ABIVAX Société Anonyme (ABVX) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. Welcome to ABIVAX Conference Call to discuss 2023 financial results and business update. My name is Sandra, and I'll be your operator for today's call. [Operator Instructions] As a reminder, this call is being recorded at ABIVAX's request. Now I would like to introduce your host for today's call, Patrick Malloy, Senior Vice President, Investor Relations. Pat, please go ahead.

Good morning and good afternoon to everyone. Welcome to today's call, during which we'll provide an update on our financial results for the full year ended December 31, 2023, as well as key program updates across business. On April 2nd, we issued a press release summarizing our financial results. And on April 5th, we filed our 20-F and universal registration document, all of which can be found on the ABIVAX's website. Before we get started, I'd like to remind everyone that during today's discussion, we will make statements about our future expectations, plans and prospects that constitute forward-looking statements for the purposes of the safe harbour provisions under the Private Security and Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of important factors, including those risk factors discussed in our SEC filings, and we are not under any obligation to update these forward-looking statements. In just a few moments, I'll be handing the call over to our CEO, Marc de Garidel, who will provide the financial results and business update. Following the prepared remarks, we will move to a question-and-answer session, where we'll be joined by members of the management team, including our CFO, Didier Blondel; our Chief Medical Officer, Sheldon Sloan; Chief Scientific Officer, Didier Scherrer; and Chief Commercial Officer, Michael Ferguson. Now I'd like to hand the call over to Marc de Garidel. Marc, please go ahead.

Thanks, Pat. Good morning and good afternoon, ladies and gentlemen, and thank you for joining the first ABIVAX's earnings webcast that we are holding as a dual-listed company on NASDAQ and Euronext. Last year was very exciting for ABIVAX, one that has set us up to accomplish important milestones that are crucial for the future as we continue to develop Obefazimod to a potential preferred oral option for inflammatory bowel disease patients. First of all, let's focus on the financial aspects. In 2023, ABIVAX raised over EUR 500 million. This consisted of first, EUR 130 million crossover financing in February, followed in August by 2 structured debt financing transactions, allowing ABIVAX to draw up to EUR 150 million. And finally, our initial public offering on the NASDAQ global market in October of last year, which raised EUR 223.3 million. ABIVAX NASDAQ IPO was the largest ever completed by a French-listed biotech company. This record capital raise will support our overall financial and development strategy for our lead drug candidate obefazimod for the treatment of inflammatory bowel disease. With the cash position of EUR 251 million as of December of '23, we have sufficient funds to finance our operations into Q4 of '25 based on current business plan. This means that we have financed beyond the announcement of our major milestones for next year, the top line data from the Phase III ABTECT induction trial of obefazimod in ulcerative colitis expected in Q1 2025. Let's move now to our clinical and preclinical development progress. Over the course of last year, we implemented a strategy that would allow us to seize the potential of obefazimod unique and differentiated profile for the treatment of IBD. The execution of this approach is underway and well advanced. The Phase III ABTECT program investigating the efficacy and safety of obefazimod in adults with moderately to severely active ulcerative colitis is progressing according to plan. The recruitment into both induction trials is currently ongoing in all designated areas around the world unlike the Phase IIb used was only conducted in Europe. Further, we plan to initiate patient recruitment in our Phase IIb trials for the treatment of Crohn's disease in Q3 of this year with top line data expected during the second half of 2026. As already announced in September of '23, the preclinical efforts intended to identify different options to strengthen our pipeline are also progressing along the option being evaluated is a potential combination therapy of all and injectable candidates with obefazimod in ulcerative colitis. Experiments in preclinical models are ongoing and the data to support our decision are expected in the second half of this year. Research and development works to identify potential follow-on drug candidates from ABIVAX's compound library is also advancing. We expect the selection of the first follow-on drug candidate later this year in Q3 to evaluate its usefulness for IBD or potential other inflammatory conditions. To enable us to successfully execute on all R&D and clinical development programs and plans, ABIVAX made significant efforts in the past months to build the necessary operational infrastructure in the U.S. as well as in Europe. We know how a very seasoned global team in place that we believe as a required market specific competencies and expertise to conduct the ongoing programs and prepare for the respective market authorization applications, starting with obefazimod for the treatment of ulcerative colitis. In addition, not only did we reinforce the operational team, but we also made notable changes within our Board of Directors in the past year. June Lee and Troy Ignelzi joined in July of '23. I'm glad that we can also now welcome Camilla Soenderby as a new member of the Board. We believe Camilla's expertise in driving portfolio, strategy and commercialization will be very valuable for us. We will continue to bring the best expertise on the Board to strengthen our path forward with a focus on the U.S. market, representing a significant opportunity in inflammatory bowel disease. In the past year, in addition to attracting new renowned colleagues and Board members, we also experienced increasing interest among the scientific community and the industry. ABIVAX's scientific excellence has been highlighted by several abstracts presented by leading U.S. and European KOLs at the major scientific IBD congresses in 2023 in the first quarter of 2024. We'll continue to scientifically underpin obefazimod's potential as a safe and effective long-term treatment option in IBD and it's not a mechanism of action at upcoming conferences and through publication in relevant scientific [indiscernible]. ABIVAX can look back at a very successful 2023 while also looking forward to achieving implementation of our financial, clinical, scientific and operational strategy in the course of this year. We believe 2024 will lead us to a major milestones with the data readouts of our UC program in early '25, initiation of the [ IIb ] in Q3 '24 and the decisions on how to strengthen our pipeline in the future with new preclinical results. That concludes our prepared remarks. Now we will move to the Q&A session. Operator, please.

[Operator Instructions] We will now take the first question from the line of Thomas Smith from Leerink Partners.

Congrats on the progress. Just on the ongoing Phase III ABTECT-Program, I was wondering if you could elaborate a little bit on how enrollment is progressing there? Are you seeing any region-specific enrollment trends that are worth calling out? And can you comment at all on how patient retention has been in the study so far?

Sheldon, do you want to take that one?

Yes, I will. Okay. Tom, thank you for your question. I think Marc laid it out where we are with the study. Let me just give you a little bit of a highlight with our regional expectations. I think we already talked about no more than 25% of the subjects enrolled in the study will be from any specific region, which Marc already pointed out, in contrast to Phase IIb, 2/3 were from Eastern Europe. And the good news is we are now actually deployed in all our targeted geographic regions. We're already enrolling in China and Brazil. And obviously, we've been in Japan for a while. North America, obviously, has been up and running the longest and even though we had, what I would say, at the beginning, a little bit of a delay with [indiscernible] primarily European countries, we're all fully engaged in those countries now. I think the second thing, which you were talking about retention. I think you're talking about the dropout rate, although that's -- right now it's blinded, so we really don't know, but that's something we're actively looking at to discontinuation, as you know we had a little over 12%, I believe, in the Phase IIb study, and we're really tracking that carefully. One of the things that drove discontinuations was headaches in the Phase IIb study. And we know that the headaches is more of a managing expectations at this point, making sure that the investigators and patients know that it's something that occurs early on in the start of therapy, generally almost always treated with over-the-counter either acetaminophen or nonsteroidals and does not last for more than a few days to a week. And the bottom line is once the patients are on the medication, the headaches actually do not return. And that was apparent in our second year of our open label extension where headaches were not an adverse event. Just to -- just to kind of wrap that up, we're managing that by actually instructing the sites at headaches. Again, there are reasons why patients need to discontinue, but generally should not be a reason to discontinue in the study. So we're actually aggressively and actively, proactively actually managing that discontinuation of that.

Got it. That's helpful. And then with respect to the long-term extension trial readout for obefazimod in UC that you're expecting in Q3, can you just talk about your expectations? And what are you hoping to learn from the data set?

So I think that's -- as you know, we announced -- we actually presented the first cut this past ECCO. And we are planning actually a similar data cut and then we'll have patients on for more than -- actually from the IIa study, probably 6 years exposure and up to 4 years exposure from the IIb study. What we found in the first year for those patients who are well controlled those patients, this is an enriched population. So they need to have endoscopic improvement, meaning an endoscopic subscore -- Mayo endoscopic subscore of 0 or 1, they needed to have a 0 or 1 at that point where many of them, over 70% started with the 3 at the start of the study. So it's a very impressive improvement and we saw the durability over that 1 year starting the entry into that 25-milligram open-label extension, 100% were obviously with endoscopic improvement and there was very few that dropped to without endoscopic improvement, 95% were still in endoscopic improvement. So what we hope to show, Tom, is continued durability even with 25 milligrams in a well-controlled population. We're testing, obviously, the 1-year durability for the first time in our Phase III program, but this will give us some long-term data on that durability in patients well controlled.

We will now take the next question from the line of Vikram Purohit from Morgan Stanley.

So we had 2. First, on the ABTECT readout that you're guiding to for 1Q '25. I know it's a little bit early, but would you have any initial sense on which parameters of data and how extensive of a readout you might expect the induction readout in 1Q to be? And kind of as you progress through the study and as you presumably get 4 KOL feedback on the program over time, how are you seeing the hurdle for a win on efficacy evolve there? And then secondly, on follow-on compounds, I would just love to get a bit of color on how you're prioritizing, I'm thinking about choosing the best follow-on compounds to add to the pipeline

Sheldon, do you want to take the first part and then maybe Didier Scherrer and Marc can weigh in on the approach to combination.

Yes. So Vikram, as to what data we're going to present first quarter 2025, we're still in discussion internally as to how extensive because we have to manage, obviously, a maintenance study that's concurrently running. So we will -- we're going to get some clarity on that as we go a little further down. And I think the second question that you had was about the KOLs. Again, it's -- and I wasn't clear on winning on efficacy. Can you just clarify that question? I apologize. I didn't quite catch it.

Yes. I was just wondering, as you speak with more KOLs in the space and as the Phase III program progresses, how is your view on what a win on efficacy from the induction readout? What that could look like in 1Q?

Yes. So that -- I'd tell you wish I had the crystal ball for that one. We're -- again, we're blinded to the data currently. The only thing I could tell you that is really more of an anecdotal is when we meet with key opinion leaders or investigators who participated in our IIb program, who continue to have patients enrolled. They tend to be very enthusiastic about the opportunity for obefazimod because many of these patients were at the point of going to surgery, and we hear these stories now they're anecdotal. So I don't want to give any kind of overpromise under deliver expectations, but this is coming from investigators who really have had -- who have patients who've gone through just about every other therapy. So when it comes to our expectations, we modeled the Phase IIIb study to be very competitive induction results with the current offerings on the market, and that's as best as I can tell you right now. I'll hand it over to Didier Scherrer.

Sure. So I can tackle the follow-on compound question. So basically, yes, so we're working on a follow-on compound. Unfortunately, I cannot disclose the exact criteria we're trying to optimize. But in general, I mean, we're looking at 2 sides of [indiscernible], I mean, looking at [indiscernible] based on the same MOA. So we're trying to play around critical chemical chemistry, properties of the compound, but also in terms of induction and efficacy. So sorry I cannot go into too much detail, obviously, for competitive reasons, but that's what we're doing right now.

We will now take the next question. It comes from the line of Julian Harrison from BTIG.

Congrats on all the recent progress. Regarding your follow-on program to obefazimod, I know it's early, but I'm curious if you have a good sense now of how you plan to prioritize IBD versus other I&I indications, given how broadly relevant the mechanism likely is and then regarding combination regimens down the road. I'm curious if there are any external data events that could inform your future decisions there? Or will that be based mainly on internally generated data?

Julian, thanks for your question. Maybe turn it to Didier Scherrer with regards to the combination. And then if Sheldon and Marc on our way in relative to the competitive events that might inform our decisions.

Yes. So the way -- I mean, combination, the way we're looking at combination of this is in a different way. I mean, obviously, we can look at combination based on complementary MOA that could make sense. So that's one. We can look at it in terms of what can we improve with the combo based on the profile of the 2 compounds we want to combine, but also, we can look at it from a payer perspective and looking at some compound that, for example, can go generic and is the combo with approach with those type of compounds. So there's a different approach we're looking at. Right now, we're looking at the preclinical data -- running preclinical experiment. I don't know if the decision will be fully based on preclinical data. But right now, we're waiting to see what we're going to get from those experiments.

Maybe I can jump in just on further consideration. I think obviously beyond the preclinical experiments. We are attentive to a number of things, in general, first, as you know, many of the large companies are developing their own combo programs. So that's obviously one thing we have to think about. But we took advantage of our presence at ECCO, where we met, I think, about 30 investigators from different nationalities to ask them about what do you think about where combination therapy is going? What are you looking for? And what is the kind of thing that would attract you and especially as you think about obefazimod profile from the Phase IIb? And we heard actually, I think, a different sort of thoughts. The first one that, by the way, that was also in conjunction with another presentation at ECCO was the fact that some doctors believe that it would be highly variable to hit hard with a strong combination in terms of efficacy for induction so that you can reduce the information to the maximum and therefore, increase obviously the response. And then actually potentially a drug like obefazimod in maintenance, given again the strong early profile we have in that setting. So that's sort of the first school of thought. The second school of thought was actually sort of on the other side of the spectrum where some doctors told us we'd rather use combination really more toward when there is less options available to us and certainly because of safety considerations. So we would want to -- employee combination therapy for more advanced patients and certainly before a potential surgery. And then the third one, so the school of thought was, well, you should combine with obefazimod with also with a safe drug because safety ultimately is paramount to this young population. We don't want to [indiscernible] them, obviously, as we try to control the [indiscernible]. And you should really consider safety as a criteria, if you want to comment. So I think this is why in the current preclinical program, we are going to have a vast array of essentially experiments so that we better understand for different type of drugs that could be combined what's happening. And then finally, the last thing obviously that the doctors could not re-comment upon is a reimbursement payer environment, that's going to evolve over time, as the drug -- some of the drugs get [indiscernible] or get into biosimilar land. So we'll have obviously to bear that in mind how we think through the combination therapy. And then, in the end, I would say, for us, we will have probably to make a choice on one combo development because it's going to be very hard, as you know, to finance multiple combination human trials. I think it's going to be very difficult. So we'll have probably by year-end or early next year, we'll have to reflect on all those parameters and figure out where we would advance combination therapy with obefazimod.

There are no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.