ABIVAX Société Anonyme (ABVX) Earnings Call Transcript & Summary

Good morning, good afternoon and good evening, everyone. Thank you for joining us today. My name is Rumen Vasilev, and I'm a member of the JPMorgan team. It is my pleasure to introduce to you Hartmut Ehrlich, CEO of ABIVAX. Hartmut, I'll turn it over to you now. Thank you.

Thank you, Rumen, and good morning, afternoon or evening, ladies and gentlemen. My name is Hartmut Ehrlich. I'm the CEO of ABIVAX, and I would also like to welcome you to the ABIVAX company presentation at this year's virtual JPMorgan Healthcare Conference. To introduce the ABIVAX presentation, I would like to preempt our main take-home messages. First of all, ABIVAX is a late-stage biotech with one major asset, ABX464, which, in our view, can become a game changer in inflammation, starting with inflammatory bowel disease. Second, based on the impressive efficacy in our Phase IIa ulcerative colitis study, where ABX464 was twice as efficacious as current treatment and the overall favorable safety in more than 700 patients, we have all the reason to believe that the Phase IIb clinical readout in Q2 of this year will confirm and actually expand the Phase IIa results. And thirdly, ABX464 has a convenient, once-daily oral administration regimen and could take, according to our KOLs, a leading position in the IBD market, which is growing to USD 25 billion in 2025, which is the expected launch date for ABX464 in ulcerative colitis. Now let me guide you through the presentation to provide you with details about the ambitious aspirations of ABIVAX. Let's get started with Slide #3, which summarizes the key facts about the company. ABIVAX was founded at the end of 2013 and went public in June of 2015. The EUR 58 million we were able to raise still make it the largest biotech IPO on Euronext Paris. And today, our market cap is close to EUR 0.5 billion or USD 0.6 billion, and our available cash resources are leading to a runway until Q4 of this year. The next slide, #4, shows our clinical pipeline, which is focused on chronic inflammatory diseases. Our lead compound is ABX464, a small molecule with potent anti-inflammatory properties. Ulcerative colitis is the most advanced clinical indication. One month ago, we completed the recruitment of 254 patients in our Phase IIb induction and maintenance study, and we are expecting the top line data of the Phase IIb in Q2 and the initiation of the Phase III program in Q4 of this year. With respect to Crohn's disease, based on the very promising results of our Phase IIa induction and maintenance studies in ulcerative colitis, our Steering Committee, Séverine Vermeire, Bill Sandborn and Bruce Sands, strongly suggested not to lose time with early-stage Phase IIa or IIb studies but instead go straight into a pivotal Phase IIb/III program, which is in preparation for a study start later this year. Rheumatoid arthritis is, of course, the largest revenue generator among all inflammatory diseases, and we are about to complete the recruitment of our Phase IIa induction and maintenance study with top line data in Q2 of this year and the subsequent move into Phase IIb in late 2021. And finally, we are running a Phase IIb study in patients just diagnosed with COVID-19 infection. Based on both the potent anti-inflammatory and antiviral activities of ABX464, we are testing the hypothesis that early treatment of high-risk COVID-19 patients may prevent the occurrence of severe disease and death, thanks to a dampening of the cytokine storm and the ARDS, which typically are killing the patients. Our second molecule in the clinic is ABX196, the synthetic glycolipid agonist of iNKT cells. These are the invariant natural killer T cells. And this study is currently -- this product is currently in a Phase I/II study in patients with hepatocellular cancer. Changing from our clinical portfolio and focusing on our lead compound, please move to Slide 5, which shows the key properties of ABX464. It is coming from our proprietary compound library, which contains more than 2,200 small molecules that were designed to modulate RNA biogenesis. ABX464 is for once-daily oral administration with a first-in-class mechanism of action centered around the upregulation of the anti-inflammatory micro RNA miR-124. The product has been administered to more than 700 volunteers and patients, to some of them actually daily for more than 3 years with a favorable safety profile. In the clinic, a strong anti-inflammatory effect was observed in our Phase IIa induction and maintenance study in patients with moderate to severe ulcerative colitis. And as you know, there is a high unmet medical need and commercial opportunity for novel, safe and efficacious drugs in a wide range of inflammatory diseases, including inflammatory bowel disease like ulcerative colitis. The mechanism of action of ABX464 is summarized on Slide 6. After the binding of ABX464 to its molecular target, which is the cap binding complex, or CBC, the CBC becomes capable of efficiently splicing a long noncoding RNA, and the embedded sequence of miR-124 is released. miR-124, like all micro RNAs, acts by preventing the translation of its target genes. And as a consequence, key pro-inflammatory cytokines are substantially downregulated to about 40% to 75%. And these cytokines are MCP-1, TNF alpha, IL-6 and IL-17, and the number of Th17 cells is also reduced. Therefore, ABX464 is essentially applying a broad break on excessive inflammation. Next slide, please, #7. After obtaining very encouraging efficacy data in the DSS mouse model of ulcerative colitis, the leadership of the European Crohn's and Colitis Organization, ECCO, and especially their President at the time, Professor Séverine Vermeire from Leuven in Belgium, was helping us with the drafting of the clinical protocol of our proof-of-concept Phase IIa clinical trial. 32 patients were randomized 2:1 to receive either 50-milligram ABX464 or placebo daily for 8 weeks of induction in this double blinded, placebo-controlled study, followed by open-label ABX464 maintenance. The first patients are now in their fourth year of daily oral dosing with ABX464. 50% of the patients were naive to biologics. The other half had failed on biologics like TNF alpha blockers or vedolizumab. And importantly, the endoscopies before and after induction as well as after 2 years of maintenance were centrally read in a blinded fashion. The table on the right summarizes the top line induction results after 8 weeks of treatment. The data showed that the key registration endpoint, clinical remission, which is essentially characterized by an almost complete disappearance of symptoms as well as an essentially clean endoscopy, was achieved by 35% of the patients in the per protocol population and 30% in the ITT population compared with 11% of the placebo patients. This leads to a delta between active and placebo of 24% in the per protocol cohort and 19% in the ITT cohort, which is very competitive compared to the key products in the market, as I will show you in a bit. Retrospectively applying the latest FDA and EMA guidances regarding the modified total Mayo Score, the rate of clinical remission is actually increasing to 40%. While this study was not powered, it was a proof-of-concept study for statistical significance, a p-value of smaller than 0.05 was actually reached for endoscopic improvement, total and partial Mayo Score reduction as well as upregulation of miR-124 in rectal tissue, as shown on the last column of the table. The next slide, #8, shows the complete resolution of ulcerative colitis lesions in the colon of an ABX464 treated patients, which is easily recognizable on the endoscopic photographs. The specific case shown here is even more impressive as this patient had previously failed on several biologics, including vedolizumab, adalimumab and infliximab. And the patient would have faced colectomy as the final resort had ABX464 not worked. The fact that ABX464 works in both biologics-naive and biologics-refractory patients is further demonstrated on the next slide, #9, which shows the reduction of the partial Mayo Score, which is the key indicator of disease severity during the 8 weeks of induction treatment. You can see that the separation between the active and the placebo groups in the entire patient population on the left slide is clearly similar to that in patients refractory to biologics. The curves also indicate that the onset of ABX464 therapeutic activity is very fast as the lines start to separate from each other as early as after only 2 weeks. The durable and also improved long-term treatment outcomes are shown on the next slide, #10. After 1 year of open-label ABX464 treatment for maintenance, 75% were in clinical remission and 68% after 2 years, which speaks to the outstanding long-term efficacy of our product candidate. And this is clearly the key treatment goal for patients with ulcerative colitis, a currently uncurable disease with severe symptoms that are heavily debilitating for the affected patients. It is not only important to rapidly achieve clinical remissions but, of course, also to keep the patients in remission in the long run. The next slide, #11, is comparing our key efficacy data with that of key licensed products for the treatment of ulcerative colitis. Bottom line is that if we are comparing the net remission rates, which are the deltas of active, corrected for placebo rates at the end of 8 weeks induction and illustrated at pink in the table, you can see that for vedolizumab and tofacitinib, the remission rates are around 10% to 13%. And ABX464, as just mentioned, showed a 24% rate in the Phase IIa study, which is twice the rate observed for existing products. And the data are even more clinically differentiated after 1 year of maintenance treatment. The remission rate for the active treatments are around 40% for vedo and tofa and 75% for ABX464. So again, we see a doubling if we are comparing the rates with marketed products. It is always difficult to compare the outcomes of small proof-of-concept studies with those of large Phase III studies. But nevertheless, these data are signaling to us that ABX464 has the potential to become a highly differentiated and very competitive product in this attractive space with respect to long-term and short-term efficacy. And what about the clinical safety of ABX464? Our results are summarized on the next slide, #12. The frequent adverse events -- the most frequent adverse events at 50 milligrams on early onset, typically mild and self-limiting headache in about 30% of the ABX464 treated individuals compared with 12% in placebo patients. We are also seeing GI disorders like pain, nausea and emesis, each in less than 10% of the patients. And again, these events are typically occurring during the first 2 weeks of treatment and are usually mild and transient. A similar AE profile is seen in the ongoing blinded studies like the Phase IIb ulcerative colitis study or the pivotal miR-AGE study in COVID-19 patients as well as in the long-term maintenance studies in ulcerative colitis and rheumatoid arthritis. And most importantly, we have not seen meaningful changes in important laboratory parameters like liver function tests, hemoglobin and cell counts like lymphocytes or neutrophils. And you may say as a consequence of this, we have not seen an increased incidence of opportunistic viral infections or lymphomas, which are the root cause of black box warnings for several of the current treatments. So how are we planning to bring ABX464 to the finish line? This is shown in the next slide, #13. Basically, our ongoing Phase IIb study in 254 UC patients is on track for top line induction data in Q2, and we are planning to start the recruitment of our Phase III program before the year is over. Here, I would like to change gears from the clinical data to business implications. And the next slide, #14, provides some detail around our commercial assumptions. In 2019, there were 12.8 million cases of ulcerative colitis worldwide, coming down to 270,000 cases for our target population, which are the patients in the G7 countries with moderate to severe disease treated as second or third line. Of special interest is the growth of this population between 2019 and 2025, which is forecasted to reach 510,000 patients in 2025, and therefore, almost doubling during this 6-year period. Pharmaceutical sales in this ulcerative colitis population are predicted to grow to USD 11.2 billion in 2025. Similarly, the revenues in Crohn's disease are growing, in this case, to USD 14.3 billion in 2025, so in total, reaching $25 billion for IBD treatments in 2025. ABIVAX assumes that ABX464 will be able to reach a market share of 10% to 20%, and thus becoming a blockbuster drug, assuming that clinical trials will be confirming our targeted marketing claims of, first, better and more durable efficacy; and second, of course, better safety. The next slide, #15, is introducing our concept for treating COVID-19 patients, which is currently tested in the miR-AGE clinical trial. Last December, the study was named a priority project by the French government. It was designed with the rationale that a product candidate with potent anti-inflammatory as well as antiviral activity against SARS-CoV-2 virus, if given early after infection and before patients develop severe disease, that this approach might be able to protect patients from the cytokine storm that is so typical for the severe and deadly forms of the disease. We are conducting this fully powered and randomized placebo-controlled, double-blinded study in 1,034 high-risk COVID-19 patients, high risk, meaning that patients need to be either at least 65 years of age or carry one other important risk factor for severe COVID-19 disease like obesity, heart disease or diabetes. We are conducting this study in 10 countries in Europe and South America. The primary endpoint is the absence of high-flow oxygen, assisted ventilation and/or death, and we are preparing the submission of market or emergency use authorizations in 2021 should the study results be positive. The next slide, #16, is introducing our second clinical stage project, which is ABX196 for the treatment of liver cancer. As mentioned before, ABX196 is a synthetic glycolipid agonist of invariant natural killer T cells that is developed based on the rationale that as the liver is a very tolerogenic organ and also that patients with liver cancer are typically treated with checkpoint inhibitors that this might benefit from a combination treatment that also stimulates iNKT cells in the environment of the tumor. ABX196 has produced strong preclinical efficacy data in a retrograde mouse liver cancer model, as shown on the 2 graphs on the right. A Phase I clinical trial demonstrating the safety and humoral as well as iNKT immune responses has been completed in volunteers, and ABX196 is now in the Phase I/II clinical study in hepatocellular carcinoma treated with checkpoint inhibitors at the Scripps MD Anderson Cancer Center in San Diego and the MD Anderson Cancer Center in Houston, Texas. We are expecting preliminary results of the dose escalation part of the study in early Q2. And this takes me to my last slide, showing the rich news flow that we are expecting for 2021. Bottom line is that Q2 will be key for important top line clinical readouts in ulcerative colitis, rheumatoid arthritis, COVID-19 and hepatocellular cancer, with ulcerative colitis being the top priority for ABIVAX and each of the other 3 indications presenting promising major opportunities. Therefore, the face of ABIVAX is likely to substantially change after these readouts. And at this point, I would like to thank you for your attention, and I'm looking forward to your questions.

Thanks, Hartmut. The first question which is why are you so bullish about the positive outcome of your Phase IIb UC in Q2 2021?

That's a very good question. And I would like to say that from a methodological point of view, our Phase IIa study that we have been basing the Phase IIb study on was state-of-the-art with specific features that were included to eliminate investigator bias like the central blinded reading of the endoscopies and also the determination of the core biomarker, which is [ physical ] protecting in a central lab. So we believe our data are robust. Furthermore, although our Phase IIb study is still blinded, we have observed that, first of all, the Phase IIb enrollment has occurred at record rates despite COVID-19, indicating an excitement of the investigators for ABX464. Also, few patients dropped out during the induction phase due to lack of efficacy or tolerability issues. And importantly, out of the first 150 patients who completed the induction phase, only 2 elected not to continue with long-term treatment. And as I mentioned in the study, as we of course, are observing the safety profile, I can tell you that this is consistent with what has previously been observed for ABX464.

Hartmut, the second question, where are you in your interactions with FDA?

Thank you. We have an open IND with ABX464 in ulcerative colitis and with ABX196 in hepatocellular carcinoma, and the end of Phase IIb meetings are planned for Q3 2021. In addition, INDs are planned in Crohn's disease and rheumatoid arthritis, respectively, for Q3 2021 and Q4 2021. And also, I think it's important to mention that with regards to COVID-19 infection, interactions with major regulatory agencies worldwide are planned once the interim analysis has occurred.

Thank you, Hartmut. Next question is, what is your strategy for advancing your products in terms of partnering or M&A?

We are keeping our options open. So we are considering how we can optimally advance our projects and the clinical development programs. We believe our strategy is balanced with a preference for partnering ABX464 following the data readout, the top-level data from the Phase IIb trial in ulcerative colitis, as I mentioned, expected in Q2 2021. We're actively seeking to optimize shareholder value and will also consider an IPO in the U.S., on the NASDAQ as well as other options in parallel. It's important to say that we will consider any M&A proposals we receive as we did in the past, but as has been communicated, the proposals we received in the past, we decided to reject.

And so far, we have the last question, Hartmut. What are your financing plans and financing options?

As a biotech company, you know that we are always evaluating the different possible options and scenarios for financing. We have a secured financial position with our operations currently financed through the fourth quarter of this year. This means that we don't have immediate needs to raise funds, but we, of course, always closely monitor the situation, especially with important data readouts coming up as early as Q2 of this year.

So Hartmut, there is no other question online.

Okay. Maybe we wait for a minute to see whether other questions are coming up. And as this doesn't seem to be the case, I want to thank you for your attention. And if you have additional questions for me and the ABIVAX management team, you can always reach us through our website or e-mail, and we are happy to answer the additional questions that we may be getting. Thank you very much.