Filed by e3 Filing, Computershare 1-800-973-3274 - IMV Inc. - Form 6-K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2020

Commission File Number: 001-38480

IMV Inc.
(Name of registrant)

130 Eileen Stubbs Avenue, Suite 19 Dartmouth, Nova Scotia B3B 2C4, Canada

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

[   ] Form 20-F [ X ] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [   ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [   ]





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  IMV Inc.
 
Date: August 12, 2020 By: /s/ Pierre Labbé
  Name: Pierre Labbé
  Title: Chief Financial Officer

 





Form 6-K Exhibit Index

Exhibit
Number
Document Description
99.1 Interim Financial Statements for the period ended June 30, 2020
99.2 Management Discussion and Analysis for the period ended June 30, 2020
99.3 CEO certification
99.4 CFO certification

 



Exhibit 99.1
Exhibit 99.1


Unaudited Interim Condensed Consolidated
Financial Statements
June 30, 2020





August 11, 2020

Management’s Responsibility for Financial Reporting

The accompanying unaudited interim condensed consolidated financial statements of IMV Inc. (the “Corporation”) are the responsibility of management and have been approved by the Board of Directors. The consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The unaudited interim condensed consolidated financial statements include some amounts and assumptions based on management’s best estimates which have been derived with careful judgment.

In fulfilling its responsibilities, management has developed and maintains a system of internal accounting controls. These controls are designed to ensure that the financial records are reliable for preparation of the unaudited interim condensed consolidated financial statements. The Audit Committee of the Board of Directors reviewed and approved the Corporation’s unaudited interim condensed consolidated financial statements, and recommended their approval by the Board of Directors.

(signed) Frederic Ors (signed) “Pierre Labbé”
Chief Executive Officer Chief Financial Officer

Approved on behalf of the Board of Directors

(signed) “James W. Hall”, Director (signed) “Wayne Pisano”, Director

 





IMV Inc.
Unaudited Interim Condensed Consolidated Statements of Financial Position
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

  June 30, December 31,
  2020 2019
  $ $
Assets    
 
Current assets    
Cash and cash equivalents 28,251 14,066
Amounts receivable 911 845
Prepaid expenses 7,973 3,032
Investment tax credits receivable 1,442      1,661  
 
  38,577 19,604
 
Property and equipment 2,825     2,830  
 
  41,402      22,434  
Liabilities    
 
Current liabilities    
Accounts payable, accrued and other liabilities 8,286 6,157
Amounts due to directors 75 60
Current portion of long-term debt (note 5) 592 88
Current portion of lease obligation 123     100  
 
  9,076 6,405
 
Lease obligation 1,295 1,208
 
Long-term debt (note 5) 8,696     8,373  
 
  19,067     15,986  
 
Equity 22,335     6,448  
 
  41,402     22,434  
Subsequent event (note 10)    

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.





IMV Inc.
Unaudited Interim Condensed Consolidated Statements of Changes in Equity
For the period ended June 30, 2020 and 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

  Share   Contributed              
  Capital   Surplus   Warrants   Deficit   Total  
  $   $   $   $   $  
  (note 6)   (note 7)   (note 8)          
 
Balance, December 31, 2018 90,152   6,504   415   (92,754 ) 4,317  
 

Net loss and comprehensive loss for the period

      (10,994 ) (10,994 )

Issuance of shares in public offering

29,456         29,456  

Share issuance costs

(2,499 )       (2,499 )

Exercise of warrants

82     (21 )   61  

Warrants expired

  62   (62 )    

Employee share options:

                   

Value of services recognized

  694       694  

Exercise of options

281   (225 )     56  
 
Balance, June 30, 2019 117,472   7,035   332   (103,748 ) 21,091  
 
Balance, December 31, 2019 117,544   8,691   332   (120,119 ) 6,448  
 

Net loss and comprehensive loss for the period

      (16,936 ) (16,936 )

Issuance of shares in public equity offering

7,639         7,639  

Share issuance costs in a public equity offering

(716 )       (716 )

Issuance of shares in private placement

21,307         21,307  

Share and warrant issuance costs in private placement

(139 )       (139 )

Issuance of warrants in a private placement

    3,775     3,775  

Redemption of deferred share units, net of applicable taxes

184   (189 )     (5 )

Warrants expired

  332   (332 )    
Deferred share units (“DSU”s):                    

Value of services recognized

  239       239  
Employee share options:                    

Value of services recognized

  469       469  

Exercise of options

644   (390 )     254  
 
Balance, June 30, 2020 146,463   9,152   3,775   (137,055 ) 22,335  

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.





IMV Inc.
Unaudited Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
For the three and six months ended June 30, 2020 and 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

  Three months ended June 30,   Six months ended June 30,  
  2020   2019   2020   2019  
  $   $   $   $  
Income                
Subcontract revenue   6     14  
Interest income 55   180   123   254  
 
  55   186   123   268  
 
Expenses                
Research and development 5,260   3,803   12,085   7,816  
General and administrative 3,047   2,184   6,082   4,144  
Government assistance (note 4) (1,406 ) (1,142 ) (1,964 ) (1,488 )
Accreted interest (note 5) 422   392   856   790  
 
  7,323   5,237   17,059   11,262  
 

Net loss and comprehensive loss for the year

(7,268 ) (5,051 ) (16,936 ) (10,994 )

 

Basic and diluted loss per share

(0.13 ) (0.10 ) (0.31 ) (0.23 )

 

Weighted-average shares outstanding

57,300,903   50,601,866   54,010,195   48,667,904  

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.





IMV Inc.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2019 and 2020
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

  Six months ended June 30,  
  2020   2019  
  $   $  
Cash provided by (used in)        
Operating activities        
Net loss and comprehensive loss for the year (16,936 ) (10,994 )
Charges to operations not involving cash        

Interest on lease obligation

80   76  

Depreciation of property and equipment

245   225  

Accretion of long-term debt

856   790  

Deferred share unit compensation

239   (390 )

Stock-based compensation

469   694  

Loss on disposal of assets

  1  

Revaluation of long-term debt

  (840 )

Net cash flows used by operating activities before changes in non-cash working capital items

(15,047 ) (10,438 )
 

Net change in non-cash working capital balances related to operations

       

(Increase) decrease in amounts receivable

(66 ) 52  

Increase in prepaid expenses

(4,941 ) (338 )

Decrease (increase) in investment tax credits receivable

219   (639 )

Decrease in accounts payable, accrued and other liabilities

(1,001 ) (3,148 )

Increase in amounts due to directors

15   14  
 
  (20,821 ) (14,497 )
Financing activities        

Proceeds from issuance of share capital and warrants in private placement

25,082    

Share and warrant issuance costs in private placement

(139 )  

Proceeds from public equity offering

7,639   29,456  

Share issuance costs in public equity offering

(716 ) (2,499 )

Proceeds from short-term borrowing

3,130    

Proceeds from the exercise of stock options

254   56  

Proceeds from the exercise of warrants

  61  

Withholdings on redemption of DSUs

(5 )  

Repayment of long-term debt

(29 ) (42 )

Repayment of lease obligation

(120 ) (120 )
  35,096   26,912  
 
Investing activities        
Acquisition of property and equipment (90 ) (406 )
  (90 ) (406 )
 
Net change in cash and cash equivalents during the period 14,185   12,009  
 
Cash and cash equivalents – Beginning of period 14,066   14,895  
 
Cash and cash equivalents – End of period 28,251   26,904  
 
Supplementary cash flow        
 
Interest received 123   254  

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

1 Nature of operations

IMV Inc. (the “Corporation” or “IMV”) is, through its 100% owned subsidiary, a clinical stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable and more widely available to people facing cancer, infectious and other serious diseases. IMV is pioneering a new class of targeted immunotherapies and vaccines based on the Corporation’s proprietary drug delivery platform (“DPX”). This patented technology leverages a novel mechanism of action that does not release the active ingredients at the site of injection but forces an active uptake by immune cells (antigen-presenting cells) and delivery of active ingredients into lymph nodes. This unique MOA enables the programming of immune cells in vivo, which are aimed at generating powerful target-specific therapeutic capabilities. IMV’s lead candidate, DPX-Survivac, is a T cell-activating immunotherapy that combines the utility of the platform with a target: survivin. IMV is currently assessing DPX-Survivac as a monotheraphy in advanced ovarian cancer, as well as a combination therapy in recurrent/refractory disffuse large B cell lymphoma and other indications across multiple clinical studies with Merck. IMV is also developing a DPX-based vaccine to fight against COVID-19. The Corporation has one reportable and geographic segment. Incorporated under the Canada Business Corporations Act and domiciled in Dartmouth, Nova Scotia, the shares of the Corporation are listed on the Nasdaq Stock Market and the Toronto Stock Exchange under the symbol “IMV”. The address of its principal place of business is 130 Eileen Stubbs Avenue, Suite 19, Dartmouth, Nova Scotia, Canada.

An outbreak of a novel strain of coronavirus, identified as “COVID-19”, was declared a global pandemic by the World Health Organization on March 11, 2020. In response, many countries have required entities to limit or suspend business operations and implemented travel restrictions and quarantine measures. These measures have disrupted the activities of many entities and have led to significant volatility in the global markets. The Corporation continues to monitor and actively manage the developing impacts from COVID-19, including but not limited to, the potential future effects on its assets, cash flow and liquidity, and will continue to assess impacts to the Corporation’s operations, going concern assumption, and the value of assets and liabilities reported in these statements. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Corporation’s operations and ability to finance its operations.

2 Basis of presentation

The Corporation prepares its unaudited interim condensed consolidated financial statements in accordance with Canadian generally accepted accounting principles as set out in the Chartered Professional Accountants of Canada Handbook – Accounting Part I, which incorporates International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

These unaudited interim condensed consolidated financial statements have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34, International Accounting Standards 34 “Interim Financial Reporting”. Accordingly, certain information normally included in annual audited financial statements prepared in accordance with IFRS, as issued by the IASB, have been omitted or condensed. The unaudited interim condensed consolidated financial statements should be read in conjunction with the Corporation’s annual audited consolidated financial statements for the year ended December 31, 2019.

The policies applied in these unaudited interim condensed consolidated financial statements are based on IFRS issued and outstanding as of August 11, 2020, the date the Board of Directors approved the statements. Any subsequent changes to IFRS that are given effect in the Corporation’s annual audited consolidated financial statements for the year ending December 31, 2019 could result in restatement of these unaudited interim condensed consolidated financial statements.

(2)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

3 Significant accounting policies, judgements and estimation uncertainty

These unaudited interim condensed consolidated financial statements have been prepared using the same policies and methods as the annual audited consolidated financial statements of the Corporation for the period ended December 31, 2019. Refer to note 4 of the Corporation’s annual audited consolidated financial statements for the year ended December 31, 2019 for more information on accounting policies and methods applied.

4 Government grants

The Corporation is evaluating all applicable government relief programs. Notably, in response to the negative economic impact of COVID-19, the Government of Canada, in collaboration with the National Research Council of Canada Industrial Research Assistance Program (“NRC IRAP”), announced the Innovation Assistance Program (“IAP”) program in April 2020. IAP provides a wage subsidy on eligible remuneration, subject to limits per employee, to eligible employers pursuing technology driven innovation who are not eligible for funding under the Canada Emergency Wage Subsidy. The Corporation qualified for this subsidy from the April 1, 2020 effective date through to June 23, 2020, and has, accordingly, recognized $601 of IAP for the 12-week period ended June 23, 2020, and has recorded it in government assistance on the unaudited interim condensed consolidated statements of loss and comprehensive loss. As at June 30, 2020 there is $121 in receivables related to this IAP funding.

In May 2020, the Corporation obtained $378 in NRC IRAP funding toward the development of its COVID-19 vaccine candidate, DPX-COVID-19. Under this program, NRC-IRAP will reimburse up to 80% of eligible project salaries and 50% of eligible contractor costs. As at June 30, 2020, the Corporation has recognized $150 of this NRC-IRAP funding in government assistance on the unaudited interim condensed consolidated statements of loss and comprehensive loss.

Refer to Subsequent event (note 10) for detail on additional government assistance obtained for the Corporation’s COVID-19 vaccine project subsequent to the reporting period.

5 Long-term debt

 

 

June 30,

December 31,

 

2020

2019

 

$

$

Atlantic Canada Opportunities Agency (“ACOA”), Atlantic Innovation Fund interest-free loan with a maximum contribution of $3,786. Annual repayments, commencing December 1, 2008, are calculated as a percentage of gross revenue for the preceding fiscal year, at 2% when gross revenues are less than $5,000 and 5% when gross revenues are greater than $5,000. As at June 30, 2020, the amount drawn down on the loan, net of repayments, is $3,744 (2019 - $3,744).

1,650

1,404

 

ACOA Atlantic Innovation Fund, interest-free loan with a maximum contribution of $3,000. Annual repayments, commencing December 1, 2011, are calculated as a percentage of gross revenue for the preceding fiscal year, at 2% when gross revenues are less than $5,000 and 5% when gross revenues are greater than $5,000. As at June 30, 2020, the amount drawn down on the loan is $2,995 (2019 - $2,995).

1,454

1,237

 

ACOA Business Development Program, interest-free loan with a maximum contribution of $395, repayable in monthly payments beginning October 2015 of $3 until October 2017 and $6 until September 2022. As at June 30, 2020, the amount drawn down on the loan, net of repayments, is $167 (2019 - $184).

159

180

(3)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

5 Long-term debt (continued)

 

ACOA Atlantic Innovation Fund, interest-free loan with a maximum contribution of $2,944, annual repayments commencing September 1, 2014, are calculated as a percentage of gross revenue from specific product(s) for the preceding fiscal year, at 5% for the first 5 year period and 10%, thereafter. As at June 30, 2020, the amount drawn down on the loan is $2,944 (2019 - $2,944).

1,740

1,481

 

TNC 120-140 Eileen Stubbs Ltd. (the “Landlord”) loan, with a maximum contribution of $300,000, bearing interest at 8% per annum, is repayable in monthly payments beginning upon receipt of the final installment of the loan until May 31, 2028. The loan is made available in three equal installments based on the Corporation meeting certain milestones. As at June 30, 2020, the amount drawn down on the loan is $267 (2019 - $279).

267

279

 

Province of Nova Scotia (the “Province”) secured loan with a maximum contribution of $5,000, bearing interest at a rate equal to the Province’s cost of funds plus 1%, compounded semi-annually and payable monthly. The loan is repayable in monthly payments beginning January 1, 2021 of $83 plus interest until December 2025. The Corporation and its subsidiary have provided a general security agreement granting a first security interest in favour of the Province of Nova Scotia in and to all the assets of the Corporation and its subsidiary, including the intellectual property. As at June 30, 2020, the amount drawn down on the loan is $5,000 (2019 - $5,000).

4,018

3,880

 
 

9,288

8,461

 

Less: Current portion

592

88

 
 

8,696

8,373

Total contributions received, less amounts that have been repaid as at June 30, 2020, are $15,090 (2019 -$15,164).

Certain ACOA loans and the Province loan require approval by ACOA or the Minister for the Province before the Corporation can pay management fees, bonuses, dividends or other distributions, before there is any change of ownership of the Corporation. The Province loan requires the Corporation to obtain the written consent from the Province prior to the sale, disposal or abandonment of possession of the intellectual property of the Corporation or its subsidiary. If during the term of the Province loan, the head office, research and development facilities, or production facilities of the Corporation are moved from the Province, the Corporation is required to repay 40% of the outstanding principal of the loan.

In June 2019, the Corporation amended its loan agreement with the Province. Previously, the maturity date of the loan was August 9, 2020. The Corporation shall now start repaying the balance of the principal amount on the first day of January 2021, by making 60 monthly principal payments of $83 plus interest from January 2021 to December 2025. The annual interest rate remains at the Province’s cost of funds plus 1%.

The Province loan requires certain early repayments if the Corporation’s subsidiary, or the Corporation on a consolidated basis, has cash flow from operations in excess of $1,500. The Province loan also requires repayment of the loan under certain circumstances, such as changes of control, sale or liquidation of the Corporation or the sale of substantially all of the assets of the Corporation.

(4)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

5 Long-term debt (continued)

 

  June 30,   December 31,  
  2020   2019  
  $   $  
Balance – Beginning of year 8,461   8,150  
Accreted interest 856   1,239  
Revaluation of long-term debt   (840 )
Repayment of debt (29 ) (88 )
 
Balance – End of year 9,288   8,461  
Less: Current portion 592   88  
 
Non-current portion 8,696   8,373  

The Corporation is in compliance with its debt covenants as of June 30, 2020.

6 Share capital

 

Authorized

Unlimited number of common shares and preferred shares, issuable in series, all without par value.

  Number of  
  common shares Amount
  # $
Issued and outstanding    
Balance – December 31, 2018 45,106,401 90,152
Issued for cash consideration, net of issuance costs 5,404,855 26,957
Stock options exercised 105,196 353
Warrants exercised 14,423   82  
Balance – December 31, 2019 50,630,875 117,544
Issued for cash, net of issuance costs 10,840,888 28,091
Stock options exercised 155,389 644
DSUs redeemed 76,920   184  
Balance – June 30, 2020 61,704,072   146,463  

As at June 30, 2020, a total of 5,033,100 shares (2019 – 2,069,142) are reserved to meet outstanding stock options and deferred share units.

On May 7, 2020, the Corporation completed a private placement of 8,770,005 units at a price of $2.86 per unit, for aggregated proceeds of $25,082. Each unit consisted of one common share and 0.35 of one common share purchase warrant, with each whole warrant entitling the holder to acquire one common share of the Corporation at an exercise price of $3.72 for a period of 24 months expiring on May 7, 2022. The value allocated to the common shares issued was $21,307 and the value allocated to the warrants was $3,775. Total costs associated with the offering were $139, including cash costs for professional and regulatory fees.

On March 17, 2020, the Corporation entered into an Equity Distribution Agreement (“ATM Distribution”) with Piper Sandler & Co. (“Piper Sandler”) authorizing the Corporation to offer and sell common shares from time-

(5)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

6 Share capital (continued)

to-time up to an aggregate offering amount of US$30,000 through Piper Sandler, as agent. The total expenses associated with the ATM Distribution, excluding compensation and reimbursements payable to Piper Sandler under the terms of the Equity Distribution Agreement, were approximately $487. As of June 30, 2020, 2,070,883 common shares have been sold under the ATM Distribution for total gross proceeds of $7,639. In order to maintain the remainder of IMV's ATM Distribution facility under its new Canadian base shelf prospectus, IMV re-entered into an ATM Distribution dated June 30, 2020, with Piper Sandler, to offer and sell common shares from time-to-time up to an aggregate offering amount of US$24,500 through Piper Sandler, as agent. An additional 4,770,890 common shares were sold subsequent to June 30, 2020 for gross proceeds of US$24,500, concluding the proceeds raised under the ATM Distribution to the maximum offering amount of US$24,500 as of July 20, 2020.

On March 6, 2019, the Corporation completed a public offering, issuing an aggregate of 4,900,000 common shares at a price of $5.45 per common share, raising gross proceeds of $26,705. On March 11, 2019, the underwriters partially exercised their option to purchase common shares, resulting in the issuance of 504,855 common shares of the Corporation at a price of $5.45 per share for additional gross proceeds of approximately $2,751. As a result of the exercise of this option, the Corporation has raised total gross proceeds of approximately $29,456 before deducting the underwriting commissions and offering expenses of $2,499.

7 Contributed surplus

Deferred share units

The maximum number of common shares which the Corporation is entitled to issue from Treasury in connection with the redemption of DSUs granted under the DSU Plan is 968,750 common shares.

DSU activity for the three months ended June 30, 2020, and the year ended December 31, 2019, are as follows:

  June 30,   December 31,
  2020   2019
  #   #
 
Opening balance 360,965   223,604
Granted 78,047   137,361
Redeemed (79,106 )  
 
Closing balance 359,906   360,965  

At June 30, 2020, there were 359,906 (2019 – 360,965) DSUs outstanding related to this Plan.

Compensation expense for the three and six months ended June 30,2020 was $117 (2019 – ($186) recovery) and $239 (2019 – ($390) recovery), respectively, recognized over the vesting period. All services received in exchange for the grant of DSUs were measured at their fair values at the time of grant and vest immediately. Vested DSUs cannot be redeemed until the holder is no longer a member of the Board.

On August 8, 2019 (the “Reclassification Date”), the the Corporation resolved to settle all future DSU redemptions in shares instead of cash. All outstanding DSUs are accordingly now considered equity-settled instruments. As a result of this change, the fair value of the DSUs at the Reclassification Date were reclassified from liabilities to contributed surplus.

(6)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

7 Contributed surplus (continued)

Stock options

The fair values of stock options are estimated using the Black-Scholes option pricing model. As at June 30, 2020, 295,850 stock options (2019 – 343,100) with a weighted average exercise price of $5.66 (2019 - $6.39) and a term of five years (2019 - five years), were granted to employees and consultants. The expected volatility of these stock options was determined using historical volatility rates and the expected life was determined using the weighted average life of past options issued. The value of these stock options has been estimated at $873 (2019 - $1,112), which is a weighted average grant date value per option of $2.95 (2019 - $3.24), using the Black-Scholes valuation model and the following weighted average assumptions:

    2020     2019  
Risk-free interest rate   1.20 %   1.81 %
Market price $5.98   $7.20  
Expected volatility   68 %   64 %
Expected life (years)   4.2     4.2  
Forfeiture rate   4 %   5 %
Expected dividend yield   0 %   0 %

 

Option activity for the six months ended June 30, 2020 and the year ended December 31, 2019 was as follows:

        June 30, 2020     December 31, 2019  
      Weighted     Weighted
      average     average
  Number   exercise price Number   exercise price
  #   $ #   $
Outstanding - Beginning of year 1,573,411   4.63 1,474,477   4.12
Granted 295,850   5.66 343,100   6.39
Exercised (193,751 ) 1 2.43 (139,877 )1 2.32
Forfeited (45,775 ) 6.81 (90,570 ) 6.81
Cancelled (26,042 ) 6.40 (1,219 ) 7.04
Expired   (12,500 ) 2.37
Outstanding - End of year 1,603,693   4.98 1,573,411   4.63

1 Of the 193,751 (2019 – 139,877) options exercised, 100,001 (2019 - 98,408) elected the cashless exercise, under which 61,639 shares (2019 - 63,727) were issued. These options would have otherwise been exercisable for proceeds of $217 (2019 - $229) on the exercise date.

The weighted average exercise price of options exercisable at June 30, 2020 is $4.27 (2019 - $3.29).

The maximum number of common shares issuable under the Corporation’s stock option plan shall not exceed 4,600,000, inclusive of all shares presently reserved for issuance pursuant to previously granted stock options.

(7)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

8 Warrants

Warrant activity for the period ended June 30, 2020, and the year ended December 31, 2019, was as follows:

          June 30, 2020         December 31, 2019  
      Weighted         Weighted    
      average         average    
      exercise         exercise    
  Number   price Amount   Number   price Amount  
  #   $ $   #   $ $  
Opening balance 134,766   6.53 332   192,458   5.84 415  
Granted 3,069,501   3.72 3,775      
Exercised     (14,423 ) 4.22 (21 )
Expired (134,766 ) 6.53     (332 ) (43,269 ) 4.22 (62 )
 
Closing balance 3,069,501   3.72     3,775   134,766   6.53 332  

The fair values of warrants are estimated using the Black-Scholes option pricing model. The fair values of warrants are estimated using the Black-Scholes option pricing model. There were no warrants issued in 2019. The weighted average assumptions used in the Black-Scholes valuation model for 2020 were as follows:

  2020  
Risk-free interest rate 0.27 %
Market price $3.12  
Expected volatility 83 %
Expected dividend yield  
Expected life (years) 2  

 

9 Financial instruments

Fair value of financial instruments

Financial instruments are defined as a contractual right or obligation to receive or deliver cash on another financial asset.

The following table sets out the approximate fair values of financial instruments as at the unaudited interim condensed consolidated statements of financial position date with relevant comparatives:

  June 30, 2020   December 31, 2019
  Carrying   Carrying  
  value Fair value value Fair value
  $ $ $ $
Cash and cash equivalents 28,251 28,251 14,066 14,066
Amounts receivable 243 243 439 439
Accounts payable, accrued and other liabilities 8,261 8,261 6,142 6,142
Amounts due to directors 75 75 60 60
Long-term debt 9,288 9,288 8,461 8,461

(8)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

9 Financial instruments (continued)

Assets and liabilities, such as commodity taxes, that are not contractual and that arise as a result of statutory requirements imposed by governments, do not meet the definition of financial assets or financial liabilities and are, therefore, excluded from amounts receivable and accounts payable and accrued liabilities.

Fair value of items, which are short-term in nature, have been deemed to approximate their carrying value. The above noted fair values, presented for information only, reflect conditions that existed only at June 30, 2020 and December 31, 2019 and do not necessarily reflect future value or amounts which the Corporation might receive if it were to sell some or all of its assets to a willing buyer in a free and open market.

The fair value of long-term debt is estimated based on the expected interest rates for similar borrowings by the Corporation at the unaudited interim condensed consolidated statements of financial position dates. As at June 30, 2020, the fair value is estimated to be equal to the carrying amount.

10 Subsequent event

On August 5, 2020, the Corporation announced an additional $4 million in project funding from NRC-IRAP, ACOA and Next Generation Manufacturing Canada (“NGen”) to support the rapid development of DPX-COVID-19. NRC-IRAP and NGen’s contributions are government grants reimbursed based a percentage of eligible project expenditures. ACOA’s contribution is an interest free government loan with a maximum contribution of $1 million conditionally repayable based on a percentage of revenues only from resulting COVID-19 vaccine revenue.

(9)



Exhibit 99.2

Exhibit 99.2

Management’s Report on Financial Position and Operating Results

For the three and six months ended June 30, 2020





LETTER TO SHAREHOLDERS

Dear Fellow Shareholders,

Amidst these challenging times where the world is seeking to adapt to the reality of the COVID-19 pandemic, every day, our employees are working diligently to continue to advance IMV’s novel class of immunotherapies and vaccines for the patients who suffer from important diseases with high unmet medical needs. While our focus remains in oncology, we are also selectively pursuing other opportunities with partners to leverage our DPX technology for other serious diseases. In recognition of the global public health crisis surrounding COVID-19, we joined forces with some of the most recognized vaccine researchers and clinicians in Canada to tackle this disease.

Moving rapidly since the announcement of our DPX-COVID-19 vaccine program in March 2020, we announced the selection of our candidate vaccine on May 21st, 2020 and in preclinical studies DPX-COVID-19 demonstrated strong antibody responses with capacity to bind on target to the spike protein and viral neutralization.

More recently on July 14, 2020, IMV reached agreement with Health Canada on the design of our phase 1 clinical study in humans. We anticipate having preliminary results later this fall. In parallel, IMV secured nearly CDN $5 million of non-dilutive funding from various governmental agencies in Canada to support this Phase 1 clinical trial and the manufacturing of DPX-COVID-19.

In oncology, we provided a positive update on SPiReL, IMV’s Phase 2 study of a DPX-Survivac combination with Merck’s Keytruda® (pembrolizumab) in patients with measurable or recurrent diffuse large B cell lymphoma (‘DLBCL’). In May we announced that the study met its primary efficacy endpoint with 64% (7/11) of evaluable patients demonstrating a clinical response. The study remains ongoing and the top line data are expected to be presented at a conference later in 2020 and we also plan to engage with the U.S. Food and Drug Administration (FDA) to identify the best path forward in this indication.

These promising DLBCL results were closely followed by updated ovarian clinical results in a poster presentation as part of the American Society of Clinical Oncology 2020 (ASCO20) Virtual Scientific Program. Results from DeCidE1, a phase 2 study evaluating DPX-Survivac in patients with recurrent, advanced platinum-sensitive and platinum-resistant ovarian cancer showed prolonged durable clinical responses, continued favorable tolerability and strong translational data linking the observed clinical benefit with DPX-Survivac’s mechanism of action. As of the data cut-off date on May 2, 2020, 19 patients were evaluable for efficacy with four patients still receiving treatment. 5/19 patients (26%) achieved a partial regression (PR) on target lesions with tumor regression >30% on target lesions. These results compare favorably to historical data with single agent chemotherapy standard of care (12% clinical response rate) and warrant further clinical development.

We ended the quarter in a strong financial position which has continued to strengthen, following the completion of a CDN $25.1 million private placement in May. Subsequent to June 30th, we raised gross proceeds of US$24.5 million (CAD$33.5 million) in the sale of 4.8 million common shares under our at-the-market facility. In addition, we attracted new quality investors. Consequently, on a pro-forma basis, IMV had cash and cash equivalents of CDN$61.8 million at June 30, 2020. This financial strength puts IMV in a good position for its future development.

We are grateful for the extraordinary work and commitment of our employees and the continued support of our partners and shareholders and we look forward working closely with them as we continue to deliver on IMV’s great opportunities.


Frederic Ors
Chief Executive Officer

2





MANAGEMENT DISCUSSION AND ANALYSIS (“MD&A”)

The following analysis provides a review of the unaudited interim condensed consolidated results of operations, financial condition, and cash flows for the three and six months ended June 30, 2020 (“Q2 2020”), with information compared to the three and six months ended June 30, 2019 (“Q2 2019”), for IMV Inc. (“IMV” or the “Corporation”). This analysis should also be read in conjunction with the information contained in the audited consolidated financial statements and related notes for the years ended December 31, 2019 and December 31, 2018.

The Corporation prepares its unaudited interim condensed consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (IASB). Management is responsible for the preparation of the consolidated financial statements and other financial information relating to the Corporation included in this report. The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting. In furtherance of the foregoing, the Board of Directors has appointed an Audit Committee comprised of independent directors. The Audit Committee meets with management and the auditors in order to discuss the results of operations and the financial condition of the Corporation prior to making recommendations and submitting the consolidated financial statements to the Board of Directors for its consideration and approval for issuance to shareholders. The information included in this MD&A is as of August 11, 2020, the date when the Board of Directors approved the Corporation’s unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2020, on the recommendation of the Audit Committee.

Amounts presented in this MD&A are approximate and have been rounded to the nearest thousand except for per share data. Unless specified otherwise, all amounts are presented in Canadian dollars.

Additional information regarding the business of the Corporation, including the Annual Information Form of the Corporation for the year ended December 31, 2019 (the “AIF”) and included in the Corporation’s registration statement on Form 40-F filed with the U.S. Securities and Exchange Commission, is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.

FORWARD-LOOKING STATEMENTS

Certain statements in this MD&A may constitute “forward-looking” statements which involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, or achievements of the Corporation, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. When used in this MD&A, such statements use such words as “will”, “may”, “could”, “intends”, “potential”, “plans”, “believes”, “expects”, “projects”, “estimates”, “anticipates”, “continue”, “potential”, “predicts” or “should” and other similar terminology. These statements reflect current expectations of management regarding future events and operating performance and speak only as of the date of this MD&A. Forward-looking statements include, among others:

  • The Corporation’s business strategy;

  • Statements with respect to the sufficiency of the Corporation’s financial resources to support its activities;

  • Potential sources of funding;

  • The Corporation’s ability to obtain necessary funding on favorable terms or at all;

  • The Corporation’s expected expenditures and accumulated deficit level;

  • The Corporation’s expected outcomes from its ongoing and future research and research collaborations;

  • The Corporation’s ability to obtain necessary regulatory approvals;

  • The Corporation’s expected outcomes from its pre-clinical studies and trials;

  • The Corporation’s exploration of opportunities to maximize shareholder value as part of the ordinary course of its business through collaborations, strategic partnerships, and other transactions with third parties;

  • The Corporation’s plans for the research and development of certain product candidates;

  • The Corporation’s strategy for protecting its intellectual property;

  • The Corporation’s ability to identify licensable products or research suitable for licensing and commercialization;

  • The Corporation’s ability to obtain licences on commercially reasonable terms;

  • The Corporation’s plans for generating revenue;

  • The Corporation’s plans for future clinical trials; and

3





  • The Corporation’s hiring and retention of skilled staff.

Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed in the AIF, under the heading “Risk Factors and Uncertainties”. Although the forward-looking statements contained in this MD&A are based upon what management of the Corporation believes are reasonable assumptions, the Corporation cannot provide any assurance to investors that actual results will be consistent with these forward-looking statements and should not be unduly relied upon by investors.

Actual results, performance and achievements are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about:

  • Obtaining additional funding on reasonable terms when necessary;

  • Positive results of pre-clinical studies and clinical trials;

  • The Corporation’s ability to successfully develop existing and new products;

  • The Corporation’s ability to hire and retain skilled staff;

  • The products and technology offered by the Corporation’s competitors;

  • General business and economic conditions, including as a result of the pandemic outbreak of COVID-19;

  • The Corporation’s ability to protect its intellectual property;

  • The Corporation’s ability to manufacture its products and to meet demand;

  • The general regulatory environment in which the Corporation operates; and

  • Obtaining necessary regulatory approvals and the timing in respect thereof.

These statements reflect management’s current views and beliefs and are based on estimates, assumptions, and information currently available to, and considered reasonable by, management. The forward-looking information in this MD&A does not include a full assessment or reflection of the unprecedented impacts of the COVID-19 pandemic occurring in the first half of 2020 and the ongoing and developing resulting indirect global and regional economic impacts. The Corporation is currently experiencing uncertainty related to the rapidly developing COVID-19 situation. Uncertainties include the scope, severity and duration of the pandemic, the actions taken to contain or mitigate its impact and the direct and indirect effect of the pandemic and containment measures, among others. It is anticipated that the spread of COVID-19 and global measures to contain it will have an impact on the Corporation, however it is challenging to quantify the potential magnitude of such impact at this time. The Corporation is regularly assessing the situation and remains in contact with its partners, clinical sites and investigators, and suppliers to assess any impacts and risks.

The information contained herein is dated as of August 11, 2020, the date of the Board’s approval of the Q2 2020 unaudited interim condensed consolidated financial statements and of the MD&A. For additional information on risks, uncertainties, and assumptions, including a more detailed assessment of the risks that could cause actual results to materially differ from current expectations, please refer to the AIF of IMV filed on SEDAR at www.sedar.com and included in the registration statement on Form 40-F filed on EDGAR at www.sec.gov/edgar.

CORPORATE OVERVIEW

IMV is a clinical-stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable, and more widely available to people facing cancer, infectious and other serious diseases. IMV is pioneering a new class of targeted immunotherapies and vaccines based on the Corporation’s proprietary drug delivery platform (“DPX”). This patented technology leverages a novel mechanism of action (“MOA”) that does not release the active ingredients at the site of injection but forces an active uptake by immune cells (antigen-presenting cells) and delivery of active ingredients into lymph nodes. This unique MOA enables the programming of immune cells in vivo, which are aimed at generating powerful target-specific therapeutic capabilities. IMV’s lead candidate, DPX-Survivac, is a T cell-activating immunotherapy that combines the utility of the platform with a target: survivin. IMV is currently assessing DPX-Survivac as a monotherapy in advanced ovarian cancer, as well as a combination therapy in recurrent/refractory diffuse large B Cell lymphoma (“DLBCL”) and other indications across multiple clinical studies with Merck. IMV is also developing a DPX-based vaccine to fight against COVID-19.

4





The Corporation’s first cancer immunotherapy uses survivin-based peptides licensed from Merck KGaA, on a worldwide exclusive basis, formulated in DPX (“DPX-Survivac”). Survivin is a well characterized and tumor-associated antigen known to be overexpressed in more than 20 different cancers. DPX-Survivac leverages the MOA of the DPX platform to generate a constant flow of killer T cells in the blood that are targeted against survivin expressed on cancer cells. It is comprised of five minimal major histocompatibility complex (“MHC”) class I peptides to activate naïve T cells against survivin.

DPX-Survivac is currently being tested in:

  • A phase 2 clinical trial that evaluates DPX-Survivac in an open label safety and efficacy study in ovarian cancer patients with advanced platinum-sensitive and resistant ovarian cancer;

  • Two investigator-sponsored phase 2 clinical trials in combination with the checkpoint inhibitor Keytruda® (pembrolizumab) of Merck & Co Inc. (“Merck”) in patients with recurrent, platinum-resistant and sensitive ovarian cancer and in patients with recurrent/refractory DLBCL; and

  • A phase 2 basket trial in combination with Merck’s Keytruda® (pembrolizumab) in patients with select advanced or recurrent solid tumors in bladder, liver (hepatocellular carcinoma), ovarian, or non-small-cell lung (“NSCLC”) cancers, as well as tumors shown to be positive for the microsatellite instability high (“MSI-H”) biomarker.

In infectious disease indications, DPX-COVID-19 is IMV’s vaccine candidate against the novel strain of coronavirus that is responsible for the current pandemic. It is a DPX-based formulation of multiple peptides of the SARS-CoV-2 that generated early and strong immune responses in preclinical assays in animal models. A first-in-human Phase 1 clinical study is scheduled to initiate during the summer of 2020.

The Corporation also has a commercial licensing agreement with Zoetis for the development of two targeted therapies for cattle and is also conducting several research and clinical collaborations, including a collaboration with the Dana-Farber Cancer Institute (“Dana-Farber”) for Human Papillomavirus (“HPV”) related cancers and with Leidos, Inc. (“Leidos”) in the United States for the development of targeted therapies for malaria and the Zika virus.

The common shares of the Corporation (the “Common Shares”) are listed on the Nasdaq Stock Market LLC (“Nasdaq”) and on the Toronto Stock Exchange (“TSX”) under the symbol “IMV”.

BUSINESS MODEL AND STRATEGY

IMV is dedicated to making immunotherapy more effective, more broadly applicable, and more widely available to people facing cancer and other serious diseases. The Corporation’s lead product candidate, DPX-Survivac, has demonstrated the ability to induce prolonged T cell activation leading to tumor regressions in advanced ovarian cancer and DLBCL. The Corporation is also developing a DPX-based vaccine candidate against COVID-19.

Foremost, the Corporation’s clinical strategy is to target late stage unmet medical needs for a shorter path to clinical demonstration and first regulatory approval. In addition, the Corporation is evaluating combination with Merck’s Keytruda® checkpoint inhibitor in multiple solid tumor indications.

In collaboration with commercial and academic partners, the Corporation is also expanding the application of DPX as a delivery platform for other applications. Pre-clinical and clinical studies have indicated to date that the Corporation’s delivery platform may allow for the development of enhanced targeted therapies for a wide range of infectious diseases by generating a stronger and more durable immune response than with existing delivery methods.

The Corporation intends to be opportunistic in the development of products by exploring a variety of avenues, including co-development through potential collaborations, strategic partnerships or other transactions with third parties. The Corporation may seek additional equity and non-dilutive funding and partnerships to advance the development of its product candidates.

5





PLATFORM AND PRODUCTS IN DEVELOPMENT

Delivery Platform

The DPX platform is a unique and patented technology discovered by the Corporation that provides a new way to deliver active ingredients to the immune system using a novel MOA. This MOA does not release the active ingredients at the site of injection but forces an active uptake by immune cells (antigen-presenting cells) and delivery of active ingredients into lymph nodes, inducing a targeted, robust and sustained immune response. IMV is exploiting this unique MOA to pioneer a new class of cancer immunotherapies and vaccines that will represent a paradigm shift from current approaches. Thanks to its “no release” MOA, the DPX-based targeted therapies allow the programming of immune cells in-vivo to generate new target-specific therapeutic capabilities. The DPX platform can be leveraged to generate “first-in-class” T cell therapies with the potential to be disruptive in the treatment of cancer. The Corporation believes that the novel MOA of DPX makes the platform uniquely suitable for cancer immunotherapies and vaccines against infectious diseases, such as COVID-19.

DPX-based products are based on active ingredients formulated in lipid nanoparticles and, after freeze drying, suspended directly into a lipidic formulation. DPX-based products are stored in a dry format, which provides the added benefit of an extended shelf life. The formulation is designed to be easy to re-suspend and administer to patients.

DPX also has multiple manufacturing advantages: it is fully synthetic; can accommodate hydrophilic and hydrophobic compounds; is amenable to a wide-range of applications (for example, peptides, small-molecules, RNA/DNA, or antibodies); and provides long term stability as well as low cost of goods.

The DPX platform forms the basis of all IMV’s product development programs.

DPX-Survivac

Product Candidate Overview

The Corporation’s first cancer immunotherapy candidate, DPX-Survivac, which combines the advantages of the DPX platform and the cancer antigen survivin, is the lead candidate of IMV’s new class of immunotherapies that generate cancer-targeted T cells in vivo. The protein survivin is found in more than 15 types of solid and hematologic cancers. It has been recognized as a promising tumor-associated target because it is overexpressed in a high percentage of tumor types. Survivin plays a critical role in tumor biology as it is associated with tumor cell differentiation, proliferation, invasion and metastasis. The Corporation believes DPX-Survivac’s ability to deliver a sustained flow of T cells that target survivin expressed on cancer cells can lead to clinically effective anti-tumor therapies.

Figure 1: Examples of % of patients with survivin expression in different indications

DPX-Survivac has demonstrated to date, a robust and sustained, survivin-specific immune response with infiltration of targeted T cells into tumors post-treatment which was associated with prolonged duration of clinical benefits up to more than two years in certain cases. DPX-Survivac showed a well-tolerated safety profile with no related immune or serious systemic adverse events reported Compared to traditional immuno-oncology therapies, which require intravenous infusions and more extensive safety monitoring, DPX-Survivac may lessen the burden on patients’ quality of life.

In clinical trials exploring the activity of DPX-Survivac, an intermittent low dose oral regimen of cyclophosphamide (“CPA”) is used as an immune-modulator. Conventional chemotherapeutic drugs are traditionally used for their cytotoxic effect on tumors but CPA can also be used at lower doses to potentiate the activity of other immunotherapies without inducing significant cytotoxicity.

Several studies have demonstrated that low-dose regimens of CPA can have multiple beneficial effects for T cell therapies such as DPX-Survivac, including reduction of T regulatory cell numbers and increase in effector T cells (Hugues et al, Immunology. 2018). In Phase 1 clinical studies, IMV demonstrated that intermittent low-dose oral CPA can act as an immune-modulator increasing the number of survivin-specific T cells generated by DPX-Survivac (Weir et Al, AACR, 2016).





CLINICAL PIPELINE

IMMUNO-ONCOLOGY

DPX-Survivac is being tested in 6 different cancer indications through multiple phase 2 clinical trials.

DPX- Survivac - Ongoing Clinical Trials

COVID-19 Impact on Clinical Program

The COVID-19 pandemic crisis is impacting ongoing trial activities across the industry due to the pressure placed on the healthcare system as well as governmental and institutional restrictions. IMV’s clinical team is working closely with each clinical site and our contract research organizations (“CROs”) on contingency plans to ensure that patient safety and the integrity of data is maintained. IMV is following the FDA guidance issued for the COVID-19 pandemic: “FDA Guidance on Conduct of Clinical Trials of Medical Products during COVID-19 Pandemic Guidance for Industry, Investigators, and Institutional Review Boards”. Additionally, the team continues to monitor updated institutional, regional and national guidance to fully comply with applicable guidelines as they are issued. It is noted that some clinical sites have paused or slowed enrollment in clinical trials, while other sites, less impacted, are continuing activities as planned. The overall enrollment rate may decrease, but clinical activities are continuing. Patients are encouraged to comply with directives from public health officials and, subject to such compliance, attend visits as planned or to discuss alternatives with their physician. The current activities performed at central labs to assess the eligibility of patients and the management of clinical samples is not impacted to date, and IMV is working with the vendors to ensure continuity of activities. Drug supply is not expected to be impacted at

7





this time. As added precaution, IMV is working on contingency plans to ensure proper supply of drugs to all clinical sites in the event of future transportation or other constraints.

Ovarian subpopulation - DeCidE1 phase 1b/2

The DeCidE1 phase 2 study is a multi-center, randomized, open-label study to evaluate the safety and effectiveness of DPX-Survivac with intermittent low dose CPA. This phase 2 arm enrolled 22 patients with recurrent, advanced platinum-sensitive and resistant ovarian cancer. Patients received 2 subcutaneous injections of DPX-Survivac 3 weeks apart and every eight weeks thereafter, and intermittent low dose CPA 50 mg BID one week on and one week off for up to 1 year. Paired tumor biopsies were performed prior to treatment and on treatment.

Primary endpoints of this study are overall response rate, disease control rate and safety. Secondary endpoints include cell mediated immunity, immune cell infiltration in paired biopsy samples, duration of response, time to progression, overall survival and biomarker analyses.

On May 29, 2020, Dr. Oliver Dorigo, MD, Ph.D. presented clinical translational and updated clinical response data from DeCidE1 supporting the mechanism of action of IMV’s lead compound, DPX-Survivac, in a poster session (Abstract Number: 6075) at the ASCO20 Virtual Scientific Program. As of data cut-off date of May 2, 2020, 19 patients were evaluable for efficacy with four patients (21%) still receiving treatment. Notably, 18/19 evaluable patients had stage 3 or 4 disease at time of diagnosis, the majority of whom had received >3 lines of prior therapy and were platinum resistant. Key findings on the safety and efficacy of DPX-Survivac/CPA are outlined below:

  • 5/19 patients (26%) achieved a PR with tumor regression >30% on target lesions;

  • 15/19 patients (79%) achieved disease control, defined as Stable Disease (SD) or Partial Response (PR) on target lesions;

    • Tumor shrinkage of target lesions was observed in 10 patients (53%).
  • Overall, treatment was well-tolerated. The majority of treatment-related adverse events reported were Grade 1 events and related to reactions at the injection site;

  • Durable clinical benefits lasting ≥ 6 months were observed in seven patients (37%);

    • 5/7 patients (71%) have now reached duration of clinical benefit > 10 months including three patients with PR and two patients with SD; and

    • The two patients with SD are about to reach the 1-year mark.

Translational analyses on longitudinally collected peripheral blood mononuclear cell (PBMC) and tumor tissue samples link observed clinical benefit and survivin-specific T cells, supporting DPX-Survivac’s unique mechanism of action. Key translational findings are outlined below:

  • Treatment generated a survivin-specific CD8+ T cell response in PBMC samples of 14/16 (87%) evaluable patients; and

  • Treatment induced infiltration of survivin-specific T cell clones into the tumors as early as day 56 following treatment, which was shown in an analysis of the TCRβ repertoires in five subjects who achieved stable disease.

  • On February 4, 2020, the Corporation presented clinical translational data supporting the mechanism of action of its lead compound, DPX-Survivac, during the 2020 ASCO-SITC Clinical Immuno-Oncology Symposium. The Corporation measured systemic immune responses, tumor immune infiltrates and clinical tumor response from pre- and post-treatment patient samples in connection with three Phase 1 and/or Phase 2 clinical studies, each evaluating DPX-Survivac/CPA alone or in a combination regimen in patients with platinum-sensitive or resistant, advanced ovarian cancer. Highlights from these translational data include:

    • DPX-Survivac generates robust, functional, targeted, and sustained survivin-specific T cell response in ovarian cancer subjects in the maintenance setting as well as with recurrent disease.

    • DPX-Survivac induced activation of cytolytic T cell pathway is correlated with clinical response highlighting its unique mechanism of action.

    • Enhanced number of unique survivin-specific T cell clones are detected in on-treatment tumor samples and the T cell infiltration on-treatment correlated with clinical responses.

8





    • DPX-Survivac mechanism of action has been confirmed across multiple clinical trials and has shown to provide clinical benefit and long-term clinical response in some subjects with advanced recurrent ovarian cancer.

IMV plans to take these results to the U.S. Food and Drug Administration (“FDA”) in the second half of 2020 for a Type B meeting, to align on the design of a Phase 2b study with potential to support registration under accelerated approval in this indication.

In December 2018, IMV met with the FDA in a Type B meeting to discuss the results to date of its DeCidE1 clinical trial and continuing development plan, as well as to obtain agency guidance on a potential accelerated regulatory pathway for DPX-Survivac as a T cell immunotherapy for the treatment of advanced ovarian cancer in patients with progressing disease.

The purpose of IMV’s Type B meeting with the FDA was to request feedback on the design of the clinical program for DPX-Survivac. This program includes the continuing DeCidE1 phase 2 clinical study and a potential future registration trial for accelerated approval in a subset of ovarian cancer patients.

The FDA reviewed the Corporation’s proposed clinical development plan and acknowledged the potential for accelerated approval in advanced ovarian cancer based on objective response rate (“ORR”) according to Recist 1.1 criteria with reported median duration of response (“DOR”). In addition, the FDA provided important guidance on clinical design considerations for different lines of therapy and platinum-sensitive and resistant patient populations.

Figure 2: Examples of previous US FDA accelerated approvals in ovarian cancer (source: FDA website)

In addition, IMV submitted a protocol amendment for a predictive enrichment approach to the phase 2 DeCidE1 trial, and further discussed those details with the FDA during the Type B meeting. The phase 2 primary end point, based on ORR per Recist 1.1 criteria, is intended to confirm the high response rate and duration of clinical benefits observed in previously announced results in a patient population defined by a clinical biomarker based on baseline tumor burden.

The Corporation believes that there is still an urgent medical need in advanced recurrent ovarian cancer (Sources: 1. NCCN

Guidelines Ovarian Cancer V2.2018; SEER Ovarian Cancer; JCO, vol 33; 32 Nov 2015, Gyn Onc 133(2014) 624-631):

  • Nearly 70% of ovarian cancers are diagnosed in advanced stage;

  • The overall 5-year survival rate is 46.5%, and only 29% for advanced disease;

  • Most patients develop advanced, platinum-resistant, poor prognosis disease; and

  • Limited options exist with current single-agents at 6-30% response rates and median progression free survival (“mPFS”) of 2.1 - 4.2 months.

The Corporation believes that it has the potential to be “best-in-class” in the competitive landscape of recurrent, advanced ovarian cancer as other immunotherapeutic treatments tested in this patient population (Merck’s Keytruda® and Pfizer/Merck KGaA’s Bavencio®) are unlikely to proceed into registration trials based on the recently published updates:

  • In an article published May 20, 2020 in the Journal of Clinical Oncology®, an American Society of Clinical Oncology Journal, it was reported that Merck’s Keytruda® showed only modest clinical activity in patients with recurrent

9






    advanced ovarian cancer after a median follow-up of 16.9 months in an interim analysis of the KEYNOTE-100 trial (NCT02674061).

  • In an article published March 21, 2019 in Pharmaphorum, it was reported that Pfizer/Merck KGaA’s check point inhibitor, Bavencio®, was unable to demonstrate improved progression-free survival in the phase 3 JAVELIN Ovarian PARP 100 study. In this study, Bavencio® was given in combination and/or after platinum-based chemotherapy followed by a pairing with Pfizer’s PARP drug Talzenna (talazoparib) in previously untreated women with advanced ovarian cancer. This phase 3 study was abandoned shortly thereafter.

The Corporation’s clinical strategy with this trial is to establish the targeted T cell activity of its lead compound in order to increase value and de-risk clinical development, and to target late stage unmet medical needs for a shorter path to clinical demonstration and first regulatory approval.

The Corporation anticipates that, in addition to general clinical expenses which are distributed amongst the various clinical projects, the costs to complete this phase 2 clinical trial is currently estimated at $750,000 which is expected to be spent in 2020.

Combinations with Merck’s Keytruda® (pembrolizumab)

Phase 2 clinical trial in DLBCL - SPiReL Phase 2 (investigator-sponsored)

This phase 2 study is a combination trial with Merck’s Keytruda® (pembrolizumab) in patients with measurable or recurrent DLBCL led by Dr, Neil Berinstein, MD, FRCP(C), ABIM, hematologist-oncologist at the Odette Cancer Centre at Sunnybrook Health Sciences Centre (investigator-sponsored). This investigator sponsored trial, announced initially in May 2017, is designed to evaluate the safety and efficacy of DPX-Survivac, Merck’s Keytruda® (pembrolizumab), and intermittent low-dose CPA. IMV has provided an update on this trial at the American Society of Hematology Annual meeting held on December 6-10, 2019.

The primary objective of this study is to document a response rate to this treatment combination using modified Chesoni criteria of at least 24% (6/25). Secondary objectives include duration of response and safety. Exploratory endpoints include T cell response, tumor immune cell infiltration, and gene expression analysis.

i Cheson, B.D., Pfistner, B., Juweid, M.E., Gascoyne, R.D., Specht, L., Horning, S.J. and Diehl, V. (2007). Revised Response Criteria for Malignant Lymphoma. Journal of Clinical Oncology, 25(5) DOI: 10.1200/JCO.2006.09.2403.
CR: Nodal disease less than 1.5 cm, absence of extranodal disease, no new lesions and normal bone marrow (BM);
PR: ≥50% decrease in the sum of the product of the diameters (SPD), no new lesion;
PD: Longest diameter of node > 1.5 cm and ≥50% increase from Product of Perpendicular Diameter and increase in longest or smallest diameter from nadir (lowest value), unequivocal progression of non target, new lesions or BM involvement.

As of May 15, 2020, the Corporation has reported that the study has met its primary efficacy endpoint with 64% (7/11) of evaluable patients demonstrating a clinical response so far. The study remains ongoing and the top line data are expected to be presented at a conference later in 2020. As of August 3, 2020, 22 subjects have been enrolled across five different clinical sites in Canada.

Researchers conducting the investigator sponsored study are testing the novel immunotherapy combination in patients whose DLBCL expresses survivin. DPX Survivac stimulates the immune system to produce T cell responses targeting survivin.

On December 8, 2019, IMV provided updated data on this study. Seven of the nine evaluable patients demonstrated clinical benefit, including three complete responses and two partial responses.

Updated SPiReL data highlights:

At the time of data cut-off for this analysis, efficacy data based on modified Cheson criteria was available from nine evaluable patients:

  • 7/9 (77.8%) evaluable subjects exhibited clinical benefit, including three (33.3%) complete responses and two (22.2%) partial responses;

10




  • Reproducible survivin-specific T cell responses observed in all subjects that achieved clinical responses on treatment;

  • One subject, who received three prior lines of systemic therapies and failed autologous stem cell transplant, reached a complete response at the first on-study scan following treatment with the DPX-Survivac combination regimen and remains free of disease recurrence after completing the study; and

  • Clinical benefits and favorable toxicity profile observed in a heterogenous population of r/r DLBCL patients, including patients of advanced age and/or with comorbidities, who are more susceptible to adverse effects and more difficult to treat.

The Corporation anticipates that, in addition to general clinical expenses which are distributed amongst the various clinical projects, its share of the cost to complete this study is currently estimated at $600,000, which is expected to be spent in 2020.

Phase 2 basket trial in 5 solid tumor indications

In September 2018, the Corporation announced the expansion of its clinical program with a phase 2 basket trial in collaboration with Merck evaluating its lead candidate, DPX-Survivac/CPA, and Merck’s KEYTRUDA® (pembrolizumab), in patients with select advanced or recurrent solid tumors.

The open-label, multicenter, phase 2 basket study will evaluate the safety and efficacy of the immunotherapeutic combination in patients with bladder, liver (hepatocellular carcinoma), ovarian, or non-small cell lung NSCLC cancers, as well as tumors shown to be positive for the microsatellite instability high (MSI-H) biomarker. Investigators plan to enroll up to 184 patients across five indications in 20 medical centers in Canada and the United States.

The ASCO defines a basket clinical study as a trial that investigates the effects of a drug regimen in multiple tumor types that share a common molecular target, regardless of where the disease originated.

This is the third clinical trial evaluating the combination of DPX-Survivac/CPA and KEYTRUDA® (pembrolizumab) in advanced recurrent cancers.

On September 30, 2019, IMV presented preliminary results from its ongoing phase 2 basket trial, during the Immunotherapy of Cancer poster session at the European Society for Medical Oncology (ESMO) 2019 Congress in Barcelona, Spain.

Preliminary Results from the Phase 2 Basket Trial

At the time of cut-off, 23 patients were enrolled across all five patient cohorts. This includes 19 patients across all cohorts who received DPX-Survivac in combination with pembrolizumab with CPA, and four patients from the ovarian cancer cohort receiving DPX-Survivac with only pembrolizumab:

  • Preliminary results from the first on-study scan showed tumor reduction in patients with ovarian cancer (with and without CPA), NSCLC and bladder cancer;

  • Partial responses observed at first scan in two subjects (bladder cancer, ovarian cancer); 19/23 subjects are still active on study treatment;

  • T cell infiltration observed in biopsy samples from subjects who achieved tumor reduction on treatment;

  • Eight ovarian cancer patients were enrolled in the study, randomized 1:1 to treatment with and without CPA. Tumor control and tumor reductions were observed in both groups; and

  • Safety evaluation on all evaluable patients demonstrated that treatment was well-tolerated, with no related Grade 3-4 or immune-related adverse events (AEs) reported.

As at August 3, 2020, 19 clinical sites were open, and 100 patients had been enrolled across the five indications. Given the ongoing COVID-19 pandemic, the pressure placed on the healthcare system, as well as governmental and institutional restrictions, the enrollment in this trial as well as the collection and analysis of data has been slowed down.

IMV is uncertain of when it will be able to report results from this trial but expects to disclose interim data in the second half of 2020 when a more mature dataset will be available. The Corporation anticipates that, in addition to general clinical expenses,

11





which are distributed amongst the various clinical projects, $22,400,000 is currently estimated to be spent for stage 1 for this trial, of which $6,500,000 is estimated to be spent in 2020.

Phase 2 clinical trial in ovarian cancer (investigator-sponsored)

In February 2017, the Corporation announced an investigator-sponsored phase 2 clinical trial in ovarian cancer in combination with Merck’s checkpoint inhibitor pembrolizumab in patients with recurrent, platinum-resistant ovarian cancer. University Health Network’s (“UHN”) Princess Margaret Cancer Centre conducts the phase 2 non-randomized, open-label trial designed to evaluate the potential anti-tumor activity of the combination of pembrolizumab, DPX-Survivac, and intermittent low-dose CPA. It is expected to enroll 42 subjects with advanced epithelial ovarian, fallopian tube, or primary peritoneal cancer. The study’s primary objective is to assess overall response rate. Secondary study objectives include progression free survival rate, overall survival rate, and potential side effects, over a five-year period. At this stage, the Corporation has no specific plan on the next steps after this trial as it will have to be assessed with its partner based on the clinical trial results.

As of August 3, 16 patients were enrolled in the trial and the Corporation will disclose final results once provided by the UHN Princess Margaret Cancer Centre and currently anticipates that, in addition to general clinical expenses, which are distributed amongst the various clinical projects, its share of the costs to complete this study, currently expected to be spent in 2020, are estimated at $200,000.

DPX-SurMAGE

In March 2019, IMV announced that CQDM, a Canadian bioresearch consortium, had awarded a grant for a collaboration among IMV Inc., Centre de recherche du CHU de Quebec-Universite Laval (“CHU”) and La Fondation du CHU de Quebec (“FCHUQc”). The collaboration will receive a grant of up to $1.2 million from the CQDM and $300,000 from the FCHUQc over three years, to develop a novel dual target T cell therapy for an initial clinical application in bladder cancer. IMV currently expects to contribute $2.8 million over the next three years towards this project of which $1.6 million has been contributed in 2019 and $500,000 is estimated to be contributed in 2020.

The work will target immunogenic peptides from the MAGE protein family member A9 (MAGE-A9). This protein is frequently expressed in various human cancers including bladder, lung and kidney. These peptides will be combined with selected immunogenic peptides from the survivin protein composing the DPX-Survivac T cell drug candidate.

The researchers believe that MAGE-A9 and survivin peptides presented on the surface of cancer cells can be used to program T cells to destroy tumors and may represent ideal targets for anti-cancer T cell immunotherapies. The collaborators will combine these peptides with IMV’s proprietary DPX technology to develop a first-in-class dual target T cell therapy (DPX-SurMAGE).

DPX-SurMAGE will be initially evaluated in preclinical studies. Upon successful completion of these preclinical evaluations, researchers are aiming to test the candidate in two clinical studies in patients with:

  • Muscle invasive bladder cancer combined with an anti-PD-1 and intermittent CPA prior to cystectomy; and

  • Low-grade highly recurrent non-muscle invasive bladder cancer combined with CPA prior to transurethral resection.

This collaboration is expected to span at least a three-year period and as part of the collaboration agreement, IMV holds an exclusive option to in-license intellectual property related to this collaboration.

In June 2019, IMV met with Health Canada for a pre-clinical trial application (“CTA”) meeting. The objectives of this meeting were to present and discuss the strategy for the development (including pre-clinical and clinical plans) of DPX-SurMAGE, to the agency to ensure the strategy was aligned with the agency’s expectations. The agency agreed with the approach for pre-clinical, manufacturing and clinical development and made suggestions to facilitate its review by the agency.

Given the ongoing COVID-19 pandemic, the pressure placed on the healthcare system, as well as governmental and institutional restrictions, and the fact that IMV had not initiated a phase 1 trial of DPX-SurMAGE prior to the pandemic, IMV is uncertain of when it will initiate this trial. The Corporation intends to provide an update when more information is available. In the meantime, pre-clinical work is continuing on DPX-SurMAGE.

12





Orphan Drug Status and Fast Track Designation

The Corporation announced, in November 2016, that the European Medicines Agency (EMA) had granted orphan drug designation status to IMV’s DPX-Survivac in ovarian cancer. In July 2015, the FDA also granted orphan drug status to DPX-Survivac for the treatment of ovarian cancer. This designation is valid for all applications of DPX-Survivac in ovarian cancer without restriction to a specific stage of disease.

IMV had previously received FDA fast track designation for DPX-Survivac. The designation is intended for patients with no measurable disease after their initial surgery and chemotherapy.

Other Programs

Oncology

DPX-NEO

On January 17, 2019, treatment of the first patient occurred in the phase 1 trial evaluating neoepitopes formulated in the Corporation’s proprietary DPX delivery platform in patients with ovarian cancer. The study is part of the Corporation’s DPX-NEO program, which is a continuing collaboration between UConn Health and IMV to develop neoepitope-based anti-cancer therapies.

Investigators will assess the safety and efficacy of using patient-specific neoepitopes discovered at UConn Health and formulated in IMV’s proprietary DPX-based delivery technology in women with ovarian cancer. Investigators plan to enroll up to 15 patients in the phase 1 study. UConn Health is financing the trial with IMV providing materials and advice.

The Corporation expects to disclose results only when those are made available by UConn Health.

DPX-E7

Dana-Farber led the DPX -E7 study through a $1.5 million research grant from Stand Up To Cancer and the Farrah Fawcett Foundation to clinically evaluate collaborative translational research that addresses critical problems in HPV-related cancers. The Dana-Farber study was a single center, open label, non-randomized clinical trial that investigated the safety and clinical efficacy in a total of 44 treated participants. Its primary objectives were to evaluate changes in CD8+ T cells in peripheral blood and tumor tissue, and to evaluate the safety in HLA-A2 positive patients with incurable HPV-related head and neck, cervical, or anal cancers. Between the start of the trial in December 2016 and the termination of the study in February 2020, 76 patients were pre-consented, of which, 11 patients were treated with DPX-E7. IMV and Dana-Farber are planning to meet in the second half of 2020 to discuss the outcome of the trial and next steps.

The Corporation expects to disclose results only when those are made available by Dana-Farber.

Other Applications

Product Overview

A component of the Corporation’s business strategy is partnering the DPX platform for infectious and other disease applications. The DPX platform has the potential to generate a rapid and robust immune response, often in a single dose. The unique single-dose capability could prove to be beneficial in targeting difficult infectious and other disease candidates.

DPX-COVID-19

In early March, IMV announced plans to develop a DPX-based vaccine candidate for COVID-19 in collaboration with experts in the field. IMV has completed preclinical studies and is on track to initiate a Phase 1 clinical study for DPX-COVID-19 this summer.

The ongoing pandemic outbreak of COVID-19 and its alarmingly quick transmission to over 125 countries across the world resulted in the World Health Organization (“WHO”) declaring a pandemic on March 11, 2020.

13





The outbreak is caused by a novel coronavirus, the Severe Acute Respiratory Syndrome Coronavirus 2 (“SARS-CoV-2”). There is an urgent need to develop vaccines to control its spread and help protect vulnerable populations. However, a potential bottleneck with current conventional vaccine approaches is the length of time required for vaccine development. The Corporation believes IMV’s DPX delivery technology offers the possibility of a fully synthetic epitope-based approach with the potential for accelerated development and rapid, large-scale production of a vaccine that would be compliant with current good manufacturing practice (“cGMP”).

Research in coronaviruses has identified the benefit of humoral and cellular (B and T cell) immune responses for treatment and protection from infection.

IMV believes that it has already demonstrated in multiple clinical trials in oncology and infectious diseases the potential of its technology for the induction of robust and sustained B and T cells. The Corporation believes there is an opportunity to pursue a COVID-19 development program to establish the clinical safety and immunogenicity using a similar approach for COVID-19.

The Corporation is developing its vaccine candidate DPX-COVID-19 in collaboration with lead investigators for the phase 1 clinical study: Joanne Langley, M.D. and Scott Halperin, M.D., of CCfV at Dalhousie University, the Izaak Walton Killam Health Center and the Nova Scotia Health Authority and CIRN; along with Dr. Gary Kobinger, Ph.D., Director of the Research Centre on Infectious Diseases at the University Laval in Quebec City and GUARD in Canada. The investigators are assisting with preclinical and clinical evaluation and with further development strategy in collaboration with the Canadian government and others.

Since IMV announced its plans on March 18, 2020 to develop a DPX-based vaccine for COVID-19 in collaboration with well-respected experts, the Corporation has made significant progress:

  • The Corporation has used sequences of the virus and immunoinformatic to predict and identify several hundred epitopes, of which 23 were selected for their biological relevance to the virus and potential to generate neutralizing antibodies against SARS-CoV-2;

  • Based on this analysis, peptide candidates targeting these epitopes were manufactured and IMV's suppliers and contract manufacturers were engaged to prepare the cGMP batches required to support a clinical study in humans;

  • Preclinical assays in animal models have been completed to validate the safety and potency of the vaccine candidate before initiating the human clinical study;

  • The Corporation has selected its vaccine candidate to advance into human clinical studies and has positive preclinical results demonstrating robust immunogenic and antibody responses from the majority of selected peptide epitopes;

  • In collaboration with Joanne Langley, MD, at the CCfV and the CIRN, the design of a phase 1 clinical study has been completed and clinical sites have been selected in both Nova Scotia and Quebec. Start-up activities are ongoing;

  • IMV recently held successful discussions with Health Canada about the design of a phase 1 clinical study in humans scheduled to be initiated this summer. The proposed trial will enroll approximately 84 patients. It will be a randomized, placebo-controlled study that will assess two different doses of DPX-COVID-19 in two age strata; and

  • The Corporation has received confirmation of $4.75 million in grants in Canada to help support its COVID-19 development program. The Corporation is continually monitoring additional funding opportunities for this project and has submitted several other grant applications in Canada and the United States.

Through the Corporation’s other clinical studies, the Corporation believes its DPX technology has demonstrated a favorable safety profile and immunogenicity in both cancer and infectious disease settings, with sustained effect and potential for single-dose effectiveness as a prophylactic vaccine. Over 200 patients have been dosed with DPX-based immunotherapies and data from these studies suggest treatment is well-tolerated, including in heavily pre-treated cancer patients with advanced-stage disease. The Corporation has also applied this technology for the prevention of RSV, the second-leading cause of respiratory illness in infants, the elderly and the immunosuppressed. The Corporation reported its Phase 1 data from its clinical candidate, DPX-RSV, which demonstrated a favorable safety profile and immunogenicity in older adults (age 50-64), as well as preclinical data from research-stage candidates aimed at other infectious diseases, including malaria and anthrax.

14





DPX-RSV

The Corporation has performed preclinical research activities for an RSV targeted candidate, which is the second leading cause of respiratory illness in infants, the elderly, and the immunosuppressed. Currently, there is no preventive therapy available for this virus and IMV is seeking to develop a novel DPX-based formulation to be used in elderly and healthy adults, including women of child-bearing age. IMV has in-licensed the RSV antigen exclusively from VIB VZW, a non-profit life sciences research institute funded by the Flemish government, to expand its pipeline of DPX-based candidates. The novel RSV antigen being evaluated in the DPX platform is based on the short hydrophobic protein present at low levels on the surface of the RSV virion. But, more importantly, it is also present on the surface of RSV-infected cells. This DPX-based candidate has a unique mechanism of action in which the resultant antibodies bind to and destroy infected cells.

Phase 1 clinical trial in RSV

A phase 1 clinical study has been conducted in Canada with the Corporation’s RSV targeted candidate in healthy adults. The RSV candidate is formulated in IMV’s proprietary DPX platform and is initially being developed to protect the elderly population from infection. The phase 1 study, which was the first clinical trial of a DPX-based formulation in an infectious disease indication, evaluated the safety and immune response profile of the DPX-RSV candidate in 40 healthy older adult volunteers (age 50-64 years) and two dose cohorts, with 20 subjects in each cohort.

In October 2016 and April 2017, the Corporation announced positive topline results from this trial. The report outlined that more than nine months after the last vaccination, 15 of 16 participants (93%) who received DPX-RSV demonstrated antigen-specific immune responses. The candidate also continued to have a positive safety profile and was well tolerated with no SAEs among all study participants. Within the 25µg dose patient cohort, which was the only dose tested out to one year, 100 percent of older adults (7/7 immune responders) vaccinated with DPX-RSV maintained the antigen-specific immune responses one year after receiving the booster dose. After one year, the antibody levels measured were still at peak with no sign of decrease.

On September 27, 2018, IMV announced results of ongoing research to further explore the novel MOA of its candidate. New data from a preclinical study highlighted the effects of two potential approaches to preventing RSV, comparing a single dose bovine version of DPX-RSV to a two-dose conventional investigational bovine RSV (bRSV) preventive therapy. Researchers found that IMV’s targeted therapy yielded strong antigen-specific immune responses and a protective effect on disease pathology.

They found SH antibodies in 14 of the 15 animals that received DPX-bRSV, and the improvements observed in disease pathology were comparable between the two cohorts. These were the first bovine animal health data to directly correlate the induced immune response against IMV’s novel RSV target - the SH viral protein- with measures of disease protection.

Conventional RSV preventive therapies target either the F or G proteins of the virus and provide protection by neutralizing the RSV virus. Clinical measures of efficacy focus on the amount of neutralizing antibodies in the bloodstream. DPX-RSV works differently; it targets the SH viral ectodomain of the RSV virus and, instead of neutralizing the virus, it enables the immune system to recognize and destroy infected cells. Because there are no neutralizing antibodies resulting from the DPX-RSV MOA, a different clinical assessment is required to determine the candidate’s protective effect. IMV has exclusive worldwide licenses on applications that target the SH ectodomain antigen in RSV. The Corporation is exploring opportunities to out-license this product to potential partners.

Leidos Collaboration

In 2016, IMV was awarded a subcontract by Leidos, a health, national security, and infrastructure solutions company, to evaluate IMV’s DPX platform for the development of peptide-based malaria targets. The subcontract is funded through Leidos’ prime contract from the U.S. Agency for International Development (“USAID”) to provide DPX-based candidate evaluations in the preclinical, clinical, and field stages of malaria preventative therapy development. Leidos and IMV are working together to identify adjuvant and antigen combinations that can be used to protect against malaria and, with the DPX delivery system, formulate promising targeted therapy candidates for potential clinical testing.

In November 2017, an expansion of this collaboration was announced. Following the achievement of several preclinical milestones in the collaboration with USAID, Leidos and USAID selected the DPX-based platform as one of the preferred formulations for further development under a new contract extension. Additional research is ongoing under this new subcontract, with collaborators focusing on identifying the most promising target-formulation combinations.

15





Zoetis Collaboration

On August 31, 2017, the Corporation announced the achievement of several milestones in its ongoing collaboration with global animal health company Zoetis to develop targeted T cell therapy for cattle. In recent controlled studies, the IMV formulations met efficacy and duration of immunity endpoints against two disease targets. These results will enable Zoetis to advance two DPX-formulation candidates into late-stage testing. Research relating to this collaboration is still ongoing.

Licensing Agreements

While the Corporation is focused on developing a pipeline of cancer immunotherapies, it is also pursuing opportunities to license its platform technology to other parties interested in creating enhanced T cell targeted therapies on an application-by-application basis.

In April 2018, IMV signed a licensing agreement and granted SpayVac-for-Wildlife (SFW Inc.) a license to two of its proprietary delivery platforms. SFW Inc. has global exclusive rights to use both of these platforms to develop humane, immune-contraceptive compounds for control of overabundant, feral and invasive wildlife populations against royalties on sales.

MARKET OVERVIEW

Cancer Immunotherapies

Cancer is considered one of the most widespread and prevalent diseases globally. According to the 2019 Cancer Facts & Figures released by the American Cancer Society, it is predicted that the global cancer burden will rise to 27.5 million and the number of cancer deaths to 16.3 million by 2040 solely due to the growth of the aging population. However, these projections may be underestimates given the adoption of unhealthy behaviors and lifestyles associated with rapid income growth and changes in reproductive patterns in economically transitioning countries. According to the 2019 Cancer Facts & Figures, cancer usually develops in older people; 80% of all cancers in the United States are diagnosed in people 55 years of age or older. The “oldest old”, adults ages 85 and older are the fastest-growing population group in the US and women outnumber men in this age group because of a longer life expectancy.

Conventional cancer treatment involves surgery to remove the tumor whenever possible, as well as chemotherapy and radiation. Chemotherapies are widely used, despite their associated toxicities, because they interfere with the ability of cancer cells to grow and spread. However, studies have shown that older patients often receive little or no treatment because the benefit of prolonged survival does not outweigh potential adverse effects and impact on quality of life. Also, in all groups of patients, tumors often develop resistance to chemotherapies, thus limiting their efficacy in preventing tumor recurrence. Despite recent advances, independent sources note a high unmet medical need in cancer therapy, noting the median survival rate remains poor. Cancer immunotherapies may provide new and effective treatments. According to a Market & Markets report released in September 2016, the global immunotherapy drug market is projected to reach USD$119.39 billion by 2021 from USD$61.97 billion in 2016, growing at a compound annual growth rate (“CAGR”) of 14 % during the forecast period of 2016 to 2021. The major players operating in the immunotherapy drug market include F. Hoffmann-La Roche AG (Switzerland), GlaxoSmithKline (U.K.), AbbVie, Inc. (U.S.), Amgen, Inc. (U.S.), Merck(U.S.), Bristol-Myers Squibb (U.S.), Novartis International AG (Switzerland), Eli Lilly and Corporation (U.S.), Johnson & Johnson (U.S.), and AstraZeneca plc (U.K.).

Cancer immunotherapy seeks to harness the immune system to assist in the destruction of tumors and to prevent their recurrence. There has been significant interest in the field of cancer immunotherapy stemming from recent clinical success in prolonging patient survival with novel compounds. The ability to apply these appropriately has resulted from a greater understanding of the immune dysfunction that is characteristic of cancer. One area in which there have been breakthroughs has been in the area of checkpoint inhibitors, which are compounds that target key regulatory molecules of the immune system. Yervoy® (anti CTLA 4, or ipilumumab, developed by Bristol Myers Squibb) was the first compound in this class to be approved for use in advanced metastatic melanoma. In cancer, these regulators (CTLA 4, PD 1 and its ligand PD L1) act to inhibit CD8 T cell-mediated anti-tumor immune responses that are crucial for tumor control. Monoclonal antibodies that target PD 1 and PD L1 have shown unusual efficacy in cancer patients, with a significant percentage of patients experiencing durable response to these therapies. Several of these compounds have been approved in multiple indications. Merck’s Keytruda® (pembrolizumab) and Bristol Myers Squibb’s Opdivo® (nivolumab) received FDA approval in 2014 for advanced melanoma patients who have stopped responding to other therapies. These therapies have subsequently been approved for use in other advanced cancers including bladder cancer, non-small cell lung cancer, Hodgkin’s Lymphoma, squamous cell carcinoma of

16





the head and neck and stomach cancer. In addition, Keytruda® in particular has been approved for use in cancers with a specific molecular indication irrelevant of cancer type, having been approved in May 2017 for use to treat solid tumors having a biomarker for microsatellite instability (MSI-H), which is a defect in the DNA repair pathway. This represents about 5% of different tumor types, including colorectal, breast, prostate, and thyroid cancers.

These drugs have been shown to be helpful in treating several types of cancer but with success only in a limited percentage of patients. It is not yet known exactly why, though researchers have noticed that these drugs seem to work especially well for patients whose cancer cells have a higher number of mutations.

Key opinion leaders in the field have indicated that that the solution lies in combining checkpoint inhibitors with other cancer treatments and that the ideal combination is likely to be a therapy that drives tumor specific immune responses. These include novel T cell-based therapies. These targeted therapies fit well with checkpoint inhibition therapy because they simultaneously activate strong tumor-specific T cell activation, while also releasing the brakes on immune suppression. The success of such combinations should allow pharmaceutical companies to significantly expand the market of their checkpoint inhibitors.

The Corporation believes that targeted T cell therapies will become an important component of these novel combination immunotherapies, with the potential of synergistic benefits to become an essential part of a multi-pronged approach for the treatment of cancer.

INTELLECTUAL PROPERTY

The Corporation strives to protect its intellectual property in established, as well as emerging, markets around the world. The Corporation’s intellectual property portfolio relating to its platform technology includes 18 patent families, the first of which contains eight patents issued in five jurisdictions (United States, Europe, Canada, Japan, and Australia). The 17 other families collectively contain 42 patents issued in 10 jurisdictions (United States, Europe, Canada, Australia, Japan, India, Israel, Singapore, China, and, separately, Hong Kong) and 73 pending patent applications in 10 jurisdictions. Considering the validations of the European patents, the Corporation’s intellectual property portfolio includes 96 patents. More details on the Corporation’s intellectual property strategy and patents can be found in the AIF filed on SEDAR at www.sedar.com.

The Corporation owns registered trademarks in the United States, Canada, and Europe.

RECENT AND QUARTERLY DEVELOPMENTS

In March 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. IMV continues to monitor the COVID-19 situation, which is rapidly developing. IMV has been designated as an essential business by the Nova Scotia Department of Business and Nova Scotia Public Health. In addition to adhering to directives from public health officials, IMV has implemented a pandemic contingency plan to guide employees, contractors, visitors, facilities, and operations. The Corporation’s plan includes identifying essential business activities to help ensure continuity of business, restricting access to its offices and operation sites and encouraging all employees to work from home to the extent possible, asking business partners to engage by telephone or video conference where possible, eliminating business travel and requiring self-isolation for employees travelling outside of Canada and increasing the frequency and emphasis on cleaning and sanitizing. As the COVID-19 health-crisis further develops, IMV will continue to rely on guidance and recommendations from local health authorities and the Centers for Disease Control and Prevention to update its policies.

The Corporation announced:

  • On August 5, 2020, confirmed $4.75 million of funding from Canadian governmental agencies to advance Phase 1 clinical development of is vaccine candidate, DPX-COVID-19. The Corporation is receiving $4.15 million in advisory services and funding from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP), Atlantic Canada Opportunities Agency (ACOA) and Next Generation Manufacturing Canada (NGen) to support rapid scale-up of DPX-COVID-19 manufacturing process and its evaluation in a phase 1 clinical trial. In addition to this funding, IMV also received $600,000 from the NRC IRAP Innovation Assistance Program (IRAP IAP).

  • On July 20, 2020, appointed Michael P. Bailey to its Board of Directors. Mr. Bailey currently serves as President and Chief Executive Officer and a member of the Board of Directors at AVEO Oncology. Mr. Bailey has more than 25 years of experience in the pharmaceutical industry, where he has been instrumental in the commercial planning and

17





  • launch of several new medicines across multiple oncology indications. He holds an M.B.A. in International Marketing from the Mendoza College of Business at University of Notre Dame and a B.S. in Psychology from St. Lawrence University.

  • On July 14, 2020, updated progress on its COVID-19 vaccine program. Since IMV announced the selection of its vaccine candidate on May 21, 2020, the Corporation has made significant progress including:

    • Preclinical studies have demonstrated the capacity of DPX-COVID-19 to induce strong immunogenicity including the binding on target to the spike protein and viral neutralization;

    • The Corporation has completed the current good manufacturing practice (“cGMP”) formulation and manufacturing process development for DPX-COVID-19; and

    • Multiple batches have been successfully produced at IMV.

  • On June 30, 2020, that in order to maintain the remainder of its at-the-market (“ATM”) facility, the Corporation re- entered into an equity-distribution agreement dated June 30, 2020 with Piper Sandler & Co. (“Piper Sandler”) pursuant to which the Corporation may from time to time sell through “at-the-market” offerings (the “ATM Offering”), with Piper Sandler acting as sales agent, on the Nasdaq Capital Market (the “Nasdaq”) such number of common shares that have an aggregate offering price of up to US$24.5 million under the ATM Prospectus Supplement. This amount reflects the amount which remains unsold following the Corporation entering into the initial equity distribution agreement with Piper Sandler for an aggregate amount of US$30 million as of such date and is only being filed as a result of the underlying Canadian final base shelf prospectus expiring on July 5, 2020.

  • On May 29, 2020, updated clinical response and translational data from DeCidE1, its Phase 2 study evaluating the safety and efficacy of DPX-Survivac with intermittent low-dose CPA (CPA) in patients with recurrent, advanced platinum-sensitive and -resistant ovarian cancer.
    As of data cut-off date, May 2, 2020, 19 patients were evaluable for efficacy with four patients (21%) still receiving treatment. Notably, 18/19 evaluable patients had stage 3 or 4 disease at time of diagnosis, the majority of whom had received >3 lines of prior therapy and were platinum resistant. Key findings on the safety and efficacy of DPX- Survivac/CPA are outlined below:

    • 5/19 patients (26%) achieved a PR with tumor regression >30% on target lesions;

    • 15/19 patients (79%) achieved disease control, defined as Stable Disease (SD) or Partial Response (PR) on target lesions;

      • Tumor shrinkage of target lesions was observed in 10 patients (53%).

    • Overall, treatment was well-tolerated. The majority of treatment-related adverse events reported were Grade 1 events and related to reactions at the injection site;

    • Durable clinical benefits lasting ≥ 6 months were observed in seven patients (37%);

      • 5/7 patients (71%) have now reached duration of clinical benefit > 10 months including three patients with PR and two patients with SD; and

      • The two patients with SD are about to reach the 1-year mark.

        Translational analyses on longitudinally collected peripheral blood mononuclear cell (PBMC) and tumor tissue samples link observed clinical benefit and survivin-specific T cells, supporting DPX-Survivac’s unique mechanism of action. Key translational findings are outlined below:

          • Treatment generated a survivin-specific CD8+ T cell response in PBMC samples of 14/16 (87%) evaluable patients; and

          • Treatment induced infiltration of survivin-specific T cell clones into the tumors as early as day 56 following treatment, which was shown in an analysis of the TCRβ repertoires in five subjects who achieved stable disease.

        These data were presented in a poster session (Abstract Number: 6075) at the ASCO20 Virtual Scientific Program.

      • On May 21, 2020, that it has selected a vaccine candidate against COVID-19 to advance into human clinical studies and has positive preclinical results demonstrating robust immunogenic and antibody responses from the majority of peptide epitopes. The antibody responses observed were equivalent or superior to levels achieved with DPX-RSV,

        18





        which delivered a robust and sustained immune response in a Phase 1 study. Based on these data, the Corporation has selected multiple peptide epitopes to be formulated within its DPX platform to form a vaccine candidate against the novel coronavirus, DPX-COVID-19.

      • On May 7, 2020, the completion of a private placement (the “Private Placement”) of 8,770,005 units of the Corporation (each, a “Unit”) at the market price of $2.86 per Unit. With aggregate gross proceeds of approximately $25.1 million, this non-brokered private placement is being co-led by Fonds de Solidarité FTQ, an existing investor, and Lumira Ventures, a new investor in the Corporation, along with participation by Altium Capital, also a new investor in IMV, together with incumbent investors.

      • On March 30, 2020, that it has made significant progress on the development of DPX-COVID-19, a vaccine candidate against the novel coronavirus, including:

        • The Corporation has used sequences of the virus and immunoinformatics to predict and identify several hundred epitopes, of which 23 were selected for their biological relevance to the virus and potential to generate neutralizing antibodies against SARS-CoV-2;

        • Based on this analysis, IMV has begun manufacturing peptide candidates targeting these epitopes as well as planning with IMV’s suppliers and contract manufacturers to prepare for the cGMP batch required to support a clinical study in humans;

        • In collaboration with Gary Kobinger, Ph.D., Director of the Research Centre on Infectious Diseases at the University Laval in Quebec City, preclinical assays in animal models are also planned in April through May of this year to validate the safety and potency of the vaccine candidate before initiating the human clinical study;

        • In collaboration with Joanne Langley, M.D. at the Canadian Center for Vaccinology (CCfV) and the Canadian Immunization Research Network (CIRN) the design of a Phase 1 clinical study in 48 healthy subjects has been completed and clinical sites identified in both Nova Scotia and Quebec;

        • IMV has initiated discussions with Health Canada in preparation for a CTA. A meeting is being scheduled in the week of April 20, 2020 with the goal to initiate the clinical study in the summer of 2020; and

        • The Corporation has submitted several grant applications in Canada in an effort to help support its clinical program.

      19





      SELECTED FINANCIAL INFORMATION

      The selected statements of loss and comprehensive loss data for the periods presented and the selected statement of financial position data as of the dates presented are derived from the unaudited interim condensed consolidated financial statements. The selected historical financial data below should be read in conjunction with the financial statements and related notes and the sections titled “Components of Operations Overview” and “Results of Operations” appearing elsewhere in this report.

      Statement of loss and comprehensive loss data:

          Three months ended June 30,       Six months ended June 30,  
          2020       2019       2e020       2019  
          (in thousands, except share and per share amounts)       (in thousands, except share and per share amounts)  
      Revenue                              

      Subcontract revenue

      $ -     $ 6     $ -     $ 14  

      Interest revenue

        55       180       123       254  
      Total revenue   55       186       123       268  
      Operating Expenses                              

      Research and development

        5,260       3,803       12,085       7,816  

      General and administrative

        3,047       2,184       6,082       4,144  

      Government assistance

        (1,406 )     (1,142 )     (1,964 )     (1,488 )

      Accreted interest

        422       392       856       790  
      Total operating expenses   7,323       5,237       17,059       11,262  
      Net loss and comprehensive loss $ (7,268 )   $ (5,051 )   $ (16,936 )   $ (10,994 )
      Basic and diluted loss per share $ (0.13 )   $ (0.10 )   $ (0.31 )   $ (0.23 )
      Weighted-average shares outstanding   57,300,903       50,601,866       54,010,195       48,667,904  

          As of,  
          June 30, 2020     December 31, 2019  
      Statement of financial position data:   (in thousands of Canadian dollars)  
      Cash and cash equivalents $ 28,251   $ 14,066  
      Working capital (1)   29,501     13,199  
      Total assets   41,402     22,434  
      Total liabilities   19,067     15,986  
      Accumulated deficit   (137,055 )   (120,119 )
      Total shareholder's equity (deficit)   22,335     6,448  

      (1) Working capital is defined as current assets less current liabilities. See financial statements for further details regarding current assets and current liabilities.

      COMPONENTS OF OPERATIONS OVERVIEW

      Revenue

      The Corporation has no products approved for commercial sale and has not generated any revenue from product sales. Revenue consists primarily of income earned on cash balances held at a commercial bank. The Corporation also generates immaterial revenue from providing formulation services under research collaboration agreement with Leidos for the development of targeted therapies for malaria and the Zika virus. Revenue is recognized when the formulation services are performed.

      20





      Operating Expenses

      Research and development expenses

      To date, the Corporation’s research and development expenses have related primarily to discovery efforts and preclinical, manufacturing and clinical development of its product candidates. The most significant research and development expenses for the year relate to costs incurred for the development of the Corporation’s most advanced product candidate, DPX-Survivac, which include:

      • Expenses incurred under agreements with CROs, as well as investigative sites and consultants that conduct clinical trials, preclinical studies and other scientific development services;

      • Costs related to the production and scale-up of clinical materials, including fees paid to contract manufacturers;

      • Employee-related expenses, including salaries, related benefits, travel and share-based compensation expense for employees engaged in research and development functions;

      • Expenses incurred for outsourced professional scientific and regulatory development services;

      • Laboratory materials and supplies used to support research activities; and

      • Facilities and other expenses, which includes depreciation on laboratory equipment.

      The Corporation expenses all research and development costs in the periods in which they are incurred. The Corporation accrues for costs incurred as the services are being provided by monitoring the status of the project and the invoices received from its external service providers. Accruals are adjusted as actual costs become known. Where contingent milestone payments are due to third parties under research and development arrangements or license agreements, the milestone payment obligations are expensed when the milestone results are achieved.

      Research and development activities are central to IMV’s business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-staged clinical trials. The Corporation expects that research and development expenses will increase substantially over the next few years as it increases personnel, advances manufacturing processes, initiates and conducts additional clinical trials and prepares regulatory filings related to its product candidates. The Corporation also expects to incur increased research and development expenses as it selectively identifies and develops additional product candidates. However, it is difficult to determine with certainty the duration and completion costs of current or future preclinical programs and clinical trials of product candidates.

      The duration and timing of clinical trials and development of the Corporation’s product candidates will depend on a variety of factors that include, but are not limited to, the following:

      • The scope, progress, outcome and costs of clinical trials and other research and development activities, including establishing an appropriate safety profile with IND-directed studies;

      • Patient enrollment, discontinuation rates, per patient trial costs, and number and location of clinical trial sites in clinical trials;

      • The ability of the Corporation’s clinical partners and sponsors for investigator-sponsored trials to manage clinical trials;

      • Establishing commercial manufacturing capabilities or making arrangements with third party manufacturers;

      • Timing, receipt and terms of any marketing approvals from applicable regulatory authorities;

      • Obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;

      • Significant and changing government regulation; and

      • Significant competition and rapidly changing technologies within the biopharmaceutical industry.

      The probability of success for each product candidate is highly uncertain. The Corporation will determine which programs to pursue and what resources to allocate to each program in response to the scientific and clinical success of each product candidate

      21





      as well as an assessment of each product candidate’s commercial potential. Further, because IMV’s product candidates are still in clinical development, the Corporation cannot estimate the actual amounts necessary to successfully complete the development and commercialization of product candidates or whether, or when, it may achieve profitability.

      General and administrative

      General and administrative expenses consist primarily of salaries and other staff-related costs, including share-based compensation expense for personnel in executive, finance, human resources, project management, business development, investor relations and administrative functions. General and administrative expenses also include, but are not limited to, facilities and overhead costs, legal fees related to corporate, securities and patent matters, investor relations costs, insurance and professional fees for assurance, taxation, information technology communications and human resources matters. General and administrative costs are expensed as incurred and the Corporation accrues for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from its service providers, adjusting accruals as actual costs become known.

      The Corporation expects that its general and administration expenses will increase in the future as it increases personnel to support the continued development of its product candidates. The Corporation has experienced and expects to continue to experience, increased expense associated with being a Nasdaq listed company including increased accounting, audit, legal, regulatory and compliance costs, director and officer insurance premiums, as well as higher investor relations and public relations costs.

      Government Assistance

      Government assistance consists primarily of research and development investment tax credits awarded through the Canada Revenue Agency’s Scientific Research and Economic Development (“SR&ED”) program for research expenditures incurred in Canada. Government assistance also contains other government funding for research projects and employment funding as well as fair market value adjustments to interest-free and low-interest government loans.

      Accreted interest

      Accreted interest relates entirely to the valuation of interest-free and low interest-bearing government loans, most of which are repayable based on a percentage of future gross revenue.

      RESULTS OF OPERATIONS

      Comparison of the Three Months Ended June 30, 2020 and 2019

      The following table summaries the Corporations results of operations for the three months ended June 30, 2020 and 2019 (in thousands of Canadian dollars):

          Three months ended June 30,          
          2020       2019       Change ($)  
      Revenue                      

      Subcontract revenue

      $ -     $ 6     $ (6 )

      Interest revenue

        55       180       (125 )
      Total revenue   55       186       (131 )
      Operating Expenses                      

      Research and development

        5,260       3,803       1,457  

      General and administrative

        3,047       2,184       863  

      Government assistance

        (1,406 )     (1,142 )     (264 )

      Accreted interest

        422       392       30  
      Total operating expenses   7,323       5,237       2,086  
      Net loss and comprehensive loss $ (7,268 )   $ (5,051 )   $ (2,217 )

      22





      Revenue

      Revenue did not significantly fluctuate period over period.

      Research and development expenses

      Research and development expenses increased to $5.3 million for the three months ended June 30, 2020 from $3.8 million for the three months ended June 30, 2019. The increase of $1.5 million is mainly attributable to $955,000 in clinical costs related to the basket trial as a result of increased sites and enrollment in 2020, $659,000 related to pre-clinical expenses for development of DPX-COVID-19 which is fully offset by an increase in project-specific government assistance recorded in the Government Assistance line of the Statement of Loss and Comprehensive Loss, and $378,000 in personnel costs due to an increase in headcount. This increase is partly offset by a decrease of $142,000 in travel and a decrease of $177,000 in costs related to DeCidE1 Phase 2 study of DPX-Survivac/CPA, in patients with advanced recurrent ovarian cancer.

      General and administrative expenses

      General and administrative expenses increased to $3 million for the three months ended June 30, 2020 from $2.2 million for the three months ended June 30, 2019. The increase of $863,000 compared with Q2 2019 can be explained by an increase of $435,000 in D&O insurance premium. The Corporation renewed its Directors and Officers insurance on June 1st and due to the COVID-19 impact on the market at the time of renewal, experienced an increase in premium of US$3.2 million on an annualized basis. The Q2 2020 increase is also attributable to a $298,000 increase in legal and professional fees and a $303,000 increase in non-cash deferred share unit (“DSU”) compensation compared with Q2 2019. This increase is partly offset by a decrease of $180,000 in travel as a result of COVID-19 travel restrictions. In Q2 2019, DSU compensation was a ($186,000) recovery due to outstanding DSUs being revalued each period and a lower share price at the end of Q2 2019, compared with Q1 2020. Effective August 8, 2019, the Corporation elected to settle all future DSU redemptions in shares. As a result, DSUs are now accounted for as equity-settled instruments and do not need to be revalued at each reporting period. The Corporation expects that this will reduce the comparative volatility in the DSU compensation expense from Q3 2020 onward.

      Government Assistance

      The increase in government assistance for the period ended June 30, 2020 compared with June 30, 2019 is mainly attributable to $759,000 in government grants for development of DPX-COVID-19 and related wage subsidies, $353,000 to the increase in SR&ED investment tax credits consistent with increased spend on R&D salaries, raw materials, and increased clinical trial

      activity being performed in Canada, partly offset by a non-cash $840,000 decrease associated with the revaluation of the low interest-bearing government loan from the Province of Nova Scotia upon receipt of the extension and amended repayment plan in 2019.

      Comparison of the Six Months Ended June 30, 2020 and 2019

      The following table summaries the Corporations results of operations for the six months ended June 30, 2020 and 2019 (in thousands of Canadian dollars):

          Six months ended June 30,          
          2020       2019       Change ($)  
      Revenue                      

      Subcontract revenue

      $ -     $ 14     $ (14 )

      Interest revenue

        123       254       (131 )
      Total revenue   123       268       (145 )
      Operating Expenses                      

      Research and development

        12,085       7,816       4,269  

      General and administrative

        6,082       4,144       1,938  

      Government assistance

        (1,964 )     (1,488 )     (476 )

      Accreted interest

        856       790       66  
      Total operating expenses   17,059       11,262       5,797  
      Net loss and comprehensive loss $ (16,936 )   $ (10,994 )   $ (5,942 )

      23





      Revenue

      Revenue did not significantly fluctuate period over period.

      Research and development expenses

      Research and development expenses increased to $12 million for the six months ended June 30, 2020 from $7.8 million for the six months ended June 30, 2019. The increase of $4.2 million is mainly attributable to $1.9 million in clinical costs related to the basket trial as a result of increased sites and enrollment compared with 2019, $1.2 million increase in non-recurring purchases in early 2020 of GMP grade raw materials for DPX-Survivac, $297,000 in preclinical expenses relating to the DPX-SurMAGE collaboration with CQDM, CHU, and FCHUQc, $784,000 related to pre-clinical expenses for development of DPX-COVID-19 which is offset by an increase in government assistance, and $577,000 in personnel costs due to an increase in headcount. The purchase of GMP grade materials for DPX-Survivac in 2019 and Q1 2020 has covered all the needs of the Corporation for ongoing DPX-Survivac trials until mid-2021. This increase is partly offset by a decrease of $186,000 in travel due to COVID-19 travel restrictions and a decrease of $113,000 and $111,000 related to the DeCidE1 Phase 2 study of DPX-Survivac and investigator-sponsored phase 2 clinical trial in ovarian cancer at UHN, respectively.

      General and administrative expenses

      General and administrative expenses increased to $6 million for the six months ended June 30, 2020 from $4.1 million for the six months ended June 30, 2019. The increase of $1.9 million compared with Q2 2019 can be explained by an increase of $467,000 in legal and professional fees, $459,000 in Directors and Officers insurance premium, $333,000 in investor relations consulting fees, $128,000 in personnel costs due to an increase in head count, and a $629,000 increase in non-cash deferred share unit (“DSU”) compensation compared with 2019. These increases are partly offset by a $223,000 decrease in non-cash stock-based compensation. In 2019, DSU compensation was a ($309,000) recovery due to outstanding DSUs being revalued each period and a lower share price in 2019, compared with Q4 2018. Effective August 8, 2019, the Corporation elected to settle all future DSU redemptions in shares. As a result, DSUs are now accounted for as equity-settled instruments and will not need to be revalued at each reporting period. The Corporation expects that this will reduce the comparative volatility in the DSU compensation expense from Q3 2020 onward.

      Government Assistance

      The increase in government assistance for the period ended June 30, 2020 compared with June 30, 2019 is mainly attributable to $759,000 in government grants for development of DPX-COVID-19 and related wage subsidies, $559,000 to the increase in SR&ED investment tax credits consistent with increased spend on R&D salaries, raw materials as well as increased clinical trial activity being performed in Canada, partly offset by a non-cash $840,000 decrease associated with the revaluation of the low interest-bearing government loan from the Province of Nova Scotia upon receipt of the extension and amended repayment plan.

      CASHFLOWS, LIQUIDITY AND CAPITAL RESOURCES

      Liquidity and Capital Resources

      The Corporation has incurred losses and negative cash flows from operations since inception. As of June 30, 2020, the Corporation had an accumulated deficit of $137 million and anticipates that it will continue to incur net losses for the foreseeable future.

      At June 30, 2020, the Corporation had approximately $30.6 million of existing and identified potential sources of cash including:

      • cash and equivalents of $28.3 million; and

      • amounts receivable and investment tax credits receivable of $2.3 million.

      Management believes that its cash resources of $28.3 million and its additional potential cash resources of $2.3 million, will be sufficient to fund operations for more than 12 months based on current forecasts. This estimate does not consider an additional $4 million of funding for the development of DPX-COVID-19 awarded after June 30th by various government organizations. In addition, subsequent to June 30th, an additional 4,770,890 common shares were sold for gross proceeds of

      24





      US$24.5 million under the ATM Distribution allowing the Corporation to offer and sell Common Shares from time-to-time up to an aggregate offering amount of US$24.5 million (CAD$33.5 million) through Piper Sandler, as agent. Considering the government funding and the funds raised under the ATM in July, on a pro-forma basis, the Corporation has approximately $68.1 million in existing and identified potential sources of cash. The Corporation continually reassesses the adequacy of its cash resources, evaluating existing clinical trials, research projects and/or potential collaboration opportunities, to determine when and how much additional funding is required.

      The Corporation’s primary use of cash is to fund operating expenses, which consist primarily of funding clinical and preclinical trials, research and development expenditures and related personnel costs and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when the Corporation pays these expenses, as reflected in the change in its outstanding accounts payable and accrued expenses.

      It is common for early-stage biotechnology companies to require additional funding to further develop product-candidates until successful commercialization of at least one product candidate. The Corporation’s product candidates are still in the early stages of clinical and preclinical development and the outcome of these efforts is uncertain. Accordingly, the Corporation cannot estimate the actual amounts necessary to successfully complete the development and commercialization of its product candidates or whether, or when, it may achieve profitability. Until such time, if ever, as the Corporation can generate substantial product revenue, it expects to finance cash needs through a combination of equity or debt financings and collaboration arrangements. If the Corporation does raise additional capital through public or private equity offerings, the ownership interest of its existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect its stockholders’ rights. If IMV raises additional capital through debt financing, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If the Corporation is unable to raise capital when needed, it will need to delay, reduce or terminate planned activities to reduce costs. Doing so will likely harm the Corporation’s ability to execute its business plans. The Corporation continuously monitors its liquidity position, the status of its development programs including those of its partners, cash forecasts for completing various stages of development, the potential to license or co-develop each product candidate, and continues to actively pursue alternatives to raise capital, including the sale of its equity securities, debt and non-dilutive funding.

      Cash Flows

      The following table summarizes the Corporation’s cash flows for the periods indicated (in thousands of Canadian dollars):

        Six months Ended June 30,
        2020     2019  
      Net cash (used in) provided by:          

      Operating activities

      (20,821 )   (14,497 )

      Financing activities

      35,096     26,912  

      Investing activities

      (90 )   (406 )
      Net increase in cash and cash equivalents 14,185     12,009  

      Cashflows from operating activities

      During the first half of 2020, $20.8 million was used in operating activities. This included the reported net loss of $16.9 million prior to being decreased by $1.9 million for non-cash expenses including DSU compensation, depreciation, accretion of long-term debt and lease obligations and stock-based compensation. The Corporation had a net decrease of cash of $5.8 million as a result of changes in working capital balances, which was mainly attributable to a $4.9 million increase in prepaid and a $1.0 million decrease in accounts payable, accrued and other liabilities

      During the first half of 2019, $14.5 million was used in operating activities. This included the reported net loss of $11 million prior to being decreased by $556,000 for non-cash expenses including DSU compensation, depreciation, accretion of long-term debt and lease obligations, loss on disposal of assets and stock-based compensation. The Corporation had a net increase of cash of $4.0 million as a result of changes in working capital balances, which was mainly attributable to a $3.1 million decrease in accounts payable and accrued liabilities and an increase of $639,000 in investment tax credits receivable.

      25





      Cashflows from financing activities

      During the first half of 2020, sources of cash from financing activities included: $25.1 million in proceeds raised from the May 7th Private Placement less cash issuance costs of $139,000, $7.6 million in proceeds raised from the ATM Distribution less cash issuance costs of $716,000, $3.1 million in proceeds from short-term borrowings related to financed Directors and Officers insurance premium, and $254,000 through the exercise of stock options. The Corporation used $149,000 to repay long-term debt and lease obligations during the period.

      During the first six months of 2019, sources of cash from financing activities included: $29.5 million of proceeds raised in the March 2019 Public Offering less cash issuance costs of $2.5 million; and $117,000 through the exercise of stock options and warrants. The Corporation used $162,000 to repay long-term debt and lease obligations during this period.

      Cashflows from investing activities

      During the first six months of 2020, IMV used $90,000 of cash in investing activities, consisting mainly of purchases of furniture and equipment for ongoing research and operating activities.

      During the first six months of 2019, IMV used $406,000 of cash in investing activities, consisting mainly of purchases of furniture and equipment for ongoing research and operating activities.

      JUNE 2017 EQUITY OFFERING AND USE OF PROCEEDS

      On June 21, 2017, the Corporation completed a public offering, issuing 2,403,846 Common Shares at a price of $4.16 per share for aggregate proceeds of $10 million. The Corporation intended to use the net proceeds of this offering for the research and development and clinical advancement of its cancer and infectious disease therapy candidates and for working capital and general corporate purposes. The table below provides the amount used to date and any variances in thousands of Canadian dollars (except for working capital and general corporate purposes).

      Intended Use of Proceeds Estimated Amount Variances
        amount to date  
        $ $  
      phase 2 clinical trial in DLBCL with Merck 2,400 2,219 No variances anticipated
      phase 1 clinical trial for multiple indications 4,200 4,200 None

      MARCH 2019 EQUITY OFFERING AND USE OF PROCEEDS

      On March 6, 2019, the Corporation completed a public offering, issuing 5,404,855 Common Shares (including 504,855 Common Shares upon the exercise of the underwriters’ over-allotment option on March 11, 2019) at a price of $5.45 per share for aggregate proceeds of $29.5 million. The Corporation intends to use the net proceeds of this offering to accelerate the development of DPX-Survivac in combination with Keytruda as part of the basket trial in selected advanced or recurrent solid tumors in bladder, liver (hepatocellular carcinoma), ovarian and non-small-cell lung cancers, as well as tumors shown to be positive for the microsatellite instability high biomarker and for general corporate purposes. The table below provides the amount used to date and any variances in thousands of Canadian dollars (except for working capital and general corporate purposes).

      Intended Use of Proceeds Estimated Amount Variances
        amount to date  
        $ $  
      Phase 2 clinical trial for multiple indications 16,000 4,649 No variances anticipated

      26





      MARCH 2020 ATM DISTRIBUTION AND USE OF PROCEEDS

      On March 17, 2020, the Corporation entered into an Equity Distribution Agreement with Piper Sandler authorizing the Corporation to offer and sell, through “at-the-market” offerings, common shares from time to time up to an aggregate offering price of US$30 million through Piper Sandler, as agent. The Corporation intends to use the net proceeds from this offering for research and development expenditures, clinical trial expenditures, including expenditures related to a COVID-19 vaccine candidate and general corporate purposes. As of June 30, 2020, 2,070,883 common shares have been sold under the ATM Distribution for total gross proceeds of $7.6 million. In order to maintain the remainder of the ATM Distribution facility under its new Canadian base shelf prospectus, IMV re-entered into an ATM Distribution dated June 30, 2020, with Piper Sandler, to offer and sell common shares from time-to-time up to an aggregate offering amount of US$24.5 million. An additional 4,770,890 common shares were sold subsequent to June 30, 2020 for gross proceeds of US$24.5 million, concluding the proceeds raised under the ATM Distribution to the maximum offering amount of US$24.5 million as of July 20, 2020.

      SUMMARY OF QUARTERLY RESULTS

      The selected quarterly financial information(1) for the past eight financial quarters is outlined below: (in thousands of dollars, except for amounts per share)

        Q2-2020 Q1-2020 Q4-2019 Q3-2019 Q2-2019 Q1-2019 Q4-2018 Q3-2018
      Total Revenue 55 68 136 164 186 82 133 125
      Total Expenses 7,323 9,732 8,611 8,060 5,237 6,025 7,818 6,112
      Loss (7,268) (9,664) (8,475) (7,896) (5,051) (5,943) (7,685) (5,987)
      Basic and Diluted Loss per Share (0.13) (0.19) (0.17) (0.16) (0.10) (0.13) (0.17) (0.14)

      (1) Unless otherwise noted, financial information in thousands of Canadian dollars and prepared in accordance with IFRS.

      Revenues from quarter-to-quarter may vary significantly. Revenues are non-recurring by nature and are generated by license agreements as well as contract research agreements. It is also important to note that historical patterns of expenses cannot be taken as an indication of future expenses. The amount and timing of expenses and availability of capital resources vary substantially from quarter-to-quarter, depending on the level of R&D activities being undertaken at any time and the availability of funding from investors or collaboration partners.

      27





      OUTLOOK FOR THE REMAINDER OF 2020

      The exact timing could differ from expectations but are currently management’s best estimate.

      RELATED PARTY TRANSACTIONS

      For the period ending June 30, 2020, there were no related party transactions (2019 - $nil).

      CONTRACTUAL OBLIGATIONS

      There is no material change in the contractual obligations of the Corporation since the beginning of the 2020 fiscal year. Details on the contractual obligations of the Corporation can be found in the in the annual audited consolidated financial statements and related notes for the year ended December 31, 2019.

      OFF-BALANCE SHEET ARRANGEMENTS

      The Corporation was not party to any off-balance sheet arrangements as of June 30, 2020.

      OUTSTANDING SECURITIES

      As at August 11, 2020 the number of issued and outstanding common shares was 66,481,659 and a total of 5,037,425 stock options, warrants and deferred share units were outstanding.

      RISKS AND UNCERTAINTIES

      The Corporation is a clinical-stage company that operates in an industry that is dependent on a number of factors that include the Corporation’s capacity to raise additional funding on reasonable terms when necessary, obtain positive results of pre-clinical studies and clinical, successfully develop existing and new products, to hire and retain skilled staff, protect its intellectual property, manufacture its products and to meet demand, and obtain necessary regulatory approvals and the timing in respect thereof, etc. An investment in the Common Shares is subject to a number of risks and uncertainties. An investor should carefully consider the risks described in the Corporation’s AIF and the registration statement on Form 40-F filed with the U.S. Securities and Exchange Commission, as well as the other information filed with the securities regulators before investing in the Common Shares. If any of the such described risks occur, or if others occur, the Corporation’s business, operating results and financial condition could be seriously harmed and investors may lose a significant proportion of their investment.

      There are important risks which management believes could impact the Corporation’s business. For information on risks and uncertainties, please also refer to the “Risk Factors” section of the Corporation’s most recent AIF filed on SEDAR at www.sedar.com and included in the registration statement on Form 40-F filed on EDGAR at www.sec.gov/edgar.

      28





      DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

      Disclosure Controls and Procedures

      The Chief Executive Officer (the “CEO”) and the Chief Financial Officer (the “CFO”) of the Corporation are responsible for establishing and maintaining the Corporation’s disclosure controls and procedures (“DCP”) including adherence to the Disclosure Policy adopted by the Corporation. The Disclosure Policy requires all staff to keep senior management fully apprised of all material information affecting the Corporation so that they may evaluate and discuss this information and determine the appropriateness and timing for public disclosure.

      The Corporation maintains DCP designed to ensure that information required to be disclosed in reports filed under applicable securities laws, is recorded, processed, summarized and reported within the appropriate time periods and that such information is accumulated and communicated to the Corporation’s management, including the CEO and CFO, to allow for timely decisions regarding required disclosure.

      The CEO and CFO have evaluated whether there were changes to the DCP during the period ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, the DCP. No such changes were identified through their evaluation.

      In designing and evaluating DCP, the Corporation recognizes that any disclosure controls and procedures, no matter how well conceived or operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met, and management is required to exercise its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

      Internal Control over Financial Reporting

      The Corporation’s management, including the CEO and the CFO, are responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”) for the Corporation to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The fundamental issue is ensuring all transactions are properly authorized and identified and entered into a well-designed, robust and clearly understood accounting system on a timely basis to minimize risk of inaccuracy, failure to fairly reflect transactions, failure to fairly record transactions necessary to present financial statements in accordance with IFRS, unauthorized receipts and expenditures, or the inability to provide assurance that unauthorized acquisitions or dispositions of assets can be detected.

      The CEO and CFO have evaluated whether there were changes to the ICFR during the period ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, the ICFR. No such changes were identified through their evaluation. In response to the COVID-19 pandemic, the Corporation asked its employees to work from home to the extent possible. This change requires certain processes and controls that were previously done or documented manually to be completed and retained in electronic form. Despite the changes required by the current environment, there have been no significant changes in the Corporation’s internal controls during the quarter ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, ICFR.

      The Corporation’s ICFR may not prevent or detect all misstatements because of inherent limitations. Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes in conditions or deterioration in the degree of compliance with the Corporation’s policies and procedures.

      BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES

      The consolidated financial statements have been prepared in accordance with the IFRS as issued by the IASB. The accounting policies, methods of computation and presentation applied in the consolidated financial statements are consistent with those of previous financial year except for business development and investor relations expenses are now presented in general and administrative expenses on the consolidated statements of loss and comprehensive loss. Certain comparative figures have been reclassified to conform the presentation adopted in the current year for general and administrative expenses.

      29





      The significant accounting policies of IMV are detailed in the notes to the annual audited consolidated financial statements for the year ended December 31, 2019 filed on SEDAR www.sedar.com and included in the registration statement on Form 40-F filed on EDGAR at www.sec.gov/edgar.

      CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

      Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The determination of estimates requires the exercise of judgement based on various assumptions and other factors such as historical experience and current and expected economic conditions. Actual results could differ from those estimates.

      The Corporation’s significant accounting policies and critical judgements in applying the Corporation’s accounting policies are detailed in the annual audited consolidated financial statements for the year ended December 31, 2019 filed on SEDAR www.sedar.com and included in the registration statement on Form 40-F filed on EDGAR at www.sec.gov/edgar.

      FINANCIAL INSTRUMENTS

      Financial instruments are defined as a contractual right or obligation to receive or deliver cash on another financial asset. The Corporation recognizes financial instruments based on their classification. Depending on the financial instrument’s classification, changes in subsequent measurements are recognized in net loss or other comprehensive loss.

      A description of the financial instruments, their fair value and risk management is included in the Corporation’s annual audited consolidated financial statements for the year ended December 31, 2019 filed on SEDAR www.sedar.com and included in the registration statement on Form 40-F filed on EDGAR at www.sec.gov/edgar.

      (Signed) Frédéric Ors (Signed) Pierre Labbé
      Frédéric Ors Pierre Labbé
      Chief Executive Officer Chief Financial Officer

      August 11, 2020

      30



      Exhibit 99.3
      Exhibit 99.3

      FORM 52-109F2
      CERTIFICATION OF INTERIM FILINGS
      FULL CERTIFICATE

      I, Frederic Ors, Chief Executive Officer of IMV Inc., certify the following:

      1.     

      Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of IMV Inc. (the “issuer”) for the interim period ended June 30, 2020.

       

      2.     

      No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

       

      3.     

      Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

       

      4.     

      Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

       

      5.     

      Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings:

       

      (a)     

      designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:

       

      (i)     

      material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

       

      (ii)     

      information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

       

      (b)     

      designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

       

      5.1     

      Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.





      - 2 -

      5.2     

      ICFR - material weakness relating to design: N/A

       

      5.3     

      Limitation on scope of design: N/A

       

      6.     

      Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2020 and ended on June 30, 2020 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

      Date: August 12, 2020

      (signed) Frederic Ors
      Frederic Ors
      Chief Executive Officer



      Exhibit 99.4
      Exhibit 99.4

      FORM 52-109F2
      CERTIFICATION OF INTERIM FILINGS
      FULL CERTIFICATE

      I, Pierre Labbé, Chief Financial Officer of IMV Inc., certify the following:

      1.     

      Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of IMV Inc. (the “issuer”) for the interim period ended June 30, 2020.

       

      2.     

      No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

       

      3.     

      Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

       

      4.     

      Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

       

      5.     

      Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings:

       

      (a)     

      designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:

       

      (i)     

      material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

       

      (ii)     

      information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

       

      (b)     

      designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

       

      5.1     

      Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.





      - 2 -

      5.2     

      ICFR - material weakness relating to design: N/A

       

      5.3     

      Limitation on scope of design: N/A

       

      6.     

      Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2020 and ended on June 30, 2020 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

      Date: August 12, 2020

      (signed) Pierre Labbé
      Pierre Labbé
      Chief Financial Officer