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

Good day, and welcome to the DBV conference call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Katie Matthews, Investor Relations. Please go ahead.

Thank you. On Monday, March 24, DBV Technologies issued a press release announcing that the company secured agreements with the FDA on safety exposure data required for a BLA filing for the Viaskin Peanut program in children 4 through 7 years old, accelerating the time line for BLA submission in this age group. Additionally, on Thursday, March 27, DBV Technologies issued a second press release announcing a financing of up to $306.9 million, which includes gross proceeds of $125.5 million upfront upon closing and an aggregate of $181.4 million in gross proceeds if all warrants are exercised. Both press releases are 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 the ability of the company to close the financing, the expected timing of closing of the financing, and the anticipated use of proceeds from the financing; the exercise by the investors of the warrants and prefunded warrants to be issued in connection with the financing; the company's financial condition; forecast of its cash runway; our clinical and regulatory development plans; the design of our anticipated clinical trials; the timing and results of interactions with the regulatory agencies; our plans and expectations with respect to our clinical trial; plans with respect to submission of BLAs to FDA; expectations with respect to any actionable regulatory pathway, including an accelerated approval pathway; and the ability of any of our product candidates, if approved, to improve the lives of patients with food allergies. 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 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 statements to account for or reflect events or circumstances that occur after this call. So joining me on the call today are Daniel Tassé, Chief Executive Officer of DBV; Dr. Pharis Mohideen, DBV's Chief Medical Officer; and Virginie Boucinha, DBV's Chief Financial Officer. I will now pass the call over to Daniel. Daniel?

Thank you, Katie, and thank you, everyone, for joining our call this evening. I'm thrilled to speak to you about the positive news the company issued last week. As you know, we announced the financing last Thursday that sufficiently funds the company through expected BLA submissions and commercial launch of Viaskin program, if approved. We also announced DBV's agreement with the FDA, allowing us to accelerate the timing through BLA submission in our 4- to 7-year-old program. Let me just start by walking you through the highlights of last week's press conference. Through the agreement we secured with the FDA, we are no longer required to conduct the COMFORT Children 6-month supplemental safety study in the 4- to 7-year-old age group. The FDA has agreed the safety exposure data generated from the CTEP Phase III study and VITESSE's open-label extension are sufficient to support the BLA submission for Viaskin Peanut patch in children 4 to 7, and we'll talk about that more a bit later on. We also reaffirmed that VITESSE's top line results are on track in the fourth quarter this year. Given that we no longer need to conduct the COMFORT Children safety study, anticipate submitting the BLA for our 4- to 7-year-old program in the first half of 2026 to accelerate the potential launch of Viaskin Peanut in this age group, if approved, by approximately one year. This is fantastic news, obviously, not just for DBV, but most importantly, our patients and their loved ones. And finally, last Thursday, we announced that the company has secured financing of up to $306.9 million to advance DBV's Viaskin Peanut patch to BLA submission and, if approved, its U.S. commercial launch. Now before diving in, please allow me to remind you that we are conducting in parallel 2 independent Viaskin Peanut programs, one in toddlers, the 1- to 3-year-old age group with the original square patch; and one in children in the 4- to 7-year-old age group with a modified circular patch. We intend to submit a separate BLA for each program that is one BLA submission anticipated in the first half of 2026 for Viaskin Peanut program in children and a second BLA submission anticipated in the second half of 2026 for toddlers under a formalized, accelerated approval pathway as we previously announced in December of last year. Let me share with you a brief overview of the financing. DBV has secured gross proceeds of $125.5 million upfront to be received upon closing the transaction with the potential to secure another $181.4 million to the exercise of warrants. The potential to secure the $181.4 million in gross proceeds will be triggered subject to the satisfaction of the conditions VITESSE meets its primary endpoint and all warrants are exercised thereafter. If all warrants are fully exercised, DBV has the potential to raise a total of $206.9 million. I'm delighted to share that DBV will be sufficiently funded through the BLA submission and through U.S. commercialization for the Viaskin Peanut patch in 4 to 7, if approved. And as I mentioned before, it's important to understand, we are pursuing 2 independent BLAs. The timing of one does not impact the timing or value of the other. We have 2 distinct and independent opportunities to create value. And we are delighted to have clear guidance from the FDA on both Viaskin Peanut indications, the accelerated approval pathway in 1- to 3-year-olds and a potentially expedited pathway following the development of last week in 4- to 7-year-olds. Accordingly, we anticipate a submission of both BLAs next year and have sufficient funds to get us there. Before we get to the details about the financing, I would like to discuss Monday's announcement concerning the written response TBD received from the FDA. Last Monday's press release announced that we have secured an agreement with the FDA on the safety exposure data that will be required for us to file a BLA in the Viaskin Peanut in children 4 to 7. Most notably, we are no longer required to run the COMFORT Children 6-month supplemental safety study to support the BLA submission in the 4- to 7-year-old age group. The supplemental safety study was going to recruit approximately an additional 240 participants to generate safety data prior to a BLA submission. We are thrilled that the FDA has agreed that we no longer need to run additional safety study, and that the safety data generated from our ongoing VITESSE Phase III study, together with open-label extension study will be sufficient to support a BLA in this age group. You will recall that the VITESSE Phase III study is a 12-month clinical trial with a 3-year open-label extension in 654 participants randomized 2:1 active to placebo across 86 sites in the U.S., in Canada, Europe, the U.K. and in Australia. It is the largest Phase III clinical trial for peanut allergy ever conducted in this age group. More than 400 participants were randomized to active treatment and will be included in the primary endpoint analysis as the ICH guidelines used by FDA state that a typical safety database should consist of between 300 to 600 subjects. At the time of BLA submission, the data generated in VITESSE and in the VITESSE OLE will yield a safety database comprised of more than 500 study participants in Viaskin Peanut patch active treatment. I'm delighted that the agency and DBV have aligned on the sufficiency of the safety exposure data required for BLA submission in 4- to 7-year-olds. This alignment is a combination of a great deal of ongoing communication with the agency through constructive engagement with FDA division leadership. We also wish to sincerely thank the division for their speed and common-sense approach to regulatory process, and we thank them on behalf of the millions of children eagerly awaiting additional FDA-approved treatment options in peanut allergy. As I mentioned in my opening remarks, the VITESSE top line results are on track to read out in the fourth quarter this year. And since we no longer must conduct COMFORT Children, we have thus accelerated our plan to file the BLA in 4 to 7 in the first half of 2026 as opposed to what we had originally guided to, which was the second half of 2026. Moreover, Viaskin Peanut also has breakthrough designation. We are thus eligible for priority review, which, as we know, will only be confirmed upon BLA acceptance. So given this news and if approved, obviously, we now expect to launch Viaskin Peanut in 4- to 7-year-olds approximately 1 year earlier than originally planned. That's a big year for patients and their families who want and deserve treatment options. Simply put, we need to move fast, and I cannot emphasize enough that data shows the treatment window is best in younger children, and we don't want children to miss that window. Both accelerated approval pathway in 1- to 3-year-olds announced back in December and the recognition that VITESSE is sufficiently large to support our BLA in 4- to 7-year-olds provide two things. One, regulatory clarity; and two, the potential of that regulatory clarity to accelerate DBV's availability to these two patient groups. Given the utmost importance of VITESSE, let me invite Pharis, our Chief Medical Officer, to provide some more information and comment on the VITESSE trials and assumptions behind its design and why we think we are positioned for success. Pharis?

Thank you, Daniel. Let me remind you of some of the key design elements of the VITESSE study. We targeted a younger and more sensitive patient population relative to the 4- to 11-year-old age group that we pursued in the past. This is because younger patients have more responsive immune systems not just for Viaskin Peanut, but in general. Our post hoc analysis of PEPITES efficacy data in peanut allergic children showed a more robust response rate among 4- to 7-year-old children relative to 8- to 11-year-olds. As you may recall, we presented this data in 2022 and at the Canadian Society of Allergy and Clinical Immunology. We also decreased our baseline entry food challenge eliciting dose in VITESSE to 100 milligrams relative to the previous Phase III studies, which were at 300 milligrams. The post-hoc analysis of PEPITES efficacy data also showed that the more sensitive patients, those with lower baseline eliciting doses also had a more robust treatment effect. Thus, the VITESSE inclusion criteria were defined to address younger and more sensitive patients with a high unmet need. Other entry inclusion criteria for VITESSE are consistent with the other Phase III studies we've conducted including the skin prick test and serum peanut-specific IgE. As we've previously disclosed, to align with this younger, more sensitive patient population in VITESSE, we defined the statistical definition of a treatment responder as either a subject with a baseline eliciting dose less than or equal to 30 milligrams, who reaches an ED greater than or equal to 300 milligrams of peanut protein at month 12, or a subject with a baseline ED of 100 milligrams who reaches an ED greater than or equal to 600 milligrams of peanut protein at month 12. Subjects that entered the study with a baseline eliciting dose of 30 milligrams will be counted as treatment responders if the month 12 eliciting dose is greater than or equal to 300 milligrams. This is still a 2-level increase in the food challenge dosing and a clinically meaningful increase. The FDA requested that we include a 600-milligram eliciting dose response criteria consistent with other food allergy clinical trials. Thus, subjects that enter the study with a baseline eliciting dose of 100 milligrams must achieve a month 12 eliciting dose of at least 600 milligrams to be counted as a responder. Note that our previous Phase III studies of Viaskin Peanut required the 30-milligram and the 100-milligram baseline eliciting dose groups to reach greater than or equal to 1,000 milligrams to count as a statistical responder. We expect this to result in a more robust treatment effect. So to summarize, our original statistical calculations had at least 90% power with 600 randomized subjects. With 654 subjects enrolled in the study, the power is now greater than 90% with a higher probability of meeting the primary endpoint. The final randomized subject population also turned out to have more 4- to 5-year-olds, 57% of enrollment and an overall randomized study population with a lower-than-expected peanut-specific IgE level. Both factors, younger age and lower IgE have been associated with more robust treatment effects with Viaskin Peanut. So again, we are confident with the design of the VITESSE Phase III study and believe we have designed a protocol that puts us in the best position to be accessible. We are on schedule for top line results in the fourth quarter of 2025. And with that, I'll hand over to Virginie. Virginie?

[Foreign Language], Pharis. Allow me now to provide a high-level summary of the financing we announced last week totaling up to USD 306.9 million in terms of gross proceeds. The financing consists of an issuance of ordinary shares and prefunded warrants with additional warrants exercisable, subject to satisfaction of specified conditions I will come back to. The financing proceeds of gross proceeds of USD 125.5 million to be received upon closing and an aggregate of up to USD 181.4 million in gross proceeds, if all the warrants issued are exercised. The upfront gross proceeds of USD 125.5 million are expected to take us into the second quarter of 2026. We didn't expect that the proceed of this funding will be used for working capital and general corporate purposes, to finance the continued development of the Viaskin Peanut program, to finance the preparation and submission of a potential BLA and to finance the readiness of the launch of Viaskin Peanut in the U.S., if approved. The warrants issued, as part of the financing, consists of 2-year warrants, which exercise will be accelerated by the company's announcement of positive VITESSE top line results as described earlier by Daniel and which, again, are anticipated in the fourth quarter of this year. If VITESSE top line results are positive, the warrants will have to be exercised within 30 days, else they will expire. And to be fulsome here, warrants cannot be exercised before we test top line results. So based on positive top line data from VITESSE, we anticipate a second installment of up to $181.4 million, if 100% of the warrants are exercised. And we expect that this will provide sufficient cash runway through anticipated approval and commercialization of the Viaskin Peanut patch for the 4 to 7 years old. Back to you, Daniel, for concluding comments.

Thank you, Virginie. It goes without saying we are beyond thrilled that we have secured the support of such highly regarded fundamental investors. For this newly secured capital, we look forward to the continued advancement and launch of the two Viaskin Peanut patch programs. We will, of course, continue to exercise great diligent use of our resources, ensuring a solid balance sheet and the best interest for our shareholders and future patients. This infusion of capital from leading health care investors, both existing and new, reflects the importance of Viaskin Peanut patch and, obviously, a recognition of its potential impact, significant potential impact on families. And before closing out, I'll be remiss if I did not mention that in connection with the financing, we intend to propose, subject to shareholder approval at our next Annual General Meeting, the appointment of Dr. Christiana Bardon, Managing Partner of MPM BioImpact, who many of you know, as a member of the Board of Directors of DBV. And finally, on behalf of all of us here at DBV, I want to take a moment to sincerely thank the allergy community, the allergists, patient advocacy organizations, individual patients, investigators, their families for their ongoing, wonderful and very well-expressed support. I'm very proud and happy to share the fantastic developments with you all today. And thank you to all of you on the phone and on the webcast for joining us today and for your continued interest in DBV. I'll now ask Pharis and Virginie to join me for Q&A.

[Operator Instructions] Our first question comes from Jon Wolleben of JMP Securities.

Congrats on the progress. A couple for me. You talked a little bit about improved responses in VITESSE. I was hoping you could talk a little bit how that translates also to what you expect for the placebo arm in that study. Can you -- wondering if you'd talk about the planning of the start of COMFORT Toddlers. And then lastly, the relative unmet need in the 4- to 7-year-old, which could come earlier, versus the 1- to 3-year-old population. So I guess those three would be great to hear from.

I'll take the last one relative to sort of interest of 1 to 3 versus 4 to 7. I'll have Pharis answer the first 2. Pharis?

Yes, sure. So thanks, Jon. So as far as the placebo arm in VITESSE, obviously, we have a lot of post hoc data from our 4- to 11-year-old study, and we can parse out the 4- to 7-year-olds to look at both the active as well as the placebo responses. And as we described, the two changes that we made in the response criteria -- and again, these are not new. They've been in place since we submitted the protocol to the FDA being the 30-milligram going to 300-milligram and the 100-milligram going to 600-milligram. Those really bode well for us as far as the active delta that we anticipate relative to placebo. So those changes, again, work in our favor as far as the statistical design and the conservative nature that we took in powering the study. Does that answer your question, Jon?

Is there any way you can quantify what you expect, so in placebo response in the prior trial versus what you expect here as well? And I'm sure you still think the delta is greater but -- so you're expecting a more robust response just in the Viaskin Peanut arm versus the placebo here?

Yes. So we published the 4 to 7. Obviously, the PEPITES criteria was presented in 2022, in Canada, the placebo response in that trial was about 9.6%, I believe, somewhere in that ballpark. And so we've looked at that as well as all of our other data. And we have a really good feel for where we think the placebo response is going to be based on that data. We can also look at some of the 1- to 3-year-old data. A little bit different population, but we get the same sort of feel where we can look at a placebo response. And obviously, as we've talked about in the past, we take a very conservative approach to the treatment effect that we might see. So I believe we're very well positioned as far as the projected placebo response rates. Does that help?

Yes. And then can you talk about kind of start-up activities for COMFORT Toddlers?

Sure. We're on schedule for our second quarter to start that study as we've said in the past. We've done as much work as we can prior to the raise, and the team is in place. They've been in place for a long time. The CRO has been selected, and everything is a go.

And Jon, to answer your question about sort of the relative positioning of 1- to 3- and 4- to 7-year-olds, obviously, 4- to 7-year-olds are 1- to 3- before that and, obviously, age into it. If someone -- to recognize, I think, two important sort of factors. One, the age of diagnosis of food allergy, and of peanut allergies, between the age of 1 and 5. So that's what we've always targeted, 1 to 7 because it's the sweet spot of diagnosis and just parental motivation to do something besides also being -- and we've shown that clearly, younger patients tend to have more classic immune systems. That's fact number one. Fact number two is our indication of the 1 to 3 at the age of initiation and 4 to 7 at the age of initiation. So you don't have to change after you turn 4, you'll have to stop treatment when you turn 7, in fact, we expect that the conversation takes place between allergists and families of children with peanut allergy that you're going to be in treatment for 4, 5 years. That's sort of the expectation for all forms of immunotherapy, making the 1 to 3 and 4 to 7 sort of division that is a result of, obviously, the regulatory pathway we chose to be not something that's terribly significant when it comes to what we expect to be a patient or allergist behaviors in treating those children, if that answers your question.

Next question comes from Sam Slutsky of LifeSci Capital.

Congrats on all the recent progress. A couple for me. I guess, obviously, the Xolair launch has exceeded expectations in food allergy. Could you just discuss the read-through from this on the market opportunity as a whole in food allergy and then consideration for the Xolair within the competitive landscape for Viaskin Peanut? And then I have one more question after.

That's fine. Let me take that one. So yes, Xolair was approved about a year ago in February of 2024, for food allergies in patients 1 to 55. So their market in the U.S. is 17 million people. And it seems Roche is very happy with the fact that they've put about 40,000 patients on treatment in 2024. So then if we look to use data to answer to your question -- actually, before we get to data, the perception by allergists and experts is that Xolair was an important addition, but likely to be used in older patients, adults, or adolescents, and often for short, specific amounts of time as they're managing specific risk in their lives. The data we see now that Xolair has launched validates that. 24%, so a bit less than 1/4 of the Xolair-treated patients for food energy, have a peanut allergy. Typically peanut allergy and something else, but 75% of patients don't have a peanut allergy. Of those that have a peanut allergy, among many treated with Xolair, as we expected, close to 60% of them -- I believe it's 58% of them are adults over the age of 18. Again, as we expected. We see only 10% of these patients being between the age of 1 and 7. So 10% of the Xolair-treated patients with a peanut allergy are 1 to 7, that's the indication, the age range we are targeting. And as we expected, most of these children that -- a lot of them have peanut allergy and at least three other comorbid conditions, validating what we expected. It's an important product for adult patients with food allergy. In 1- to 7-year-old, it's not used very much. The major reason for that is there's not a lot of data -- in fact, there is no data on long-term use of the monochrome antibody in developing immune systems and thus, making Xolair to be a really important addition. And it's great that it's actually available to families who need it, it enriches the discussion in a physician's office but it's not a treatment option that is a direct competitor to the 670,000 patients we want to treat in the U.S. between age 1 to 7.

And then just last question. For the two age groups for Viaskin Peanut, are those BLAs linked in any way? Or are they completely distinct, their submissions?

Okay. They could be the same. They're -- what they will share is a small part of the [ CMT file ] if it's made on the same machine except we changed the last step of the manufacturing process as we cut it, but -- and I'm sure some safety database that is used when it comes to pooling previous studies will be also similar. But the essence, the heart of the BLA are going to be distinct here, which is a bit more work for us. On the other hand, as we said, there's a natural headwind here in our regulatory strategy by having [ 2 doses here that are independent ].

Our next question comes from Sushila Hernandez.

I just have one. Does the departure of Peter Marks have any material impacts on the regulatory part of Viaskin Peanut in toddler or children?

That's an important question. And obviously, the departure of Dr. Marks, to me, is greatly regrettable. But Dr. Marks runs CBER, which obviously comprised a number of review divisions. The Office of Vaccine Research and Review, where allergenic products are reviewed, is part of the office -- of OVRR that's run by Dr. David Kaslow, who reports to [ Dr. Sievers ]. Dr. Kaslow will be losing [ his office ] at the end of the week here. But the discussions we've had on the success and progress on regulatory pathway have always been entirely between us, Dr. Kaslow and his senior leadership that are there. Dr. Kaslow was new to the agency. He joined essentially at early 2023 and was not there when Dr. Marks was involved in the COVID dossier. So we don't believe it has an impact, given that Dr. Marks is not involved directly at all in our dossier. Sushila, does that answer your question? Any other questions?

[Operator Instructions] This concludes our question-and-answer session. Daniel, I'll turn the conference back over to you for any additional or closing remarks.

My additional remarks would be simply to thank everybody again for attending the call today. As always, we're a phone call away if you have any questions for us. Thank you again, and I wish everybody a very good evening.

That concludes our conference today. Thanks, everyone, for joining.