Vivoryon Therapeutics N.V. (VVY) Earnings Call Transcript & Summary

Good day and welcome to the Vivoryon Therapeutics Earnings Call Half Year 2020. Today's conference is being recorded. At this time, I would like to turn the conference over to Manuela Bader. Please go ahead.

Thank you. Good afternoon and good morning, and welcome to our H1 conference for investors. My name is Manuela Bader, Director of Investor Relations and Communications at Vivoryon Therapeutics. Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning the development of Vivoryon Therapeutics' core technology, the progress of its current research and development programs and the initiation of additional programs. Should actual results differ from the company's assumptions, ensuing actions may differ from those anticipated. You are, therefore, cautioned not to place undue reliance on such forward-looking statements, which speak only as the date hereof. With me on the call today are Ulrich Dauer, our Chief Executive Officer; and Michael Schaeffer, our Chief Business Officer. You can find today's -- for today's call -- you can find the agenda for today's call on Page 4, in the presentation, we will start by giving you a review of the financial results of the first half year 2020, followed by operational review. The presentation will last about 30 minutes. After the presentation, we will be available for your questions. You will find the slide deck of this presentation on our corporate website. And with this, I would now like to hand over to Ulrich Dauer.

Thank you, Manuela. Also a warm welcome from my side, and let me directly start with elaborating on the highlights for the 6 months, which we believe are proving Vivoryon being well on track with meeting its corporate objectives for 2020. In January, our company entered into a collaboration with Nordic Bioscience, a pioneer in the development of blood-based biomarkers for decades and is, therefore, the ideal partner for identifying molecular fingerprints in blood of patients. This supports Vivoryon Therapeutics' approach of targeting neurotoxic pGlu-Abeta by inhibiting its producing enzyme Glutaminyl Cyclase. For the biomarker activities, blood samples of patients in the European VIVIAD Phase 2b trial are being collected and analyzed by a mutual team of scientists from Nordic Bioscience and Vivoryon Therapeutics with the goal to identify correlations with clinical response. We believe our collaboration with Nordic Bioscience has the potential to bring tremendous benefit to patients suffering from this complex and devastating disease. The ability to select patients who have a greater chance of responding to PQ912 will transfer an already proven principle of precision medicine into Alzheimer's disease. Also, as a result of the collaboration with Nordic Bioscience, we announced an update of the study protocol to include further less or noninvasive, clinically meaningful exploratory parameters such as blood-based biomarkers, but also the speech assessment by Winterlight Labs for sensitively detecting cognitive changes. Michael will update you on the status of the VIVIAD trial in more detail in the course of our presentation. In April of this year, we made an important step to strengthen the sustainability of our pipeline with a new patent portfolio that perfectly matches our scientific key strength. Vivoryon entered into a research collaboration with the Fraunhofer Institute for Cell Therapy and Immunology, and acquired related patents from the institute for Meprin protease inhibitor and assay platform. Our partner will work together with us to advance first-in-class low-molecular Meprin inhibitors. This collaboration is combining Vivoryon's expertise in translating basic research into marketable small molecule therapeutics, with the academic institutes focused on discovery and development of new therapeutics that target putative pathological post-translational modifications, for example, in fibrotic diseases or cancer. This new asset opens up new partnering opportunities in medically underserved conditions. End of April, MorphoSys informed us that they will not execute their exclusive option to license Vivoryon's QPCTL inhibitors with the goal to augment the efficacy of anti-tumor antibodies such as tofacitinib through a novel mode of action based on silencing a newly described cancer immune checkpoint. Also, we had hoped for a different outcome. We continue to be excited about the potential of our QPCTL inhibitors, which is underlined by new scientific data that is supporting our hypothesis. Therefore, we are continuing our activities in this field and have reengaged in promising partnering discussions with potential licensees for mutual development in oncology. An important element in our development strategy for PQ912 in Alzheimer's disease has been the Phase II trial in the U.S. meant to complement our European activities. This study, which we have planned to conduct together with our U.S. partner ADCS was granted with a USD 15 million from the U.S. National Institute of Health, NIH. Given the budget requirements for our original study protocol that considered more than 460 patients, we had made the start of this trial contingent through an additional cash flow event. In discussions with the ADCS and NIH, we now achieved an agreement to split the original study protocol in 2 phases, with a major portion for the NIH grants to be released for the first of this phase. This will enable us to start the U.S. trial within the course of next year and, presumably, within our current financial capabilities. Two post-period highlights refer to progress we've made in the context of our key value driver, varoglutamstat or PQ912 in Alzheimer's disease. In July, we announced the start of the VIVIAD trial with the enrollment of the first patient. This is a great achievement against the background of the COVID-19 situation in Europe and was only possible by the enormous engagement and dedication of our internal team and our clinical collaborators. Beginning of this month, we've already received IND clearance for varoglutamstat or PQ912 for its planned Phase 2b trial in the U.S. This is another important milestone towards our plan to start our U.S. trial next year. I'll now give a brief summary on the financial development in the reporting period. Starting with an overview of the share, which is listed under the ticker symbol VVY at the Euronext in Amsterdam. The share price development started with a positive trend beginning of this year, it was peaking over EUR 7 and seemed to converge at a level around EUR 4. Lately, we've seen an interesting dynamic in share price and liquidity in a time with significant development in the Alzheimer's field, especially with the priority review status by aducanumab by FDA. Selected key financials from the P&L according to IFRS. Our R&D expenses rose significantly from approximately minus EUR 1.9 million in the first half of 2019 to minus EUR 6.4 million in 2020, which is due to the ramp-up and start of our European VIVIAD trial in Alzheimer's disease, and that also reflects the operational progress we've made. The G&A expenses slightly declined in the first half of 2020 to EUR 1.14 million from EUR 1.22 million in the first half of 2019. Operating loss amounts to minus EUR 7.48 million for the first 6 months of 2020 compared to minus EUR 3.08 million for the first half of 2019 and largely as the result of the higher R&D expenses for the first 6 months of 2020, leading to a net loss of minus EUR 7.57 million for the period until June 30, 2020, as compared to minus EUR 3.09 million for the first half of 2019. Further key financial figures. Equity stood at EUR 35.075 million, which translates into an equity ratio of 92.5% as compared to 60.8% for the first 6 months in 2019. As of June 30 this year, we had EUR 37.9 million on our balance sheet. Let me explain the cash and cash equivalent position. We've implemented a cash management strategy against the background of 2 factors: to avoid negative interest rates for higher cash volumes in our accounts; and secondly, to build up special assets which are not vulnerable in case of bank insolvent. In this context, we purchased securities, essentially conservative pension funds, in an amount of approximately EUR 20 million, which can be liquidated at any time, and approximately EUR 11 million in deposits with a run time of 6 months. Those deposits and securities, even though they can be liquidated at any time, will not be recognized as cash and cash equivalents according to IFRS. If they were, in essence, we had a cash available of EUR 35.5 million as compared to EUR 8 million as of June 2019. Loss per share as of June 30, 2020, is EUR 0.38. Back to the operational aspects for the reporting period. To put our operational progress into context, I want to remind you of the DNA of the volume, which carries our key strength and scientific leadership in targeting pathological post-translational modifications. Throughout the history of Vivoryon, our company has been leading this discipline. The first example being the discovery of DPP-4 inhibitors by the scientific founders who, based on these discoveries, pioneered the development of a new class of diabetes called gliptins; another example being CDK9 inhibitors; and lately, QPCT and QPCTL inhibitors for Alzheimer's disease and cancer, respectively. The recent acquisition of a unique patent estate from our collaboration with the Fraunhofer Institute for Meprin inhibitors, pathological development to further strengthen our competitiveness for products based on targeting post-translational modifications. Now this pipeline representation is summarizing our project portfolio, and that's the value drivers for the volume going forward. Most advanced is PQ912 in Alzheimer's disease with an ongoing European Phase 2b trial called VIVIAD and the plan to start a Phase II U.S. trial next year, both leading to a potential value inflection with anticipated study readout in 2023. As mentioned, our portfolio of QPCTL inhibitors promises to augment efficacy of various anti-tumor antibodies and qualified for respective clinical development, which we are discussing with potential partners. Based on the Meprin protease inhibitor portfolio, we have the goal to qualify appropriate clinical candidate with animal models suited to address medically underserved conditions and indications like acute kidney injury, fibrosis or cancer. And finally, and this is not reflected yet in this pipeline representation, we continue to explore further indication potential of varoglutamstat or other QPCT and QPCTL inhibitors, including inflammation, Huntington's disease or NASH. In this context, we pursue a clear partnering strategy of combining our scientific strength with pharmacological and development expertise of a partner. Now with this being said, I will hand it over to Mike to walk you through our pipeline projects and the science behind it.

Hello, everybody, and welcome, everybody, on the call. So thanks, Ulrich, for this overview. I will go into the R&D overview now with you with a couple of slides. First slide shows you the portfolio we have accumulated at this time point. So the company has certainly made quite a transition from, let's say, one-trick pony in the Alzheimer's field to, in the past 2 years, maybe a company that is looking for a broader portfolio of activities, which were already mentioned by Uli. Obviously, the Alzheimer program is our key value driver with Vivoryon's trials and VIVIAD trials in U.S. and Europe, but we also have for sure exciting opportunities for oncology coming up. Our goal is certainly also to further broaden our development pipeline and balancing our development risk, which is nicely shown by the recently acquired program from Meprin protease inhibitors. And let's say, our fourth layer we have set up is, what Uli just mentioned, is certainly looking also for other opportunities. We can use the QC inhibitors in other indications. I will not comment on this fourth layer in my slide deck today, but there are other areas and negotiations going on in different stages from early phase up to a turnkey level. Next slide shows you quickly the mode of action of our lead compound varoglutamstat. And so if you look at the top-right box, you see that we are addressing -- and this is a hallmark of this compound, I think, we're actually addressing more than 1 crucial AD pathology pathway. And in that, we are addressing oligomer aggregation, neuro-inflammation and also neurotoxicity. So our molecule is inhibiting this enzyme QPCT, which then, in turn, is relevant for that not -- pGlu-Abeta species are developed, and these species of Abeta have been shown to be especially neurotoxic. So that's brief mode of action of the drug here. And what sets us aside, I think, was a special feature of that compound, is that I would think it belongs to the new generation of compounds. If we look at Abeta drug development, which historically, we, of course, have Abeta focused on programs, beta secretase inhibitors, Abeta antibodies. We have more recently also Tau-related approaches, obviously. And I mean looking back into the Abeta approaches, again, certainly, many antibodies have failed in the past, but with the recent more positive news on aducanumab, we also feel that, in essence, Abeta theory and especially focusing on toxic Abeta oligomer, which is what aducanumab is also doing, further validates our approach in that respect. Looking at the novel disease-modifying approaches on the right side. I mean this is the list here of the companies, thus far it's not complete. But the idea here is certainly that I think it was a learning in the whole community that you have to look a little bit broader maybe a different mode of actions for targeting cognitive improvement, targeting different proteins also. And among these approaches, we think our approach is well-situated actually and this is also pretty advanced, especially given the fact that, as Uli said, we just started the Phase 2b trial in Europe called VIVIAD study, stands for advancing disease modified treatment and non-invasive diagnostics for Alzheimer's disease. One could also maybe say less invasive diagnostics because also blood sample is, if you will, invasive. So we started this trial, and that's certainly long-awaited for within our company, also within the Alzheimer's community. We just started in Denmark with 3 sites there. We have the regulatory goals in Germany and the Netherlands. We are waiting for ethics approval in both of these countries, but these are expected to come soon so we should be able to recruit patients from Netherlands and Germany in probably September time, actually. And I don't have an exact number right now, and this will be given when this is available. But what I hear, and that's also an important news, certainly, it seems that we are not hindered too much by the COVID situation. So our sites report that they have taken measures to, for example, accompany patients to the clinic and make sure that everything is done properly. So there seems to be no bottleneck in this regard for the time being, although we have to observe the situation and the development of COVID, obviously, closely in the trial. I'm talking about less-invasive analysis. So we have included in that trial what we also had included in the trial before, which is EEG management, which is certainly a very low invasive technology because the patients, which are just sitting for 15 minutes, have no task to do, have just tried to not falling asleep, and theta waves in the brain are measured, which are indicators for communication between brain regions. We're also using speech analysis, Uli pointed to that, also with the company based in Canada, actually, that have developed a nice tool where we look for -- where we investigate basically speech patterns. So the patients just have to describe a comic picture they see and from synthetic/semantic words of -- use of words, coherence patterns and so on, there are tools developed by this company to analyze the complete status. And last but not least, we are working with Nordic Bioscience as our partner in that trial. And so we are focusing here, as -- also as said before, also very much on blood-based biomarkers. And this is in the diagnostic as well as efficacy biomarkers. And we are very pleased to have this integrated, let's say, even ahead a bit before time because we see now there's a lot of buzz around blood-based biomarkers in Alzheimer's disease, and we feel very well-situated with Nordic and with Amsterdam University also, both of them are really frontrunners and experts in that regard. So next slide, just briefly -- sorry. Next slide just briefly summarizes the 2 trials. So we will have 250 patients from only 10 sites in the European trial. We have a treatment duration of minimum of 48 weeks and up to 96 weeks, actually, and we are working there with Prof. Scheltens and the University of Amsterdam, head of PI. We have also the U.S. Phase IIa trial coming up, obviously supported by the NIH as mentioned before also. And this is in preparation, this is now our Phase IIa trial, which should start sometime next year, and we are planning with 180 patients there, have also a little bit different primary endpoint and readout technologies here, let's say, or measures. So we think it's a very nice trial additive to the European trial, also broadening the patient base here. Both trials, and this is also [ to see, ] should read out at more or less similar times in the course of 2023. So this was the topics I briefly want to share about Alzheimer's. And quick to cancer. Yes, this is certainly a very interesting finding, which developed over the past 2 years. Maybe timing that you see in either QC inhibitors, for QPCTL and QPCT inhibitors, play a role in oncology as well. But the new thing here I want to share with you as well is actually to have -- that we are looking at 2 different mode of actions here, yes. So the story around -- also our deal with MorphoSys was rather around CD47/SIRP-alpha interaction. But we have also interactions here in the pathway of CCL2-CCR2. I will point you to that on the slide. Important here, I think, is also that we have a really nice IP situation with our compounds, and we certainly have the clinical phase compound varoglutamstat, but we also have a number of very improved, also in terms of plasma PK, for example, profiles, a number of compounds behind that, which are also in our portfolio. So next slide shows you quickly the mode of action in the SIRP -- CD47/SIRP-alpha. So it's very simple to just focus on the middle. Basically, here you would see the QPCTL, so the enzyme we are targeting taking care basically of our cyclization called pyroglutamate, with cyclization on the N-terminals of CD47. And this cyclization is important for the binding to SIRP-alpha. The CD47/SIRP-alpha interaction gives a "do not eat me" signal to a macrophage that would take a tumor cell in a moment. If we apply our inhibitor, the cyclization will not take place, and the binding of CD47 of SIRP-alpha -- to SIRP-alpha is also blocked. So this is a nice tool to basically turn this "do not eat me" signal given by this interaction back into an "eat me" signal again, making this small molecule a very interesting combination partner to a number of anti-tumor antibodies. However, as I just mentioned, there's also another pathway, which is clearly addressed by our drug, which is a very important pathway in metastasis for example, and/or in other events tumors like to use to abate the new system in the end. And this is about a chemokine called CCL2. Another name for this is MCP-1, so that's monocyte chemoattractant protein, which just acts as a glue, so its one function is recruiting monocytes to the site of inflammation, for example. And the CCL2 is also cyclized by the compound we are targeting, the cyclization makes -- it makes CCL2 very stable against proteolytic cleavage. So in other words, if we inhibit the cyclization, we make CCL2 much more vulnerable to protein degradation, and make this strong activation a function of the cyclized CCL2, we turn it into, let's say, a physiological normal CCL2 situation. So we have actually discussions going on towards this pathway for the use of our compound. The very last slide, I guess, I want to point you to is our recently acquired program, which is around Meprin and protease inhibitors. So it's kind of a little bit going back to the roots with the company. And the DPP-4 inhibitors, obviously developed, so also protease. And Meprin is a new target, if you will. We have a new -- we have a very unique IP position, so there's not much around other than the IP we have acquired. Meprin, there is alpha and beta meprin, and their metalloproteases, they are very crucial for the remodeling, for example, of an extracellular matrix as they are helping core collagen turn into collagen, which then, in turn, is actually the major component of any fibrotic tissue. So fibrosis is certainly one of the potential applications we're looking at here. Other than that, mainly inflammatory cytokines like is IL-6, for example. IL-6 receptor are also a downstream of Meprin, so this -- there are applications in that direction and in addition to many cancer-related potential substrates, which we would also hit with the Meprin inhibitor in the end. We have acquired quite some IP from Fraunhofer Institute in Leipzig around that. We have a lead compound, with even an animal concept already in acute kidney injury model. And yes, we have obviously also very recent IPs or PCTs just from the past couple of years. So we are certainly looking to develop this program, also in close collaboration with the group at the Fraunhofer Institute, where we have a really tight connection with, and looking to develop this into patent in the next years towards an IND status. So with that, I would hand over back to Uli again for the outlook, summarizing also what is coming up.

Perfectly. Thanks, Michael. Now while we have already initiated all sites in Denmark, as Michael mentioned, we want to get all sites in the Netherlands and Germany recruiting and advance our VIVIAD trial to full speed in the weeks to come. An interim safety assessment by an independent data safety monitoring board will be central event in this trial since this will determine the dose level of the chronic treatment phase of the trial, which will either be 300 or 600 milligrams twice daily. This interim readout is expected for 2021. We are excited to be able to start the U.S. Phase II trial in 2021 and thus complement our European clinical activities in Alzheimer's disease. As mentioned, and based on the promising data of our QPCTL inhibitors in oncology, we project the start of a combination trial in oncology next year. We are working with our collaboration partner to advance the Meprin inhibitors to clinical maturity, and we'll update you on relevant progress on this path. Finally, we are confident that one of the various partnering discussions, which we currently maintain with respect to various pipeline projects, will turn into partnership soon. Now that concludes our presentation, and the call will be open for your questions. Operator?

[Operator Instructions] We will now take our first question from Joseph Hedden from Rx Securities.

It was quite [indiscernible] at least with the start of the trial. Can you just give us perhaps a possible [indiscernible]

I'm sorry, you have -- your line is breaking up, so we really can't hear you.

Sorry.

Can you tell -- or can you wait?

Try again. Full sentence, maybe? It sounded not bad in the beginning, so...

Okay. It was just a question on the R&D, what you expect the spend to be for the year overall?

Well, I mean, as you have seen, so we haven't given precise guidance because I think it's very difficult in the dynamic of a ramp-up and starting Phase II trials in Alzheimer's disease. But what we're sticking to is our goal to end this trial, which is scheduled in over the course of '23, with our current cash position, and we'll stick to that.

Okay. So just to confirm, it's still the expectation that you have a cash runway to the results of VIVIAD?

Given the current situation, but what we, of course, have to do is be aware of uncertainties in the context of the COVID situation. But from our current perspective, that is still the case.

Great. And then perhaps if I could just have one on the IO program. It's new, and so you've -- you're starting to plan a trial for perhaps next year. Is -- can you confirm, is that subject to partnering the program?

Yes. So that would be the goal, to have a partner on board for the trial.

[Operator Instructions] There appears to be no further questions at this time. [Operator Instructions] We will now take our next question from Chris Redhead from goetzpartners.

Chris Redhead here. Yes. I think the issue about biomarkers is particularly interesting. I think there's clearly a lot of excitement in the last couple of months. How -- can you guys kind of give us a bit more color on how that's going to roll out? What -- and how are you going to select the markers, whether the markers that have just been -- there's information that the markers are coming out over the last couple of months. Has that colored the way that you've constructed the trial? Just your thoughts on that.

Thank you, Chris. Good to have you on the call. I will hand over to Michael directly.

Yes, Chris. Yes, I mean, so talking about the European trial, and obviously, this is all planned and protocol is in place and all like that, so we are a bit limited in that regard. But surely, what we do here is that we sample blood and serum samples from the patients at screening visits and during the course, certainly. As you say, I mean the thesis is so dynamic that at the moment, I just want to make sure that we certainly have sample to test, also very respectively in that case, available because we also would make a selection on which biomarkers we are really looking at, maybe in the course. As we know, [ autonomous ] players runs for some years. And in this -- for the U.S. trial, maybe a bit different as this topic is now evolving rapidly. I think we should be able to include here more direct already in the protocol the one or other blood-based measurement we're going after.

Yes. I'm just thinking about in terms of the phase of the future trials, will you be able to -- do you think you'll be able to start to recruit earlier, or is that just a fantasy at this point? I mean patients...

Do you mean the [indiscernible] just because of the diagnostic markers?

Yes. Is that a feasible thing? Or are we jumping the gun a little bit here?

I think that's too early to say, but it's possible. But I would say at the moment, it's too early to say.

Yes. Okay. So -- but one would suspect that when one moves into the pivotal environment, the Phase III, that you would start to see potentially markers that are -- you'll be able to potentially use the drug earlier if it -- if all goes to plan, right?

Yes. That could happen, sure. I think we are, however, also well ahead in that regard in terms of the people we are working with and the markets we have in hand. So as you know, we are targeting early-stage patients. And of course, I could speculate about -- if you could even find the patients to be more urged with the biomarkers that are blood-based. But again, I think this has to also be await a bit for the dynamics and also the validation of these markers.

The other thing, I guess, is that the strengthening of the sort of Abeta story seems to flow from some of that, at least with my understanding of reading the sort of biomarker literature. The reason is that it seems to even strengthen the idea of the role of Abeta in the process and that it's an early part of it or maybe the -- one of the earliest elements in the onset of Alzheimer's. Is that fair?

I would definitely agree to that. Yes. It's certainly early. And I mean, that's exactly the point. Timing is a very important issue as well, right? So I mean it has been found out since ages I think that Abeta plays a role. The question is then only when you hit it. And when you hit it, maybe when it has already formed a plaque, that the learning curve is definitely too late. So -- but that's a better -- it's a crucial hallmark and an important protein of this disease, I think. Honestly, I would not doubt that, and probably nobody really does, to be honest.

Yes. I guess it's whether it's -- as you say, it's whether it's -- whether the biomarker data gives you the sort of sense that it's more druggable, in a sense, that was the issue, wasn't it? That it's a matter of -- as you say, it's a matter of timing rather than it not being druggable, if you see what I mean.

Definitely, it's timing, yes. That's a crucial factor. I mean you're talking about biology systems in the end drive, so everything is falling in an equilibrium and sometimes maybe not anymore, but this is not happening from the first day onwards. And Abeta is also a very important protein in the brain, so removing all Abeta from the brain is certainly not a good idea. Yes.

We will now take our next question from [ Sasha Berridge from Hawk ].

Yes. I would be more interested in the statement you are giving here that you are optimistic about collaborating with other oncology companies. Obviously, there was a lot of hope and optimism in the MorphoSys Corporation, which was terminated -- or there was no [ option ] by MorphoSys. So I wonder if you could be a bit more concrete about this. What makes you optimistic? And how collaboration would look like? Will it be a sponsorship, or are you thinking of selling part of the research work you did? So I would be thankful if you can be a bit more concrete here on that point.

Yes, sure. Thank you for your question. I mean, first of all, before I come to what makes us optimistic, just some comments as to our kind of view on what has happened in the context of this option agreement, which -- it's the basic principle of such an agreement, that the licensee of the option right decides at its sole discretion, and whether or not to execute the right does not depend on any parameters. Now what we experienced is that MorphoSys, obviously left us with the impression that we were closing the deal with a different company than we find MorphoSys today. When we recall our discussions on prospective scientific criteria, so we feel that MorphoSys now rather putting a major emphasis on and dedicate resources, obviously, to commercial success factors around tofacitinib sales in the corporate spreadsheet, and after approval of this drug, which I think is a great and transforming achievement far more closer than the European biotechnology as a whole. Now our excitement is based on the scientific data, which we see in the context of our experiment, which we have conducted. That's one aspect. And the second aspect is the progress, obviously, which we are making in discussions with potential partners. So we know that it's always, let's say, for a management, difficult to point to those potential partnerships because we know we have been chased on that by every call. But the other side is that, indeed, we are very optimistic that we will be able to have a new partner onboard for the development of this exciting technology going forward. Does that answer your question, at least kind of?

Yes. But your aim is then to co-develop?

I mean what would you define as co-develop? I mean, first of all, where we see our role in this page is really our scientific expertise and our DNA, which we have described in the basic [ slide. ] And what we would expect from a partner is the development expertise, the pharmacologic expertise in the indications, which we want to develop. And what the deal will leave for us in terms of downstream potential, that's too premature to discuss in this context now.

We will now take our next question from Christian Ehmann from FMR Research.

Sorry, I got a little bit technical difficulty. So I have a few questions, actually. Sorry, maybe I'm repeating myself, but I had some difficulties. So in the figure of minus EUR 6.4 million for the R&D development, does this also include some preliminary research into the Meprin protease? And what can we expect for this number in the second half of the year? And also, is this number indicative of the response or demand you see from patients for Alzheimer's disease? And second, how far do you want to take these -- the Meprin [indiscernible] threshold, do you want to pursue the package for a potential partner? And my third question would be concerning the topic of CCL2. What is the state of the in-house research?

Yes. Thanks. Great to have you on the call. Let me answer your first question, and I may hand over to Michael for the -- for question 2 and 3. The EUR 6.4 million which you have mentioned is by and large related to our Alzheimer's disease Phase 2b trial. The Meprin, what you find there is a position in the balance sheet of approximately EUR 550,000, so that's the kind of purchase price for the patent update and the collaboration, which we maintained with the Fraunhofer Institute, with the few FPLs which are paying them -- which we are paying them, and that does not significantly alter our R&D expenditures at this point. So again, it's mainly costs associated to the ramp-up of the Phase 2b clinical trial in Europe, the VIVIAD trial. Yes. As to the questions to Meprin and CCL2, I'll hand it over to Michael.

But what can you expect for the second half?

[indiscernible]

Second half, excuse me?

What would you expect in terms of magnitude of this expense in the second half of this year? Do you also expect something in this range, like EUR 6 million?

Again, I mean, this question has been asked already in a similar form. So what we say is we are very prudent in sticking to our goal to be able to finalize the VIVIAD trial with current -- with our current financial position. I think that's the most important message. And how this would kind of mean for specific quarters, we haven't given guidance on that.

As I said, I had some technical difficulties. I didn't get that part, sorry.

No worries. No problem.

Can you hear me?

I can.

Christian? Okay. So talking about Meprin, I think you were asking how far we want to develop that. And this all sticking, let's say, to the general corporate strategy we have, taking up early stage opportunities here, either as we did it here by in-licensing, for example, our own developments. And develop them always into a stage where we can find a partner for further development. And this is just depending again how the data are, how the sentiment is, how -- what the indication is in the end we are targeting. Obviously, there are preclinical deals being done as well. In general, my just opinion here would always be to come to a stage where we at least have like IND or clinical Phase I data maybe. But that's -- again, this could also be earlier. And CCL2 in-house data, so there are some publications from the time where the company had the name called Probiodrug. I also can share that. As you know, our in-house R&D is not existent more or less, so we outsource, anyway, everything. And we are actually also working in that regard, and people we are working on in the [ prefilled, ] funny enough, are also the ones that worked on the CCL2 project. So at least we have the expertise here in-house to do and collect more data on that, but I can share with you separately, certainly what we have done in the past.

Fraunhofer Institute has been performing superbly in the market.

Yes.

We will now take our next question from Martin Fahey from Mackenzie Investments.

Quick question. You seem to have done a good job, and you're making good progress, but the equity market doesn't seem to give you much credit. I mean your market cap is EUR 89 million. You've got whatever, EUR 35 million of cash, which obviously you won't have to spend. It would seem like you would get a lot more credits in the NASDAQ or certainly, there are loads of companies that -- certainly, I've seen them in the U.K. market where they come up with some type of concept like they're working on a vaccine, and the market cap goes to EUR 500 million or EUR 1 billion within 6 months. How much consideration are you giving to either better communication or better coverage or thinking about the NASDAQ listing?

Yes. Welcome to our call. I think this is a very, let's say, interesting question. And what we feel as a European company in this kind of listing situation at the Euronext is that we, by and large, have to deal with general -- or dealing with general investors. And for specialists, investors -- and investors who have really a specific interest in Alzheimer's, but they are -- they seem to be more in the U.S. And of course, we have -- we are discussing this kind of situation, and we are discussing, "So what could we do to put the company in a shape that makes it probably more attractive to those kind of investors?" But that's all I can say so far. Yes, there are discussions, and we certainly will give updates whenever we made progress along these lines.

Right. And sorry, just a follow-up question. I see MorphoSys is selling their stock. You weren't aware of that, were you?

Yes. I mean again, after their decision not to execute the option, obviously, the strategic component of their investment is not relevant anymore and therefore they are just a financial investor. Of course, we are still in a dialogue, and we try to maintain a very good working relation, but I mean that's the way it is. It's their right to sell the stock whenever they feel they should. And yes, again, so the strategic kind of element for their shareholding is certainly not relevant.

[Operator Instructions] There appears to be no further questions. I'd like to turn the conference back to the host for any additional or closing remarks.

Yes. Thanks again, everybody, for joining the call, and we look forward to keep you updated on any progress going forward. Thanks very much, and talk to you next time. Bye.

Thank you. Bye-bye.

Bye-bye.

This concludes today's call. Thank you for your participation, ladies and gentlemen. You may now disconnect.