OSE Immunotherapeutics SA (OSE.PA) Earnings Call Transcript & Summary

Welcome to everybody, and thank you for being here and taking the time to assist this webinar for immunotherapy. My name is Fiona Olivier, this should be lasting 1.5 hours. And we have the warning and then serious business. We will talk about ambition and innovation, strategic levers and then the main strategic lever. And we will also discuss a part that will be when we have the capacity to ask the questions. You are going to meet the team. Nicolas is not the only person at OSE. There is the whole team, and you will see who is the leadership team, the executive team of OSE. And you will also meet Didier Hoch, who is the Chairman of the Board as well as Maryvonne Hiance, who is one of the co-founders of the company. And finally, the Vice President of the Board. She has been the Vice President since 2016. Very quickly, I would like to go over who is who, so that we don't need to introduce everybody. Nicolas Poirier on top left-hand corner, then Sonya Montgomery, who is the Development and Portfolio Strategy Development Manager; Thomas Gidoin, our new CFO. Then we have Silvia Comis. Silvia Comis, is the Director of Medical and Clinical Research. Then you have Jean-Jacques Mention, who is the Chief Business Officer; myself, Fiona Olivier; Aurore Morello, who is Director of Research and R&D Programs. And as I said, you will be listening to Didier and Maryvonne. Just a few practical pieces of information. You can ask questions. There is a chat function. You can ask questions. They will be gathered at the end. We will try and answer as many questions as we can. If there are important questions that we haven't had time to reply to, then we will update the question-and-answer part on our website as we always do. I'd like to give the floor to Nicolas.

Hello, everybody. Thank you for your interest. I see many people connected. It means that many people are interested. 2024 last year was an important year for us. If we can move to the next slide. It was really a pivot year, and it was a very successful year, especially Phase II results -- positive results regarding ulcerative colitis with Lusvertikimab and the Phase III Tedopi trial was also started that we will cover with Silvia later. But besides these successes and the progress we made on the portfolio aspect of things, 2024 was also a very successful year regarding our partnerships. We signed 3 industrial agreements of one very nice agreement with the AbbVie Laboratories, and we reinforced our existing historical collaboration with Boehringer. In total, EUR 90 million non-dilutive financing, which allowed us to take a position in the company with some public aid assistance that helped us launch Phase III. And the company also started the transition work in order to clear the first few stages of the growth. There was a new Board in June 2024, which was significantly renewed with changes, more international profiles being added to the Board. And the same applies to the management team. There are new managers now to support the transition and growth phase. To support the strategic work with the Board, we have 3 different levers, 3 strategic orientations. There are 2 beautiful products, Tedopi. Tedopi is an essential stake for our company with the capacity to obtain registration for the first vaccine against lung cancer. We will cover the development later. And the second important challenge is Lusvertikimab. There's a lot of buzz currently. And with Sonya, we're going to explain where we stand, where we're going and why this Phase IIb trial in ulcerative colitis is so important. And we have some questions we want to answer what is the dose, how to make a precise formulation and the validation of the biomarker, which is going to help new avenues in precision medicine. Those are the new avenues on which we want to explain to you what the road map is. And finally, we also have the innovation engine, which is really driving the innovation. We want to introduce to you the new technologies, the new research orientations that we're working on in order to develop our products to fill our pipelines and also find new partnerships. This is the road map that we're going to explain today. Strategic expansion is something that we have already started working on, and we're going to continue doing so for the next 3 years. The strategy is based on a derisked approach, many different value creation points for all of the portfolio in order to create more value and work on strategic opportunities, strategic partnership opportunities with a mixed and responsible financing scheme, we're going to explain to you how we're going to come up with the right equity financing for the company. So how do we move on? Well, I would like to go over the projects one by one. And Silvia is going to explain to you where we stand regarding Tedopi for lung cancer, and we're going to listen to the first video by Professor Capuzzo, who's going to tell us about this disease.

I'm the Director of Medical Oncology at the National Cancer Institute of Regina Elena in Rome, Italy. Non-small cell lung cancer is a very frequent disease. And we estimate that in 2030, around 220,000 people per year in the core country will have non-small cell lung cancer with no targetable oncogenic drivers progressing after 6 months of chemotherapy and checkpoint inhibitors. And around 100,000 of them will be HLA-A2+. This is an important detail because now we have a vaccine that has been specifically designed for HLA-A2+ patients that is Tedopi. Tedopi doesn't need a tumor biopsy from each patient. And this is a very important advantage over the other vaccines that are currently under development. There are 2 important clinical trials with Tedopi. One is the ARTEMIA trial that is the most relevant trial. This is a Phase III clinical trial studying Tedopi as a monotherapy in this population compared to docetaxel that is the standard of care in second-line setting. And we expect the results from this important clinical trial in 2028. Then we have the CombiTED trial that is a Phase II randomized trial that is conducted in a similar population in which Tedopi is compared to -- in combination with nivolumab or docetaxel is compared to docetaxel, and we expect the results of this trial in 2026. So we have a lot of interesting clinical data to look forward to with Tedopi, and everyone involved in this study is excited to see how the potential of Tedopi translates into clinical trial results.

Thank you, Nicolas. Next slide, please. Two key studies ATALANTE-1 and ARTEMIA have been launched by OSE to deliver evidence for Tedopi non-small cell lung cancer, the most frequent type of lung cancer. ATALANT-1 published in 2023 demonstrated an increase in survival in the third-line treatment of patients with non-small cell lung cancer and secondary resistance to immunotherapy with better safety and quality of life. And the ongoing ARTEMIA trial, which is on track for registration of Tedopi in second-line non-small cell lung cancer, an earlier line and larger population compared to ATALANT-1. Recruitment of patients in ARTEMIA will last approximately 2 years. Primary goal is to demonstrate an increase in survival compared to standard of care chemotherapy. Key secondary objectives are to demonstrate an improvement in patient-reported outcomes. To date, 98 patients have been randomized out of a bit more than 360 subjects required. The curve is according to plans. Next, please. ARTEMIA is a large global study conducted at 144 clinical sites in 14 countries in Europe, U.K., Canada, United States. Next, please, 3 independent Phase II trials will provide broader evidence in lung cancer and other cancer indications with readout for CombiTED and TEDOVA and additional survival information for TEDOPaM in 2026. I'd now like to turn the floor to the next strategic driver, which is Lusvertikimab and my colleague, Sonya Montgomery, starting with a video from Professor Matthieu Allez.

Ulcerative colitis is a chronic disease, which we can't cure, and it has a huge impact on the daily life of the patients with digestive symptoms, diarrhea, blood in the stool, abdominal pain and something important, the feeling of emergency. Sometimes you simply have to find rest rooms very quickly, and this has a huge impact on our patients' quality of life. In the treatment of ulcerative colitis, we talk about a glass ceiling. What does it mean? Well, there is a therapeutic ceiling, a glass ceiling showing that even in therapeutic trials with the biologics or advanced therapies, we have limited efficacy. Response rate is approximately 60% remission rate, 30%. In real life, we have slightly better response rates when we use those products. But there are several solutions to increase the efficacy such as early treatment of the patients. But clearly, we also need other therapies targeting different kinds of mechanisms. As I said earlier, there is -- we observe wide heterogeneity between the patients. There are different physiopathological forms. And so we need therapies that target other molecules or other cells.

The next slide, which talks about Lusvertikimab's novel mechanism of action. As you can see, the cells in the lining of the intestines produce IL-7, which is a highly inflammatory immune cell that drives both chronic disease in patients with ulcerative colitis as well as resistance to the therapies that are targeting those -- that downstream inflammation. So it's differentiated by a novel mechanism of action. It targets this inflammation at the source, so blocking the receptor to IL-7 in the actual intestinal epithelial cells, as you can see at the top of the drawing. This selective approach preserves the regulatory T cells, which are really important to maintain immune tolerance and to prevent autoimmune disease and to limit chronic inflammation. Lusvertikimab is also complementary to those other biologics that are targeting the downstream consequence of inflammation. Next slide. In the Phase II study of Lusvertikimab, both doses that we tested, 850 and 450-milligram doses were met the primary efficacy endpoint of reduction in MMS, which is a measure of ulcerative colitis disease severity in the all-comers population. We also looked at patients with severe disease, as you can see in the plot on the left. And in those patients, you can see that Lusvertikimab achieved clinical remission in approximately 1/4 of those patients who were treated, and that's compared to none of the patients with severe disease who were treated with placebo. On the right, you can look at those patients who had previously failed biologic treatment, so those who are refractory to biologics. And there, we see that Lusvertikimab treatment effect of about 18% on the endpoint of endoscopic remission, which represents the healing of the intestinal lining, and that's what we see on biopsy. So this efficacy signal will need to be confirmed in a larger study. However, when we share these data in patients with severe or refractory disease with clinicians, they were super excited by the potential of this new mechanism of action. And the conversations that we had with KOLs such as Matthieu were really supportive of progressing this new MOA. Next slide. Here, we can see that when we look at the plot comparing the treatment effect of Lusvertikimab in our all-comers population, so all of those moderate-to-severe UC patients, with a range of treatments that are either approved or in development. We see a similar efficacy activity for our 450-milligram dose to those other therapies, including the recent results that Abivax had with their obefazimod. Historically, as Matthieu mentioned, we only have about 1/4 of UC patients able to achieve disease remission with these treatments, which we refer to as a therapeutic ceiling. Our research and translational teams used a foundational learning model that was trained on millions of patients with inflammatory disease. They then performed a multimodal AI-based evaluation of clinical tissue and molecular data from the study that we had run for CoTikiS, and they were looking to predict those who would respond to Lusvertikimab. So this precision medicine approach identified a biomarker characterizing those who were likely to achieve clinical remission of their UC with Lusvertikimab. And as you can see in the plot where the biomarker-positive patients are demonstrated in that bright green, we see a much higher rate of disease resolution. This predictive biomarker, if we can confirm it in our Phase IIb study, would have the potential to target those patients who are most likely to respond and really break through what we currently understand as a therapeutic ceiling. Next slide. So this slide illustrates the Phase IIb clinical trial, including our -- on the right, our planned patient population and then underneath our study design. So the design of this Phase IIb study is intended to validate the efficacy signal in that bigger population and then to identify also the best dose to carry forward as well as to confirm the potential of that really exciting predictive biomarker. In parallel to starting and running that Phase IIb study, we have initiated subcutaneous formulation development, and we will manufacture subcutaneous material that we will then use in bridging studies. And then as part of our Phase IIb study, we can then provide a substudy where we will evaluate Lusvertikimab in induction with a subcutaneous dose. Where this sets us up is that we can be ready for a pivotal study to be successful and to potentially partner with pharma partners who are really interested in not just good efficacy, but also in the commercial opportunities to have a subcutaneous formulation delivered will help us be ready for that successful partnering in pivotal stage development. Now I will hand off to Aurore, our Head of Research.

Thank you, Sonya. Presenting our strategy and different technologies that we've implemented in the R&D team. Our ambition and our objective is clear is to create a new generation of immunotherapy by involving immunotherapy and precision according to the medical needs, which are not satisfied yet and the new immunotherapies would be to offer new options to our patients. Next, our strength in the R&D team is our solid expertise in immunology and the fine understanding of the means of action, which are specific to each type of situation. The idea is to develop therapies that can modulate and rebalance the immune system, either by calming an excessive response by inhibiting inflammatory pathologies or self autoimmune disease or to stimulate the immune system to treat with patients who have cancer. Now there are different types of cells in the immune system of these types of diseases and the objective is to identify them precisely these cells and the mechanisms that are key and that have a deleterious role in the pathology. That's what our specific therapies are targeting in the immune system. Next slide. To create the immunotherapies of tomorrow, we're basing this on 2 technologies, which are areas of expertise, therapeutic antibodies, bispecific and multispecific and RNA therapeutics. The idea is to respond to what's lacking in existing treatments. The idea is to identify a target and act on a single means of action, but to obtain an efficient response in patients, we know that combined therapies are key. So instead of specific and multi-specific to identify 2 molecules with 2 actions to improve the therapeutic results and to have a beneficial effect on the patients. And so far as the RNA therapeutics is concerned that we've been working on for a few years, the idea is to address immunology differently to modulate the immune system either locally or within the cell itself to design the molecule and the future medication is to work on molecular biology to have a molecule that's specifically developed by using artificial intelligence, which will make it possible for us to build a unique molecule by using artificial intelligence in terms of the precision of our targeting to assess and better identify biomarkers in patients who are being treated by our medication. Thank you for your attention.

Thank you, Silvia and Sonya and Aurore. So we've discovered the advances that have been made in our 3 strategic levers very briefly. We'll be getting back to these topics in the webinar in the future. Now we're going to be taking the time to talk about the future. And I'd like to invite Didier Hoch, who is Chairman of the Board, to start this off.

Hello, everyone. As you've seen in 2024, there's a double change in the paradigm entering into Phase III for Tedopi and Phase III for a company such as ours is a new challenge. It's not nothing. They had a second point or second change, which was the success of Phase IIb of Lusvertikimab, which is another very good bit of news. There was a new Board in July '24, and their priority was to think finding a strategy to have the best added value for the company and how to use as best we may in these 2 fantastic products. And for that reason, we worked with the Board and set up a strategy committee in the summer of '24. We had a strategy seminar by grouping together all the management committees and the Board to think about our strategies and to integrate at the time, we had just had the results of the studies. So the plan that was established was quite simple. The priority -- the first priority was to focus on business development activities and to get involved in acquisitions, including both of these products so that we could start in Q3 and Q4. And today, the priority is still that. We had a backup plan to investigate possibilities of financing that would be dilutive and non-dilutive, which are still being investigated. So as far as the follow-up of the plan, all of the big farmers concerned by Tedopi, a big farmer or midsized farmer have been approached. In terms of Tedopi, we will need to have Phase III results to enter into a partnership about the other medication. Many groups have been interested. The question is about dosage and opportunities with the new means of administration and a very strong interest in biomarkers. We think that in the Board that it's very important to be able to continue advancing on Lusvertikimab to create value. Doing nothing on this product would be counterproductive. This is the strategy that we propose to continue for the future in future Board meetings with an approach having to do with the optimization of added value research, transparent research, nondogmatic and in parallel, open to permanent discussion with the Board and minority holdings as well. Nicolas?

Thank you, Didier. Next slide. So what is the road map for the next 3 years? Well, what we're proposing and what we're committing to is to have the means to move forward. We've already talked about the road map, and there are 3 things: Tedopi oncology and the new research problems that are coming up in our portfolio. So what about the values for the company? We have to understand the value biotech takes on value when you have the right catalysts, the right inflection points. And these are the right results that are of interest to us to continue to develop our molecules is the best way of going after these results, which will make it possible for us to create value for shareholders and to support the interest in the industry. As Silvia indicated, we're in Phase III recruitment is active. It's online, we're moving forward according to plan. So that today, if we continue at this speed with these wonderful perspectives, we will be closing or finishing the recruitment in Phase III by the end of '26. So in about a year with a subtlety in the analysis where we can move faster in the future. So by the end of '27 or '28, we'll make it possible to move the products towards approval. And 2026 will be marked by catalysts or clinical results of Tedopi. There are 3 Phase II studies, which are together. We've already talked about that in Phase II in pancreas cancer. It is not yet mature enough. So we're waiting to have a longer survival on the part of patients to see if by combining Tedopi has any added value. We'll probably have the opportunity to get back to that at the beginning of next year with the premature results. And quarter-by-quarter, we'll see how working on ovarian cancer and combined therapy having to do with lung infections as well. So the road map is clear for Tedopi. We're committed. There are a lot of clinical results expected in '26 and then one major point will be occurring in '27. In parallel, Lusvertikimab. So we can explain that this product is stimulating a lot of interest. So first Phase II study has an objective of developing the potential for this product. Does it work? The responses are yes in both cases. So how do we move to Phase III studies? We need to have a commercial formulation that is viable. Today, these patients have products that are subcutaneously administered or orally administered. We need an intravenous solution for the future and the commercial success of the product to develop subcutaneous. We're working on that as well. We had some good first results. We need to get past these steps one after the other by 2028 by validating subcutaneous. In Phase II, we'll make it possible to respond to biomarkers and doses with the main results expected by the end of '27 and maintenance. So this is all in parallel with the strategies to have catalysts that are parallel so that we can derisk the whole thing. These are -- developments can be risk because sometimes the results are not good or inadequate. So it's important to diversify that risk to always have good options. The objective very clearly in the strategy that we have set up is to prepare the product to get into Phase III by responding to essential questions so that partners can launch these studies, which cost hundreds of millions of euros and a lot of them, so that's not the case today. It's a much more reasonable trajectory, and we're going to be talking about the budget in just a second. So the product is very interesting for other scientific and medical indications. We are faced with the rules of the games have been changing. The FDA, the rules in the States have changed. Pharma wants to very quickly develop for parallel indications. So that's why it's important for us to have a partnership for investors. So we're proposing optionally to assess the activity of the product in another indication in inflammation, and we'll get back to that when things are more clear. That would be in Phase II in exploratory phase. And lastly, the third pillar is research. Today, we have several programs that are ramping up in bioculture. The ambition here is to move on to other phases of development at beginning of next year. And we are -- we have a problem -- we have -- we're developing purification toxicology studies. So by the end of '27, we'll have a possibility of getting a new product in our portfolio or in the portfolio of a new partner. And that's where today, the way we're going to derisk the portfolio and creation of value. And lastly, we're not forgetting our current partnerships where we're developing new modules at AbbVie and Boehringer and Veloxis. These programs continue to move forward. Veloxis is preparing or launching a Phase II in renal transplant and subcutaneous is being worked on as well. Boehringer is running studies in oncology and MASH, which is stimulating a lot of interest. So these are -- there's a lot of creation of value that year. We're in a transition period for preclinical moving towards clinical, it's taking a bit more time because of sales formulations at stake to prepare that from the beginning, the subcutaneous solution to save times in development and for commercialization. Thomas, can you tell us a bit more about the way we're working on this?

Thank you, Nicolas. Hi, everyone. I'd like to briefly review the various sources of financing available to us. These are the ones we've used in the past and intend to continue using in the coming months and years. Due to its business model, a biotech company does not generate recurring revenue for a certain period of time, at least until it potentially launches its first product or receives royalties from a partner. From that point on, there are 3 main tools that can be used to finance the development of a program. The first and the one is sometimes a source of concern and debate among shareholders, particularly individual shareholders, is equity financing. Simply put, this involves issuing new shares or increasing capital and generally at a discount to the stock market price and in principle, reserved for institutional investors, but can also be subscribed to by individual investors under certain conditions, notably thanks to the primary bid platform. This type of financing generates dilution for existing shareholders, and that's true. But it also creates values by financing key milestones such as clinical results. So 20% dilution today means that the share price doubles tomorrow, it is obviously a good option. It also allows key shareholders to come on board who will support the company over the long haul. And lastly, the second tool is a partnership with a pharmaceutical company, whether it be in a licensing or co-development agreement. So these agreements is something that all extremely important that we're going to be working on in the coming. The second tool is partnerships with pharma in license or co-development. It's usually a payment of an upfront at the signature, a significant amount, and there are step-by-step payments and possibly royalties on future sales. This type of financing does not dilute shareholders' holdings, but it does share the risk and therefore, the value of the asset with a partner. The last 2 tools are complementary. Here, we're talking about debt, whether it be traditional bank debt, which is very difficult to access given the risk profile of a biotech company or what we call venture debt, which includes stock warrants to compensate for this risk. And lastly, public funding in Bpifrance has -- calls for projects, which are generally structured within a non-repayable grant component and a conditional advance component that will be repayable if the project is successful. We have used these 4 tools in the past, which require resolutions on the general assembly that are approved regularly by shareholders. Since the creation in 2012, we've raised EUR 53 million in equity, of which EUR 12 million has been raised in the last 3 years, which is very little. This has been made possible mainly by the extensive use of partnerships, which have generated EUR 179 million in revenue, including EUR 84 million in the last 3 years. So these are non-dilutive, but these assets are now under the exclusive control of the partners, particularly in terms of timing and their risk and value are therefore shared with the pharmaceutical companies. Added to this was the approximately EUR 33 million in debt, mainly a EUR 20 million from EIB loan in 2021, of which only EUR 5 million was raised in the last 3 years and approximately EUR 33 million in public funding and EUR 28 million in conditional advances that will be repayable in full if the project is successful. We have, therefore, used all of these tools in the past, and we will continue to do so. And that is healthy. They each have different features. And the challenge is to put in place an optimal mix based on opportunities, both in terms of the market and that we don't -- have no control over and the interest of potential partners and based on the objectives to be financed in terms of amounts and timing. Next slide. Thank you. Another concern raised by shareholders is the cost of the clinical development of Lusvertikimab, which is currently unfunded and which will need to be financed in the absence of a licensing agreement with a pharmaceutical company. As Sonya and Nicolas have just presented, the strategy is to conduct a Phase III study to demonstrate the efficacy of Lusvertikimab in ulcerative colitis, which if the results are positive, would make a partnership relatively likely. We currently estimate that the cost of the study involving approximately 300 patients would be around EUR 45 million. This is the cost of the CRO coordinating the study, the clinical centers of patient visits and examinations. To this must be added the cost of producing clinical backage of Lusvertikimab, which are roughly EUR 4 million. We're, therefore, looking at a total budget of around EUR 650 million. As mentioned previously, the objective is to move to a subcutaneous formulation, the development of which would cost around EUR 10 million, including batch production, toxicology studies, formulation development and a small Phase I study to confirm the tolerance profile. This is completely independent of the Phase IIb study in itself, but is a necessary step prior to a possible Phase III trial. Therefore, the overall cost of the clinical development of Lusvertikimab prior to a possible Phase III trial that would be funded and conducted by a partner that this is important would be very clear out there being a partner would be estimated at around EUR 60 million. Nicolas, back to you.

Thank you, Thomas. We will conclude on this part before we move to the questions. The general assembly will come very fast. It's going to be a decisive moment for the shareholders, a time for choice, a time for choosing the company's trajectory. We have 2 blocks of founding shareholders face-to-face with options and trajectories that are not necessarily very different, but obviously, they will have different consequences. We will explain the 2025-2028 trajectory, which consists in continuing the company's strategic development, dare grow -- to dare to grow, to dare to develop a derisked portfolio to look for new inflection points. We're talking about 10 clinical trials or 10 clinical results over the next few years. And there are very, very few biotech companies in France that can afford to do this, have the same wealth of innovation and opportunities for value creation. And as Thomas was explaining, we need to continue developing the company on a healthy development model, very balanced, not only on equity or only on partnerships, but a balance between the 2. For this strategy, we suggest that we're going to continue with the same government. The renewal has started last year. We're going to continue opening it up, but we want to retain a certain balance with the different shareholders. And with this first trajectory, we understand it in this way. It's much more product focused and the readout is now with a 2-year follow-up. And the only option for Lusvertikimab is a partnership, but it's still a hypothesis or short-term hypothesis. It will allow us to fund the Phase III. And there are questions regarding the alternatives. If there is no short-term partnership, how do we continue operating this project with the company and how do we fund the Phase III? And I would like to talk about a governance risk, which is completely different from what we have done so far, no continuity. It's the shareholders' choice today. They need to decide where -- how they want the company to progress in the next few years in which direction. It's an important time.

Thank you, Nicolas. Thank you, Thomas. Thank you, Didier. We see questions coming in. But before we take some questions, I would like to send the first question to Jean-Jacques. Jean-Jacques is the Chief Business Officer. Jean-Jacques, how do you see the partnership opportunities? This is an important question, obviously. How do you see the partnership opportunities?

Yes, of course, it is an important question because we are a clinical phase biotech at OSE Therapeutics. So how would I answer this question? Well, we do not rule out any opportunity. We are a biotech company, and we're lucky that we have a beautiful portfolio going from oncology to inflammatory diseases and autoimmune diseases. And we developed some products in clinical trials, but also some of the products we have taken to the clinical phases, Phase I, Phase II, Phase III. So our library at the biotech is based on 3 pillars: preclinical research, and we have Lusvertikimab in Phase II to show this. And this year, we have disclosed the results and the results are very promising. And we have the Tedopi Phase III trial for non-small cell lung cancer treatment. So how do we see these opportunities? Well, quite clearly, we have a large activity. We are talking to a number of pharma companies on a number of products. And if I take the example of Lusvertikimab, yes, there are several ways for us to discuss the subject with the pharma companies. And each of those pharma companies obviously have different strategies and aims. But we can cluster them in small groups. Some of them have entire IL-23 in the market, and they are looking rather at a combination therapy, why? Because most companies -- most products are comparable with ours, the ones they use for benchmarking. Well, not the mechanism of action because ours is new. But in terms of efficacy, they are quite comparable. So a combination is obviously increasing the efficacy, and that's what pharma companies are looking for. But we're also very lucky that we have developed a precision medicine with predictive biomarkers, and this can match other pharma company strategies. There are pharma companies that are looking more for this kind of biomarker because they will be able to gain more market shares in the treatment of bowel inflammatory diseases. So that's for Lusvertikimab. But for Tedopi, well, there are discussions in progress to identify a partner, a partner with whom we would be able to market the product just before market authorization. And that means a couple of years, 2, 3 years. And also regarding the preclinical aspect, we have shown this last year, the OSE-230 with ABBV, well, we have shown that there are opportunities here as well. So quite clearly, we rule out no opportunity. We are a biotech company. We're pragmatic and we adjust.

Thank you, Jean-Jacques. I would like to come back to the question and ask another question to Nicolas. Nicolas, are you there? How can we position Lusvertikimab in -- on the background of everything that happened with Abivax?

Well, thank you very much. It's a very good question. As we explained and as Sonya can show you, and I have a few slides in backup that I would like to show, the mechanism of action is very original and something that everybody is looking for. All the products that have been approved or about to be approved, target inflammation, the downstream part of the inflammation, the consequences. And here, we can target the upstream, the source of the mechanism. And that is why it's interesting. The mechanism of action is interesting. Although it's the same level of efficacy in terms of clinical efficacy as the other products that have been approved or are in Phase III trials, such as the Abivax molecule. This molecule has huge potential because it can be used as a combination therapy. Once we have the capacity to co-formulate it as subcutaneous administration, nobody would think of treating a patient with one subcutaneous injection and one intravenous injection. And this precision medicine is a major challenge. No or almost no product in these indications have the same potential with a predictive biomarker that can identify a subgroup of 30% of the patients, and we can double the efficacy. So that's the whole point of this Phase IIb trial. There are great results with Abivax, with other companies. And what we are offering is to provide an answer to the questions and market products with value creation on the same level once we have answered the essential questions. Now if I can have a look at the next slide, -- many questions. I mean, I'd like to take the opportunity that you asked me this question about Abivax because there are many questions regarding a forward movement on Phase III. Abivax is a big success, and everybody is happy about that for biotechs, especially in France, but it's still an exception in our development. If we look back over the last 10 years of the partnerships, be it biotech and pharma companies, for instance, for UC or Crohn's disease, all the great industrial agreements happened before the Phase III after the Phase IIb or during the Phase IIb, be it for ulcerative colitis or Crohn's disease during the development. So that's the whole ambition. We want to continue with that model because we believe that then it's important that the industry right from the beginning of the Phase III is in a position to anticipate marketing of the product.

Thank you, Nicolas. There are many questions coming in. I can see [ Andre, Michel, Joel ] among others, asking this question regarding the retribution, the benefits for the managers and the employees. And I would like to ask this question to Maryvonne and maybe to Thomas, if Thomas can chime in. But if I summarize the questions, the questions are the following: -- how do you organize everything? Why are there free shares being distributed? And Maryvonne, could you please answer, you're the Vice Chairman of the Retribution and Appointment Committee within the Board. So maybe you can explain.

Thank you, and good evening, everyone. Indeed, the company has, as many listed companies do in the Appointments Committee, which is comprised of 2 or 3 Board members and which meet several times a year. And there are 2 main meetings during this time. There is a meeting which is to make proposals in terms of salaries of the General Director and initiatives. So the policy of the company is to have a fixed salary, which -- with incentives on objectives. So what does the Appointments committee? Well, they make proposals, obviously, for a fixed pay and an incentive-based pay. And for that purpose, they study all of the objectives of the company for the following year, which are discussed with the operational team. And starting from that point, percentage is given according to each objective. And so far as the salary is concerned, the committee since the beginning had benchmarks all in biotech companies that are almost equivalents, and we try to position ourselves in the average. And until now, the company has really been positioned at a lower average of the benchmark. There's been no overpay of salary. And now this is -- the same is true of incentive -- incentive portion. So over the year, what's happened is that we studied the objectives to see if they've been reached or not, whether we grant or not to the General Director as well. In addition to the cash objectives, we created a package of free shares in BSA, BCU, both for management and for the various key people in the company and a certain number of members of personnel. And internal management gives out these free shares and the role of the Appointments and Remuneration Committee is to grant to General Director or not the free shares. So there's always been a policy since I've been in the company that was set up such that the CIO would also be a shareholder and that there will always be a significant package of free shares as a function of the objectives produced during the year. So that's basically how that strategy works in so far as compensation is concerned. The Committee of Appointments and Compensation makes proposals to the Board, and the Board approves these suggestions or not.

Thomas, could you add to this? There's another question from [ Regis ] that I've put in the chat. Thomas, could I ask you to add to Maryvonne's response?

Yes, Maryvonne responded to the question, but I could add by saying perhaps about the AGOA. I think the discussion is crystallizing around AGOA and not the cash package. So these have conditions of performance. You have to understand that the amounts that are allocated every year are not necessarily the amounts that will be converted into shares after the acquisition period. It's not because you're attributing a certain number of shares that at the end, the manager is going to get that same number of shares. There's also an uncertainty about the curve at the moment of the acquisition. So that's a risk that is shared by all shareholders. And also, you have to understand that these shares are blocked in time for at least 2 years. So this is really an incentive in the middle term at least. And also the taxation on free shares is a tool that's essential for motivation and incentive of all members of staff. The taxation is very important. We don't necessarily need to look at the gross amount. You need to look at the net amount. And just a couple of minutes more than taking Nicolas' case because the discussion is mainly about Nicolas' compensation, and we're going to be asking you in a couple of days to approve his compensation. I'd like to remind you that in 2023, when the company went through a complicated period, Nicolas voluntarily -- he wasn't the only one to do that. [ Dominique ] at the time, accepted to reduce voluntarily their compensation. It was 25% for Nicholas during 2023. In 2024, the company was again in a financial situation that was much more reassuring and boring was there. So we paid what had been offset in time in 2023. We paid it in 2024. So artificially, this seemed to increase the fixed remuneration in '24. And about the Board also voted when he took over his function as CIO at the end of '22, they voted a free share program over 3 years. The purpose was to bring him to a level of holdings that would be standard for CIO of a company of this type. So it was a plan over 3 years. So there was no attribution when he was appointed. It was smooth. And by '22, '23, '24, obviously, the allocation was significant for these 3 years. But now starting in '25, the attributions will be standard and relevant for this type of company.

Thank you, Thomas. We have a few questions about partnerships. I see Jean-Pierre, Joel and other people. Nicholas, I'd like to ask you perhaps to respond with respect to how we stand in our partnerships. And there's a question about our discussion we had with the individual I'm going to call [ Naser ]. I'm not going to cite his name, who said, I'm going to summarize the question. What did we say about the partnership? I think it's worth clarifying where we stand in our partnership and the fact that in our discussion with shareholders, we're not telling anything that's confidential.

Right. I think that we can also confirm that nothing that's confidential can be communicated. Everything that was said other than public information. It's a difficult question to deal with because we are subject to NDAs and the confidence of our partners in the new partnership. It's also a question of results, but it's also a question of trust and science and the existing team. So where do we stand? I'm going to -- I spoke about it briefly. It takes more time, and that is a weakness of the model. But it takes more time than an industrial partner in pharmaceutical industry, which has a certain amount of financial resources. But sometimes, they have various strategic plans and a vision over time, which is not the same. So we have development plans that are much more aggressive and sometimes -- so it takes a certain time scale involved in that. So it takes some time. The product in oncology is a program that was signed quite a few years ago. And we've seen that was accelerating in a new indication and it's accelerating. And [ Veloxis ], well, things are changing. In '21, the product was ready to get into Phase II normally for renal function. But the world has changed. We explained that the rules of the game have changed for industrials and AI and also competition has changed and the efficacy bar or the bar to accessing the market is higher. And very quickly, [ Veloxis ], the intravenous product could have had a commercial future, and it was time to change that formulation to prepare subcutaneous version. It's going to take 2 or 3 years because you're going to do the formulation, do the toxicology study and so forth. And now they're working on Phase II. The question in terms of AV, we have to get back to the origin of the partnership that was signed basically about a year ago because it was blocked by the FTC, the Federal Trade Commission in the United States and up until the end of '24. So we had a development plan as it's usually ambitious, aggressive, and we wanted to get it to phase very quickly to derisk the program as soon as possible with a new intravenous formulation. The teams worked together in a transition plan to bring this to clinical, and they continue working together today to be able to make sure that the product will have a commercial future and once again, without any secrets. So now it's subcutaneous that's being examined. We're expecting a study of Phase I at the end of '24 in mid-'25. So we're going to have a new development plan with a partner we cannot communicate on because this is strategic. It's competitive for them.

Nicolas, I have a question from Thierry, and I'm going to send it to Thomas. I'm got to read it because it's a part that is heartwarming. And it's a real thank you to our teams because a lot of people are watching the webinar. Thierry wrote, if we're here as small shareholders, we dared to support the team. But why [indiscernible] to NaNotics, no investment fund has entered into the capital. This would improve the value of our investments. Thomas, can you respond?

It's very difficult to compare biotech companies to each other. They're all unique, and everybody has their own strategy. But now thank you. That's an echo of what I was saying earlier, and thank you for that. The capital increases and equity investments are also there to get reference investors in. In the response to the question of why today do we not have any investment funds of prestige or of reference in capital, it's because we haven't called for that. We haven't called upon this type of financing. It's not a judgment about the strategy in the past. It made it possible to get where we are today. But I believe that today, this type of funding is an option amongst others. It would make it possible to fund our activities, but also to get new investors -- the first order investors into our capital they could finance and make what we're doing more credible with respect to our potential partners and to accompany us over the long haul as well.

Thomas, the first question, there are 2 questions for you. The first being -- even though I know you speak some French, Sonya. Sonya, how do you show the efficacy of the biomarker and if it's effective?

The Phase IIb study, we would prospectively evaluate patients before they entered into the study as to whether they had the biomarker or not, are they biomarker positive or not. And then when we randomize and, we would stratify them to equally, so we would have equal numbers in each of the dose groups, so 450 milligram, 850 milligram and placebo. Then although the primary endpoint for the study would be clinical remission at the end of induction and maintenance of clinical remission at the end of the maintenance phase, our key secondary endpoint would be to do those same evaluations in that subpopulation so that we could prospectively confirm that we are seeing that increased enrichment of efficacy and prediction of response in that population.

Thank you, Sonya. The next question is from Leonel. Comment on the design of the IIb and induction being evaluated at week 14. And the question is, is this late compared to other designs?

Thanks, Fiona. So when we look at designs for other programs, we have seen a range of sort of 8, 10, 12 and 14 weeks, even 16 weeks for induction. This has shifted longer over the last few years. And for us, because we're operating with the mechanism of action that I talked about where we're really getting to the root cause of the inflammation, we anticipate it takes a little bit time -- a little bit more time to heal those cells and then have that subsequently translate through to symptom improvement. And in fact, when we looked at our data from the CoTikiS Phase IIa study at week 10, although we had nice efficacy. When we looked in the open-label extension, we saw that symptoms really improved between week 10 and week 14. So I think those 2 things really support that we still see continued improvement and our induction phase really needs to be that 14-week length.

Thank you, Sonya. I'm just looking through the questions here, and I'm trying to get to as many of them as possible. I'm checking how many questions we can still take. The next question, an interesting one from Thierry. Nicolas. Maybe this question is for you XinThera and company Knott, would there be an opportunity of partnership, complementarity in the approach? Nicolas, this question is for you.

It's probably a shareholder or one of the employees of XinThera asking the question. It's a beautiful company. We know them really well. And to be very honest, in this ecosystem, sometimes employees move from one company to another. It's a very similar technological approach. Both companies develop antibodies. XinThera is more polyclonally oriented with transplant applications. And there are some very promising results for oncology. We could think about synergies if we wanted to combine treatments from company A with company B, but then we would need to find a way to share the value and co-finance the work. Everything is possible. Nowadays, we have our own internal wealth to develop. And as we explained, this is where we focus our efforts and our resources.

Okay. This brings us to the end of our event. Maybe 1 or 2 questions more. Before we close by asking Nicolas one last question. There's one question here about clarification. We were told that Lusvertikimab, the trial is a Phase IIb trial, but you also say it's a Phase IIa trial. Somebody is asking, you said that the study done at start of 2025 is a IIb and you also said it was a IIa. Can you just explain a little bit the difference maybe between studies II, IIa and IIb, that might be helpful. And then we'll maybe ask the final question to Nicolas.

Sure. So yes, the IIa I was referring to is really within the context of the CoTikiS study, the study that we just completed, which is a bit of a -- typically, a IIa is a little bit smaller, looking at a number of doses. And then our proposed Phase IIb study is a larger study to confirm the efficacy that we saw in the CoTikiS study that's been completed. So it's a transition where we are really confirming what that dose is and really allowing us in a larger population to see the efficacy. I hope that answers the question.

Thank you, Sonya. Nicolas. One question before last. This question cropped up several times. Well, I'll try and summarize because sometimes we have the same question from different people. Could you make a comment knowing that it's not always possible to comment on the share price. But if we have results -- such good clinical results, how come it doesn't reflect in the share price.

Well, it is an important question again. I'd like to start by explaining that as a shareholder, and this applies also to employees, this is why it's important with incentives when the share price drops, everybody is frustrated, when it raises, everybody is happy. And sometimes when it drops, we get negative comments. But the share price concerning the company valuation holds a number of promises for the future. Sometimes the price was very low in 2023 was a difficult period. And we have been in a very difficult period ever since the end of the COVID crisis. And when companies are not well financed, it has an impact on the share price. When we went below EUR 3 early 2024 and then all of a sudden in 2024, the price rose, thanks to the partnerships, new money coming in and thanks to clinical results, which were pending, and we know that people speculated on the pending results. And finally, this sometimes may also drop again. We know that the partners now have captured 90% of the value, and that's what normally happens with the license agreement. So the market is slowing down. I mean that's the whole point. And if you license all the assets, all the value is transferred to the industrial partners and then the market no longer values your potential because you no longer are in control of the execution. But when you have your own products, they create more values, and this is why we observed a higher share price in 2024. And people understood that the positive -- the result was positive, Phase IIa, Phase IIb, but it was not possible to transfer the product in Phase III. The 250 dose, for instance, was discontinued. And this created some doubts and people understood we need to take this one step further. We need to finance the next trial, and we need to confirm the efficacy with a larger population. And this is the reason why the share price plateaued and even decreased because the [indiscernible] AC scheme that was shown by Abivax recently illustrates that when the results are obvious and allow you to think about possible market authorization, then it makes a huge difference on the share price.

The last question will be for you, Nicolas as well. I'm sorry, there are so many questions coming in. We will look at those questions. We will organize them, and we will try and provide an answer in the future at a future occasion. Thank you very much for your participation, all of you. So Nicolas, the last question, and then I will deliver the concluding remarks, and we will need to close in a couple of minutes. So one last word, Nicolas. What is your vision for the future, the growth and the company's next steps?

Well, thank you, Fiona. We have shared the vision in our road map. I believe that for the first time, we have shown a very clear 3-year road map. It's very challenging for a biotech company. We don't necessarily have that kind of vision for financing. But this is our commitment. We are willing to encourage the growth. We have to be daring. We have to dare to grow. And we want to support the growth. We want to encourage strategic expansion to allow the company to be present in France, obviously, but we don't want to play only in the big leagues. We want to also be present on the international level. And for this, you need to push our products upwards towards the next level. We have identified what our potential partners are waiting for, what have been expecting for the few -- last few years on Lusvertikimab and other research products. We have gone over this with Jean-Jacques, but it's up to us to convince them to provide the right answers. And we are in a position to answer those questions in order to continue this beautiful adventure and create more value and share the value with our shareholders because we have to be daring. This is a beautiful entrepreneurship adventure. For the benefit of patients, we're going to celebrate our 10th anniversary the governance 12 months ago. We have to continue on this momentum. We should not stop halfway.

Thank you very much. I'd like to thank all the participants, all those who attended the webinar you are listened to. We are here to listen to you, to hear what you have to say, listen to your feedback and your questions. So don't hesitate to reach out via e-mail. We have shared the e-mail addresses on which you can reach out to us and send questions, and we will do our best to answer the questions. I'd like to thank all the technical teams for having organized this webinar for all their work, everything they do for the projects. A few dates for future events in the coming days. The webinar will be available in replay. So if you are interested, you can watch it again on September 25. There will be a disclosure regarding our cash situation, our treasury situation. The general assembly, which we're all looking forward to is on the 30th of September. Please vote as soon as possible and use vote access, the new modern platform that makes it easier for everybody to vote. And on September 30, we'll also disclose our financial results for the first semester of 2025. This being said, I would like to close the webinar. Please send us your feedback and see you very soon. Thank you. Statements in English on this transcript were spoken by an interpreter present on the live call.