Vivoryon Therapeutics N.V. ($VVY)

Good day, and thank you for standing by. Welcome to Vivoryon Therapeutics Full Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Julia Neugebauer. Please go ahead.

Thank you, Sandra. Good morning or good afternoon, everyone, and thank you for joining us today for Vivoryon's Full Year 2025 Results Call. Earlier today, we issued a press release reporting our full year 2025 financial results and business update, which can be found on Vivoryon's website at www.vivoryon.com. On the call with me today are Frank Weber, our Chief Executive Officer; Marcus Irsfeld, our Chief Financial Officer; as well as Michael Schaeffer, our Chief Business Officer. 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 platform, the progress of its current research and development programs and the initiation of additional programs as well as the results of operations, cash needs, financial conditions, liquidity, prospects, future transactions and strategies. 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 of the date hereof. As you can see on the agenda for today's call, I will begin by highlighting our progress throughout 2025 and the recent weeks as we continue to build a robust body of evidence for varoglutamstat in kidney disease and to drive our strategic priorities. I will then hand the call over to Frank, who will walk you through our progress in more detail and share some new data we're particularly excited about because it nicely addresses some of the important and deep diving questions our shareholders as well as potential biopharma partners have been asking. Building on a compelling new analysis of our study data, Frank will highlight additional evidence supporting the potential of varoglutamstat in a high unmet need population, including a meaningful treatment effect in patients with risk factors such as hypertension and diabetes and therefore, at risk of progressive kidney disease. Many of you already know that the mechanism of action underlying the compelling data we see with varoglutamstat in our clinical studies is what truly differentiates our assets from other approaches. After Frank's remarks, Michael will share with you additional new data on the mechanism of action, showing how varoglutamstat targets drivers of loss of kidney function simultaneously at 2 levels. After this, Marcus will review the full year financial results. Following the prepared remarks, we will move to Q&A. Now let me talk you through our key achievements for 2025 and the recent months. Starting with clinical evidence, we have continued to build a robust and consistent data package for varoglutamstat in kidney disease, which is strongly supporting our partnering efforts. We presented compelling kidney function data, including a meta-analysis of our clinical studies at the world's key nephrology meetings such as ERA, ASN Kidney Week and most recently, WCN in Japan. Importantly, the beneficial effect of varoglutamstat on kidney function is most pronounced in patients with diabetes and lower baseline eGFR. This supports our decision to advance varoglutamstat into a Phase IIb study in the target population of Stage IIIb and IV diabetic kidney disease. Varoglutamstat is differentiated from other approaches in development because QPCTL inhibition addresses multiple key drivers of disease, spanning both inflammatory and fibrotic pathways. Frank and Michael will share details on some of our latest findings, including data highlighting varoglutamstat's role on collagen maturation and in reducing reactive oxygen species, reinforcing its potential to impact fibrosis and podocyte injury. As a reminder, we also continue to see a clear evidence of synergy with SGLT2 inhibitors like, for example, dapagliflozin, which remains highly relevant in the context of the established standard of care. On the corporate side, we have further strengthened our position to execute on our strategy. Our intellectual property is protected in the U.S. until at least 2044 with the potential for further extension. In October 2025, we successfully raised EUR 5.1 million, strengthening our financial flexibility as we continue to advance partnering discussions. We are seeing strong and growing interest from both biopharma companies and investors with multiple discussions and active due diligence processes underway. At the same time, over the last year, we have further strengthened our leadership team, ensuring we have the right capabilities in place to execute. And finally, based on our current planning, we have extended our cash runway into the fourth quarter of 2026. Overall, we believe we are in a strong position scientifically and strategically to advance varoglutamstat and to realize the next phase of value creation. And with that, I'd like to hand the call over to Frank. Frank?

Thank you, Julia, for a great summary, and good afternoon to the audience. My name is Frank, I'm the CEO of Vivoryon. I will dive into the varoglutamstat opportunity, what we did last year in detail, why we did it and where the company is heading. We are aiming to develop a new therapy to preserve kidney function and to prevent progression of kidney failure. And what we did, we looked at the market, and we understand with the actual data from the U.S. that the number of patients with end-stage kidney disease in U.S. is stable and more than 100,000 new patients with end-stage kidney disease come every year on top of what we have today. That results in annual Medicare spending for end-stage kidney disease of EUR 52 billion and for CKD overall for EUR 77 billion. So despite there are therapies out there, which are approved for treating chronic kidney disease and diabetic kidney disease, the number of patients doesn't decline, and there is a huge unmet medical need. Most patients still progress on the current standard of care. We generated compelling data with our lead program, varoglutamstat in kidney function, and it is positioned to be the first oral treatment to show improvement in long-term stabilization of kidney function. And we have generated already data on this, and I will go a little bit deeper on the next slide on this. We feel and are convinced that we have a very attractive opportunity with very defined value creation steps. We designed a program where we can confirm the findings of the previous studies in the 24-month study with an interim analysis after about 50 months. And let's don't get it wrong. Our objective overall is to get a partner for that development step. In order to get this partner, we, of course, need to generate more evidence because also we get more questions from these potential partners during the diligence. And I want to share you a few findings which we have generated first, together with the University of Hamburg-Eppendorf and Professor Tobias Huber on podocytes. Now podocytes is a cell type which basically creates the glomerulus. It is the one which filtrates the blood into urine and it gets really defective and stressed during chronic kidney disease and diabetic kidney disease. And what the team in Hamburg found out is that QPCTL inhibitors like varoglutamstat or new molecule 2149 improve the respiratory reserve of the mitochondrium. The mitochondrium is the energy machine in the podocytes and it's critical for podocytes functioning and survival. And we improved that energy machine as seen in significantly as seen in these podocyte results. We also reduced the number of reactive oxygen species, that's the bad guys who actually annoy and kill these podocytes and our drugs can really have a significant reduction. These are new findings, which differentiate varoglutamstat further from other mechanism of actions and show that the drug is really truly innovative and has a completely different mechanism of action to what has been seen before. Further on, on the next chart, these are data we also generated during due diligence, which are ongoing with pharma companies. And the question here we answer is, does the drug generally increase eGFR in all subjects indifferentiable or does it have a differential effect dependent on the underlying disease or so-called pathophysiology of the patient. And we have here a couple of graphs, and I'll walk you through step by step. The first one shows all patients we had in our Phase IIb program, VIVIAD and VIVA-MIND on 600 milligram and placebo. And the active is the blue and the yellow is the placebo. And these are slope analysis. So that's the one the FDA and the regulators want to see. And what you see that in average, there is only a mild improvement of eGFR above baseline with varoglutamstat, about 1.1 milliter per year. And there is a mild worsening in the totality of the population of 2.1 millimeter. Adding in 3.2 milliliter data, which we have shown so far already, of course, much more than any other drug, but still quite modest. Now when you go in the first gray shaded area, we look here in a subgroup of patients with either hypertension or diabetes. And what you see in the shaded area is that the effect size of varoglutamstat doubles in these patients compared to the overall population. It goes to 2.2 milliter. And the placebo patients because they have risk factors for chronic kidney disease, of course, worsen more, so they go down by 2.7 milliter. The corresponding group, which has neither diabetes nor hypertension shows virtually no improvement on the drug and only a mild age-related decrease of kidney function, which is typical of 1.5 milliter. So you can conclude from this chart that varoglutamstat has a differential action of mechanism based on the pathophysiology. If the patient is ill, it works good. If the patient isn't ill, it works virtually very little. And in diabetic patients, which is the second gray shaded area, you see a much stronger effect even. You see that the drug improves eGFR by about 4.1 milliter per year, whereas the placebo patients dropped by 3.2 milliter average a year. So those are patients who are likely going to chronic and diabetic kidney disease. The corresponding population, again, with no diabetes shows only a stabilization of eGFR under varoglutamstat and a mild decline in the nondiabetic patient, which is expected age-related in that population with an average age of 70. In summary, we can show that the drug works specifically well if the patient has an inflammatory and fibrotic background and kidney function is worsening. Now further on, on the next chart, the next question was asked to us, how predictive are the data for the next study? Because, of course, in the Alzheimer's studies from which we generated these data, patients had relatively high baseline eGFR data and many didn't qualify for Stage IIIb/IV diabetic kidney disease, that is the stage where we want to run the next study. So what we did is we created severity percentiles. So patients 50% worst percentile to the 20% worse, the 20% worst are the worst of the worst and looked whether the effect size was conserved in the worst population and similar or even better than in the not so severe population. And when you go from left to right, you see the same graph as in the past slide, you see blue varoglutamstat and yellow placebo. And you see that varoglutamstat, the severe the patients get still has a significant increase of eGFR above baseline around 3 milliliter in average or 3.3, 3.4. And the placebo group, the more severe the baseline is as expected, declines faster going from 1.62 to the worst patient, 4.7, 4.3. That means that the data we generate are predictive for a future outcome in a Stage IIIb/IV study, where we can expect a treatment difference probably about 7 millimeter when we follow this graph here displayed. In summary, on the next slide, we are convinced that we have a significant commercial opportunity with varoglutamstat and the number of diabetic kidney disease patients is around 1.5 million in U.S. and probably around 2.5 million EU in the Stage IIIb/IV. That is a huge population, which progressively goes to end-stage kidney disease and which requires treatment. The large and growing problem in patients with kidney disease is known and has been accentuated and many experts look for treatment and many pharma companies are interested in getting a new mechanism of action treatment under their umbrella. So as a consequence, we are currently engaged in multiple discussions and active due diligences under CDA with potential biopharma partners to fund the upcoming Phase IIb study. Substantial progress has been made. And personally, I'm very optimistic that we can conclude an agreement in the near future. With that statement, I want to hand over to Mick.

Thank you, Frank. Yes. So let me first remind you in a bit more detail on the truly unique mechanism of action of varoglutamstat, a selective and potent oral small molecule inhibitor of glutaminyl cyclase enzyme QPCT and QPCT/L. In the human body, QPCT and QPCT/L are the only 2 enzymes that are catalyzing the ring formation of glutamate or glutamine amino acids on the very end terminal end of the substrate molecules. Under physiological conditions, this ring pyroglutamyl or in short PE formation makes proteins and peptides modified like that more stable and active and also is crucial for the binding of some signaling molecules to the specific receptors. As several of the substrate proteins and peptides of glutaminyl cyclase are crucial inflammatory and fibrotic players, blocking the enzymatic activity of QPCT and QPCT/L by varoglutamstat leads to down regulation of inflammatory and fibrotic processes and ultimately to improvement of kidney function. Now the work over the past 2 years as well as earlier research now allows us to shed more light on the mode of action of varoglutamstat in kidney diseases on the molecular level. So let's start here on the left side with the diseased kidney. Mechanical stress by hypertension and/or increased stress on the cellular level by underlying diseases like diabetes leads to inflammatory and fibrotic responses, which are also amplifying each other and ultimately leading to kidney failure. Our work and the work of others show that several of the proteins crucial for inflammation and fibrosis are substrates of glutaminyl cyclase. Thus, varoglutamstat inhibits such processes at several points and on 2 separate levels, inflammation and fibrosis, which is in clear contrast to earlier approaches targeting just one chemokine or other signaling protein exclusively. Substrate proteins and peptides of glutaminyl cyclase like some CCL-type chemokines, collagens and other molecules are crucial inflammatory and fibrotic activators, respectively. So blocking the enzymatic activity of QPCT and QPCT/L varoglutamstat leads to down regulation of the most active PE versions of these substrate molecules and thus of inflammatory and fibrotic processes and ultimately to improvement of kidney function. In this context, I'd like to direct you to 3 talks we just have posted and you will find a link in the -- our approach section of our website. Professor Tobias Huber of the UKE in Hamburg, Stephan Schilling of Fraunhofer Institute in Halle and our VP Discovery, [Stefan Hassler] will talk in much more detail about the most recent data on the mode of action of QPCT/L inhibitors, including first-time findings around collagen processing. In this update today, let me just very briefly summarize some data from animal model investigations collected in the past year or so, showing the anti-inflammatory and anti-fibrotic impact of varoglutamstat. The preclinical models we have been using are complementing each other. We are addressing tubular inflammation and intestinal fibrosis with the ADI-CKD model, and we go closer to the diabetic setting and podocyte injury with the rein ReninAAV DKD model on the right side. In both models, we could show the significant downregulation of fibrotic markers in immunohistochemistry analysis here exemplified with CD11c, a marker for pro-inflammatory M1 macrophages. We also could show this reduction in the tubular injury marker, KIM-1 in the ADI-CKD model that this effect was not seen in the ReninAAV DKD model is fully in line with expectations as this model does not reflect tubular injury. So switching to fibrosis. Here as well, significant downregulation of fibrotic markers by varoglutamstat could be shown, exemplified here by the fibroblast activation marker, alpha-SMA as well as for the collagens 1 and 3 on the right side. We then went on using the ADI-CKD model to investigate potential combination effects with standard of care and to compare once daily versus twice daily dosing. We conducted a series of experiments in several groups, including SGLT2 inhibitor dapagliflozin alone, dapagliflozin with varoglutamstat on top, both with once twice daily dosing. Readout included a broad panel of blood parameters and immunohistochemistry markers and kidney samples to analyze inflammatory and fibrotic events and kidney function. We found highly significant synergistic effects for the combination treatment of dapagliflozin and varoglutamstat over a broad panel of markers. You can see here that the combination treatment achieved statistically significant improvement versus the dapagliflozin only treatment. Just as examples here on the left side is the CD11c indicating a beneficial impact on inflammation. You also see this very well in the 3 histograms here where we -- where the combination with SGLT2 inhibitors normalizes this marker down to the control level when you compare here the histograms left and right. On the very right side of the slide, you see the same effects for fibrotic markers, alpha-SMA and collagen I. Moreover, comparing both of the green columns, which is once daily versus twice daily dosing, you see they are quite similar, which clearly supports a once-daily investigation in our planned clinical study. Now to sum this up, targeting inflammation fibrosis in DKD could provide a complementary layer to existing treatments targeting metabolism and hypertension. And why we are, based on the significant improvement of eGFR we found clinically, positioning varoglutamstat as a stand-alone therapy, our preclinical models clearly show strong synergism in combination with the standard of care SGLT2 inhibitor, making glutaminyl cyclase inhibitors candidates for a co-medication approach. And with that, I'd like to hand over to Marcus for providing you with the 2025 key financial figures. Marcus?

Thank you very much, Michael. I will now walk you through the financial figures for the 2025 business year. Research and development expenses in 2025 amounted to EUR 4.3 million compared to EUR 14.1 million in 2024. The reduction of EUR 9.8 million was largely attributable to a decrease in clinical development costs from the VIVIAD and VIVA-MIND as well as a reduction in manufacturing costs. R&D expenses in the reporting period mainly occurred for kidney-related research. We have seen a decrease in G&A expenses with cost of EUR 4.8 million for the full year of 2025 versus EUR 6.9 million in 2024. The decrease was largely attributable to lower personnel and other legal costs with the decline in personnel costs primarily attributable to a decrease in noncash effective share-based payments. All of this resulted in a net loss for the year of EUR 8.9 million compared to EUR 20.6 million in 2024. As of December 31, 2025, the company held EUR 5.6 million in cash and cash equivalents compared to EUR 9.4 million as of December 31, 2024. In October 2025, we completed a private placement of new ordinary shares to selected investors with gross proceeds in the amount of EUR 5.1 million. Including these proceeds and based on our most recent financial and business plan, we now expect that our cash and cash equivalents will be sufficient to fund our operating plans into Q4 2026. Our spending remains focused on strengthening our intellectual property position and on advancing strategic financing and partnership discussions. In our kidney disease focus area, R&D activities are undertaken selectively to drive sustainable value creation with further development dependent on additional financing and strategic partnerships. Before we come to the Q&A, I would now like to hand the call back to Frank for a wrap-up.

Thank you, Marcus. And let me summarize where the company stands today. We are now based on high-quality science in clinical and nonclinical area for chronic kidney disease and diabetic kidney disease. We have generated additional high-quality evidence that the QPCT/L approach in kidney disease is very promising. We have further corroborated that the medical need is still extremely high and progression to end-stage kidney disease is a therapeutic problem, which needs to be addressed and that QPCT/L inhibition and varoglutamstat is a potential new innovative and disease-changing solution. In order to add quality and value to our approach, we could extend the IP runway for varoglutamstat to 2044, and we have worked also an additional indication, including opportunities in orphan diseases based on the podocyte findings of the University of Hamburg. In summary, all this should lead and enable us to find an attractive partnership with the pharmaceutical companies in the upcoming future. I thank you for your attendance.

[Operator Instructions] We will now take the first question from the line of Sushila Hernandez from Van Lanschot Kempen.

This is [indiscernible] for Sheila. To start off, I was just wondering on partnership or funding discussions. We've seen various meta-analysis of the VIVIAD and VIVA-MIND study data. So what is there left to show potential partners or investors without actually starting a Phase IIb? And what are the key discussion topics? And also, I was wondering if you want to start a new trial, you've currently been looking at the use of SGLT2 inhibitors together with varoglutamstat. Would you also be looking at some other standard of care such as like the inhibitors?

I'm not sure I have understood your question correctly. But what we're currently doing is a risk reduction or a probability increase for the next study. And those questions, of course, come in from various partners we are talking, and we wanted to share publicly and transparently the findings and the answers. And I think the answers are excellent and the quality of our data analysis and research is excellent that will increase the probability of having a good partnership. And the next study, of course, going to be based on those findings on the clinical and nonclinical science. And that will take into account to design a study, which is a very high likelihood of a successful outcome. And that is, of course, in the interest of our shareholders. but also in the interest of potential future partners. They want to have a successful development and not a failed one. So all the investments we did in the last year to better understand the data, to generate new data, to generate evidence has to be seen in that perspective. And that's the rationale why we did it -- or were asked to do it. So then to the SGLT2 inhibitors, SGLT2 inhibitors have an inflammatory component or an anti-inflammatory component in the mechanism of action, which is not fully understood. And we just did this combination study with our varoglutamstat and QPCT/L inhibitors with SGLT2 inhibitors to ensure that the combination is additive and synergistic and not antagonistic because if you don't know why SGLT2s are anti-inflammatory and you cannot pin down that mechanism exactly, you can, of course, analyze whether there is a synergism antagonism. So we did that study, which Mick presented and which you can further drill down in the webcast we have published, and we can ensure that there is an additive and synergistic effect between the 2 mechanisms. So varoglutamstat can be given in future trials on top of standard of care and add a significant benefit to that.

We will now take the next question from the line of Samir Devani from Rx Securities.

I think I've probably got 3. I just wanted to continue the comment, Frank, that you made about the SGLT2. You presented some sort of subgroup analyses with the results today. And I was just wondering how many of the diabetes patients in VIVA-MIND had run SGLT2 anyway? I guess that's the first question.

So a couple of had, but the number was too small to do a specific subgroup analysis on SGLT2 alone. In average, diabetes patients had about 2 antidiabetic medications and at least 1 or 2 antihypertensive medications and usually a lipid lowering and an anti-inflammatory drug. So they were treated according to standard of care, which can be expected from the U.S. and Western European population. But we didn't -- we couldn't run really a subgroup analysis by type of concomitant medication. That was the reason why we did the preclinical study to make sure that we are on the right track.

Okay. That makes sense. And then just on the proposed Phase IIb trial, you've highlighted that there will be an interim readout at 15 months. I just wanted to check, is that going to be just the futility? Or will there be some efficacy data that you'd release at that point? And if it's an efficacy analysis, is there going to be a statistical penalty on the final primary endpoint calculation?

Yes, that's a good question. Thank you for that one. 15 months, first of all, is a good time when we probably have around 70, 80 patients at least treated for 6 months. And you know that our onset of action is not super fast. We don't have a hemodynamic effect or a dip like the SGLT2s. Our effect size builds up over about 6 months. And so we need to wait until some patients have completed 6 months. The treatment effect size we have shown you today is so big that after 6 months, you can already see a p-value. And any penalty we would have until the final analysis is, I wouldn't say meaningless, but it is, in that sense, not very meaningful because the effect size we power that study is around 3.5 to 4 milliliter. The true effect size probably is more around 5 to 7 what we expect. And that is much more than when we need for the p-value of 0.005. So we can divide alpha easily, alpha spending between interim and the final one. The interim is also more not meant to terminate the study for success. It is meant to enable the planning of the Phase III study because you don't want to wait with the Phase II results until you at the last moment, lift the lid and say, oh, now we know and then start the planning. So the interim analysis is meant to allow about 9 months before the full results to start the detailed planning of the Phase III and not to lose time.

Okay. That's great. And then just finally, obviously, the market is focused on delivering some sort of commercial deal. But I'm just -- in terms of the sort of next-generation asset, 2149, what sort of ongoing work is happening with that right now? And what can we expect? Can we expect any more data, preclinical data this year?

I think we're carefully investing into QPCT/L inhibitors and 2149 is always a part of our let us say, a series of inhibitors we test. We currently focus 80% to 90% of our energy on the partnering and the advancing of the company and the remaining 10% on new science. We are going ahead. We have some ideas which I cannot really talk about with 2149 because they are subject to future patents and new mechanisms we are working on. Whether there will be -- I expect that there would be more data this year, but I cannot promise that. But there is new stuff going on, which is super exciting, but it's not disclosable right now.

Our next question comes from the line of Tom Rosenfeld from Intron Health Research.

I just got one question on trial design for the upcoming Phase IIb trial. It looked like in the annual report, you envisage the primary endpoint being the eGFR change from start to week 48. Have you received advice or feedback from the FDA or EMA on that? What's the rationale between over choosing that over eGFR slope?

Well, the principal analysis for regulatory pivotal studies is always eGFR slope. And that's the general guidance for pivotal studies. Now when we want to understand the onset of action and the evolution over time of our effect size. So what is happening in the first 6 months, what has happened in the 6, 7 -- 6 months and so on, then, of course, the slope analysis is not very helpful because it depicts the totality of the results over a year or over 2 years. So in order to have some additional findings what happens after 6 months to 12 months, how big does the effect go and what happens, then you do a change of baseline analysis and to understand how big is the change from baseline. That is very similar to what we have shown today in the call where we showed what is the change in the slope up and down. We can do it as a slope or you can do it as an MMRM change from baseline. I think for the Phase II, both are possible and viable. We will anyhow do both. We expect both to be significant. But as the Phase II is a more understanding confirmatory design, that may be the better primary endpoint.

[Operator Instructions] There are no further questions at this time. I would now like to turn the conference back to Julia Neugebauer for closing remarks.

Thank you for your continued interest and support. I would like to reiterate that we are seeing clear progress for varoglutamstat in kidney disease and most importantly, on the partnering side. We remain focused on advancing to the next steps of our growth. We appreciate your time today and look forward to speaking with you soon again. Thank you, and bye-bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.