Advicenne S.A. (ALDVI) Earnings Call Transcript & Summary

[Foreign Language]

[Foreign Language] I'm delighted to present to you the business of our company. I'm David Horn Solomon, I'm the Chairman of Advicenne, and we will begin at the next slide, which is Slide #6, please. So at this stage in the development of our company, I'm pleased to tell you that Advicenne is now a commercial stage specialty pharmaceutical company focused on advancing our prime medicine, our lead medicine, ADV7103, also called Sibnayal in rare renal diseases with high unmet need, and these diseases include dRTA and cystinuria in both Europe and North America. I'll tell you more about these diseases in a few minutes. What is unique about our company is the medicine, Sibnayal, is now already approved in Europe and -- for dRTA, and we are now focused on both commercializing the medicine in Europe and at the same time, completing clinical studies in the United States towards approval, so in a way, this is a derisk company with an approved medicine marching towards commercial value. Next slide, please. I want to tell you a few more highlights about our company. On the left side of the slide, our pipeline. As I mentioned, our pipeline is led by Sibnayal or ADV7103, and we're commercializing this medicine now in Europe for dRTA. The medicine was approved by EMA on April 30, 2021. We're working on commercial partnerships, as we speak, and we expect to have first launches in the EU scheduled for Q3 2021. We're also working to advance the same medicine, Sibnayal, also known as ADV7103, for both dRTA and cystinuria in the United States. Our trial in dRTA is on track. And our trial for cystinuria in Europe is also on track to begin Q1 2022. We have conducted lots of marketing reimbursement and market access studies. And we believe that overall, in the maturity of the company and at peak sales, the revenue that can be generated from Sibnayal globally in both dRTA and cystinuria can be upwards in terms of peak sales of USD 1 billion as a potential. We've also received recently clear FDA guidance on our pivotal studies in the United States towards both NDA submission and approval. So we really have a clear guide of how to advance our medicine. On the right side of this slide, a few words about where this medicine came from. The medicine is, in fact, a combination -- a fixed-dose combination of potassium citrate and potassium bicarbonate in special granules that allow for slow release of the medicine. And through lots of work in our company by many of our founders, many of our key employees, we really have figured out how to make a combination medicine that addresses the needs in these diseases, which I'll talk about further. So now we can move to the next slide. So our medicine, Sibnayal or ADV7103, targets, in fact, 2 rare renal diseases. The first one is dRTA or distal renal tubular acidosis. And this is a disease that can be inherited, and you often see this in children, easy to diagnose and also acquired after serious diseases. The hallmarks of this disease, especially in children, are muscle aches and pains, fatigue, growth failure in children, bone diseases, they have very soft bones, kidney stones, cardiac anomalies and sometimes owing the genetic form of the disease, hearing loss. There's no known medicine that really works well for this disease. Children with this disease are now given bicarbonate that is compounded by pharmacies, and they have to be given the medicine up to 8 times a day, waking these children twice in the night. So compliance is very poor, and these children don't have the right dose of bicarbonate and as a result, suffer significantly. So our medicine given twice a day that provides full daily coverage is, I think, a very, very good medicine for the treatment of this disease. We're also able to treat with this disease, cystinuria, and cystinuria is a disease caused by genetic mutations where the amino acid cystine under acid conditions in the urine forms kidney stones. And these kidney stones are, of course, extremely painful, lead to serious complications such as kidney or bladder damage and chronic kidney disease. So by increasing the amount of bicarbonate, ultimately in the urine, you can allow the cystine to dissolve and therefore, not form stones. And this is of enormous benefit to patients. And this is where we're going to be conducting further studies, both in Europe and also in the United States. Cystinuria in the United States is considered a rare disease. Next slide, please. So if you consider our pipeline and our advances for our pipeline, our main medicine, again, ADV7103 or Sibnayal, has already been approved in Europe, owing the ARENA 1 program, and we have marketing authorization, we're marching together with partners towards commercial sales later this year. ADV7103 in Europe for cystinuria, the CORAL 1 program, will begin in the second half of 2021. In terms of the United States activities, ADV7103 for dRTA, the ARENA 2 program, will have activities beginning later this year with marketing authorization planned for end of 2022. And then also for cystinuria in the United States, the CORAL 2 program, will also have further activities as well. So again, global programs for both cystinuria and dRTA, advancing our prime medicine, Sibnayal or ADV7103. Let's move now to the next slide, please. Now given that we've recently had, at the end of April, European marketing authorization for Sibnayal for dRTA in Europe, we are now getting ready for a market launch, both Q3 and Q4, of this medicine. Our prime activity now is to select partners. And I can tell you that we're in late discussions with a range of partners so that eventually we will announce to our shareholders, which partner will we select and what are the terms of that agreement. We're also advancing our manufacturing so that we have a commercial supply ready for the commercial launch. We're also in discussions with market access and reimbursement officials across different geographies in Europe, so that we're really ready for assuming the pricing. And all of these activities will lead to an expansion together with our commercial partner across Europe. Next slide, please. Now actually, what is our medicine? What is Sibnayal or ADV7103. And you can see on this slide on the right side, that our product is actually micro granules of about 2 millimeters in diameter, a mixture of potassium citrate and potassium bicarbonate. And these are prepared with coatings so that they dissolve in different parts of the GI tract in different ways, so that you ultimately have proper coverage over the full day of bicarbonate levels by taking a dose morning and evening of our medicine. You can see in the graph in the middle, the prolonged profile of potassium release by this medicine over time. We have very strong IP protection for our medicine. We have 3 formulation patents that cover 15 countries, including the United States, with expiration of the rights and our claims for this medicine through 2031. Next slide, please. Medicine [Audio Gap] and others with dRTA and those with cystinuria basically don't have a lot of choices today. And in terms of dRTA, you can take bicarbonate, but it's suboptimal. So in terms of the advantages of our medicine per se, we obviously have evidence from our earlier clinical trials that led to approval in Europe of a strong efficacy of the medicine. You only need 2 doses a day enabling adequate coverage through the night, so you don't have to awake children through the night. This normalizes potassium in the plasma. It has a very satisfactory tolerance in the gastrointestinal tract. And importantly, this is tasteless. As some of you might know, taking baking soda or potassium bicarbonate has a very noxious taste and is not very addressable for children or pediatric patients. And ultimately, our form factor is ready to use in sachets that make it easy to administer. So net-net, we think compared to the choices available today, ADV7103 or Sibnayal is a very good medicine with clear benefits for the treatment of dRTA. Next slide, please. In terms of cystinuria, we are now excited to advance clinical programs in both Europe and America. In Europe, we already have had positive clinical proof of concept, and we're going to be conducting the CORAL 1 study, which is a 4-month pivotal study, and we'll announce more about that study coming up. In the United States, we've already submitted orphan application at the end of Q1. We've had some feedback, and we anticipate further feedback in terms of the orphan status later this year. Our U.S. strategy is currently under review, and we have a meeting with the FDA planned in Q3, end of this year, so that we can then address exactly what the clinical plan for cystinuria will be in the United States. Now we turn to actually the transformations of our company. Next slide, please. We call where we're at now as we move from an R&D-based company to a commercial-based company, the transformation is really called Advicenne 2.0. And this transformation really establishes a new and risk-reduced foundation for our company. As you know, we have a new senior management team. I'm delighted to welcome again today, Didier Laurens, as our CEO. And we also have others that are very strong in our company, leading the charge here in France and also in the United States. Over the last period, we've also begun transforming our Board, and we have new members with deep experience in both clinical development, nephrology and corporate strategy. And finally, as you know, from a recent press release, on the right side of the slide, we've received written feedback from the FDA with guidance on our regulatory pathway towards approval for dRTA in the United States. So we really have the setup now between management, governance, regulatory feedback to advance the company now to significant value as we launch Sibnayal in Europe for dRTA. And finally, on the next slide, I want to introduce more members of our team. Again, I'm David Solomon, I'm the Chairman here at Advicenne, and I'm delighted to lead the Board, a very talented Board of both shareholders and experts. My background is in both Board service and also as a public company CEO for the last 15 years in notable companies, including Zealand Pharma. Joining me on -- joining me both on the Board, but also involved the President on the management team is Dr. André Ulmann, who is a nephrologist, who's an expert in these diseases. He is a shareholder in the company, Board member and also serves at present as Chief Medical Officer. Heading our U.S. effort is our General Manager in the U.S., Robbie McCarthy, who's worked earlier in rare diseases at Shire and also served at GSK, and is based in our U.S. offices. And finally, you'll hear more from Didier today. Didier is our new CEO, and we're delighted again to welcome Didier Laurens to Advicenne. Didier has a background both as a pharmacist as a banker at both Oddo and Societe Generale, and also has been a CFO at Pixium Vision on the public company side and at Korian on the private company side. So again, welcome, Didier. So now I'll end my comments for now. Look forward to any comments or questions you may have. And now I'm going to turn the word over to our Deputy CFO, Isabelle Kervella, to talk about our financial results from the year 2020. Isabelle?

[Foreign Language]

[Foreign Language]

[Foreign Language] Thank you, Didier. So let's go to the slide on Page 25, please. to look at the synthesis of the governance in the year 2020. So the Board of Advicenne has the following composition. As you know, I've been serving as the President or Chairman of the Board. Also Board members are André Ulmann; the Bpifrance, that's represented by Philippe Boucheron; Irdi Soridec, that's represented by Jean-Michel Petit; and Cemag Invest, represented by Catherine Dunand. Also on the Board are Thibaut Roulon; Charlotte Sibley; Hege Hellstrom; Luc-André Granier, the former CEO, that is now resigned from the Board; and Françoise Brunner-Ferber, that's also resigned from the Board. During the year 2020, we had 13 meetings and the presence of 90% of the administrators. In terms of the Audit Committee, the Audit Committee is led by Catherine Dunand. Also members of the Audit Committee are Thibaut Roulon and Jean-Michel Petit. In terms of the Nomination and Compensation Committee, the committee is led by Philippe Boucheron of the BPI with membership also by Catherine Dunand and Charlotte Sibley. Now let's move to the next slide, please, to talk further about the governance in terms of the confirmation of the Euro MiddleNext Code about the independent board members. On the left side of the slide, you can see the 2 administrators of the 8 are considered independent according to the code. And in terms of the conformity of our rules about women representation on our Board, we have 3 Board members of 8 that are women on our Board, and this is obviously a balanced representation as we continue good governance practices according to the code. So now I'm going to pass the word to Didier Laurens for the [Foreign Language]. Didier?

[Foreign Language] David, you want to lead the Q&A session?

Yes. [Operator Instructions] [Foreign Language] And as I see that there are no questions at present, we're going to turn towards the resolutions and the results. And so for that, we turn to Renaud Bonnet, representing us from the law firm of Jones Day, Renaud, the word is yours. And we're just waiting for a moment for Renaud Bonnet to join us, and then we will give you a summary of the resolutions and the results. Thank you for your patience.

[Foreign Language]

Great. So we keep open all options about financing our company. Obviously, we're looking forward to a possible partnership in Europe that may bring in some nondilutive money as part of that relationship to commercialize our medicine in Europe. And then like all good companies, we consider all other financing options that are available to us, and they include an equity capital raise, they include a possible debt financing and they include other types of financing as well. So we look at our current cash position, we look at our likelihood of nondilutive money and we also consider all other possibilities, including equity capital financing. And as we know more and have something to disclose, of course, we're glad and we'll share it with the markets. Thank you.

[Foreign Language]

Yes. So in terms of the price, we are working with different countries and different pricing administrations about how to price the medicine. And again, until we have pricing assured and done through a commercial partner, I cannot tell you the precise price. But I can give you the guide from a thought experiment point of view. If you look at a medicine like ours and a pharmacoeconomic argument like ours and predicates like ours, it's not unreasonable, again, not as a guidance, but as a thought experiment to say that it's likely the pricing of this medicine will be approximately around EUR 10,000 per patient per year. But again, we will guide and disclose as we have specific pricing from individual countries and individual circumstances.

[Foreign Language]

Yes, then these are good questions about partnerships. So obviously, if we have -- and the choices include launching the medicine ourselves or doing it through a partnership. And we have looked from a governance perspective about the cost benefit calculus, if you will, about launching ourselves versus launching with a partnership. And if we launch the medicine in Europe ourselves, as we've considered for some time, the issue there is that we have to make lots of affiliates and invest an awful lot of money in not only the affiliates, but all the personnel in every country in Europe to do the launch. So that would require even more cash than we anticipate. On the other hand, we can have a partnership with a very well-established commercial partner that can do these launches for us and through that partnership, achieve possibly some upfront payments and royalties. So the company, as earlier disclosed, has decided that we're going to launch our medicine, Sibnayal, together with a commercial partner. We think this is to our benefit for the following reasons. It will ultimately lead to less capital expense for the company today, upfront now and will lead to possibly, depending on the terms of the agreement, possible upfront nondilutive payments on one hand and royalty payments on the other hand to the company that will allow us to use these monies to further advance our medicine in the United States as we complete further clinical trials. So this is really, I think, the most responsible way, and it's a common way that companies of our size would advance to value for shareholders. Maybe we can take 1 more question, Didier, and then we'll turn it over to [Foreign Language].

In fact, there is 2 other questions. The first one is would you have some figures to give us about the market potential for dRTA in Europe?