Pharvaris N.V. (PHVS) Earnings Call Transcript & Summary

My name is Tiago Fauth. I'm a biotech analyst here at Wells Fargo, joined today by the Pharvaris team. I appreciate you guys joining us today for our healthcare conference. We're going to do a fireside chat and run through some questions. Usually, I'd like to start by giving you some room to just do intro remarks; where the company is today, next upcoming catalysts, and then we'll dive into the more nitty-gritty questions.

Very good. Well, thank you, Tiago. Thanks for having us here. Pharvaris, we're a late-stage pre-commercial biotech company. We are in Phase III right now for 2 products. One is the deucrictibant IR, immediate-release, a product for the treatment of HAE attacks. And the other one is the same active ingredient, deucrictibant, but in an extended release form for the prevention. The key -- it's very exciting times for us because end of the year, we'll read out our first Phase III for on-demand, followed by a filing in the first half of 2026. And then in the second half, we'll have the readout of our second Phase III for prophylaxis. So we're very excited here to get our product to patients as soon as possible.

There you go. Easy enough. So the HAE market, I guess, let's start there, right? So perceived to be very crowded, but also growing, it's a substantial market opportunity. So I understand why there's continuous innovation there. What are some useful ways of trying to subsegment that market? Again, on-demand prophy are kind of the classical. I don't know if there's any other subsegmentations that might be helpful to think in terms of what's going to grow, what's going to expand.

Yes. Well, very good. So as you said, we'll start off with the basics, on-demand and prophy. Well, we anticipate that both markets will grow independently. The on-demand market will grow particularly because of the entry of oral opportunities, oral products that will lead to hopefully more attacks being treated. We know that today, about 40% of the attacks never go treated. Patients don't have the medication with them. They are reluctant because it's very painful to inject yourself with some of the treatments. And sometimes they are -- can you say the attack is not severe enough. Having an oral can really radically change that. And so we anticipate that in the next couple of years, we'll see growth in on-demand. That said, the biggest part of the market is clearly prophylaxis. Even today, in the U.S., there are about 60% of the patients on prophylaxis, but they represent 80% of the value. And that comes because of the yearly cost for prophylactic treatment. So the prophylactic market, we kind of look at it as a market that will ultimately evolve in a blue ocean and a red ocean, the blue ocean being the orals and the red ocean being the injectables. What I mean by that is that when you start on prophylaxis, today already, the majority of patients who are new to prophylaxis start on Orladeyo. It's kind of logical that you start on an oral in this space. For most therapeutic areas, orals are the first step into a treatment. And once you don't respond, you want to have something better, you go to an injectable. Our plan is -- our ambition is to really capture the majority of those new patients once we get approved. Every year, there are between 150 to 250 new HAE patients in the U.S. So they flow through to prophylaxis. So if we can capture those year-over-year, combined with a much lower dropout rates than Orladeyo because we seem to have at least numerically a better efficacy level, that becomes a pancake effect, whereby we build up significant share in the market. So that kind of first-line option with orals will ultimately lead to the orals obtaining at least 50% and probably more of the total market. And so why do I call it then a blue ocean, the orals, because there's going to be 2 competitors only. It's going to be Orladeyo and it's going to be deucrictibant. I think if you confirm the data in the Phase III from a Phase II, we are very well positioned to take a leading share in that segment. On the flip side, you got the injectable market. In a couple of years from now, there might be 7 to 8 products competing for the same patient pool. Today, there's still patients on CINRYZE. They probably get CINRYZE until they die. There will be patients on HAEGARDA, there will be patients on TAKHZYRO. So all these 7 to 8 products, they might be a winner there, but they're going to have to share some market with the others. And ultimately, it will be much more easy for us to become a leading product for prophylaxis than it will be to any of those injectables in the market.

Got it. But then you assume that the growth on the share for the orals are going to be mostly from patient churn and the new patient starts. Like why is it so difficult perhaps to see switches at some point? So to your point, there seems to be a lot of patients that are very sticky to their brand, right?

It's interesting because stickiness is driven by how satisfied are you with your therapy and b, do you have an alternative. So right now, we know from patients, if you listen to the Harris Poll that was conducted by Ionis a couple of months ago, 65% of the patients on prophylaxis are not satisfied or would like to get a better prophylactic therapy. Better can be nominated in many different ways. It can be convenience, can be efficacy, it can be tolerability, you name it. But with a profile as deucrictibant, where you can offer injectable-like efficacy with very good tolerability and an oral daily regimen, we think we do can switch patients. I spoke about the new patients. But by the time we launch, about 1,000 patients will have tried Orladeyo and come off. They are probably today on an injectable, but they have clearly shown that they were interested in -- so those are the patients we will go after. Thirdly, the Orladeyo patients that are so-called stable or sticky, they still have significant amount of breakthrough attacks, a lot of them. We're going to go aggressively after those. And lastly, there are going to be some patients that are stuck with TAKHZYRO or HAEGARDA when Orladeyo came to market because they didn't want to sacrifice on the efficacy. But if they have an oral that has the same level of efficacy, they might make that move.

Especially for patients, as we mentioned, that have been injectable for a long time. A lot of patients, the physician noticed that they're already tired of injection. But meanwhile, they don't want to sacrifice anything regarding to the efficacy part, right? They're waiting for the alternative oral option can provide injectable like efficacy and also placebo-like safety there, so they can consider to try new options. That's exactly even though we consider maybe sticky to their brand, but because patients have no option yet, the 65% of patients are waiting still for the new treatment available.

Got it. No, I think that's fair. And again, to your point, your Phase II data stacks up really well against the competitive landscape, right? I guess the questions that you might get all the time is like how likely are you to actually translate that into the competitive Phase III? So lot of nitpicking there. So the first one is just related to the Phase II interpretation and monthly frequency attack relative to historicals and relative to typical Phase III trials. There are some differences there. So again, how reliable is the translation, I guess, of some of those findings?

Yes. Actually, that typically, especially for prophy trial that for HAE is quite standard that the trial design and all the endpoints there and also that if we look at the past development for prophy treatment and the translation from early phase to late phase and it's quite consistent, we have to say. And also, you mentioned a very interesting point is about that frequency attack, right, for patients there. Actually, if you look at all the prophy trial, especially for placebo group, you can notice the patient that attack rate is typically all around 2 attacks per month. So quite consistent across the trials. And also if that we are lucky, we can get more severe patients that in the pivotal trial there, actually, it will be further boost efficacy because that really our primary endpoint is active treatment arm, the attack rate compared to placebo group, right? If the placebo group attack rate gets elevated, and a reduction that maybe we can even achieve 90% or above 90% reduction there, that currently is regarded as a ceiling of the efficacy for prophylactic treatment.

Got it. No, I think that's a fair point when you think about that. I guess the other question is just related to formulation, right? And again, [indiscernible]. What drives efficacy here seems to be fairly well understood from a PK perspective, right? So like what was the work that you guys did to be comfortable with the bridging between the 2 formulations?

Yes, that's really important for us, especially what's the major difference for us, from Phase II to Phase III. As is that for our Phase III study, we will use that once-daily extended release formulation. As you mentioned, that the PK and also that really the target therapeutic exposure level is very important for prophy treatment, especially the trough level typically was treated or regarded as a surrogate for efficacy. Therefore, compared to the 20-milligram BID we used for Phase II and the 40-milligram extended release formulation we used for our pivotal study further boost the trough level for our -- that from our PK profile that looks like it's doubled, even more than doubled for the -- we call it C24. It's trough level we expected from Prophy trial.

So we have even fewer hours of patients at the lower trough level.

Exactly. We can consider we have more buffer room to consider the variability from the Phase III trial that a large patient population there. And therefore, based on the currently our PK/PD modeling there, we expect that the efficacy will be at least comparable to the Phase II and maybe potentially can be even better.

Got it. So I guess like the 2 points of risk that is brought up in terms of, again, the differences in baseline characteristics and also the formulation, theoretically, you guys feel like it should be the same, if not better.

Right, exactly. Not only [indiscernible], but you can see from the formulation that are changing here, maybe potential can even boost efficacy and reduce the potential safety concern because you know that the peak concentration is reduced that the PK profile gets even optimized for peak and trough ratio there.

Got it. And I guess when you're thinking about commercially, what is the bar of differentiation, right? So again, between injectables and Orladeyo, you have some buffer there. Like do you have to be exactly like injectables, not necessarily?

Yes. So before we had the Phase II data, we assessed kind of what would good look like. And based on the input of the market, we assume that as long as we had 75% attack reduction, we would be good. We would be able to win in the oral market. With the Phase II data now, our target has changed. We basically feel that we now have the duty really to make this product the leading product in prophylaxis, not just win against Orladeyo, but even, as I said before, to capture some of the patients from the injectables because injectable-like efficacy with an oral is a huge advantage. We're seeing -- if you look at the uptake of Orladeyo, I don't think a lot of people would have predicted that based on the efficacy. They really have demonstrated. They've done a fantastic job, by the way, in commercializing. And we're going to steal and copy as much as we can from what they've been doing. But they also have shown how important this oral really is for American patients. So we're going to hopefully be able to build on that. And as Peng said, to raise the bar and really be in the right level versus the injectable as well.

Got it. Okay. And again, we talked about the competition. So again, share for new patient starts seems to be -- there should be a strong preference for oral. So again, the pace of that conversion could be a little faster if you get positive data and eventually get approved. The conversion from potentially either Orladeyo patients or injectables, that could take a little longer, right? And if you have a breakthrough, like how should we think about the potential pace of uptake in those subsegments in the prophy setting?

I think the switch from injectables is facilitated by the fact that it's an oral. So there is not a lot of -- if we -- again, if we confirm everything we've seen until now, there is now a price to pay to try it. So if you on TAKHZYRO , you get 85%, 90% attack reduction, you take a needle and you have then the option to say, try deucrictibant to daily pill, we don't anticipate any GI side effects, no tolerability issues and the efficacy is going to be similar. That's a relatively small step to try. That's partly why Orladeyo is successful. Oral, you don't have to do much. So I think even though that it's in that whole pool of injectable patients, it might be a smaller group, I don't think it's going to be the whole group. But that switch is something that we really can induce. We can really achieve that by bringing the arguments forward about this trifecta of efficacy, tolerability and convenience. On the Orladeyo side, very similar. If you look at their real-world evidence, they show that patients still have attacks, a little breakthrough attacks. If 50% of the patients have more than 1 breakthrough attack per month or one per month, we can really target those patients and you say, look, you have -- you feel you're good with what you have, but you can try the other one. And that's where the confidence around IR also can come in. Patients have used it, for instance, for on demand for rescue. They believe in the drug, see that it works. So yes, it's not going to come by itself, but I also don't think it's going to be climb in demand efforts to achieve that.

Has payers influence that the HAE market share substantially in the past? Or like how does that -- could that come into play here as well or not?

Not yet, really, particularly on the prophy side. On the on-demand side, there's a bit more discounting, but it's not really driving behavior. There are obviously prioritizations, potentially step edits. But given that most patients have already tried most products. It's easy to kind of -- it's a administrative hurdle, you have to go through it, but it's not a real hurdle. On the prophylactic side, either that at the moment, there hasn't been a lot of rebating goal. So we don't -- a lot of preferential use [indiscernible] products. One of the advantage we could have there is a bradykinin-mediated angioedema label. So Peng is actually initiating a study in acquired angioedema. We've been asked by the regulators to include normal C1 patients in our on-demand and prophy Phase III programs. If we can get a bradykinin-mediated angioedema label, that's different from our competition. It's basically a broader label and a broader label equates with potential preference from payers as well as for some physicians one-stop shop, don't have to think too much about it, much easier.

Got it. No, that makes sense. And again, we spent a lot of time talking about prophy, but your next data point is actually on demand. So let's pivot to that again. So data is Q4, correct? And again, what do you think you need to see there to differentiate versus standard of care or for like the new oral that has recently gotten approved in that market? Again, it feels like from what we know of the Phase II, the efficacy should stack up favorably, but what's the bar for success?

Yes. Good question. That's exactly we have high hope for our pivotal readout from our Phase III study here, especially based on our Phase II observation there. As we know that for the response, right, to the on-demand treatment, it's not as the only one part, it's a several part from how quickly that the symptom can be relieved and how quickly the patients can feel the attack severity can be reduced and how quickly people can feel they really go back to the normal life and no symptom anymore. So all this perspective is a holistic package. We expect we can see the differentiation for deucrictibant there. So based on our Phase II data, we expect, for example, the time to onset of symptom relief may be between 1 to 2 hours. Currently, our data show 1.1 hour. So that's why we set up this window for the onset of the symptom relief. Meanwhile, that our data also shows that attack can be reduced from, for example, severe to moderate or moderate to mild attack within 3 to 4 hours. Compare our -- the competitor there, it's significant, maybe better there, even though it's not a head-to-head comparison. And also, we expect that deucrictibant can lead the median time to the complete symptom resolution within 12 hours. And also, hopefully, in the future, it helps our payer discussion is that we also expect over 85% attack can be resolved with a single dose of deucrictibant. So all this, I think, is very appealing no matter if you compare the past standard of care or the injectables also compared to the new approved oral treatment.

Yes. And it must mean the commercial dynamic on the on-demand side of things is a little different, right? So what is a successful launch? What are some of the main drivers where you can actually gain share there?

So on-demand has the advantage that you can -- it's slightly easier to switch because every time a patient comes into the office to get a repeat script, you can basically be there and say, hey, why don't you try the other alternative? 1 attack, 2 attacks, just go. And I think our belief is that if patients really get the opportunity to try IR, they will notice the difference. I think the product, as Peng was explaining, brings a full package. It's not just fast onset, it gets you really to complete resolution as rapidly as possible and with the confidence of doing that with one single dose. That's something, by the way, is arguing the payers. When we shared our data with payers, they were really impressed with that because that obviously has a cost implication. If you double the cost for an attack by needing a second dose, that can add up very quickly.

Got it. And again, if everything goes according to plan, you're going to be on the market for on-demand. How does that actually set up the launch in prophy? Like again, different formulations, different price points, different everything, but I'm assuming API is the same and there's going to be the trust on the data, right?

So I think the great benefit of having on-demand first is that it gives us a year or 9 months, 6 months, whatever the difference would be to build relationship with the community, to build trust in the compound and actually build up pent-up demand for the time we get approval. If you wouldn't have on-demand, you can't promote, obviously, your product beforehand. We can't promote prophylaxis, but we'll be promoting on on-demand. And there will be a spillover, there will be a halo effect to that for the prophylactic approval. So that is -- it's a huge -- we call it a launch pad for prophylaxis because that's ultimately, I think, where we want to focus our efforts on, given also that the guidelines really clearly lay out that no patients suffer any attack. The only way to do that is with prophylaxis.

And also on-demand response will be very direct and straightforward. That's exactly as you mentioned, right, if the patients really get immediate response, then they indeed build up really great credit to the prophy use.

Yes. And some of the real-world experience actually builds up interest and the positive feedback to physicians on the prophy setting, so on and so forth. Okay. That makes sense. Again, the on-demand side, the business seems like it's been stable. It's not necessarily growing substantially over the last few years, and you are introducing more effective options, I would argue, over time. Is there some cannibalization here? You mentioned that you actually thought that both sides of the business could grow over time. Like what are some of the dynamics between the interplay in those markets?

So I think what we're going to see is in the first couple of years, we see a growth in on-demand, but then I think it will get caught up in the growth of prophylaxis. At the moment, there are about 60% of the patients in the U.S. on prophylaxis, but that's growing every quarter, small, 0.1%, 0.3%, 0.5%, but that continues. And that's why we anticipate that the overall prophylaxis market will grow to 70%, 75%, maybe 80%. It will never be 100%. But that ultimately will start taking away some of the market from demand. But initially, absolutely, there will be growth, we think, by more attacks being treated. The other aspect that could help growth where we might particularly benefit from is the acquired angioedema segment. So patients with acquired angioedema, they, today, are only diagnosed because the doctor who's treating the underlying condition, whether it's lupus, MGUS or lymphoma, when they realize this angioedema should be treated and send them to an allergist. So the 800 patients that are more or less identified in the U.S. right now are really patients that the hematologists or the immunologists have realized they should be treated. But I've been spending a lot of my career in myeloma. I spoke to a friend of mine, doctors in myeloma asked them, have you heard about quiet angioedema and they had no clue, which tells me that if we have a label for quiet angioedema and we can go and educate at ASH, ASCO at these big conferences that there is a solution for this condition, that it is something that should be treated, that will actually unlock a lot of patients that are today unknown. And given that we then have a label there exclusively, that will be obviously help for us in building our leadership position in the market.

All right. I guess let's talk more about that, like mechanistically, again, why pursue the indication? Again, any way a subsegment the addressable market there. But again, biologically, why pursue that indication? And why haven't others tried or have not been as successful?

Yes, that's an excellent question. That's why we feel deucrictibant is unique for the patients there because they compare all the approved treatments or the current under development. You know that deucrictibant is only the treatment target most downstream is bradykinin B2 receptor there as a new prophy treatment here because that all the other prophy treatment currently under development are either plasma kallikrein or upper stream there, right? That's exactly why that from MOA mechanism part, we can really block bradykinin bunch to the receptor. Regardless, the bradykinin is generated either kallikrein pathway or kallikrein independent pathway. That's exactly that we were being -- that a lot of physicians are looking forward to us because a lot of normal C1 patients, for example, it's a [indiscernible] mutation or other mutations, they are plasma kallikrein independent. All other treatment supposed will work for them. That's exactly that deucrictibant becomes later the hope for these patients who have no any approved treatment yet. That's why that we were -- that include normal C1 patients in our pivotal trial and looking forward to provide the new treatment for this patient population.

I guess how do you even power study in terms of thinking about natural history and some of the baseline characteristics, is that patient that dissimilar that it adds some degree of clinical risk? Is the bar different given the lack of treatment options? How should we think about the clinical risk?

Yes. Good question there. So basically, from the symptom wise that the normal C1 patients is quite comparable to the type 1, type 2 C1 deficiency patients. That's why we can include into our trial assessment. And from the type wise, we expect for our pivotal study that 90% of patients are still type 1 and maybe 5% of patients type 2 and another 5% will be type 3 in normal C1 patients. Therefore, we did not dedicate the power for the study, but we included it into our pivotal study.

Therefore, you can get a free option on the label based on deucrictibant.

Exactly. We will include all this data, hopefully, that into the label there. Only the difference is acquired angioedema patients because this patient population is not hereditary. That's why, as we mentioned, we have the dedicated pivotal study, we will be initiated by the end of this year. And then that we will collect the data that for prophylactic data first, the on-demand data. So prophylactic Part 1 of this trial will be parallel to the HAE prophylactic trial there. So hopefully, that as mentioned, we will target the bradykinin-mediated angioedema, not only limited to HAE. That's also consistent with the orphan designation. We've already been granted no matter for U.S. or ex U.S.

And we haven't talked about ex U.S. almost at all, right? Anything noteworthy either from a pricing, reimbursement access, the treatment paradigm, like what are some of the puts and takes there?

So very different landscape there, mainly driven by pricing. So completely different prophylaxis is still meaningful, still significant, but particularly on the demand side, it's much more challenging. So that's why our focus right now is really on the U.S. We think with a very limited footprint, we can really unlock a significant, very significant opportunity. Outside of the U.S., we're looking at options. We're looking at potential partnerships that can be licensing, can be distributors shifts. We're doing the work, which is kind of on the clinical path. So for instance, when we do KOL engagements, that is happening by default because of very international community. We're working on health economic models, the preparation for that, but we don't deploy yet like any commercial resources in those markets. So we really want to look what is the best way of getting the product as fast as possible to patients because that's ultimately the most important thing that we try to achieve.

Yes. Fair enough. And again, with the recent capital raise, I think the latest guidance from a runway perspective is into first half of ' 28, right? So again, you get to...

First half '27.

First half of '27, I'm sorry. Thanks for the correction. But again, you get to a data point in the on-demand setting, on the prophy setting. And can you talk about like launch prep, I guess? Again, you could be very imminently with a good problem to solve, right?

So until now, we have been very prudent financially with deploying big resources, but we have really focused on hiring people that have a lot of experience and relationships in HAE. HAE is a very particular therapeutic area. It's relationship-driven. You have to be engaged with the community and community means physicians, means the patient organizations, means the payers as well. So our leadership, whether it's sales and marketing, medical, market access, patient advocacy in -- for the U.S., they all have a long history in HAE. Peng has another one on the clinical side with our team. So that is really what we're focusing right now to building that relationship. And then from -- as of next year, we're going to be starting to build out the organization further, prepare the infrastructure, hire the field force to support the launch. And then we're really going to be in the absolute launch mode.

Ready to roll.

Yes. Perfect.

It feels like it's a natural stopping point. I don't know, is there anything else that we didn't cover that might be worth highlighting. But again, I feel we cover a lot of ground. We should be...

Pretty complete.

Perfect. Again, I really appreciate the time.

Thank you very much.

Thank you.