From start-up to NASDAQ:

Immunic develops innovative therapies for the treatment of chronic inflammatory and autoimmune diseases

One in every two hundred people in Germany is affected by inflammatory bowel disease (IBD). Anyone who develops a medication for this widespread disease would enter a market worth billions. Immunic AG was founded in 2016 and develops best-in-class therapies for the treatment of chronic inflammatory and autoimmune diseases. After only one year, the start-up closed a series A financing round amounting to 31.7 million euro. Two years later, through a stock-for-stock transaction with San Diego, USA, based Vital Therapies, Immunic is now listed as Immunic, Inc. on NASDAQ (NASDAQ: IMUX). Concurrently with the closing, the existing investors invested a further 26 million euro. The company, which is based at the IZB, now has its global headquarters in the USA – research and development activities will remain in Martinsried. Rarely has there been such a meteoric rise of a biotech start-up. In an interview with Susanne Simon for the “IZB in Dialog”, Dr. Daniel Vitt, CEO of Immunic, explains why Immunic is considered promising by investors and which partnerships were decisive for its success.

Dr. Daniel Vitt_Dr. Hella Kohlhof_Dr. Manfred Gröppel_Dr. Andreas Mühler_Immunic

Dr. Daniel Vitt, CEO, Dr. Hella Kohlhof, CSO, Dr. Manfred Gröppel, COO, Dr. Andreas Mühler, CMO, Immunic, Inc. (f.l.t.r.)

In Dialog: Dr. Vitt, what drugs are Immunic researching?
Dr. Vitt: Our pipeline comprises three oral therapies in development for which important milestones are expected in the short term. The lead product, IMU-838, is in two phase 2 studies for the treatment of ulcerative colitis (a chronic inflammatory bowel disease) and multiple sclerosis (a chronic inflammatory non-infectious disease of the central nervous system). We are currently preparing the start of two further clinical trials, in Crohn’s disease and a rare liver disease called PSC, which is likely to be triggered by one’s own immune system. This study will be conducted by the renowned Mayo Clinic in the USA. A phase 1 study with the second program, IMU-935, is expected to start in September 2019 in healthy volunteers and patients with psoriasis. The third program, IMU-856, aims to restore the intestinal barrier function, whose disruption significantly contributes to the development of inflammatory bowel disease, including ulcerative colitis and Crohn’s disease, as well as disease relapse.

In Dialog: What does the option and license agreement with ­Daiichi Sankyo that you completed at the end of 2018 mean for Immunic?
Dr. Vitt: As part of this collaboration, we secured exclusive worldwide rights to the highly promising IMU-856 drug development program. This allowed us to acquire a true “game changer” that could fundamentally change the therapy of, for example, Crohn’s disease. This new drug targets a yet undisclosed therapeutic target that provides a promising, completely new approach to treating the cause of inflammatory bowel disease. IMU-856 is not based on immunotherapy; instead it blocks the penetration of pathogenic bacteria and thus the development of inflammation in the intestine through the restoration of the natural barrier function in the intestine. Until now, most drugs have been associated with the unintended down regulation of the immune system, which increases the risk of side effects such as infections or even a potential tumor development. Therefore, there is a tremendous need for effective intestinal therapies that will allow long-term treatment while leaving the immune system as intact as possible. The first contacts with Daiichi Sankyo were made at the BioJapan 2017, and after only a year, the deal was completed. Incidentally, IMU-856 in Japanese numerology means “good intestine forever”.

Development pipeline of Immunic

Development pipeline of Immunic, Inc.

In Dialog: Why has Daiichi Sankyo signed this contract with the young start-up Immunic?
Dr. Vitt: Of course we are very proud of that. Dr. Takashi Fukuoka, CEO of Venture Science Laboratories at Daiichi Sankyo, sees Immunic as an expert in the field of inflammatory bowel disease and believes that the drug has the best chance of success in the hands of the Immunic team.

In Dialog: You have been listed on the New York Stock Exchange NASDAQ since April 2019 through a reverse takeover with Vital Therapies. How did that happen?
Dr. Vitt: There were of course different possibilities to further finance the development of our products. A classical series B financing with venture capital investors would have been possible, however the further funding required for potential future phase 3 studies is very difficult to achieve in Germany. As an alternative, we had also considered a traditional IPO on NASDAQ ourselves – but in addition to interim financing this would not have met our timing requirements. Through our personal network, we were able to negotiate with Vital Therapies and prevail against more than 70 US and international competitors – in our view, a real accolade. In addition to our phase 2 product, the deal with Daiichi Sankyo played a significant role in strengthening our innovative power. Through the reverse takeover with the US company, we have carried out a “back door” IPO on NASDAQ. Upon completion of the transaction, Vital Therapies shareholders held 11.75 percent of now NASDAQ-listed Immunic, Inc.

In Dialog: At the same time, an investor consortium invested 26.7 million euro in Immunic. Which investors does this include?
Dr. Vitt: To finance the clinical development pipeline, the venture capital firms LSP, Omega Funds, Fund+, LifeCare Partners, Bayern Kapital, High-Tech Gründerfonds, and IBG Beteiligungsgesellschaft Sachsen-Anhalt invested in Immunic. The cash position of the new company now amounts to approximately 42 million euro. This is sufficient to finance development activities into the third quarter of 2020 and covers all planned activities.


Immunic’s products target, among other drug developments, chronic inflammatory bowel disease

In Dialog: What strategies are important for you as a listed biotech company to survive in the marketplace?
Dr. Vitt: Important are good products, enough capital, and good management. If you want to survive on the stock market, you cannot just rely on one product. It is a balancing act between focusing and extending the product range. We addressed this early by developing three independent products – a very robust setup from our point of view.

In Dialog: Who will manage the new company after the IPO?
Dr. Vitt: The Immunic team has taken on full control, myself in the role of CEO and president of the company. The new Board of ­Directors comprises five members, four of whom are members of the Supervisory Board and Management of Immunic: besides myself, Dr. Jörg Neermann, Dr. Vincent Ossipow and Jan Van den Bossche. In addition, Dr. Duane Nash, formerly CEO, President and Director of Vital Therapies, continues to serve on the board of directors – also serving as chairman of the board.

In dialog: Where do you want to be in five years?
Dr. Vitt: Five years is a very long time – but I would like to see our first product approved for marketing. In addition, three or more products should be in development and two studies in phase 2 trials. Then we will be a great deal closer to our ultimate goal of providing effective medicines for chronic inflammatory and autoimmune ­diseases.