Vivoryon Therapeutics NV

AEX:VVY

Earnings Call Transcript

[Operator]

Good day, and thank you for standing by. Welcome to the Full Year 2022 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 speaker today, [ Anne Doering ]. Please go ahead.

[Unknown Executive]

Thank you, Heidi. Good afternoon, and thank you for joining us today for Vivoryon's conference call to discuss the company's full year 2022 results and operational progress. This morning, Vivoryon issued a press release reporting its full year 2022 results, which is posted on the company's website at www.vivoryon.com.On the call with me today are Ully Dauer, Chief Executive Officer of Vivoryon; and Florian Schmid, our Chief Financial Officer. Also with us on today's call and available for questions is Michael Schaeffer, our Chief Business Officer. We will begin today's call with opening remarks from Ully on Vivoryon's clinical and operational progress and then Florian will review the financial results for the full year of 2022. Following the prepared remarks, we will host a Q&A session.Before we start, I would like to remind you that during the conference call we will present and discuss certain forward-looking statements concerning the development of Vivoryon's core technologies, the progress of its current research and development programs and the initiation of additional programs. Should actual results differ from the company's assumptions, ensuing actions may differ from those anticipated. You are therefore cautioned not to place under reliance on such forward-looking statements which speak only as of the date hereof.With that, I will now turn the call over to Ully.

[Ulrich Dauer, executive]

Thanks, Anne, and thank you, everyone, for joining us today. You just heard a new voice in our team which belongs to Anne Doering during, our new Head of Investor Relations, whom I wanted to introduce with this call. We are very excited to have her on board with us and I'm sure you will have the chance to speak with her in the weeks to come.I will now move on to our 2022 results and updates. 2022 has been a critical year for Vivoryon as we made important operational progress with 2 successful private placements extending our cash runway and simultaneously progressing our lead asset varoglutamstat in 2 promising Phase II clinical trials in Europe and in the U.S. We are incredibly pleased with varoglutamstat development to date and we continue to see this program as a highly differentiated approach to Alzheimer's disease treatment.At Vivoryon, our primary focus is to address patient need, but we are acutely aware that unmet need in Alzheimer's disease goes far beyond treating this devastating disease symptoms. As such, we've designed varoglutamstat as a truly differentiated treatment to address the multitude of unmet needs for Alzheimer's disease patients.Fortunately, recent advances with Abeta antibodies show promise, like the Phase II data of the Lilly drug tanezumab and Eisai Biogen's lecanemab, which received accelerated approval by the FDA at the beginning of this year. However, those Abeta antibodies come with substantial limitations, including an increased risk of brain swelling and bleeding, so-called Amyloid-Related Imaging Abnormalities or ARIA.So patients receiving these treatments need to be closely monitored, required specialized infrastructure that you can't find at just any medical practice. This specific infrastructure is not yet broadly available and that is an issue not only for side effect risk mitigation, but also for the administration of the treatment itself because these are currently all infusion-based treatments that need to be administered in a hospital setting.Our small molecule approach is designed to address all of those limitations. We are developing an orally available medicine that can conveniently be taken at home and does not come with an increased risk of ARIA.Grounded in the discovery that the enzymes glutaminyl cyclase or QPCT catalyzes formation of the neurotoxic epitabariant N3pE Abeta, a key driver of Alzheimer's disease pathology, we are pioneering small molecule-based therapies to block this disease pathway.varoglutamstat has already shown statistically significant improvement of working memory, a cognitive ability that is eventually heavily beaconed in Alzheimer's disease patients. Through its dual mode of action, varoglutamstat modulates all 3 important pathological hallmarks of the disease. And what's perhaps most differentiating to all antibody-based approaches is that we have strong evidence supporting a favorable safety profile. varoglutamstat has shown no signs indicating ARIA, which are clearly a limiting class side effect of Abeta antibodies.The Alzheimer's disease landscape has experienced significant innovation in 2022 and we are incredibly encouraged by where varoglutamstat can potentially fit into the treatment paradigm in the future. Importantly, we feel it's critical not to rely on the endpoints established to date alone. This is why we are introducing additional endpoints which are innovative and validated into our study. We believe that in combination with established endpoints, such as CDR sum of boxes, they will be sufficient to reliably translate from clinical study success into real life benefit.Before reviewing our 2022 highlights, I would like to take a moment to outline our clinical development strategy, because this is an element that is truly unique to Vivoryon.As you can see on this slide, we are following a meticulously designed clinical development strategy and we're able to show that varoglutamstat was well-tolerated in both a completed first in human Phase I trial in over 200 participants and a subsequent first inpatient Phase IIa study SAPHIR which enrolled 120 patients suffering from early Alzheimer's disease. Importantly, after only 12 weeks of treatment, this study showed evidence of improving not only pathological hallmarks, but also synaptic function and connectivity, cognition, memory and attention in Alzheimer's disease patients, including statistically significant changes from baseline and working memory.Building on these encouraging results, Vivoryon based a selection of endpoints for both VIVIAD and VIVA-MIND on the outcome of SAPHIR as well as on the regulatory draft guideline for Alzheimer's disease drug development introduced by FDA and EMA in 2018. Vivoryon's scientific rationale is focused on upstream pathogenesis, including prevention of formation of N3pE, which we strongly believe represents an optimal approach to addressing all key pathological hallmarks of Alzheimer's disease.As such, we've set up our two complementary studies intending to assess if potential cognitive improvements in patients in the European VIVIAD study, measured by a composite endpoint will translate into an established clinical endpoint CDR sum of boxes in patients in the U.S. VIVA-MIND study.We recently announced clinical updates for both the VIVIAD and VIVA-MIND Phase II clinical studies and are well-positioned to continue advancing these programs through the clinic. As a reminder, VIVIAD is a state-of-the-art Phase IIb study being conducted in Europe and is designed to evaluate safety, tolerability and efficacy of varoglutamstat in patients with mild cognitive impairments and mild Alzheimer's disease compared to placebo over the course of 48 to 96 weeks of treatment.The highest dose investigated in the study, 600 milligram twice daily, was selected by an independent data safety monitoring board as final dose after the dose escalation portion of the study. Enrollment was completed in the fourth quarter of 2022 and the study was adopted to enable longer average treatment duration of participants with an anticipated average treatment duration of around 82 weeks.The primary endpoint is a composite of the Neuropsychological Test Battery focusing on changes in working memory and attention with secondary endpoints, including multiple cognitive safety and biomarker assessments. We recently shared an update on VIVIAD at the 2023 International Conference on Alzheimer's and Parkinson's Disease and Related Neurological Disorders, or AD/PD in late March 2023 and we are encouraged by the results thus far.To recap, as of January 5, 2023, the most recent data cutoff date, over 100 of the 259 participants enrolled were randomized into the study and had been treated for 48 weeks or more. As mentioned earlier, to-date, varoglutamstat has not shown any on-target toxicity or clinical signs of ARIA. At this juncture, the total number of serious adverse events and the discontinuation rate were considerably lower than the respective numbers at the 800 milligram twice-daily varoglutamstat dose in Vivoryon's completed Phase IIa SAPHIR study, while retaining a similar level of target inhibition of around 90% at the dosing in both studies. We continue to advance VIVIAD and remain on track to report the final data readout from the study in the first quarter of 2024.Turning now to the complementary VIVA-MIND Phase II study being conducted in the U.S. This study is being coordinated by the Alzheimer's Disease Cooperative Study at the University of California, San Diego School of Medicine and supported by the National Institute on Aging, part of the National Institute of Health, the NIH, with a USD 15 million grant. We are continuing to recruit patients at the 18 open sites across the U.S. and expect the first cohort to be fully randomized into the study within the second quarter of this year.We focus on the same patient population as immediate and expect to treat 180 patients for 72 weeks. The objective is to reach the 600 milligram twice-daily dose, which is the final dose selected in the VIVIAD study without requiring slow up titration to reduce the overall burden on patients and study sites. Additionally, the study's DSMB recently provided a unanimous recommendation to continue the study without modification.We are incredibly pleased with this decision as we've worked diligently to design and build this study uniquely, complementary and informed by the VIVIAD study. In 2022, we also shared that we've deliberately made changes to the study design, adding in more flexibility to the protocol so as to allow us the potential to transform the study into a Phase III study, including further patients beyond the current currently planned 414, an option which we will consider upon the readout of our European VIVIAD trial.We expect to provide the next update on VIVA-MIND in the second half of this year. Overall, we are pleased to report that both of our ongoing studies are progressing steadily and we continue to broaden the overall data package for varoglutamstat with consistently positive incremental results. We are extremely encouraged by what we have been able to report to-date and we see a unique opportunity for ultimately realizing the promise of a widely accessible treatment option in Alzheimer's disease, with a realistic potential to reach the millions of patients in need.Turning briefly now to additional 2022 achievements beyond our varoglutamstat program. As alluded to in my opening remarks, in April 2022, we were able to successfully raise EUR 21 million in a private placement, supported by a number of high-quality institutional investors from Europe and the U.S. as well as executive and non-executive members of our own Board.Subsequently, in September 2022, we entered into another private placement of EUR 50 million, supported by our longstanding investor Claus Christiansen and our new investor KKR Dawn Aggregator, a platform controlled by affiliates of KKR, a leading global investment firm.While the placement closed in the fourth quarter of 2022, investors have the option to place an additional EUR 50 million. Securing this additional capital continues to enable us to follow our carefully drafted development strategy and support our upcoming clinical milestones.In addition to our own efforts, the regulatory achievements of our Chinese partner Simcere enabling near-term clinical development in China, broaden the tremendous opportunity for us to make varoglutamstat available to as many patients in need as possible. As per our agreement, Simcere is fully responsible for the further development and marketing within the Greater China region.On the leadership side, I'd like to highlight that we've expanded and diversified our team, the appointments of Dr. Claudia Riedl and Samir Shah, Medical Director -- or Medical Doctor, sorry, to our non-executive Board of Directors.And with that, I'd like to hand over to Florian to review our financial results. Florian?

[Florian Schmid, executive]

Thank you, Ully. 2022 was a year of driving our clinical studies forward and securing additional capital. This is reflected in our financials. In 2022, we did not report a gross profit, while in 2021 gross profit of EUR 9.2 million came from our Simcere licensing partnership signed in 2021.Research and development expenses amounted to EUR 20.2 million versus EUR 17.5 million in 2021. This increase was mainly due to higher manufacturing costs as well as clinical costs driven by the progress of our Phase IIb clinical trial VIVIAD.We have also had a meaningful increase in general and administrative expenses, with cost of EUR 8.9 million in 2022, compared to EUR 4.5 million in 2021. This increase is largely attributable to costs generated from our capital raising activities.As in previous periods, our finance result was predominantly driven by the FX result on U.S. dollar cash and U.S. dollar receivables and liabilities in our balance sheet. All this together resulted in a net loss of -- a net loss for 2022 of EUR 28.2 million, or a negative EUR 1.28 per share, compared to EUR 12.7 million, or a negative EUR 0.63 per share in 2021.On the next slide, I would like to highlight selected KPIs. The company held EUR 26.6 million in cash and cash equivalent as of December 31, 2022, compared to EUR 14.7 million as of December 31, 2021. This increase is due to our 2 capital raisings in 2022, which Ully mentioned earlier and brings our cash runway at least through the end of December 2023. On December 21, 2022, total assets amounted to EUR 31.4 million and total equity was EUR 26.5 million.And with that financial overview, I would like to turn the call back over to Ully for a brief concluding remark. Ully?

[Ulrich Dauer, executive]

Thanks, everyone, for joining us today. I'd like to conclude by reiterating our enthusiasm for what we've built here at Vivoryon to-date, particularly with varoglutamstat. As a truly differentiated small molecule from other medicines in development, we believe that we are at the forefront of innovation. Our focus remains on addressing the incredibly high unmet need in Alzheimer's disease, which is already affecting an estimated 30 million people worldwide and projected to double in patient population by 2050.Our approach is grounded in the discovery that the enzyme glutaminyl cyclases, or QPCT catalyzes formation of the neurotoxic Abeta variant N3pE-Abeta, a key driver of Alzheimer's disease pathology and we are pioneering small molecule-based therapies to block this disease pathway.We are encouraged by the recent updates we shared on both VIVIAD and VIVA-MIND and look forward to keeping you all informed on our progress as we gear up for our meaningful catalysts from both studies.With that, we will now open the call to take questions. Thank you.

[Operator]

[Operator Instructions] We will take our first question. And the question comes from the line of Joseph Hedden from Rx Securities.

[Joseph Hedden, analyst]

Not long ago, you had a positive update on the status of both of your studies of varoglutamstat. Just on the VIVA-MIND trial. Just want to dig in a little more onto that progression, possible progression to Phase III and your vision of what that might mean in terms of additional duration and number of patients. And have you had any interaction with -- or you or the NIH had any interaction with FDA over that, or is there any kind of meetings upcoming on that so they can kind of rubberstamp that design?

[Ulrich Dauer, executive]

We believe that it is most efficient to approach the FDA with the entire picture of the full readout of the European VIVIAD trial. Of course, we had interaction with the FDA before. As you may know, we got granted the Fast Track designation and of course, we had to apply for the IND. But with respect to the requirements of the VIVA-MIND trial going forward, as an important element of our approval strategy, we believe it's most efficient to have the full data readout of VIVIAD available.

[Joseph Hedden, analyst]

Okay. Great. That makes sense. And then if I could just ask on the Simcere deal. I understand there's a receivable of EUR 3.8 million that's due somewhere around this time. Has that receivable been taken in yet? Because I think that's part of your cash runway calculation. Is that right?

[Ulrich Dauer, executive]

Yes, I can confirm that.

[Operator]

We will take our next question. The next question comes from the line of Christian Ehmann from Warburg Research.

[Christian Ehmann, analyst]

I have 3 questions, please, and one is towards the VIVIAD trial. You shared with us that you expect the average treatment duration to come out at around 82 weeks. Could you also share the median figure for this treatment duration? Which -- for how long is the median treatment duration?The second question would be, could you give us a little bit -- or can you explain a little bit more into detail the rationale for the VIVA-MIND study expansion to go beyond the initially planned treatment duration in this area?And the third, a little bit similar to my colleague's questions, how is Simcere progressing in China? And how -- or is there a realistic chance that we can see some additional milestone inflows this year besides the EUR 3.8 million you just mentioned?

[Ulrich Dauer, executive]

Yes, thanks, Christian, for your question. Starting with the first one. So the median expected treatment duration, so we don't have a number for you. And please understand that this can only be a prognosis because you can't predict potential treatment discontinuation, dropouts and so forth. So we were just kind of trying to guide for an average treatment duration, 82 weeks, again, which is substantially longer than what we have seen from the Phase III trials, for example, from lecanemab.Secondly, I think we have a little bit of a misunderstanding here. So we are not proposing to increase the treatment duration in VIVA-MIND. So this is going to be 72 weeks. And again, primary endpoints here are sum of boxes. What we put in a higher flexibility with respect to as how many patients we may be able to enroll in that trial and to even upgrade this trial into a full blown Phase III trial, if you believe it's required. So this is the optionality which we have built in and this is what we also had part of our clinical update recently.Then the third question referring to our, yes, prognosis as to progress in China. I mean, first of all, it's important to mention that Simcere is in full control and responsible for the development. So it's for us hard to speak on their behalf. I can only emphasize that we see strong commitment on their end. And yes, we are not able to give a more precise guidance on what their timelines are than those which we have already shared.

[Christian Ehmann, analyst]

Okay. Could you at least talk about if the median and the average treatment duration is somewhere in the -- somewhere similar in a ballpark area?

[Ulrich Dauer, executive]

Yes. Since we do not expect to have many outlayers in a statistical sense, they should be close together. But again, we are not kind of quantifying that at this moment in time.

[Christian Ehmann, analyst]

Sure. I understand the problems with this kind of prognosis, but thank you very much for the input.

[Operator]

We will take our next question. Your next question comes from the line of Dominic Rose from Intron Health.

[Dominic Rose, analyst]

This is Dominic from Intron Health. I've got a couple. Question one is, could you give us an update on your thoughts around the likelihood of being able to get accelerated approval given the changing AD landscape?Question two is around potential combinations of varoglutamstat. Of the AD mAbs that are already approved or may soon be approved, how would you rate the potential for combining those with varog? I mean, are they all equally likely to be good combinations or are some likely to be better choices than others? And how would you make that assessment?

[Ulrich Dauer, executive]

Okay. Thank you, Dominic, for your question. Starting with the first one. So what is our view on the likelihood of an accelerated approval? We see 3 important factors that are kind of driving the probability. First and foremost, it's the clinical outcomes of our 2 trials VIVIAD in Europe and VIVA-MIND in the U.S. It's the potential additional peer data or -- and/or approvals in the field, obviously, which obviously has an impact on the medical need situation in Alzheimer's disease. And thirdly potential additional criteria set by the regulators.And here for example, the necessity to have an actively enrolling Phase III trial underway. And yes, it's those 3 kind of parameters which are driving the likelihood and that's all I'm able to comment on. As mentioned also in my presentation, there is this draft guideline out by FDA from 2018. And also here we are pretty aligned with what they are requesting for in terms of ticking the boxes for an accelerated approval.Second question -- yes. Then the second question, I think that's a very interesting topic combinations and we are firmly convinced that we will see a similar development in the Alzheimer's disease landscape as we have seen for cancer. So a lot of different therapies, but also lots of combinations. And as you may know, on a preclinical level, we have already shown that a combination of varoglutamstat with Abeta antibodies gives additive effects, which we -- which makes this very exciting, because that could also be a mean to manage the ARIA side effects of Abeta antibodies, which is clearly dose-dependent.In terms of combining varoglutamstat with antibodies, I think there are 2 principal possibilities. So one is the kind of simultaneous administration exactly to achieve what I was just describing. But if you look on the trial design and the concept of donanemab for example, which discontinues treatment once plaque clearance is completed in patients, you could also envision a kind of clear and maintained strategy. And also in that respect, we feel that we are very well-positioned with varoglutamstat as a drug that can potentially take over the maintenance part once plaque is cleared first. And I think that is important to emphasize our current clinical development strategy is based on monotherapy. And yes, the trial design is kind of aligned to show the mono-therapeutic potential of varoglutamstat and maybe Michael wants to add to my...

[Michael Schaeffer, executive]

Dominic, that's Michael. So all what Ully said definitely underline -- I think one part of your question also was referring to let's say, if the one or other of the approved or more advanced antibodies is more -- is a better combination partner. I think that at the moment we cannot answer that. I would think given the mode of actions that's mainly a question that's driven by the antibody rather, so when we -- so saying varoglutamstat is definitely I would think unsuitable for being combined with all of these antibodies.If we look at things like for example ARIAs and look at as treated maintain, as mentioned by Ully, yes, you could for example say an antibody that's higher in ARIA is maybe also a good combination partner, so like donanemab is higher, if you will in ARIAs than the donanemab, for example. So these could be kind of things which come into play, but we are not there yet, obviously. So these are things that then have to be answered in the clinical context rather.

[Operator]

[Operator Instructions] We will take our next question. And the question comes from the line of Alexander Galitsa from Hauck.

[Aliaksandr Halitsa, analyst]

I have a follow-up on the combination therapy topic. I wonder here at what point such a trial in a clinical setting would be feasible, given the fact that the safety of varoglutamstat has been confirmed now. So what else is needed in a way that if there is an interest from the companies that own antibodies to go into clinic and try out the combination?

[Ulrich Dauer, executive]

Yes, Alex, thank you for joining and thanks for your question. So in terms of what is required, I think it's much more easier to combine an investigational drug with an already approved drug from a regulatory perspective. So I think that may be one part of the answer to your question. But apart from that, I think we are currently laser-focused on completing our trial and really understanding what is the monotherapy potential before we take decisions as to what is the most appropriate combination or the most appropriate positioning for varoglutamstat in an emerging treatment landscape.

[Aliaksandr Halitsa, analyst]

Okay. And then I also have a question on the anticipated study update in the second half of the year for VIVA-MIND. What kind of sort of data are you expecting to communicate at this stage?

[Florian Schmid, executive]

So concerning VIVA-MIND second half, I mean, we are looking at that maybe that the trial is based on 3 different cohorts, starting with the highest dose and then going down to lower doses. So we are expecting to have kind of a DSMB decision on then the dose which we will carry forward into the trial. That's the main thing. And if you follow the press releases, you might remember that besides that we have built up this possibility to turn this trial into a Phase III study, which then also mean that we will not further guide on this interim [indiscernible] which was originally planned. So I think the main part for end of this year, second half of this year will be the DSMB on the dose which will be carried forward into that trial.

[Aliaksandr Halitsa, analyst]

And then maybe just briefly a follow-up on the Simcere discussion. Again, understandable that you cannot really speak for Simcere, but just from your personal sort of view on this subject, given that I think the approval from the regulators was issued early in 2022. From your personal, what -- like, is that to you somehow disappointing that it takes quite a while, what seems from the outside for Simcere to really go and do the I guess, more tangible inroads to start the trial actually, or is that sort of normal occurrence that you don't view as somehow disappointing on the time line?

[Ulrich Dauer, executive]

Yes. This is Ully. I think -- so disappointment is not a category I would describe that kind of relation. I mean, again, I can only repeat what I've said. They are in the driver's seat and we assume that they have substantial interest in progressing this trial and making varoglutamstat available to patients in China. But we have to respect that they have their own kind of time lines and view as to how to achieve that in a most efficient manner. Yes, and again, we see commitment, strong commitment on their side. We have a lot of interactions and I'm positive about this partnership going forward.

[Operator]

There seems to be no further questions. I would like to hand back to Ully Dauer for closing remarks.

[Ulrich Dauer, executive]

Yes, once again, thank you very much for participating in our earnings call today. We highly appreciate your attention and questions. Have a nice day, everyone. Bye-bye.

[Operator]

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