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

Thank you. Good day and thank you for standing by. Welcome to Inventiva's First Half of 2026 Financial Results Conference Call. At this time all participants are in listen only mode. After the speaker's presentation there will be a question and answer session. As a reminder, today's conference call is being recorded. I would now like to hand the call over to David Nicodem, Head of Investor Relations for Inventiva. Please go ahead.

Thank you. Good morning. Good afternoon. Thank you for joining Inventiva's first half 2026 financial results and business update. This morning we issued our press release reporting our full financial results for the first half of 2026. A replay of this webcast will be available in the investor section of our website following the call. Before we begin, a quick reminder that the statements we make today, including during the Q&A, may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our views only as of today and should not be relied upon at any later date. Please refer to slide 2 and to our filings with the SEC and the AMF for discussion of the associated risks. Joining me today are Andrew Obenshain, our Chief Executive Officer, Dr. Jason Campagna, our Chief Medical Officer and President of R&D, and Axel-Sven Malkomes, our Chief Financial Officer. Chris Benecki, our recently appointed Chief Operating Officer, will be joining us for the Q&A portion of the call. With that, I'll turn the call over to Andrew.

Thank you, David, and welcome everyone. Today I'll start by providing an update on the company and our priorities. Jason will overview our Lanifibranor Development Program. Axel will walk through our first half of 2026 financial highlights, and then we will open the call for Q&A. The first half of 2026 has been a defining period for Inventiva. We have stayed focused on our near-term objectives, advancing Lanifibranor toward the Phase 3 top line results readout in MASH expected in Q4 2026, preparing for regulatory filing while building your organization to support a potential commercial launch. Let me start with why we believe in the potential of Lanifibranor and why a potential new therapy for MASH is so important. It comes down to 3 key elements, differentiation, late stage validation, and market opportunity. Let's begin with differentiation. MASH is driven by both intrahepatic and extrahepatic processes, and Lanifibranor is designed to address both through a single, once-daily oral therapy. In our NATIVE Phase 2b study, Lanifibranor showed improvement across all key histological endpoints. Next is validation. We designed the NATIVE 3 Phase 3 trial to build on the foundation established in our positive Phase 2b study. We look forward to reporting top-line data in the fourth quarter of this year. And finally, market opportunity. The market is being built in front of us. If Lanifibranor is approved, we will enter an established therapeutic area with a market potential expected to exceed $15 billion by 2035. However, significant unmet need remains, and this represents a meaningful opportunity for Inventiva to bring a potentially differentiated treatment option with Lanifibranor to people diagnosed with MASH, if approved. Let me take each in turn and then lay out our priorities for the year ahead. Let's start with differentiation, and it begins with understanding the biology of the disease. MASH is not simply a liver problem. It is the hepatic expression of a broader systemic metabolic dysfunction. As slide 6 shows, the disease is driven by multiple interconnected pathways, both outside and inside the liver. These include insulin resistance, adipose dysfunction, and dyslipidemia on the extrahepatic side, and steatosis, inflammation, and fibrosis within the liver itself. That has clear implications for treatment. If the disease is driven by several processes at once, there is an opportunity for next-generation treatment to target more than just 1 driver. That is the unmet need we believe Lanifibranor could address if approved. Our aim is not only to target the liver, it is to modulate pathways across both the metabolic and hepatic components of the disease and bring a differentiated treatment option to patients with MASH. The differentiating mechanism of Lanifibranor modulating both pathways is reflected in compelling clinical data. In our Phase 2b study, after 6 months, Lanifibranor delivered an 18% placebo-adjusted improvement in fibrosis, 26% on MASH resolution, and 24% on the composite endpoint. Those results are the foundation for NATIVE 3. We are now testing the same approach in a larger controlled Phase 3 population of patients with F2 and F3. That is what makes NATIVE 3 so impactful. It was designed to confirm at pivotal scale the biology and activity we observed in our Phase 2b study. And we are pursuing this in a market with substantial and growing unmet need. As slide 8 shows, there are an estimated 18 million Americans living with MASH, yet only 10% are diagnosed. That is changing fast. As the treatment landscape has matured, diagnosis has increased, up roughly 25% versus 2024. And that is translating into a larger population being actively identified and managed. Today, approximately 374,000 patients with F2 or F3 disease are already in treatment or under the care of a physician. The picture is clear. A large, prevalent patient population expanding rapidly as awareness and testing improve, and it could a compelling opportunity for Lanifibranor if approved. Turning to slide 9, to see where Lanifibranor may fit in the treatment paradigm, it helps to think about MASH in terms of 2 factors that are top of mind for physicians. Severity of fibrosis, and the cardiometabolic factors that can influence the risk of disease progression. Put fibrosis on 1 axis and cardiometabolic risk on the other, and 4 clinically distinct populations come into view. Start with the lower right quadrant. We have patients with F3 MASH and cardiometabolic risk, such as type 2 diabetes. This is a population with high unmet medical need. With the mechanism of action of Lanifibranor could be compelling in that it targets both the liver and the metabolic driver simultaneously. In our Phase 2b trial, Lanifibranor demonstrated an 18% placebo-adjusted improvement in fibrosis at just 6 months. Similarly, in the lower left, although these patients have earlier stage F2 fibrosis, their cardiometabolic risk factors can put them at risk for more rapid disease progression. For these patients, physicians may also want to act urgently and Lanifibranor for potentially offer an opportunity to intervene earlier in the course of the disease if approved. Moving to the top right quadrant. By extension, Lanifibranor could be well positioned in patients who have F3 fibrosis without significant cardiometabolic risk. Here, the fibrosis itself is the primary concern, and Lanifibranor may have the potential to address the underlying liver disease before it progresses. Taken together, these 3 quadrants represent a large population with significant unmet need. And if approved, we believe Lanifibranor has the potential to play an important role in addressing the needs of these patients. With that overview of why we believe in the potential of Lanifibranor, let me lay out 3 key priorities we are focused on to unlock new opportunities for patients with MASH. First, the NATIVE 3 trial. We remain on track to report top-line data in the fourth quarter of 2026. Earlier this month, the last patient completed their final, second-to-final, and final 72-week visit. The main cohort enrolled 1,009 participants, all with biopsy-confirmed non-cirrhotic MASH and F2 or F3 fibrosis. Second, regulatory readiness. We are advancing our preparations now to support a potential NDA submission with the FDA in the first half of 2027, positioning us to move quickly into regulatory interactions if the top line data readout is positive. And third, commercial readiness. We are building a commercial organization with the depth and breadth of experience with the best disease products to be ready for the potential launch in 2028. We believe we are moving forward with Lanifibranor from a position of strength and with the potential for a differentiated profile, a late-stage validation opportunity with NATIVE 3, and a significant market opportunity if approved. I'm truly energized by the potential to make a real difference for millions of people living with this serious disease. With that, let me hand it over to Jason to take you through the science behind Lanifibranor and our clinical program.

Thank you, Andrew, and greetings, everyone. I'll spend a few minutes on 4 aspects of our Lanifibranor development program in MASH. 1, how Lanifibranor is designed to address the spectrum of disease. 2, what we've observed in the positive NATIVE Phase 2b clinical trial. Third, how our NATIVE 3, Phase 3 trial is built to confirm that Phase 2 study. And lastly, where we're thinking of taking the program next. Let me start with the molecule. Slide 11 shows Lanifibranor as a potential novel new chemical entity, structurally and mechanistically distinct from both fibrates and thiazolidinediones, and recognized by the FDA with both Breakthrough Therapy and Fast-Track designations. It was informed by decades of research on PPAR biology and the development learnings of prior compounds. And it rests on 1 critical concept, balance. Lanifibranor engages all 3 PPAR isoforms, alpha, delta, and gamma, in a low-potency, balanced manner such that no single receptor biology dominates. It was also engineered to have only partial agonism of the PPAR gamma receptor. The combination of this balanced low-potency pharmacology and partial PPAR gamma agonism are the keys to our differentiation. This is what lets Lanifibranor modulate in harmony the metabolic, inflammatory, and antifibrotic pathways of MASH combined rather than forcing 1 mechanism or receptor at the expense of the others. The 2 charts on the right illustrate this design pharmacology. On the first panel, we see the balanced activation profile and the approximately 80% gamma activation with Lanifibranor, while on the far right, the cofactor recruitment fingerprint that sets Lanifibranor apart from full TZD gamma agonists. Result is a once-daily oral therapy intended to deliver a physiologic balance between achieving PAN-PPAR activation and avoiding any 1 receptor dominance. Moving now to our Phase 2b NATIVE Clinical Trial Data. Andrew shared our overall histology efficacy data, but that included patients with lower risk earlier F1 disease. When we exclude these patients with earlier stage disease, we continue to see robust effects across all 3 histologic endpoints, showing that the drug worked equally well in both early and later stage disease. And these results were achieved after only 6 months of treatment. Looking more closely at the data for the composite endpoint, you can see that treated patients were roughly 8 times more likely than placebo patients to achieve dual histologic improvement in the type 2 diabetes subgroup. Thank you. This tells us that spontaneous regression of the disease was uncommon and that the treatment effect of Lanifibranor was strong. Together with the early and late stage data, these results underscore the potential of Lanifibranor to perform across the disease spectrum, including in patients with the most urgent disease. Let me now turn to safety and tolerability. On slide 13, we show the most frequently reported adverse events by investigators in our NATIVE Phase 2b clinical trial. Lanifibranor was generally well tolerated across the totality of our Phase 2 program, but the adverse event profile in NATIVE 2b tracked closely with the underlying scientific design of Lanifibranor. Consistent with our preclinical toxicology data, we saw minimal classic alpha or delta toxicities. Gamma-related effects, weight gain, edema, and hemoglobin decline, these were present but attenuated relative to the full TZD class gamma agonists. The weight gain we observed in patients treated with Lanifibranor is biphasic. Early on, the partial PPAR gamma activation acts on a sodium channel in the kidney, resulting in sodium and water retention. While in a later phase, that same partial PPAR gamma activation drives improved insulin sensitization and adipose remodeling, reflected in the rise in adiponectin, tied to histologic efficacy. Both phases are consistent with the known pharmacology of PPAR gamma engagement, and based on our legend study, these gamma-related effects were mitigated by adding an SGLT2 inhibitor, empagliflozin, while also preserving the metabolic benefit of Lanifibranor. This brings me to NATIVE 3. This is a Phase 3 global registrational trial, and it was deliberately designed to build on our Phase 2b, the same 2 doses, a similar patient population, and a primary composite endpoint of MASH resolution and at least 1 stage fibrosis improvement in the same patient. Secondary endpoints include MASH resolution and fibrosis improvement of 1 stage or more. The trial enrolled approximately 1,400 patients across 2 cohorts, a placebo-controlled randomized portion consisting of 1,009 patients with biopsy-confirmed F2 or F3 MASH. And an exploratory cohort of 410 patients with predominantly F1 or F4 disease. Both cohorts were treated for 72 weeks. All patients who completed the trial are eligible for an active treatment extension to support a longer-term view of the safety and tolerability of Lanifibranor. The main cohort will serve as the basis for global marketing registration, and the primary endpoint is powered at 90% on deliberately conservative assumptions with a higher placebo response and a lower treatment effect than we observed in the Phase 2b NATIVE trial. It is stratified by fibrosis stage and diabetes status. This main cohort also reflects the real world. The NATIVE 3 population is a contemporary MASH population, with higher diabetes prevalence, more advanced fibrosis, and more use of GLP-1s and SGLT2 inhibitors compared to our Phase 2b trial. As Andrew noted, it has been fully recruited, and the last patient visit for the week 72 portion of the trial was completed earlier this month. And as Andrew shared, we are excited for top-line data in the fourth quarter of this year. Subject to positive Phase 3 results, we intend to file for accelerated approval with the FDA and conditional approval with the EMA. We will also be initiating a confirmatory clinical outcomes trial designed to evaluate the effects of Lanifibranor in patients with more advanced disease. That's worth pausing on because everything I've described targets the core pathophysiology of MASH. That same pathophysiology also underlies Compensated Advanced Chronic Liver Disease, or CACLD, due to MASH. These are patients who have progressed to advanced fibrosis or early histologic cirrhosis, yet they remain clinically compensated but have evidence of clinically significant portal hypertension. The primary driver of adverse liver-related outcomes. This subgroup of patients has no approved disease-modifying therapy. It is a significant area of high unmet need in the disease. We believe that Lanifibranor is mechanistically compelling in CACLD because the same PPAR isoforms that drive the histologic and metabolic effect in the non-cirrhotic MASH population also act on the vascular biology that underpins portal hypertension in this more advanced group. And in CACLD, portal pressure matters because as the disease advances, portal hypertension and not fibrosis alone becomes a key driver of these hard clinical outcomes, including bleeding, ascites, and liver transplant. We recently published an analysis of our Phase 2b NATIVE trial showing a correlation in patient biopsies with vascular remodeling we've observed preclinically. Exploratory analysis, but they add to our conviction to pursue further advanced disease states in MASH. With that, I'll hand it over to Axel.

And I will pick up for Axel here.

Yes, I'm sorry. I lost my text. Please go ahead. Yep so good, I.

So this morning we issued our press release reporting our full financial results for the first half of 2026. Axel will focus on the key financial highlights and our financial position as we approach the NATIVE 3 top line readout. Axel, are you ready to take over? Not yet. Okay. As of June 30, 2026, we had €233.9 million of combined cash, cash equivalents, and short-term deposits. And we significantly strengthened our financial position through the comprehensive capital structure optimization that we announced in June. Under that, we bought back approximately 60% of the EIB warrants with anti-dilution protection for €50 million, and repaid our EIB loans for €63 million. In addition, the remaining EIB warrants with anti-dilution protection were cancelled and then Inventiva issued new EIB warrants in exchange described in the July 9, 2021.

I'm ready to take over. Please go ahead. As part of this optimization, we secured new debt financing of up to €130 million in 3 committed tranches, subject to conditions, with an initial drawdown of 2 tranches of €75 million gross, plus an additional uncommitted tranche of up to €20 million, as described in our press release of June 2, issued earlier this year. We also completed an underwritten public offering of our American Depository Shares, generating gross proceeds of €103 million. Together, these actions strengthened our balance sheet, extended the maturity of our debt, and simplified our capital structure. Our current financing assumptions, existing resources, and completed financing transactions provide cash runway until the end of the second quarter of 2027. Seeing us through key milestones, the Phase 3 top line data readout and potential NDA filing. Assuming full exercise of tranche 3 warrants on the back of a positive top line result, as well as successful completion of tranche C of the debt financing transaction, cash runway would extend to the start of the first quarter of 2028. R&D expenses were €46.2 million in the first half of 2026, brought in line with the prior year and reflecting continued clinical development of Lanifibranor and MASH. Marketing and business development expenses increased to €2.6 million and G&A expenses increased to €22.2 million. Overall, we entered the second half of 2026 with a strengthened balance sheet and financial visibility for the company. With that, I'll turn the floor back to Andrew for his closing remarks.

Thank you, Axel. This is truly an exciting time for Inventiva. Our differentiated mechanisms of action, the results we saw in the NATIVE Phase 2b trial, and the robust design of our NATIVE Phase 3 trial provide a strong foundation as we approach the milestones ahead. The next major milestone is our NATIVE 3 Topline Results Readout expected in the fourth quarter of this year. Positive it could support a U.S. regulatory filing in the first half of 2027 and a potential EU filing to follow. And if approved, we're prepared for a potential U.S. commercial launch in 2028 with the goal of bringing a new treatment option to patients with significant unmet need. We also expect to initiate an outcomes trial, which could support a potential opportunity for Lanifibranor to expand into more advanced disease populations. Stepping back, what does this all mean for Lanifibranor? Let me bring it back to where I started. Why Lanifibranor and why now? Lanifibranor was designed to target both the metabolic and hepatic drivers of MASH in 1 oral medicine. NATIVE 3 top line results readout is imminent in Q4 this year. The market is established and significant unmet need remains. We have established the foundation to build a launch-ready organization and prepare for the next stage of development, moving forward from a position of strength with the discipline and the urgency that people living with MASH deserve, and I'm genuinely excited about what lies ahead. With that, let me hand it back to the operator to begin Q&A. Operator?

Thank you. We will now open lines for questions. [Operator Instructions] We'll now move to our first question. And our first question comes from the line of Yasmeen Rahimi from Piper Sandler. Please go ahead.

Good morning, team. Congrats on all the updates, and thank you so much for walking us through some of the key questions. Maybe we've been lately getting questions from investors how we should be thinking about the 2 doses in the NATIVE study, and the NATIVE 3 study, and whether it would even make sense commercially if both showed a clinically meaningful difference to move forward. Would love to get your thoughts, and maybe 1 other 1 that sometimes comes up is that the higher dose had a phenomenal histological benefit, but then when we compared the NITs, the 2 doses looked more the same. So would love if you could maybe comment on both. That would be very helpful, as it's on top of you of the investors that have been asking us that. Thank you.

Thank you, Yasmeen, and good morning. So 2 questions in there. First 1, I think more of a commercial question, which I'll take, and then I'll pass it on for the correlation with histology and those to Jason in a second. If both doses are positive, are statistically significant positive, I think it would make sense to bring both forward in the market. It's going to depend on the data. So we'll clearly look at what the efficacy is with each dose and the tolerability of each dose. And if there is a there were to be scenarios in which the difference between the 2 makes sense to bring both the market potentially 1 for 2 patients or 1 you could think of as earlier stage patients that are less urgent and so therefore would be okay with a dose response of lower efficacy and more more tolerable, and if another 1, if you have, if there's a tolerability difference between low and high, then a higher dose with still tolerable, but a slightly different profile, you could see bringing both forward. But that's really remains to see in the data. It's a little bit too early to speculate until we get the actual data to see it. Jason, let me hand the second question over to you, the correlation of NITs.

Sure, happy to Yasmeen, good morning. So in the NATIVE Phase 2 trial, generally speaking, the histology endpoints tracked well with most, but not all, of the clinical biomarker endpoints. Obviously, ALT-AST reduction was evidence. This reflects a hepatocellular injury, but moving into fibrosis, you can see that the Think of the data that we had as looking at both new scar being laid down and active scar resorption. PRO-C3 is the best example of new scar being laid down. It's a fragment of the collagen peptide, and the PRO-C3 marker actually tracked quite nicely with the 1,200 milligram histology efficacy endpoint. Similarly, when we look at ELF, the hyaluronic acid was a little noisy at baseline, but the 2 other components actually tracked very nicely in a dose-dependent manner, representing that we were, in this case, laying down, resorbing some existing scar. And lastly, on the TE, the range, you know, it's very difficult to compare trials, Yasmeen, as you know, across different sponsors, but when you look at the data ranging from 6 months to 18 months, the range in TE, liver stiffness measurement, ranges from about a 1% placebo-adjusted change all the way up to like a high, uh, sorry 1 kPa up to a high of 3 kPa. So that's somewhere around 10% to 30%. Lanifibranor came in at the lower end of that range, and it's our belief that do that's 1. It's just early in the disease to really have movement on liver stiffness, the composite view of what's going on in the liver. And more importantly, we know that Lanifibranor has some confounding due to that fluid retention. This is a known concern with liver stiffness in general, listed in the the ECHO SENS manuals about being cautious about getting liver stiffness data after a meal or in the presence of fluid loading, and at 6 months, the dynamic fluid flux that's still happening due to the PPAR gamma, we believe is likely impacting some of that. So we landed at about a 10% reduction in liver stiffness, about a 1 kPa placebo, which just a number, and we're confident that with a longer treatment duration, the underlying fibrosis improvements will, in the end, dominate that signal by 18 months.

Thank you so much. Thank you. We'll move on to our next question. Our next question comes from the line of Rami Katkhuda from Fisai Capital. Please go ahead. The line is open.