DBV Technologies S.A. (DBVT) Q3 2021 Earnings Report, Transcript and Summary

Welcome to the DBV Technologies conference call webcast. My name is Adrianne, and I'll be your operator for today's call. [Operator Instructions] Please note this conference is being recorded. I'll now turn the call over to Anne Pollak, Head of Investor Relations. Anne, you may begin.

Thank you. This afternoon, DBV Technologies issued a press release that outlines our financial results for the 3 and 9 months ended September 30, 2001 (sic) [ 2021 ] and regulatory updates. This release is available on the Press Release section of the DBV Technologies website. Before we begin, please note that today's call may include a number of forward-looking statements, including but not limited to comments regarding our clinical and regulatory development plans; the timing and results of interactions with regulatory agencies; our forecast of our cash runway and the ability of any of our product candidates, if approved, to improve the lives of patients with food allergies. These forward-looking statements are based on assumptions that are subject to risks and uncertainties that could cause the company's actual results to differ significantly from those suggested by these statements. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Please refer to the company's filings with the SEC and the French AMF for information concerning risk factors that could cause the company's actual results to differ materially from expectations, including any forward-looking statements made on this call. Except as required by law, the company disclaims any obligation to publicly update or revise any forward-looking statements to account for or reflect events or circumstances that occur after this call. Daniel Tassé, Chief Executive Officer of DBV, is joining me today, and I will now pass the call over to him. Daniel Tassé: Thank you, Anne, and thank you all for joining the call. Today, in addition to releasing our third quarter financial results, we provided an update on Viaskin Peanut in the European Union and in the United States. Let me focus on EU first. The review of the MAA, the marketing authorization application, for Viaskin Peanut, is progressing according to established EMA processes and aligned to our ongoing conversations with the EMA. We are currently preparing our response to the Day 180 letter of outstanding issues we received in the summer. We're also evaluating how to best address the agency's remaining objections, including the one major objection that questions the limitation of the data, for example, the clinical relevance and effect size supported by single pivotal study. Our team anticipates having further exchanges with the EMA, and we estimate the EMA could issue its decision on potential marketing authorization for Viaskin Peanut in the first quarter of 2022. And now turning to the U.S. We recently received feedback from the FDA on the STAMP protocol we submitted in early [Audio Gap] So turning back to the U.S., we were interrupted here. We recently received feedback from the FDA in the STAMP protocol we submitted in May. As I'm sure you remember, STAMP is a 6-month safety and adhesion study of modified Viaskin Peanut in children ages 4 to 11 who suffer from peanut allergy, a study the FDA recommended we conduct. In the feedback we recently received, the FDA requested a stepwise approach to the mVP development program. Specifically, the agency would like to review data from a protein uptake release study with a modified Viaskin patch and the current patch prior to providing additional comments on the STAMP protocol. This request is a new development. The FDA did not request a stepwise approach in the guidance they provided in January as part of the written response to our Type A meeting request. In that recent communication providing STAMP feedback, the FDA stated that further guidance is forthcoming on how to best demonstrate the protein uptake comparability of the 2 patches. We have not yet received this second communication from the agency. As such, we remain steadfast that we will not initiate STAMP until complete feedback is received from the agency and we have full alignment on the STAMP protocol. So what are the next steps -- the next key steps? First, we await the forthcoming FDA feedback. In the meantime, we also explore all avenues for mVP clinical development. We continue to see constructive exchanges with the FDA to align on a clearly defined clinical program and regulatory pathway for Viaskin Peanut. Now let me turn briefly to the third quarter financial results. Net cash used in operating activities between the first 9 months of 2020 and 2021 decreased 33% (sic) [ 32% ] and reflects our continued implementation of cost containment measures. We ended the quarter with $98.2 million in cash and cash equivalents, which we continue to expect will support our operations into the third quarter of 2022. Our cash runway projections consider 2 types of expenditure: one, the day-to-day fixed operating cost of the company, salaries, corporate facilities, rent, et cetera; and the variable costs associated with our scientific and clinical development such as expenses related to STAMP and EQUAL. Before I open the call to questions, I want to reaffirm DBV's commitment to the food allergy community, including allergists, families, patients, loved ones and all those who advocate tirelessly on their behalf. Everyone at DBV is motivated each day by patients and providers urgently awaiting a therapeutic advancement in treating peanut allergies and by our unwavering confidence in the potential of Viaskin Peanut. We will continue to explore all viable pathways and maintain open communications with the FDA. With that, I would like to open the call for questions. And to help answer those questions with me besides Anne Pollak, Head of Investor Relations; I have Sébastien Robitaille, who's our Chief Financial Officer; and Pharis Mohideen, our Chief Medical Officer, all to join me. Operator?

[Operator Instructions] Our first question comes from [ Samuel Levine ].

Thanks for the update today. A few for me. Could you give us an update on the PREQUAL study? And then also, what your current expectations are for EQUAL? I know you thought it would be a quick turnaround. So just wondering if you could remind us of how long you think that could be, number of patients, et cetera. Daniel Tassé: Yes. So again, to put all this in perspective, that's important here. As you know, the equivalence in uptake of allergen study, what we call EQUAL, is the touch of technical complexity. So first, we want to optimize the sample methodology. Now how do you collect essentially microgram amounts of peanut protein off of surfaces, both the skin and the patch? And then also how to validate the assays that we're going to use to calculate that actual data. So that's what we call PREQUAL. Now work actually has been completed, and the data is in-house, on its way to the in-house. Now in parallel, and this is what the FDA is asking us to do here, as part of our ongoing exchanges with the FDA, we proposed to the agency to first compare cVP to mVP in healthy volunteers before a trial in patients. That's the protocol for which we're waiting for feedback now. We don't know, since optimizing -- with that as background, since optimizing methodology was the objective of PREQUAL, randomizing that right now and waiting from feedback from the agency, we don't yet know what is going to be the sample sizes required for EQUAL. Did that answer your question?

Okay, yes. In the initial communication from the FDA, did they have a rationale for why the 6-month duration for STAMP? Or is there, do you think, a possibility for that to be a 3-month or even shorter study given that there are no efficacy requirements and which the primary goal here is just to measure adhesion? Daniel Tassé: Yes. Let me turn the question to Pharis here since he's been the one managing, obviously, the STAMP protocol. Pharis?

Yes. There was no specific detailed rationale around the 6 months. It was of long enough duration to be able to assess the patch, and you need to have the patch on for a reasonable number of months to be able to assess the adhesion properties. As you know, there's an initial few weeks where you get up to speed in terms of the 24 hours per day. And it was a recommendation, so that's part of the negotiation with the agency. Daniel Tassé: Yes. I would also add, if I may, that the adhesion assessments in our pivotal trial was between month 3 and month 6, and month 3 and month 9. So that's a reasonable sort of boundaries for this study. We were comfortable with 6 months.

Got it. And one last for me on Europe before I jump in the queue. Does EMA have all the longer-term data you've collected? Or is there more that you can send over to give them a more robust data set? Daniel Tassé: You're welcome. No, the EMA -- if I'm correct, Pharis, the EMA has the PEOPLE data, so the 3-year efficacy in 4 to 11-year olds, that data they do have.

That's correct. Daniel Tassé: They also have most but not yet all of the safety data from REALISE, our safety-only trial. So I think we've shared with them the data up to date, but there's more to come. Am I correct in that, Pharis?

That's correct.

[Operator Instructions] Our next question comes from Graig Suvannavejh.

Daniel, I've got a couple. First, just on the EU regulatory review process in terms of this major objection. Given it seems as if they're perhaps questioning the data supported by 1 single pivotal study, is there potentially an increased risk that you may -- DBV may have to run another pivotal trial in order to gain approval in Europe? So I just want to get your sense of how we should be thinking about that, if I'm understanding the major objection that the EMA has. And then secondly, on the U.S. side of things, is the guidance that you're going to get -- is your anticipation that as you've already thought out EQUAL, that it's going to perfectly meet that guidance? Or are you scenario planning around the potential that you'll have to perhaps consider a different trial design altogether? And kind of how should we think about that if that's a potential gating factor now before STAMP can start, what the potential impact from a time line perspective could that be? Daniel Tassé: It's important. I'll answer your second question first, Graig, if I may, then I'll come back to the EU question. We don't know what to expect from the FDA. We're surprised that they see EQUAL and STAMP has been, in some way, joined conceptually. One study is meant to assess adhesion, that's STAMP. One is meant to assess whether or not the protein transfer is comparable between cVP and mVP. That's the one we call EQUAL. How data out of EQUAL becomes critical to inform STAMP, we don't know the answer to that. So obviously, we've been speculating, but that's not helpful. And we don't know what it is. Given the fact that, that feedback is forthcoming, as the FDA stated in the communication to us, we will wait that feedback and then see what it means. At that point in time, we'll have to decide whether or not what we had in mind for EQUAL is adequate or not. Again, what we have now is, in some ways, it's healthy. It's frustrating because of the delay, but it's also healthy. We're exchanging with the FDA to make sure that the EQUAL study, for which there is no analog, is one that is conceptually sound. And essentially, what we're trying to achieve here is what the agency wants here, which is why we did PREQUAL first, to validate methodology and sampling. Then we want to do an EQUAL-like study in healthy volunteers, again, to further optimize the approach before we do it in kids here. There's exchange on that. It's the time that's a touch, obviously, disappointing. And the codependency of the 2, obviously, is the recent development that was unexpected. So did I answer your EQUAL question adequately before I get to the EMA?

Yes. Maybe just a follow-up on the U.S. side, if I could. So do you have -- and you might have mentioned this in your prepared remarks, I might have missed it. But do you have a potential expectation of when you might get the FDA's guidance on how best to demonstrate protein uptake? Is this by the end of the year? Is it first half of next year? Or is it just kind of we'll see when the FDA gets around to it? Daniel Tassé: Let me share with you the facts we have. It took 5.5 months for the agency to respond to our STAMP protocol. It was sent in early May. We got the feedback in mid-October or late October. The protocol that the agency wishes to discuss with us was sent to them -- the protein uptake protocol, [indiscernible] protocol discussion documents, was sent to the agency in mid-July. So we like to think we'll get that feedback in a reasonable amount of time. The agency said forthcoming. I don't wish to speculate when that will be. So to your EU question, look, the -- we have an ongoing [indiscernible] with EMA. We essentially remain pretty much confident that our product, we have the answer to their major objection, and we will put that forward to them. Whether or not that would be convincing to the EMA, obviously, that's up to the EMA to decide. So we have not at this point in time contemplated doing anything supplemental to answer their objection. That will be something obviously that will be informed by the next round of discussions with them, but we remain confident the product can help patients. The product is approvable. But obviously, that decision does not belong to me but to CHMP.

Great. And if I could just ask one more slightly off-the-cuff question. Any thoughts on changing the company name to DBV Therapeutics? Daniel Tassé: Excellent suggestion. So what Graig is making reference to here, if I may, is that on my voice mail, I called the company's DBV Therapeutics and I've never corrected it. I probably should.

[Operator Instructions] And currently, we have no further questions. Daniel Tassé: If it is all right, give another 30 seconds or a minute, and if not...

[Operator Instructions] And we have Graig back in the queue.

Daniel, I think it's just really important, I think, for investors to get a better sense of kind of -- obviously, we've seen the Viaskin Peanut story unfold over multiple years. It seems as if we're at a point with the agency, at least in the U.S., that perhaps there is a little bit more of a delay. And while I appreciate that perhaps we're getting closer and closer, hopefully, to the finish line, I guess the big question that I or other investors might have is what else could possibly crop up that could derail kind of time lines to approval. So while I'm not expecting you to necessarily answer that or speculate on questions around what next could arise from FDA, but you've done a great job along with the team on kind of looking at your cost basis and reducing kind of cash burn. But given where you are right now, how -- can you remind us how far your current cash way is projected to run until? And how do you balance kind of the uncertainty of what's happening with the FDA with the need to make sure you have enough capital to fund the company? Daniel Tassé: Yes. It's obviously absolutely fundamental question, and we know, pride ourselves in trying to be good stewards of our shareholders' money here. We cut down expenses significantly. As I said, we think about expenses, not the basal rate. And then there's what we have planned to spend and put the money aside for when it comes to EQUAL and STAMP. As we wait for FDA feedback, those expenditures obviously shift back a little bit, providing us now a bit more headroom. Right now, we have cash into Q3 of next year. And we remain very much both hands on the levers here to control that best as possible. I'd like to think we will get to closure with the agency a way before that. The -- we also -- if I may, since you're asking a bit about what else can happen with the agency. We also understand that it is a division of vaccine research and review. They have been very busy, overwhelmed with COVID. There was an article in the Washington Post a few weeks ago that said that OVRR has 3 years of work to do in the next 6 months. And despite the fact that it is obviously -- we're impatient. I won't use the word frustrated, but we're so impatient. We understand where the agency is here. We continue to believe that exchange with the agency will serve patients, will serve investors even if it's slower than expected. And I need to reaffirm that in all the communications we have from the FDA, they reassure us that Viaskin Peanut program is a priority for them. And we get that in the urgency of their engagement with us. The process is slower than expected. And we remain very vigilant, obviously, to our expenditures so that we're in a position here where there's no artificial pressures on us to get to the right answer with the agency.

And the next question comes from Jon Wolleben.

Just one more for me, Daniel. You mentioned that you have a response to EMA's major objection. I was wondering if you could provide any color on what your answer is to this major objection as it is new news to at least us. Daniel Tassé: Yes. We don't wish to elaborate on what is the nature of that objection. We would obviously -- we think it would be counterproductive in relation to the EMA again, which again is one where the exchange is ongoing here. So I do not wish to comment further on those ongoing exchanges, except to say that it's an issue of interpretation of clinical data, which is the bread and butter of what sponsor regulatory agencies discuss here and will be the substance of our Day 180 response and other interactions with them going forward. Again, we believe that their objection, we have an answer to it. We believe that we -- an interpretation that is fair and correct when it comes to benefit. And the EMA will have to make that decision, obviously, to the process sometime in Q1.

[Operator Instructions] And the next question comes from Alex Cogut.

Daniel, so maybe it was answered before, but I believe you previously mentioned that the EQUAL study could be done fairly quickly in a couple of days. Is that still valid? Or do you see a scenario where the FDA asks something that makes the study much longer to perform? Daniel Tassé: I don't know the answer to that. To again remind ourselves what EQUAL is, the idea is to show the equivalence in protein delivery between the current patch and the modified patch, a study that can be done over, whether it's days or weeks, this is not a chronic study here. This is one that is essentially the -- [indiscernible] version of what would be a PK/PD data if it was possible to measure concentration in the blood stream, something we can't do with our product, given the mode of action. Again, I don't wish to speculate what the agency will ask us to do, whether the study is going to be longer or more complex. What I think is important investors to know, and the reason why we were a bit surprised by that development with the agency is, by asking us to do these things in a stepwise way, what we wish to do is to run EQUAL and all the work leading up to EQUAL in parallel to STAMP, which was important for us, obviously, in getting a resolution here. That's what's changed with the FDA guidance. That needs to be stepwise as opposed in parallel. And until we hear more from the agency on their thoughts on EQUAL, our ability to run these in parallel as opposed in a stepwise way is something that we don't know. Hopefully, that would help answer your question.

And we have no further questions in the queue. Daniel Tassé: Adrianne, thank you, everybody calling in, to Pharis and Sébastien, and thanks for joining us today. And as you know, we're always a phone call away if you wish to have a further discussion. I thank you all for attending today.

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