Inventiva S.A. Q4 FY2020 Earnings Call

Good afternoon, ladies and gentlemen and thank you for standing by. Welcome to today’s Inventiva’s Full Year 2020 Results Presentation. At this time, all participants are in listen-only mode. I must also advise you that the meeting is being recorded today on Friday, March 5, 2021. And may I hand the meeting over to your host today, Frédéric Cren, Chairman, CEO, and Co-Founder of Inventiva. Please go ahead, sir.

Thank you, operator and welcome everybody. Good morning and good afternoon. I am very pleased to launch this 2020 financial webcast. As you know, 2020 has been a fantastic year for Inventiva. I will be making some forward-looking statements, so please refer to the regulatory documentation available on our website. Today, I will share the floor with Pierre, our Chief Scientific Officer and Co-Founder, Michael Cooreman, our new Chief Medical Officer dialing in from the U.S., and Jean, who will give us an overview of the figures. Let me immediately go into the core of the presentation and share some highlights from this fantastic year. If we start with our lead program in NASH, I won’t delve too much into the detailed achievements of 2020, as Pierre will present the results from NATIVE that secured breakthrough designation through very positive meetings with both the FDA and EMA, and Michael will discuss the upcoming NATIVE 3 trial starting in a few weeks. However, I’d like to underline a key viewpoint we received from the FDA just a couple of days ago, which confirmed that the toxicology package is complete and acceptable to support NDA filing. This is another step forward for lanifibranor and its potential commercialization in NASH. Looking at odiparcil in MPS, we are extremely thrilled about this program and the clinical data we published in late 2019. We also received Fast Track designation from the FDA in 2020. As you know, we decided to focus our resources financially on human in NASH and found a new home for odiparcil for its continued program. The evaluation of this strategic option is ongoing and we are confident we can provide updates in 2021 regarding the company's future. Turning to ABBV-157, now known as cedirogant, following the completion by AbbVie on the international nonproprietary name, we are genuinely excited about this program. We have seen AbbVie regularly updating at JPM or during their annual webcast, and it's great when they mention cedirogant as one of their early promising compounds. We are looking to obtain the clinical proof-of-concept results in Q2 2021, slightly delayed from Q1 due to the COVID situation. Regarding our advancements, we are actively preparing the launch of the Phase 3 trial for lanifibranor in NASH, and to support this, we have opened our U.S. subsidiary of Inventiva, which is live, and we are building our team there. This is one of Michael’s inaugural tasks since joining us a couple of months ago. We've also reinforced our network and are extremely pleased with the collaboration established with Dr. Sanyal, who has been instrumental in our discussions with the FDA. Financially, we've been extremely busy with Jean and the rest of the team reinforcing our position through several capital increases, an agreement with the French government for €10 million, and especially the IPO in July, which was bolstered by positive data. We now have a comfortable cash position ensuring our runway through Q4 2022. Now, I will turn over to Pierre for details about the product, and then Michael will present the NATIVE Phase 3.

Yes, thank you, Frédéric. As you know, lanifibranor is the only pan-PPAR agonist in clinical development for the indication and treatment of NASH and improvement of liver fibrosis, characterized by its unprecedented chemical structure and pharmacological profile. It acts as a pan-PPAR agonist with moderate and well-balanced activity across three PPAR isoforms, unlike fibrates. A few months back, we received breakthrough therapy and Fast Track designations from the FDA for this treatment. Preclinical investigations have demonstrated that lanifibranor can address several pathological features of NASH through the activation of several PPAR isoforms, with PPAR delta and gamma showing strong anti-fibrotic activity. These isoforms also inhibit inflammation and ballooning induced by lanifibranor, while alpha and gamma isoforms reduce intrahepatic vascular resistance and portal pressure, which has been observed in animal models of cirrhosis. Favorable tolerability was identified in non-clinical toxicology studies, differentiating it from previously reported single or dual PPAR agonists from different chemical classes. As Frédéric mentioned, the FDA recently confirmed that our non-clinical toxicity package is complete and acceptable to support our New Drug Application filing. Following the successful outcome of the NATIVE Phase 2b trial with lanifibranor in NASH, we have spent the past month discussing with regulatory authorities at the EMA to finalize the Phase 3 design, which Michael will present shortly, completing our clinical development plan for lanifibranor in NASH. Additionally, we are preparing further studies to evaluate the potential of lanifibranor in NASH compensated cirrhosis and its use in combination with other therapies to strengthen its value proposition.

Thank you, Pierre. The Phase 3 trial is designed to achieve registration for the indication of NASH with F2-F3 fibrosis. It is a large, randomized, double-blind, placebo-controlled, multi-center study evaluating long-term efficacy and safety of lanifibranor in adult patients with NASH and liver fibrosis. The study consists of two parts: Part one includes a treatment duration of 72 weeks, while part two serves as an extension period defined by clinical outcomes. Inclusion criteria involve a screening biopsy to confirm the activity of NASH and fibrosis grading; patients will be randomized into three arms: placebo, lanifibranor 800 mg once daily, and lanifibranor 1200 mg once daily. This two-dose strategy is based on the efficacy results from the Phase 2 study. The study will be conducted globally, with a strategy to recruit at least one-third of the patients from the United States. The trial is powered for a 90% chance of success based on a sample size calculation of around 1,900 patients for Part 1. Histology will be critical for efficacy evaluation, alongside a central biopsy review performed by two expert pathologists. Our primary endpoint at Week 72 is a composite of resolution of NASH and improvement of fibrosis by at least one stage, differentiating lanifibranor from other compounds. We further aim to show that these endpoints reflect significant disease modification, which we believe validates our focus on both NASH resolution and fibrosis improvement.

Good afternoon, everyone. From a financial perspective, this year has been both key and exciting for us. We entered the NASDAQ Global Market in early July 2020, and following this, thanks to the positive results from the NATIVE Phase 2 study, we have strengthened our shareholder base. We now have a balance of 60% European shareholders versus 40% American shareholders. This has consolidated our cash position, now at €113 million, allowing us to operate into Q4 2022. Over the past year, we have funded €120 million, including $95 million from the NASDAQ listing, €15 million in Q1 2020 through a capital increase, and a €10 million guaranteed loan from the French government. This means we have a low level of indebtedness—less than 10% compared to equity. We extended our analyst coverage and currently have a market value of around €471 million or $538 million. Yet we are aware that a gap remains to be matched with our peers. As for the profit and loss accounts, we are managing expenses under control and did not expect revenues in 2020. Last year, we had a milestone payment from AbbVie, with more to follow in the next two to three years. Income also grew slightly from the R&D French credit. Importantly, we saw a decrease in R&D expenses at €23.7 million, thanks to the restructuring plan initiated following the halt of SSC last year. In short, we are set for an exciting venture ahead.

Thank you, Jean. Before we move on to Q&A, just one last slide regarding our next milestones. We’re working diligently on the launch of the NATIVE 3 study for site initiation planned for Q2 this year, with patient screening and the first patient visit planned for Q3. Regarding odiparcil, we remain optimistic and are comfortable providing an update on its future strategy in 2021. Regarding our promising partnership with AbbVie for cedirogant, we are looking forward to achieving the clinical proof-of-concept in the ongoing trial for psoriasis. This concludes our presentation, and now let’s move to the Q&A session.

Thank you. Your first question is from Etzer Darout from Guggenheim. Please go ahead with your question.

Great. Thanks for today’s update. Just a couple of questions. I wanted to ask about the timelines and whether you have accounted for any potential delays due to COVID, which has affected other trials. Also, could you provide more information on the options being explored for compensated cirrhosis and the proportions of F4 patients concerned?

In regard to COVID, we have considered its potential impacts. However, the situation has been improving recently with the start of vaccinations. We've selected experienced global sites for our Phase 3 NASH study, which has implemented many strategies to facilitate patient monitoring while ensuring patients are comfortable returning to hospitals. As for F4 cirrhotic patients, I will turn to Michael for further details.

Thank you, Frédéric. We aim to study lanifibranor in patients with compensated cirrhosis, targeting those with normal liver function. The relevant clinical outcomes include signs of decompensation, which can be measured through various clinical indicators such as ascites or MELD score changes.

Hi, thanks for taking my questions. Can you clarify if the Phase 3 timelines are set for improvement or if they are already optimistic? Also, does the cash run-rate consider anticipated milestones?

Our milestones reflect cautious optimism. We are not factoring in any potential future milestones from AbbVie or other collaborations, which represents an upside. Our timelines for Phase 3 are based on careful planning and coordination with our CRO and a well-selected site network.

In 2021, we will see an increase in R&D expenses due to the Phase 3 trial initiation. This has been accounted for in our cash runway guidance, which remains through Q4 2022.

Hi, guys, this is Jack for Derek. About the cedirogant program, do you view developing it in plaque psoriasis as a proof-of-concept, and how does it differentiate from others in development?

The strategic direction for cedirogant is handled by AbbVie. They possess extensive experience in developing compounds across various autoimmune indications. Cedirogant has substantial potential in moderate-to-severe psoriasis and other indications like IBD and RA. Its unique ROR-gamma mechanism offers efficacy comparable to biologics but with the convenience of an oral pill and favorable safety profile.

Thanks for taking my question. Is the exploration of lanifibranor in compensated cirrhosis or combination therapies more on the preclinical level or do you expect clinical efforts in the short term?

While there is no committed clinical investigational study currently included in our cash runway guidance, we are focusing on exploratory studies, likely clinical studies could confirm the benefits of lanifibranor in combinations with other anti-diabetic drugs.

Our cash position allows us to explore various funding options for the Phase 3 trial, including potential out-licensing deals or non-dilutive financing opportunities. Our current estimates include increases in R&D spending in line with our upcoming studies.

Just a couple of quick questions. Considering the FDA's interest in biomarkers, can you share how the EMA might be thinking in this area based on your discussions?

The EMA shows alignment with the FDA on supporting the exploration of biomarkers for diagnostic and prognostic purposes, and our established biomarker program under the NATIVE 3 study aligns well with this regulatory outlook.

You mentioned that the primary endpoint depends on NASH resolution and fibrosis improvement, which is quite ambitious. What gives you confidence in lanifibranor's efficacy on fibrosis?

Our high dose from the Phase 2 study established confidence with significant histological improvement of fibrosis. We've seen potential direct effects of lanifibranor in reducing fibrosis in human hepatic stellate cells, which supports the drug's efficacy.

I can assure you that we are working diligently to ensure that our drug's efficacy aligns with our detailed plans. We are proactively exploring several potential avenues to secure additional funding and support for the Phase 3 trials.

There are no further questions at this time. Please continue.

Thank you for attending and for your continued support. It has been an extremely exciting 2020, and I could assure you that 2021 looks even better. We are eager about the future and grateful for your support. Thank you very much and have a great day.

Thank you, goodbye.

This concludes the presentation today. Thank you for participating. You may now disconnect.