Vicore Pharma Holding AB (publ) (VICO) Earnings Call Transcript & Summary

Good morning, and welcome to the Vicore Pharma Program Update. [Operator Instructions] As a reminder, this call is being recorded, and a replay be made available on the Vicore website following the conclusion of the event. I'd now like to turn the call over to Carl-Johan Dalsgaard, Chief Executive Officer of Vicore Pharma. Please go ahead, Carl-Johan.

Thank you very much, Tara, and welcome to this webinar where we're going to present the interim analysis #2 of the AIR IPF trial. We're pleased to share these strong data with you. It's really an exciting data set showing that we have a stabilization of lung function already at week #6 following treatment. And this is followed by an increase from week 18 and onwards in lung function. This is really unprecedented data. I think since we last -- the interim in February, it's been also a challenge to perform and an IPF trial, and that's basically to go on as normal with recruitment and retention, and there's basically 3 reasons for that. One is COVID, the second one is fear of COVID and the third one is the war in Ukraine. Ukraine and Russia is normally very good recruiting sites in studies like this. And COVID, we thought was over with, but we actually had during spring 2 cases of COVID that, of course, cost dropouts in the trial. But despite this, I think we have a very successful trial that gave us really the confidence to take the next step to develop C21 for IPF. And I'll be happy to start this call. And if I can have the next slide, please. To go through a little bit, about the receptor, about the uniqueness of the approach that we're taking based on preclinical and clinical data, and the mode of action that is so specific for this approach that also resonates well with the data that we see here. And then I will be joined with -- by Rohit Batta, our CMO, who will guide you through the study and the outline of the study, and then by Professor Toby Maher, who will review the data. And then we will have the Q&A session. Can I have the next slide, please? So the target that we have, the receptor, is the angiotensin type 2 receptor, and if I can have the next slide. First of all, the Renin Angiotensin System, why do we really have this? It's a system that is there to protect us. It's conserved in evolution, and it's dating more than 400 million years back, and it's really essential for survival. Not only does it monitor fluid and tissue homeostasis, but in acute situations and emergencies, it prevents blood pressure drop when you have a big bleeding. But not only that, it also kicks in to help the body to regenerate and repair, and that's really where our agonist is functioning. That's also why we believe that this is an important mechanism in IPF. Can I have the next slide, please? Now the two types of receptors that we deal with when it comes to the angiotensin system, angiotensin 2 is the mother molecule that then activate the type 1 receptor, that's the rescue part. That's a blood pressure part. And the type 2 receptor is activated, both by angiotensin, but also by down -- or degraded products from angiotensin. So -- but then later on, it kicks in the resolution. It's an inducible receptor. And C21, the little molecule you see there, is acting as an activator of this system. To the right, we have the difference between the 2. Again, AT1 is increasing the blood pressure. And the AT2 then is, therefore, repair, but also to dilate small vessels, making sure that the blood reach the area where needed for regeneration and repair. And here, we have the new class of drugs, the ATRAGs, that are agonists to this receptor, that is activating the system in the body. And I think the beauty with ATRAGs and the system is that it is really precision pharmacology. And precision pharmacology by nature is not something that we have done. We're working with agonists, which means that we're stimulating something, that we want this to be done. We're not blocking mediators, receptors or enzymes throughout the body. The receptor is upregulated, so it's only really present when needed. So it's not constituted. So it doesn't bring us nonselective effects or pharmacological effects that we do not want. And also thirdly, it's a hit and run. I know this may not be a good word in English, but it's a well-known word when it comes to receptor pharmacology. We have a short exposure, so it's a Cmax that is important, and we activate the system. And then we have a short exposure over time, which means that we have a reduced risk for drug-drug interactions and adverse events. So it's really an ideal concept for pharmacological treatment. Can I have the next slide, please? And then the next one, I will go through a little bit of the preclinical data. I will not go into too many details. The next slide, please. We have data for C21 in the relevant gold standard models, the bleomycin model in rat, the monocrotaline model, which is a model both IPF and pulmonary artery hypertension. They're very much alike in many ways. And then finally, the Sugen-Hypoxia model, which is a pulmonary artery hypertension model, which is maybe the most disease-like model of these 3 because you have a destruction of endothelium, and you expose the animals for hypoxia, which induces the changes that you look for. And we can, in summary, in all these models see that we have a reduction of the lung fibrosis. It's been looked at with histology. We have a remodeling of pulmonary vessels, which I think is a little bit more unique among the IPF drugs. And we know that IPF patients, they do have hypertension in their lung system as well and also in small vessels. I think that could be an important and contributing factor to the effects that we are seeing and certainly important for IPF. We do see a reduction of the cardiac remodeling that comes as a consequence of the increased pulmonary pressure. And we see then, also, of course, a reduced pulmonary hypertension and an increased cardiac output. So everything that we would like to see with a treatment like for IPF, we see with C21. Models that, I think, maybe a little bit more relevant in a way is the human ex vivo model. So we have used the human precision-cut lung slices, which means that patients that are undergoing lung transplant will have their -- one of their lungs taken out, and pathologists will cut out a piece of the lung that is representative for the disease, and then that is cut into smaller pieces and kept in tissue culture or cell culture as an explant, and you can then test your own drug in the system. And we can look at biomarkers of fibrosis processes. And we have been, in those models, a very dose-dependent and significant reduction of TGF-beta and also collagen 1 that we look at regularly, and we know by testing the other molecules that we are developing for the type 2 receptor, that this is a pharmacological effect. We see this for all of them. And I think, also, which is important when you're dealing with models is that we see it in clinically relevant concentrations. We've also cocultured primary airway epithelial cells together with fibroblasts, and you can see that, also, significant reductions of TGF and collagen and in vitro markers of ongoing fibrosis and even fibrolytic enzymes. So these results are consistent in both the animal models, but also, I think, important for understanding the effects that we see in the clinic. If I can have the next slide, please. So the PK profile, you can see that we have a fast uptake and a fast Cmax, concentration maximum, and then also a fast elimination. And this is now, again, the hit-and-run effect. We have a linear pharmacokinetic, which means that if we double the dose, we double the exposure. We're activating the receptor, and we have a low exposure over time. As you can see, after 4 hours, there's basically nothing left from the 100 milligram dose, and that means that the rest of the day, you're not exposed to this drug. And you don't need that because the effect is already taken care of in the first half hour. We have also done extensive cardiovascular examination of healthy individuals, including 24-hour ECG that has been monitored and looked at by certified cardiologists, and there's really no findings on the cardiovascular thing. So all in all, it's been well tolerated, safe in our 3 Phase I studies and also done in 1 Phase II and 1 Phase III COVID-19 trials. So the safety profile, I think, has a -- it's very good for a pharmaceutical drug. Can I have the next, please? So in summary then, we have strong data in multiple preclinical models. All of them, we're targeting, we're going for, for, of course, inhibiting the fibrosis and also -- we're also targeting the vasculopathy and what we -- what we are not really showing here today is that we have demonstrated very nice effects on human vessels with nitric oxide release and vasodilation, which is, of course, important in the endothelial dysfunction situation. And these patients, they do have endothelial dysfunction as well. We have an oral administration, and we have a very good safety profile so far. So if I can then move on and have the next slide, please. Coming now to the more critical part in terms of why the C21 and ATRAGs play important role here, and the mechanism of action and what's behind our successful results in the clinic because I think it really sticks together in a good way. So if I can have the next slide. Coming back to what IPF really is, it is a disease where there is an insufficient repair of the alveoli, which then leads to a scarring process. And I think that's now been very well established in many different models and laboratories. And it's been now covered by a number of reviews. And to the left, you have a normal alveoli, the little bubble where the gas exchange occurs. You have 2 types of cells. Funny enough, they're called type 1 and type 2, alveolar epithelial cell 1 or 2. And the type 1 cell is a cell where the gas exchange occur through cell. That's where the oxygen goes to the blood stream and the carbon dioxide comes off. The type 2 cell is a progenitor cell that proliferates and differentiate into type 1 cells because there is a constant exchange of type 1 cells. I think that's very much because of things that we inhale, vapors, and there is a constant repair of the alveoli. To the right then, when this type 2 cell is dysfunctional, apoptotic or cell isn't -- the healing doesn't really occur, and there is a disturbance or a destruction of the integrity, which then triggers a scarring process, buildup of extracellular matrix, fibroblast turning to myofibroblast. You have all these growth factors and factors released and driving the fibrosis -- fibrotic process. So this is really now the trigger. And the central sense of the type 2 cells has really been pointed out as a very important piece in this disease. Now if I can have the next slide, please. When you look at RNA in single cells from the lung, you will find that you have a high expression in these very type 2 cells that are responsible for healing and repair of the alveoli. It's even more expressed in the IPF situation. But as you can see, even in the control situation, there is a continuous repair ongoing. We will have that expression. It's one of the only places in the body where we actually have expression on this. The other place under normal circumstances is the endometrium. But then we know, in other disease, it increases when you get into, for instance, fibrotic kidney disease and so forth. Now if I can have the next slide, please. This may be a little bit of a busy slide, but we wanted to show here that in the lung, if you look at the upper left, we have 6 pieces of tissue where we have exposed them to radioactive angiotensin 2, so the parent molecule that binds the type 1 and type 2 receptor. And with the radioactivity, we can label receptors and receptor binding. When we give a type 1 receptor blocker, a blood pressure drug like valsartan, in excess to this exposure to the radioactive angiotensin, nothing happens. So it means that the type 1 receptor is not really present here. So the binding on the -- of the angiotensin 2 is actually to the type 2 receptor. And when we then give C21 that binds to the type 2 receptor, it completely blocked the angiotensin labeling here, which means that, interestingly enough, in the lung, there's primarily type 2 receptor, and we can demonstrate that with radiolabel angiotensin. What we then also have shown is below there that we can radioactively label C21, and we will have a very nice binding to the tissue in clinically relevant doses. And this binding then could be displaced with cold or unlabeled C21 showing specificity. And we have played around with cold and radioactive C21 angiotensin and different other binders. So we know that we have a true target engagement in the very right tissue in humans, the human lung. And then we can do displacement curves, and we can look at concentrations that are completely activating the receptor. And it's clear that the concentration is really hitting the clinical Cmax, where you have the starting point for this displacement curve, which is really encouraging. And now we're also comparing all the new molecules with C21, so we can get a full picture of how these compounds work. And then as I mentioned before, the human precision-cut lung slices, those experiments, we look for a few days, both -- we can look at both protein and we can also look at the mRNA expression levels. And we have robust effects on reducing the mediator than TGF-beta and also collagen, and we do that repeatedly and also for all the new compounds and even now in other tissues -- other human tissues. So this kind of ties the story together for us. And if we can go to the next slide, then I can -- this will summarize the situation, and that is that the type 2 cell is important for repairing the injury that otherwise would lead to scarring in IPF tissue. And it is actually that very cell that carries our receptor, that is a regeneration repair receptor. And by doing so, it can stimulate the alveoli to maintain the alveolar integrity, which we think is a very important mechanism for dealing with the disease IPF. And that's why we believe we can stop the disease, but it's also why we believe we can cause even maybe not tissue regeneration, but the functional regeneration of the capacity that the lung has that has not completely been destroyed by fibrosis, which can then translate into an increased efficacy over time. So I will stop there and hand over to Rohit Batta to go through the details of the IPF trial.

That's great. Thank you, Carl-Johan. If we go to the next slide. So IPF patients have a poor prognosis, and the disease naturally progresses, which is a scary proposition. And I've heard Toby describe IPF as the lung equivalent of Alzheimer's disease, where the lung is aging much faster than the rest of the body. If 240 mL is much faster decline in FVC, and this has been demonstrated in numerous studies such as the INPULSIS trial. Now we designed the AIR study based on that by carefully applying a historic arm, and you can see that in the graph. The green is the lung function decline of an untreated group. The yellow is the likes of pirfenidone or nintedanib, which half that decline. However, that sort of juxtaposition to the quality of life as one of the largest challenges with these approved antifibrotics is the GI intolerance because up to 70% of patients suffer from it, and about 1/3 discontinue or take suboptimal doses. Now the orange space there is our C21 target, demonstrating better efficacy and demonstrating better safety, and that's how the trial was sort of designed to assess these outcomes. Now just to highlight, this only works if you've actually confirmed that you have IPF patients in the trials. So at screening, the historic scans were sent to the U.K. to be read by professor of radiology specializing in ILD, and that's critical, really. And the second aspect is that you have a tight control over the spirometry. And patients came frequently over the 9 months to the clinic. And actually in the first 3 months, it was every fortnight, which was quite bothersome at times. And we also contracted the market leader, Clario, to centrally overread the data to ensure that we have this high-quality data. And thus, we were able to conduct this trial as an open-label trial and remove that placebo lottery, which actually helped aid recruitment, and we're very pleased with the progress that we've made. Now the AIR study is an ongoing multicenter trial. The target is 60 subjects, and the primary endpoint is safety. And we have an independent data monitoring committee in place. And according to the charter, they've had 3 meetings now. And reassuringly, there's not been any safety signals identified by them. The primary efficacy endpoint is the FDA preferred change in FVC. And the eligible population was treatment naive. And the reason being is that in this early proof-of-concept study, we wanted to firstly fully characterize what C21 does in monotherapy, so that we get a clear go/no-go signal. You go to the next slide. And on that note, we're thrilled to present the latest interim data set for the 45 subjects that have been enrolled. And here is the baseline overview. And the demographics and clinical characteristics are very similar to other IPF interventional studies that have enrolled based on that HRCT central reading. The mean age is 67 years, which is not surprising. It's predominantly male. In the mean time since diagnosis was 0.6 years, which is reflective of an untreated population. Now the HRCT usual interstitial pneumonia, UIP, pattern helps radiologists determine the certainty of diagnosis. A typical pattern has honeycombing, and that's the result of a progressive fibrosis. And the probable, you honeycombing is absent, but you have other distinguishing features such as traction bronchiectasis. And it is thought that the remodeling process appears to be a continuum from traction bronchiectasis to honeycombing. And the split in this study is fairly similar to other published studies. These patients had impaired lung function, as you would expect. The mean percent predicted FVC was 76.8%, very close to the pool of impulses, which was 79.5%. And they didn't have an overly obstructive picture. The FEV1/FVC mean was 0.8%, which is good because a large amount of coexisting emphysema can actually impact the serial FVC endpoint. So if anything, the most recent recruitment has put sort of the patient base very close to sort of what we've seen in trials like the INPULSIS studies. You can go to the next slide. So here is the patient disposition. And we enrolled 45 subjects, 18 are ongoing, 18 discontinued and 9 completed. And let me drill down into the 18 discontinued. I think, firstly and foremostly, as Carl-Johan mentioned, moving forward for the next study, we will certainly try to avoid a global pandemic and also screen patient's relocation plans. Because, collectively, COVID and the fear of getting COVID and logistical reasons of moving homes, that contributed to 50% of all discontinuations. And that's totally understandable. I mean, we enrolled our first subject in November 2020 at the height of the pandemic. And actually, in January '21, you had the highest number of daily deaths due to COVID. And we were asking patients to come in frequently. But let's look at the adverse event withdrawals, and there were the 6. 5 of those were actually not related to IMP. And again, 3 of those out of the 6, 50%, was associated with COVID-19. In terms of the subjects that met the withdrawal criteria, just to first highlight that IPF patients, when they suffer the cough, it's incredibly distressing, disabling and has a major impact on quality of life and the spirometry. And 2 of those subjects really struggled to perform spirometry due to the cough. And then the other one actually got bronchiectasis. So overall, we didn't see anything discerning here. Can you go to the next slide? And a question you might ask is, well, where were -- was each -- where are each of these patients in terms of their IPF progression and change from baseline in FVC. And here you have a nice visual of the last data point for each subject. And yes, you can see this one subject there, who has a rapid decline, which, again, is not uncommon in IPF. But overall, you have this positive upward trend. And recently, I heard a patient advocacy member describe IPF as a one-way street and a very short street, but perhaps no longer now. And before I hand over to Toby, I just want to say a heartfelt thank you to the amazing study team because it takes us more village to actually do a study like this, and also a big thank you to all the patients that participated. So over to you, Toby.

Thanks, Rohit. Hi, everyone. Thanks to the Vicore team for inviting me. I will apologize. I've lost my voice. So hopefully, you'll still be able to hear me. It's also a little bit early in the morning here in California, so I've not had a chance to warm it up either. But anyway, Rohit has done a nice job of introducing the study. I think he made some key important points there that the patients were adjudicated by central screening of the CT scan, and that's important because we know that these patients are comparable to those that we've seen in other IPF clinical trials. And I think the other important point has been the central overreading of spirometry, which again has tended to be the gold standard in the last decade for late-phase IPF clinical trials. And again, add some confidence that the readings we are seeing are comparable to other late-phase clinical trials in this space. So this here is the analyzed data at the interim performed after 45 patients. You can see for yourselves the shape of the data. This is, I believe, the observed FVC at each time point, and you can see the end numbers at each time point available for analysis. And I think you can appreciate that, over the first 16 weeks, when the majority of patients have provided readings, there does appear to be a genuine stabilization in FVC. And beyond that point, obviously, the numbers become smaller, but there is this tantalizing improvement in FVC seen in patients who have completed visits beyond the 16-week time point. And additionally, on the graph, you've got the trajectory that we would expect for FVC for patients with IPF based on historic data from Phase III studies. And again, if you look at the IPF literature, you will find that the placebo group in Phase III studies have tended to behave fairly consistently losing somewhere between 200 to 260 mL of FVC over 12 months. So albeit this is an open-label study, the stabilization over 16 weeks is quite striking. And the improvement, as I say, beyond 16 weeks is fascinating. I hesitate to read too much into it at this stage, but it is certainly thought provoking. I can have the next slide, please. And then you've sort of been shown some of this data already, but this is providing additional context. So the background slide, the black lines on here come from a study that I ran with colleagues at the Brompton and Imperial College a few years ago where we have patients perform daily handheld spirometry. So we had to measure their FVC every day for 18 months. And the black lines represent the disease trajectories for each individual patient based on their daily FVC. And so from that data, we see that a small proportion of patients with IPF do show FVC stability over a year, and that number is probably about 8%. Furthermore, we see that a larger proportion, about 3x as many patients have rapidly progressive disease and lose 50% or more of their FVC over that first 12 months, and we see that the median FVC loss -- and none of these patients were on antifibrotics because the study was conducted prior to the availability of antifibrotic therapy. The median FVC loss was about 11%. And then superimposed on that in orange are the data for the patients who've completed 36 weeks of treatment in the AIR study. And you can see that the distribution of disease trajectory is quite different from our historic cohort from the Brompton. And in theory, these patients are very similar. They're all untreated with antifibrotic therapy. They all have a centrally defined diagnosis of IPF. And if we were watching the natural history of the disease, you would expect the orange group to better match the black group. So again, providing some confidence that what we're seeing in this open-label study represents a genuine treatment response. If we can have the next slide, please. And then I think Rohit alluded to this in his introduction. So this is looking now at the individual disease trajectories on treatment in the AIR study over 24 weeks, so it's a slightly larger number of patients, 22 of them. And on the left-hand side, you've got all of the patients in the study with data out to 24 weeks. On the right-hand side, you've got separation of that data into patients who've got what is considered by the current American Thoracic Society, European Respiratory Society guidelines as either typical or definite UIP, which is to say they've got honeycomb destruction of the lung. So these are patients with more advanced architectural destruction of the lung, with loss normal functioning alveolar units. And then on the top panel on the right-hand side, you've got the patients with probable UIP, and that is to say that on their CT scan, they have clear evidence of fibrosis in the pattern that we expect to see for patients with IPF, but they lack the honeycomb change. And so in some ways, these are patients with better preserved lung architecture and whom the fibrosis has not necessarily entered that sort of terminal phase of the disease. And you can see that the treatment responders, the patients who show the striking improvements in FVC over the 24 weeks of the study, predominantly tend to align in that group of patients with probable UIP, which raises the hypothesis that maybe treatment is most effective when you've got more preserved lung tissue for the drug to work on. If we can have the next slide, please. So this just moving -- moving on from the efficacy is the summary of adverse events. Again, this table just tries to contextualize what has been seen in the AIR study. So here, you have the first 2 columns on the left are lifted from the INPULSIS trial, so the pivotal trial of nintedanib in patients with IPF that led to the regulatory approval of the drug. And this just shows the proportion of adverse events by category for patients who are on nintedanib, but also importantly on placebo. And this just provides a bit of background context given that AIR is open label and we, therefore, don't have a comparative placebo group. It's worth remembering, of course, that INPULSIS was over 52 weeks, so there was a little more time for adverse events to accumulate. But we are looking at proportions. So these should be comparable to a certain extent. And you can see that unlike nintedanib, where we see a lot of gastrointestinal side effects, in the AIR study with C21, we don't really see any gastrointestinal signal, which I think is important when you think about the future role for C21. If approved, it will enter an environment where many patients will be on background nintedanib or pirfenidone, both of which are drugs that cause GI upset. And therefore, having a drug with a clean GI profile is going to be important. Obviously, COVID has cropped up in the AIR study, unfortunately, just due to timing. And then alopecia has been the side effect that has been reported most frequently. In most cases, I'm told that alopecia in this context doesn't represent total hair loss. It simply represents excess hair loss, but this was a recognized side effect from the early phase studies with this compound. And then if you look at the proportion of fatal and severe adverse events, these compare favorably to that were seen in INPULSIS. So if we can have the next slide, please. Again, this just recapitulates essentially what Rohit showed in his introduction. These are the explanations for some of the dropouts and withdrawals that have been seen in the study. Many of them relate either directly or indirectly to COVID. And I think the frequency with which we're seeing these COVID-related dropouts is comparable to other studies that have been running in the last 2 years. If we look at the remainder of the dropouts, then there are no concerning signals that appear to arise. If I can have the next slide. And then these are stories that have been collected by the site PIs relating to how patients in the study have been feeling. You can see here, of course, there's one has grown to collect comments that are positive, but you can see here that there are a number of important comments, particularly around improvements of cough and -- sorry, it's always a danger of talking about cough. It causes one to cough oneself. But you can see the range of positive comments made by patients. The next slide, please. So this is the final slide of the presentation. So this here is just providing a summary of what you've been shown. You've seen the rationale for why C21 ought to be effective in IPF. And we've now looked through this further interim analysis of the data performed on 45 patients. We've seen that disease appears to stabilize early on. And in the patients who continued longer term, there even appears to be some signal of improvements. The drug has been safe and well tolerated and, importantly, with no GI side effects. And the patients who've been on the drug, in general, have provided enthusiastic testimonies about the benefits of treatment. So for an open-label study, I think the results are as positive as one could possibly have hoped they might be at this stage. Thank you very much. And I'll hand over to Tara now for the question and answers.

[Operator Instructions] So our first question comes from Viktor Sundberg from Nordea.

So Viktor Sundberg from Nordea. I have a few questions, but I guess I'll start with the first one. So you mentioned alopecia as a side effect here in the study, and most of them were mild to moderate. I'm just wondering how you could treat that in a larger Phase III study in terms of blinding for placebo, et cetera. Is that something you have thought about going forward here?

I can take that question, if you'd like. So thank you, first. for that question. And then so the magnitude of the hair loss that we saw in the Phase I study is not what we've seen here in the AIR trial. And therefore, that gives us the confidence to move forward in a blinded Phase IIb RCT. The other point to make, I mean, it is possible that 1 or 2 subjects in the AIR trial are reaching the exposure levels that we saw in the Phase I study when we doubled the dose, so that is possible. But as you saw from the slides, no one dropped out of the study specifically due to hair loss, so that is also reassuring. And we've also got to remember that hair loss is incredibly subjective. I mean, the moment you put it into an informed consent form in an open-label study, the IPF male patient has a heightened awareness. And he's intensively, obviously, monitoring for that change of those view has, which may or may not be true. So overall, we think we're in a good place with respect to a blinded Phase IIb study. I hope I answered your question.

I would also say that the existing treatments, we had similar problems of sort of blinding -- unblinding by adverse events. And with nintedanib, the diarrhea is very different to the diarrhea the placebo patients experienced. With pirfenidone, there's a photosensitive rash that in the Phase III trials occurred in 20% of patients. So the risk of unblinding by adverse event is really comparable to prior Phase III studies in the disease area.

Okay. And maybe if I go back to that slide that you showed with the natural FVC decline from the Russell study, can you just give a bit of color on the baseline characteristics of those patients in the natural history study versus the AIR study? I note that the FVC predicted in the AIR study seems to be a notch higher compared to the pivotal trials for nintedanib and pirfenidone, so I just wanted to get your view on that.

From memory, it was a little while ago that we did the study, but the average patient was approximately 69% with an average FVC at entry of about, I think, 74%, 75% predicted and a DLC of about 40%, 45% predicted, and I think when it comes to trying to compare to sort of patients with different levels of disease severity, it's worth saying that when we've done analyses of the pivotal studies with nintedanib and pirfenidone we find that the rate of FVC decline is actually the same irrespective of level of disease severity. So if you have a patient who has IPF as defined by central adjudication of the CT scan, then you can predict that their FVC decline as a population will behave consistently across all levels of disease severity. And that's really one of the reasons why FVC is such an appealing endpoint in pivotal trials because it has a linear rate of decline, irrespective of sort of baseline physiological characteristics.

Okay. And I just had a final question before I jump back in the queue. In terms of fatal events, I guess one was COVID, but could you perhaps elaborate on the second fatal event here in the study.

We actually only had one fatal event due to COVID, and again, we've not had any related serious adverse events. So we've not had any [ seesaws ], I should say, a term that we use in other pharma [indiscernible] safety perspective. So no related serious adverse events.

It was only one, but it constitutes 2% for the comparison. Maybe that's the confusion...

Yes. Okay. Yes, yes.

Our next question comes from Adam Karlsson from ABG.

Just a couple from me. First one then just backsolving from the 2 data cuts, we can see that the new patients reaching each time point since the last data cut have or appear to have less of an FVC gain compared to the to the patients that made up of first data cut. You're still clearly benefiting -- stabilizing and improving. But numerically, it looks to be less sort of half as much on average, it seems, small numbers, of course, but do you have a theory as to why these new incremental patients seem to be gaining less -- getting back less lung function than the first patients from the first data cut. Do they have more end-stage destruction of the lung, for instance, your thoughts there would be helpful. And a second one, I'll rattle it off right away. So on the distribution of benefits across the study participants. You helpfully broke that out by IPF severity now, probable versus typical. My question is whether even in that more severe category, the typical where FVC gain is lower, do these patients in the AR studies still appear to have a benefit relative to what their natural course might have expected -- well would have been, had they not been on C21.

Maybe I can start and Rohit can, of course, jump in. I think for the first question, one reasonable explanation is that the latter additional patients haven't reached as far as 36 weeks. So we have lesser that has gotten into that phase where we see this increase. And as you point out, the group is also constituting of more probable than typical that we have from the previous time. So it's certainly one explanation. And when it comes to the distribution between the typical, I think, it's fair to say that they -- we have, I think, 4 or 5 above the x-axis and the others below. And I think this is more than what we would expect in a severely affected lung patient population, and you may comment on that Toby and Rohit.

Toby, you want to go ahead.

I was going to let you go first Rohit, but.

Please do.

Yes. No, I think the trajectory even in the patients with the typical UIP looks to be more shallow than we would expect. And I don't have a huge amount of extra to add to what Carl-Johan just said, really, I would agree with what he said.

Yes.

Great. No, that's helpful. I might squeeze in another question then related to this interim data that we just got, a mechanistic question. So you said as part of that presentation that AT2R is only expressed when it's needed in the lungs of IPF patients, for instance, so given this, how is it that you see vasodilation in that forum study, which was run in healthy volunteers, given that they don't have disease tissue, so to say, something that we've been wondering about.

Yes, it's a good question. We haven't looked specifically, for instance, with receptor radiography in the small vessels, the resolution of all the radiography is not that great or you need -- you do very specific things and you need fresh tissue. We are continuing to use the radiography for identification of receptors in disease and also in healthy, but it's clear that you have a response in healthy volunteers vasculature. I mean just to speculate, I think, the reason for being there is to direct the blood flow to an area where you basically need it. And I think maybe it's there just in case when it happens, so to speak, that you need this direction. And it will have a -- it will probably have a different sensitivity of this receptor, when you really need them. And I've seen other situations of compromised blood flow where you have a much better effect on your vasodilation. So I don't think that's unreasonable. And second, I think it's -- even though we have this effect on the small vessels in the forearm, maybe out in the hand, we don't see a fall in systemic blood pressure. So it's not so that it's regulating blood pressure and causing a blood fall. It is regulating kind of tissue blood rather than the whole body, so to speak. So it may be there in small amounts enough to elicit a nitric oxide release and give us this response. But again, the response is there. It is clear and it's useful. And it was also meaningful in the systemic sclerosis study that we did. But it's not there so much so that you get a presence out in all muscles where you regulate blood pressure and blood volumes. We don't get a systemic blood pressure for [indiscernible] the real answer is, but it is an intriguing question, but it's also something that we're looking into more and more and trying to complete the story.

Next question comes from Fredrik Thor from Redeye.

My first question was about the recruitability for the next trial. So you have mentioned that, that trial is very recruitable, but then, of course, we have these external events. But would you say that there are any learnings from this trial that you can apply to the next one? Or is it, yes, mainly due to external factors that, yes, can explain the discontinuation.

That's a question for Rohit.

Okay. So I mean, I suppose it might be worth bringing in the dialogue we've had with the FDA first. I mean, yes, so the dialogue we've had has been very positive. And we presented the AIR study to them at the meeting and the agency view C21 as an important drug for IPF patients. And the reason why that's important and relevant to your question is, obviously, they've guided us on the design in terms of dose separation. So there'll be 2 doses, there will be a lower dose in the next study. And it also presents -- and they also presented an opportunity really that if we repeat this data in a Phase IIb study, then it could account for substantial evidence for effectiveness, meaning that we will only need to do one single Phase III confirmatory study. So obviously, going back to your question now, so that sort of guides us with respect to the design of the next study. And obviously -- and as you say, we've taken a lot of learnings from our Phase IIa. We've particularly done a study through the pandemic. And I think the next study, we're going to be incredibly conscious about the patient burden as well, trying to cover different eventualities. We've also got a digital therapy study ongoing, separate program and decentralized. So we'll take those learnings as well. So our overall clinical operations team and so forth is maturing. And so we will take all those learnings to the next study.

Perfect. And yes, maybe this is early, but I mean, if you were to look at a low and high dose at what time would it be able to separate between which is the most effective given that you see especially strong effect in the later weeks?

I can take that again. Yes, I mean, if you look at the AIR study, I mean you can see that the stabilization and then obviously, the improvement. And that's critical for us in terms of designing the study. So we are evaluating all options in terms of the duration. The AIR interim data is going to play a key part into that, the dialogue and the insights we've had from the FDA. We've also just formed a Advisory Committee and Toby is part of that. And the insights, the decades' worth of experience that we can gain from that will also help us with the design of that study as well.

Perfect. And maybe a short final question about the readout in week 24. If I remember correctly, it was not significant, is that just due to the lower number of patients and that the curve doesn't -- or FVC doesn't decrease enough or can you give some more context to that week?

Carl-Johan, do you want to take that one?

Could you repeat the question? I didn't get it.

Yes. So at week 24, the result was not significant, but it was before and after, if I remember correctly. Is there any specific reason for that...

No. No, it is variability. And that's -- it's very, very close, but it's because of the variability and there is also and still low numbers, so to speak, to get the significance. I think it's more impressive that we have significance before and after. And up to 36, it's a strong significance. It's pretty close to being significant to the x-axis, so to stabilization, but we compare it then after 24-week data, with the untreated trajectory as the cohort.

Yes, that's all for me.

I could just add to your question, what about the learnings. I mean we had a study that was very unfavorably designed for a COVID pandemic because we had a frequency of visits every fortnight in the beginning, and that was really something that patients didn't lag. So I think what we have learned, as Rohit pointed out, is to really make these studies a patient-friendly -- look at the patient's need and the patient's perspective of things because that will be important. And also to this advisory group, we have the patient organizations invited. So we will definitely pick that up for the future.

Our next question comes from Eric Yoo from Bryan Garnier.

Congrats on the positive review -- it's very impressive to see this level of improvement. So I have 2 questions revolving around the -- one of the data points that you guys presented today that I may have misunderstood. But on the slide where you compare INPULSIS 1 and the AIR interim analysis, it says, adverse events leading to discontinuation is n20. And if you go to the other slide where you broke down the -- that, the causes of discontinuation, it says n18. And among them, 6 were due to adverse events. So I would love to hear more detail around that. And besides that, also it says severe AE and serious AE. And besides that, there is an N number. But it seems like it's, for example, like serious AE says, 7, but then there's only n3. Is there -- what are the other causes of the 4 cases? That would be very helpful for us to know. And -- yes, so those are 2 questions.

Again, you can take the question, but the numbers to compare is percentages, which means that -- but when we, for instance, a number in the column, 7%, it means 3 individuals. So just so we make sure that we talk about the same things. Toby, go ahead.

Yes. No, I was just about to make the same point, and apologies for the confusion. The -- obviously, the end is the subject numbers. And in the column, you can see the percentage numbers. So to -- again, to fatal adverse events, there was 1 subject, which accounts for 2% so far in the 45 enrolled. We've had 2 serious -- sorry, 3 serious adverse events, and we had 1 which is the COVID death that I mentioned previously, again, not related to C21, we had actually an IPF exacerbation, which was actually associated again with COVID-19 and these types of events can be in decline. And I know acute exacerbations are tough to define and actually even tougher to manage. But again, that was not related, and then the third one, it's a squamous cell carcinoma and -- of the mouth and actually, the patient had a preexisting lesion before they actually went into the study there. So again, not related -- 3 events and hence, 7%.

If I may, one more question. I remember in the ERS data, there were 3 cases of hypoglycemia, but did that disappear? Or is because I don't see that on the breakdown. Is there any detail around that?

Maybe I can take that one. That was the COVID trial where we -- where we are treating patients under intensive care. So it's the ICU setting, and they are -- they all had a little bit of higher glucose, which is very normal for that circumstance and nothing alarming at all. And at one point, suddenly, the placebo group was a bit lower, and that turned in to the hyperglycemia, relative hyperglycemia in that very situation. And the next time it went back to the same level as well. So it is not an issue with the drug. It was a reflection of the ICU situation. And that was true for all patients. They had a bit higher glucose levels.

That's very helpful. last question, I forgot to ask this. For this data, could you mind sharing maybe a breakdown of the Indian sites and the U.K. sites?

I mean I can take that. The actual sites and locations and actually names of the PIs are actually on clinicaltrials.gov. I mean I suppose just to sort of reading into your question, I mean, first of all, there's no scientifical medical reasons to suggest that IPF is different in different countries. I mean -- and yes, the majority of patients in this study have come from India. And I suppose, and I think Toby would agree with me is that the most important aspect here is really to confirm that diagnosis and confirm it centrally, which we did in terms of the UIP pattern and also have that tight control of that spirometry that overread. And here, Clario -- we use Clario's machines, the data was uploaded and overread and so forth. And then the third point, I suppose to mention is that in these countries, such as India, they've been part of the global registration IPF programs for many other studies as well. Hope that answers your question.

Our next question comes from Dan Akschuti from Pareto Securities.

Thank you, and hello, everyone, and congratulations to this unprecedented data update. And with that, a question to Toby Maher. I'm trying -- I'm following the space and trying to understand what is causing this kind of a completely different profile. And obviously, it is somehow related to the mechanism of action since as you do it to the patient characteristics that are quite similar across the trials. And if you look at other drugs, I only see treprostinil to have kind of maybe to its [indiscernible] effect kind of halfway similar effect, while all the others are really very weak and prone to side effects. What's your view? And how would you classify how the kind of the space of drugs that we see, say on IPF?

I certainly pirfenidone and nintedanib sort of, on average, slow disease decline rather than prevent it or reverse it. However, if you dig into the data from the registration studies, you will see that maybe 20% to 25% of the population treated with both drugs show an improvement in FVC over 52 weeks. And that compares to about 5% in the placebo group who show some improvement over that time period. So it's not unprecedented to see some improvements in FVC with treatment. It's just that the existing drugs do it fairly inconsistently and only in a small proportion of patients. When you look at other drugs that we've seen reported. [ Pfizer's ] PDE4 drug appeared to stabilize FVC over 12 weeks. Obviously, the study was only 12 weeks in duration. So we don't see what happens beyond that, and client presented something similar. So with the newer generation of more targeted IPF therapies, we are perhaps seeing better treatment effect. And I think we've talked this through before in previous settings, but when we're treating IPF patients, a lot of the lung is destroyed, and we're not hoping to improve it. But when you look at a patient's lung histologically, we see regions of early fibrosis with well-preserved lung tissue we see areas of advanced fibrosis with sort of honeycomb change and complete destruction of the lung. And my sense is that if you have an effective drug that has true anti-fibrotic properties and is capable of reversing some of that fibrosis, then even in patients with the most advanced disease, one can hope to reverse some of those areas of early fibrosis, albeit once you have advanced disease, that the scope for improving things is probably diminished. So I think there is a biological rationale for why one might see improvement. I think there is precedent already for seeing improvement with existing drugs. And it may just be that this mechanism is more appropriately targeting the early fibrotic tissue rather than the late advanced fibrosis, and that may be why we're seeing this. But of course, we're still discussing early phase data and one would want to see this repeated at Phase IIb and Phase III. But I think, as I said in my talk, it's tantalizing.

Okay. And as a follow-up, have you seen data where you really see this kind of hundreds of milliliters in FVC gains over this period of time or -- is that something that is a bit outside of what we would see with the others.

And it's been seen. It's just the proportion is very small. I think what's more unusual about the data that you've seen now is that the proportion of patients showing a response is bigger, hence, why you're seeing the sort of the deflection in average FVC being upwards rather than downwards.

Okay. And considering the cough data, so you listed some of the comments from patients and then in the adverse events, we can see much fewer adverse events related to cough, is there any rationale or understanding from your end that, that cough would be kind of attenuated?

Well, I can start and someone else can chip in. I think the IPF cough is very different from any other cough and the programs for IPF cough and we have one with Thalidomide as an inhaled drug. It seems to be one of the few that could change IPF cough, normal opioids and normal antitussives do not do anything. So the question comes where is this cough, and is it from the upper airways or is it from the areas where you have alveoli or fibrosis. And if the latter case is true, then it may well be that healing of the [indiscernible] integrity will reduce the stimulation of cough in the lung, but then again, I mean, it's a hypothesis and -- but it's certainly true that the IPF cough is different from -- if you had a chronic cough or any other or any other coughs. So simple explanation, if we can restore [indiscernible] integrity, it may also affect the cost, but it remains to be followed up.

Okay. Thank you. And the last question is for the next trial. So can we -- I think everyone agrees with this data warrants at least for the development. And can we expect kind of a trial that would allow to enroll patients faster that you can include the standard of care or maybe newcomers or something like that and obviously more sites. And if the effect is demonstrated as in this trial, in a large or randomized trial could it then be potentially pivotal.

I'll hand it over to Rohit.

Yes. I mean, first of all, we're pleased that C21 is Phase IIb ready. We are also pleased that the FDA agrees with us. So actually, that's great. And we're looking and exploring all different options at this stage, right up at the top there, obviously, is to make sure that we get to a point that C21 becomes Phase III ready, and we confirm we're able to repeat what we've seen in the 2A and obviously confirm the dose. So that's really important and also do that in a way that we can reduce the patient burden as well. So we're looking at in-clinic and home type of assessments and things like that as well. And obviously, including cough-type assessments as we've just been discussing as well. So all these types of things, and we've got this advisory committee now, which is great, which we have got patient representation, as Carl-Johan said as well, so the gears have started to move. And -- so at this time, we're really exploring options. And I suppose that's probably as much as I can say at this point.

Our next question comes from Patrik Ling from DNB Markets.

Yes. I actually also have some questions about the next trial. And maybe you can elaborate a little bit on it. Both size-wise, if you're going to include the 2 different doses. Price-wise, how much do you think you will have to spend on it? And also, if I understood you correct. I mean it's not necessarily so that you're going to have to use some sort of standard of care to compare with? Or could you do it more like a carbon copy of this trial and then move to a comparator trial in Phase III instead.

I mean -- so it's -- we're designing the study. Obviously, it would be a randomized double blind placebo-controlled study. And -- so there will be obviously be placebo. But in terms of the standard of care and obviously, the population, the eligible population, all-comers and so forth, those things right now, we're actually discussing with the advisory committee. So there will be more to come soon.

Would it be ethical to actually have another trial that is placebo-controlled when there are 2 approved drugs for this indication. I mean it -- doesn't you run a risk that no one would actually like to join the trial because, I mean, the risk of ending up in the placebo group?

I think, I mean, first of all -- I mean, I'll let Toby comment. I suppose it's questionable whether the antifibrotics are standard of care and how they're viewed, obviously, you have -- that's what patients have today, and you have this GI intolerance and they come off and so forth and suboptimal. So there's that aspect. And I think ideally, you would want to run a study on top of standard of care. So this, again, is something that we're evaluating on top of standard of care. The rescue type of treatment as well, the duration, the eligible population. These are all things that will now -- we're discussing with the advisory committee. I don't know, Toby, if you want to say anything else about the previous and the current studies that are ongoing.

Yes. I -- there are studies going -- ongoing without standard of care. So the FibroGen CTGF inhibitor studies have been run without standard of care. And essentially, that involves recruiting patients who are either intolerant to drug have made a decision not to go on one of the antifibrotics or -- as is the case in many countries, the U.K. included, are unable to access reimbursed antifibrotic therapy. So there remain a large proportion of patients not on antifibrotic drugs. And it's just the case of accessing those. It's -- it obviously creates challenges of its own, but it also has advantages.

Okay. And then lastly, when do you think that you will have concluded the discussions with the regulatory agencies so you can come to a more firm conclusion on how the next step will look like?

So I mean the good news is we've concluded our initial discussions with the FDA. We have a good idea of what they want to see. So that's great and types of end points and so forth. And so that's good from that perspective. And I think maybe, obviously, they're seeking advice of that design of the study, and that's what we've done. And then there's obviously starting the whole engine of the study and clinical trial applications and so on. So that will then come next year at some point as well.

I'll also iterate what I said that we've had very positive discussions with the FDA as we understand now, I don't think we need more advice. It is, as also been said, there's pros and cons, and you can do a naive or treatment naive or all comers or on top of standard of care, and they have advantages and disadvantages, and we're -- that's what we're dealing with. But we are -- from a regulatory point of view, pretty clear on what we need to do, irrespective or -- irrespective of what we decide which type of study we need, we'll decide to do so. That part is clear.

Yes, we have some questions -- inbound questions on -- that have been submitted. I think I'll start with the one for Toby. Since I know that you have to leave. If this data holds through in how do you foresee paradigm changing?

I think you are muted.

Yes, there we go. Sorry. So yes, I think if the data were replicated in the Phase III study, that is to say we see an improvement in FVC over 52 weeks in a pivotal study, then I think that would lead to a paradigm shift in treatment. At the moment, our goal is to slow disease progression. I think if we had a drug that genuinely improved outcomes in patients, then there would be an incredibly strong rationale to be switching patients to a new therapy. You know the thinking in the area continues to be that we -- that the next generation of treatment will further slow things. So I think that's what makes this so exciting, albeit an open-label study is that it could potentially lead to a paradigm shift in how we treat patients clinically.

Thanks for that, Toby. If you have to drop [indiscernible]. Thanks a lot.

Thank you, yes. Apologies. I have another meeting to go to. Bye, guys.

Thanks, Toby.

And then Hans, we just have one follow-up question from Viktor Sundberg from Nordea.

I think my question might have been for Toby, but maybe I can ask it anyway here and see if you could answer that question as well. So coming back to the UIP patterns, I just wondered if the patients that have improved on the pivotal trials with pirfenidone or with nintedanib also have shown a milder UIP pattern. And related to that, I just also wondered if you could stratify patients based on UIP pattern to include milder patients in the next study? Or do you think the FDA will force it to include all patients in the next study?

Maybe I can start. I mean theoretically, you can, yes, stratify. I don't think -- I think we should look upon it and do a subgroup analysis at least. I think that's probably the right thing to do. I think the IPF community is more still on the total IPF patient group for studies and not for splitting up at this stage. But it is an interesting hypothesis. And I think we should definitely make sure that we capture that in the next trial. Maybe not by stratifying because there is normally some 40% out of these probable UIP patients in trials. So I think we will get our share, but we should definitely make sure that we do subgroup analysis here.

We have some more inbound questions here. So maybe the next one for Carl-Johan. It's generally perceived that if we see improvements of more than 200 or 300 milliliters are unlikely unless C21 drives lung generation. How would you scientifical explain the FVC improvements?

Well, I guess it is the mechanism of action, the target cell that is the regenerative repair cell [indiscernible] there to replace the type 1 cells when needed and the IPF is a disease where that process is not functioning properly, which then leads to a scarring process, which in turn drives the fibrosis in the lung. And the lung seems to be very susceptible to that since there's many, many ways by which patients get fibrosis, not only IPF. So I think by doing the repair job that is insufficient in the IPF patient and support that with C21. I think it is possible to regain function and regenerate -- maybe not regenerate lung tissue like all lungs. But to regenerate the tissue in the vicinity of functional lung so that you can improve the FVC or the lung capacity. And also importantly, to stop the further development of the fibrosis in other parts of the lung, so to speak. So I think it's possible.

Okay. Thanks, Carl-Johan. Maybe next up for Rohit. Can you provide more granularity on the hair loss observed in the study? Did any of the cases of hair loss lead to discontinuation from the study?

Yes. And I think, actually, we've covered some aspects of that in the previous questions. But again, magnitude of the hair loss we saw in Phase I is not what we're seeing here. We don't expect it to blind and therefore, we're moving forward and have that confidence with respect to the Phase IIb. And to your point -- question, sorry, Hans, that no one dropped down specifically due to the hair lots. So none of the withdrawals were specifically due to the hair loss. And again, it's an incredibly subjective thing, particularly in an open-label study. And -- but it's something that we'll certainly monitor in the Phase IIb trial as well. But I've spoken to many patient advocacy groups and we've discussed this quite openly in terms of the benefit risk as well. And obviously, if you factor in, this is a progressive, devastating condition. And on top of that, you have this GI intolerance, then obviously, in weighing everything up, this C21 certainly has a positive benefit risk profile.

Thanks, Rohit. Maybe last question and also for you. How many acute exacerbations have you had in the study and can you comment upon that?

So acute exacerbation is where you get a sudden acceleration of the disease. And it's -- the 1-year instance, I think, is around 15%. So in our study, we've had one event, and it was associated with COVID-19. It was actually challenging to decipher whether it was actually due to COVID-19. And I think that's the nature of the beast of acute exacerbations, as I mentioned, they're tough to define and they're actually even tougher to manage. They have a mortality of about 50%. So I know the AIR study is ongoing, but it is a 9-month trial. And by now, we would have expected to have seen more acute exacerbation events and acute exacerbation related deaths and the latter we have not seen. So we will build this into the Phase IIb trial and ideally and then obviously confirm it in a Phase III. And if we do confirm this that we can, in some ways, reduce the acute exacerbations, then this will clearly show that C21 is getting ahead of the disease and will then obviously differentiate us amongst the other medicines out there.

Thanks, Rohit. I think that's it from a Q&A perspective, on the inbound questions. So I may turn back to Carl-Johan for some concluding remarks.

I always like, but I will try to [indiscernible]. So in summary then, I think we had an unprecedented data set, and we're very confident that we would continue and proceed with this drug into the next step of development. And I think we have shown that by the genuine stabilization and the increase and also by having a mechanistic and medical scientific explanation for it. So all in all, I think we're very enthusiastic about what we've seen -- and I would like to thank the speakers here, the Vicore team behind the study. And of course, our patients who have been participating in the study to all make this happen, and I really look forward to the future. Thank you.