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

Good day, and thank you for standing by. Welcome to the Vivoryon Therapeutics Half Year Results 2023 Earnings Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded. I would now like to turn the conference over to your first speaker, Anne Doering, Chief Strategy and Investor Relations Officer. Please go ahead.

Thank you, Rod. Good afternoon, and thank you for joining us today for Vivoryon's conference call to discuss the company's first half 2023 results and operational progress. This morning, Vivoryon issued a press release reporting its first half 2023 results, which is posted on the company's website at www.vivoryon.com. On the call with me today are Vivoryon's new Chief Executive Officer, Frank Weber; and Florian Schmid, our Chief Financial Officer. Also with us on today's call and available for questions is Michael Schaeffer, our Chief Business Officer. We will begin today's call with opening remarks from Frank on Vivoryon's clinical and operational progress, then Florian will review the financial results for the first half of 2023. I will then walk you through key catalysts, and Frank will wrap up. Following the prepared remarks, we will host a Q&A session. 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's 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 be different from those anticipated. You are, therefore, cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. With that, I will now turn the call over to Frank.

Yes. Thank you, Anne, and thank you, everybody, for joining our conference call today and your interest in Vivoryon. I feel honored to lead Vivoryon through its transformational phase with VIVIAD results expected in the first quarter of 2024 and its growth beyond these results. As Chief Medical Officer also, I'm working on varoglutamstat program for more than 10 years. And I'm fully aware of the responsibility of the new function, for the patients with Alzheimer's disease and the families and caregivers, for our Vivoryon team and the organization and for the shareholders who have trusted thankfully the company for a long time. I'd like to start by emphasizing that Vivoryon has a unique asset in clinical development for treating patients with early AD, a small molecule varoglutamstat, inhibiting the glutaminyl cyclase and thereby blocking the production of pyroGlu-abeta. For [indiscernible], the neurotoxic peptide being considered the culprit for starting the disease and driving its progression. And this pyroGlu-abeta does this also in aggregate forms together with normal abeta molecules. This keeps or actually even enlarges the toxicity. These states are called oligomers or even bigger aggregates like Protofibrils. pyroGlu-abeta is now recognized as a validated target, and Vivoryon is one of the pioneers and scientific leaders in this field. Our approach by blocking the production of pyroGlu-abeta with varoglutamstat is unique. And we are confident that this is more promising than binding this neurotoxic peptide once it has been produced. So monoclonal antibodies bind soluble forms of pyroGlu-abeta or protofibrils or bind them when they're deposited in the plaque. From our point of view, our approach has a clear advantage. It attacks the problems at the route before it can cause damage in the synaptic space and in the neuron and it comes without drug-associated adverse effects like areas of infusion-related reactions because we have oral application. Furthermore, this mechanism to tackled the problem at the root course also affects positively other pathological processes observed in Alzheimer patients like the tau pathology and information. And why is this? This is because these other processes have been shown to be downstream of pyroGlu-abeta. Now downstream is a little bit elastic expression. But what it means is that they happen as a consequence of pyroGlu-abeta production or at least amplified by pyroGlu-abeta induced toxicity. Now moving forward to the next slide, please. Looking at our development program, you're going to ask who does it and who oversees it. And we have done some changes. In order to stay today and to more or laser focused on the execution of the clinical studies of artist in early as I think is our most important task. And this is done by a strong team, and we are convinced that the recent additions to the management and the board level with the nomination of Anne, leading IR and Strategy; and Morten and Kugan as non-executive directors, coming with a huge expertise in science, health care investments and management, prepares us very well for all tasks we have ahead of us. Finally, we have funds reaching into the second half of 2024, well beyond VIVIAD results. So we believe that having the right mix of expertise and management skills is a very important success sector of our company at this stage, which means, with all the multiple tasks ahead of us, including science, communication, company growth and defining the pathway to the market. And the best position of the drug in the treatment in the area of Alzheimer, we are well equipped. We have expanded and diversified our team from both the management and board level. And we are working trustfully and transparently together, which I consider as a very important success sector. Vivoryon will hold an Extraordinary General Meeting on Friday, September 15, 2023, related to my appointment to CEO and as a member of Vivoryon's Board of Directors as well as Anne's appointment as a member of Vivoryon's Board of Directors. Let's switch to the next slide, please. And here we go a little bit more in granularity of our achievements in the first half of 2023 and the post-period highlights. And the first thing I want to point out in the first block is that actually the dose of varoglutamstat has been defined. And that is very important and that is actually behind the sentence of a positive DSMB decision in the second quarter of this year. And now I want to be a little bit more detail why that's important. As you might know or remember, about a year, in May 2022, the DSMB recommended to select the 600-milligram dose given twice daily for the continuation of VIVIAD study. Subsequently, from 2022 onwards, mid of the year, all patients on 300-milligram were then shifted blindly to 600-milligram. And now a year later, the DSMB looked again at the data when all the patients were at least 9 months or longer on 600 milligram. And what we wanted to know is from the DSMB whether there're concerns with the long-term safety of 600 milligrams. And they responded clearly, they're not at all. They said continue unchanged and don't come back until the study results. So we consider this a huge win because we have settled now on a high dose of varoglutamstat with nearly 90% target occupancy, meaning inhibition of the analogue and CSF, which seems based on unblinded DSMB review and blinded management safety review is very well suitable and tolerated for long-term treatment. But there will be more on this in a later chart. In the U.S. VIVA-MIND trial, we are also advancing well, and we have completed recruitment of the 600-milligram cohort with a positive regular DSMB review. We will provide an update on VIVA-MIND in the fourth quarter of this year. And this will be also interesting because in the U.S., we have a different titration scheme compared to the EU study, VIVIAD study. So the question here will be not whether 600 milligrams is safe or not. That question is, I think, already answered, but whether the accelerated titration is also a therapeutic possibility. That will be the update [indiscernible]. Now going back into achievement of the first half of 2023, we are pleased to have secured EUR 25 million private placement in May, bringing in both new and existing high-quality institutional investors. This financing was important because it provides the foundation to extend our runway into the second half of next year, way beyond our exciting upcoming inflection points in the first quarter, namely the VIVIAD study. And then let me have a short word on the Scenic IP licensing agreement. This agreement concerns the oncology indications, and it does not affect any way our proprietary rights. By agreeing on a license, we actually secured the broadest potential application of our projects, patent protected, even in areas where we're currently not active, but we may pursue those later and so we have secured an agreement. So knowing to the next chart. And here, I want to a little bit illustrate where we are today in order to bring you into our view of the road map to the end of the Phase II data. So we had a very successful discovery in research phase, on which the well-designed Phase IIb program the VIVIAD and VIVA-MIND builds. And I think we should mention here that for a small biotech, we have a very rigorous approach of research and development. We had a huge discovery program with lots and lots of experiments, driving the science around pyroGlu-abeta and varoglutamstat. And we have an extremely robust early development program with excellent nonclinical translational medicine and randomized and blinded early clinical trials. And we follow this route and principles with the studies we are currently conducting. Now moving to the next slide. This is just a summary of the previously concluded Phase IIa SAPHIR study. So what we find there, and I do this rewind in this earnings call to better explain in the next chart the findings we have now in VIVIAD. So in SAPHIR, we generated evidence that varoglutamstat shows signs of synaptic recovery within 12 weeks of treatment at 800 milligrams twice daily, that's about a 93% target occupancy. And we saw these indicators in 3 different methods or parameter in working memory, as measured at a Cogstate test battery in improving resting EEG perimeter like reducing the Theta wave and improving the connectivity in the alpha band and by reducing neurogranin, which is a marker of neuronal injury. All 3 together gave us confidence of a target engagement and proof of concept and help to design the long-term VIVIAD study. Next slide, please. Now the first thing when we look at VIVIAD is to ensure that the right patients have been included with MCI, with minimal cognitive impairment due to AD, and with mild AD. We did this by using the MMSE, which is a standard in studies, but also the DSST or WAIS IV. And that is an analogy. And of course, we have mandatory abeta/tau CSF levels measured for each patient by the most modern and accurate method, ELISA analyses. So what we can show today in these data in front of you is that the recruitment is completed, and the baseline criteria of the patients randomized in the VIVIAD study are basically mature. And we confirm that, with early AD, our patients really meet the criteria of having minimal cognitive impairment. The MMSE is 24.5 the average and the median is 25. By using the WAIS IV DSST criteria, which I used anonymously, so sorry about this, for inclusion in VIVIAD, data, which we shared at the AASC ensure that patients are included really having minimal cognitive impairments, and this correlates very well with impairment of working memory. We published this data, and we believe that the strategy of matching the right patients in order to better measure efficacy will allow us to better represent the early AD population in our study. So we have the right patients in our study. We know that already. Now going to the next slide, it's another thing we know already. And that is, the last slide of the first part of my presentation, and it deals with discontinuations due to adverse events, which are burdensome and risky for the patients. They prevent that the patient can continue to take the treatment. And if the number would be high, the impaired interpretation of the efficacy of this data of the study. They should be avoided as much as possibly specifically in elderly and fragile population like AD. And in VIVIAD, we did, I think, a very smart move. We designed the titration scheme at the start of treatment, which results in discontinuation where we are looking at blinded data in that graph, of only 1.2% in the first 12 weeks after randomization and then only 1.5% discontinuation in the first 6 months. This is not additional 1.5, this is a total of 1.5 in the first 6 months. And this compares extremely favorable to the figure we observed in SAPPHIRE, where we saw discontinuations about 17% within the first 12 weeks of treatment, the blinded data set. That's about a tenfold reduction, and we think that is very important, confirming our strategy, selecting the 600-milligram dose. Why are these data so important, and what I said already? Firstly, we have an excellent tolerability profile at this high dose of 600 milligram, ensuring a target occupancy of nearly 90%. Secondly, these are mature data. What does that mean? All patients in VIVIAD, still in the study today, are already beyond week 24. So there will be no more patients added into this period. Please don't misunderstand me here, mature data are not final data. We still need to clean data and control this data before looking the data -- blocking the base and minor changes can occur. But the data of varoglutamstat that you see on the chart today indicate that it's very well tolerated and very suitable for the treatment of early AD patient. This is also seen in the discontinuation rates staying low and stable throughout the study due to AE is around 3.5%. So these are, I think, very competitive and interesting data, which show that our drug is ready for the use in AD patients from a safety perspective. Now I want to hand over to Florian, leading through the functional results. Thank you.

Thank you, Frank. The first year of 2023 was a period of driving our clinical studies forward and securing additional capital. This is reflected in our interim financials. Research and development expenses with EUR 6.3 million in the 6 months ended June 30, 2023, decreased by EUR 4.8 million compared to the 6 months ended in June 30, 2022. This decrease is primarily attributable to EUR 2.5 million lower expenses related to our clinical trial VIVIAD and EUR 2.2 million lower manufacturing costs for study drug production. General and administrative expenses in -- at EUR 4.4 million for the 6 months ended June 30, 2023, compared to EUR 2.3 million in the 6 months ended June 2022. EUR 1.3 million of this increase is attributable to higher costs of the nonexecutive board, including share-based payments and change of compensation of EUR 0.9 million and onetime severance payments of EUR 0.4 million. The remaining EUR 0.8 million of the G&A increase was largely due to higher consulting and personnel costs. As in previous periods, our finance result was predominantly driven by the FX result on U.S. dollar cash and a U.S. dollar receivable in our balance sheet. The income tax reported relate exclusively to deferred taxes, that have to be reported in accordance with IAS 12, but the company does not pay any taxes due to existing loss carryforwards. All this together resulted in a net loss for the 6 months ended June 30, 2023, of EUR 10.7 million or a negative EUR 0.44 per share, compared to EUR 12.6 million or a negative EUR 0.60 per share for the 6 months ended June 30, 2022. On the next slide, I would like to highlight selected KPIs. On June 30, 2023, total assets amounted EUR 45.4 million and total equity was EUR 41.5 million. The company held EUR 29.6 million in cash and cash equivalents as of June 30, 2023, plus a term deposit of EUR 9 million, which is disclosed under financial assets. As of December 31, 2022, the cash and cash equivalents position was EUR 26.6 million. The increase of liquid funds in the 6 months ended June 30, 2023, is mainly due to a private placement completed on May 26, 2023, placing 1,785,715 registered shares at an offering price of EUR 14 per share, with gross proceeds of EUR 25 million. As of June 30, 2023, the company's issued share capital increased to 25,961,892 including the exercise of share options. This brings our cash runway into the second half of 2024. This guidance does not include potential milestone payments from development partnerships potential payments from licensing agreements and/or additional financing measures as exercise of the options granted in connection with the private placement announced in September 30, 2022. And with that financial overview, I will now turn the call to Anne, who will touch upon upcoming catalysts. Anne?

Thanks, Florian. I'm excited to share with you an overview of Vivoryon's multiple value-generating catalysts, and the near-term events following a strong first half of the year. We've got a lot to look forward to, and we're positioned to share multiple facets of our progress throughout the remainder of this year and into next year. We're planning to host a virtual R&D Day with key opinion leaders in the fourth quarter of 2023, where we're intending to focus on the company's scientific approach for our glutonstat and study design. Of course, we're also looking to maintain a consistent presence with our investment community throughout the remainder of the year. As Frank mentioned, for VIVIAD, following the DSMB decision to move forward with the 600-milligram twice daily dose for the second part of the study. We are well on track with 22 active sites in 5 countries, gearing up the final readout in the first quarter of 2024. And for VIVA-MIND, the study is also progressing nicely through the Phase IIab portion, and we're on track for its next update in the fourth quarter of this year. With both of these studies progressing well and according to schedule, we're also working towards an end of Phase II meeting with the U.S. FDA. Finally, while our focus remains VIVIAD and VIVA-MIND, we're committed to generating future value from our pipeline on varoglutamstat. We have several future opportunities that we continue to think about in the background, including potential combination studies with antibodies in Alzheimer's and also potential follow-up clinical programs beyond Alzheimer. And there are also additional development opportunities coming from our partners in Ser in Greater China. Overall, we've got a lot of exciting opportunities, both with the near and long term, and with a strong team in place and a promising asset in varoglutamstat, Vivoryon is positioned for robust value creation. And with that, I'll turn it back over to Frank.

Yes. Thank you, Anne. Thank you, Florian. I only close this earnings call presentation in summarizing the position of our assets. PyroGlu-abeta is now a validated target for the treatment of early AD. And pyroGlu-abeta needs the glutamine cyclases to get produced. So by inhibiting this enzyme, we solve the problem at the source and target the improvement of the outcome of AD. The VIVIAD study will also address some wider issues in R&D of Alzheimer's disease, but also in the future treatment landscape of AD. And we will answer notably a question whether small molecules with intracellular effects are more effective than monoclonal antibodies. Can they reach efficacy beyond the approximately 30% reduction of the rate of decline of cognition, which has been observed so far in the best studies of monochronal antibodoes in Alzheimer's disease. That is something which will answer in the first quarter of 2024. Let me end by thanking you for your attendance and interest in Vivoryon, and we hope you will follow us in the exciting times ahead. Let me also thank the team to prepare that call and to help us through this call. And let me also thank and recognize the prior leadership of our companies and the employees, which have carried the program so far. And that includes the founders, Konrad Glund and Ulrich Demuth, who drove the pyroGlu-abeta science and discovery of other groups. [indiscernible], who led varoglutamstat through the late research and early development phase. And the former CEO, Ulrich Demuth, who initiated the Phase IIb program, we are looking at right now. So we will open the call now to take questions. I want to thank you again. And expecting your comments or suggestions. Thank you.

[Operator Instructions] And the questions come from the line of Christian Ehmann from Warburg.

Let's say, I was hoping -- I have 2 questions. So first one, would -- I was hoping that you could give us some more details about the potential scope of the VIVA-MIND update in Q4. So what kind of data we can expect in more detail a little bit. And the second question is a more broader one, but I've noticed when I looked at the FDA minutes from the approvals of Lecanemab and so on, that the FDA is quite -- has quite good propensity on using plaque reduction as a surrogate marker for potential cognition improvement. When I look at your, let's say, secondary endpoints, I see an MRI scan, but I see -- I don't see any PET scans. So maybe you can correct me on this, but I think you don't actually look exactly at the amount of plaque reduction. And if this is true, what do you think are your chances to getting a potential partner for varoglutamstat in the second -- in the first half of next year and so on, if the results are obviously positive, given that this might trigger some pushback from the FDA?

So probably, I'll start taking that question. Now I hope I can remember the first part, which was...

VIVA-MIND.

VIVA-MIND. So there is probably no scheduled data update anymore before the readout. So that was not set. What was said is the VIVA-MIND will be updated. And what was said is that we will have an assessment of the titration phase of VIVA-MIND once the 60 patients randomized 1:1 between placebo and 600-milligram has been completed actually 20 weeks. So the DSMB looks after 20 weeks of the last patient randomized in the first cohort at the tolerance of the titration regime, which is an accelerated one compared to the EU and decide that is also good or that is not so good. And that is what we will release in the fourth quarter. Is that answering your question on the first part?

Yes. I misspoke and mix...

I mean it's important to get things clear. So, yes, yes. So then I think it's important. And I think the second questions are right to the core of study design. I think they are super point. And I think we -- we believe that they are so important that we probably cannot answer them fully in this call, so we have an R&D Day scheduled, as Anne mentioned, so we address all these points more in detail. But let me summarize our position on this. We have designed the study with world-leading expert and regulatory guidance, written regulatory guidance like the FDA draft guidance or the EU guidance for disease-modifying therapies in Alzheimer's disease. That concerns both the inclusion criteria, the patient selection and the stage of the disease and the endpoints. And what the FDA want to see is an effect on cognition and an effect on function of the patient. Now there are several scales to do this. PET is one of those. PET is a surrogate. PET is a surrogate, which you can discuss loosely in a group level, very loosely on a patient level correlates with an improvement of [indiscernible]. We measure directly the cognitive function in the Cogstate test battery. Now the Cogstate test battery is approved by the FDA as a medical device as the CCB test. You can look it up. It measures cognition as an approved device. So we can piggyback build on this, and we, I think, have much stronger data from our cognitive tests than any PET would provide. I think the data we deliver are much better than PET tests. Then why don't we do PET on top? PET is something for a drug, which fishes out the neurotoxic peptides from the plaques and the soluble space. And you can measure that fishing expedition, where basically the antibody binds to the peptide, shuttles it to the microglia or to the macrophage and get digested there. That leads to complement reactions, that leads to inflammation additional and the side effects. But you can actually measure it. We don't have that pathway. We have the pathway that we block the production. Subsequently, we expect also the concentration of the plaques and the CNS space go down. But the injury of the neurons and the synapsis don't happen in the plaque. They happen in the south, and we stop it there. So for us, it's, I would say, the secondary interest. We have studies planned to measure also PET because at one point in time, we want to do it, but it is not for our mechanism [mandatory]. Now we have also the Amsterlam scale of functional outcomes in Alzheimer's patients in the VIVIAD study. So we look at functional outcomes. We don't only look at cognition, we look at functional outcomes and as a key secondary parameter, which is [indiscernible]. So we will be able with VIVIAD, not only to answer the question on how much do we see a cognitive improvement or reduction of cognitive decline, we also see how much does the patient functionally improve or deteriorate less than on placebo. And these are the 2 questions which are important to answer. And I think we have the most sensitive scales you can have on the market currently to measure the change in our studies. Having said that, of course, everybody will grill us on the [indiscernible] some of boxes. Why don't you use it? And what are you against it or why are you against it. it's quite a, I can say, crude scale or a high level scale on measuring both functional and cognitive outcome in Alzheimer's patients in a single scale. And we do it as well. When you look in our VIVA-MIND study protocol, it's the primary endpoint of the VIVA-MIND. But this requires a higher sample size. You will see that in VIVA-MIND, we had 420 patients to be randomized, and in VIVIAD there are only 60, and it requires probably a treatment period of 72 weeks, which is standard. And in VIVIAD, we have flexible treatment periods between 48 and 96 weeks. So we think we did the right endpoints of the right study, and we have everything together, except of PET, which we think mechanism-based is not as a important to us. Is that answering the question?

yes.

And then the partners. I mean, I don't know. I mean everybody has a different view. The FDA is not -- I mean, a stakeholder. But our feedback from -- when I talk to my peers and to other companies is that clearly, this study will deliver into treatable, important and clear results. Every expert knows that these data, what to think about the drug and how good it performs. And we will do a lot to make that transparent and clear, not only to experts, but also to all the shareholders and the patients and the patient associations, and we will not be agnostic of the need to make it simple. So we will take care of all this. Let us a little bit of time. The R&D is the first step, and then we follow up this.

We are now going to proceed with our next question and the questions come from the line of Joseph Hedden from Rx Securities.

Firstly, 1 on the accelerated titration of varoglutamstat. I realize that you're running the accelerated titration, and you -- in VIVIAD, you switched patients from 300 up to 600 last year, but that was before you completed for recruitment of VIVIAD. So did the remaining patients in that, have they already experienced this accelerated titration for then to call? Or is it an enhanced version even from that?

So thank you for the question. I think I have is expressed myself a little bit. The different citation regimes are really separate by study. So VIVIAD has a titration regime, which goes from 50 milligrams to 600, also 300 in 12 weeks and then to 600. And that is used throughout the study. The only question is we had to the DSMB, is the final dose of that 300 or is the final dose of that 600? Are there safety differences between 300 and 600? And they said a year ago now. And now we ask them again, are you sure. And they said, "Yes, you're good." So that is VIVIAD. Now because we thought from a commercial aspect, going from 50 to 300 and then to 600 over 3 months, while the patient in Alzheimer's all the time for doing this, it's probably from a, let's say, medication handling perspective of a slightly memory impaired patient not that good. So in the U.S. study, we have a titration regime, which starts at 150-milligram twice daily, goes to 300-milligram test daily and then after 8 weeks goes up to 600. And that is much faster and basically only requires a 150-milligram tablets where the other one would require at least a starting package in smaller strength. And we thought it is important to study these 2 titration regimes in 2 different studies. And so we have not -- so to answer your question, in the VIVIAD study after the DSMB, we never tried a different titration regime. We just put everybody on the dose of 600mg who was on active randomized and the placebo patients, of course, [trade] on placebo. So that was what we did. Could I clarify your...

Yes. That's very clear. And then if I could just talk about the open-label extension or the potential open-label extension in terms of the patients who might go from VIVIAD into that study. So VIVIAD has been designed so patients have a mean treatment duration of 82 weeks. Does that mean that patients in VIVIAD, no matter when they recruited, has maintained -- they're being treated until the top line readout and then they just seamlessly progress into the open label? Or is there going to be a gap in treatment for some of those patients?

It's very clear. There's a gap in treatment. But that is not error or a problem. I think it's an ethical must because you cannot keep and propose patients the treatment duration of 3 years without having clear efficacy data. Those patients who exit the VIVIAD study earlier, of course, need to have access to other studies. They may choose another treatment, another study, another whatever. And then they can come back into the VIVIAD open-label study once it is open for recruitment. We will open the study for all, or that's a plan at least. We will open to all participants of VIVIAD and VIVA-MIND an open-label study, but it stage gated by positive VIVIAD study results. So if the drug doesn't work, we will not offer it, and I think it's also not useful to offer it. And to propose continuous treatment of 2, 3, 4 years without efficacy is probably not even possible. I think it also would be unfair. So that's the plan. Now how do we deal with the gap in the data analysis? So the patient will have new baseline data. And we, of course, and that's common science because we are not the first one to do this and had several programs where that gap happens, you look at the treatment period of the patient in the study. You look at the progression in the gap, and you then have a new baseline and from that baseline onward, you look what the treatment is. Of course, it's open label anyhow so the evidence for efficacy is probably limited, but it's very valuable for doing at outcome research for pricing later, to add some PET studies, which was discussed before, is PET needed or not? We will add in the open labels on PET studies as possible, specifically on those patients coming from placebo, to see whether we have a plaque reduction. I can really not -- not that we think it's necessary, but I think the scientific bold and also the vessels want to know that at one point in time.

Okay. Great. That's very clear. And perhaps a final 1 for me, just on the financials. On the R&D expenses, they were quite a lot lower than I expected. And I realize that some of that is manufacturing costs that perhaps haven't repeated this half, but still WAIS is now fully recruited and you've recruited more patients into VIVA-MIND. So can we expect a bonus of costs in H2? Or is something that else going on, if something else going on in terms of the phasing of R&D costs.

Thank you, Joseph. Let me answer this. This is Florian speaking I think you already summarized it very well. So our main study is approaching its end. So we don't have these excessive costs than we had last half year when we were still recruiting. On the other hand, our study in the U.S. is not fully up to speed, so we don't have those costs like in the last half year. And as you already mentioned, our API production this year is not at the same level as last year because last year, we had a 2-supplier strategy. We have finished those projects, and we didn't start a new one. So that's the reason for the decrease of the research and development expenses.

Sorry, let me say a word on this. I think, Florian didn't mean excessive cost. Actually, the VIVIAD study has a very fair complete price agreement, and I think we have an excellent price. It's just an amount which we get built for that total amount we have agreed on is not anymore as high as it was before because it's milestone driven, of course, and of course, at a certain point in time, it goes down. The second thing is, in U.S., also the costs are still low because the study is financed by the NIH. So all the costs we have -- or not all, but the vast majority of the costs of the VIVA-MIND study in the U.S. are funded by NIH grant. And so we still profit from it.

Okay. Okay. That's clear. So do you think that perhaps 2023 then the R&D level might not reach the same level as 2022, but they're all going well with VIVIAD, you're going to be going into Phase IIb with VIVA-MIND or even Phase III. Those costs will pick up again in 2024 because presumably, the NIH grant was EUR 15 million. So we will have run down by the time you get to Phase IIb?

So in 2024, all depends on the VIVIAD results. That stage gates our investment. And if we go full speed into the long-term extension, if we enlarge the VIVA-MIND or accelerate or change -- extend the geographic regions because currently in the U.S. study, we may think of around going to Europe also in terms of diversity, maybe, add an Asian country or Australia or whatever. If we do this, of course, the cost will get up again. But until the VIVIAD results in first quarter, I think we have a very strict cost control in place because, of course, investment needs positive outcome and data and VIVIAD. Is that what we know or...

Yes, yes. That's great. That's great.

[Operator Instructions] The next question comes from the line of Alexander Galitsa from HAIB.

Maybe 1 on your partnership with Simcere. If you could give us an update on where do you stand with regards to this partnership? Have you had any discussions with them as to the time line? [indiscernible] Phase I trial. And so what's your confidence level, I guess, that this -- that the -- that Simcere will to enter the global trial, please?

Yes. Alex, that's Michael. Nice talking to you again. Yes. I mean we are -- or you can guess, we are in constant contact with Simcere on all that on the full program basically. I mean, again, the situation is like that they are responsible for the development within China. And you might remember, let's say, there has been a change in terms of where they would want to join in. So in the earlier phase of our agreement, it was the European study. They picked best to join then in essence -- actually, they were not quick enough on there and to join it in time because therapy study didn't run very well. And then we changed it to the U.S. study, which has also, I have to say, other benefits for them in terms, for example, that the U.S. study run with the CDR sum of boxes kind of admonished FDA endpoint, if you will. So -- well, yes, of course, we -- as I say, we are in discussions. Due to this change, I mean, they had also to change a bit the application with the Chinese authorities. So they did this, but this is actually an answer to that is kind of still pending. And yes, we, of course, expect that they will start a Phase I study in time, obviously, also to join then a global study, which would then be the VIVA-MIND study. And that's the plan at the moment.

Understood. And then also a question on your settlement with Scenic. I wonder whether this brings you any closer to potentially partnering this oncology program? And another question is, if there is an interested party for this program, why would it not partner with scenic instead of you guys, given that they are presumably more advanced in the development program and also have the access to relevant IP?

Yes. Well, let me first say that with the settlement with scenic. I mean, I think that's definitely a really beneficial point for us, actually a positive point because, I mean, we have gained basically freedom to operate in the oncology field. So that's a very good thing. And then also to say that, as you know, I mean, this is -- was a long years -- well, not high, but a long years discussion, which was drawn out by certain circumstances, which have also to do actually with the Dutch Court. So I don't want to go into anymore details there. It was more a personal thing of one of the judges also where some rulings were delayed. So then we entered into the -- entered into the settlement. And yes, I mean, in the end, I mean, we are the company that have the composition of matters on really good QPCT/L inhibitors, and we are -- we have the most advanced compounds in hand. So that's what my argument would be for anybody who would say, "Well, should I partner with Vivoryon or should I partner with scenic in this regard?" On the other hand, of course, I mean we live in a free word, so everybody can decide what he likes to do, but I think we are very well positioned in that context.

And then I have just 2 questions left. One of them would be on your pyroGlu-Abeta antibody, whether you could provide any update, any color of whether there have been any progress done on finding a partner or going into an alliance with somebody? That's #1. And the last question, just to confirm, on your VIVIAD study, if I understood it correctly that you basically expect this readout in Q1 2024 to deliver a conclusive message basically as to the drug's effect on cognition and its clinical benefit. And so with that, the open-label study would realistically be able to start even ahead of the VIVA-MIND readout?

So to the last question, yes, we expect VIVIAD to read out to be conclusive. The open-label study actually should start, as Frank elaborated. I mean it cannot start immediately after the VIVIAD readout, but it should start as soon as possible. There are obviously some regulatory things you also have to take care of, but it should start as soon as possible. And that -- this will be before the vm read out, yes. So if that was the question, I think. And the other question was on the antibody, right? Well, the antibody, of course, we are in talks with the relevant companies in the AD space, I would say. Still, as you know, the antibody is a preclinical product, which also requires some more investment into production and refinement of production, let's say. So it's a little bit early on target. But in essence, we are as this what I can tell you, we are in negotiations any time basically on this antibody. But I cannot, of course, deliver you any detailed concrete update basically on that.

But what you're saying is basically an antibody program is too early in its development to be partnered? Is that...

No, that's not what I have said. It's not too early. It's early. So of course, they can there could be a possibility to make a deal. But on the other hand, you have to see that, for example, you have donanemab upcoming on the market in close time. So of course, I think people will just consider they're thinking about that. And as we say, the antibody is definitely designed to circumvent or to be better with the area question. However, I have to say, and this should be obvious, the area question itself can only finally be answered in the patient. So -- and again, it's a preclinical product. So it has not seen a patient. So we have to -- yes, that's the situation we are in. But I would never say it cannot be partnered. So if this would be the case, we would not talk to anybody and we do, and we have interest.

And the questions come from the line of Bo Zhang from Intron Health Research.

I want to ask about the option for investors to purchase the EUR 15 million of shares following the raise in September of last year. I'm wondering is there any particular deadline associated with that option? And then can you comment on how likely that may be exercised going forward?

Yes, let me answer this, please. the options from September last year can be exercised until the first point in time will be after the data readout of our clinical trial VIVIAD. And after the final results are definitely available, then you have a period of, I think, 3 months, and then they have to be executed until the time after that, it will be possible you can look it up in our annual financial statements. It's very detailed described there. There are some minor additional goes to that.

We have no further questions at this time. I will now hand back the call to Mr. Frank Weber for closing remarks.

Yes. So thanks to the management team, thanks to the operator. and specific thanks to all who dared to ask your questions because I think this is how we live with you together. It makes -- it's really interesting to understand what you need to know about us. We try to reach out and stay in touch and try to inform you as transparent as correct as possible. And, yes, let's work together in the future. Thank you for your attention to us. Goodbye. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you.