this well-established market. In Europe, we delivered $33 million in Q2 net revenue, representing an exceptional 115% year-on-year quarterly growth.

While we are very pleased and well-penetrated across most major European markets, this growth was driven by successful launches in the UK, Poland, and Netherlands, continued growth in mature markets like Germany, as well as strong market access achievements. Going forward, we expect to see incremental growth coming from Europe as these launches reach maturity. Looking ahead, KIMMTRAK is well-positioned for long-term growth with two phase 3 clinical trial programs ongoing, starting with TEBI-AM in cutaneous melanoma, which is on track to complete enrollment within the next 12 months. As we prepare for the potential expansion of KIMMTRAK, we are well-positioned with around half of cutaneous melanoma treaters already experienced with KIMMTRAK due to the overlap with uveal melanoma. Providing positive data, this experience, coupled with a robust phase 3 study design and OS endpoint, will give KIMMTRAK a very strong value proposition in the setting of high unmet need.

We have the ATOM study, the only registrational phase 3 trial in the adjuvant uveal melanoma setting, where there is currently no standard of care. Together, these could bring the benefit of KIMMTRAK to up to 6,000 patients across the U.S. and Europe. I'm confident in our team's ability to execute on this vision and continue delivering exceptional long-term growth. With that, I would like to hand over to David to discuss these trials in more depth, our clinical progress, and pipeline developments.

Speaker 10

Thank you, Ralph. I am pleased to share an update on our clinical portfolio. We have a truly unique and broad clinical pipeline. Three phase 3 trials in oncology, with line-up sites completing TEBI-AM. We look forward to new insights maturing over the next 12 months in our earlier stage oncology and infectious disease clinical programs. In 2026, we will see the first clinical experience for our platform in autoimmunity. I will now highlight the three registrational trials, starting with TEBI-AM. TEBI-AM is a phase 3 randomized trial in melanoma patients who have progressed on checkpoints and targeted therapy. Patients are randomized to KIMMTRAK alone, KIMMTRAK plus pembrolizumab, and to a control arm, the primary endpoint being overall survival. This study is enrolling well globally, and we project to complete enrollment in the first half of 2026.

In first-line cutaneous melanoma, patients receive either an anti-PD-1 with or without additional checkpoints, or BRAF-targeted therapy. In second-line cutaneous melanoma, patients can switch between these classes of therapy where appropriate. After this, however, there remains the large unmet need. Chemotherapy, retreatment with the same therapies, and clinical trials are frequently a primary option. The only new therapy in this setting are TILs, and no therapy in this setting has yet demonstrated an overall survival benefit, which is the gold standard. This is where we believe the opportunity for KIMMTRAK lies. TILs are approved under accelerated approval and only based on response rate. Other options are commonly used but are not considered as having proven benefit. If TEBI-AM is positive, then KIMMTRAK would be the first new therapy with overall survival benefit in second-line melanoma.

In addition, KIMMTRAK will provide an off-the-shelf therapy that is easy to administer and familiar to melanoma doctors. There's also another unique factor for KIMMTRAK, the safety profile. Having treated over 1,000 patients with KIMMTRAK, we have established a very clear AE profile that is unique in melanoma. The most frequent treatment-related AEs are mechanism-based, cytokine release syndrome, and rash. They are transient and reversible. They occur early in the first few weeks with no cumulative or novel treatment-related AEs after month one, and we expect KIMMTRAK to have a similar profile in cutaneous melanoma. ATOM is the only ongoing phase 3 in adjuvant. High-risk adjuvant patients are randomized to KIMMTRAK or observation, the primary endpoint being relapse-free survival. The study, which is sponsored by EORTC, is activated in multiple European countries, and EORTC expects to start in the U.S. this fall.

ATOM is currently in the initial stages of site activation and patient accrual. I will now turn to the third phase 3 trial, PRISOMEL. PRISOMEL is randomizing first-line cutaneous melanoma patients to bernadifusp plus nivolumab versus either nivolumab monotherapy or duralag. The primary endpoint is progression-free survival. We have successfully activated 150 sites globally. In a pre-planned analysis conducted earlier this year, the IDMC reviewed only the safety of the first 30 patients randomized and advised us to continue with no changes to the study. The next step is for the IDMC to select the go-forward dose from the ongoing phase 3 study, and I will now give you some context for this. In the phase 1 trial, we observed that both 40 and 160 micrograms had similar clinical activity, and both were well tolerated. However, this was from a non-randomized phase 1.

Therefore, in discussion with the FDA and as per Project Optimus, we agreed to compare these two doses in a randomized fashion within the ongoing phase 3 study. After the first 90 patients are randomized, the IDMC will review safety and RECIST efficacy endpoints, such as response rate and disease control rate. The decision on the go-forward dose will be based on a benefit-risk analysis by the IDMC. The IDMC will not review or compare the efficacy on the control arm. Finally, I will turn to the early to mid-stage clinical pipeline. As we anticipate significant clinical progress over the next 12 months, in addition to the PRISOMEL trial in cutaneous melanoma, our PREME program includes bernadifusp combinations in ovarian and lung, as well as the phase 1 dose escalation of PREME half-life extension.

Over the next 12 months, we plan to complete this exploration of PREME to inform next steps. For PWOLF in colorectal cancer, we expect a complete monotherapy dose escalation and initiate combinations in earlier lines of therapy. For HIV, we plan to complete dose escalation, including evaluation of HIV viral control, and also we plan to initiate an expansion. Final data for the single dose escalation of HPV will be presented in a few months at AASLD. Finally, we expect to start dosing the type 1 diabetes program, our first autoimmune indication, and we plan to submit the CTA for our second autoimmune program for CD1A in atopic dermatitis. We are in a unique position for a biotech of our size. We have a commercial product and have invested in two lifecycle management phase 3 registrational trials, including one in the adjuvant setting.

We have a third phase 3 registrational trial in first-line cutaneous melanoma for bernadifusp. Randomized trials take longer to recruit and to read out, but once we have the data, it is definitive. We believe we have line-up sites for the first of these phase 3 trials, TEBI-AM. For our earlier stage programs, 2026 will be an important year to inform the next steps for PREME and PWOLF, as well as for our HIV and HPV programs. Finally, the next 12 months will bring our first clinical experience in autoimmunity. We believe that this will be the first clinical test ever of a purely PD-1 agonist and one that is tissue-targeted. This is a robust pipeline, and I have confidence that our R&D teams will continue to hit our operational milestones. I will now hand over to Travis.

Speaker 8

Thank you, David. Good morning and good afternoon, everyone. Earlier today, we released our financial results for the second quarter and six months ended June 30, 2025. Please refer to the press release and our latest SEC filing on Form 10-Q for our full financial results. Let me share some of our key financial highlights for the quarter and touch on expectations for the remainder of 2025. We are pleased to report strong performance for KIMMTRAK, with Q2 net sales reaching $98 million. This represents a 4% sequential increase over Q1 sales and a 30% increase over Q2 of last year and was driven by volume growth in both the U.S. and Europe. Recently, quarterly revenue from KIMMTRAK has grown sequentially in the range of 4% to 7%. Moving forward, we expect KIMMTRAK to continue growing, albeit more modestly given that we are in our fourth year on the market.

One other revenue-related item to note is that throughout 2024, we booked revenue reserves due to ongoing pricing negotiations in Europe, most notably in France and Germany. The success of those price negotiations in Q1 of this year now results in favorable year-on-year comparisons for Europe. As we think about future performance for Europe and the international regions, we expect incremental growth to come from additional launches. While we continue to advance our portfolio, we saw an increase in our operating expenses this quarter. The growth in R&D spending was primarily driven by ongoing investments in our three phase 3 trials, as well as advancement of our early-stage research programs as we progress towards initiation of clinical studies. Consistent with what we said at the beginning of this year, we expect our R&D expenses to increase versus last year as we make data-driven investments in our pipeline.

Our SG&A expenses versus last year have increased slightly, primarily due to an increase in general business functions needed to support our growing operations. We will continue to be disciplined with our SG&A investments. We have averaged $42 million per quarter for the last three quarters and expect those investments to be mostly flat for the remainder of 2025, while allowing for typical quarterly variability. Through the first half of this year versus the same period last year, we are pleased to have our net loss decrease from $36 million to $5 million as revenue has grown more than our operating expenses. As of the end of June, we have a strong balance sheet with $883 million in cash and marketable securities. In the second half of 2025, we expect to pay approximately $65 million related to European rebate accruals from prior periods.

With a robust foundation built upon strong revenue from KIMMTRAK, expense discipline, and data-driven strategic investments, we are advancing our portfolio to deliver transformative medicines across all three of our therapeutic areas, while continuing to expand our reach to patients globally. I'll now turn the call back to Bahija.

Speaker 3

Thank you, Travis. With our solid first half-year results, we remain focused on delivering continued progress with the lifecycle management plans for KIMMTRAK, as well as enrolling patients across the multiple ongoing clinical trials from phase one to phase three in oncology and infectious diseases. I'm really excited by the expansion of our diversified pipeline into autoimmunity, as we plan the CTA for our type 1 diabetes candidates before the end of 2025 and starting clinical trials in the first half of 2026. There is a lot to come over the next year. I want to thank our shareholders, our partners, and most importantly, the patients and families who inspire us every day. In addition, none of this progress would have been possible without the dedication and expertise of our employees. Their commitment and passion drive our mission forward and are fundamental to our continued success.

Together, we are making a difference, and I am confident that 2025 will be another year of meaningful progress. Thank you for your continued support, and the team and I will be happy to take your questions.

Speaker 9

Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into the question queue, please press star one on your telephone keypad. We ask you to please ask one question and one follow-up, then return to the queue. If you'd like to remove yourself from the queue, please press star two. Once again, that's star one to be placed into the question queue, and please ask one question and one follow-up, then return to the queue. Our first question today is coming from Gil Blum from Edelman. Your line is now live.

Good morning, everyone, and congrats on the advancement in this quarter. Maybe a quick question for David as it relates to the design of the study. We're removing one of the doses. What happens to the patients whose dose is being discontinued? Are they crossing over? How will this be analyzed in the larger statistical analysis? Just remind us. Thank you.

Speaker 10

Hi, Gil. Thank you for the question. The patients who are in the not go-forward dose, the dose that's dropped, will continue on that dose, although the IDMC may also recommend that they switch to the go-forward dose. They will not be included in the ITP analysis.

Okay. Thank you. Very helpful. A question for you, Travis. Clearly, growth is continuing unabated, and margins are looking pretty good. Should we start thinking about a break-even point? Thank you.

Speaker 8

Yeah, thanks, Gil. I think it's a bit too early to be thinking about profitability. You know, we continue to invest in our three phase 3 trials as well as the remainder of the portfolio. We do expect our R&D expenses to increase. I think we continue to be pleased with the growth from KIMMTRAK, but we do expect that growth to moderate on a sequential basis moving forward, given that we are on the fourth year of the market.

Speaker 9

Thank you. Our next question today is coming from Eric Schmidt from Cancer Pathology. Your line is now live. Eric, your line is now live. Please proceed. Can you hear me? Yes, please proceed.

Speaker 2

Another question for David. This one on TEBI-AM. Possible changing goalposts at the FDA with regard to oncology drug approvals. With regard to TEBI-AM, if you hit on the pembrolizumab combination arm but miss on the monotherapy arm, do you have enough evidence to support KIMMTRAK's contribution to the effect? Thanks.

Speaker 10

Eric, thank you for that good question. In that setting, I think there's two arguments. One is the scientific argument that we designed the eligibility such that the patients are unlikely to respond to PD-1 or shouldn't respond to PD-1. The second is that we know from real-world analysis of patients who have the eligibility for our trial that a significant proportion actually do get retreatment with anti-PD-1, even though it's believed to be ineffective. If our control arm reflects that real-world evidence, we do believe we'll have sufficient anti-PD-1 monotherapy in our control arm to provide the contribution of components.

Speaker 2

Thank you. A quick one for Travis. Can you quantify what the impact in Europe is from the previously deferred revenue component? Thanks.

Speaker 8

Yeah. As I mentioned, those pricing negotiations that we were completing in the first quarter of this year, we were booking revenue reserves last year. The total of those revenue reserves was about $18 million, roughly spread evenly for last year. That gives you some quantification on how you can think about it.

Speaker 9

Thank you. Next question today is coming from Tyler Van Buren from TD Cowen. Your line is now live.

Speaker 2

Great. Thanks so much. Can you talk about where you think the average duration of therapy for KIMMTRAK will settle out at? Are we about there at 13 months, or do you think we could add another month or potentially more than that? The second question is, I think Erkam alluded to this, but given the recent reptilumumab CRL, are you seeing a change in stance at the FDA based upon your interactions, or do you think there's any read-through to your ongoing programs?

Speaker 3

Great. I think Ralph would start, then David.

Speaker 2

Sure. Thank you, Tyler. We're very happy with what we're seeing from a duration of therapy perspective because obviously that means that patients are doing very well. In terms of where it's going to go, this is my first experience with a medicine having a better real-world duration of therapy than in clinical trials, which makes it hard for me to give you exactly where this is going to go. That being said, we're in our fourth year of launch, so we do expect this to be significantly moderating and currently is at 13 months.

Speaker 10

I think, Tyler, with respect to your second question, we haven't seen any changes yet. Maybe the other thing just to mention is that the review division that reviews KIMMTRAK and bernadifusp is the Melanoma Solid Oncology Group. We have been getting insight from them before we started the trial and during the trial. Our phase 3 trials are well designed. TEBI-AM uses a survival endpoint that's randomized with a homogeneous population. As I said to Eric, I believe we'll have enough anti-PD-1 in the control arm to provide contributional components. The PRISOMEL first-line phase 3, also well-designed, randomized trial, also with input from the FDA.

Speaker 9

Thank you. Next question is coming from Jessica Fry from JP Morgan. Your line is now live.

Hi. Thank you. This is Adam on for Jess. Thanks for taking our question. Two for you. Can you share some details as to what drove the growth in the U.S., and will this trend continue? My second one is, can you update us on the timeline of the phase 3 ATOM trial? When could we see data? Thank you.

Speaker 3

Sure. Ralph, do you want to start? Mohammed, do you want to?

Speaker 2

Sure. Adam, again, really pleased with the growth that we've had, $64.1 million in the U.S. That's a 15% year-on-year quarterly growth. The progress has mostly come from what we've been saying, which is we're trying to penetrate deeper into the community and get that experience with KIMMTRAK as well. We went from 65% to 68%, and now with duration of therapy, we also see that increase from 12 months to 13 months. That being said, we're in our fourth year of launch, so I do expect the growth to be moderating, as Travis has mentioned.

Speaker 3

TEBI-AM? Which is the next growth then.

Speaker 2

With TEBI-AM, we have line of sight to the final enrollment within the next 12 months, which actually puts us in the midterm growth potential if the data is positive. After that, we have ATOM, which is the question that you've asked. I'll pass it on to David for that answer.

Speaker 3

Mohammed, you go ahead.

Speaker 4

Yeah, I can answer it. With ATOM, obviously, it's an adjuvant study. We're in the early stages of site activation. This is sponsored by the EORTC, so they're actually running the trial. For these types of trials, typically, it can take up to three years for accrual, and then it's an event-free survival endpoint. I think we need to wait until we have the sites activated and we're at steady state before we can make a more precise prediction of when to expect readout from the trial.

Great, thanks for expanding.

Speaker 9

Thank you. As a reminder, that's star one to be placed in the question queue. In the interest of time, we ask you to please limit yourselves to one question, then return to the queue. Our next question is coming from Jonathan Chen from Luming Partners. Your line is now live.

Hi. This is Albert Agustinus dialing in for Jonathan Chen. My question is, are you also still on track to present data for the TEBI-AM study in the second half of 2026?

Speaker 10

Albert, we're on track to complete randomization of the TEBI-AM. That's certainly within our control. The endpoint is always driven by events, so that obviously depends on when the events occur. Right now, we've speculated that it could be in the second half of 2025.

Speaker 3

'26.

Speaker 10

Sorry, of '26. Apologies. There is always a cone of uncertainty. As you get more events, you can narrow that cone of uncertainty more precisely. As we get more events, we'll be able to narrow that cone and predict better when those events can occur.

Speaker 9

Thank you. Next question is coming from Michael Schmidt from Guggenheim Partners. Your line is now live.

Speaker 8

Hey, this is Paul on for Michael. Thanks for taking our question. For KIMMTRAK, I had a quick follow-up on the duration discussion. Have you observed any meaningful differences in the real-world duration of therapy depending on whether patients are treated in academic settings versus the community, where there might be some different logistical challenges? Also, on KIMMTRAK, I wondered if you could comment briefly on the potential evolution of competition in the uveal melanoma space. There's a late-line oral regimen in development for the HLA-negative setting that's also generating some survival data across all comers. How would you expect KIMMTRAK to be positioned against a possible off-label competitor, particularly in oral regimen? In general, what does your sort of market research tell you about the longer-term role for KIMMTRAK in uveal melanoma? Thank you.

Speaker 2

Sure. Thank you, Ralph. Thank you, Paul, for those questions. With regard to the duration of therapy, we're seeing very similar numbers in the academic setting and the community. Keep in mind, the community is also closer to home, so for these patients, it's a very convenient aspect to go in and out of the office. Importantly, actually, and I think one of the reasons the duration of therapy is being driven is the safety profile. We don't see a lot of events happening after the first few cycles, which actually makes it a much more tolerable medicine for patients. In fact, we've seen patients who have been back to work seven years after being on KIMMTRAK, which is actually very impressive.

With regard to the therapies developed for HLA-negative patients, while we don't underestimate competitors, and it's great to see development in this high unmet need population, for the positive, we have established KIMMTRAK as a center of care. It's the number one prescribed drug. We have completely shifted the OS bar to now 22 months of median. We have three-year long-term overall survival, which is unprecedented in a setting like uveal melanoma. As we discussed, the long-term safety and patients doing well from a real-world therapy duration perspective all speaks to this excellent profile and establishment.

Speaker 9

Thank you. Next question is coming from James Shin from Deutsche Bank. Your line is now live.

Speaker 8

Hey, good morning, guys. Thanks for taking the question. First one is for David. Just to piggyback on what Eric and Tyler asked on TEBI-AM, and I appreciate all the comments you meant about contribution component and OS being the primary, but you know, the peers that had FDA turmoil, they also had agreement, it sounded like, but there was not complete agreement. I guess a more pointed way to ask is, has Immunocore Holdings plc checked in with FDA? Were the right people at CBER to confirm TEBI-AM's design is acceptable? Then could you, relative to, I think, and this one's for Travis. I think they said, you said duration is now 13 months in the U.S. How is, it's very early in Europe, but how is duration trending relative to how duration trended in the U.S.?

Speaker 10

Yeah. I'll take the first one. There were two issues with the recent news. The first was the issue on a phase 2 single-arm combination. That doesn't apply to us because we're having a phase 3 trial that's randomized with overall survival benefits. That's, I think, point number one. Within the phase 3 trial, the last interaction we had was last year, but it was with the right folks at the FDA. I will just repeat that our analysis of real-world evidence for the eligibility of our trial indicates somewhere in the mid-30% of patients still get retreated with an anti-PD-1, even though we know it doesn't really work. I do believe that will be reflected in our trial. If so, then we believe we will have sufficient COC contribution of components if only the combination arm is the one that wins.

Speaker 2

With regard to the duration of therapy in Europe, it's good to keep in mind that we were launched in 28 countries, many of which are European countries, and there are different launch stages. Where we see mature markets such as Germany and France, we actually see an excellent duration of therapy that is similar to what we've seen in the U.S., whereas obviously some other markets like the UK, where we recently launched, it's still maturing. We do expect to see some consistency across markets.

Speaker 9

Thank you. Our next question is coming from Greg Savanovic from H.C. Wainwright. Your line is now live.

Speaker 8

Hi. This is Doug on for Greg, actually from Mizuho. Thank you so much for taking my question and congrats on a strong quarter. I'm interested mainly in ex-U.S. growth and what we could be looking forward to. If we're expecting sort of low to mid-single-digit overall growth, how might this be broken down between the U.S., the EU, and the rest of the world?

Speaker 3

Yeah, I think Ralph and Travis, you want to take?

Speaker 2

Sure. I'll start with the answer. Doug, you know, ex-U.S., we're seeing roughly that contributes around 65% of our revenue today. Sorry, 35% of our revenue today. We do expect that to be the case moving forward. We delivered obviously $33 million, which is 115% year-on-year growth. That had to do with underlying demand, of course, growing, but also with some good news from a pricing perspective. Travis, anything you want to add from a growth perspective?

Speaker 8

I think you covered it well.

Speaker 9

Thank you. Next question today is coming from Patrick Trujillo from HC Wainwright. Your line is now live.

Thanks. Good morning. Just a clarification question on KIMMTRAK. With the Q2 growth, have you or could you tell us how much of this was attributable to new patient starts versus those longer treatment durations? My question is on the HIV program. I think you mentioned ongoing dose escalation and plans to initiate an expansion. What criteria will you use to trigger the expansion, and what are the expectations around improved viral control at higher doses?

Speaker 3

Go ahead, Ralph.

Speaker 2

It is a little bit of both, right? I mean, it mostly has come from penetration. We've gone from 65% to 68% in the U.S., as well as obviously we see some growth in Europe from the new launches. I think that is the majority of the growth and what also remains ahead of us. DOT is obviously contributing from a tailwind perspective, which is great to see.

Speaker 10

Patrick, with regard to the HIV, I think first I will say just as a reminder that the data that we showed earlier was really exciting to us because we showed we were having some effect in viral control and time to rebound and reservoir. That obviously is not the TPP because you need to have viral control going out much longer, but the initial trial was limited to 12 weeks, the initial protocol, and that's what we showed. Now we're continuing to go higher. What we want to see is we want to see viral control beyond 12 weeks. With the new amendment, we now have the option of extending viral control beyond 12 weeks. We want to see in the small number of patients that at least we can have viral control beyond 12 weeks. That would trigger the expansion.

Speaker 3

Get the right dose.

Speaker 10

Yes, of course, get the right dose because we only have a few patients at each cohort. We need to get a larger cohort. In terms of viral control, we've talked about the TPP, which is probably a couple of years of viral control. We don't know what to expect. This is our first, this is the world's first foray into this. I think we're going with our eyes open, but it is certainly intriguing where we are now.

Speaker 9

Thank you. Next question is coming from Jack Allen from Baird. Your line is now live.

Speaker 8

Hi. Thank you so much for taking the questions. Congratulations on the progress made over the course of the quarter. Two quick ones from me. The first of which is on TEBI-AM. I was just hoping you could provide any additional color on the powering assumptions you have there. I know you've talked a little bit about the control arm, including, you know, PD-1 retreatment potentially, but I'd love to hear how you're thinking about the control overall survival there. More of a logistical question, you mentioned that you'll have potential PWOLF data next year. I wanted to also ask if we could get PREME half-life extended or PREME-A2/4 data as well next year.

Speaker 3

David, do you want to start with AM?

Speaker 10

Yeah, I can. With regard to the historical control arm, Jack, I think we're looking at a one-year survival of 55%. That's been historically what the survival has been, and that's what we've modeled for the control arm. You can see that in multiple different trials. We'll have a better timing of the events within the next six to nine months. With regard to the data release, both PWOLF and HLA are dose escalating well, and we should complete dose escalation for both of them in the next 12 months. It is possible HLA can be shared next year as well.

Speaker 9

Thank you. Next question today is coming from Peter Lawson from Barclays. Your line is now live.

Great. Thank you so much. I'd just like to ask along your kind of updated thoughts around the current shifts in U.S. trade policy, whether there's anything we should think differently around tariffs, IP, etc., how that kind of affects your manufacturing costs or supply chain. Thank you.

Speaker 3

Definitely. Travis, you want to take that?

Speaker 8

Yeah, happy to. Yeah, thanks, Peter, for the question. You know, regarding tariffs, there's been, you know, certainly has been a lot of uncertainty the last few months, and we continue to monitor the situation very closely. KIMMTRAK is manufactured in Europe. If tariffs do come to play, we do expect a potential non-immediate impact on our cost of goods sold. Given that uncertainty that I referenced, what we've really been focused on is ensuring we have patient continuity in supply. We have about 18 months of inventory in the U.S. That impact, if it were to come to pass, would be non-immediate, as I mentioned.

Speaker 9

Thank you. Next question is coming from Justin Zelling from BTIG. Your line is now live.

Speaker 8

Thanks for taking the question. I'll have some commercial questions for Ralph. You mentioned growth coming from launch in new markets. Any particular you'd like to call out, and would you look to launch there with partnerships or on your own? You've also mentioned increasing use in the community setting. Any tactics that were most effective in engaging new prescribers to drive the growth in the community settings?

Speaker 2

Thanks for the question, Justin. In terms of new markets, we're currently prosecuting three launches, the first one being the UK, Poland, and Netherlands. That's contributing to the growth that we're seeing in Europe to a certain extent. We also recently announced a partnership with Erkam, which actually takes us into Turkey, which is actually a good market as well because it's fairly sizable and has a high HLA2/1 expression, around 50%. It looks like Europe from that perspective. The Middle East and North Africa regions as well as part of that partnership. From there, in the U.S., we continue to work at going deeper into the community. Obviously, we're not expanding our operations to do that. We actually are leveraging a lot of, you know, triggers, next best action, the usual aspects.

We're actually infusing a lot of AI that helps us with predicting where patients are going to relapse and sending our reps after that or NPP after that. We're doing it, but we're doing it in a hard way.

Speaker 9

Thank you. Next question is coming from Rajan Sharma from Goldman Sachs. Your line is now live.

Hi. Thanks for taking my questions. It seems like having sufficient U.S. trial centers and representative patient populations in clinical trials is increasingly a focus at the FDA, given recent ATOM. It would be helpful if you could outline your confidence that both TEBI-AM and ATOM have sufficient U.S. trial centers, but also have planned patient demographics, which are reflective of the real-world populations. Just on KIMMTRAK, could you talk to us about where penetration is in Europe relative to the U.S. and where you think that lands? Specifically in the community setting in the U.S., where do you think that could land long-term? Thank you.

Speaker 3

David, do you want to start?

Speaker 10

Sure. Yeah. The bottom line is, yeah, we have confidence that the site footprint will meet the requirements from the FDA. First of all, almost all of our trials' sites are either U.S., Western Europe, Canada, Australia, or UK, so places where the standard of care is the same as the U.S. We do have enough sites in the U.S. for both trials, for all three trials actually, to ensure that we will have sufficient patients from the U.S. I will reemphasize that the standard of care and practice is the same in the countries, for the most part, where we are studying as the U.S.

Speaker 2

On KIMMTRAK in Europe, we see actually very good penetration in markets like Germany and France, where we've launched for over four years. We are seeing above 80% penetration. That's a great guide because in the U.S., you know, obviously, the U.S. is the size of many of these markets put together. There's a lot more work to be done in the community. We'd use that as a guide because, you know, we do think that we can get to higher numbers. That's the effort that we're putting in today. In the academic centers, we're above 80%. In community, this is where the work, as I've been mentioning, needs to continue.

Speaker 9

Thank you. Next question today is coming from Romy O'Connor from Van Lanschot Kempen. Your line is now live.

Hi. Thank you for taking my questions. I just wanted to know whether you can update us on your current efforts of bernadifusp in lung and ovarian, and whether the ctDNA and the T-cell fitness data insights collected influence any strategies going forward with these programs. Thank you.

Speaker 10

Yeah, I see our PREME exploration as three clinical experiments, which are certainly taking into account everything we've learned. Following up on the signal of ovarian, the T-cell fitness said go into earlier lines of therapy, and there was reason to believe why addition of chemotherapies makes sense. We are continuing that exploration, and yet ctDNA and T-cell fitness continue to be important. Same in lung cancer. It just happens, as we talked about, that in lung cancer, in late-line lung cancer, T-cell fitness is among the lowest of all the populations, and that's why we need to look in earlier lines. Finally, HLA is ongoing, and we've taken all of the insights from the bernadifusp and applied them to HLA as well.

Speaker 9

Thank you. Our next question is coming from Sean Mohammed from Morgan Stanley. Your line is now live.

Good morning. Good afternoon, everyone, and thanks for taking my question. I don't think I quite got it. At the risk of repetition, just the future competitive positioning for KIMMTRAK, and particularly in relation to what we know so far about Adair's Darrow, that would be very useful. Thank you.

Speaker 2

Sure. First of all, not much is known to date, but it's good to see this development in the HLA-negative patients because there's still a very high unmet need there. The median OS is 12 months. That being said, with KIMMTRAK and HLA-positive, the median OS is 22 months. We have 27% of patients alive at three years, which is exceptional, unheard of in this disease. We have standard of care across most major markets. In fact, 28 markets, as we mentioned, number one prescribed medicine in the HLA-positive. I think, David, is there anything you'd like to add?

Speaker 10

Yeah, Ralph, thanks. A couple of things I'll add from the analogs in cutaneous melanoma, because right now there's only one therapy approved in uveal. That's KIMMTRAK. In cutaneous, you have targeted therapy and you have immunotherapy. What we've learned in randomized trials is you get better long-term survival if you start with immunotherapy and then you go to targeted therapy. If you do the reverse, starting with just reducing the tumor and then giving immunotherapy, the survival isn't good. We don't know how that plays out, but that's our best analog. As Ralph said, just as a reminder, we've established 22 months overall survival, and I think that's the hurdle for any new therapy coming on the market.

Speaker 9

Thank you. Next question today is coming from David Dyer from UBS. Your line is now live.

Great. Thanks for taking my questions. I have a couple. One is on the duration of therapy of 13 months. I'm just curious, what do you think is driving that long duration of therapy in the real world? Our physician check has suggested that a lot of patients continue to be on therapy after disease progression. Is that what you're seeing in the real world versus the clinical experience? The second question is on the PRISOMEL, front-line melanoma for bernadifusp. Curious, in terms of your thoughts around the control arm, how many of those patients are going to be, can you break down the % of patients who are going to be enrolled on the nivolumab monotherapy versus nivolumab plus RELA?

Speaker 2

Sure. Happy, David, to start with the duration of therapy question. I think first and foremost, and this is true of any medicine, is patients are feeling good. David actually today spoke about our safety profile, our long-term safety profile. You could see there's not much happening, not much new happening, especially after several years. In fact, from a treatment beyond progression perspective, which is a characteristic of our therapy, we are seeing a lot of that happening in the community where patients are in stable disease or have progressed, and the physician keeps them on because the patient is feeling good, is feeling that, and then we see the disease still in control. In fact, they also use sometimes radiation therapy and other local interventions to help control that disease. We're seeing a lot of that in the real world.

I mentioned the patient that we recently met that has been alive for seven years, and they still have disease. They're alive for seven years, going into the office every week to get KIMMTRAK and feeling good, still at their job. I think it's this quality of life component that makes it compelling.

Speaker 10

Yes. With regard to the question, a minority of the patients will likely get Abduolac, and we believe the majority will get nivolumab. However, David, I will say I remain confident that we will beat both of them. The reason is because as a monotherapy in late-line cutaneous melanoma, bernadifusp had greater activity in cross-trial than Abduolac in a similar population. It's going to be a minority. I don't yet know the exact number yet because we're still enrolling.

Speaker 9

Thank you. Our next question is coming from Jeff Jones from Oppenheimer. Your line is now live.

Good morning, afternoon, folks, and thanks for taking the question. Two quick ones from us. In terms of, as you noted, building an 18-month inventory in the U.S., can you remind us what the shelf life is on the product? In terms of the revenue reported, rest of world, ex-U.S. and ex-EU revenues were down. Can you give us some color there?

Speaker 8

Yeah, thanks, Jeff. I'm happy to take both of those. We have a three-year drug product stability, part of which is allowing us obviously to have that 18-month inventory in the U.S. With respect to the international region, we typically see a lot of variability in the international region due to various buying patterns and just how that region operates. It's not atypical for us to have a little bit lower quarter. I'd consider this quarter within that typical variability that we've seen. If you look at the quarters last year, I think we ranged from about $1.5 million to about $4.3 million. As I mentioned, there's a lot of variability that we see throughout the international region. We do expect incremental growth to continue from additional product launches there, though.

Speaker 9

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments.

Speaker 3

Yes. Thank you very much. That will conclude this call. I just want to reiterate one more time our thanks for all your support and thanks to our patients and their families and our employees. Thank you very much.

Speaker 9

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.