Vivoryon Therapeutics NV

AEX:VVY

Earnings Call Transcript

[Operator]

Good day, and thank you for standing by. Welcome to the Vivoryon Therapeutics 2025 First Quarter Results Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Julia Neugebauer. Please go ahead.

[Julia Neugebauer, executive]

Thank you, Nadia. Good afternoon, and thank you for joining us today to discuss the company's first quarter 2025 results and operational updates.

This morning, Vivoryon issued a press release reporting its first quarter 2025 financial results and also provided an update on our progress in positioning our lead asset, varoglutamstat, in the kidney space. This press release is posted on Vivoryon's website at www.vivoryon.com.

On the call with me today are Vivoryon's Chief Executive Officer, Frank Weber; and Vivoryon's Chief Financial Officer, Anne Doering. Our Chief Business Officer, Michael Schaeffer, will be available for questions during the Q&A session.

I will begin today's call with an overview of our most recent key achievements. I will then hand the call over to Frank, who will give a summary of our exciting proof-of-principle data in kidney disease and provide details on varoglutamstat's unique and beneficial effects on kidney function as well as the relevance of eGFR as a validated clinical endpoint. And we'll then conclude our presentation by walking you through the first quarter 2025 financials. Following the prepared remarks, we will host a Q&A session.

Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning the development of Vivoryon's core platform, the progress of its current research and development program and the initiation of additional programs as well as results of operations, cash needs, financial conditions, liquidity, prospects, future transactions and strategy. Should actual results differ from the company's assumptions, ensuing actions might differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.

Despite recent advances in the field, there remains a significant unmet need for effective treatment for kidney diseases, including chronic kidney disease, CKD for short, and diabetic kidney disease or DKD. These conditions often progress to end-stage kidney disease and kidney failure. Current standard of care therapies can only slow disease progression, they cannot halt it or improve kidney function.

Vivoryon is well positioned and on track to deliver much-needed effective therapy for patients suffering from kidney disease. The first quarter of 2025 has been another highly active period during which we have continued to build on the already substantial body of evidence supporting our lead candidate, varoglutamstat, as a potential game changer in the treatment paradigm for kidney diseases.

Varoglutamstat is an oral first-in-class potent and selective QPCTL inhibitor designed to prevent inflammatory and fibrotic processes by blocking pyroglutamate formation. It has demonstrated outstanding benefits in kidney function in Phase II clinical studies and is uniquely positioned within the evolving kidney disease landscape. The compound is backed by a robust and compelling clinical and clinical data package and further derisked by extensive safety data.

Its impact on kidney function was evaluated in 2 independent, randomized, double-blind placebo-controlled Phase II studies. Results were analyzed individually as pooled data in a meta-analysis, which was presented at the European Renal Association's Annual Congress earlier this month. Across all analyses, varoglutamstat consistently demonstrated statistically significant and clinically meaningful improvements in kidney function compared to placebo. Frank will go deeper into this data in his presentation today, highlighting how this unprecedented large and sustained improvement in kidney function, particularly on a group of patients with diabetes, translates into an actionable risk-contained strategy for a planned Phase IIb study in CKD.

In addition to the clinical data, varoglutamstat has shown synergistic effects in preclinical in vivo studies when combined with standard of care therapies, further enhancing its potentially unique positioning within the commercial landscape. And importantly, we have also strengthened our IP position. This includes several recent patent filings covering medical use, dosing and combination regimens as well as the granting of a new U.S. composition of matter patent for varoglutamstat. This patent supports market exclusivity through 2044 with the potential for further extension.

And with that, I'd like to hand the call over to Frank. Frank?

[Frank Weber, executive]

Thank you, Julia. Good afternoon, good morning, everybody. Varoglutamstat has the potential to transform kidney health outcomes. And we want to look now in the next coming slides into why we believe we have outstanding data and how we move forward from our current evidence level.

Our conviction that we have outstanding data is based on 2 randomized placebo-controlled studies with more than 360 patients treated for up to 2 years, where we prospectively measured eGFR and could show an improvement of eGFR above baseline and versus placebo in a statistically significant and clinically meaningful magnitude of effect in both studies independently, with a much larger effect size in patients with diabetes compared to those with no diabetes in both studies. So we could replicate the finding and have a very consistent outcome in those studies. I want to remind you that eGFR was only an exploratory secondary outcome, and the primary was cognition where the endpoint failed.

In the next slide, I show you that we presented now the data the second time. This time, we were at the ERA in Vienna recently and presented the pooled analysis and the meta-analysis of those 2 studies to the scientific community, and there was exciting feedback on this data. And we could show that both in a pooled and meta-analysis, there is the same finding, so the outcome does not depend on the statistical methodology. We find statistically significant data from week 24 onwards and can sustain them until week 96, which is unprecedented in that space.

Now on the next chart, the ERA is also, like other scientific congress, is a good place to look around what is the trend, the scientific trend, what do other companies do, where is the world heading towards. And the world is heading towards combination therapy because now we have with the SGLT2s, the first-time drugs, which are recommended broadly for patients with chronic kidney disease and diabetic kidney disease for stages up to 20-milliliter of eGFR baseline down. And this data show on the SGLT2s that while you have a reduction in the progression, so the speed of progression is lower, the drug don't stabilize kidney function. The patients still progress and get worse. And this is why everybody had 2 additional mechanisms of action. Here, you see on the left side, the rare kidney disease space where you see various products which are under development from companies which are still doing this or have been acquired by larger pharma companies, largely in the IgAN space and in the FSGS space, there is a lot of movement. The products are largely not yet approved, but they're under development with new mechanism of actions.

And you see on the right side where you are in the CKD space where millions of patient pools available, there are largely combination treatment or new version of existing mechanism of action being developed. And there is virtually only varoglutamstat, which has a completely new mechanism of action which is an oral therapy, which has shown synergies with standard of care available in that space to be moved forward with the aim to stabilize and improve eGFR and kidney function long term. So we have an outstanding position in that field of development products in the orphan and in the non-orphan space. And that is confirmed at the ERA, where no comparable data to ours have been presented or shown.

On the next chart, we need to discuss a little bit about the relevance of our finding. You know that we have made the slope analysis, the primary analysis of our eGFR data for the secondary endpoint. And it is important to put that in perspective what does that mean. eGFR slope analysis is an acceptable clinical endpoint for Phase III studies as published already in 2018 by a workshop of the FDA, the EMA and the National Kidney Foundation. That is also the case for albuminuria, but the data support much stronger eGFR as a surrogate endpoint for outcomes for kidney health outcomes than does albuminuria because albuminuria is, of course, dependent on the protein transporter which transports the protein, which is filtered through the glomeruli back in the kidney, and those can be up or downregulated that may change a little bit the proteinuria interpretation.

So we can conclude that eGFR slope analysis is a valid surrogate endpoint. And because it is a decline which goes across diseases, it is a valid endpoint for many types of chronic kidney diseases, so for many causes of disease. And the regulators say that effect sizes of 0.5 milliliter or 1 milliliter per year in that slope different from placebo is necessary and ensures a high probability of a benefit, meaning not being equal to placebo but having a benefit. So if you have about 0.5 milliliter to 1 milliliter in a slope difference, this is already good and likely predicts a positive outcome on kidney health.

And let's say that 2 years is a likely duration of a study for eGFR slope analysis because you need to follow-up for patient for a while to make the prediction whether the slope is really stable or improving or different from placebo. This is not possible short-term data. And knowing that regulatory assessment, of course, when you look at our data in the next slide, in the comparison also what is there, you see that the SGLT2s have about 1 milliliter to 1.5 milliliter improvement over long-term studies in eGFR per year. The same as mineralocorticoid antagonist like finerenone. And you see varoglutamstat has 3 to 4x the effect size on eGFR compared to those products.

These other products show also an improvement in proteinuria or in other words, urinary albumin-creatinine ratios. We haven't been able to collect these data in the previous studies in a quantitative way, only in a qualitative way. There we don't see an increase in proteinuria, but we will look at a quantitative way in the future studies. So in that graph, you see that there is a huge magnitude of effect for PCT inhibitors in the diabetes population on that slope analysis.

And on the next chart, it becomes a little bit theoretical and complicated. But what we did here, we simulated what we would need for Phase III because when we now start the development of the product in diabetic kidney disease and chronic kidney diseases, then we, of course, need to understand what is the end game of confirmatory studies. And we see that it is highly feasible to run also a Phase III program for varoglutamstat. Why? Because we have already 2 years data and a slope analysis conducted in the Phase II, and that is the active arm is the dark blue line, the slope of the dark blue and the yellow one -- the orange one is the placebo. And the difference is 5 milliliter. And over 2 years, we have a p-value of 0.002 in already 94 patients only.

If we run a Phase III and want as a simulation, only see a difference of 3-milliliter because we can make, of course, the point, the Phase III, the magnitude effect may be a little bit lower because the population is a little bit wider and not so consistent, then we would need 260 patients in the study to complete one Phase III study.

If you go down to smaller effect sizes like the SGLT2s have or the GLP-1s or finerenone, you see that studies become, of course, more difficult to be conducted with eGFR as an endpoint because you need already thousands of patients to do this. And if you go for the regulatory minimum, you need a couple of thousand patients to power a study adequately.

In other words, varoglutamstat is specifically suited for a Phase III development program with Phase III studies in the range of 250 to 350 patients in the single study conducted over 2 years to meet that regulatory endpoint. And that encourages us, of course, to now start the development program, first of all, in the Phase IIb study and then confirming this data and the simulations and then running the Phase III program accordingly.

Going to the further story of the ERA and what is currently state-of-the-art. As said, these SGLT2 inhibitors and none of the single agents being out there today can stabilize kidney function or even slightly recover kidney functions. This is why everybody looks at additive effects of existing approved treatments like the combination of finerenone and empa or dapagliflozin where we had the confidence study just published at ERA or similarly with other products under development in combination being either mineralocorticoid receptor antagonist or endothelin receptor antagonist or aldosterone [indiscernible] inhibitors, which are known mechanism of actions. And those show, of course, an additive effect in the reduction of proteinuria. But there is no evidence that long term, they stabilize eGFR or significantly further ahead. There are some indications of eGFR being quite similar to the single agents, but the studies they have conducted are, of course, not long enough to make any interpretation on the eGFR slope. So the medical need of a stable outcome in chronic kidney disease is still out there and new therapies and new mechanisms are needed, those like the glutaminyl cyclase inhibitors in varoglutamstat.

Next chart. This is why our data we generated in the pharmacological model on top of gliflozins or SGLT2s are so important because gliflozins are, of course, the standard of care and given to many patients now with chronic kidney disease and diabetic kidney disease. And of course, we wanted to show and demonstrate that glutaminyl cyclase inhibitor varoglutamstat on top of these gliflozins give additionally a boost and an improvement of the kidney function.

And we look here at inflammation, at fibrosis and as kidney function. And you see that, of course, the gliflozins alone in these models have an effect. But you add -- if you add varoglutamstat, then you see that the pathology nearly disappears and the green bars are about the same height as the gray bar and the gray bar is the non-diseased healthy animal. The black bar is the diseased animal and the green bars you see is the combination of SGLT2 plus varoglutamstat, which is a highly promising finding. And we patented this finding because of the fantastic synergies we saw here in the combination of those 2 treatments, a highly promising finding for the future clinical trials.

In the next chart, then you see that we filed that patent. That is the last line, but we also have a composition of matter now granted in the U.S. with a run time of 2044. So when you see of all medical use in kidney dosing regimes we filed, our patent spend is now to the mid-40s to the end 40s, which allows us a sufficient market exclusivity for the compound in the future to leverage our scientific findings.

In summary, this is the probably most promising compounds to be a convenient new oral therapy and is -- has a potential to transform really the treatment of kidney diseases, making these diseases stable and less progressive and preventing ultimately kidney failure and kidney replacement therapy for many patients.

So the medical need is products that really stabilize or improve kidney function for the majority of patients. And varoglutamstat has, based on the current finding and the future development plan, a huge potential to show and leverage that. And we have now a clear development pathway forward, which has, based on regulatory discussions and findings and future programs, can be based on our currently robust available evidence based on the statistical findings on eGFR, on the 2 independent study on a huge effect size, on an excellent safety profile and on the synergy with the gliflozins.

With that, I want to hand you over to Anne for the financial part. Thank you.

[Anne Doering, executive]

Thank you, Frank. I will now walk you all through the first quarter 2025 figures. Research and development expenses amounted to EUR 1.2 million in the first quarter of 2025 versus EUR 7.4 million in the first quarter of 2024. The decrease is primarily attributable to lower clinical and manufacturing costs, following the ramp down of the VIVIAD and VIVA-MIND study.

We have seen a decrease in general and administrative expenses with costs of EUR 1.3 million in the first quarter of 2025 compared to EUR 2.1 million in the first quarter of 2024. The EUR 0.8 million decrease was largely due to the decrease in personnel costs as well as legal and consulting costs. All of this resulted in a net loss for the first quarter of 2025 of EUR 2.4 million compared to EUR 9.1 million in the first quarter of 2024.

The company held EUR 7 million in cash and cash equivalents as of March 31, 2025, compared to EUR 9.4 million as of December 31, 2024.

Our cash runway into January 2026 does not include any funds from the Standby Equity Purchase Agreement announced in April 2025. There are only minimal costs remaining from VIVIAD and VIVA-MIND.

Our spending plans continue to support the kidney disease strategy and the strengthening of our intellectual property position. We continue to actively pursue additional financing and partnership opportunities to primarily fund the Phase IIb study.

As shown throughout today's presentation, we have been working on all fronts to drive the company forward and develop a much-needed treatment for kidney disease. The cornerstone of our strategy and steps forward has been based on varoglutamstat breakthrough clinical results in this indication.

Varoglutamstat is a unique asset targeting inflammation and fibrosis, which are key drivers of kidney disease. Our approach is differentiated from standard of care, not only with regard to how it potentially works, but also from a substantial beneficial impact on kidney function that we have reported.

The Phase II kidney function data for varoglutamstat, which has been observed in 2 independent Phase II studies, show that we have the potential to stabilize and even partially recover kidney function, not just slow the progression of disease. We could even have a synergistic effect on top of standard of care. Let's also not forget, we have an extensive safety data package supporting varoglutamstat. And in terms of convenience, we are talking about an orally available medicine.

Moving forward, we have established an actionable development path to reach the market in diabetic kidney disease, with the next step of Phase IIb study in this area, building on the data seen thus far and extending it into a more advanced patient set. We see significant market potential in diabetic kidney disease and also in chronic kidney disease and even in rare kidney diseases. We have secured further patent protection to fully take advantage of these opportunities. Simply put, we believe we are well equipped as we aim to transform the treatment and more importantly, outcomes for patients suffering from kidney disease.

Before we move to Q&A, I would like to take the opportunity to thank the extended team of Vivoryon who have enabled us to reach where we are today. And with that, I want to thank everybody for listening, and we're ready for Q&A.

[Operator]

[Operator Instructions] And now we're going to take our first question, and it comes from the line of Romy O'Connor from Van Lanschot Kempen.

[Romy O'Connor, analyst]

I have 2 questions. The first, I'd like to know what steps you can currently take with your current cash position to prepare for the planned Phase IIb in CKD? And also what do you consider optimal funding solutions for this trial?

And secondly, regarding partnership progression, how are discussions going? And are you reaching a more advanced state?

[Frank Weber, executive]

So for the progress of the clinical trial, we are in in-depth protocol design discussions with CROs and experts. And as you have seen in the last quarter, we put a significant emphasis of understanding the full development path until the end of Phase III and how we get to the market, because we need to keep the Phase III program in mind when designing the Phase IIb program to make it a reasonable intermediate step. And our efforts were directed to understand the regulatory environment and the product environment and the competitive environment as displayed today to really fine-tune the protocol and to make it a success and to derisk it. So that's where we are.

We also look, of course, at study medication and financial parts and so on. So we try to get ready for really starting the study, and we are relatively advanced and not fully there, but we are in advanced protocol design discussion. I think that is -- did that answer the first part of the question?

[Romy O'Connor, analyst]

Yes. Perfect.

[Frank Weber, executive]

So regarding partnership, of course, we need to be always careful in disclosing what we do, not to make confidential disclosures to the public. I can confirm that we are in conversations with interested pharma companies, and they continue. And as I always say, we need to see what comes out and whether such a partnership is in the best interest of the company at the end, also for our shareholders or not, and this is another decision we need to take.

So this is ongoing, and we are confident we have a significant interest in that program because we have unique data. And then we're going to see what is the best for the company to move forward.

[Operator]

Now we're going take our next question. And the question comes from the line of Joseph Hedden from Rx Securities.

[Joseph Hedden, analyst]

Two, please. Firstly, on -- just on the evolving treatment dynamics in DKD. Just wondering what proportions of patients in the U.S. and Europe now are receiving the SGLT2s.

And then secondly, in your recent attendance of the ERA Congress, just wondering if there are any key takeaways for you or learnings that you can incorporate into the Phase IIb trial design or whether that's solidified now or indeed competitor programs?

[Frank Weber, executive]

So as you know, the SGLT2s were broadly recommended in the KDIGO guidelines of 2024. That is probably based on the evidence there, the KDIGO kidney outcomes consortium made a huge recommendation. Since then, I think it's really picking up.

I would say we are probably north of 30% to 35% of the potential population getting SGLT2s today, and it's strongly increasing. There was a time needed until everybody was convinced that SGLT2 is the right thing to give because you have initially a strong dip in eGFR, which looked a little bit like a worsening and there were people thinking that, that is a bad thing to happening. But it turned out that there was a certain recovery after a couple of weeks, and then there was a stabilization or a slower decline later, which compensated the initial dip that made it a little bit a long shot in terms of market penetration.

But keep in mind, these are all compounds which make north of [ EUR 1 billion ] in turnover, so this is not -- these are not small compounds. But of course, the market penetration to reach more than half of the patients will take a while, also because the diagnosis of patients in 3a and 3b chronic kidney disease is not perfectly done and practiced these days. There are huge gaps in identifying those patients still. Many patients only are seen in Stage 4 or 5 by a nephrologist who then initiates treatment. Sometimes it's already too late unfortunately.

So this will take a time, but it plays into our cards because as an add-on to SGLT2s in probably 4, 5 years, that will be penetrated. So it's not an issue for the commercial perspective of our drug. And for the clinical trial subject availability, it's also not an issue. You see that combination studies are ongoing and done. We find plenty of patients who take SGLT2 inhibitors for many years and who are progressing their disease.

So we can confirm by talks to CROs and experts, there is sufficient patient out to run our Phase II and III program. And as you see, we have a relatively efficient program. So we don't need thousands of patients for showing efficacy. We need probably 1,000 patients for showing tolerance in big parts because of big disease. But for the efficacy study, we can stay in a very efficient program, what we have communicated today.

The second question asked what our ERA learnings. And it's interesting because you always -- I mean, it's a little bit sloppy, but you always need new experts and new views. And the reaction overall is, wow, this is very interesting. So it's a very supportive, interesting statement, but then people have different views on what we could add as additional parameters in the trial, how long that trial should go, how many patients that could be. Overall, we have, let us say, on the key parameter, we have clearly seen that we should, in the randomized study, not go below 20-milliliter eGFR. Probably should be -- also include some 3a patients and not make too hard a cut on 3b.

They encouraged us to say, look, with improving diagnostic, more and more patients are diagnosed earlier and there are patients in 3a with high degree of proteinuria, which have a high risk of fast progression, which you should not include. Of course, not everybody with 3a we should include, but those with a very high degree of proteinuria have very bad perspectives and those we should include.

So there is a little bit movement, let us say, in the exclusion criteria right and left. But overall, I think we have pretty much nailed down what we do, and that is confirmed at the ERA where you see, of course, a lot of people doing similar things.

[Operator]

[Operator Instructions] There are no further questions for today. I would now like to hand the conference over to speaker, Frank Weber, for any closing remarks.

[Frank Weber, executive]

Thank you for your continued interest in the company, and we're starting now really a new promising area to move forward in chronic kidney disease. We have a clear plan laid out. We're working on executing that plan, and happy to walk with you forward together. And I want to thank the team again who contributed to this fantastic turnaround of Vivoryon. Thank you.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.