DBV Technologies S.A. Q4 FY2021 Earnings Call

Welcome to the DBV Full Year 2021 Financial Results. My name is Adrian and I will be the operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Please note this conference is being recorded. And I'll turn the call over to Anne Pollak. Anne, you may begin.

Thank you. This afternoon, DBV Technologies issued a press release that outlines our financial results for the 12 months ended December 31, 2021. This release is available on the Press Release section of the DBV Technologies website. Before we begin, please note that today's call may include a number of forward-looking statements, including, but not limited to comments regarding our clinical and regulatory development plans, the timing and results of interactions with the regulatory agencies, our forecast of our cash runway and the ability of any of our product candidates to improve the lives of patients with food allergies. These forward-looking statements are based on assumptions that are subject to risks and uncertainties that could cause the company's actual results to differ significantly from those suggested by these statements. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Please refer to the company's filings with the SEC and the French AMF for information concerning risk factors that could cause the company's actual results to differ materially from expectations, including any forward-looking statements made on this call. Except as required by law, the company disclaims any obligation to publicly update or revise any forward-looking statements to account for or reflect events or circumstances that occur after this call. Joining me on today's call are Daniel Tassé, Chief Executive Officer of DBV; Sébastien Robitaille, Chief Financial Officer; and Pharis Mohideen, Chief Medical Officer. Daniel will provide an update on Viaskin Peanut and our extended cash runway and Sébastien will review the full year 2021 financial results. Pharis will join Sébastien and Daniel for questions at the end. I will now pass the call over to Daniel.

Thank you, Anne, and thank you all for joining us on the call this afternoon. As Anne mentioned, this evening I will provide an update on two key areas of focus for DBV. The first, the clinical regulatory development of our modified Viaskin Peanut patch and the second being an update on our cash management and our cash runway. Now, let's start with Viaskin Peanut. During our last corporate update in December, DBV announced that we will initiate a pivotal Phase 3 clinical study for a modified Viaskin Peanut patch in children in the intended patient population. As we said then, we still believe that this data from the several trials will further strengthen the Viaskin Peanut label, if approved, and enhance its commercial potential, and as such, initiating this trial is our highest priority. Now, we completed the pivotal trial protocol at the end of February and prepared it for submission to the FDA for their review. Now, in parallel to finalizing our proposed protocol, we also have had timely and productive exchanges with the FDA. We very much appreciate the FDA's willingness to engage with us during this critical stage of protocol alignment. So we believe that incorporating any feedback from those collaborative FDA discussions on the broad strokes of the protocol will facilitate and possibly streamline the protocol review process. We intend to submit the full protocol following further alignment from ongoing and productive exchanges with the FDA. And now turning to our cash management. Through our continued financial diligence, we have extended our cash runway from the third quarter of this year into the first quarter of next year. So the first quarter of 2022 delayed. Based on our assumptions, we believe our cash balance and significantly reduced monthly run rate provide us with sufficient time to gain alignment with the FDA on the final pivotal protocol for Viaskin Peanut. Now, as you know in biotech, there's a balancing act. Extending cash runway is always a delicate balance between cutting expenses now, and obviously our ability to preserve critical research and development which fuels enterprise value and growth later. I want to commend DBV employees who collectively aim to do more with less can preserve their ability to thoughtfully advance the Viaskin platform in the coming year. And I'm looking forward to updating you on our progress. At this point, let me turn the call over to Sébastien for a review of our full year 2021 results. Seb?

Thank you, Daniel. Earlier today, we issued a press release with our 2021 financial results. The cash and cash equivalents as of December 31, 2021, were $77.3 million, which, as stated earlier, we believe will support alterations into the first quarter of 2023. When we initiated our global restructuring initiatives in June 2020, we aimed to reduce our average monthly cash burn by 40% to 50% in the second half of 2021 as compared to the first half of 2020. I am very pleased to report that we exceeded all our goals. Cash used in operating activities in the second half of 2021 was $41.7 million, which represents a 54% decrease compared to the first half of 2020. We continue to maximize the efficiency of our spending and remain highly disciplined in our cash management. I will now turn the call back to Daniel for some closing remarks.

Thanks, Sébastien. So again, I'm very pleased by the progress we've made since we last talked in late December, when we announced our decision to initiate the pivotal trial for the modified Viaskin Peanut patch. Most importantly, since then, we have engaged the FDA on key elements of the Viaskin Peanut dossier in preparation for the new protocol submission. The protocol is written, ready to go, and we are very pleased with the exchanges we're having with the FDA. Obviously, finalizing the proposed pivotal trial protocol and preparing for the FDA submission was our top priority, and I want to thank Pharis and his entire team for their hard work and for the position we're in right now. I would also like to recognize the extensive review of our planned expenditures and the financial discipline that has been practiced by all DBV employees, led nicely by Sébastien and his team. DBV employees continue to demonstrate the creativity, discipline, and resilience that is needed to realize the full potential of Viaskin technology for patients, families, and allergists and treating physicians. Now, I would like to tackle one last topic before we open the line for questions. It is no secret that DBV will need to raise money before we submit the modified Viaskin Peanut BLA. The good news is that based on our current assumptions we just shared with you, we have sufficient time to gain funding from the FDA on the protocol for their pivotal mVP trial. Now our current stock price, in our opinion, does not reflect the significant potential of the Viaskin platform and Viaskin Peanut specifically. As such, we are exploring a number of tools to finance the company, including non-dilutive financing strategies that could leverage Viaskin Peanut's significant commercial potential among all other options worth contemplating. A mix of financing tools done incrementally are amongst the potential options that we are exploring. Now, I want to thank everyone on the call today and webcast for joining us. And operator, at this time, we would like to open the line for questions.

Thank you. We will now begin the question and answer session. Our first question comes from Jon Wolleben from JMP Securities.

Hey, good afternoon and thanks for the update and taking the questions. It sounds like, Daniel, you've already had some interactions with the FDA on the protocol. So I was hoping you could provide a little more color on that back and forth in terms of what you're learning that they want to see in this protocol, and kind of the cadence of those back and forth?

The cadence has been very good. What we'll discuss with the FDA right now are the basic broad strokes and core principles of our study. As you know, Jonathan, we have a pretty unique patch that has no analogs, and our ability to have this rich discussion with the agency on the key elements. In principle, before we send them the nitty-gritty of the details, we thought it was the right approach, and the fact that the FDA is engaged in those discussions is heartwarming to us. I don't wish to provide more detail at this point, as I would be providing half of that conversation that the FDA would wish to be protective of, but I can only tell you that the protocol is ready to go. The fact that we have not submitted it is something that we're pleased with, we're happy with, as we are showing progress in parallel.

Can you give us any sense of when this could be submitted? And then kind of next steps between today and actually starting the study?

Yes, it will not be on time. The next step, of course, towards...

Daniel, you are breaking up. We're having a hard time hearing you.

Sorry. What about now?

That's good.

Is it better?

Yes.

My apologies. So, Jonathan, we are ready to send this protocol, and the interactions with the agency are taking place frequently. We would expect to be sending the protocol in short order. But again, we believe that getting agreement on those core principles will make for a faster, more expedient, and better protocol at the end of the day. So the trade-off here is one that we're very comfortable with.

Got it. Makes sense. And maybe one last one for me, if I may. Can you give an update on the EPITOPE program?

Pharis, do you want to take it?

Yes. The EPITOPE study, as we've said in the past, is due to report out mid-year. We're looking forward and excited to see the results of that study.

And have you set any internal expectations on what you want to see towards moving forward and the younger one, the three-year-olds, or how should we think about a dual path forward with two different patches?

With that said, if I may, Pharis, you can add more details. The EPITOPE is done with the current patch, obviously. The study is in the intended population; the second pivotal we're discussing will be in the older children. We have a number of options, and what we do with the data, as we understand it, until we see the data, informs how we move forward is difficult to forecast. At this point, I'd rather not speculate. It's an important population, as you know, one to three-year-olds represent an epidemiology of about 300,000 kids. But more importantly, it's also very often the age of diagnosis and the time when the children are most vulnerable. Given their young age, the ability for them to build strategies to avoid Viaskin peanut consumption is much more difficult for them. So it's a very important market for us. We will have data with CDP, and once we see it, we can tell. But I'd rather reserve judgment until we see the data. We are extremely excited by the potential that this study could represent in adding options for children out there. Let's be clear that for one to three-year-olds, nothing is approved.

Yes, makes sense. Okay, thanks again for taking the questions.

Welcome, Jonathan. Thank you.

Currently, we have no further questions.

Operator, if you have no further questions, can you go one more time? You don't? Okay.

No more, no questions in the queue.

Okay. Again, I want to thank everyone for joining this afternoon or this evening for our colleagues in Europe. As you know, we're always available for comment or information. So thank you all for your attendance today and wish you a great evening. Bye-bye.