DBV Technologies S.A. Q1 FY2022 Earnings Call

Welcome to the DBV Technologies First Quarter 2022 Earnings Conference Call. My name is Daryl and I will be your operator for today’s call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded. I’ll now turn the call over to Anne Pollak. Anne, you may begin.

Thank you. This afternoon, DBV Technologies issued two press releases, one that outlines our financial results for the three months ended March 31, 2022, and the second that announces we have established an at-the-market or ATM program. These press releases are available in 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 regulatory agencies, our forecast of our cash runway and the ability of any of our product candidates, if approved, 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 obligations 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 the call today are Daniel Tassé, Chief Executive Officer of DBV; Sébastien Robitaille, Chief Financial Officer; and Pharis Mohideen, Chief Medical Officer. Daniel will provide a business update and Pharis and Sébastien will join Daniel for questions at the end. I will now pass the call over to Daniel. Daniel?

Thank you, Anne. And thank you all for joining us on this call today. Now, let’s start with an update on the clinical and regulatory development of our modified Viaskin Peanut patch. As a reminder in December, we announced our plan to initiate a pivotal Phase 3 clinical study with the modified Viaskin Peanut patch in children in the intended patient population. We made the decision because, in our view, conducting a pivotal trial with an efficacy assessment is the fastest way to potentially bring Viaskin Peanut to the families and allergists who are anxiously awaiting the additional therapies for peanut allergy. At DBV, speed to patient is both the lens through which we evaluate all regulatory and clinical options, as well as the standard by which we will measure our progress. As such, we have named the new pivotal trial VITESSE, which means 'speed' in French and stands for Viaskin Peanut immunotherapy trial to evaluate safety, simplicity, and efficacy, V-I-T-E-S-S-E. At the time of our last corporate update in early March, we had completed the VITESSE protocol and prepared it for submission to the FDA for their review. At that time, we were engaged in productive exchanges with the FDA. Our conversation with the FDA continued into March and eventually advanced to a shared view that DBV should request a Type C meeting to facilitate further and more detailed exchanges. The FDA granted us a Type C meeting in the second quarter, and we look forward to their feedback on key elements of the VITESSE protocol. Our recent exchanges with the FDA have been collaborative and timely. Our goal is to run a pathway that serves peanut allergy families and allergists, and as always, we are mindful of speed to patients. Once we have alignment with the FDA on the VITESSE protocol, which could require one or two further exchanges after the Type C meeting to clarify key protocol elements, we will provide more details on the study design and, importantly, how it translates into expected timelines. We look forward to providing that update as soon as possible. There’s also a second upcoming milestone in the clinical development of Viaskin Peanut. We expect top-line results from EPITOPE by the end of Q2 2022. EPITOPE is a Phase 3 trial assessing the safety and efficacy of Viaskin Peanut 250 micrograms for the treatment of peanut allergic toddlers aged one to three years old. DBV initiated this study shortly after starting the PEPITES study in 4-11-year-olds with peanut allergy. We plan on showing the EPITOPE top-line results soon after we unblind this study. The EPITOPE results will also inform our proposed regulatory pathway for Viaskin Peanut in children ages one to three. We plan to initiate exchanges with the FDA regarding the regulatory pathway for one to three-year-olds after we have fully analyzed the data from EPITOPE. I’d like to now spend some time on the financial results for the first quarter of 2022 in the context of the clinical and regulatory update I just provided. Our cash and cash equivalents as of March 31, 2022 were $74.1 million, which we expect is sufficient to support our operations while we align with the FDA on the VITESSE protocol. More precisely, we expect our cash balance will support operations into the first quarter of 2023. That being said, DBV will need to raise money before we resubmit a modified Viaskin Peanut BLA. A mix of financing tools are among the potential options we are exploring. Today, we announced that we have established an at-the-market or ATM program, which is one of the financing tools we wish to have available to DBV. In a volatile market, we want every financing tool at DBV’s disposal to maintain a strong balance sheet as we advance Viaskin Peanut towards potential approval. The ATM program enables us to offer and sell DBV American Depository Shares or ADSs to eligible investors from time to time. The ATM documents filed with the SEC today state that DBV may sell up to $100 million of ADSs and that the program is valid until June of 2024. Now, I will comment on these terms. As you know, ATM programs can be time-consuming and expensive to establish. We thus defined broad parameters for DBV’s ATM program to maximize the efficiency of the program’s expenses. We intend to apply the same financial diligence that we have demonstrated in establishing the program as we actually make use of it. As we’ve discussed, we are also exploring non-dilutive financing strategies that could leverage Viaskin Peanut’s significant commercial potential, among other options for financing. Our current stock price, in our opinion, does not reflect the significant potential of the Viaskin platform. The good news is that we have time to explore all available financing options and select the one tool or combination of tools that best fits our corporate strategy and circumstances at the time. We will keep you updated on our progress. There are two near-term DBV catalysts on the horizon. FDA alignment on the VITESSE protocol is one, and the other is the EPITOPE top-line data. We will, of course, issue a press release for each development. After each announcement, we will host a conference call to review the news in more detail and take any questions. Given the timing of each, it is likely that DBV will host at least one conference call and possibly two before we release our first half of 2022 financial results, which are currently targeted for early August. I look forward to providing those updates when appropriate over the next several months. I want to thank everyone on the phone and webcast for joining us today. Operator, let’s open up the lines for questions, please.

And our first question comes from Jon Wolleben.

Thank you, and congrats on the progress. I know previously you’ve discussed a protocol similar to what you did with PEPITES. I was wondering if you could tell us any more about the broad strokes of the protocol you plan to submit to the FDA ahead of the Type C meeting.

Yes. We’re looking forward to sharing actually extensive details on the protocol, Jonathan. We’d rather get the alignment with the FDA first. We know what we wish to do. The FDA has seen already two, this is the third pivotal study they’ve seen from us, PEPITES being the first one and EPITOPE the second one. We don’t expect it’s going to be a particularly difficult discussion, given the fact that this has been done before, but we’d rather finalize the protocol with data alignment and then share all the details with investors. We think that’s just a healthier process.

And I think I heard in your prepared comments, you envision there could be one or two interactions after the Type C meeting. I’m wondering why you’re thinking that those may be necessary?

Well, they may not be necessary, just trying to again make sure that we’re as wholesome in our communication here with investors. The Type C meeting will provide all the answers we need. However, it may be necessary to go back to the agency and make use of what’s been a very healthy dynamic with them to ensure that everything is really buttoned down. As we’ve mentioned, Jonathan, repeating the pivotal trial in the targeted population of children over the age of 4 is replicating PEPITES. We think we have very good insights around the clinical profile, what I call the clinical risk, and study execution risk. What we think is also important is to minimize as much as possible what we call regulatory risk, or the possibility of not achieving full alignment with the FDA, which is why we are prioritizing that. If there is a need to make sure that every last detail is well-aligned before we move forward, we believe that would serve the process well and would be in the interest of speed at the end of the day.

Got it. And maybe the last few on EPITOPE, looking forward to that data. Can you walk us through your expectations on assumed success? What would success look like in an environment where you might have EPITOPE looking good with the original patch, but then you moving forward with the older children with a modified Viaskin patch? Is there going to be some sort of bridging work to have just one patch, or is there a scenario where you have two different patches out there? Can you just walk us through those different scenarios and how you are thinking about it today?

Yes. We are comfortable conceptually with two different patches, what we call cVP in one population, mVP in the older one. But yet here I’m simply speculating, Jonathan, until we have the results of the study and we talk to the FDA. At this point in time, I’m just suggesting what is obviously DBV’s perspective on this; the perspective of the FDA is essential. The beauty of our ability to answer that question will be just having data in hand to show what the profile of the studies looks like. EPITOPE is designed around and has lines that are very similar to those of PEPITES around patient stratification, clinical response, and everything else. Our ability to take the EPITOPE results and engage in a fruitful discussion with the FDA regarding the regulatory pathway is something that will be relatively straightforward once we have the data on hand. We don’t have it right now, so I’d rather not speculate. However, we are comfortable with having two patches out there if we encounter a manufacturing issue. That’s not the question. Obviously, we want to ensure that we work hand-in-hand with the regulators.

And we have no further questions at this time.

Operator, we thank you. We thank everybody in attendance today.