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

Good morning, and thank you, everyone, for joining us today. Hope everyone is enjoying the final day of JPMorgan's 40th Annual Healthcare Conference. My name is Tarun Soni, and I'm the Vice President in JPMorgan's Healthcare Investment Banking Group. Before I introduce you to our presenter for the session, I want to call your attention to the blue button on your screen, which says ask a question. This is where you can submit your questions, and I can address them during the Q&A session with Frederic. With that, I'm very pleased to introduce you to Frederic Cren, CEO of Inventiva Pharma. I'm sure he is very excited to tell you a little bit about their story. So over to you, Frederic.

Thank you, Tarun, for the invitation and for the nice words of introduction. I'll share with you an overview of Inventiva today. So if we move to Page 3 of the -- Page 2 of the presentation that are only some forward statements, just to make sure that today, I will be making forward-looking statements. And for more information, please consult the regulatory information that is available on our website. But let's turn to Inventiva story, and so let's move to Page 3. This is an important slide, just to give you the key takeaway from the company. And I would like to highlight the fact that if you look at Inventiva, there are 3 pillars, not only one, we are often considered a 1-asset company with lanifibranor, which, of course, is a great asset, potentially a first-in-class and best-in-class NASH drug with, I would say, exceptional result of this Phase IIb with an asset that has shown the its ability in 6 months to reverse NASH and to reduce fibrosis by 1 stage. It's a mechanism of action that addresses all the key features of NASH, and this has been recognized by FDA with after Fast Track designation, the designation of breakthrough therapy. And on the back of this very good data, we have moved into pivotal Phase III, which we initiated as planned in Q3 '21. So this is the first pillar. But on top of that, we have a second asset, which we are extremely proud and which is coming from our partnership with AbbVie. And this is cedirogant or ABBV-157. We see the small molecule, RORgamma Inverse Agonist. And actually, the first 3 bullet points of this slide are taken from yesterday's AbbVie presentation, and we were very pleased to see that ABBV-157 was one of their key assets mentioned in their immunology franchise. This is an asset that potential -- has a potential to more effectively inhibit IL-17 production than antagonist approaches. It is an asset that has shown, as AbbVie said, promising activity in a Phase I study that involved patients with psoriasis. And as planned, they started Q4 '21, a dose-ranging study, Phase IIb study in psoriasis. And the last bullet point was added by me, and it's very important. It's the fact that Inventiva is eligible to receive milestones but especially royalties that can reach low double-digit levels. The third pillar of the company is its strong R&D capabilities and cash position. We have grown with the company. We now have R&D capabilities in France, of course, in Europe, but also in the US with a [ clinical ] team that is up and running with our CMO that is based in the US, up and running to manage our Phase III NASH. We continue to be supported by strong European and US investors, and we have a cash position that finances the company through Q1 '23. So let's now move to Page 5 and talk about lanifibranor, our pan-PPAR agonist in development in NASH. So what is particular about this asset? If you look about it, it's a small molecule, and it's the only pan-PPAR able to activate the 3 isoforms currently in development in NASH. It's important to highlight that this is not a T2D. It's not a fiber. This is a unique and novel chemical structure, once daily orally available, and this is the differentiating factor versus other molecules, other approaches in NASH that are injectable. I talked about the strong Phase IIb results, and I'll come back on that. Supported by Fast Track that has been recently extended to cover cirrhotic -- compensated cirrhosis patients, and we enjoyed Breakthrough Therapy. IP in many countries running until 2035. On the tolerability profile, we have run a large number of Phase I in more than 200 healthy volunteers. We have a Phase IIa in close to 50 participants with type 2 diabetes. 250 patients have been included in our Phase IIb studies, the longest one being treated for 48 weeks. We recently completed a thorough QT/QTc study, and we're very pleased with the result because we demonstrated no impact on the drug on QT intervals. This study, of course, was done in preparation to the NDA that we are preparing to commercialize Lani after the Phase III NASH. We also had FDA confirmation that the non-clinical tox study that include a 1-year monkey study, 2-year carc studies, is considered by FDA complete and acceptable for NDA filing. If we turn now to the next page, Page 6, let's look at the overall development plan. You have here in green the study that have been completed. In orange, the study that are currently ongoing, the Phase III, F2-F3 patients with fibrosis and then come back to this study. We have a very interesting study in patients with NAFLD and type 2 diabetes that is ongoing. And we have recently announced our plan to launch this year a very interesting combination study of Lani with empagliflozin and SGLT2 in patients with NASH and type 2 diabetes. In light green, you also have a study -- a potential study that we could launch in patients with NASH, with compensated cirrhosis. We plan to meet with FDA and discuss the design of this study this year. Moving now to Page 7. What are the key highlights or key headlines you can expect from us? And you'll see that we'll have a busy coming years with a clinical readout every year. This year, in the second half of the year, we'll have the headline results of the study in patients with NAFLD and type 2 diabetes. In the second half of '23, the result of the Combo Study, Lani plus and empagliflozin, and in '24, the headline results from the Phase III. So you see a continued flow of clinical results. So let's move to the NATIVE Phase IIb. So Page 8, this is the trial design. You're probably familiar with it. This was the Phase III [ NATIVE ] study with biopsy at the entry and at the exit with a centralized analysis, blinded centralized, 2 doses of placebo, 247 patients, stratified and randomized 1:1:1, with stratification on type 2 diabetes patients. I will come back on the Phase III of the inclusion criteria. What is important to highlight is that the inclusion criteria between the Phase IIb and the Phase III have not changed. On Page 9, you have the results from the biopsy study. What is exceptional and particular to highlight is the fact the high dose was statistically significant on all primary and all secondary endpoints. And especially on those endpoints that are important for FDA and EMA for approval, resolution of NASH and no worsening of fibrosis, improvement of fibrosis and no worsening of NASH. And also, I would like to highlight one endpoint that is really important, which is resolution of NASH and improvement of fibrosis. This is important because the 2 doses were statistically significant. We had 3x to 4x more responders in this endpoint. And also, this is a relevant endpoint because this is the endpoint that we have selected for our Phase III as primary endpoint and that has been selected by the FDA as the primary point of our phase. Moving to Page 10 on top of very nice, very good biopsy results. It's important to highlight that we had statistically significant effect on liver enzyme, with an efficacy starting after only 4 weeks of treatment. Similarly, moving to Page 11, if we look at the metabolic profile, a statistically significant increase in HDL, reduction of triglycerides, no change of LDL-cholesterol. So you see that Lani is also a compound, providing a favorable metabolic profile. I mentioned that we had included patients with type 2 diabetes. This were stratified. And on these patients, we were very pleased to see that we provide -- and we'll provide improvement in insulin sensitivity and glycemic control. And these were patients with type 2 diabetes that were controlled with metformin or sulfonylureas. And you see that those treated with Lani had an improvement in their insulin profile. Page 13, I will not go into the details, but just to let you know that we continue to dig into this Phase IIb result and we'll continue to do so. So we have presented and there are details here at EASL and AASLD, a relevant sub-analysis, and we'll continue to do so in the upcoming meeting. So you should need to look out for additional data coming from this very interesting study. Safety, of course, is also important. In safety, we had a favorable safety profile. You have here the slide summarizing the adverse events that I've seen. I'll come back in the next slide in the serious treatment emerging adverse events. And just to highlight that consistent with the mechanism of action, we had a small moderate weight increase. And we also see some cases of peripheral edema, but only 4 were attributed to the drug. And out of those, most of them were moderate or mild. Page 15, looking at the treatment emerging adverse events. If we take out from this slide those that were related to biopsy, you see that those emerging adverse events were evenly allocated, let's say, between the 3 arms and none of them were worrying. For those of you that would be interested in having more detail, in Page 16, you'll have the reference from the New England Journal of Medicine that in October accepted Lani Phase IIb for publication. Page 17, it's a slide putting the data into context. And you see that we have oral compound that was the only drug currently in development that was able to add statistical significance on NASH resolution and on fibrosis. And when you look at the responder rate, you see that we are in a very comfortable and in a very good position compared to other drugs, especially [ oral approaches ]. Turning to Page 18, the design of the Phase III, which is called NATiVE3 that's currently ongoing, not a surprise to all of you that follow the NASH phase, a typical design with a Part 1 of 72 weeks, the same 2 doses versus placebo, followed by an extension period. Importantly, if we look at the inclusion criteria, as I said before, we have not changed the patient population from the Phase IIb. We will use the same screening criteria. Randomization, stratification 1:1:1, the same stratification on type 2 diabetes. And this time, we also stratify for F2/F3 and we will enrich the population with F3 patients. US are an important territory for NASH, and we expect to have at least 30% of patients. In Part 1, we'll have roughly 900 patients with a statistical powering of 90%. The central biopsy process has been validated with FDA, and we have adopted, maybe ahead of others, an approach with 2 pathologists to validate the screening biopsy and 3 pathologists will be involved to evaluate the exit biopsies. On Page 19, you have the summary of the primary endpoint and the key secondary endpoint. There, too, no surprises, we have used and we have adopted as a primary endpoint, the composite endpoint looking at patients who enjoy both the NASH resolution and the fibrosis reduction. Just remind you that we met with the 2 doses of this endpoint in our Phase IIb. And we also confirm with FDA that if after the 72 weeks, we meet the primary endpoint, we will be eligible to file for US accelerated approval in the US and conditional approval in Europe. On Page 20, you have the extension period, where a number of clinical events will be measured and this extension period will end when a certain number of clinical events will take place. Where do we stand on Page 21 with this trial? So we plan to qualify more than 330 sites, where we plan to run this study in 25 countries. The first country that has been opened in Q3 are the US. We have more than 50 sites that are now up and running and screening in the US. We have other sites running in 2 European countries, and we continue to open countries and sites as we speak. In parallel to the Phase III, we have 2 important studies up and running. And this is our Page 22. This is a study that we'll read out this year, study in patients with NAFLD and type 2 diabetes. This is a mechanistic study. We will dig deeply into the mechanism of action of Lani in patients with type 2 diabetes with a series of measures on the metabolic profile. We will perform PLAN study. There are imaging studies involved. So we think this will provide a wealth of information that will be useful for positioning Lani in that phase. We also think even the Phase IIb result, this is quite a derisked study and we have high hopes for this study. Moving to Page 23. We also looked at what potential combination study we could run with lanifibranor. We looked at potential studies with GLP-1. We published also preclinical data showing that Lani, when combined with ACC inhibitor, provide synergistic effect on fibrosis. But at the end of the day, we decided to launch a combination study with SGLT2. This is motivated by a number of studies that have been run with a PPAR gamma called bio and different types of SGLT2 inhibitors. Quite a large number of patients because totally, there were 1,400 patients with type 2 diabetes patients involved. And the results were quite encouraging with efficacy on HbA1c, reduction of fasting blood glucose level and also weight reduction. And so that's what triggered us in exploring a study that is called LEGEND and that you find on Page 24. And this is a study, where we will study the low dose of Lani plus and empagliflozin versus Lani alone versus placebo. The primary endpoint will be the reduction of HbA1c change. But on top of that, we'll have many evaluation of liver function. We'll have imaging and also, we will evaluate the changes in body fat composition. The first site we plan to activate in first half of '22. And as I mentioned before, we're looking at headline results for this study in the second half of '23. So that's for a quick update on Lani. Let's now move to Cedirogant. So that's covered on Page 26. So cedirogant or ABBV-157 is the clinical stage RORgamma inverse agonist that we discovered with AbbVie. It's actually a very interesting approach because RORgamma is a nuclear receptor, that is a master regulator of Th17 differentiation and controls IL-17 expression. And IL-17, as you know, is a validated approach in clinic by biologic. But the beauty of this approach is that you can, with a small molecule, block IL-17 expression. And therefore, from a patient point of view, you could move from injectables to orally to an oral once-daily drug. The beauty also of this approach is that it applies to several autoimmune disease. We have some data that have been published with an earlier compound than ABBV-157. These are examples coming from the psoriasiform dermatitis, RA, but other autoimmune disease could also be targeted with this approach. If we look to Page 27, there are some additional data about where the program stands and why we're excited by this drug. We are excited because cedirogant target product profile from the beginning has been to develop a Humira in a pill, but with a better safety. We're excited because the financials, I think, are very motivating for Inventiva. So AbbVie is in fully in charge of the clinical development and the commercialization and we are eligible to milestone and also very importantly to royalties that start from mid-single and reach low-double digits. On the right side of this slide, you have some of the examples of the IL-17 and other drugs active or commercialized in psoriasis. And you see that the level of sales that these drugs are reaching are extremely interesting. Composition of matter patent has been filed recently. So of course, we can enjoy a long commercialization period if this drug makes it to the finish line. Where we stand in terms of development? A single ascending dose has been completed by AbbVie and following Phase Ib in patients with chronic plaque psoriasis was completed. And AbbVie announced in their results that they will be looking for this compound for Humira-like efficacy or greater, which is exactly the profile of the objective that we were aiming when we started this program. Very interestingly, AbbVie has also announced that they have started a Phase IIb study before the end of last year. This is a 16-week treatment, 200 patients, 3 doses of cedirogant versus placebo. And as you can expect, PASI score will be the key evaluation criteria in this study. Concerning timing, the study started in late '21, and the study is expected to be completed in Q1 '23. So this is really exciting for us because it means that next year in '23, we'll have the result of this very important study from cedirogant. Looking at milestones. So that in Page 30, we anticipate a key milestone. You see we have a busy year in the coming -- in the next years with a series of clinical results that are involved in this slide. So we'll have the headline results from the study in patients with NAFLD in '22. In '23, 2 results from the Combo Study, Lani plus empagliflozin and the end of the study in Phase IIb of cedirogant. And in '24, the result from the Phase III NASH. Of course, in the meantime, we'll have updates on Lani in terms of recruitment and also updates from cedirogant because, as you know, we are eligible to milestone payments as the program progress clinically. So these are the key updates I wanted to share. And now we are open for the Q&A session.

Thanks a lot, Frederic, for the great overview of your company. So we have a first question from our conference portal. The question is, what are your plans for commercialization in Europe? Are you planning to do it yourself? Or you are looking for a partner? And when are you expecting to commence partnering discussions?

Yes. Excellent question. So I think Inventiva has proven its capabilities as an R&D company. From a commercial point of view, especially in NASH, there's such a large commercial opportunity, we think that would be better suited to be -- to find a partner. What is the best moment to find a partner? I think it would be post data. But of course, provided the financials are interesting, we are open to start partnering discussion today. But of course, we think we have derisked this compound. We know exactly what it takes to make it to the finish line. And so we feel that if we have to partner now, it needs to be on financial terms that are attractive for us and for our shareholders.

Cool. Thank you, Frederic. I just want to call your attention to all the audience. If you want to ask a question, please use the blue button on your screen which says ask a question, and I can ask the question to Frederic. So a question to you, Frederic. There are like couple of key events, which are going to take place probably this year in 2022 from your competitors, Intercept, as well as from Madrigal's data. What do you think are some of the key takeaways for the entire NASH phase probably, first of all, because both of them are in the Phase III? And what are some of the breakthroughs for your own product lanifibranor from them?

Yes. I think you're right. Yes, there are many events where I think everybody is looking forward to the Madrigal results. And 2, will Intercept be able to file again Ocaliva? Breakthrough for us, I would say, it's -- I would say, first, NASH, as I [ explained that ] if you look at the result of the last -- over the past year, except our results, it's been more often a disappointment than anything else. So I think the overall space is looking for good news. And us too, we really hope Madrigal will have positive data. We hope that Intercept will be able to file again with FDA. Breakthrough for us, I think, given our results, we feel comfortable. I don't want to be too optimistic or discard competition. But if you look at our data, we really have efficacy level that have not been shown by anybody else. And so we really think we can take on competition with confidence and that we have a compound that is sufficiently differentiated to make it to the finish line and to be commercially successful.

All right. So one of the key question is that you presented in your presentation that -- first of all, that was a great chart in terms of comparison across different products. So there are 2 key endpoints. One is NASH resolution, as well as the second endpoint is the fibrosis improvement. Now some of these products have not achieved that, at least in your Phase II data what we have. How are you thinking the regulatory bodies going to look into this data for your competitors? And when you have mentioned that you have an advantage of showing benefit on both NASH resolution and fibrosis improvement together, so how does that play to an advantage to lanifibranor?

Excellent question. So in the US, the FDA is very clear. You need to either meet NASH resolution or fibrosis. That's very clear. So a compound like Ocaliva that only has fibrosis could fire. In Europe, it's different. You need to meet both. And the EMA has clearly said, we'll give approval only to a drug that can show significant NASH resolution and fibrosis. And so if you look at that, for the moment, the only compound that could, let's say, be commercialized worldwide is Lani. And I think EMA has confirmed that. The other point, I think, is one thing, the regulator. But if you look at the payers, that is a discussion we have with them is that NASH resolution is nice, fibrosis is better. Because at the end of the day, what you want to avoid that where the costs are is to avoid that your patient becomes F4. So you want to avoid that. So you want to act on fibrosis. And clearly, at least this is our read is that payers are much more interested in a drug that shows antifibrotic activity. And this is also why we put our primary endpoint, this compound, this co-primary endpoint where we really want to show that our drug is acting on NASH resolution and also on fibrosis because we think that this will put us in the best position to negotiate a good price and also to be commercially successful.

All right. So one of the key points that you have mentioned for lanifibranor is that regarding the weight gain and the peripheral edema, how big, based on your conversations with the KOLs, is that of an issue? And if you could comment also regarding the quality of weight gain because I think this is kind of a good weight gain, if I'm correct. So can you please comment on that? And what has been your research around it?

Yes. It's an excellent question because when we talk to KOLs, physicians, they're not worried by weight gain, the edema. They see the data. They know. They are familiar with the concept of good weight gain. This concept that if you look at the patient with Lani that increased the weight and you look at their metabolic profile, it improved. So they gained some weight, but they improved on LDL, on HDL, insulin and blood pressure. So all of that goes in the right direction. And we know that from the mechanism of action, this weight gain is explained from fat moving the visceral, from the visceral fat into the adipose tissue, which is the concept of good weight gain. So we are not worried. We get sometimes more feedback, more pushback from investors because they are less used to it. But at the end of the day, we are more happy to know that the KOLs and the physicians understand that concept and investor because we can explain it to investors and I think that ultimately they will get it. And then also importantly, I think that there are also pharmacological ways to control this weight gain. And this is why we also are exploring this combination because for some patients, it is a cosmetic issue to gain a couple of kilos. If we find a way to reduce this potential weight gain with -- combining it with an SGLT2, that also provide advantages in terms of HbA1c or cardiovascular -- reduction of cardiovascular risk. This is also an interesting approach. And this is why we launched the LEGEND Study.

Got it. So that's a nice segue for my next question, which is that you have lanifibranor, both -- you are evaluating in your NATiVE3 trial as a monotherapy, as well as the LEGEND trial in combination with SGLT2 inhibitor. So how are you thinking in terms of what would be the patient population where you would be using lanifibranor and in which patient population you would be using the combination?

Yes. Lani, given as a monotherapy, given its activity on NASH resolution and fibrosis, we really think it can be used very largely in all patients at stage of F2/F3. Of course, patients with type 2 diabetes are also an interesting sector. But if you look at the data we recently published at AASLD, where we showed that the patient with prediabetes treated with Lani had a reduction in progression to diabetic stage. That's also quite interesting. So you really see a large patient population that can enjoy lanifibranor as monotherapy. The combination, I think, is more a tool that we want to provide to physicians if they have a patient that experienced some weight gain, that really feels uncomfortable with weight gain that cannot go on a diet, that cannot do exercise, then that could be a solution provided to the physician to control this potential and modest weight gain.

Got it. So one of the questions I may just want to ask is regarding -- in terms of the diagnosis and as well as in terms of testing, any of the noninvasive biomarker that you are very excited about? We know that biopsy is the gold standard. So anything from ASLD or in your research that you feel would be -- or can be utilized for prescription more importantly?

Yes. So I think the field is moving very quickly. So personally, I still don't know who's going to be the winner. Will it be blood serum test? Will it be imaging? But you really see progress every time we go to a [ Congress ], new data, new things that are happening. The only thing I'm convinced is that while biopsies are the gold standard for the clinical trials, from a commercial point of view, I'm convinced 100% that there are going to be a noninvasive step that will allow to screen your patient and to identify those that should be treated with Lani versus those that should not be treated because they do not have NASH. I'm pretty confident that by the time Lani is on the market, we will have a noninvasive test widely available.

Got it. So let me switch gears to the -- to your next asset activity, which is interesting that you have highlighted, which is cedirogant, the RORgamma for moderate to severe psoriasis. Could you please -- I know the data is not out and still, we are waiting, but could you please provide an update on the Phase IIb program? And how your asset is differentiated compared to some of the traditional, which are already launched and approved in the market like the IL-17s or 23s and the upcoming TYK2s for psoriasis?

Yes. So the -- so update on the Phase IIb. So the Phase IIb, first of all, to be very clear, it's managed by AbbVie, which I think is a great opportunity for us because if you can name a company that knows how to develop a compound in this space and make it a success, everybody would name AbbVie. And they are running that study. The study is available on clinicaltrials.gov. It started in November. It's running in Japan, US, Canada, and the results are expected early '23. On the mechanism of action, what is great about RORgamma is the fact that it can really block IL-17 expression and that it's orally available. So compared to biologics, it's immediately the advantage of being oral versus injection, compared to TYK2, I think it will be more on the safety. I think TYK2, it's linked a bit to the JAK family. The JAK have had this labeling issue, FDA regulatory question. So I think that certainly will be an advantage for RORgamma. And then lastly, I think where we are, I would say, proud of what we have achieved with AbbVie. If you look at the competitive landscape about RORgamma, of course, it's such an interesting target. There were a lot of contenders, a lot of companies that tried, but there were also a lot of failures. Some companies never managed to develop once daily. And we have a once daily. Some other had safety issues like -- it was well reported by Allergan with liver issues that we have not seen. So we -- I think that from a research discovery, the work done by AbbVie and by Inventiva has been tremendous.

Got it. So just following on that, what do you think for this asset, is it the more efficacy that you would be -- you would say that is going to blow out if it's successful? Or is it more of the safety that is going to meet an unmet need?

Excellent question. I think where there is an unmet need is on having a drug that can have the efficacy of an IL-17 with a safety due to a shorter half-life that could be improved, and that is orally available. If we take a compound like Otezla, that is a blockbuster with an efficacy that is -- if you look at their PASI score, well below IL-17. If you can have an oral drug that has an efficacy, let's say, Humira-like and that is oral, I am convinced that this can find a commercial space. And on top of that, we are focusing now on psoriasis, but it's a mechanism of action, that can -- could be extended to other autoimmune diseases. And hopefully, that would be the case for cedirogant.

Got it. And just maybe a question, although JAK psoriatic arthritis, it may not be for psoriasis, so how are you thinking? And the JAKs got a black box label as well recently. So any anticipation of how your RORgamma is very different and will not have issues like thrombosis or other malignancies like the JAKs in your asset? Any initial views? I know it's too early, but there has been a lot of RORgammas from your competitors, which have failed. So any breakthroughs?

Yes. I think, first of all, I think we need to be cautious. It's starting now Phase IIb. It would be unfair to compare it with JAKs that have done a large number of Phase III and have been commercialized. What we can say is that just look at the data right now and AbbVie is continuing the development. So they consider that the safety is there and that, as I mentioned, the efficacy is there to be sufficient to continue the development. Compared to other RORs, I think what is important is to understand why they have failed. Some have failed because, as I mentioned, they did not meet or they couldn't develop a once daily or could not develop an oral formulation. So they had topical formulation. So this is clearly something that we have overcome because we have a once-daily compound. Some, as I mentioned, had issue in the liver that was compound-related because of RORgamma. The liver is not the target organ for RORgamma. So all of that, we managed to navigate and really developed a compound that seems to have the potential to be best-in-class and also first-in-class.

Got it. Thanks a lot, Frederic, for your great thoughts, and it's been a pleasure hosting this session with you. I hope everyone enjoyed the virtual JPMorgan's 40th Annual Conference. And hopefully, next year, we'll do it in person. So thank you all. And have a great rest of the day.

Thank you, Tarun.

Thank you.