DBV Technologies S.A. (DBV) Earnings Call Transcript & Summary

Welcome to the DBV Technologies Conference Call Webcast. My name is Darryl, and I will be your operator for today's call. [Operator Instructions] I will now turn the call over to Anne Pollak. Anne, you may begin.

Thank you. This evening, DBV technologies issued a press release that outlined the written response we received from the U.S. Food and Drug Administration related to the U.S. regulatory pathway for Viaskin Peanut, an investigational epicutaneous immunotherapy patch for peanut allergy. This release is available on the press release 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 development plans, our anticipated future interactions with regulatory agencies and our financial forecasts. 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 AMF for information concerning risk factors that could cause its 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 statements to account for the -- or reflect for events or circumstances that occur after this call. Joining me on today's call are Daniel Tassé, Chief Executive Officer of DBV; Pharis Mohideen, Chief Medical Officer; and Sébastien Robitaille, Chief Financial Officer. It is now my pleasure to hand the call over to Daniel.

Anne, thank you, and good afternoon, good evening, everyone, and thanks for joining us on the call this evening. On today's call, Pharis and I will share a summary of the company's recent communications with the FDA about the regulatory pathway for Viaskin Peanut as well as an overview of the clinical development program that we believe will generate supportive data for a modified Viaskin Peanut patch. Sébastien will then provide an update on our financial guidance. As a reminder, Viaskin Peanut is a novel epicutaneous immuno product -- therapy product, a patch that is applied once a day. It is designed to activate the immune system to the skin. And in doing so, promote desensitization in children who are allergic to peanuts. Viaskin Peanut has been evaluated as a potential treatment for children ages 4 to 11, who suffer from peanut allergy in a global development plan comprised of 8 clinical trials. On August 3, 2020, DBV received a complete response letter from the FDA regarding our biologics license application for Viaskin Peanut. The CRL identified the FDA's concerns regarding the patch -- the impact of patch adhesion as it relates to efficacy, and indicated a need for patch modifications and then subsequently, the need for new human use factor study. The FDA also requests additional chemistry, manufacturing and controls data. As we've mentioned, the agency did not raise any safety concerns related to Viaskin Peanut. Now following our receipt of this [ era ] in August, DBV worked hard to develop a plan to address the issues the FDA raised. And we submitted that plan to the FDA briefing book in late October of 2020. Today, we received the FDA's written feedback. And based on that feedback, we believe there is a well-defined and executable regulatory pathway forward for Viaskin Peanut in the U.S. Let me summarize the few key points that before I turn it over to Pharis, who'll provide you the more detail. For those of you who have been familiar with the dynamic at DBV, we referred to the modified Viaskin Peanut as MVP. So we refer to now as modified Viaskin Peanut, is not considered a new product entity versus the current form of Viaskin Peanut by the FDA, which we expect will streamline the regulatory process. What the FDA wants us to show is that modified VP's occlusion chamber performs as well or better than the occlusion chamber of the current Viaskin Peanut patch configuration. The FDA asks that we provide data that is similar to the [ Solar ] data to assess that the delivery of the antigen payload of the modified VP is comparable or better than the antigen payload delivered of the current patch as to bridge the comparability of the two products. Obviously, the comparability, if shown, is the reason why MVP would not be considered a new entity. The FDA also wants us to assess the safety and addition of the MVP in peanut allergic 4 to 11-year olds. I'll also add that in parallel to what have been fruitful exchanges with the FDA over the last few months, the engineering and product design team has identified several modifications to the patch that we believe will improve the adhesion performance of Viaskin Peanuts, thus the modified Viaskin Peanut. These patches on the process of being manufactured as we speak, and they are ready to start, and we are ready to start [indiscernible] of these patches in the clinic in the next few weeks. Now before I turn the call over to Pharis to provide more details on the regulatory pathway, I would like to speak directly to the families of children with an allergy and the allergists who treat them. DBV always remained deeply committed to Viaskin Peanut's potential approval and launch in the U.S., and we're very pleased today that we have a clear regulatory path forward to help those patients. Peanut allergy is a life-threatening situation for many patients and the severe reaction to an accidental peanut ingestion causes tremendous stress to families. We believe families and allergists want and deserve to have multiple therapeutic options for children. And we believe Viaskin Peanut has a distinct profile that is important to many of these families and allergists. That being said, let me turn over to Pharis.

Thanks, Daniel, and good evening, everyone. As Daniel mentioned, [indiscernible] received the FDA's written feedback on the regulatory path forward for Viaskin Peanut in the U.S. Importantly, the FDA agreed with our position that a modified Viaskin Peanut patch should not be considered as a new product entity, provided that the occlusion chamber of the current Viaskin Peanut patch, and the peanut protein dose of 250 micrograms remains unchanged and performs the same. To remind you, the occlusion chamber is a [indiscernible] brand, which is 0.5 millimeter thick and below the allergen coated film that covers the ring. The occlusion chamber [indiscernible] solubilized by natural water loss from the skin and then absorbed into the outer layers of the skin. After that, [indiscernible] highly specialized immune cells to the lymph nodes to initiate a desensitizing immune response. In order to confirm the efficacy data between the existing and modified patches, the FDA has requested an assessment comparing the uptake of allergen, the peanut protein, between the existing and modified patches in peanut allergic children ages 4 to 11. The FDA also recommended conducting a 6-month well controlled safety and adhesion studies to assess the modified Viaskin Peanut patch in the intended patient population. We plan to initiate the selection of modified prototype patches in the first quarter of this year. Additionally, we will submit the protocol for the safety and adhesion trial in children with peanut allergy to the FDA for review and comments in the second quarter of 2021, before we initiate the trial. In the CRL, the FDA also asked for additional CMC data and indicated that a modified Viaskin Peanut patch would need to be evaluated in a new human factor study. We chose not to present our CMC progress in human factor study plans in the briefing book that we sent to the FDA in October. We will address these topics with the FDA in future exchanges. Our overall objective is to work closely with the agencies to determine an efficient pathway to potential approval. During the time between receiving the CRL and the written responses to our briefing book, we were encouraged by the FDA's willingness to communicate by e-mail and phone, especially given that the COVID vaccine review was underway at the time. We sincerely appreciate the clear feedback from the agency. I would now like to turn over the call over to our Chief Financial Officer, Sébastien Robitaille.

Thank you, Pharis, and good evening, everyone on the call. I would like to spend a few minutes confirming the financial guidelines we originally provided in late October. In the press release announcing our third quarter cash balance, we said our cash runway extends into second half of 2022. That is still the case today. We also recently announced that the process implementing our global restructuring plan was approved by the French governing body that oversees labor and employment. The assumption that process implementing the plan will be approved was also included in our October cash projection. By the way, the full implementation of the restructuring plan will result in a reduction of more than 200 jobs, resulting in the remaining global team of [ 19 ] individuals. And now, I will turn the call back to you, Daniel, for some closing remarks.

Sébastien, thank you. So our goal today was to provide all DBV stakeholders with a clear view of the U.S. regulatory pathway that we have established for Viaskin Peanut. In summary, we believe FDA provided clear guidance on the next steps forward for Viaskin Peanut in the U.S. We are ready, very much ready to initiate the selection process of the best modified Viaskin Peanut patch in the coming weeks. We have a healthy cash balance. It translates the cash runway into the second half of 2022. And most importantly, everyone, DBV believes the treatment potential of Viaskin Peanut for children age 4 and 11. And if approved, we remain highly committed to submitting a BLA for the enhanced Viaskin Peanut quickly and efficiently as possible. With that said, I would love to open up the call for questions. Darryl?

[Operator Instructions] And we do have a question from Derek Archila. Go ahead, Derek.

Bill on for Derek. Congrats on the progress. Can you just maybe give us a sense of what you're thinking on time lines in terms of refiling? And then sort of to the design of the study, the human factor study, sort of what kind of endpoints are you looking at in that study? And how large of a study do you think that would need to be?

That's fair. So let me answer the first half of that, and then I'll have Pharis add some details on how we think to the human use factor study. What -- amongst the many things that we're very pleased given the return from the FDA, the fact that there's been a fulsome exchange of ideas of e-mail and an agreement on a path forward, we think it's very important that we make sure that all our protocols are shared with the FDA, so we have that full alignment and continue building on this good dynamic here. The FDA is quite busy. It's still the vaccine division with COVID. And obviously, pandemic and remote working, the cost efficiency is all of us here. So a big part of my ability to answer how quickly can we refile is a function of this dialogue with the FDA that we want to continue and whether sign off on protocol [indiscernible]. So we're not in a position right now to be able to answer that question. The moment we can, obviously, we will. As far as how we think about the human use factor study, Pharis, do you want to share your thinking with Bill, Derek's colleague?

Yes. Sure. So these human factor use studies are designed to assess how well subjects or potential subjects or patients can follow the instructions of your product. So it's not a study endpoint that's hard and fast. You provide the instructions and you see how well they follow them. And generally speaking, these are healthy volunteer type studies. So they don't require large sample sizes, usually in the range of 20, 30, 40, something in that ballpark, and they tend to be quite short, like 1 day-type studies. Does that answer your question, Bill?

Yes. I guess for the -- what are you thinking then for the 6-month study? Presumably, that's a different study than a human factor study?

That's correct. It is a different study.

Yes. So what would the endpoints be in that study?

Yes. So again, we won't know the precise endpoints until we put the protocol together and have that discussion with the FDA. As we've said in the discussion in the press release, this is an adhesion and safety study, and the FDA had recommended a 6 months' time point. But again, until we have had the ability to discuss a protocol with them or share a protocol with them, it's probably premature to get into all the specifics of endpoints and things of that nature.

The other thing I would [indiscernible] add, Bill, if you allow me Pharis, is that the adverse event profile of Viaskin is not pretty well and is not pretty well characterized. Obviously, skin adverse events are the most common ones and easy, obviously, to assess. The agency will probably want us to be attentive also to systemic adverse events, but we would imagine this to be very much similar to the safety package that is put together with the original Viaskin Peanut. So something that we wish to discuss with the agency, but should be relatively straightforward conceptually.

And our next question comes from Graig Suvannavejh.

Congratulations, team, for the progress on a go-forward path here. Two questions for me. The first would be, while it's still early days in terms of the 6-month study, could you comment on whatever you end up collecting in terms of the information? Is there, in your eyes, the potential risk that the existing efficacy and safety profile that comes out of that 6-month study may be somewhat different from what's already been established? And if so, what happens there? And maybe it is a hypothetical. And then my second question has to do with current cash available and your cash burn. And in the context of what you now can share with us. Any high-level thoughts on what the cost of these additional studies may be and how that is contemplated in your current cash burn guidance. Maybe a quick follow-up. And it's early days, what do you think the cost of this type of study might be relative to some of the other studies that you've run just to help us think about what that potential R&D might look like?

Yes. Let me tackle the latter question, Graig, if I may, and then Pharis can tackle the -- how we think about the study. About the [indiscernible] to be clear, the FDA wants us look at adhesion and safety. They're not asking us to look at efficacy in that 6-month study here, so that obviously makes the design to be quite a bit more straightforward here. Since the FDA getting back to us and signing off on protocol is key before we move forward, our ability to really forecast how long it's going to take for us to run the studies and how much we're going to eat into our cash position is something that remains a variable here. In our modeling, we know what these studies costs. We have an order of magnitude. I don't wish to share the specifics here. So we understand that those studies, what they would cost for us to do. The variable that we can answer because we can model the cost of the study is, obviously, how quickly we can get to closure with the agency here. So again, until we've filed the protocols in Q2, as Pharis said, and get signed off from the agency, the biggest variable on cost we don't have. And I'm not in a position to answer your question. But once we do, obviously, we will make sure to come back to investors with that precision. Now okay, Graig, before I ask Pharis to expand on the study design?

Yes. I will just wait for your next, perhaps, earnings calls or something like that at this point.

Yes, we just don't know because that big variable is one that we don't control, but most importantly, it matters to us very much, given the fact that there's just a good dynamic between us and the agency now in trying to help patients. That's something we want to very much build on.

Yes. Okay. Graig, so back to the 6-month study. So as Daniel said, we had not been asked to assess efficacy. So that part of your question is not applicable. Clearly, until we have a protocol with them, we won't really know the hard and fast end points. But what I can say is, I'll remind you, as we've said, there were no safety issues called up in the CRL. And as far as safety, we would just do the standard safety monitoring that we've done across the different protocols that we've conducted. And obviously, if you're changing some aspects of the patch, as we've done in our Phase III study, we would look at the local application site reactions which are the events of interest, right, if you're doing this sort of a modification. Does that help?

It does. And if I can just steal maybe one more question, just on CMC related issues. I know that was kind of an obstacle on the last CRL. Any comments that you can provide just on how you feel about where you are on those matters?

Yes, we've made good progress on the CMC issues. The fact that we chose to discuss that with the agency at this point in time is simply because the clinical questions, obviously, are much more binary in us coming to closure with agency here, but the quality manufacturing team have done a fantastic job since we received the CRL in August to advance all the questions. So in a position to have a discussion with the FDA, and we will have it -- we wish to have it with them, discussion with exchange with them before we move forward. But I'm very pleased with the progress that's been made.

Many congrats again.

And our next question comes from Joseph Schwartz.

And it's good to see you guys getting closer still. I was wondering if you have any insight into -- well, I guess, what is your understanding of the threshold for acceptable level of non-adhesion at the FDA? And how far away from this are you from this level with the existing design of Viaskin Peanut based on the studies you've done already? Just so we have an idea of how difficult it will be to close that gap.

Yes. I remain confident that it's very much a closable gap. As you may remember, Joe, we had pretty good exchange with the agencies starting with what we call that the clinical summary and adhesion and efficacy. We referred this as the white paper, which was, as you know, published back in May and June of last year in a couple of peer-reviewed journals, as to really enrich discussion with the FDA, how to think about the patch experience with the FDA. And we're certainly very pleased with the common understanding here. So what I'm comfortable saying again, until we have finalized protocols with the FDA, I can certainly speak to what were the -- they had the agreement with the agency, that the agency understands that the patch does not need to be worn for all 24 hours, and does none -- hold on everyday to still -- and in every patient to still deliver efficacy, so that basic understanding has been achieved. The specifics, we know what we think is right, and the agency seems to have a position that is aligned to ours. Again, until the protocol is signed off, I'd rather reserve comment here. But there's been good progress on that core concept. And I'm pleased with that. Pharis, anything you wish to add?

Yes. No. I think, Joe, what I might just add is there's no analog for epicutaneous immunotherapy, we're the first product. And we were pleased to see the FDA acknowledged this in consideration of their thinking around the approach to adhesion, and that epicutaneous immunotherapy is different from traditional transdermal patches.

Right. Okay, makes sense. And then just what kind of prototypes are you considering? And what could the impact on tolerability be? How will you balance the need to satisfy the FDA on the adhesion front while also having it -- not have any more reactogenicity?

Yes. The -- that's obviously the most important question is can we solve [ revision ] without obviously changing the adverse event profile? The team has done tremendous amount of work since -- in fact, before August, that work started because the FDA indicated to us that adhesion was a question back in March. So we've done a lot of work on that front. I think we understand very well what those trade-offs are in size of patch, type of adhesive that we use and the shape of the patch also makes a big difference. There's a lot to body movement and all of that. I know Pharis is probably rolling his eyes now. I'm going to talk about that famous robot that we have. But it's been really great for us to mimic what actually is the movement of a patient of a child, particularly. And we're coming to shaping, no pun intended here, but putting forward patch modifications, we believe very much manage that trade-off. But on top of it, we're going to be taking those prototypes into the clinic now in the next few weeks here, so that we can use data in humans to funnel down from the number of designs we have right now to the ones we want to take into the 4 to 11 year old patient population. So we're going to do that in a way that is not only, I think, clever, smart and well thought through from a product design point of view. We're going to use also clinical data to make sure that we made the right choices here. Is that helpful [indiscernible]

I expect nothing less.

Having been in -- and I'd say it's been fun. It's the best part of biotech, right, if you have an idea and you play with it and you see it can help patients. And obviously, I'm quite pleased with -- in the last 6 months, the strides we've made in better understanding the profile of the patch. I think it's going to pay off for us also for future products in our pipeline in due time.

And our next question comes from Joel Beatty.

This is Shawn Egan calling in for Joel. Two questions from the [indiscernible] [ point of view ]. You mentioned that the FDA requested that the payload be kind of comparable or better to previous. Did that provide any insight to the FDA's comfort with the efficacy of the product? And how typically would you kind of assess product delivery via payload in a credible study? What are the typical ways that people do that? And then I have one follow-up as well.

Yes. The -- I use the term payload, and it's a good way to illustrate what we're trying to do here is deliver enough antigen to [indiscernible] tissues to get the clinical responses. It's obviously not a -- the term of our trust at DBV. It's not a clinical regulatory term, but illustrates what we're trying to do here is to make sure that the protein comes off the patch and is delivered to the patients. We've done a lot of that work already, Joel -- or Sean, in the work that we did with our current Viaskin Peanut patch. Now the study that we call the Solar study. And the general principles behind the Solar study or the one that the agency wants us to build on for this study here. Again, that's -- and it's a protocol that Pharis and his team will want to finalize with the agency. But I think it's pretty clear to us how we wish to tackle that. And now we want to think about stats and robustness of data. So I think there's a good common ground with the agency here. And we wish to tackle that. It's going to be quite similar. Some modifications and enrichment to the protocol we use for the Solar study with our current Viaskin Peanut. Is that a fair way to think about it, Pharis, anything you wish to add?

No, that's right on.

Okay. Great. And just one follow-up question. You mentioned how you're kind of contemplating the size and shape of the patch. Just wondered if you've had any kind of patient input into that development? And any insights that could go to kind of patient preference going right [indiscernible] the market?

And so you broke up a little bit, Sean. Could you repeat your question? I'm so sorry.

Yes. No problem at all. But with tender contemplating the size and shape of the patch, have you had any patient insight into that development? And how do you think about that could help commercially?

We have had what we call market input into the development. Yes. We know enough about what would be acceptable to patients, but validation of that becomes important. The human use factor being the ultimate validation of the design you choose is whether or not it is used the way you intend it to be. So the short answer to your question is yes, but more to do.

And our next question comes from John Wolleben.

Congrats, guys. Just a couple for me. My understanding of this is FDA wants an assessment where you're looking at the efficacy and safety of the existing and modified patch and then also a 6-month study. So what does that first assessment look like? Is that another clinical program of some kind? Or is it something simpler?

No, the FDA is asking us to assess between the modified patch and the current patch that essentially, the occlusion chamber performs the same way, which can be assessed by making sure that what I call the protein payload, the antigen payload is delivered in a way that's comparable or better in the modified patch in the current patch. We'll do that with a protocol that's pretty much aligned to the Solar protocol that we published back in May, June. So that's what the agency is asking us to do when it comes to bridging the efficacy of the product, the modified patch versus the current patch. They're also -- and so that would be one set of work, one set of studies or one study. And then they're also asking us to assess the safety and the adhesion profile of the modified patch, and that's a study we'll do over 6 months. Is that helpful [indiscernible]?

Yes. Yes, it does. And last one for me. How many of these activities between those 2 assessments, the human factor and the CMC, can you do in parallel? Or are these gating at all from one to another?

I'll let Pharis answer that one because he's been scratching his head [indiscernible] that went through since yesterday. Pharis?

Yes. So the human factor study, it sort of just depends on where in your pathway you wanted to do that study. So we have multiple places where we could do that. And sort of the beauty of these studies is you can't really fail. I mean, if you do one, and it doesn't quite work out the way you want, you adjust and you do it again because they're simply short, quick, down and dirty type studies. So they're not gate rate-limiting to any extent. And we can't do them in parallel, if we want to. There's a lot of flexibility around the timing of that particular study.

And our next question comes from Alex Cogut.

I think most of them have actually been asked, but just a final one on you mentioned that you're looking to select between a number of patches in the first quarter of 2021. I was wondering how long you still think that process will take? Or is that already pretty much done?

That's a relatively short and straightforward process to assess which of these -- all the patch designs we have, which ones are the most promising to take forward. That's something that's [ realty ] short and straightforward. At that point in time, though, what we do, both for the antigen payload study as well as the safety study, we want to ensure the protocols are very much aligned with the agency here. So until we have that bun down, we will not start those clinical programs. So those have become the longer [indiscernible] and the selection of the handful of patches we want to take to the clinic is relatively straightforward. Is that a fair way to put it, Pharis?

Yes. That's a fair way.

So just to make sure, maybe I understand it right, there will be several patches that you would take into the clinic? Well-designed?

Yes.

Yes. We would look at the different prototypes that we have and assess which of those seem to perform the best and then make a determination. Again, until we have a final protocol and have decided and discussed it and received feedback from the agency, we won't be able to know until we get that sort of feedback.

Yes. We have a view on it, but it adds to complexity and time. So there's a trade-off that we have to think through and discuss with the agency on the number of patches we take. And obviously, the ability to get to the right answer quickly. We have a view on that, but we want to make sure that we have agreement with the agency.

[Operator Instructions] And we don't have any more questions at this time.

Darryl, thank you. And obviously, to everybody who's attend the call today, I very much [indiscernible] want to thanks for your attendance. Our goal today was to provide DBV stakeholders with a clear view of our regulatory pathway. We have more work to do in getting to that agreement with the agency on every detail, and we're going to work obviously on that on a double time here. And as always, as our understanding progresses, as our thinking progresses, we'll make sure to stay in regular contact with the market and with investors. So I thank you all for your time today and wish you a wonderful evening.