Inventiva S.A. (NASDAQ:IVA) Q4 2022 Earnings Call Transcript

Inventiva S.A. (NASDAQ:IVA) Q4 2022 Earnings Call Transcript March 30, 2023

Operator: Good day and thank you for standing by. Welcome to the Inventiva 2022 Full Year Results Call and Webcast. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please note that today’s conference is being recorded. I would now like to hand over to your speaker, Mr. Frédéric Cren. Please go ahead, sir.

Frédéric Cren: Thank you, operator, and welcome to everybody to this full year 2022 financial results. As usual, I will be making with my colleagues forward-looking statements. So please have a look at the regulatory documentation that is available on our website. In terms of speakers today, I’m very happy as usual to have Pierre with us our CSO and Co-Founder; Michael, our CMO, will go through an update of our three important clinical trials with lanifibranor, of course, the Phase III, but also two Phase II that are ongoing. And then Jean will conclude the presentation with an update on the financials. Of course, at the end of the session, we will have a Q&A session. So let me give you, first of all, some highlights for the full year.

So let’s start with our lead program, lani in NASH, and start with NATiV3, where we’ve been, I would say, very happy to work and extend, develop the Phase III in 23 countries. And now we have more than 350 clinical sites that are active and more than 300 that have screened at least a patient. We have throughout the year, and we continue to do so, implemented a series of measure to boost enrollment and I would say that this continues throughout 2023. We have done many things and we’re very proud of those and grateful to our team. We have reviewed and implemented a new process to speed up our biopsy are analyzed. We have trained sites. We have put in place incentives. We have included site networks, which are specialized. We have a strong NASH expertise.

And we are €“ also have closed sites that were not performing to our expectations. We have developed patient material including opening recently the patient website. We have provided support to pre-screening activities to sites, including providing a screening algorithm to better identify the patients. We are €“ we have organized and we’re currently organizing investigator meetings and also made several protocol improvements. All of that, I would say, make us confident that we will achieve our target to have the last patient first visit has targeted for the second half of 2023. We have also €“ and you know and Michael will go through that. Developed a new design for the €“ for NATiV3, which is much more patient-centric. We have started to implement this new protocol.

It has been submitted and we’re very pleased to see that it has been approved in key countries, including the U.S. This morning Akero announced their design for the Phase III and we’re very pleased to see that Akero is working on our footsteps with a design, which is very close to ours, and especially they have selected the same primary endpoint as our primary endpoint in NATiV3. On the other trial, I think it’s important to point out that LEGEND. We have activated the first clinical site in U.S. and in Europe, and, of course, we’re randomizing in all of the countries where LEGEND is open. And then finally, we’re looking forward to the results of the investigation study conducted by Professor Cusi from the University of Florida. The last patient was enrolled in September 2022.

We recently exchanged with Professor Cusi, is going through the database analyzing the last cleanups and getting ready for the database log. So we’re looking to be able to publish those results by middle of Q2 2023. The 2022 has also been very active in terms of partnership, very proud of having secured a strong partner with Sino Biopharm after an extensive due diligence from their part, which proved that our drug is well positioned in China, which as you know, is a very promising market for NASH given the prevalence of the disease in China. It has allowed us to secure close to €13 million of upfront payment and we’re eligible to additional milestone that can reach €290 million on top of royalties. That depending on various discussion and interactions, Sino Biopharm will have with the regulatory authorities, they’ll be €“ they can join the NATiV3 trial.

And then finally, I would point out that, we’re very pleased by the strategy of finding partners in Asia. This allows us to speed up the development and the entry to market, and we continue exploring other potential commercialization of lanifibranor in NASH. And then finally, in terms of IP, we are secured in the U.S. a patent that strengthen our IP estate, especially in patients with €“ especially in cirrhotic patients. Looking at the elder program in terms of ABBV-157, unfortunately, that we received €“ we’re notified by AbbVie that following the expected tox result in a long-term tox study they have decided to hold to this program. We received notification in October. On odiparcil, we have a very constructive discussion with the FDA over the summer.

They confirm that we can move with this drug in children, given the safety profile of the drug and also have validated that a single Phase II/III trial in children would be sufficient to secure if positive accelerated market approval. Financially, we’ve been very active as well. We’ve secured the €50 million loan from EIB, one of the largest for biotech in Europe. Out of those €50 million, still €25 million are to be used and are not included in our cash runway. On top of the €13 million or close to €13 million we received from Sino, we also raised close to €10 million from our ATM program and also secure additional facilities backed by the French government of close to actually a bit more than €5 million. And then of note, we were selected as a few €“ a very limited number of players to be part of the Euronext Tech Leaders segment.

And also we’re very pleased to welcome Dr. Lucy Lu as the new board member. So let’s talk a little bit about lanifibranor. And before I give the floor to Michael, let me just remind you some key features of lanifibranor. Very importantly, the profile of the drug is really unique. We are, to our knowledge, the only panPPAR currently in development in NASH. And this profile is really important because of strong result, we are able to show during the Phase IIb that granted breakthrough therapy a role is according to AbbVie that is really the ability to activate the three isoforms. We also remind you that we’re not a TZD, that we have not seen any of the typical liabilities that characterize TZD especially during the preclinical program. The safety continues to be in our mind, very favorable.

Recently had DSMB in our NATiV3 and the conclusion rules for the previous DSMB were throughout the course of the history of lanifibranor, that we can continue the trial with no changes. I mentioned the very strong result of the Phase IIb I think is important to try to position lanifibranor compared to the potential competitors. This is, of course, very difficult because trials are of course different. And also we have reported our data giving the ITT population because this seems to us the relevant population, because this is the one that is considered by regulatory authorities while most of our competitors only reported data for protocol, but I think it gives an idea that lanifibranor, when we look on NASH resolution and no worsening of fibrosis, a very compelling data, certainly, with the profile very competitive and probably superior to the other oral drug in development and also competitive profile versus injectables.

This is even more true when we look at fibrosis improvement, which for us remains given the disease and given what we want to achieve, which is that patients with NAFLD to become cirrhotic. We see that on fibrosis. We have a very compelling profile very competitive even with injectables. And lastly, I also would like to show very briefly the primary endpoint we have selected, and that also Akero has selected for the Phase III. You see that this primary endpoint was made by both our low dose and high dose at 800 milligram and 1,200 milligram, and that was three to four times more responders. Lastly, I also would like to point out that this is a €“ I think, a compelling endpoint because it enables to really reduce the placebo. We have 7%. You see that Akero was 5%.

So you really see that with this approach we are able to reduce the noise of the placebo effect. Finally, let’s talk of the interaction we have had with the FDA, a positive interaction that have led to the new design Michael represent. And I think this is a very good step for all the €“ all the field with this approach to have a trial based on surrogate histology endpoint in patient with a non-cirrhotic NASH, and then enable the possibility to secure full approval with an outcome trial in patients with a compensated cirrhotic NASH. I think that makes the development more feasible also from a timing point of view shorter development to secure full approval. And also in our case, it would expand the population that we could address, I also including patient with compensated cirrhosis.

So that’s for my briefing introduction. And I will now turn to Michael. Michael will give you an update on NATiV3 and also the other two Phase II that are ongoing.

Michael Cooreman: Thank you, Frédéric, and good morning. Good afternoon to everybody. I’m on Slide 15 now, which summarizes the development program for lanifibranor. On the left in green, you have the completed study that was summarized by Frédéric just a minute ago, so the Phase II study and I would just highlight also that this was a six month treatment with a very robust efficacy on histology both NASH activity and fibrosis, which is a testimony to the efficacy of the compound to have that degree of €“ effect on fibrosis after a short treatment period for a fibrosis evaluation. Based on these data, the efficacy and the safety of the compound, the FDA has granted breakthrough therapy designation for lanifibranor in NASH.

And on the right in orange, the Phase III study, which is currently ongoing. We are in the midst of the Phase III study as you know and I also speak about two earlier Phase II studies that Frédéric also mentioned on Slide 16. As you heard, we have updated the design of the study to make it more attractive to patients and investigators removed the seven-year placebo-controlled treatment period and have had very good interactions with the FDA on this change. And as you know, the FDA has also made public communications that correspond to the overall development approach that we currently have in place. So what are the main changes in NATiV3? The readout for the surrogate efficacy endpoint, which is histology after 72 weeks of treatment, has remained unchanged.

We have two active arms, and a placebo arm and there will be two biopsies, one at baseline may be historical, but one biopsy at baseline and one at the end of treatment for a total of about 950 patients. After that, patients will remain in the study, but they will be re-randomized to an active treatment arm, so they will not be receiving placebo beyond that time, which is seen by everybody as a very positive approach. And the active treatment extension will be at least 48 weeks after that read out for the secondary or after the second biopsy. So, that will provide also data on longer term treatment with lanifibranor. In addition, and this is also a new aspect, we will enable patients who screen fail because of histology, but who have NASH and fulfill all the other inclusion criteria to enroll in an exploratory cohort of about 200 patients again, using two doses and placebo-controlled.

And this exploratory cohort will, for example, enroll patients who are staged for fibrosis by SF3B1 pathologist for by the second one, and the tiebreaker data for these patients who have very early cirrhosis and would be eligible to enter into the exploratory cohort. That’s just one example. So the main changes are really the shorter duration of exposure to placebo and two biopsies instead of three. And the exploratory cohort also will not have a second biopsy. So we’ll move on to the next slide, Number 17. The readout of the histology at 72 weeks is the basis for submission for accelerated approval in United States with the FDA and the corresponding conditional approval by the European Medicines Agency, the EMA. And this is with regard to the FDA corresponding to several communications that they have made and their continued support for accelerated approval in the field of NASH.

The principal investigators are Dr. Francque from Antwerp and Dr. Sanyal from Richmond, Virginia, two very well-known, leading experts in the field of NASH. And the main inclusion criteria, of course, have remained the same. So result patients within a degree of activity based on the SAF scoring, which is the scoring system for the degree of tissue injury, ballooning, and inflammation and fibrosis stages F2-F3. So, patients with advanced fibrosis, but not proceeded to the degree of €“ to the stage of cirrhosis. We do in allow patients who have a stable dose of GLP1 receptor agonist, they have to be at least three months on a stable dose. And I think that will also be very important for enrollment and to get data on the treatments of those two compounds.

So that’s, I think, an important aspect, especially since GLP1 receptor agonists have become €“ have an increasing uptake in patients with metabolic disorders. We have randomization according to type 2 diabetes in fibrosis stage. The study is powered based on the Phase 2 data, which were very positive. So we have 90% power for the primary efficacy endpoint. And then of note, the biopsy reading is very robust. We use three expert pathologists, and it’s based on the fact that every biopsy is read by two of them. And in case of non-agreement on certain aspects that affect eligibility, the third pathologist is a tiebreaker. So the primary efficacy endpoint is again, based on the Phase 2 data both NASH resolution and fibrosis improvement, which is of course also €“ relays some clinical benefits, which is significant compared to having only one and also corresponds to the mechanism of action of the compound, lanifibranor treating all the aspects of the disease biology, so we do have an effect on all these aspects of NASH.

And then there are several secondary endpoints. Here the key secondary endpoints are listed, which are NASH resolution, no worsening of fibrosis, and the other way around fibrosis improvement and no worsening of NASH, but we also have a large amount of secondary endpoints that related to the beneficial effect of NASH on the metabolic immune marker of NASH, and of course, also safety and tolerability to have a good benefit risk ratio which is the basis for approval. Going to Slide 18, the current NATiV3 update will provide the data for accelerated approval in order to get full approval thereafter. We have to have data on outcome benefits. And our plan, and this is again in agreement with communications of the FDA, will be coming from a study €“ an outcome study in patients with NASH who have compensated cirrhosis.

So at four, but early without any decompensation at study entry. There are a lot of data that inform us about the natural course of patients with early cirrhosis. In other words, when decompensation events will occur so that enables us to predict the sample size of such a study quite well. We plan to have about 900 patients, select one dose of lanifibranor and of course, placebo control. The outcome will be event-driven. And this study then will provide a data for approval based on outcome benefits, which is defined as essentially an improvement on the decompensation events €“ in the hepatic decompensation events. The first ones that appear in patients with cirrhosis or hepatic encephalopathy progression of portal hypertension with either bleeding from variceal or the need to prophylactically treat these viruses, which is common practice today.

And the new onset of cystitis that is symptomatic the other words that requires treatment. Also all-cause mortality, a worsening of liver function measured by the MELD score of 15 or more, which is quite by degree of worsening of liver function and the need for liver transplantation in that period. So the trial is expected to last up to three years. And it, as I mentioned, an outcome benefit study for full approval. So, going to Slide 19, in NATiV3, the study is conducted on a quite worldwide scale. As you can see, we have several studies on both sides of the Atlantic, the Americas, Europe, also some sites in South Africa and Australia. And as Frédéric mentioned, through our partnership with CTTQ , we also may have sites in China before the end of enrollment.

That is currently ongoing, so quite a global approach. Next, Slide Number 20, with regard to the timelines, in the second half of 2023, the last patient first visit target of the circa 900 patients is planned. So completion of enrollment essentially at the end of this year. And then in the first half of 2025 will have for the current design of the study, last patient, last visits and that will bring us to top line data in the second half of 2025. And an NDA submission for accelerated approval with the FDA at the beginning of 2026. Going to Slide 21, I will say a few words about the two Phase 2 studies. The first one is a study in patients with NAFLD non-histologically defined and who also have Type 2 diabetes. It is a study that has completed enrollment last year.

It is, as Frédéric also mentioned, the study that is sponsored by University of Florida and conducted by Dr. Cusi. And it is truly a mechanistic study that will provide much more granularity and data on the effects of lanifibranor as a pan-PPAR agonist, to really address all the metabolic events that occur in the cascade of NASH development and also in Type 2 diabetes, two conditions which have very similar and common underlying disease biology, which is really in its upstream mechanism evolving around insulin resistance in multiple tissues, and the corresponding dysregulation of lipid metabolism and accumulation of toxic lipid intermediaries that lead to the inflammation and tissue injury and fibrosis in the liver, but also to an atherogenic lipid profile that causes atherosclerosis, et cetera.

So many of these disease biology aspects will be evaluated in this study. And I think therefore it will be giving us a wealth of information about the benefits of lanifibranor in addition to the hepatic benefits which we have described and published earlier. The NAFLD, or NASH and NAFLD and Type 2 diabetes occur very much in parallel, as you know, and the more advanced the disease becomes and that’s true for both Type 2 diabetes and NASH to more frequent the overlap becomes, which has to do by the fact that both diseases reinforce one another. So it is a very significant medical issue. And I think therefore, studying lanifibranor in patients with these overlapping conditions helps us understanding the disease and its medical value quite a bit.

So it has to do with insulin resistance and lipid metabolism, as I mentioned. So Dr. Cusi has enrolled 30 patients who had Type 2 diabetes with a fasting glucose level below 250 milligrams per deciliter, and an HbA1c below 9.5%. So they were controlled but with an amount of hepatic steatosis defined by MR spectroscopy of 10% or more, and stable weight. The randomization was 1:1 active 800 milligram versus placebo, and they had a treatment of half a year. If you go to the next slide, just mention that in summary, the site uses on the spectrum of state-of-the-art imaging technology to evaluate truly the fat amount in the liver fat distribution, and also inflammation and fibrosis delivered through various software methods that we have today available based on MRI, as well as ultrasound FibroScan, and then also very sophisticated ways to measure insulin resistance using the hyperinsulinemic clamp and the use of stabilizer TOPs to measure glucose uptake by muscle, et cetera.

So to get really a very detailed picture of the effects of lanifibranor on insulin resistance. And the primary efficacy endpoint that’s based to have just to define the sample size calculation is based on the reduction of intrahepatic triglycerides measured by mass €“ MR spectroscopy at week 24. But there all is really wealth of secondary endpoints that will give us that I think profile from of lanifibranor on its €“ with regard to its broad metabolic beneficial effects in NASH as I mentioned. So this study is fully enrolled since September. It’s on the last patient was enrolled and in Q2 2023, in other words, the next weeks we’ll have the results, the top line results of these analysis. And then a few words about the combination of lanifibranor and empagliflozin in another Phase 2 study, which is run by Inventiva study also in patients with NASH and type 2 diabetes.

The rational for combination treatments in a disease like NASH, of course, has been discussed in many fora and there’s a strong rationale given the biology of the disease stretching from metabolism all the way to fibrosis and cancer. So with regard to lanifibranor based on its mechanism of action, there is a very good rationale to combine it with compounds such as GLP-1 receptor agonist and SGLT2 receptor agonist €“ SGLT2 inhibitor, sorry. Lanifibranor in itself, of course, addresses all aspects of the disease. And so in many patients, it’ll probably be adequate as a treatment, but some patients may have an additional benefit from the combination treatment. And the other aspect is that with lanifibranor a certain percentage, roughly about one-third, if you define it as 5% or more of patients will have an increase in weight.

We know that weight increase with lanifibranor is metabolically healthy, that has been clear from all data that we have from NATIVE and that we have published. Yet it is €“ it may be an issue for some patients, and therefore, I think it is important to show that with combination such as with an SGLT2 inhibitor, that way it can be balanced out. If you go to the next slide number 26, so we know from at least four randomized trials have been published, then when you combine empagliflozin with an SGLT2 inhibitor, that you do see an improvement of metabolic markers, a further improvement such as lowering of HbA1c. And that the weight gain that you see with empagliflozin, which is PPARγ agonist is as I mentioned before disappearing. So there’s no further €“ no weight increase, which may be of an important aspect for some patients.

And these data are quite robust. They’re robust, they are based on four large services I mentioned about 1,400 patients in different parts of the world. So this is a good foundation for our approach, and there has been no safety concerns for the combination of PPAR agonist with an SGLT2 inhibitor. And Slide 27 gives some more information about the LEGEND trial. I summarized to the rationale. We will have information from that study, which is currently ongoing as well about the distribution of fat because we use imaging as well so multiscan. And we will have information about the additional metabolic benefits and the effect that the combination has on the way to change. So the study is based on the effect of lanifibranor on HbA1c that is used for the sample size calculation, and we have those data from NATIVE HbA1c of course, is also as it underlies insulin resistance, an important marker for NASH, as well as for type 2 diabetes that provides the rational to use this marker as an endpoint €“ as a primary efficacy endpoint.

But the true information €“ the true importance of this study is really that it’ll give us an amount of information about the benefits of the combination on the metabolic immune markers of NASH, as well as the hepatic health markers assessed non-invasively. And of Slide 28, some more details, we run this study in four countries. The primary €“ the principal investigators are Dr. Holleboom from the Academic Medical Center in Amsterdam and Dr. Lai from Harvard, Beth Israel in Boston. And it’s an ongoing study. So top line results are planned to be available this year. As you can see it’s an half year treatment as well. We have one dose of lanifibranor and one dose of empagliflozin that’s the SGLT2 inhibitor that we choose. And in one arm and one another arm is lanifibranor 800 milligram, and it’s a placebo-controlled study.

I covered the endpoints already, so I can go to Slide 29, which filled in be covered by Jean.

Jean Volatier: Good morning, good afternoon, everyone. So we will get to the key information on our financial landscape. Happy to answer, of course, your questions later on if you have further questions. So first of all, in terms of shelter base no significant change. It’s stable, and therefore Webex with our key partner. We have recently extend the €“ our coverage, our analyst coverage with Stifel came recently. I wouldn’t like to elaborate too much about our market cap, which appears disconnected from what is the potential of the lanifibranor assets, but at least at the moment, the consensus is still positive and at the significant spread process, the current market cap. In terms of financial statements, three takeaways to remind, first of all, in terms of revenues I guess it’s the first time we reach this level of €12.2 million in sales.

And the good thing is it’s the same cash white, because we record it also this amount with the upfront from the CCTQ Sino Biopharm partnership in China, where we’re talking about. The second point important is the continuous effort, and we have seen some of the actions to boost the enrollment and continue to too much our operational target on 93. This explained the significant increase in R&D expense, and which should in 2023 continue this trend to reach the plateau could speed in 2023 expected too much again our objectives by the end of the year. And then third point in a very difficult market this year on the financial field, we have securitized a short-term close to €80 million principally with the European Investment Bank deal to €“ of €25 million.

One, I’ve been raised on the first quarter, and we’ve also used our at the market program with $9 million plus also in June remaining $58 million on the shelf. And we have optimized also kind of state backed loan niche with a $5 million plus also cashed in this year. So we finished the year with a close to €8 million without considering let’s say the cash cartridge of the €25 million second tranche of the EIB, which allow us to operate until the end of 2023.

Frédéric Cren: Great. Thank you, Jean. So on the catalyst, so the near-term, so it’s €“ as you understood for us is closing and obtaining the data from Professor Cusi on the Phase 2 we’re looking with relatively confident on this trial, and we think it’s going to be an important data for positioning lani patient with type 2 diabetes. And of course, I mentioned all the efforts that we’re doing, and we target and we continue to target an end of enrollment for NATiV3 for the second half of this year. That will be also I think a very important achievement and positive news. And then the last one is of course the work we are doing on LEGEND with the data expecting in the second half. So this is for a quick update of the 2022 financials and achievements. I give now the floor to the operator that will provide instruction to ask your questions.

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Q&A Session

Operator: Thank you, sir. And the questions come from the line of Seamus Fernandez from Guggenheim Securities. Please ask your question.

Seamus Fernandez: Great. Thanks so much for the question. So a couple of quick questions. The first one is really hoping to know if there will be a disclosure of baseline characteristics of the patients now that the next or the first Phase 3 trial that’s going to readout in 2025 is likely €“ if those are likely to be presented and shared with investors. I think that’s definitely an important dynamic as we think about the differentiation of this clinical trial versus some of the other competitor opportunities. And then the second question is just what your hoped for results or the opportunity is to really share with investors the opportunity that you see from the Phase 2 clinical studies. I think Michael you provided a lot of detail in your prepared remarks.

Just hoping to better understand what or how those results are likely to be presented, whether it’s in a press release with a sort of formal primary endpoint assessment or if it’s more kind of exploratory analysis that will be provided and perhaps presented at a medical meeting specifically. Thanks.

Frédéric Cren: Thank you, Seamus. So maybe I’ll take the first question and then for the communication strategy of the Phase 2 with Professor Cusi maybe I’ll let Pierre or Michael summarize the discussion we’ve had with scan. Concerning your first question about disclosing the baseline characteristic, it’s actually a good suggestion. Honestly, we have not thought about that and we’re not able to answer, but yes, this is feasible that could be interesting to do. Of course, we have looked at the patient that has been enrolled, and Michael maybe can correct me, but from what we have seen is that of course, we’re not changing patient population from the previous Phase 2b. And so we really looking for patient, of course, F2, F3 with a moderate to severe level of inflammation and ballooning always selected with the same approach with an activity score of at least two or three.

What we have seen is maybe a bit more patient with type 2 diabetes, I think with approximately 40% in the Phase 2 now. We’re more at 60%. So I don’t know what it is due to, I don’t think it’s €“ it means anything. We have seen that the drug is as efficacious in both populations on €“ patients with NASH or patients with NASH and type 2 diabetes. But otherwise, they are good suggestion maybe to disclose the baseline characteristics once we are fully enrolled. Maybe Michael or Pierre you want to talk about communication strategy for the Phase 2?

Michael Cooreman: Yes, sure. For the study that is sponsored by University of Florida, we will have once the data are available and press release on the top line results. And then of course, the data €“ the details of the data, the primary efficacy endpoint and all the secondary efficacy endpoint will be presented made public at scientific conferences in the first place by Dr. Cusi’s team.

Seamus Fernandez: Great. And maybe just as one follow-up, should we anticipate those results likely in terms of the medical meetings that you would be targeting. Is that more of an EASD conference, just because this is a diabetic patient population or a little bit more along the lines of AASLD remaining focused on the liver focused patient population? I know there’s a blend of marketing to endocrinologists and to liver specialists.

Michael Cooreman: Absolutely. And so we aim for both actually. And we are doing that now. We even €“ we have done a great deal of analysis of the metabolic immune markers of the NATIVE study and present those to both liver conferences, AASLD, EASL, but also to the ADA. We also have a presentation this year at ADA and with conclusion cause we will discuss that together. And the goal is to certainly also cover the endocrinology conferences, but that does not €“ we also stay active with the liver conferences. I think that’s enough.

Seamus Fernandez: Thanks so much

Michael Cooreman: Yes. Enough material to cover both conferences.

Seamus Fernandez: Okay. Thank you.

Operator: We are now going to proceed with our next question. And the questions come from the line of Annabel Samimy from Stifel. Please ask your question.