DBV Technologies S.A. (DBVT) Q4 2022 Earnings Report, Transcript and Summary

Good day, and welcome to the DBV Technologies Full Year 2022 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Anne Pollak, Head of Investor Relations. Please go ahead.

Thank you. This afternoon, DBV Technologies issued a press release that outlines our financial results for the 12 months ended December 31, 2022. This press 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 our product -- of our product candidates 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 really 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. Joining me on today's call are Daniel Tassé, Chief Executive Officer of DBV; Sébastien Robitaille, Chief Final Officer; and Pharis Mohideen, Chief Medical Officer. I will now pass the call over to Daniel. Daniel? Daniel Tassé: Anne, thank you, and thank you all for joining us on this call this afternoon. In a few moments, Sébastien will walk you through the highlights of the full year 2022 financial results. But before he does that, I'd like to take a few moments to talk about recent clinical updates. Last year, our top priority was to finalize the design and protocol of VITESSE, the Phase III pivotal study of the modified Viaskin Peanut patch in children ages 4 to 7 with a confirmed peanut allergy diagnosis. We did that, and we are on track to screen our first patient by the end of the first quarter this year, and we look forward to providing an update when this event occurs. Now in advance of initiating VITESSE, we completed a study called EVOLVE, which was a 12-week caregiver and patient user experience study with the modified Viaskin Peanut patch in 50 peanut-allergic children ages 4 to 11 years of age. Now our objective with EVOLVE was pretty straightforward. It was to optimize the eDiary tool that families will use in VITESSE to best capture patch adhesion and patch experience data. I will invite Pharis to speak in more detail about EVOLVE, what we learn from it as well as also update you all on Viaskin Peanut data that was presented last weekend at the American Academy of Allergy, Asthma & Immunology Annual Scientific Meeting, the meeting that we all know as AAAAI. Pharis?

Thanks, Daniel. As Daniel said, EVOLVE was a user experience study designed to provide qualitative data on several study elements that would also be used in the test, our Phase III study in 4- to 7-year olds. In EVOLVE, we tested the functionality of an electronic patient diary called the eDiary to collect information on activities of daily living and patch adhesion scores. As we have previously discussed, the test will assess patch adhesion of the modified Viaskin Peanut patch, and we will include a statistical test of adhesion into VITESSE stat analysis plan. We've all verified that the eDiary tool can be used by caregivers to capture adhesion data in the test that is required to support a potential BLA application. I'm also pleased to report that EVOLVE showed that the updated instructions for use, the IFU, supported correct patch application which we defined as no listing of the patch edges or detachment directly after applications. Furthermore, the majority of parents and caregivers reported a positive ease of use experience with the modified Viaskin Peanut patch. We have always believed in the importance of ease of use in a potential peanut allergy treatment profile, and we continue to believe that the overall product profile of Viaskin Peanut will appeal to peanut-allergic family. Let's turn now to the American Academy of Allergy, Asthma & Immunology Annual Scientific Meeting, which took place last weekend in San Antonio. AAAAI is among the most important and widely attended meetings on allergy and immunology each year, and DBV had a strong presence this year as we do every year. DBV had 2 EPITOPE posters at the meeting that summarize the efficacy and safety profile of epicutaneous immunotherapy with Viaskin Peanut and peanut-allergic children aged 1 to 3 years with and without certain comorbid atopic conditions. Specifically, we assessed its treatment response for safety of Viaskin Peanut therapy was influenced by either baseline atopic dermatitis or concomitant food allergy. Both of these conditions are common comorbidities in young children with peanut allergies, each having a reported prevalence rate of 60% to 70%. The results demonstrated consistency in Viaskin Peanut safety and efficacy across multiple patient groups, those with and without other food allergies and atopic dermatitis. Furthermore, treatment with Viaskin Peanut for 1 year did not appear to result in any change in atopic dermatitis severity for children ages 1 to 3 years old. We believe that these EPITOPE data analysis further validate the potential benefit of using the Viaskin platform for the treatment of peanut allergies in young children. For those of you who would like to read the posters in detail that can be found in the Scientific Publications and Presentations section of the DBV website. At this point, I'll turn the call over to Sébastien to review the financial results. Go ahead, Séb. Sébastien Robitaille: Thank you, Pharis. Let's briefly review financial highlights for the full year 2022. Cash and cash equivalents were $209.2 million as of December 31, 2022 compared to $77.3 million as of December 31, 2021 which is an increase by $131.9 million, mainly due to $194.1 million in financing activities in Q2. Net cash used in operating activities for the full year was $81.8 million, which is a decrease of 24% compared to prior year, reflecting the cost containment measures that have been continuously maintained since the implementation in 2020. Finally, in the last quarter, our treasury position, which is stated in U.S. dollars benefited from a change in the euro to the U.S. dollar exchange rates. The company's activities and expenditures in the fourth quarter were in line with expectations and continue to maximize the efficiency of our spend and remain highly disciplined in our cash management. I will turn the call back to Daniel for closing remarks. Daniel Tassé: Thank you, Sébastien. In closing -- can you hear me? Can you hear me? Sébastien Robitaille: Yes.

Yes, we can hear you. Daniel Tassé: Okay. Cool. Sorry about that. So in closing, I'm very pleased with our continued financial discipline and progress across our clinical programs. Looking ahead to the remainder of 2023, we'll continue to keep you updated as appropriate on our VITESSE III -- Phase III trial progress in children ages 4 to 7 as well as our development plans for Viaskin Peanut as a potential treatment for -- in allergic toddlers ages 1 to 3. I want to thank you all on the phone today on the webcast for joining us. And operator, let's open the line for questions, if there are any.

[Operator Instructions] And the first question will come from Charles Wolleben with JMP.

Jon Wolleben here. A few on EVOLVE eDiary study. Wondering if this was requested by FDA. Why 4 to 11 versus 4 to 7? And then did you collect any other data, whether patch adhesion, adhesion type reaction, anaphylaxis or any safety data? Anything else you can learn from the EVOLVE study besides validating the eDiary? Daniel Tassé: I'll have Pharis give you more details. Then to be clear, no, this was entirely our decision. This decision was made when we were contemplating to a new pivotal trial, given that we have a new patch. We also know, Jonathan, that adhesion on application is a mark of adhesion, obviously, through the day. And that would be used an eDiary tool to make sure that we capture all the rich data was required to inform the BLA in the label. Our decision was made on our own to sort of -- the expression to me was sort of work the yards out to make sure that when we rolled out that tool in VITESSE, a pivotal trial, we were very confident it was the right tool for us, which is what this was intended to do. Again, it was not powered to prove or measure anything. It's something we choose to do or chose to do, again, to make sure that we came into VITESSE confident that we had a good IFU and a good tool to capture the data. Pharis, anything else you want to add to that?

No, that's correct. But I can answer the other questions, if you would like, Daniel. Daniel Tassé: Yes, please.

Yes. Okay. So as far as the 4 to 11 versus 4 to 7, so as Daniel said, this was designed to work the [IFU] prior to starting to test. And so with the nature of the objective of the study being let's optimize the eDiary and the instructions for use, it didn't matter whether you were 4 to 7 or you were 4 to 11 as long as you were a peanut-allergic subject, we felt that in a caregiver parent of a peanut- allergic child, we felt that we could generate the same amount of data. And then, of course, recruitment for us is always primary in terms of being effective and efficient. So we wanted to generate the data in a short period of time. So that's the reason for the 4 to 11. Nothing more beyond that. And in terms of your other question, yes, we collected safety data, a lot of other things, just as we normally was through any other trial and it performed as it always does very consistently relative to other studies that we've seen from a safety standpoint. Does that answer your question, Jon?

Yes. That's helpful. In the prepared remarks, Daniel, you mentioned VITESSE will be up and running this month. Wondering if you could get an update on this 275 subject safety study, you'll also be running, if there's any guidance for when that will be starting. And then also, if you have any update on your progress in the 1 to 3 year olds. Daniel Tassé: Yes, I'll have Pharis answer the question on 1 to 3 year olds. The safety trial companies, VITESSE, was meant to enrich the safety database. As you know, the 6-month trial, also 12-month trial, enrollment is going to be faster because 275 obviously is less than 600, but mostly there's no food challenge, which makes enrollment those trials to be a lot easier. So our plan here is to start the safety trial later on towards the sort of plateauing of enrollment in VITESSE as to not compete with ourselves for patients. And we're, again, planning and confident that we can land the completion of the safety trial at the same time or before the database lock of the VITESSE trial. Does that answer your question?

Yes. And then that's helpful there. And just wondering about the toddler update, if there is one. Daniel Tassé: Yes. Please, Pharis.

As we've said in the past, Jonathan, we'll communicate with the FDA this quarter. Beyond that is probably not prudent to comment in terms of when we would get feedback from them. We'll follow the traditional application processes. So...

Okay. And one more, if I may. My math might be off, but I see a pretty big jump in R&D this quarter. Wondering if there's any one-off expenses in there or how to think about spend moving forward. Daniel Tassé: Séb, you want to take the jump in R&D question, which in a start-up cost to VITESSE is mostly what it is. But any more color you want to provide? Sébastien Robitaille: Yes, of course, you're right, Daniel. It's only related to the fact that we will initiate some cost on VITESSE. So we have some upfront with the CROs. So we have, I will say, a slight ramp-up of our R&D expenses in the last few months. Daniel Tassé: So no. It will not carry through, Jonathan. Again, we reiterate that we have enough cash to complete VITESSE in the safety trial with the cushion. If that changes, obviously, we'll communicate that to investors at this point in time. All around good financial discipline, the actual spend as activities planned in Q4 was very much what we had planned when we rolled out the time frame for both studies.

[Operator Instructions] And this will conclude our question-and-answer session as well as our conference call for today. Thank you for attending today's presentation. You may now disconnect. Daniel Tassé: Thank you, everyone.