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

Thank you for joining the Vicore webinar where we will present and analyze the final results from the Phase IIa AIR trial, investigating buloxibutid over 36 weeks in idiopathic pulmonary fibrosis. My name is Megan Richards, and I'm the VP of Investor Relations, Communications and Portfolio Strategy at Vicore, and I will be moderating the session today. Our speakers today will present key insights from the data for about 40 minutes, and then we will open up the discussion for Q&A. To kick things off, I will turn the conversation over to Vicore's CEO, Ahmed Mousa.

Thank you, Megan, and thank you, everyone, for joining. Good morning. Good afternoon. I'm Ahmed Mousa, I'm the CEO of Vicore since September of 2023. I'm really excited to have joined the company after the highly promising interim results of this Phase IIa study of bloxibutid were revealed, especially as I previously worked in IPF and felt that these data reflect disease-modifying potential in an area of such high unmet need. My enthusiasm for the approach also stemmed from my time in the lab, where I saw firsthand the ability of angiotensin II pathway modulation to resolve fibrosis and other disease context. Now with me here today presenting are Bertil Lindmark, our Chief Medical Officer. He is a highly experienced drug developer, was previously the Vice President of Clinical Development for Respiratory at AstraZeneca, leading the approval of large respiratory franchise drugs, Symbicort and Pulmicort. He was the Head of R&D at Almirall, bringing a COPD medication to the market, and he's been the Chief Medical Officer of a number of biopharmaceutical companies leading clinical development programs including large late-stage IPF programs as well. And of course, last but not least, we have Professor Toby Maher, who really needs no introduction. He's amongst the world's leading clinicians in the development of therapies for pulmonary fibrosis and currently the Director of the ILD Center and a professor at the University of Southern California. On the next slide, we can look quickly at the agenda and so first, I'll talk a little bit about the rationale for buloxibutid in IPF, why we think this approach is the right one. And next, Professor Maher will review the final Phase IIa data as was presented at ATS and after that, Bertil will give us some deeper context on the data set and also place it in the broader therapeutic landscape. And after that, I will make some connections between what we've seen preclinically and clinically with respect to the mechanism and also talk about the Phase IIb ASPIRE trial that we're excited to kick off in the coming months as well. And finally, we'll, of course, do the Q&A, as Megan mentioned. So first and foremost then, why buloxibutid for IPF, we all know that IPF's a tough disease with progressive fibrosis, it essentially chokes off patients' ability to breathe with only 2 to 5 years of survival from diagnosis with the current therapies and there have also been a number of therapies that have not worked in recent years. So then why angiotensin II type 2 receptor agonism for IPF? And if we look at this kind of schematic of the mechanism. What buloxibutid is doing is selectively agonizing on right in orange, this AT2 receptor, which is an endogenous tissue repair system that sits within this broader Angiotensin II pathway. We believe that agonizing this upstream mechanism of action provides broad antifibrotic and tissue repair mechanisms. And it's a really nice approach for a heterogeneous disease like IPF as contrasted perhaps with downstream antagonistic approaches that might block collagen deposition. And just to kind of orient you to this angiotensin II pathway. When you look at the angiotensin II peptide, it signals on both the AT1 and the AT2 and these receptors sit as opposing forces in the body, the AT1 pathway is a hypertensive pro-fibrotic, pro-inflammatory pathway, and that's actually an entirely suitable response to certain injuries, infections, in salts to make sure that you maintain a good blood pressure. So it's very conserved. You see it in most species and it's quite important. At the same time, because of that importance, the AT1 pathway or AT1 receptor is broadly expressed and constitutively expressed across tissues. And so for that reason, when there's angiotensin II peptide release, the net effect is typically this AT1R phenotype, hypertension, inflammation fibrosis leading to the development of ACE inhibitors and angiotensin receptor blockers. What then is interesting about this AT2 receptor is it's much more selectively expressed both in tissues and in time. So in most tissues, you don't find the AT2 receptor basally expressed, rather it's upregulated after there's extended hypertensive fibrotic or inflammatory processes and then it becomes upregulated so that it can resolve those processes over time. Interestingly, though, one of the few tissues where you'll find basal and constitutive expression of the AT2 receptor, is the lung. And we believe that's because you're always breathing in some external particles that might drive some of these fibrotic or inflammatory processes. So it's great to have kind of the built-in system there to always kind of be resolving that. But for whatever reason it's there, and so our main thesis is to then basically supercharge this endogenous tissue repair system against the tough disease that is IPF. And the other thing that's been very interesting is actually the primary cell type in which you'll find this AT2 receptor expressed are these precursor alveolar epithelial type 2 cells, and so if we look at the next slide, we can tell you, why are these cells important for the healthy function of the alveola, is a critical compartment of the lung for breathing. And these are really the -- kind of exist at the distal lung and are critical for gas exchange. And so when you look at the type 2 cells, first and foremost, they actually differentiate into the type 1 gas exchange cells, which are the main cell type of the alveola, so that's a very important function for them. Second key function that we highlight for the healthy function of the alveola is the production of surfactant proteins. And there are surfactant proteins that are involved in innate immune response, and there are also surfactant proteins that are critical to address the surface tension associated with water. So in the absence of the surfactant proteins, there's the surface tension of water in the alveola would drive the collapse of this compartment. And so that's quite a critical function for this -- for the cell type as well. So maybe if we push forward then and say, okay, well, what happens in the disease state of IPF to the alveolus and what happens in the disease state to the type 2 epithelial cells. And so you see here on the left the injury to the lung that drives this fibrotic process, it doesn't spare the type 2 cells. So they become dysfunctional, they undergo apoptosis. So there's a reduction in that population of cells and that injury, then, of course, cuts off the ability of this cell type to produce surfactant protein, leading to what's known as pre-fibrotic alveolar collapse due to loss of surfactant production. And what that essentially means is even before the fibrotic buildup inhibits the gas exchange, you actually have the alveola unable to participate in that process. Because it's no longer has its integrity. And so that's a critical function. In addition to that, of course, the dysfunction of these type 2 cells is going to lead to less replenishment of the type 1 gas exchange cells, which, of course, are quite important. And then further than that, when you have the injury to the type 2 epithelial cells, it drives them to release this profibrotic cytokine in response to the injury, this TGF-beta1. And this is widely recognized to be a master regulator of fibrosis. And that TGF-beta1 drives what's called this epithelial to mesenchymal transition, where these type 2 epithelial cells, which should be differentiating more into the type 1 cells are now differentiating into fibroblasts and then ultimately, myofibroblasts, which are the kind of key drivers of the collagen deposition and buildup of fibrosis in the lung interstation. And then last but not least, the TGF-beta1 is involved in dysregulation of the matrix metalloproteinases and in particular, there are set of matrix metalloproteinases need to be collagenase that can break up the collagen. And those collagenases are down-regulated in the disease state that is IPF. So with a lot going on that drives this fibrotic process. On the right-hand side, we see what buloxibutid is postulated to do to alleviate this. And first and foremost, we're agonizing this AT2 receptor on these type 2 epithelial cells to refunctionalize them and basically allow them to continue to survive, to continue to produce surfactant and to continue to be available to differentiate into type 1 gas exchange cells. So that gave me the first piece of the puzzle. And then the second piece of the puzzle is an inhibition of TGF-beta1. So agonism of the type 2 receptor will downregulate expression of TGF-beta1. It will downregulate expression of TGF beta receptor that it signals on. And also, we've shown in vivo will downregulate the signaling through the key pathways by which TGF-beta1 drives its profibrotic activity. So a significant impact on that particular cytokine, which we think is important. And that ultimately will inhibit that epithelial to mesenchymal transition that we talked about. So stop the type 2 precursor cells from differentiating into fibroblasts than ultimately myofibroblast and then last but not least, we have then an upregulation also of the collagenase type MMP through this mechanism of action so that we have the enzymes available to break down the fibrosis that's already built up. On the next slide, when we put this all together then, this is what really underscores our excitement. We think we have the right mechanism with an upstream kind of broad approach to drive an endogenous tissue repair system. We have this really nice Phase IIa signal that Toby and Bertil will talk more about and then we have the right next experiment with a robust Phase IIb design to really demonstrate in a larger study and a placebo-controlled study, the efficacy and the safety of this molecule for IPF. So from here, I'll turn it over to Professor Maher, who will review the Phase IIa data set as we did at ATS.

Great. Thank you, Ahmed. So yes, it's a pleasure to be on here today to talk everyone through the results of this study. If we can move to the next slide. So people may well have seen the interim version of this data before. This is now the full and final data set. And just to remind everybody of the trial design. This was an open-label multicenter international Phase II trial of buloxibutid at the dose of 100 milligrams twice daily given for up to 36 weeks in treatment-naive patients. And there are a few important parts of the study design just to focus on. So first of all, as is the standard with late phase clinical trials in idiopathic pulmonary fibrosis, all patients have to have central reading of their CT scan to confirm that they had idiopathic pulmonary fibrosis before they could enter into the trial. And that's been an important sense check in IPF trials to make sure that we are actually studying the population of patients that we want with ultimately progressive fibrotic lung disease. As you can then see from the trials schematic, patients went through screening and ones enrolled into the study underwent regular study visits. The primary endpoint of the trial was safety and tolerability. The efficacy endpoint of forced vital capacity was measured as a secondary end point and as we will touch on, there were exploratory biomarker endpoints. With the forced vital capacity, again, there are a few things to focus on there. So although this was an open-label study, the spirometry was again performed essentially to Phase III standards, which is to say that there was a standardized spirometry device provided to each center and that there was a central overreading of all the spirometry results. Again, that's an important step in the quality control process to ensure that the spirometry that is obtained by sites has been well performed and is accurate and interpretable. And then finally, if we look at the study schematic, you will see that there was a plan for frequent study visits in 2019, when the study was being put together, this seemed like a great idea. The goal really being to ensure that by collecting frequent FEC measures, we were going to have a very clear impression of individual disease trajectories. Of course, with the onset of COVID in 2020, having quite so many touch points with the clinic, actually became something of a weakness for the study and as you'll see, this led to a number of dropouts with patients during 2020 and early 2021, often being very scared about coming up to health care facilities because of concerns about COVID. And so that's just something to keep in mind. As we said, patients with treatment naive and there were 2 specific visits where investigators were asked to consider where the patient should be exiting the study on to open label or on to standard of care therapy, and then patients were ultimately followed up to week 36 on treatment. So if we can move to the next slide. So this is the study disposition, 138 patients were screened, 86 of whom screen failed. That may seem like a high screen failure rate, but it's comparable to other late-phase studies in IPF and a lot of that screen failure is accounted for by the central reading of the CT scan. So in some ways, it's important that there was an appreciable screen fail rate because it tells us that patients were appropriately not being included in the study if they didn't have the CT appearances of idiopathic pulmonary fibrosis. So ultimately, 52 patients were enrolled. And then as I've alluded to, there were a reasonable number of dropouts. So 24 patients didn't make it to week 36 and the vast majority of those dropped out during the COVID pandemic, as we said, because of concerns about attending health care facilities during the pandemic. The minority dropped out because of drug-related reasons, and we'll come on to that on the next slide. So 28 completed the week 38 -- week 36 visit. And then for our safety analysis data set we have 52 patients, and in our efficacy for analysis set we have 50 patients. If I can have the next slide. So these are the baseline demographics of the patients. Now in general, this looks very similar to what we see in comparable late-phase IPF trials. So we have predominantly men in their mid- to late 60s. The ratio disposition reflects the countries in which the study was run. The time from diagnosis of 1 year, again reflects the fact that these were treatment naive patients. So these were patients very early after diagnosis who had either chosen not to go onto antifibrotic drug or did not have access to reimbursed therapy. And then if we look at disease severity, again, this is very similar to what we see in late-phase IPF trials with at least moderate disease severity and an FVC of 75% predicted. And then just the final bit to point out is that when we look at the CT pattern and when it is centrally read, we can divide patients up into the sort of typical and probable groups and so just over 1/3 of patients had what we call a typical UIP appearance, whilst 2/3 had a probable UIP appearance. Again, this is comparable with late phase studies that have been run in this disease area. So next slide. So as I said, safety and tolerability was the primary endpoint of the trial. And if we start first on the left-hand side, with the safety, we can see that there were not any serious or severe treatment-emergent adverse events that were ascribed to the drug itself. There were 3 TAEs that resulted to -- that were ascribed to the drug and resulted in withdrawal from the trial, and as you can see there were no deaths ascribed to the drug. If we look on the right-hand side, the main side effect that was seen that can be assigned to the drug is hair loss. This was recognized in the Phase I trials. And this in Phase I appeared to be a dose-dependent side effect at very high doses, occasional patients lost all body hair at the dose used in this trial of 100 milligrams twice daily, the hair loss that was reported was described as mild to moderate at worst and only 1 patient discontinued treatment due to this hair loss. It might be noted that the current drugs in this space, nintedanib and pirfenidone have significant gastrointestinal side effects, and it's often been difficult to combine treatments that have additional GI side effects with pirfenidone and nintedanib. And so it's important to note that buloxibutid didn't have any appreciable GI tolerability issues. So if we can move on to the next slide. And so this is the FVC data. And I think this is the very exciting part of the trial. Now of course, this was an open-label study, and so we did not have a placebo group. The dotted line on this graph is a hypothetical line describing the trajectory that we would expect a standard IPS population of patients would follow. And this is really based on our 20 years’ experience of running clinical trials in this disease area. We know from that experience that the average IPF placebo group loses somewhere between 180 and to 240 milliliters of FVC per 12 months. So we've just sort of put the dotted line on there as an indicator of what might have been expected from a placebo group. The green line is what was observed in the patients being treated with buloxibutid. So each time point represents the observed mean for that time point, and you will see there's a little number under each green circle that reflects the number of patients who provided measurements at each of those time points. As we've said, there was an early dropout rate, which was primarily ascribable to COVID. So we do see some attrition in numbers over time. But the startling thing about this line is that it's going upwards, suggesting an improvement in lung function over the 36 weeks of the study. And for those of you on the line who have looked at other IPF clinical trials, this is not something that we generally see with the approved therapies, we see a slowing of disease decline. So the treatment line has tendered to mirror the placebo line, albeit with a more shallow level of deterioration over time. So to be seeing a set of results where we're seeing an upward inflection in the curve is very exciting from my perspective. Clearly, we have to caveat this with the fact that it's an open-label study. We do know that occasional patients with IPF who are untreated do show some mild improvements in lung function over time. But if one took a sort of [Indiscernible] type approach to interpreting this data, the chances of sort of accidentally enrolling 28 patients who show a persistent improvement in FVC over 36 weeks is miniscule. So I find this data to be incredibly tantalizing in terms of suggesting an effective treatment. If we can move forward -- and then Vicore have started trying to dig into other data and look at some of the plasma biomarker responses. And we put here 2 potentially important biomarkers. So on the left-hand side, we have TGF-beta. Ahmed has already described TGF-beta is the master regulator in idiopathic pulmonary fibrosis. And it's a very important profibrotic cytokines, so seeing a reduction in TGF-beta levels would suggest an important effect on fibrotic pathways. On the right-hand side, what we see is an increase in MMP-13. MMP-13 is a collagenase responsible for degradation of collagen and extracellular matrix. And so an increase in plasma MMP-13 would suggest increasing collagenase activity with exposure to treatment. And again, that's something that would be considered a good thing to happen in the treatment of IPF. So if I can have the next slide. So having talked to you through all the data, this is just the summary. Ahmed gave you the rationale for why targeting the angiotensin 2 receptor makes sense and the buloxibutid is a novel drug targeting this mechanism. We've shown you the safety profile, which I believe is very good. There is that one tolerability issue of hair loss, which has been mild to moderate. And I think in a population of predominantly older men is not something that has caused concerns with patients enrolled in the study. And finally, I've shown you the lung function data which, as I've said, has to be caveated by the fact that this is an open-label study, but really for me is incredibly tantalizing given how the treatment curve differs so startlingly from what we've seen in other drug trials in this disease space. So I will stop there, and I will hand over now to Bertil for the remainder of the session.

I want to give extra context to the AIR data and to do a little bit of comparison with historical data and try to set this in perspective. And it's pretty obvious if we had shown a shallower decline of the FVC, then we wouldn't have intended as much interest as we have. But actually, we, for the first time, have shown a pretty dramatic increase in FVC. So can I have the first slide, please? As Toby saying, we took very much care to include the right patients. And when you compare here with the INPULSIS patients in the placebo group, they were very much alike in terms of age, in terms of gender, BMI, et cetera. The lung function was actually slightly worse in the AIR trial. So the patients had lost 25% of their lung function. And this is sort of -- the combination of HRCT and the FVC percent predicted, I think that tells the story that these patients had really bona fide IPF and that there is a good comparison with historical data based on that. Next slide, please. So Toby showed the benefit or the good side effect profile. And I think that's -- this is this is another sort of contrasting data set because can you achieve an increase in lung function and still be very tolerable. And you look at the side effects on the buloxibutid, extremely good on the GI side, low rate of exacerbations and cough worsening, which are kind of key IPF characteristics and then sort of comparable or much better [Indiscernible] and not related to buloxibutid. So given the side effect profile and given the kind of effect opportunity that we see with buloxibutid. We think that sort of, you could be thinking of first-line therapy, you could be thinking of combining buloxibutid with most of them sort of currently present or upcoming therapies. So this is a good starting point, sort of a tolerable therapy with potentially good disease-modifying characteristics. Next slide, please. So we've seen this graph before, and as Toby was pointing out, it sort of goes in the wrong direction. But for the patients with IPF, I think it goes in the right direction. And obviously, you can prove and unprove any approved drug with sort of cutting and slicing the data into a really small buckets. But here, we look at sort of the different subgroups in the AIR trial and both in terms of gender, geography and in terms of type of IPF and we talk about the probable UIP and the typical UIP depending on the HRCT pattern, all end up north of the horizontal line showing improvement. And when we look at the -- both the mean and the median FVC change, you can see that both are positive. And that tells you that this is not a -- this is not driven by singular patients or a subgroup of high responders. The data set is really internally highly consistent. So that tells you that the patients had a good bona fide IPF and they reacted completely different. And it's not a single patient or a subgroup that sort of posted this data way. Next slide, please. When we look at the percent predicted, and this is a way to link the lung function to the body size and the length of the patients, for example. The buloxibutid again shows both a mean and a median improvement compared to baseline. And we've added in the untreated patients from the INPULSIS studies and the nintedanib patients just for comparison, and we'll interplate it down to 36 weeks. So here again, percentage predicted it's consistent with an increase in absolute FVC and tells the uniqueness of the intervention. Next slide, please. When we look at the sort of patients that outperform the change in FVC. When we compare with standard care, the INPULSIS data with nintedanib, buloxibutid wins -- sort of outperform 75% of the patients. And when we compare with the untreated in the same study, we outperformed against 82%. So it's really a population shift that we accomplish with the buloxibutid intervention. Next slide, please. Here, we look at the percentage of patients with improved lung function versus baseline. And of course, as Toby was saying, how likely is it that you would in a population like this 52 patients that you would see an accumulation of patients with vastly improved lung function. Well, if we compare with the untreated, that's about 9%. So you would think of 5 patients maximally or maybe 10, but it will still be much less than what we saw in the AIR trial. Standard care, 25% also not doing as well as buloxibutid. And there is sort of internal consistency in the data. There is the loss of lung function, the previous loss of lung function saying that these are bona fide IPF patients that actually increase in lung function. Next slide, please. So we had -- in the trial, we built in a risk-benefit evaluation at week 12 and week 24 -- and the physician was prompted to think about whether or not it was -- the benefit risk was okay and whether or not it was indicated to start antifibrotic therapy. One patient in the whole study went from inside the study into antifibrotic therapy. And overall, 97% at both time points kept going in the study, and it was felt that the benefit risk was fine. So what I try to say today is, basically, we have a population that looks similar to previous populations and where we have a completely different side effect profile, extremely well tolerated and with no gastrointestinal side effects to be mentioned. And really, however, we cut the data, the internal consistency and the comparison with historical data outside of the trial is really sort of telling that we have potentially a drug that could be extremely well sort of put in -- both for patients in the first line, but also in combination with other therapies that might be approved in the meantime. So with that, I'll finish my talk and hand over to Ahmed, over to you.

Thanks very much, Bertil. And so we have Professor Maher who talked about the clinical data. Bertil, who put it into a broader context and before I talk about the Phase 2b design, I'd just like to relink what we saw in the clinic with our postulated mechanism of action and even a couple of pieces of translational data that we have. So on the next slide is just a reminder of what Professor Maher showed, the decrease in plasma TGF beta trend as well as the increase in the collagenase type MMP. But exactly what does this mean? And why are these important? And how does it link to our kind of preclinical data set and why we think this mechanism is important. So just on the next slide, really, again, kind of reinforcing the importance of this profibrotic cytokine that it stimulates the extracellular matrix formation, drives these transitions of the type 2 cells to ultimately myofibroblast for collagen deposition and also plays a role in the MMP imbalance, associated with disease progression. So it's been very nice to see very consistently in the preclinical and translational data sets that buloxibutid inhibits the expression of TGF-beta-1 and on the right-hand side, this is an ex vivo study in human IPF precision-cut lung slices. But we've generated similar data in vivo and other models as well. And in addition to kind of the effect on the levels of TGF-beta-1, we also have very nice data in vivo reflecting inhibition of the signaling pathways, the SMAD2/3 signaling associated with TGF-beta-1 profibrotic drive. So for us, this kind of correlation between what we see in the preclinical and translational data set in the blood biomarkers and in the ultimate kind of lung function has been very exciting for us. And then maybe if we move to the next slide, there's also, right, as we said, this kind of increase in collagenase type MMP-13, and there have been a number of studies that have shown that this is an important matrix metalloproteinase for breaking up the collagen matrix. On the right-hand side, you'll see a study where they knocked out MMP-13 in mice and then bleomycin challenge them, leading to a greater level of fibrosis and damaged the lung. So this is an MMP that's known to decrease collagenic activity -- sorry, to increase collagenic activity and to promote resolution of lung fibrosis. And so it's been very nice to see them the correlative kind of plasma biomarker work that's consistent with the importance of this type of a matrix metalloproteinase and this is also consistent with our translational data sets showing increases in the collagenase type matrix metalloproteinase, and then the third slide, this is also the third piece of the puzzle, which I think is not to be forgotten, right? And this is the impact on the type 2 epithelial cells and the surfactant production. So again, here, just kind of showing a small study in vitro on the left-hand side where you co-culture the type 2 epithelial cells with bleomycin. So essentially, you're simulating that injury that I was talking about that occurs in the alveola in the IPF disease state. And that will lead to apoptosis and cell death in the type 2 epithelial cells. And here, we see that C21 or buloxibutid in a concentration-dependent way, is able to inhibit that bleomycin-mediated apoptosis. And what should that lead to, right? That should lead to an increase in these surfactant proteins that can address the surface tension and prevent or address the pre-fibrotic alveola collapse and our ex vivo human IPF precision-cut lung slices data are consistent with that with an mRNA upregulation and key surfactant protein B as well as C in order to address that phenomenon. So on the next slide, if you take this and you put it all together, what that means is that you're hitting the fibrotic drive from 2 ends, right? You're reducing hopefully, the level of fibrosis with this postulated mechanism of action for the TGF-beta1 inhibition of expression in signaling, but you're also then impacting the fibrosis that exists through the upregulation of the collagen type MMPs and then as kind of a slightly separate category is how we see it, you're impacting also the alveola integrity and addressing pre-fibrotic alveolar collapse due to loss of surfactant production. And those are some of the reasons why we believe we've seen this exciting clinical signal, and why we're excited to push forward to the Phase 2b study. So maybe on the next slide, we can do a quick overview of that one. So again, this is really intended to be a robust Phase 2b with kind of the regulatory endpoint in mind so that we really demonstrate as much as we're able to the safety and the efficacy of this molecule for IPF. So it's randomized, double-blind, placebo-controlled study. It will include IPF patients now who are on the standard of care nintedanib or not on standard of care, whether that be treatment naive or treatment intolerant or otherwise. It will be a 52-week period, where we're measuring as the primary endpoint change from baseline FVC at 52 weeks, will include 270 patients and will also include 2 dose levels, 100 milligrams twice daily, same as in the Phase 2a AIR study as well as a [50-milligram] twice daily dose relative to the placebo group as well. On the next hand slide, we just put into a little bit of context, what it means to enroll 270 patients based on our statistical powering. So while I've been very excited to see this improvement in lung function in the Phase 2a AIR trial, and we see that as a clinical signal of activity. certainly something that could stabilize lung function, especially something that's safe and well tolerated would be a huge win for IPF patients, would address a really high unmet medical need and would be also a significant commercial opportunity. And so from that perspective, we've ensured that by including 270 patients in our trial we have the statistical power to be able to detect a stabilization of lung function out to 52 weeks under the assumption of kind of the most mild of placebo/standard-of care arms that have been observed in IPF trials. So really trying to make sure that we power this in a conservative way for success after seeing this nice Phase 2a clinical signal. And then on the right, just depicting that we are going for a broad geographical footprint as we advance to Phase 2b, including significant enrollment in the United States with 20% to 30% of the study being anticipated to enroll in the U.S. And then from there, I will hand it over to Megan for the Q&A.

Great. Thanks, Ahmed, and thank you all for an engaging presentation. We will now open up the conversation for questions, and we'll start with the analysts on the phone and then move on to questions in the chat.

[Operator Instructions] The next question comes from Dan Akschuti from Pareto Securities AB.

Congratulations again on the great data. I have mainly questions for the Phase IIb trial now. Are you -- when are you expecting the trial start? And how do you see your data enabling you in kind of marketing to get the patient enrollment up and fast because there's still quite some competition, as you know, with other modalities.

Yes, that's a great question. So on the timing side, we'll make the regulatory submissions to initiate the Phase IIb starting next month. So of course, compiling the final Phase IIa data set to include as part of those. We've identified the 97 clinical sites that we'd like to include in the study across the 14 countries, and so we're already engaged with them. Maybe on the point of how enthusiastic investigators might be, maybe I'll turn that over to Professor Maher and see if he has any perspective on what this data set might mean for enthusiasm amongst the clinical community as we kick off the Phase 2b as well.

Thanks, Ahmed. Yes, and I think as was alluded to in the question, it is certainly a competitive space at the moment for clinical trials. We've got at least 1 Phase III study and a large Phase IIb study running, that said, as a disease area, we've become much more experienced at recruiting patients and the time lines, even at Phase III for recruiting patients have got shorter and shorter over the last decade as more and more centers have become involved in clinical trials. And I think for Phase II studies, one of the keys to engaging interest is really having both a good rationale and having as much good data as possible. And I think Vicore is in an excellent position with the data that we've just described to really engage with investigators and patients and patient support groups to really drive enthusiasm for this trial. And my expectation, given the data that I presented today is that recruitment should be as easy as it gets in a Phase 2 IPF study given what we can tell patients about the drug to date.

Okay. And with one follow-up for you, Toby Maher, if I may listen to your presentation quite frequently since you present a lot of other data sets from other companies as well. So I wonder how -- because many of these data sets are 12 weeks based and even in Vicore data, we don't see much at 12 weeks, how do you compare kind of the significance of 36 weeks data versus 12 weeks [Indiscernible] thinking about the trajectory that Vicore now has for how that bodes kind of for the 52-week trial. If you can share anything else that you think is really standing out here in a positive or negative way?

Yes, it's a good question. My general view is that 12 weeks will give us a reasonable impression of the potential efficacy of a drug. I think it's unlikely that we will miss an effective drug by running 12-week studies. And if you think back to the data I showed today, at 12 weeks, there was stabilization of FVC with buloxibutid. So that in itself would have been considered quite exciting in comparison to some other studies. I think clearly, having longer-term data is advantageous. As you alluded to, the regulatory expectation is that Phase III studies will be run over 52 weeks. So ultimately, decisions about efficacy will be made at the 52-week time point. So where we have more than 12-week data I think it can only build confidence further that the signal is sustained. And as you've seen from the shape of the curve with buloxibutid, perhaps the advantage of having run the study a good distance beyond 12 weeks is that we've seemingly begun to see a cumulative benefit. So when I'm talking to companies about study design, I tell them that I think 12 weeks is sort of the bare minimum and it is enough. But if we can go further, then it can only build confidence that there is durability of treatment effect.

The next question comes from Sushila Hernandez from Van Lanschot Kempen.

Also a question for Toby. But all these developments in the IPF space, what about [indiscernible] profile excites you the most?

I think 2 things. Obviously, one always has to caveat one's enthusiasm about the improvement in FVC that we see over the 36 weeks given that it's an open-label study. So I don't want to get -- sounds like I'm getting too carried away. But on the other hand, the lung function trajectory that we are seeing is completely different to anything that we've seen before. So to have a treatment let's say that plays out in the Phase IIb to have a treatment that genuinely improves lung function over time. would really be a paradigm shift in this disease area. So I think that's reason for cautious excitement. And I think the other important factor is the tolerability profile. Our existing drugs and several of the drugs in development are potentially very difficult for patients to tolerate. And with nintedanib, we see when nintedanib is used in community practice, about 50% of patients discontinued therapy at 12 months because of gastrointestinal side effects. So what we've seen with buloxibutid suggests to me that it should be a drug that is relatively easy for patients to take long term. So that combination of efficacy and good tolerability really makes this a very exciting program.

The next question comes from Patrik Ling from DNB Markets.

Two questions. Actually, more for Ahmed, I think. First, can you say anything about what you expect the Phase IIb trial will cost? And if the financial resources that you have in your balance sheet right now, is that for you to bring that trial to completion?

Yes. No, great, great questions, and thank you, Patrik, for joining. We currently have a cash runway that takes us into 2026 as we've guided kind of publicly. So we really have kind of a strong balance sheet to push forward in a significant way. And of course, it's been really great to also build the build the support with the deal with NS Pharma, where we've out-licensed regional Japanese rights, but of course, that brought in upfront payments, it will bring in milestone payments. and also some cost sharing for both the nonclinical like the CMC cost, a portion of those, as well as the late-stage clinical development costs as well.

Okay. Great. And then also another question when it comes to the trial. I mean, in the AIR trial, you had several interim readouts. Will you have anything similar in this trial? Or will we just have to wait until the trial is completely finished before we get any sense of direction from the trial?

Yes. It's a great question. So for both like regulatory reasons and because now this will be a placebo-controlled study, there are limitations around what can be -- what can be done in order to make sure that we're able to have the right regulatory interactions with the FDA. Our hope and anticipation is that with a positive Phase IIb readout, we could engage with FDA to facilitate having only one Phase III trial in order to get the drug approved. And for that reason as well as some others, we won't have an efficacy kind of interim analysis. There will be an interim analysis for futility built into the study, though.

Okay. And then lastly, I mean, since these patients might be on nintendenib as well, I mean, how do you handle if the patients drop out? Because [indiscernible], I mean most patients drop out within 12 months of treatment [Indiscernible].

Yes. So also a great question. So as part of our powering calculation, we have assumed a particular dropout rate, and that is in line with what's been observed in prior clinical studies that included nintedanib -- including INPULSIS itself, but also including kind of other Phase II and Phase III study. So we've made we've made a baseline assumption of kind of what we expect for a typical study, the dropout rate to be -- it's consistent with what, for example, the post 12 week or even a little bit more conservative than what the post 12-week dropout rate was in the Phase IIa AIR trial. And in addition to that, we'll be able to observe on a blinded basis, the dropout or withdrawal rates. So if there's any kind of shift from the assumptions and a need to think about adjusting the powering, there is that opportunity built into the protocol as well in case something unanticipated does occur.

There are no more questions from the phone conference -- so I hand the conference back to the speakers for any written questions from the chat and comments.

Excellent. Thank you for those great questions on the phone. Turning over to the chat. We do have a lot of great questions coming in. So first, I want to start off with a question from Jeff Jones at Oppenheimer. Can you comment on the impact of outlier patients on these main FVC results?

Yes. I think Bertil did a great job talking through that. Bert, why don't you recap some of the discussion you did on that point.

Yes. We saw 65% of patients sort of improving the lung function. And obviously, when we look at the median, the mean improvement was 216 milliliters, and the median was, I think, from memory, about 63. So this really shows that the majority of patients sort of improve the lung function. Obviously, in a study like this, you will have patients improving and patients not improving because that's the nature of the disease. But as a cohort, we can say, for absolutely clearly. And when we cut the data materially into gender, geography, type of IPF, we think that the data is internally consistent, and it's not driven by a single or a small number of outliers.

Excellent. Thank you, Bertil. Looking at the next couple of questions, we're actually getting a few similar ones from folks in the chat. So I'll consolidate them here. When do you expect the Phase IIb study to start? And have you received any feedback from investigators?

Yes, absolutely. So we would expect to, again, make the regulatory submissions to initiate the study next month, and then you would start screening and enrollment following kind of regulatory clearance in the months thereafter. So we're really excited to kind of push forward. Professor Maher talked a little bit about the reasons why people might be excited for this study and why it might kind of be relative to the competitive landscape that is IPF and that it's a rare disease, kind of an efficient enroller in that context. And -- we certainly hope that will be the case. We're getting good initial signals at that front. We had kind of a packed room for our investigator meeting at ATS with some of the Phase IIb investigators who are attending the conference. As I think I had mentioned, we have 97 clinical sites. So that means we've already kind of aligned with those sites that we would like to include them and they would like to participate in the study. And at least for now, that will be kind of the number of sites that we have. So now we're kind of generating a little bit of a waiting list or kind of a list of others that maybe we can think about expanding in the future if it is needed. But I would say that the early signals on enthusiasm are quite nice. And I think it is this first and foremost, having a safe and well-tolerated drug that's easy for patients to take, especially since we're going on top of the nintedanib standard of care. And then on top of that, having this promise potential efficacy based on the Phase IIa signal that's getting some of the investigators excited as well. So I think the initial signals there are quite good.

Another question from the chat here. What is the reason behind the hair loss seen with buloxibutid? And how does this impact the profile of the drug?

That's a good question. Maybe I'll hand that over to Bertil, exactly.

Yes, as I mentioned, this is in a minority of patients, and we saw 1 patient stopping therapy because of the hair loss. The exact reason why we see it is not known. And we have started a program to look at the sort of the background, whether or not it's on target or off target. We think that is manageable. I think it's mild and moderate. Professor Maher mentioned the sort of the population group that we're looking at here, sort of male, predominantly males, 60, 75, et cetera, probably can tolerate some of these hair loss, especially if we improve lung function. But it's -- at this point in time, the jury is out on the exact mechanism.

Excellent. It looks like we have time for about 1 or 2 more questions. So I'll go with a provocative one. Why do you think that you will succeed where others may have failed?

That's a great question. I think some of the discussion that I did at the top and the bottom really encapsulate that, that you're going after a disease with an upstream mechanism of action that drives an endogenous tissue repair system quite distinct, I think, from some of the other approaches that are downstream, antagonistic and block collagen deposition that you're also able to impact fibrosis in multiple ways, reducing buildup and driving the breakdown, but also that you're able to have this impact on surfactant production, which is, in a way, broadly being recognized as an important piece of the puzzle in IPF. So we think each of those pieces are important. I think the other thing that you might notice if you look at the literature in the IPF space is a lot of kind of scientists and academics are focusing in on these type 2 epithelial cells. And the refunctionalization of these cells we think is quite an exciting thing to do, and we think drives kind of a broad range of beneficial effects and I think that -- those things give us hope that we can do something different based on this initial signal and the translational data that we have.

Excellent. Well, it looks like that is all the time that we have today for this session. So thank you all for taking the time to join. I know we had a lot of great engagement in the chat, and we were not able to get to all the questions. But we would love to follow up with you, so please feel free to reach out to us after this meeting. Thank you so much for attending, and enjoy the rest of your day.