Inventiva S.A. (IVA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to Inventiva's First Half Financial Results Presentation. [Operator Instructions] I would now like to hand the conference over to your speaker today, Frederic Cren, Chairman, CEO and Co-Founder. Please go ahead.

Thank you, and welcome. Good morning, everybody. Good afternoon, and welcome to the first half 2021 financial results. So as usual, I'll be making, and the team will be making forward-looking statements. So please refer to the regulatory filings that are available on our sites or at the SEC or at Euronext. Today, I'll be of course sharing the presentation with Pierre Broqua, our CFO, Co-founder; and Michael Cooreman; our CMO, who will be presenting the latest on lanifibranor. I will be speaking and introducing some very exciting news concerning our partnership with AbbVie and the recent progress of cedirogant, and Jean will be presenting, of course, the financials and our financial situation for the first half of this year. So without losing too much time let's look at what are the highlights of this very busy first half. So if we turn to what was our ambition at the beginning of the year, we wanted, and our goal was to add a pipeline by the end of the year with compound lanifibranor in Phase III and Cedirogant in Phase IIb. And I think we are in a very well position to achieve both goals. So in lanifibranor, you have seen that recently, we have announced that we have started screening in the U.S. with our partner, global partner, ICON PRA and that we have qualified more than 330 sites in 25 countries. So we're really pleased by the launch of this exciting Phase III, and Michael will provide more background on the design and how the study is rolling out. The good news also comes from Cedirogant ABBV 157. So if you followed during the Q1, the Q1 results that they communicated to have achieved a clinical proof-of-concept during the Phase Ib in patients with psoriasis. And we were extremely pleased and happy to see that on September 14th, on clinicaltrial.gov that we posted the design of the upcoming Phase IIb with cedirogant in patient with psoriasis, very important study, 200 patients, 45 sites. And especially, they have confirmed that the study will be up and running in November, which should trigger a milestone payment for us. And of course, we are already looking forward to the result of this important study, which are scheduled for March '23. Concerning odiparcil, we're continuing actively on the evaluation of the strategy of the best options to continue moving this program forward. We'll not be able to update the market in 2021 as we plan to do that in 2022. Concerning the other important events, of course, we have been able to launch a Phase III also because we have been able to reinforce our team on both sides of the Atlantic. So Michael is now leading a team in the U.S., all devoted to the Phase III. And also in France, we have reinforced our key position, both in terms of support function, medical cleanups, and we're really geared and prepared for this Phase III. Over the summer, we've put in place an ATM, as expected as have many biotech listed on NASDAQ do, and this gives us an additional flexibility in order to reinforce our cash position with the possibility to advertise ATMs up to $100 million. And then finally, we have reinforced our Board with the arrival of Martin Zimmerman, who will provide, and is providing valuable regulatory expertise, given our position currently at Alexion AstraZeneca. So this was for the short intro. And now I will give the floor to Pierre who will give a brief update on lanifibranor.

Thank you, Frederic. So hello, everyone. So as you know, lanifibranor is a pan-PPAR agonist, which is currently in clinical development Phase III for the indication, treatment of NASH and improvement in liver fibrosis. It has an unprecedented structure and pharmacological profile. It's a pan-PPAR agonist with moderate and well-balanced activity across the 3 isoforms. It's not a thiazolidinedione, and it's not a fibrate. This program has recently obtained Breakthrough Therapy designation as well as Fast Track designation from FDA. And FDA has also confirmed recently that the nonclinical toxicology package is complete and acceptable for an NDA filing. So can we go to the next slide, please? So following the successful outcome of the native Phase IIb trial with lanifibranor in NASH, we have started our Phase III in patients with NASH and the fibrosis score of F2 or F3. And Michael will present the details and the key milestones of this study. To complete the clinical development plan of lanifibranor in NASH, and besides, the study in collaboration with Professor Cusi, evaluating the effect of lanifibranor on liver insulin resistance in diabetic patients with NAFLD, we are also progressing on the preparation of additional clinical studies, evaluating the potential of lanifibranor in NASH compensated cirrhosis, and this, on the back of positive preclinical findings that we have recently published. And we are also progressing in the preparation of study to evaluate the potential of lanifibranor to be used in combination with other therapies and this to further strengthen its value proposition. So the NATIVE 2 trial, next slide. So the NATIVE 2 trial indicated that after 24 weeks of treatment, the 1,200-milligram dose had a significant effect on improvement of fibrosis by at least one stage and no worsening of NASH. And both doses, 1,200 and 800 milligrams had a significant effect on resolution of NASH and no worsening of fibrosis, as well as on the composite endpoint of resolution of NASH and improvement in fibrosis where a responder is defined as a patient showing both NASH resolution and improvement in fibrosis. Additional analysis were performed and communicated earlier this year at EASL. And these analysis indicated that in patients with NASH and F2/F3 fibrosis, lanifibranor also showed significant efficacy on the composite endpoint. And this group will observe more than 3 and more than 4 times more responders in the low and high dose groups, respectively. We also observed in this subgroup of patients with F2 and F3, liver fibrosis that markers of lipid metabolism, insulin resistance, liver injury, inflammation and fibrosis also improved with lanifibranor treatment at week 24 compared to placebo. We'll go to the next slide, please. So based on the NATIVE 2 data, clearly, lanifibranor showed key differentiating benefits compared to the current competition and particularly on insulin resistance and on fibrosis, which are, as you know, 2 important pathological features of NASH. And the latter, fibrosis, being, as you know, as well, the primary determinant of clinical disease progression in patients with NASH. Next slide, please. Now as can be seen on this slide and compared to the current competition, lanifibranor is the only drug having achieved statistical significance under key regulatory strategical endpoints of NASH resolution without worsening of fibrosis and fibrosis improvement without worsening of NASH, and is with more than 40% responders for both regulatory endpoints. Can we go to the next slide, please? So with the NATIVE 2 results, we conducted interviews of hepatologists across U.S., U.K., Germany and France. And these interviews indicated that the physicians valued lanifibranor's efficacy on multiple endpoints as well as it once-a-day over mode of administration. Next slide, please. The physicians also perceived weight gain as acceptable considering the benefit on multiple disease endpoints and suggested that weight gain could be offset with either proper patients counseling around weight loss, or by combination therapy with, for example, GLP-1 receptor agonist or SGLT2 inhibitors. With that, I will now leave the floor to Michael, who will say a few words on NATIVE 3.

Thank you, Pierre. And move to Slide 16. We have started recently the pivotal Phase III study. It's conducted in patients who have NASH, of course, and have a stage of fibrosis, F2/F3 that's based on histology and defined patients who actually most in need of treatment. The study consists of 2 parts. And the inclusion criteria, exclusion criteria are very similar to the ones in the native Phase IIb trial in order to guarantee consistency. The 2 parts define actually the objective to obtain accelerated approval after 1.5 years, 72 weeks of treatment. That's part 1, based on a surrogate endpoint, which is histology. And then part 2, which is even stronger, of course, it's up to 7 years, which will look at outcome. And outcome is the foundation for full approval following accelerated approval. It's randomized, double-blind, placebo-controlled, multi-center, of course, evaluating the long-term efficacy and safety of lonafarnib in adult patients with NASH and liver fibrosis. We evaluate 2 doses, 800 milligrams and 1,200 milligrams in the Phase III study that will give us information about the efficacy of both doses when treatment is stronger than in the Phase II study. So 1.5 years will be -- 72 weeks will the evaluation of histology. The principal investigators, we have Professor Sven Francque in Antwerp and Professor Arun Sanyal in Richmond, Virginia, will be 2 of our principal investigators. The inclusion criteria of other adult patients, of course, they have to have NASH and in order to make sure that patients have active disease, we use the so-called steatosis activity fibrosis score with an activity of more than 3 or more histologically and fibrosis F2 and F3 for the inclusion criteria. Randomization is 1:1:1. And we do have a stratification going to Type 2 diabetes and the staging of fibrosis in order to guarantee that in all arms, there is an equal amount of diabetes and fibrosis and in Part 2 [ in all, ] we will also have a defined project, a minimum amount of patients who have F3, which will enable us to detect progression of disease and the effect thereof of lanifibranor. At least 30% will be patients in the United States, statistical powering is stringent based on a 90% power that's the basis for the sample size calculation. And we have established expert pathologists who will read the biopsies for screening, for enrollment, for eligibility and also then for the evaluation of the efficacy. So in part one, the primary efficacy endpoint is histology, as I mentioned, so roughly 900 patients will be enrolled in that study. And we have set the bar according to the data from NATIVE. So the primary efficacy endpoint is a composite endpoint of patients having both resolution of NASH and improvement of fibrosis according to the CRN criteria and that's a bar that we met in NATIVE, and I think that is a very good sign of efficacy. We have key secondary endpoints, which are on each of those launch on NASH resolution and no worsening of fibrosis is one and fibrosis improvement and no NASH worsening is another one. And then there are, of course, several other secondary endpoints, which are also based on the efficacy shown in NATIVE, a selection of those most important ones from a clinical perspective are listed here. Of course, we look at the beneficial effect of lanifibranor on metabolism, on control of glycemia throughout the study at Week 12 and Week 24 in patients with Type 2 diabetes. As you know, a significant percentage of patients with NASH have Type 2 diabetes, and we look at the effect of lanifibranor on HbA1c, which is also a major pathway position in NASH progression. We look at the composite endpoints of diabetic patients having both NASH resolution and fibrosis improvement. That's also, again, based on data we have from NATIVE. We look at renal function, patients with NASH, of course, also have renal, the kidneys are also involved in this metabolic disease, so that will be another relevant secondary endpoint and the reduction of the cardiovascular risk in other -- in a positive term, improvement of cardiometabolic health. We will measure quality of life, we have a number of [ questioners ]. And together, this data based on the primary efficacy endpoint, or according to the guidance of the FDA for accelerated approval in United States and conditional approval by the EMA in the European Union. So that's the important part 1, equally important is in Part 2, which is the longer duration to look at outcomes as the foundation of full approval. And outcomes are defined as progression to cirrhosis. So there are liver-related outcomes, progression to cirrhosis which probably is what we'll see most frequently in these patients who have advanced fibrosis. We have a screening method in place to detect non-invasively when it's probably the right chance to do a biopsy and to evaluate progression to cirrhosis. And other components of these endpoints are all cost mortality, impacting the compensation events when cirrhosis has occurred or events like ascites, portal hypertension and encephalopathy, MELD score above 15 or higher. MELD score is a composite score, including bilirubin which reflects a liver function and liver transplant, which can also occur specifically if patients develop an HCC before they have cirrhosis or before [ they decompensate ]. So the outcome improvement is the basis for full approval in the United States and the EMA. Next slide. This primary endpoint, where we look at both resolution of national improvement of fibrosis will certainly clearly differentiate from other compounds, which were in advanced development. It actually reflects the efficacy of lonafarnib as an pan-PPAR agonist acting beneficially on all aspects of the complex pathway or network of events that constitute NASH, starting with metabolism, lipid metabolism, glucose metabolism, insulin resistance inflammation fibrosis. PPAR signaling has a beneficial effect of all of that, which is why we have seen this strong effect on resolution of NASH and fibrosis. So that's a competitive advantage. And that will also be the foundation of the label in the bottom of the slide, comparison with 2 other advanced compounds obeticholic acid and the HRV beta receptor agonist Resmetirom which is also in Phase III. Lanifibranor is the only compound that meets resolution of NASH and improvement of fibrosis. And we have also, as you've seen, very promising data in patients with diabetes. So the next slide. And I mentioned at the beginning that the Phase III study has started. We do one pivotal study, and that's also because lanifibranor has received breakthrough therapy designation from the FDA. The study is run in many geographic areas, as you can see. So the U.S., North America, South America, Mexico, large and most European countries, South Africa and Australia. So overall, there are 25 countries, and we have more than around 350 sites who were participating, and we have a huge interest from sites, some investigators in lanifibranor based on the positive results that we've published earlier. With regard to the time lines at the high level, so the key milestones, the study has started, as I mentioned of first sites activated and first patient screened. In the second half of 2022, we plan to have the last patient first visit of the part 1 of the study. So this first 900 patients who will provide data for accelerated approval. And then first half of 2024, last patient's last visit is anticipated, which then will provide the results of Part 1 headline results in the second half of 2024. And that's then the foundation for the NDA and the request for accelerated approval. And my last slide, save the date for the AASLD, which happens in every year, the end of the year, November of this year. Unfortunately, pre-virtualized, if you wish, initially the plan to have a hybrid meeting, but it's still a very good opportunity to hear the news and about NASH and investigational compounds. And we also plan to have a dedicated meeting to our leading hepatologists and gastroenterologists from around the world. So a KOL meeting. With that, I'll give the floor back to Pierre.

Thank you, Michael. Actually, I'll take over, and I'll present you a brief overview of AbbVie and I'll try to convince you to convey the excitement that we have on this program and with the -- in the collaboration with AbbVie. So first of all, we are scientifically excited. This has always been the case, ROR-gamma made a fantastic target, because it targets IL-17 expression, it modulates Th17 differentiation. And IL-17, as you know, is a target that is clinically validated by many biologics that have been successful in many autoimmune disease in average, we'll see it in the next slide, substantial sales. The excitement also continues when you look at where this target could apply. You know that we're developing in moderate to severe psoriasis, but some of the preclinical work we have done with our partner AbbVie, and that has been published, A-9758 is an older compound at cedirogant, but still they make an action and you see results in several relevant models of psoriasis, but also arthritis, and therefore, there is a possibility to develop cedirogant in the multitude of indication. And we know that AbbVie has the experience, the teams, the winning and also the possibility to develop cedirogant in several indications. So this is why scientifically it's exciting. It's also exciting, of course, financially. It's exciting because from a financial point of view, the collaboration we have set up with AbbVie entitles Inventiva to receive milestone royalties, and the deal is back-loaded. So the royalties that we have received are not transformative. The last one was for the initiation of the Phase Ib of EUR 3.5 million. So you see that's nice to have, it doesn't change our financial situation. But instead, the royalties that start at mid-single-digit and can reach double-digit are certainly very attractive, especially when you look at the sales potential that has been reached by some of this IL-17. And once again, I remember when we started that program with our colleague at AbbVie, the team used to call this program or the ambition of the program Humira in a pill with a better safety, if we reach that, I'm convinced that Inventiva will be able to receive double-digit royalties on the sales of cedirogant. And the excitement also comes from the progress made by AbbVie and also by the quotation, the quote, what Mike Severino said during the Q1 results of AbbVie this year, where not only they confirm that cedirogant had achieved clinical proof-of-concept in patients with psoriasis by measuring the PASI score, but even more by the fact that they believe that with cedirogant they would be looking at an efficacy as an efficacy like Humira or greater, of course, with a good safety. And this is exactly what the ambition of the program. And then the last excitement comes from a very recent news published by AbbVie on clinicaltrials.gov. So please, if you want more details, do not hesitate to look at this trial, which we summarized here. It's an important trial sponsored by AbbVie, which is going to start very soon in November and Inventiva is entitled to a milestone when the first patient will be included in the study. The study aims to recruit 200 patients, which will be treated for a 16-week treatment period in approximately 45 sites in the U.S. So you see an ambitious program, which is planned to finish in November '23. So also, one of the advantage of psoriasis also the relatively short duration of this trial. On the right of the slide, you have the various primary and secondary endpoint. So for those who follow this space, I think you'll be happy to see that the typical measures that are included in the study are included, especially, of course, the PASI score. And then lastly, also the excitement comes from the overview about the competition. Of course, as the ROR-gamma is a very exciting target, many biotech or large pharma have tried to develop a neural ROR-gamma. But when you look today at the competition, you see that AbbVie with cedirogant is very well positioned to be a first-in-class and best-in-class. As many, we have attempted to develop ROR-gamma has failed, [ they ] failed either because they were not able to develop ROR formulation. This is the case of GSK or Pfizer or because they had a safety issue like Arega. So overall, we really are pleased with the progress, and we're really looking forward now to the beginning of this Phase IIb with cedirogant. So these were the brief overview about this great program. And so I'll give the floor to Jean, who will provide us with an update on the financial situation.

Thank you, Frederic. Good morning, good afternoon, everyone. So we are still relying on a solid shareholder base, rather unchanged since the NASDAQ IPO in July. There has been no financing activity, as you know, for this semester. In terms of market value, we are -- if we may say, back in the green after the little hit during the summer when we announced the ATM, but it's all back to the value before the ITM and quite good shape. However, we are still believing that considering the potential of our programs, we are probably undervalued versus peers. And we hope we will improve that in the coming weeks and months. We can review now the next slide, the key financials. First of all, it's quite straightforward. And more importantly, it is in line with our budget trend and our operational road map. In terms of P&L, no revenues recorded during the semester. But as we said, we hope that this line will move by the end of this year with the enrollment of the first patient, which is planned according the design of study in November '21. The key information, obviously, is the strong increase in the R&D expenses with EUR 19 million compared to EUR 12.6 million last year. Obviously, it reflects the acceleration efforts, as you have seen and which are dedicated mainly to the development of lanifibranor and preparation, effective launch of the NATIVE 3 phase, going along with the reimbursement of the development -- clinical development in pharma team. And the creation of our U.S. affiliates where 100% of our staff there is dedicated to the study in lanifibranor. Also, an important increase in G&A. Again, yes, R&D expenses represent 75% of our operations -- operating expense. But G&A increased as expected. This is exclusively due to the fact that since last July, we are listed under NASDAQ. So dual listing compliance costs, insurance, legal, audit, accounting, fully in line with budget because here, we're comparing this semester with the semester last year on Euronext. And we are also implementing to match the U.S. regulation. We are implementing also the [indiscernible] to be ready in case we would switch under U.S. GAAP. In terms of cash position, we are still, let's say, reasonable cash position at EUR 93.6 million compared to EUR 105.7 million last year, driven obviously by the consummation of the cash flow in operating at EUR 19.8 million compared to EUR 7.2 million, as it's directly related to the trend of the expenses, especially in R&D. The dynamics of the burn rate was EUR 2.5 million per month during the last semester. Now for the first semester at EUR 4.6 million per month. And we are heading towards, in average, EUR 6 million by the end of the year, which is in line again with the development of the study. I will be happy to answer more detailed questions if needed during the Q&A session. Thank you.

Thank you, Jean. So if we look at the near-term catalysts, of course, they seem very busy first 6 months with many of our objectives that have been met on the various programs. Concerning lending, we will, of course, provide a regular update concerning the development of the pivotal Phase III. And also, we're looking forward to the result of the study that is ongoing currently in the U.S. by Professor Cusi of the University of Florida. Odiparcil, I mentioned, we'll provide an update in 2022. And of course, on cedirogant, you should expect to hear from us once the trial is launched, and we receive the milestone for the initiation of the Phase IIb. So these are the news and updates we wanted to share with you, and I suggest we move to the Q&A session.

[Operator Instructions] Your first question is from the line of Lucy Codrington from Jefferies.

Just a few. Just firstly, on the anticipated AbbVie milestone. Should we think about that as being in a similar ballpark to the milestone you received on the Phase I psoriasis patient dosing? Or given that this is a Phase IIb is that likely to be a bit more? Secondly, do you have any insights into the recruitment status of Prof. Cusi study? And accordingly, do you see any risk to the April 2022 completion that's suggested on the clinical trials entry at the moment? And then, with safety or treatment for psoriasis at the moment in focus, given the JAK class, what are the key safety concerns when it comes to targeting ROR-gamma and is safety the key risk to the Phase IIb over any concern regarding efficacy? And with that, I'll jump back in the queue.

Thank you, Lucy. Well, I'll take the question about the milestone and the situation of the Cusi study. And maybe Pierre if you can comment about the talks in safety, about the JAK class and any potential read-through on ROR-gamma. It's quite a good question because it's actually for us when we look at the difficulties of the JAK class. We see it as a great opportunity, because not only are we asked now to deal with the replacement of Humira, but also maybe can count less on the JAK class on its own JAK to achieve that. And therefore, cedirogant might become even more important to them. But we'll see what happens in the development of cedirogant. So coming back to the milestone that is linked to the Phase IIb. So once again, the milestones are not transformative. What is really transformative in the deal are the royalties, that can reach double digit, which for a partnership that was established at preclinical, it's quite unexpected and quite high. And therefore, in terms of milestones, they of course increase over as far, the most of the program will advance, but they remain relatively small and limited. In terms of the Cusi study about the recruitment, so this is an investigator-led. So it's driven by Professor Cusi. So he's in charge of updating the clinicaltrial.gov. So he's the one in charge of updating it. So if there [ is a point, ] we can only rely on that. I think what is important to point out about the study is that it's a study that is, of course, important to learn more about lanifibranor, especially in a population that has type 2 diabetes. But once again, it's a different -- it's not the NASH population. So it's a study that is supportive, but there's no impact on how we run and carry out our Phase III. Pierre, maybe on the potential talks or safety of ROR-gamma, any insights you want to share?

Yes, sure. So yes, as you mentioned, we see for the JAK, there is a number of such issues that have been considered like serious heart-related events, cancer, blood clots. I would say that the tracks are very, very quite a [ decreased ] as we expressed actually. So they are reacting on multiple type of cells. This is different from ROR-gamma which is much more specific, specifically distributed. And from the past experience we had on at least pre-clinical models, we haven't seen any severe side effects at all. So I think clearly, the safety profile of ROR-gamma will be totally different from the JAK class. I think there was one ROR-gamma compound that has been terminated due to safety reasons, ROR-gamma product probably. And I think the compound was really displaying specific not target related [indiscernible] PCP was an increase of [indiscernible] in patients quite happily. So yes, in a nutshell, I think the ROR-gamma still will be very, very different than what we observed for [ tech ] so far.

The next question is from the line of Lenny Van Steenhuyse from KBC Securities.

Three from my side. Perhaps first one for Michael. I was wondering just to get some sense of potential patient recruitment. Could you perhaps remind us how many patients do you roughly expect that need to be screened for inclusion of the total first 900 patients of part one? Next question is on broader clinical development of lani. So development in F4 in combination settings have been alluded to since the Phase IIb results. I was wondering if there's any visibility on when these could be initiated or what events could trigger their initiation. Also in terms of scope, should we think about smaller proof-of-concept trials, mid-stage trials or immediately pivotal trials? Then the last question. I was just curious about the drivers behind the delay of the outcome of odiparcil's strategic review. So curious to hear your opinions on that.

I'll answer the first 2 questions and on Odiparcil, maybe Pierre or Frederic can answer. So NASH studies have -- has had relatively high screening failure rates, of course, for reasons that have to do with the disease and the need to have histological diagnosis and staging and creating of the disease. And there have been actually around 70%, that's actually has been relatively good if you compare with other studies. We have just started our study. So we do everything we can, of course, to be efficient. We have a number of, I would say, approaches to try to reduce the screening failure rate as much as possible, for example, by implementing imaging FibroScan before patients are considered for biopsy. And that's -- by that approach, we hope that we can keep the screen failure rates low, low as possible within the setting of NASH, of course. So it's too early to say, of course, what our screen failure rate will be, but we are aware of these challenges. And together with our partner, PRA ICON and our investigators, we do what we can to reduce that. The question about cirrhosis is a good one. Clearly, the patients with NASH who have progressed to cirrhosis represent a high unmet medical need. I mean, because they are at risk for complications of cirrhosis and ultimately need for transplantation. And there has been not really much success in that field yet. But I should say that the efforts that have tried so far have aimed at a regression histologically of cirrhosis from a histological stage for to a lower histological stage F3, which is considered to be a high bar. And what matters for patients and for the outcome is actually how the disease progresses and slowing or reversing the disease progression is actually what matters with regard to the outcome of patients. This is also corresponding the guidance of the FDA, which I think makes a lot of sense. The FDA does not recognize histological endpoints in cirrhosis patients as a surrogate endpoint. They actually require outcome improvement. In NASH cirrhosis of course, both NASH and cirrhosis, so the disease is driven by all the pathways of NASH and then the dynamism of cirrhosis itself. So I think in that regard, lanifibranor has a very attractive position and a very good rational, I think, to study lonafarnib in patients with NASH cirrhosis, because it does affect fibrosis, of course, but not only fibrosis, it has an effect on all the other pathways that drive this disease, metabolism, inflammation, et cetera. It's well known that patients who have Type 2 diabetes, for example, and NASH cirrhosis progress much more faster. So the underlying metabolic abnormalities continue to play a role. From the FDA's angle, they have made a couple of public announcements, confirming what I just mentioned about the not histology, histological improvement of NASH cirrhosis being a high bar, and also not being a surrogate endpoint. But on the other hand, offering an outcome improvement in NASH patients as a path to full approval, as a part of full approval that would also cover non-cirrhosis NASH, assuming that the compound has received accelerated approval for pre-cirrhotic NASH. So that's actually a very good plan or a strategy from the FDA, I think it makes a lot of sense. And of course, we are thinking along those lines. And we'll seek interaction with the FDA on that topic and consultancy. So I hope that addresses your question. I think a proof-of-concept study in cirrhosis is quite difficult because you have to then know what endpoint proves your concept. And the reality is that in cirrhosis there is not really one such endpoint. So I think the strength of lanifibranor in all these pathways that drive cirrhosis as a pan-PPAR agonist right, and these are receptors that really have a programmatic effect on the spectrum of disease manifestations, gives us a very strong, a very good rationale, I think, to look at an outcome improvement with lanifibranor in NASH patients, with cirrhosis. And that's our current line of thinking.

Thank you, Michael. And the last question about odiparcil, the answer is just the fact that it's just proven more time-consuming than anticipated to find a solution for odiparcil that meets our objective, which, in a certain sense, are quite simple. The first objective is to -- that we have is to find an option or solution that ensures that odiparcil continues to be developed in MPS VI patient because there is really a need. And in a certain sense, we owe it to this patient. And secondly, also, a solution that ensures a certain return and financial gain for Inventiva because otherwise, if we do not meet these 2 objectives, we're better off keeping the odiparcil for ourselves. And once we have the time and resources, get back to work and get back on developing odiparcil. So that the -- that's why we want to -- we have more time to think what are the best option for odiparcil moving forward.

The next question is from the line of Ed Arce from H.C. Wainwright.

And congrats on the initiation of NATiV3. A few questions for me. Firstly, you mentioned there's other areas and other trials that are part of your overall programming you're considering. So firstly, with the ongoing Phase II that's expected to read out early next year in type 2 diabetes, if you could just explain your thinking about that? Is that an area where you believe ultimately could lead to a supplemental NDA, perhaps a label expansion? Or how do you see that program ultimately evolving? And then turning to combo studies. Which particular mechanisms do you believe make the most sense for lanifibranor? And what areas specifically, which you think makes the most strategic sense for you? And then turning to the NATiV3 study. Of course, there's key differences with the Phase 2b. It's longer treatment, 900 patients, and it's only F2-F3. But I wanted to just focus on any of the other key differences beyond those? Because I know that a lot of the thought behind it was to try to replicate as close as possible the baseline of the Phase 2b. And then I have a follow-up.

Maybe I'll -- for the question about the Cusi and what are the objectives of this study, I'd let Pierre answer, and Pierre can also cover the rationale for developing a combination study in which mechanism of action would make it suited to be combined with lani and for the design of the Phase III, Michael, if you can take that would be great?

Okay. So the Phase II Cusi is more, I would say, an exploratory study that would lead to mechanistic data relatively to make the vaccine in improving insulin sensitivity. And this is really something that, as I mentioned, can differentiate lanifibranor's from several of our competitors, and I think it's key also for improving the condition of NASH patients. So I would say that it's something which is really -- well, it's a study that is really purely mechanistic and aimed at understanding [ establish investment sensible on specific instances ], relatively. And of course, this would be supportive data to be brought to the attention of regulatory authorities when filing an NDA for the treatment of NASH and improvement of fibrosis in patients with NASH, obviously, and also type 2 diabetes. So that is the rationale for this study, which is currently ongoing. Relatively to your question on combination therapy, so I think a very interesting combination is actually [ lanifibranor ] plus and SGLT2 inhibitor. It can clearly improve, I would say, and the efficacy of those SGLT2 inhibitors, which you probably know are also being investigated in type 2 diabetic patients with NAFLD. Plus it has also the potential to offset value-add gain that we see in some patients treated with lanifibranor. With the -- due to the negative action of SGLT2 inhibitors, which is actually reducing the amount of the cost, which can be used for [ being stored ] as fat due to the increase urinary output of glucose, which is triggered by inhibiting SGLT2 plus and maybe -- SGLT2 inhibitors so far have been proven to be very safe, also to reduce -- well, to have a lot of positive outcomes on cardiovascular events. So there is a quite a strong rationale for developing these 2 products, noting this combination, I would say. So this is study that we are currently working on and, of course, as soon as we will have finalized the design, something that we'll share with you. To Michael?

Yes. On the question on the differences between NATIVE and NATiV3, the Phase III study, main difference is the duration of treatment, which I think is actually to the advantage of the study. NATIVE was half a year, 24 weeks. And we did see, as you -- from the data provide and strong effect on fibrosis, which is actually not always the case, right? Fibrosis histologically lags behind. And often in past studies effects have been seen or have required a longer duration of treatment. So 6 months of treatment actually is a short duration to see an effect on histology, which reaffirms actually the efficacy of lanifibranor. Longer duration should, of course, play -- should enable us to see these effects on fibrosis more importantly, more strongly. And that's the expectation. And I think when we look at the multiple biomarkers that we looked at, that's also what we can expect. We see movements in these biomarkers that reflect fibrosis that should translate in the strong histology further down the road. So that's the main difference. You mentioned that the patient population is more restricted with regard to staging of fibrosis, F2-F3, whereas in NATIVE all fibrosis stages were enrolled other than F4. That is true. We have looked at the -- we have done a sub-analysis, of course, of patients with F2-F3 compared to the total population in NATIVE, and there is essentially no difference. So the efficacy remains the same when you look at the F2-F3 population study. So that's reassuring that the Phase III study is actually NATIVE. And as you know, and as I mentioned before, the patients who do have a certain degree of fibrosis advancements are the ones who require treatment -- most in medical need of treatment. So I think, by and large, we have the benefit. We expect to benefit from a lower duration of treatment in the Phase III study. And other than that most factors have been kept as stable as possible.

Great. And -- sorry, go ahead.

So I hope that addresses your question.

And if I may, one further follow-up regarding cedirogant. You mentioned the JAK class and, of course, the safety issues that have recently come up with that class. I'm wondering, given the novel class that cedirogant is in, is there -- or are there particular classes or other drugs in development that you see particularly competitive, given the overall profile to date of cedirogant?

I think if you look at the space, of course, how the [ TIK 2 ] will evolve, but there will be a class to follow. But I said that, we have not identified compound or mechanism of action that can approach the potential of -- or once-daily oral ROR-gamma.

The question is from the line of Zegbeh Jallah from ROTH Capital Partners.

I think the first one for me is just a follow-up to the last question regarding future development for lani. And I just want to clarify if the plan is to use the same doses that you're currently using for both the combo and for the F4 patients because I imagine that would impact the development time line.

Well, concerning on doses, maybe speaking under the control of Pierre and Michael, I think it's a bit too soon to project ourselves on what type -- on what are the doses that are suited either if we decide to develop a fixed combo or that are suited for development. So let's first focus on the current Phase III and F2-F3 and then once we have our plans for the other fixed-dose combo or [ before ] we can communicate on the adequate dose.

And then the last one here for me. And I think I've asked this question before, but again, just wanted to clarify for your sites that you're currently using, are there ongoing studies at those sites? And then, again, how are you planning to kind of differentiate lani or how are doctors differentiating lani in terms of recommending patients for your study or for another study that's currently ongoing at that same site?

Yes. Maybe, Michael, you take that?

Certainly. Yes, of course, NASH is a very competitive field as many other diseases that represent the medical need, of course. So it's not unique, but it is very competitive. There are considerable number of studies in different stages of development. And therefore, most sites that have experience in NASH do have other studies, that's obvious. And how do you differentiate? Well, it's a number of factors, right? I mean first of all, I believe the most important argument is the fact that lanifibranor is a very promising compound to reach the market. It's -- efficacy data have been very -- and safety profile have been very convincing to the community. And whenever I speak with hepatologists in different parts of the world, they have lanifibranor as on their radar screen very clearly. And there is some demand for a compound like lanifibranor and has to do with the fact that it is people agonist that it really addresses the part of physiology of NASH at all levels. And that's not something that all compounds do. I think that is an advantage. So we also -- as you may see from publications have been presenting at EASL recently, looking at our data in the Phase II study in NATIVE, lanifibranor has a very convincing efficacy on all markers of cardiometabolic health on lipids, glycemia, et cetera. So these are important differentiators. We treat the liver disease, but also the entire spectrum of what constitutes metabolic syndrome with a compound like lanifibranor and pathologists or physicians who are seeing these patients, they know that and they appreciate that. And I think that gives us leverage. Of course, leverage does not come by itself. It does not make us complacent, so we do. We're fully aware of the fact that there are other compounds, which are also attractive. And so we have -- we will continue to be present scientifically. We work on good working relationships with our colleagues, investigators at different sites, together with our partners. So we have really -- we are aware every day that you have to earn that leverage, if you wish, and that is part of the efforts we do to have a very efficient operations aspect of the study, which includes multiple levels of how we interact with sites and keep a good working relationship. But I think the core of all is really the strength of lanifibranor and how it addresses the disease.

I have one more question on the phone, and this is from Del Le Louet from Societe Generale.

Yes. I was wondering what close are you from the AbbVie team regarding the development? Because I'm wondering, do you have any view on the dosage that's going to be selected. We see there is 3 dose that will be activated in the cedirogant Phase II trial. Any chance then one of them may target pediatric patients? Do you have any view on that? Secondly, can you make a secure date regarding the ramp-up in terms of royalties, Jean, possibly, I don't know if you were previously disclosed, basically about the just to get an idea if it's, let's say, comment regarding the scale-up to the double digits according to revenue? Or if there is anything we keep in mind? Regarding lanifibranor, we had some painful times previously under recruitment. So what would be your communication and do you have any idea on the way you're going to communicate regarding the number of patients included into the trial? Or you remember previously, you were also communicating on a number of opening sites, screen patients, recruited patients? Is it something that you're going to continue? Or you're going to say, basically, at the end of the 900 patient [ here or ] there, just for us to get an idea? On odiparcil, we had a previous question, but I do understand your response, but I was also really wondering what is new that make you think that you may have a different proposition than the one you have in hand, if so in the next couple of months, because there is no new clinical data, I guess, no new interpretation of data. So what is the elements that would trigger this additional year of a strategic review? And finally, can we get an update on the oncology pipeline and the YAP-TEAD program that you were working on?

So first question about the AbbVie -- our program with AbbVie, of course, we -- it's, of course, a good relationship, and then we have the contractual communication that you see that allow us to have access to the cedirogant. Otherwise, it must be clear that in terms of development strategy, this is fully in the end of AbbVie, they are totally in control. And I have to say that I think this is a great advantage because when you talk about which is a company in the world that can develop successfully a compound like ROR-gamma in the autoimmune disease space and who is strategically motivated to do so. I think AbbVie, of course, comes on top of the list. Directly on your question about the pediatric, frankly, I don't know. I suspect, nevertheless, but that's my personal opinion that they would have to run a specific study in pediatric patients. About lani recruitment, there are, I think, what is, I would say, required by the stock exchange. So if we are delayed, we believe this is a material information, so we will have to communicate on that. Otherwise, will we -- during the recruitment period, make regular updates, we haven't decided on that. We also need to be careful about competitors. So we have not taken a decision. And otherwise, we'll also have to communicate under the [ SMB ] and, of course, the safety ever something unexpected comes up. Then on odiparcil, this thing evolve, competition can evolve. We also have the planned meeting with the FDA to discuss to validate what it would take to get this product on the market. So this is probably an information that can strengthen our package. But otherwise, you're right, in terms of data, we are not planning to develop new data, of course, not in human and not preclinically. And then on YAP, there I would turn to Pierre because indeed, there have been on the Hippo pathway, some exciting developments. So this is certainly an oncology target that is getting more and more attention.

Yes. So just to add on odiparcil, we have also a few papers submitted being reviewed that we'll also share some interesting critical information to be published. And I think this will be also an important step. And regarding YAP-TEAD, so we -- as you know, there are 2 data companies that have been working on this program, we got Ikena. We've been busy those days comparing the portfolio of our compounds with [ Yasin ]. And we -- you've seen how familiar you are, but you virtually are have compound that in a bit the contact of the -- between YAP and TEAD. The YAP has the kind of something you remember which is very close, called TAZ that can actually be activated when YAP-TEAD is inhibited, and we have data showing that oral compound inhibiting both YAP-TEAD and TAZ-TEAD, which makes this -- the profile of our compound very different from those that have been published by Vivace and offers the opportunity to target many other cancers. So we are currently working on this particular type of compounds and improving the PK profile of those who have been in a position to [ mentor ] and in vivo studies.

And I think, Delphine, question for Jean, but can you repeat it?

Yes. No. I was wondering regarding the -- not the milestone, sorry, the royalties, run rate and the scale-up to the double digits. So I don't know if it's something that -- I can't remember if that was publicly communicated already regarding the level of sales -- targeted sales. Is it something that we have in common with the rest of the industry? It's a progressive ramp-up in terms of royalties, right?

What we can say that, first of all, we cannot disclose anything about the conditions. What we may say on the call of Frederic is that, the ramp is reasonable, if I may say to reach the double digits. It's not something which could be considered as very aggressive. But we see how the market will grow and how the launch, if there is the approval, obviously, will behave. But I mean, it's quite balanced and impossible to reach.

Okay. So there are some questions online, Jean-Jacques Le Fur from Bryan, Garnier, several questions, so I'll try to address. So the first one concerned the ATM and the question relates to the fact if we raise EUR 100 million with the ATM, would that totally sign under Phase III? So I would say that, first, on the ATM, this is an opportunity that is available to companies open on the NASDAQ. And it's clearly something we would -- we wanted to benefit because it happened that some long-term investor contact us, they want to buy a -- they want to build a position. They are not allowed or not allowed, not unable to do that because the liquidity is limited. In that case, we view that an opportunity to give us some financial flexibility, but we have not decided to use the full amount of the EUR 100 million. And yes, if we ever raise EUR 100 million, and we continue with the other options, we are starting like loans, like a partnership, there is a high likelihood that the Phase III will be fully funded. Then Jacques also asked about the partnership discussion, if we have a discussion with potential partners? Of course, I cannot go into details. But of course, if you look at the NASH basis, it remains an area totally unmet with the high potential. And if you look at the drug that have shown promising results that have met the 2 regulatory endpoints from the FDA, lani really stands out. So of course, we have had a discussion with potential partners. But always, first, with the option that we do it on our own. And secondly, clearly, we think lani has a high chance to make it to the finish line. So we want to keep a lot of or we want to keep downstream value, especially in the U.S. market. So this is for us a non-negotiable, which we have -- and this is something that I think is important for our shareholders. Then there are a question from Jean-Jacques concerning cedirogant, and more specifically, the fact that they are out there, a compound like SKYRIZI that only require 3 or 4 injections per year. And that, therefore, may be oral drug, it might not be such a [ pan-SA ] or other solutions. So I -- there, I would say, first, the objective of cedirogant is also to have an efficacy that is similar to Humira. If we look only at the psoriasis area, we see Otezla, but certainly an efficacy that is -- I wouldn't say minimal, but reduced compared to IL-17 or compared to Humira. And still, Otezla has made in 2020 more than $2 billion. So there is clearly the position or a role for an oral drug. And then finally, AbbVie is commercializing SKYRIZI, but they are still very much motivated by cedirogant, so there must definitely be a place for this drug. This, I think, cover the question from Jean-Jacques. And then we have one last question that tackled the R&D expense. And if we can give some projection about 2022. So I'll turn to Jean for that.

Okay. So as you know, we cannot disclose any projections. But you know where do we stand today in terms of the Phase III momentum, we did not sign the contract Jan 1 with the CRO, CDMO. So this year, we will not have a full-year base in terms of expenses. So mechanically, next year, we should have a light increase to take into consideration a full annual basis, also including the full year of our U.S. operations. So I may say that it would be in continuity, slightly increasing for next year.

Thank you, Jean. So this covers the whole Q&A session. I would like to, on behalf of all Inventiva team, thank you for your support and for following us over the past year. And of course, we look forward to provide additional exciting news with our pipeline, lani, cedirogant, odiparcil and, of course, YAP-TEA. So thank you very much, and have a great day.

Thank you. That does conclude the conference for today. Thank you for participating, and you may now disconnect.