Immutep Limited (20-F) — FY2018 summary
Period note: The supplied filing is an annual report for the fiscal year ended June 30, 2018, not a standalone 2017 Q4 filing. Financial amounts below are in Australian dollars (A$), unless noted. The statements are prepared under IFRS and Australian Accounting Standards.
Business context
Immutep is a development-stage biotechnology company focused on LAG-3 immunotherapies for cancer and autoimmune diseases. It had no approved products or material product-sale revenue. Its lead candidate, IMP321 (eftilagimod alpha, or efti), was being tested in the AIPAC Phase IIb breast-cancer trial and the TACTI-mel Phase I melanoma trial. IMP701 and IMP731 are licensed to partners; IMP761 was in early preclinical development. The company changed its name from Prima BioMed to Immutep in November 2017.
Financial and operating metrics
| Metric | FY2018 | FY2017 |
|---|---|---|
| License revenue | A$2.63m | Nil |
| Other income | A$4.72m | A$4.22m |
| Total revenue and other income | A$7.35m | A$4.22m |
| Research, development and IP expenses | A$9.99m | A$7.53m |
| Corporate administrative expenses | A$7.24m | A$4.35m |
| Net loss | A$12.75m | A$9.37m |
| Net cash used in operating activities | A$7.78m | A$8.51m |
| Cash and cash equivalents at year-end | A$23.48m | A$12.24m |
| Working capital | A$24.79m | A$13.29m |
| Total assets | A$47.00m | A$34.96m |
| Total liabilities | A$13.48m | A$8.43m |
| Net assets / shareholders’ equity | A$33.52m | A$26.53m |
FY2018 license revenue included US$1m milestone payments from Novartis for IMP701 and EOC Pharma for IMP321. Other income included government R&D grants and rebates, research-material sales, foreign-exchange gains and interest. No meaningful operating margin is presented; the company remained loss-making and has no approved product sales.
Cash from financing activities was A$18.40m, principally from equity placements and a U.S. capital raise. The company issued 946.3m shares during FY2018, including shares issued on exercise of rights; ordinary shares outstanding increased from 2.08bn to 3.03bn. At year-end, current assets were A$28.64m and current liabilities A$3.85m.
Long-term liabilities included a convertible-note liability of A$6.65m and a U.S. warrant liability of A$2.95m. The notes have a stated face value of A$13.75m, carry 3% interest, mature in August 2025 and may convert into shares. Contractual undiscounted cash flows for the note were disclosed as A$17.88m. The filing reports no dividends.
Material changes versus prior comparable period
- Net loss increased by A$3.38m, from A$9.37m to A$12.75m, while operating cash outflow improved by A$0.73m.
- License revenue rose from zero to A$2.63m, largely reflecting partner milestone payments. Grant income remained substantial at A$3.21m, versus A$3.32m.
- R&D and IP expenses increased A$2.46m, attributed mainly to recruitment and activity in AIPAC and TACTI-mel and development of IMP761. Administrative expenses rose A$2.90m, including higher staffing, A$1.4m of additional employee share-based payment expense, and U.S. capital-raising costs.
- Cash increased A$11.24m, primarily supported by financing proceeds; the company raised A$16.97m net from share and option issues and received A$2.76m from warrant issuance before related costs.
- The FY2016 net loss of A$62.02m is not a like-for-like operating comparison: it included a A$47.47m non-cash strategic-investor share-based payment charge.
Outlook, commentary and risks
- Management said year-end cash was expected to fund operations for more than 12 months from the filing date, and directors supported going-concern accounting for at least 12 months after the financial statements. The company nevertheless anticipated continued losses and substantial additional funding needs.
- AIPAC had recruited 113 patients by June 30, 2018; first data were expected in calendar 2019. TACTI-mel interim results reported response rates of 61% using the initial pembrolizumab-only cycles and 33% measured from combination treatment, with two complete responses among 18 patients. These were interim, non-pivotal results; updated data were expected in November 2018.
- The company expected R&D spending to increase as trials advanced and new partner studies commenced. It planned to initiate the TACTI-002 Phase II study after FDA IND approval in July 2018; up to 110 patients were expected across multiple countries, with first data anticipated in mid-2019. These are forward-looking statements, not guarantees.
- Key risks include clinical or regulatory failure, patient-enrollment delays, reliance on external manufacturers and collaborators, uncertain milestone and royalty receipts, need for further capital and potential shareholder dilution, intellectual-property disputes, competition, currency movements and possible Nasdaq listing noncompliance.
- The company reported no material contingent liabilities or significant legal proceedings. It disclosed A$139,162 of operating lease commitments. It relied on emerging-growth-company relief from auditor attestation of internal controls; management reported disclosure controls and internal control over financial reporting effective at June 30, 2018.
Important facts for investors to verify
- Subsequent AIPAC and TACTI-mel results, trial progress, safety findings and whether reported interim response rates translate into durable clinical benefit.
- Current cash runway and operating burn against the FY2018 cash balance, and the timing and terms of any future financing.
- Fully diluted share count, outstanding options, performance rights and warrants, and potential dilution from the convertible notes.
- Whether partner milestones, grants and rebates recur; FY2018 total income included significant non-product and potentially non-recurring sources.
- Convertible-note repayment or conversion terms, warrant valuation changes, and exposure to foreign exchange movements.