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

Well, thank you for joining me today at this fireside chat with CEO of Inventiva, Andrew Obenshain; and the CMO, Jason Campagna. I will do a quick disclosure from Morgan Stanley. So for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Without further ado, let's get started. Andrew, before we get into the details, could you give us a brief update on where Inventiva stands today and what investors should understand about the company as you approach a very pivotal Phase III readout?

Thank you. And those last words are the keywords. We are approaching a Phase III readout for our sole asset, lanifibranor, and we've guided that, that readout will happen in Q4. So it is imminent. And for those of you that don't know Inventiva, we are a single product company based in France, and lanifibranor is our lead product. It is a product that treats the disease of NASH, which is 1 disease, but that has 2 disease drivers and lanifibranor addresses both those drivers. Let me just give you a little bit of an overview of NASH. NASH is liver disease and it's the second leading cause of liver transplant in the U.S. There's 2 drivers of disease. There's the scarring of the liver itself, the scar deposit and the lack of scar dissolving and that can progress up until cirrhosis and it can be death sentence if you get to cirrhosis. But it's really driven by metabolic dysfunction, by dyslipidemia, by sugars, by adipose tissue health. And the existing therapies on the market right now really address one of those 2 drivers that either address the liver directly or they address the metabolism. There's no therapy that actually does both. And lanifibranor is really the first that addresses both. And we were very excited to see our readout in the Phase II, which is published in the New England Journal of Medicine, which showed the leading oral efficacy in this disease with an 18% reduction of fibrosis. We're looking forward to try to duplicate that in the Phase III.

That's really super interesting. And you've talked about this kind of dual mechanism for lanifibranor. MASH is often thought of primarily as a liver disease, and you described it slightly differently. So why does understanding MASH as a systemic metabolic disease MASH when you think about how you're going to treat it?

So the -- if you address just the liver, you are addressing just 1/2 of the disease. You're not addressing both. And there's a -- there's been some studies that have shown that you could give a patient the best liver drug that exists, which is a liver transplant, but a healthy liver into a patient with MASH. And within 5 years, they will all have MASH again. And about half of them all have fibrosis because you haven't addressed the metabolic dysfunction. So in order to really get at a long-term solution for disease, you need to be able to address both, and that's what lanifibranor has the possibility of doing.

So with that in mind, like what is fundamentally different about lanifibranor's pan-PPAR mechanism? And why do you think that it could like why do you believe that difference matters clinically?

I'm actually going to hand that over to Jason.

Yes. So we've known for a better part of 25, 30 years now that the PPAR pathway, alpha, delta and gamma are generally metabolic reprogrammers. They manage sort of the state of energy metabolism in an organism. So you think about glucose production, adipose tissue function, energy metabolism, et cetera. The pathways are very clear on what PPARs do. What's new is that as Andrew was leading to that in the last decade or so, since really Intercept came on the scene with the very first attempt at getting a drug approved in NASH, we've gone from thinking that this is primarily a liver-centric or liver-dominant disease. And it's more that the liver is sort of one organ manifestation of a larger metabolic problem. It's an important organ, and it's one that's really severely affected. But when you think about a drug like lanifibranor that can target multiple nodes or axis in this pathway, it makes a very compelling argument that you may have a really better way to get control of both the intrahepatic and those extrahepatic drivers. It's not the only way to do that, but it's certainly a very compelling way to do it.

Okay. And so there are already 2 therapies approved and on market that got a significant amount of clinical data attached to them. Do you think there's still a need for additional MASH therapy?

So absolutely. So the -- it is the market is actually being built in front of us. If you go back a couple of years, there was a question about whether or not there was a real market for F2 and F3 treatment. And now we have 2 therapies that have shown actually tremendous progress in proving that, that market exists. And we have actually built a company in Inventiva with the people to actually go and bring lanifibranor into this growing market as well. Again, these 2 therapies that are on the market, they address either one element of disease or the other, not both. They either address the liver aspect of it or the metabolic aspect, but not both together, and that's where lanifibranor really can make a difference.

And so what do you think the future of MASH treatment is going to look like?

So I think that right now, there's a greater understanding of the need to treat both of these elements, and we're going to see a lot more combinations. There's a lot of more people on GLPs right now, combined well with the GLP-1. We'll actually in our trial, have a number of patients actually on a GLP-1. And so physicians are going to be looking to do those combinations going forward.

And so you've touched on GLP-1 therapies. I think the number of people that are on it, both kind of prescribed but also DTC, and it's really transforming the obesity and metabolic medicine landscape. Do you think the emergence of GLP-1 change the opportunity for MASH-specific therapies like yours?

Well, I think there's a couple of elements in terms of the answer to that question. So the -- in order -- so the GLP-1s have an impact on MASH. But in order to have an impact, you have to be on a higher dose of GLP-1 and you have to be on it for the course over a year before you see a difference. So certainly very useful in terms of treating the disease. But if you have a patient that has F3, for example, so that's a patient that's pretty close to cirrhosis, you want something that's going to act fairly quickly. In our Phase IIb, we showed an effect after 6 months. So I think it's going to be unlikely that physicians are going to really want to wait a full year for effect with the GLP-1, especially for an F3 patient.

And so working through one of those PPAR pathways, actually weight gain is a sign of clinical efficacy. And so you've seen that in some of your trials. How do you think about lanifibranor's weight profile in the treatment landscape that's increasingly focused on kind of weight loss?

Actually going to hand that over to you, Jason.

Yes. I think it's a fair question, but it gets, I think, to the core of what we're trying to accomplish. So I just step back a little bit. We knew for a long time that bariatric surgery, if it's effective at weight loss, can also be effective at improving NASH. So you look at histology, whether it's NASH resolution or fibrosis, we knew that bariatric surgery can do that. So GLP-1s have clearly changed that landscape. The point is that it changed in one very particular way, weight loss through the GLP-1 pathway, muscle, et cetera, does appear to be resetting a lot of that programming that's a problem. That's a very good thing. With lanifibranor or the weight gain that we see actually has nothing to do with that pathway. It's really around a PPAR gamma mediated effect, which is well known and well understood around fluid retention. The impact of that fluid, the goal of the lanifibranor program initially was to show that on the one hand, we can capture all of that biology in a single drug, alpha, delta and gamma. But on the other hand, the drug as designed could lead to a softer gentler gamma effect. And I believe that's what we're seeing. So it's not that weight gain in the form of fluid is unimportant. It's that when you pair that more modest gamma effect with the benefits that a pan-PPAR agent might give you that, that benefit risk might make a lot of sense in a patient population, particularly the later-stage patients where the urgency to treat gets pretty high. So you're beginning to think at that point, not just, oh, you have NASH, but you have advanced fibrosis and you have several risk factors that if left unaddressed, can lead to pretty severe outcomes over a period of time, that urgency to treat makes a drug like lanifibranor with a more, say, muted or balanced PPAR gamma effect with the other benefits that we hope to see in the clinical program make a lot of sense.

And we already touched on there's already 2 assets approved and in the market. Lanifibranor obviously have its clinical data this year and hopefully, it is soon to be on the market. But there is several years, obviously, that the 2 that are already on market have in terms of kind of commercial but also real-world experience. Do you think that lanifibranor is any kind of disadvantage for not being that kind of first mover? Or how do you see this the commercial landscape?

No, I think quite the opposite, actually. I think what this did it is the entry of these 2 therapies on the market has grown the physician appreciation for the need to treat. As you've seen actually this was not something that published drugs were readily available before. So it has, I think, increased the diagnosis, right, that you see more machines and offices that can do diagnosis now. It's actually increasing the patient pool that's under treatment. And as we come to the market with a therapy that can address the multimodal etiology of this disease, we'll have an opportunity to go into that growing market as well.

Let's turn to the exciting data that's coming up. So NATiV3, what do you think you need to see in the Phase III data to confirm and build on the results that you've already demonstrated in Phase II, which was very impressive.

Yes. So in the Phase II, just as a reminder, Phase IIb, we demonstrated an 18% improvement in fibrosis versus placebo. And we believe that if we duplicate that 18% that we have a very successful therapy on our hands for patients. Specifically, if we -- the way we think about this market is that we do a very simple 2x2 grid. On one axis, you have severity, so F2 and F3, right, just before you get to cirrhosis. On the other axis, you have risk of progression. And for that, we use as a proxy diabetes because you have nondiabetics and diabetics. If you have diabetes, you are at a higher risk for progression, you move faster. And we imagine a future where a patient walks into a physician's office and the -- let's say, the patient gets diagnosed with F3 and they have diabetes. We think that lanifibranor is the first product that doctors are going to reach for and they're going to reach for it for 2 reasons. Number one, you want to pick up the biggest hammer you've got on fibrosis at that point in order for that patient not to go to F4, which can be a death sentence. And we have an effect of 18% versus the competitors that are in the low double digits. So that's the first reason. The second reason is we do address, we do lower HbA1c. We do address diabetes. That physician -- that is one element for a reason that the physician is going to pick up lanifibranor. The other is they're really worried about that patient progressing quickly because they have diabetes. And they know in our Phase IIb, we showed that we can work as quickly as 6 months. So that is another reason to pick up lanifibranor. Now so we think that, that is the patient -- that is a very natural place for us to start. And then by extension, the physician will think about lanifibranor in those F3 nondiabetic patient populations. They want the biggest hammer and in that F2 diabetic patient population that they want to address the underlying diabetes.

And so what gives you confidence that what you saw in Phase II is going to be reproducible in the NATiV3 study?

Jason, let me hand that to you.

So I think the first begins and ends with the trial design. So NATiV3 is largely very similar to NATIVE in most of the key elements. So very similar, if not identical patient population. We've narrowed it from F1 through F3 to only F2, F3. The baseline demographics are largely similar when you look at the severity of disease and the comorbidities, et cetera. Third, we are treating for longer, which is a good thing given that the mechanism of action of PPARs do take some time. So 6 months was aggressive and early, and we've already seen an effect. But there are transcriptional modulators, so they take time to work. And the underlying biology takes a little bit of time to work on the liver itself. So the 18 months favors both of those. But from a structural program, the trial looks largely similar to what we did in NATIVE, and we're letting it run longer with both doses. I think all of that lines up to give us a fair bit of confidence that if there's biology that's there, we should be able to see it and identify it.