This error message...
Error: E/launcher - Unexpected error launching Internet Explorer. IELaunchURL() returned HRESULT 80070005 ('Access is denied.') for URL 'http://localhost:40744/'
...implies that the IEDriverServer was unable to initiate/spawn a new WebBrowsing Session i.e. internet-explorer browser session.
This issue is generally observed due to incorrect Protected Mode settings
Protected Mode
On Internet Explorer 7 or higher on Windows Vista or Windows 7, you must set the Protected Mode settings for each zone to be the same value. The value can be on or off, as long as it is the same for every zone. To set the Protected Mode settings you have to choose "Internet Options" from the "Tools" menu and then click on the Security tab. For each zone, there will be a check box at the bottom of the tab labeled Enable Protected Mode.

@JimEvans in his article You're Doing It Wrong: IE Protected Mode and WebDriver clearly mentions :
Using the capability doesn't solve the underlying problem though. If a Protected Mode boundary is crossed, very unexpected behavior including hangs, element location not working, and clicks not being propagated, could result. To help warn people of this potential problem, the capability was given big scary-sounding names like INTRODUCE_FLAKINESS_BY_IGNORING_SECURITY_DOMAINS
in Java and IntroduceInstabilityByIgnoringProtectedModeSettings
in .NET. We really thought that telling the user that using this setting would introduce potential badness in their code would discourage its use, but it turned out not to be so.
Additionally, for IE 11 only, you will need to set a registry entry on the target computer so that the driver can maintain a connection to the instance of Internet Explorer it creates.
For 32-bit Windows installations, the key you must examine in the registry editor is:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Internet Explorer\Main\FeatureControl\FEATURE_BFCACHE.
For 64-bit Windows installations, the key is:
HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\Internet Explorer\Main\FeatureControl\FEATURE_BFCACHE.
Note The FEATURE_BFCACHE
subkey may or may not be present, and should be created if it is not present. Important: Inside this key, create a DWORD value named iexplore.exe with the value of 0.
References
You can find a couple of relevant detailed discussions in: