Earnings Call Transcript - IMUX Q4 2021

Operator, Operator

Good morning and welcome to Immunic's Fourth Quarter and Year-End 2021 Earnings Call. My name is Jessica Breu, Head of Investor Relations and Communications at Immunic. I will also be the moderator on today's call. Speaking on today's call are Dr. Daniel Vitt, our Chief Executive Officer and President, as well as Glenn Whaley, our Vice President, Finance and Principal Financial and Accounting Officer. For the Q&A session of today's call, we also have our Chief Medical Officer, Dr. Andreas Muehler on the call. Please note, all participants will be in listen-only mode and this event is being recorded. After today's presentation, there will be an opportunity to ask questions. If you joined a webcast via the Zoom platform, there are two ways to submit questions. You can either submit your questions in writing by the Q&A tool of the Zoom platform, or if you would like to speak with us directly, please use the raise hand function of the Zoom platform to queue your question. Before we begin, I would like to remind you that this presentation may contain forward-looking statements. Such statements can be identified by words such as may, will, expect, anticipate, estimate, or words with similar meaning, and such statements involve a number of risks and uncertainties that could cause Immunic's actual results to differ materially from those discussed here. Please note that these forward-looking statements reflect Immunic's opinions only as of the date of this presentation, and it undertakes no obligation to revise or publicly release the result of any revision to these forward-looking statements in light of new information or future events. Please refer to Immunic's SEC filings for a more detailed description of the risk factors that may affect Immunic's results. And these forward-looking statements. I would now like to turn the call over to our CEO and President Daniel Vitt, to begin the presentation, Daniel, please go ahead.

Daniel Vitt, CEO

Thank you, Jessica. I would like to welcome everybody on Immunic's year-end 2021 earnings call. I do not want to start this call without expressing our sympathy with the people in Ukraine and expressing our solidarity with them. Despite these developments, earlier this morning we announced our financial results for the year-end of December 31st, 2021 and highlighted recent activities as well as upcoming milestones to our clinical development pipeline. During today's call, we will talk through our fourth quarter 2021 and subsequent highlights, financial and operating results, as well as anticipated milestones. As Jessica noted, before we close the call, you will have the opportunity to ask questions. 2021 was another year of tremendous achievements for Immunic, marked by significant clinical progress across key pipeline programs, clearing the way for several important data readouts this year that are potentially transformative for the company. Notably, during the fourth quarter, we enrolled the first patient in our Phase III ENSURE program for vidofludimus calcium in patients with relapsing multiple sclerosis. We also completed enrollment in the Phase II CALDOSE-1 trial of vidofludimus calcium in patients with moderate-to-severe ulcerative colitis. We expect top-line data for the induction phase of the UC trial to be available in June of this year. For our second program, IMU-935, we've reported positive unblinded safety, pharmacokinetics, and pharmacodynamics data from the healthy volunteer portion of our ongoing Phase I trial. We also expanded the trial as planned to treat patients with moderate to severe psoriasis. Beyond this, we also initiated an open-label Phase I dose escalation trial of IMU-935 in metastatic castration-resistant prostate cancer and expect clinical safety data to be available in the third quarter of this year. Finally, we hope to see the first clinical data from the second part of the ongoing Phase I trial of IMU-856 in the third quarter of this year, and expect to initiate the third portion of the trial in patients with intestinal barrier function-associated diseases during the first half of this year. That overview gives you a sense of our progress, let me now walk through the fourth quarter 2021 and subsequent highlights in greater detail. Given the milestones we have achieved so far, our continued pace of development and ongoing interest in our key therapeutic focus areas. In October, we appointed Patrick Walsh to the newly created role of Chief Business Officer. This is a key position within Immunic and Patrick has already proven to be a valuable addition to the team as we work to realize the full potential of our clinical programs. Also in October, we started treating patients with moderate to severe psoriasis in Part C of our ongoing Phase 1 trial of IMU-935, representing the first time patients have been treated with our potentially best-in-class oral IL-17 inhibitor. To enable the rapid conduct of the trial despite COVID-19 related limitations in Australia and New Zealand where the trial is exclusively performed so far, we have early initiated measures to randomize patients faster. This includes a potential expansion of the trial to one or more countries in Europe. Based on our modified projections, we expect initial response from the psoriasis patient cohorts to be available in the second half of 2022. Rounding out the 2021 year, the key announcement was that we enrolled and randomized the last patient in our Phase II CALLIPER trial of vidofludimus calcium in patients with moderate to severe ulcerative colitis. We currently expect the top-line results of the induction phase to be available in June of this year. Top five promising results from our previous Phase 2b trial in Crohn's disease patients and the interim analysis of the CALLIPER trial published in September 2019, along with other data, have already established a strong safety and tolerability profile. We believe that the drug could become a preferred oral treatment option for patients suffering from ulcerative colitis and a viable alternative to biologics. In November, we enrolled the first patient in our Phase III ENSURE trial of vidofludimus calcium in relapsing multiple sclerosis. This was followed by the enrollment of the first patient in the ENSURE 2 trial, two months later in January. We have targeted an enrollment of approximately 1,050 patients in each trial. Dosing will be given 30 milligrams daily of vidofludimus calcium or placebo. The primary endpoint for both trials is time to first relapse over 72 weeks. Enrollment in this twin-phase trial comes on the heels of initiating our supportive Phase II CALLIPER trial in progressive multiple sclerosis. Together, these programs mark significant milestones for Immunic, particularly as we have now initiated our first Phase III program. As we have noted before, based on the strong efficacy observed in our Phase II trial in relapsing multiple sclerosis and the drug's well-established safety and tolerability profile to date, we believe that the design of the ENSURE program provides a straightforward path towards potential regulatory approval of vidofludimus calcium in relapsing multiple sclerosis. Despite the limitations of currently approved therapies, the global multiple sclerosis market exceeds $23 billion, and vidofludimus calcium is uniquely positioned to address the unmet needs of MS patients. Moving on, in December, based on the strength of preclinical data highlighting the therapeutic potential of IMU-935 to affect castration-resistant prostate cancer, we enrolled the first patient in an open-label Phase 1b trial in this indication. The trial's principal investigator, Dr. Johann Sebastian de Bono, is among the world's leading experts on the subject of CRPC. His expertise and deep understanding of the unique mechanism of action of IMU-935 provides important collaborations for this program within the scientific and clinical communities. Also in December, we reported positive unblinded safety and tolerability data from the single and multiple ascending dose portions of the Phase I clinical trial of IMU-935, now in healthy volunteers. The data showed an attractive profile for IMU-935 and are consistent with our preclinical data supporting our vision of establishing IMU-935 as a potentially best-in-class oral IL-17 inhibitor. Additionally, we announced new preclinical in vivo data confirming that IMU-935 maintains thymocyte maturation in relevant acute and chronic mouse models. To our knowledge, such outstanding activity hasn't been reported for any other RORgamma t inhibitor so far. More recently, just earlier this month, we've strengthened our intellectual property position with the receipt of notice of allowance for composition of matter patents covering IMU-935 in the United States, Europe, and Australia. These patents provide patent protection until at least 2038, with further extension potential in the U.S. and Europe, respectively. Also in February, we presented preclinical data on the potent anti-inflammatory activity of vidofludimus calcium at the 17th Congress of the European Crohn’s and Colitis Organization. Highlights included first that vidofludimus calcium reduces proinflammatory immune cell response by inducing regulatory macrophages, reducing proinflammatory cytokine secretion, and reducing T cell proliferation. Second, that vidofludimus calcium shows an additive to synergistic effect with anti-TNF antibodies. Finally, that DHODH is important in the fraction of cells that receive a strong immune stimulus and are highly metabolically active. In conjunction with the ECCO Congress, we also announced the blinded baseline characteristics of our Phase II CALDOSE-1 Trial of vidofludimus calcium in ulcerative colitis. Patients in the trial had active moderate-to-severe disease, and we were pleased to see that only 70% of the patients were pre-treated with biologics. The trial employed a central independent reader to evaluate the endoscopy eligibility criteria. At baseline, 55% of patients had a modified Mayo endoscopy score of three and 45% had a score of two. We believe that these data of randomized patients and methodology regarding endoscopic assessment used in the clinical trial contributes to ensuring an optimized study readout. Furthermore, in our 10-K filed this morning, we also released final data of Cohort 2 from our Phase II emphasis trial of vidofludimus calcium in relapsing multiple sclerosis. We believe that this data set provides additional support for the previously determined dose selections for the ongoing ENSURE and CALLIPER trials in RMS and PMS respectively. Recall that the emphasis trial comprised two cohorts. Cohort 1 compared the efficacy and safety of 30 milligrams or 45 milligrams once daily vidofludimus calcium with placebo in RMS, while cohort 2 compared the efficacy and safety of 10 milligrams once daily vidofludimus calcium with placebo in RMS. Full data from cohort 1 was published in the third quarter of 2020, while 12-week interim data from cohort 2 was released in the second quarter of 2021. In the newly available cohort 2 data set, the anti-inflammatory effects of vidofludimus calcium at the 10 milligram dose were observed to be lower than those found with the 30 milligram dose in the pooled cohort 1 and 2 data, providing further support for the selection of the 30 milligram dose in the ongoing ENSURE trials of RMS. The final cohort 2 data also provided evidence of dose-dependent neuroprotective activity. For instance, the highest decrease of the biomarker serum neurofilament light chain was observed at the 45 milligram dose of vidofludimus calcium versus placebo with a median difference in percentage change of minus 26%. A substantial decrease was seen with the 30 milligram dose with minus 18%. While the smallest decrease was in the 10 milligram group of cohort 2 with minus 9%. The 10 milligram group of cohort 2 also showed a signal with respect to improvement in the Expanded Disability Status Scale consistent with dose responses seen with the higher doses in cohort 1. However, all of these early signals need to be confirmed in larger patient populations with longer follow-up periods. Taken together, these observations suggest that higher doses, such as 45 milligrams in this context, may be preferred doses for clinical trials where neuroprotective effects are the main mechanism for improvement, such as in progressive disease. While the blinded treatment of Cohort 1 was completed right before the COVID-19 pandemic started, cohort 2 data provided additional evidence that ongoing treatment with vidofludimus calcium may reduce the risk of COVID-19 infections. Among the entire cohort 2 population of 59 patients, incidental COVID-19 infections in the active treatment group was 8.5%, which was less frequent than the placebo group with 25%. Additionally, we recently obtained new preclinical data underlining that vidofludimus calcium shows potent anti-Epstein-Barr Virus activity at concentrations of 3.3 to 30 micromolar in the superinfection assay. A poster with the full data was presented at the actions congress in October. We also confirmed that vidofludimus calcium can be detected to a noteworthy degree in the cerebrospinal fluid of animals after oral dosing. We believe that this finding suggests that vidofludimus calcium may be able to act directly within the central nervous system. For the next part of today's presentation, the financial overview, I would like now to hand over to Glenn.

Glenn Whaley, CFO

Thank you, Daniel. We will now review the financial and operating results for the year ended December 31st, 2021. Let me start with the cash overview. We ended the year with $86.9 million in cash and cash equivalents, and we also raised an additional $16.2 million through our at-the-market facility so far in 2022. We anticipate this cash balance to be sufficient to fund our operations through the first quarter of 2023. Regarding the operating results, research and development expenses for the year ended December 31st, 2021 were $61.1 million as compared to $38.6 million for the same period in 2020. The increase in costs for the full year reflects the continued ramp-up of clinical expenses related to our three clinical programs, as well as increased personnel expenses related to the hiring of more people to support the company's growth. Increases were partially offset by decreased costs related to our Phase II clinical trial in COVID-19 that finished in the first quarter of 2021 and a decrease in drug supply costs for IMU-856. General administrative expenses were $13.3 million for the year-end December 31st, 2021 as compared to $10.3 million for the same period last year. The increase in costs was primarily due to non-cash stock compensation expense, as well as smaller increases in costs across numerous categories. The net loss for the year ended December 31st, 2021 was approximately $92.9 million or $3.93 per share based on approximately $23.7 million weighted average common shares outstanding compared to a net loss of approximately $44 million or $2.81 per share based on $15.7 million weighted average common shares outstanding for the same period in 2020. I would like to remind everybody that our 2021 net loss was impacted by the settlement agreement our subsidiary Immunic AG signed with 4SC AG in March 2021. Immunic AG settled its remaining obligation of a 4.4% royalty on net sales of vidofludimus calcium for $17.25 million. The payment was made 50% in cash and 50% in shares of Immunic's stock. No further payment obligations remain between Immunic and 4SC AG. With that, I'll turn the call back over to Daniel for an outlook on our upcoming clinical milestones.

Daniel Vitt, CEO

Thank you, Glenn. As mentioned at the beginning of the call, we have a very exciting year, 2022, with several significant milestones coming up and I'm happy to walk you through these. One of our most important milestones in 2022 will be the readout of our Phase II CALDOSE-1 trial in patients with moderate-to-severe ulcerative colitis. We currently expect the top-line results of the induction phase to be available in June of this year. For our Phase I clinical trial of IMU-935, we expect initial results for the third portion in patients with moderate-to-severe psoriasis to be available in the second half of this year. The initial data will provide us with an important first look at IMU-935's safety and efficacy profile in this patient population. In addition, we expect initial safety data from our Phase I dose escalation trial of IMU-935 in progressive metastatic CRPC to be available in the third quarter of this year. As a reminder, the trial is designed to establish a recommended Phase II dose and assess safety tolerance, as well as tumor activity biomarkers and pharmacokinetics of IMU-935 in this patient cohort. Finally, we anticipate initial safety data from the single and multiple ascending dose portions of the Phase I clinical trial of IMU-856 in healthy volunteers in the third quarter of 2022. The initiation of the third portion of the trial in patients with intestinal barrier function-associated diseases is expected in the first half of 2022. This wraps up our formal presentation. Jessica, please open the call for the Q&A session.

Operator, Operator

Thank you, Daniel. We will now begin the question-and-answer session with Daniel, Glenn, and Andreas. As a reminder, if you join the webcast via the Zoom platform, there are two ways to submit questions. You can either submit your questions in writing via the Q&A tool of the Zoom portal, or if you would like to speak with us directly, please use the raise hand function of the Zoom portal to queue your question. At this time, we will close momentarily to assemble our roster. Our first question comes from Jessi Vo at Piper Sandler. Jessi, please unmute yourself and go ahead.

Jessica Vo, Analyst

Hi, team. Thanks for taking our questions. This is Jessi on for Yas. I had a few on top of those. Based on the demographic data from Astex on Friday, what do you guys expect to see regarding rates of clinical remission and endoscopy? And what aspects of the baseline do you expect to drive down the placebo response?

Andreas Muehler, CMO

Hi, Jessi, this is Andreas. Thank you very much for the question. I think we were very happy to provide you the data with the baseline characteristics because we believe we have worked hard to find a patient population where we have a good chance of demonstrating the properties of IMU-838 in the right setting in ulcerative colitis patients. What the baseline data showed is that we had an active population. You can see just for example in the fecal calprotectin data, but also in terms of the proportion of patients that had a very high stool frequency and had blood in stool to a very large degree.

Glenn Whaley, CFO

Almost in every stool occurrence. So I think that to my mind, the high activity seen in the baseline is the major driver for giving the drug a chance to show activity in this trial. On top of it, I think the primary endpoint is a composite of endoscopic healing and symptomatic remission, and we are also very happy that more than 60% of these patients had a baseline bioendoscopy score of 3, which is also important to limit the placebo response in any IBD trial because it is known that IBD trials have a placebo response, including sometimes for endoscopy. Having patients with very extensive baseline disease in endoscopy should help us limit the placebo response as well. So overall, I think we've been quite happy with the baseline data that we presented and we believe that this enables us to give our drug a chance to really shine in this study.

Jessica Vo, Analyst

Yes, thank you, Andreas. I have one more follow-up. Regarding the phase, if there is a Phase 3, do you plan to conduct it yourself or in partnership?

Andreas Muehler, CMO

I think that's too early to tell. We are, however, in the middle of preparing, of course, how a Phase 3 would look like. We are having many close discussions with our medical advisers in IBD. We are very happy that we have a very large and also very well-known group of medical advisers for our IBD program and we have really had a close relationship with them over the years. We are anticipating the study readout and having a lot of ongoing discussions with them that target the positioning of the drug, given what happened in IBD treatment over the last year or so with the repositioning of JAK inhibitors basically behind biologics as a medication of last resort. Also, I think we want to understand a little bit whether the newest entrants in the market have been observed to occupy the same positioning as JAKs for IBD patients. This is all ongoing, but I think it's too early to tell how we do it, because I think you need the data for that as well, and also with whom we're doing it, whether alone or with a partner. I think that's still open.

Jessica Vo, Analyst

Okay. Thank you so much, Andreas.

Glenn Whaley, CFO

Thank you, Jessie. Our next question comes from Andreas Argyrides at Wedbush. Andreas, please unmute yourself and go ahead.

Andreas Argyrides, Analyst

All right, Good morning. Can you guys hear me?

Operator, Operator

Yes Good morning.

Andreas Argyrides, Analyst

Thanks. Two quick ones from us. So from the full emphasis trial results, could you provide some of your thoughts on the explanations on the lesion reductions and visions for more robust change in the neurofilament concentrations at 45 mg compared to 30 mg? And then just if I don't know if I missed it earlier, you mentioned a delay in Part C for the psoriasis trial, just additional color would be appreciated. Thank you.

Andreas Muehler, CMO

No, thank you, Andreas. I will address the first question maybe first and then maybe let Daniel talk a little bit about Part C for IMU-935. So in the emphasis trial, which is for everybody to understand, this is the Phase II trial of IMU-838 in relapsing-remitting MS, where we had reported fantastic results for cohort 1 at 30 milligrams and 45 milligrams. We added a cohort 2 that explored 10 milligrams and placebo to really understand a little better the dose response curve. The data reported today, which we published, confirmed our conclusions regarding dosing. What was interesting, and I find this personally very intriguing is that we knew from previous DHODH drugs in MS that they have a particular strength on long-term readouts, such as disability worsening and brain atrophy. What is interesting in the cohort 2 data of 10 mg is that we see substantial effects in EDSS and a substantial effect in terms of disability worsening. However, I think we should view this as a small study, which does not have a long enough follow-up to really draw definitive conclusions. Yet, I think it gives us a first hint that IMU-838 has the potential for strong effects on disability accumulation over time. In that respect, these data are very exciting compared to just anti-inflammatory effects. And I think that's very important for the positioning of the drug in the future as well. So handing over to Daniel regarding Part C.

Daniel Vitt, CEO

Maybe just go ahead and comment on what you said, Andreas. I think for us, it was really a pleasant surprise to see the EDSS data from the 10-milligram record. This was unexpected, and I think that speaks for the strengths we have seen here relating to NFL data and so forth. But let's come to 935 to your second question. I think we are fulfilling our philosophy of being transparent and acting early. We usually try to react early if we see things not 100% in line with our expectations. Therefore, we decided quite early in this patient cohort that just recently started to consider entering another country to have a broader set of dermatologists contributing patients. So, that's something we decided and definitely want to share with the market. I wouldn't call it a delay.

Andreas Argyrides, Analyst

I appreciate it, guys. Thank you all.

Operator, Operator

Thank you, Andreas. Our next question comes from Gobind Singh at JMP. Gobind, please unmute yourself and go ahead.

Gobind Singh, Analyst

Great. Sorry about that. Well, congrats on the pipeline progress. My question would be, if I heard you correctly, I think there is an announcement that the interim results from the Phase III MS trials and the Phase II trial for progressive MS. Those are new and happening this year. Just wondering if you're hearing anything from your clinical sites that might add some color around the enrollment speed. And can you remind us what the bar is in terms of whatever kind of clinical results you're going to be presenting? What would be results that you guys would be excited about for continued development?

Andreas Muehler, CMO

Hi, Gobind. I'm not sure I totally understand the remark about the timing of the interim analysis for Phase II and III. I have not seen anything in our releases that would even discuss the interim analysis, so I'm not sure if there was a misunderstanding. For the Phase II study in progressive MS, we will have an interim readout when half of the planned patients, which is 450, have reached week 24 to provide enough data. The Phase III trials will have an interim analysis when half of the events, meaning relapses, have occurred in the study. Regarding the Phase III interim readout, we need to look at the number of events and frequency of events in this trial. It is too early to do this since we need more patient enrollment and follow-up. Therefore, there is no precise timing for the interim analysis that I can provide right now. But just to confirm, none of these interim analyses are expected in '22. Your other question about enrollment, I think we are very happy to have seen good enrollment in all of our MS studies, which are actively recruiting. All three studies that are recruiting, the Phase II study in progressive MS and both ENSURE studies in relapsing MS, are progressing as anticipated. So that's the only update I can give you at this point.

Gobind Singh, Analyst

Thank you for that. I think I misunderstood the milestone aspect. I have a follow-up regarding the MS studies. Recent studies have highlighted the role of EBV in MS, indicating a potential causative relationship. You recently presented some data on this. Could you help us understand how this might develop and whether it relates to BTKs or any other drugs currently popular or in development, particularly regarding their role with EBV?

Andreas Muehler, CMO

Yes, Gobind, that's a very good question. We as a team are very excited about seeing more data and information coming out regarding the role of EBV in MS. There was always some suspicion that EBV plays a role, and I think it has become much more concrete now. A study using thousands of U.S. military personnel tracked over 25 years found a clear link between EBV infections that become neurotropic. Those patients who had increased neurofilament levels at the time of EBV infection developed MS, while those without a neurotropic infection did not develop it. However, this does not mean that EBV plays a role during the disease itself. Another study that received significant attention demonstrated that the CSF of patients during relapse contained plasma cells that produce cross-reactive antibodies. What’s fascinating is that these antibodies are linked to neuronal destruction. The interesting aspect of anti-CD20 therapies or BTK inhibitors in this context is their role in targeting B-cells. Yet these plasma cells were shown to be CD20 negative, suggesting that we need other therapeutic strategies to eliminate EBV. For us, this is exciting because it opens up possibilities for using IMU-838 with established antiviral activities targeted at EBV, particularly when considering treatment de-escalation following CD20 therapies.

Matt Kaplan, Analyst

Hi. Good morning. Can you hear me?

Operator, Operator

Yes. Good morning.

Daniel Vitt, CEO

Good morning.

Matt Kaplan, Analyst

Congrats on the progress. Just a quick follow-up to the last question if we remain on our topic, I guess, how do the concentrations that you studied and observed in vitro at 3.3 to 30 micromolar correlate with the concentration that are observed in vivo and in the central nervous system? Since you're getting through the blood-brain barrier.

Andreas Muehler, CMO

Hi, Matt. Thank you for your question. I think we have seen many claims from companies developing BTK inhibitors, asserting that they offer the only central acting medication for MS. We have always suspected that this statement might not be entirely accurate, as smaller molecules should also enter the cerebrospinal fluid and the central compartment. These are preliminary data that we are working on expanding and confirming. In relation to your question, we see the data from our studies suggest that our concentrations are at least comparable to those observed with BTK inhibitors. Therefore, we believe that our molecule could potentially act effectively in the central compartment.

Matt Kaplan, Analyst

Okay. Very good. And then a question regarding the data that you expect from the psoriasis cohort for IMU-935 in the second half of this year. Can you give us a sense in terms of what you're looking for potentially in the efficacy profile of this drug and what you're modeling there?

Andreas Muehler, CMO

I think we'll take it as a little bit of history. You can see in different drugs that had Phase III programs in psoriasis how quickly, for simple things like the PASI scores, they change over time. Usually, Phase II trials are conducted with a 12-week endpoint, and maximum effects are often seen early on, such as in four weeks. Understanding that, we see expectations from the IL-17 and IL-23 antibodies that will fall in the range of 30% to 35% change at Week 4. Previous studies with RORgamma inhibitors found results around 20% change in PASI response at lower doses. So we expect to show results likely in that range as well. We’re also assessing various clinical scores, including itch, which is important to see early efficacy.

Daniel Vitt, CEO

One other comment regarding your first question. When talking about the EBV activity, we were surprised to see the benefit for preventing COVID-19 infections compared to the placebo group, underlining the broad antiviral activity. The concentration levels related to these observations were consistent with our in vitro data.

Matt Kaplan, Analyst

Great, and just last question regarding the recent announcements about the invasion in Ukraine. What is your exposure in terms of your clinical development programs in Ukraine?

Daniel Vitt, CEO

We have had some concerns over the past few weeks regarding this issue. However, I can assure you that the CALDOSE study, which focuses on ulcerative colitis, remains completely unaffected. This is due to our thorough approach to data cleaning for all information collected up to Week 10, which is our primary endpoint. We have verified all measurements taken during visits, and thus our data collection is complete. While there are still patients participating in the extended induction phase, all data used for the primary endpoint is verified and sourced from clean data.

Andreas Muehler, CMO

We can’t unblind the study yet, and that will extend up to Week 22. However, all the data for the primary endpoint is verified. In CALDOSE, we have no exposure to the conflict. Ukraine has been part of other studies, of course; specifically, the MS studies have also been conducted in Ukraine. We have implemented some countermeasures to monitor this situation due to the unfortunate circumstances, so we can anticipate that we will need to look at the long-term repercussions this conflict may have on clinical trials in Ukraine. However, we need to monitor the situation day by day.

Matt Kaplan, Analyst

Okay, thank you.

Operator, Operator

Thanks, Matt. Next is Zegbeh Jallah from Roth Capital. Zegbeh, please unmute yourself and go ahead.

Zegbeh Jallah, Analyst

Good morning, guys. Thanks for taking my questions and clearly a nice cadence of data readouts ahead. So I know CALDOSE is probably going to be of significant focus to investors. I just had a couple of questions. I think the first one is, I know the study involved biologically naive and biologically refractory patients. Should we expect to see very different efficacy profiles in these patients? Similarly, should we also expect to see differences in efficacy profiles between patients with different baseline Mayo scores entering the study?

Andreas Muehler, CMO

Of course, I can only take the historical view, as these outcomes can differ from drug-to-drug based on their mechanism of action. Traditionally, it has been the wisdom that biologically experienced patients often show less response to new treatments than biologically naive patients, so that may be the case now. And that is good news, as it gives the drug a chance to show a really good activity versus placebo.

Zegbeh Jallah, Analyst

Thank you. I have another follow-up here. What are your thoughts regarding the differences between ozanimod and other S1P modulators? What would you expect to see in terms of time to response between the two different drugs in the induction phase?

Andreas Muehler, CMO

As S1P modulators, they have significant differences in mechanism of action. You see S1P modulators essentially trapping lymphocytes in lymph nodes or other lymphatic tissue, leading to lymphopenia, and this can cause increased risk for infections and viral reactivations due to immune system limitations. That’s not the case with our treatments. We have difficult cases where we've seen rates of infections return to baseline, and sometimes even be lower than placebo control. The Phase II study for ozanimod had an induction period of eight weeks, while we've opted for ten weeks, which doesn't make a difference as most patients generally respond in the early weeks.

Zegbeh Jallah, Analyst

Thank you for the clarification. So you do expect a fast onset of action. And then in terms of the magnitude of response, do you expect that to be similar or should we be looking at more of a composite approach, meaning the efficacy and safety balancing? You mentioned you expect it the way to come out better on the safety.

Andreas Muehler, CMO

Yes, we always expect to be the safest drug in any indication. We’ve learned this and are pleased about the safety data we've accumulated. We focus keenly on how quickly we can control and manage diseases and their responses, and we are seeing that with IMU-838.

Daniel Vitt, CEO

I think that’s also important in considering the early onset of action, which we expect from our clinical data.

Zegbeh Jallah, Analyst

Just a couple of quick follow-ups for me. Folks typically like to change the goalposts. Assuming that the data from the induction phase comes out really good, how do you think that would de-risk the maintenance phase of the study?

Andreas Muehler, CMO

The last question is simple: No. Protocols are set, and we do randomization for the maintenance phase. The maintenance dose may be lower than the induction dose, as patients who are taken from active disease to non-active disease may need further treatment. This is common in many IBD trials, and we would not make adjustments based on induction data.

Zegbeh Jallah, Analyst

That’s it from me. Thanks for taking my questions and congrats on your progress.

Andreas Muehler, CMO

Thanks, Zegbeh.

Operator, Operator

Thank you, Zegbeh. We have two more questions in the queue. Next one is Boobalan Pachaiyappan at H.C. Wainwright. Boobalan, please unmute yourself and go ahead.