DBV Technologies Q2 2024 Earnings Call Transcript

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July 30, 2024

There are 5 speakers on the call.

Operator

Welcome to the DBC Second Quarter Financial Results and Business Update Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Katie Matthews, Investor Relations.

Operator

Please go ahead.

Speaker 1

Thank you. This afternoon, DBV Technologies issued a press release that outlines our financial results for the 3 6 months ended June 30, 2024. This press release is available in the Press Releases 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 design of our anticipated clinical trials, 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.

Speaker 1

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 AMS 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 statement to account for or reflect events or circumstances that occur after this call. Joining me on the call today are Daniel Tasse, Chief Executive Officer of DBV Doctor.

Speaker 1

Faris Mohitin, DBV's Chief Medical Officer and Virginie Butina, our Chief Financial Officer. I will now pass the call over to Daniel. Daniel?

Speaker 2

Thank you, Katie, and thank you everyone for joining our call this evening to review DBV's 2nd quarter and first half twenty twenty four financial results. For those of you who may be less familiar with our business, DBV is developing Viaskin, an investigational proprietary technology platform with broad potential applications in immunotherapy, including food allergy. Zyskin is based on epicutaneous immunotherapy. We refer to it as EPIP and it is our method of delivering biologically active compounds to the immune system through intact skin to progressively induce immune tolerance. Our most advanced candidate is ViaSkin Peanut, which we are developing for peanut allergic children ages 1 through 7, where there exists a significant unmet medical need in the U.

Speaker 2

S. And around the world. And critically is an age group where the immune system is particularly malleable. It is also where there is the most risk to these children from accidental exposure to peanut. Moreover, 75% to 80% of children with a peanut allergy will not outgrow their peanut allergy over their lifetime.

Speaker 2

And today, we are pleased to provide updates on our 2 Viaskin Peanut development program, sorry, 1 in children aged 4 to 7 years of age using the modified larger circular patch and 1 in toddlers aged 1 to 3 using the original square patch. As you know, we plan on filing 2 separate biological license applications or BLAs, one for each age group. There are 3 key highlights we wish to share with you today. Beginning with the program in children 4 to 7 years old, let's remember that we are running the VITES Phase 3 pivotal trial of the modified biast in peanut patch in that population. Results from this trial together with the COMFORT Children's supplemental safety study will form the basis of a BLA for this age group.

Speaker 2

Since the middle of last year, we have seen very good momentum enrolling the VITAS trial patients and we are unchanged in our expectation that the final subject will be screened by the end of Q3 of this year. Turning to our other program in toddlers 1 to 3 years of age, let's recall that we announced successful results from the Phase 3 efficacy study or pivotal study known as epitope, which clearly met its primary endpoint and was published in the New England Journal of Medicine last year. Also recall that the FDA requested that we conduct a supplemental safety study, which we've called COMFORT, COMFORT TODDLERS to increase the number of subjects on treatment in the 1 to 3 year old safety database in support of the BLA. We submitted the COMFORT Toddlers protocol to the FDA in November of last year and the agency responded in March. Since then, we have been engaged in ongoing dialogue with the FDA regarding the Comfort Toddlers supplemental safety study And the dialogue has mainly focused on patch wear time experience, including how prescribers would advise parents and caregivers to manage day to day variability in patch wear time.

Speaker 2

I will let Ferris, our Chief Medical Officer get into the details in a bit more of a moment here. But let me state, firstly, that we recognize the importance of that question and we believe the right answer to that question resides in the result of our existing trial, Epidopa. And in an effort to seek alignment with FDA, we have recently submitted to the agency a draft labeling proposal with comprehensive supporting supportive data and analyses that were informed by the epitope pivotal data. Focused on the user experience during the 1st 90 days of treatment, so the 1st 3 months of treatment to address agencies' queries about patch wear time. The agency asked us for more details and analysis about that proposal, which we provided to FDA on June 28.

Speaker 2

And while we are awaiting a response from FDA on this labeling proposal, we continue to advance study preparation activities to be able to initiate the study once we have protocol alignment. Finally, the 3rd update is the result of continued cost saving measures. Through that, we have extended our cash runway into Q1 of 2025 and I will let Birajini, our CFO, give more details on that shortly. At this point, I would like to turn the call over to our Chief Medical Officer, Doctor. Faris Moudin for a more detailed update on our clinical programs.

Speaker 2

Ferris?

Speaker 3

Thank you, Danielle. First, let's start with VITAS. If you recall, this is a 600 patient study in 4 to 7 year olds with peanut allergy using the modified BioSkin Peanut Patch. We have 86 sites across the U. S, Canada, Europe, U.

Speaker 3

K. And Australia. The study is assessing the efficacy and safety of BioSkin Peanut over the course of 12 months of treatment. I'm really pleased with the progress that we have made. A test has been a company wide priority and it's taken a coordinated effort within VBB to get to this point.

Speaker 3

For example, our medical affairs team is small in numbers, but they are incredibly diligent and never fail to engage our multiple stakeholders at medical conferences. And of course, our investigators and their staff did a fantastic job, and we really appreciate the support that we have received from the patient advocacy groups and the academic societies. I must also thank our study participants, the parents, caregivers and subjects for their tremendous contributions. As we said in the press release, we anticipate to close recruitment by the end of Q3 of this year. We estimate that top line results would follow approximately 12 months after the last patient is screened.

Speaker 3

We will certainly provide more detailed updates along the way. Let's move now to the status of the COMFORT Toddlers supplemental safety study protocol. The FDA asked us to do a supplemental safety study in the 1 to 3 year old patient population to add to the epitope safety database in this age group. Following a Type C protocol meeting, we submitted the toddler safety protocol to the FDA in November of 2023. The agency responded with comments in March of this year.

Speaker 3

Since then, BBV and FDA have been engaged in ongoing dialogue. These exchanges largely focused on patch wear time experience, including how prescribers would advise parents and caregivers to manage day to day variability in patch wear time. On June 28, DBV submitted a proposed draft labeling approach with comprehensive supportive data and analyses intended to address the agency's concerns related to patch wear time experience. We are now waiting for the FDA's feedback on this labeling proposal. Let me explain the labeling proposal that we submitted to the FDA.

Speaker 3

The agency's questions, we believe, are best answered with the data from our pivotal trial, Epitope. We are still in discussion with the agency and awaiting feedback, but I can give you an overview of the concept. Based on our analysis of the epitope data, we have identified 2 groups within the Vioskin peanut treatment arm. We call the 2 groups the label in and label out subjects. The baseline immunological characteristics of the label in and label out subjects such as peanut specific IgE, skin prick test and eliciting dose are similar.

Speaker 3

So there is clearly a difference in the sensitivity to the locally applied peanut allergen that drive differences in patch wear time experience. This is what we refer to as differences in immune physiology in the press release. Within the first 90 days on treatment, it is possible to identify and separate subjects into those that are very likely to have a robust efficacy response relative to those who are less likely to have a robust efficacy response. All of this can be done with just a patch wear time experience during the 1st 90 days on treatment. Subjects that are very likely to have a robust efficacy response are called label in.

Speaker 3

The proposed prescribing information, the label, would recommend that these subjects continue bioskin peanut treatment. Alternatively, subjects that are less likely to have a robust efficacy response are called label out and the proposed prescribing information would recommend a shared decision making process between the healthcare provider and the parent or caregiver to determine if treatment should be discontinued. In other words, for subjects identified as label out, the proposed label indicates that clinical efficacy is less likely and discontinuation of treatment should be discussed. If fiosket peanut is approved, we believe this labeling proposal would give prescribers a pragmatic, data driven way to discuss and provide guidance on patch wear time experience to parents and caregivers. At this point, I'd like to invite Virginie to cover financial highlights.

Speaker 1

Thank you very much, Faris. So we'll now briefly review financial highlights for the 1st semester of 2024. And there are 2 highlights I would like to elaborate on: our cash run rate and our P and L, in particular, our operating expense. So number 1, we closed H1 with $66,200,000 of cash on hand. And our cash runway now takes us into Q1 of 2025, which is an extension from prior communication where our cash runway was sufficient to fund operations until 2024, yeah.

Speaker 1

This extension is due to cost saving measures we have implemented and that we will continue to drive. There's another point I would like to highlight as we consider cash consumption in H1 of 2024. In the 1st semester, cash used in operations totaled $70,000,000 largely for our ongoing clinical trials and for CMC and regulatory activity. It is important to note that H1 cash consumption includes $24,000,000 of nonrecurring costs such as comfort study startup costs, move projects, supply chain activities. I will now elaborate briefly on our financials in terms of P and L.

Speaker 1

Our operating income amounts to $2,600,000 for the semester and it is now exclusively composed of the research tax credit, the CIF French scheme, following the termination of the collaboration agreement with Nestle Health Sciences. Operating expenses totaled $65,000,000 that's plus 28% on last year, but it is driven by what really matters, that's why it's in peanut clinical and CMC activities. And again, a third of it are non recurring expenses. So for the semester, we booked a net loss of $60,500,000 So I'd like to reiterate that we continue to maximize the efficiency of our spend and remain highly disciplined in our cash management. That concludes the financial overview and I'll turn the call back to Daniel for closing remarks.

Speaker 1

Daniel?

Speaker 2

Before opening the call for your questions, I would like to take a moment to recap our anticipated milestones for the remainder of 2024, which is a critical year for DBV. So first, by the end of the Q3, reiterating that we anticipate completing enrollment in our ongoing Efreetase Phase 3 efficacy trial in children aged 4 to 7 years of age. And obviously, that's something that we will communicate once that's done. Secondly, we believe that DBV's proposed labeling approach is a pragmatic solution backed with robust analysis and data from epitopes. Importantly, and I wish to add that on April 29th, the Office of Vaccine Research and Review, which is known as OVRR, which is the regulatory division within FDA that has responsibility for VIAGEN Peanuts, stated that non COVID related backlogs, the products such as ours were behind them now and that the agency would have more bandwidth for interaction with sponsors.

Speaker 2

And we are seeing that firsthand in our interactions with the agency in the last few months for both CMC questions as well as clinical related questions. And it's obviously we're encouraged by that. And later this year, we anticipate having the year 3 results from our ongoing open label extension epitope, our successful Phase 3 trial in toddlers. Recall that we had saw further statistical further and significant improvements across all efficacy parameters in desensitization in year 2. We look forward to sharing with you later this year the year 3 results as well as the publication of the year 2 results of the open label extension in a medical journal.

Speaker 2

With that, I want to thank everyone on the phone and web cast for joining us today. I will now ask Saracen Gervini to join me for the Q and A.

Operator

At this time, we will conduct the question and answer And our first question will come from John Wallobin with Citizens JMP.

Speaker 4

Hey, good afternoon. Thanks for the update and taking the questions. Maybe just one quick clarification on the label in, label out and then I have follow ups on that. When you say catch wear time experience, do you mean how long the kids are wearing the patch or the experience they have while wearing the patch or an interplay between those two concepts?

Speaker 2

An important question, Jonathan. Thanks for asking. No, it's the former. It's the fact that some kids wear the patch easily 24 hours a day. Other kids, it varies more from one day to the other.

Speaker 2

So that patch wear time experience measured in hours of wear varies in some patients. And that's a data that is rich to identify patients will be best responders in a nutshell. Terence, is that a good way to put it?

Speaker 3

Yeah. That that's a good way, Daniel. The other way I'd like to think about it, Jonathan, is it's kind of like a holistic experience. Right? So not just is the patch there or not like an adhesion type of assessment, but it's the day to day variability in the wear time.

Speaker 3

It's the individual sensitivity, tolerability, itching, what kind of experience did they have? Was it difficult to wear it all day long or was it easy? There may be some lifestyle components in that that's a little harder to tease out. But it's not just one element. And as Daniel said, you can look at average daily work time, but that doesn't always tell you the story in terms of day to day variability.

Speaker 3

So I like to think of what as more of a holistic experience with the product. Does that help to kind of fill in some of the gaps there?

Speaker 4

Yeah. Well, does that make it harder to quantify then though? That a simple

Speaker 2

number of customers want?

Speaker 1

No, not necessarily.

Speaker 3

We have we just it's kind of the opposite. We have a lot of data and we can look at a lot of different parameters. And with all of that data, you can get a pretty good sense of the type of experience the patient's having. Obviously, we can't talk to the patients, right? But there's so much data that we collect in our trials that you can get a pretty good characteristic of these patients.

Speaker 3

And there's really quite a clear differentiation between those who are labeled and labeled out based on this whole accumulated data sets that we have on them.

Speaker 4

Got it. Okay. And then you guys said there's an association between a robust clinical efficacy response. I'm wondering if you could put some parameters around what you define as a robust response. And then what percentage of the epitope patients were label in, label out based on this criteria?

Speaker 2

Josh, you want to take it or want me to take it?

Speaker 3

Yes, I can. No, I can take it. Yes. So at this point, because we're still in dialogue with the FDA, we're it's probably not the best idea to fill out specific numbers and details. But we know this dataset really, really well.

Speaker 3

And those numbers are robust in terms of what you've seen in the past from the epitope results. And it is a pretty good separation between the two in terms of the size of those who are labeled in versus labeled out. I know that's kind of vague, but at this point, until we have final you know, agreement with the FDA and have wrestled this down, it's probably not the right time to discuss it. But obviously, as we move forward, we'll present all of this in a public fashion.

Speaker 4

Fair enough. There's a reference point I

Speaker 2

would add here, Jonathan, if I may. We have 67% overall response rate. So obviously, the label ends would have a better response rate than that. By definition, it's a traditional enrichment strategy here. So, but the quantification will come down to the agreement we come to with the agency, if we can come to that agreement, the details will be shared at that point in time.

Speaker 4

Got it. And one last one for me. Update on Comfort Children, you guys don't have any expectations for feedback timing there. It doesn't seem. Wondering, do you think that any progress with comfort toddlers would help with comfort children or are there different issues and feedback from FDA there?

Speaker 2

Yes. I'll take that one, Farris. The 2 are intertwined, the ability to get to the right protocol design for comfort in toddlers was an element obviously of comfort children. So we wanted to solve for toddlers first. Children will come next year as the next step in our discussions with the agency.

Speaker 2

But job 1 is to get agreement in 1 to 3 rooms.

Speaker 4

Got it. Okay. Thanks again for taking the questions. Please.

Speaker 3

Thank you.

Operator

And it appears there are no further questions. Mr. Tassy, I'll turn the conference back to you.

Speaker 2

I'm not on mute. I'm not. Well, that concludes our call for this afternoon. Again, thank you. We are pleased with our progress in the first half of the year.

Speaker 2

We look forward to achievement of the additional value creating milestones that I described this year and next. As always, we will keep you posted on our progress and I wish you all a very good evening.

Operator

This concludes today's conference call. Thank you for attending.

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