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

Well, hello, everyone. I'm Max Skor, biotech analyst with Morgan Stanley. Before we get started, I just have to read some quick disclosures. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. And now I'd like to introduce Pharvaris. Very happy to have the team here, Berndt Modig, CEO; David Nassif, CFO. Welcome. Thank you very much for attending this year.

So just to kick things off, could you set the stage by walking us through deucrictibant's value proposition across both acute and prophylactic treatment of hereditary angioedema.

Yes. Thanks, Max, and great to be here again. So deucrictibant being an oral therapy option is -- fulfills a very specific unmet need in this space that we've seen over the years. And so that's a key feature, of course, the oral aspect of it. And you expect that the oral segment and the desire and the preference for oral in the patient community is very high and to have a more convenient therapy that function -- allows function and normalcy in patients' lives. But it doesn't -- it starts with oral, but it doesn't stop there, of course. The paramount proposition is for any therapy and especially also in HAE is efficacy. So the -- to have an oral in combination with a high efficacy, we describe it as injectable-like efficacy based on the current therapies and the efficacy level that we see there. And to have that in combination with an oral is one of the key propositions. And then, of course, given that this is a lifelong treatment also a placebo-like tolerability and something that is not a big burden on patients and the side effect profile that's also, of course, key. So it's all about these 3 pillars, you could say, currently. Today, in our view, there is no therapy out there today that really meets all those 3 requirements fully.

Okay. That's great. So hereditary angioedema, it's an exciting space, a lot of new players and therapies are becoming available. But can you share your perspective on the evolving HAE market, particularly trends in treatment adoption and maybe talk to the incidence or prevalence rates in the United States and the mix between on-demand and prophylactic treatment?

Yes. So in recent years, I mean, of course, the prophylactic segment has grown and has been established with the -- primarily also with the introduction of injectables with a relatively low injection frequency like TAKHZYRO. And so the guidelines for treatment in patients living with HAE is to maintain as much as possible freedom from attacks and have as low attack rate as possible. And so the growth of the prophylactic segment that we see continue. I think it's about 67% in terms of the population today and growing and about 80% in terms of the value in the prophylactic segment. But having said that, I think also the on-demand segment is also very viable in our view. It's a different way of treating. It has to have some flexibility that prophy doesn't have, especially if you're on the long-acting injectables, you have your drug in your system in a very long time. And so the innovation in the on-demand space is also important. We haven't seen that to the same degree in the last decade. So an efficacious oral therapy also for on-demand, we think is also a very viable proposition.

Okay. And there was a competitor in the on-demand space that recently launched. But what I think is interesting from a competitive perspective is deucrictibant based on 2 different formulations, you're able to potentially address both the prophylactic and on-demand. Can you potentially -- can you talk to that dynamic?

Yes. I mean that is the -- as also we say in our corporate presentation, science for patient choice. And so I think the decision how to manage the condition in HAE is a very individual decision and what your preference is and what your daily circumstances are. And it's not just calculating the number of attacks. It's about how the patient feels about the attack and what is the anxiety level of going through an attack and the unpredictability. So that all drives the decision whether a patient wants to be on prophy or on-demand. And I think having the same active ingredient in 2 formulations gives us a clear differentiation in this space. And also newly diagnosed patients typically start out a good therapy in adolescent years and on-demand therapy might be practical for that patient population. And then as they continue and sometimes typically you see attack frequency goes up over the years. And then if the patient is comfortable with deucrictibant in one form, they can also then go over to prophy and have that maintain the comfort that they then could have potentially with one drug.

Okay. And based on your market research and talking to KOLs, what is their view on having 2 different formulations, but one option potentially?

I mean generally, that's perceived very well. I mean I think that that's -- there's also -- sometimes people ask about the -- if there's any sort of mechanistic differentiation there in terms of treating a breakthrough attack. So with the same compound. And then from a mechanistic perspective, that is not -- there's no difference. There's no specific rationale to use a certain drug in prophy and then another one to treat a breakthrough attack. You could -- because it's all about the maintaining the plasma exposure level that's associated with therapeutic efficacy. So that's just not unique to deucrictibant. That's true also for the other therapy.

Okay. And before we dive into the data, maybe just refresh our memory in regards to the mechanism of action, how it differs from the competitive approaches, bradykinin in general?

Yes. So the -- what -- we are the only company out there with as you mentioned, a formulation, both prophy and on-demand with the B2 receptor antagonist. And we started out with [ Pharvaris ], my co-founder is an inventor of icatibant. So a very deep understanding about the pathway and that receptor. And so we've seen the efficacy that's been able to be achieved with bradykinin inhibition at the end of the cascade. It also has the advantage and the potential advantage to treat other subtypes of angioedema, not just the type 1 and 2. For example, patients with other mutations and normal C1, is call plasminogen are then have an overproduction of bradykinin and have the same clinical manifestations as type 1 and 2, but it's a very different pathway. It goes bypasses its kallikrein, it's kallikrein independent. So that being at the below at the end of the cascade with B2 receptor antagonist provides a mechanistic advantage.

And maybe we'll touch on that at the end, but that's an important point. So moving on to on-demand. You recently moved the RAPIDe-3 Phase III readout up to the fourth quarter of 2025. I believe it was initially you were guiding to the first quarter. So before we look ahead, can you walk us through the key efficacy and safety data reported to date? And what underpins your confidence in this readout?

Yes. So we were very excited when we saw the Phase II data, of course, I mean that -- the benchmark so far has been the efficacy level of the icatibant. And I think that the deucrictibant based on the data that we saw in the Phase II is it's, of course, the onset of symptom relief, which is the primary endpoint. That's the key parameter. But it doesn't stop there. It's really also about the completion of the resolution of the attack, the need for a second dose. And on those parameters, the Phase II data that deucrictibant shows a clear differentiation, both against icatibant as well as against other therapies that we have seen for on-demand. So that is something that we, of course, hope to see similar data in our Phase III study.

Okay. That's very helpful. I think in your corporate deck, you do a great job kind of laying out the competitive landscape, what other options, both injectable and oral are out there. Maybe we can drill down just a bit on key data points. You highlighted qualitatively what you're looking for. But is there anything quantitatively we should keep in mind when the Phase III data comes out?

Well, I think as we sort of look at the whole sequence from when the attack starts until the complete resolution, as I mentioned it's important to really to look at the totality of that because that ultimately what the patient is looking for is a reliable resolution of the attack in a good time frame with ideally we only 1 dose. And so the -- in our trial, we also have a specific endpoint, one of the secondary endpoints called end of progression, which is unique to our trial, and that is even before onset of symptom relief. That's when the patient then starts to see that the attack is getting under control. The primary endpoint on the onset of symptom relief is important, but it's only the beginning. And we also expect to see -- I mean, based on what we've seen so far, that's relatively similar in the -- compared to standard of care compared to other oral therapy and also deucrictibant is in the range of 1 to 2 hours. And -- but where we then need to look further is, of course, the reduction of severity called that [ 50 ] and also the need for a second dose. And I think there, based on the Phase II data that deucrictibant has a meaningfully lower usage of second dose and also the number of attacks within 24 hours result with only 1 dose is also very different in the data. So those are the things to look for to really see the differentiation between the other therapies.

And do you think it's appropriate or are you looking at it internally as trying to achieve injection-like efficacy or just compete against the other potential oral that is out there?

Well, I think I mean the Phase II data shows, we think, that deucrictibant has overall better data than even the standard of care today, better than icatibant. And that is also partly because we think because of the longer half-life, the lower need for a second dose. And I think that the other oral therapy does not really meet the level of the current standard of care in the injectable. It has the oral convenience, of course, but it doesn't have the -- from what we can see, the efficacy, and that's what we hope to provide that bring a meaningfully better efficacy.

Okay. That's very helpful. So how are you aligning Phase III with label relevant claims, payer expectations versus rivals? And will you pursue head-to-head or structured indirect comparisons to make differentiated claims at launch?

We're not directly planning to do any head-to-head at the moment, but it's potentially at some point in the future. I think the differentiations will be also, of course, developed by the data as such and the parameters that I mentioned. It's also that -- and for example, in on-demand, I think the key thing of importance to payers is the resolution of attack with 1 dose. And I think also from a patient perspective, we think that, that is a very significant difference because the anxiety of wondering should I take a second dose or they need a second dose or not is -- adds to the complexity. And so to have the 1 resolution with 1 dose, I think, will be also an important aspect not only for patients but also for payers.

And before we move to prophylactic, can you just touch on again what drove the acceleration in time line or moving up from the first quarter to the fourth quarter?

Yes. So when you start out this study, of course, the on-demand study is the first step is to complete the enrollment. And then after that, we collected -- I mean, we're also concurrently then collecting the database with the attacks. And then that went very quickly, a little bit faster than we had anticipated. We're excited about that. I think that also highlights the level of awareness about the program and interest in patients participating in the trial. So we completed the enrollment in 12 months. That was faster than the Phase II. And then now based on our assessment of the database of attacks collected, et cetera, and the quality of attacks, then total assessment then provided us the comfort to update our guidance.

So I'm assuming there's going to be inevitable cross-trial comparisons. Is there anything you would call out baseline characteristics, attack frequencies, just severity of the patients overall compared to your competitors that you'd like to highlight?

I think it's very similar. I mean we have -- in our Phase III trial, we also allow for a smaller number of patients to be on a prophylactic treatment during the trial. So we may see some attacks may be milder potentially and -- but it's a minority number of patients that is controlled and limited that can be on prophy. I think we still have the same criteria that we have in the Phase III trial in terms of attack frequency to be eligible to enroll and also to qualify the attack like we did in the Phase II that is considered in the assessment of the physician -- treating physician than the real attack and not just something else. So that all those parameters are the same as the [ Phase II ].

So no major changes from the Phase II to the Phase III?

No, I think that, that is maybe the key change. I mean, of course, the general Phase II, Phase III with more sites and all that. That's not unique to our Phase II, Phase III, that's typical for the Phase III trials that we have a broader footprint. And then we also have a very small number of patients with normal C1 included in the trial. And so we can collect data on those patients, then that could potentially support an expansion in the label of deucrictibant, which would be another differentiator.

Great. So pivoting to prophylaxis. With your pivotal chapter 3 Phase III readout expected in the second half of '26, can you recap the most important data you've shared so far that kind of frame expectations for this program?

Yes. I think I mean moving -- switching gears to prophy. It's relatively more straightforward or simple in terms of both in terms of trial design and also in endpoints. And there, it's really measuring the reduction of attack compared to placebo. And in our Phase II trial, we had about 87% attack reduction compared to placebo. And so that is clearly in the range of what we call an injectable-like efficacy. So in combination with the oral, which I think as I mentioned initially, is something a key differentiator for deucrictibant. And also, I think 49% of patients had 0 -- or were attack-free compared to placebo. In our open-label extension, then we had an improvement of -- further improvement of attack reduction to 93%. And for attack reduction of severe attacks of 96% and the median attack rate was also 0. So again, in the Phase III trial, then we have 80 patients to be enrolled. In the Phase II trial was about over 30 patients in 3 dose groups. So now we have 80 -- in Phase III, 80 patients in the -- with 1 dose. So it's clearly powered more for collecting safety database rather than powered for efficacy. So it's well -- is very highly powered on the efficacy side.

And is there any chance we'll see this closer to the middle of the year? Or we're going to keep guidance around the second half?

I mean right now, the guidance is maintained in the second half, and we -- enrollment is on track. We had -- sometimes in some sites, especially in Europe, we see a slowdown in the summer period, but we actually we didn't see that. So we were happy about that. So things are on track. And once we -- when we get more visibility on the enrollment completion, then we may provide more precision in the guidance. But right now, it's still the second half next year.

Okay. And maybe you can talk about the potential patient profile because there are a lot of competitors in this space, different modalities that are being investigated. But is there a specific attack phenotype or patient segment you think deucrictibant would address that others won't?

Well, I think starting with newly diagnosed patients, I think we see the preference for an oral and it is very logical then to possibly start out with an oral therapy once you have your first diagnosis. We see about 150 to 300 new patients coming in every year. And if you are able to provide the level of therapeutic satisfaction to these patients, then they presumably would stay. I mean the switching that you see in the HAE space and continue to see is really driven about -- by the lack of satisfaction. The patients are still looking for something that works better. I think about 67% of patients based on a survey, they are still not satisfied with the treatment. So they're looking for something better. So first-line oral within highly efficacious oral, I think it will be a key factor. I think also in the younger population within the on-demand, I think it's also the patient segment that can then benefit. And then I think the overall availability or affordability of a convenient oral is the many patients today that just don't carry their therapy with them and there's a lot of attacks that don't -- that still go untreated.

Okay. And then just talking more broadly, given that there are 2 oral options on the market for prophylactic and on-demand, what learnings would you take from the experience for these companies launching their drugs? And then thinking about prior authorization, the payer dynamic, pricing, I know it's too early, but anything you could provide around that would be helpful.

No. I mean I think our competition has done a very good job in launching from what we can see. And the -- I mean, I think it also highlights the really high unmet need for an oral. And so I think that in combination with the search for even -- for good efficacy also in an oral, I think, makes us excited and optimistic about deucrictibant. And I think on the payer side, there has been no real sort of drastic changes in the pricing landscape. I don't think because of the new therapies that have come seems to maintain the current structure. I think on the on-demand side, the -- again, the best attack resolution with only a single dose, it will be a key differentiator in the eyes of the payers because we've been -- to really know what the attack if you have to treat a lot of attacks with the second dose, and you have uncertainty there and the lack of maybe control in the eyes of the payer, how the patients is using the different 1 dose or 2 doses, et cetera, adds complexity. And so I think the payers -- from a payer perspective, the attractiveness of single dose solution is important.

Okay. And then pivoting, I believe the FDA accepted the TQT waivers for both formulations. I think this is important overall based on how it differentiates you from the prophylactic option on the market. But could you speak to the advantages in regards to milestones or cost and time overall?

Milestones of...

Well, just talking about -- because we won't have to run an additional study.

I see. Okay. Yes, of course, I mean that is what enables us to have the time line guidance that we have now. So the -- and we had provided full nonclinical and clinical data and assays and modeling and all of the totality of that assessment and satisfied the FDA to give us that waiver. So we were happy about that, of course. And I think that is also another differentiator, we think, of deucrictibant.

Because Orladeyo did not...

One of the many differentiators...

Yes. Orladeyo was not granted that same waiver, correct? Because at higher doses, I believe it has some potential issues there. Okay. So moving on, maybe you can just talk about the next -- I mean, it's going to be an exciting next 6 to 12 months. But what should we keep an eye out for in regards to milestones, catalysts. How is CMC manufacturing going and any predicted regulatory interactions?

Yes. So the completion of the Phase -- top line data then in Q4 on-demand, and then we will then work hard to get the filing done as quickly as possible. So now got it in the first half of '27. And then we look forward to the data readout in the second half of next year for the prophy and then that will follow the same filing as well. We also expect to -- so we had seen based on those time line and if they work out as we anticipate then potential launches in the first half of '27 and the first half of '28 for on-demand and prophy, respectively. And then we also have initiating a trial in acquired angioedema later this year. And that is with the aim also to get the label in -- for that indication. So if we are successful in that to get a broad label for deucrictibant in what's called bradykinin-mediated angioedema, not just type 1 and type 2. And if the timing works there, we -- together with the prophy data, then to potentially file all that together with the NDA for the prophy data. But that is, of course, subject to completion of that study in time.

Okay. I believe there's an investigator-initiated study that provided the supporting data to move into other indications. Can you talk about the data to date, what the opportunity looks like?

Yes. So you're correct. So there's an investigator study that's been conducted both in on-demand and prophy, and also using the extended-release formulation, by the way, in a small number of patients, only 4 patients. But what we -- these are patients with acquired angioedema that typically then use icatibant off-label and they investigated deucrictibant in the prophy setting with the XR tablet. And then we've seen except for one attacking in the first day or 2 with patient, all 4 patients have been attack-free now for almost 18 months. So that's very encouraging, not just for the indication of the acquired angioedema, which follows the same pathway, and it's also production of bradykinin through the kallikrein pathway. This, of course, also gives us additional insight into how the XR formulation works in the prophylactic setting.

And just the relative market opportunity there compared to HAE.

So yes, so right now, these are patients that are referred by other physicians to HAE treating physicians because they experience these attacks. And then if they are suspected or diagnosed by the kind of mediated edema, they get the treatment. That's about 10% of the type 1 and 2 today. But these are patients that are treated by other physicians, but possibly the level of awareness is not as high. And so once there is a drug or with the label for that indication, then it enables us also to increase and work on that segment of the market to potentially increase that even further.

Great. So maybe one question for David. In regards to financials, I believe you reported around $200 million in cash, cash equivalents at the end of 2Q. You recently raised extending the runway to the first half of 2027. So how are you prioritizing capital allocation across pivotal trials, commercial build-out and thinking about potential BD opportunities?

Sure. So the guidance of cash runway into the first half of 2027 assumes the completion of the on-demand, prophy and AAV studies and of course -- and also the filing for ODT and prophy. It also assumes the build-out of our U.S. sales and marketing infrastructure. We'll probably be at around 80 people by the end of '26 and maybe 90 by the end of '27. So we're adding a few more for prophylaxis. So all that's baked into that H1 2027. We do have an active BD effort. The guiding criterion for doing a deal is can a partner or a distributor do a better job directly outside the United States than we can. Obviously, it could also result in some upfront or milestone payments that might be helpful. But at this point, given how close we are to Phase III data approval or filing and approval, we have a whole array of nondilutive opportunities available to us from debt to royalty to other kinds of structured finance, all of which get easier and less expensive as you get closer to launch. So we're in very good shape from that perspective.

Okay. Great. So pivoting to a couple of survey questions that we've been asking our covered companies. With China's rise in biotech innovation, how are you thinking about your competitive position here? And will this influence your R&D or BD strategy?

Right now, I mean, of course, there's a lot of innovation coming from China, and we are watching that closely. But there's nothing that has a really immediate impact on us at this point in time. And so of course, for Pharvaris, it's also thinking about what could be the next product after deucrictibant. And so looking at what can be built in-house or what can be sourced outside, et cetera, in China, of course, new innovation comes there. So that is conceivably something that we can look at, at some point. I mean in terms of our commercial opportunity in China, that's also a market for HAE that's significant. And -- but it's -- of course, as everybody knows, a complex territory and most likely for a company our size that we'll be working with the partner. But it's definitely an opportunity that we think is worthwhile exploring.

Helpful. So how are you currently leveraging AI or thinking about AI's future disruption potential?

Yes, we are -- I mean, like most other companies, I can imagine, are looking into AI. We are -- have a sort of a pilot in-house where we're looking at the use of a proprietary sort of AI platform then to our model, not meaning that it's not data that goes into the public domain. So something that's sort of in-house to use for medical writing to support data analysis, et cetera. We have not really looked at AHI (sic) [ AI ] at this point as a way to reduce number of employees or anything like that. I think that that's -- we're looking at it as a tool to support it to supportive -- to support some processes maybe and also generate writing and things like that. So there's much more you can do with AI in the pharma setting, of course, also at the commercial stage, and we're looking into that also in the future and making projections and forecasts and things like that.

Interesting. Okay. Last question. What has been most impactful from the regulatory side? Would you say it's the FDA, MFN or tariffs?

Well, I'd say, first, I'd like to say that, I mean, everybody ask us, and I think every company gets the same question now these days, how is the interaction with the FDA. And then we have very positive interactions with the FDA. We found the people that we deal with, with the FDA to be extremely supportive and constructive. And so we have nothing but good things to say about that. And on tariffs, we have a -- being an international company, something, obviously, we're looking into and also looking at potential mitigation strategies there. I mean, within the legal framework. And so it's something that we are not overly concerned about. I think we have some flexibilities there. And it's also something that the whole landscape that might change in the future as well. There's a lot of things going on in that topic, as we all know. And then same is for M&F (sic) [ MFN ]. I mean that's something that -- watching that as a small company, influencing that. I think it's hard for us as a small company to do. But I think there's a lot of attention to that topic. And I think how that will shake out in the future, we will have to see.

Okay. Well, with that, I think we're up on time. Thank you very much for your time. Appreciate it.

Yes. Great. Thanks, Max. Thank you.

Thank you.