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Edited Transcript of POXEL.PA earnings conference call or presentation 26-Aug-19 6:00pm GMT

Half Year 2019 Poxel SA Earnings Call

LYON Aug 29, 2019 (Thomson StreetEvents) -- Edited Transcript of Poxel SA earnings conference call or presentation Monday, August 26, 2019 at 6:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Anne Renevot

Poxel SA - CFO & Director of Finances

* Jonae R. Barnes

Poxel SA - SVP of IR & Public Relations

* Pascale Fouqueray-Grellier

Poxel SA - Co-Founder & Executive VP of Early Development & Translational Medicine

* Sébastien Bolze

Poxel SA - Co-Founder, Executive VP of Non Clinical Development and Scientific Director

* Thomas Kuhn

Poxel SA - Co-Founder, CEO & Director

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Conference Call Participants

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* Bertrand Delsuc;Biotellytics;CEO, Founder

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to the Poxel conference call. I now hand over to Jonae Barnes. Madame, please go ahead.

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Jonae R. Barnes, Poxel SA - SVP of IR & Public Relations [2]

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Thank you for joining us today for Poxel's Half Year 2019 Financial Results and Corporate Update. I'm Jonae Barnes, Senior Vice President, Investor Relations and Public Relations. With me on the call is Thomas Kuhn, CEO; Anne Renevot, CFO; Noah Beerman, President of U.S. Operations and EVP of Business Development; Sébastien Bolze, Nonclinical Development; Christophe Arbet-Engels, Chief Medical Officer, EVP Late Development and Medical Affairs; and Pascale Fouqueray-Grellier, EVP Translational Medicine and Early Clinical Development.

Before we open up the call to the question-and-answer session, we will begin with a brief overview from Thomas Kuhn, CEO. Anne Renevot, our CFO, will provide a summary of the 2019 half year financial results, and then Thomas will review our half year 2019 accomplishments and significant upcoming milestones for the remainder of 2019 and 2020.

As part of the presentation, we will be using slides for this discussion. You can access them on Poxel's website in the Investors Company Information section under the name Corporate Presentation Half Year 2019. The slides provide a detailed overview of the company, our 2019 half year financial results and major accomplishments, which includes positive results from the Imeglimin stage 3 TIMES 1 and TIMES 3 16-week portion of the trial in patients with type 2 diabetes, positive results from an Imeglimin Metavant trial in patients with type 2 diabetes and chronic kidney disease stages 3b and 4, advancing PXL770 into a Phase IIa program for NASH and positive results from the Phase Ia trial, the PXL065 for NASH. We will also review our significant upcoming milestones for the remainder of 2019 and 2020.

During this call, we will present the highlights of the slides, so please feel free to review them in more detail during or after the call. We will open up the call for questions during our Q&A session at the end of this call.

Before we begin, I would like to read our forward-looking statements. Some of the statements contained in this presentation constitute forward-looking statements, which are statements that are not historical facts. The statements are based on the company's current strategy, plans, objectives, assumptions, estimates and projections. Investors should therefore not place undue reliance on those statements. The company makes no representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios that should not be viewed as the most likely or standard scenario. Forward-looking statements speak only as of the date that they are made, and the company does not undertake to update any forward-looking statements in light of new information or future events.

I will now hand the call over to Thomas.

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Thomas Kuhn, Poxel SA - Co-Founder, CEO & Director [3]

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Thank you, Jonae. Thank you all for joining us today. We are globally focused clinical-stage biotechnology company with robust mid- to late-stage pipeline, addressing large market opportunities. We believe that targeting cellular energy regulation pathways for the treatment of metabolic diseases, including type 2 diabetes and NASH is of critical importance since disbalances are the root of those disease. All 3 of our clinical-stage pipeline programs address significant targets in the energy metabolism pathways. Imeglimin, our lead program in Phase III, targets mitochondrial bioenergetics, mitochondria being the power station of the cell. PXL770, which is advancing in Phase II, activates the adenosine monophosphate-activated protein kinase, or AMPK, an important energy sensor, and PXL065, which is in Phase I, targets mitochondrial pyruvate carrier or MPC inhibition.

As you can see on Slide 4, our pipeline slide gives an overview of our well-diversified mid- to late-stage metabolic pipeline, targeting large chronic disease market opportunities as well as earlier-stage metabolic programs advancing in development.

During the first half of 2019, we made significant progress advancing the company, and I will review our first half 2019 accomplishments and several important upcoming milestones for the remainder of 2019 and into 2020 after Anne reviews our half year 2019 financial results.

I will now hand the call over to Anne.

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Anne Renevot, Poxel SA - CFO & Director of Finances [4]

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Thank you, Thomas. Good afternoon, everyone, and thank you for joining us today. So I will now review our half year 2019 financials.

So can you please move to the income statement on Slide 6.

So Poxel reported revenues of EUR 23.2 million for the first half of 2019 as compared with EUR 37.5 million during the same period in 2018. Revenue for the first half of 2019 primarily reflects the portion of the EUR 36 million upfront payment received from Sumitomo Dainippon Pharma relating to the partnership announced in 2017. It also reflects the Imeglimin Phase III TIMES program costs in Japan incurred during the first half of 2019 that were reinvoiced to Sumitomo. As you may recall, both the upfront payment and the reinvoiced cost of the Phase III TIMES program are recognized according to the percentage of completion of this program. I would also like to note that the decrease in revenue from Sumitomo is due to the advanced stage of the Phase III program, which corresponds to less reinvoicing and, therefore, lower revenue. In addition, please also note that the upfront payment received from Roivant for the agreement for Imeglimin that was announced in 2018, was fully reported as revenue in 2018 for EUR 8 million.

Research and development expenses amounted to EUR 24.2 million for the first half of 2019 as compared to EUR 27.4 million in 2018 for the same period. They primarily reflect the EUR 16.6 million clinical study cost incurred for the Imeglimin Phase III TIMES program. To a lesser extent, they also include the clinical study cost incurred for PXL770 and PXL065, the Poxel's 2 clinical-stage programs for the treatment of NASH.

The general and administrative expenses amounted to EUR 4.9 million for the first half of 2019 as compared to EUR 3.6 million for the first half of 2018. This increase reflects the growing organization with increased services and additional personnel expenses.

And financial income amounted to EUR 0.1 million for the first half of 2019 as compared to EUR 0.8 million for the first half of 2018, which primarily reflected foreign exchange results.

The net result as of June 30, 2019, was a loss of EUR 5.8 million as compared to an income of EUR 7.3 million in 2018 for the same period. As previously mentioned, this variation is linked to the decrease of revenue that I just commented on.

So I suggest that you now move to Slide 7. And as of June 30, 2019, cash and cash equivalents were EUR 49.8 million or $56.7 million as compared to EUR 66.7 million or $76.4 million as of December 31, 2018. Cash and cash equivalents net of financial liabilities were EUR 41.1 million as of June 30, 2019, as compared to EUR 52.5 million as of December 31, 2018. Based on our current development plan, our cash run rate extends into 2021.

So this is the end of the financial part of this call, and I will now hand the call over to Thomas.

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Thomas Kuhn, Poxel SA - Co-Founder, CEO & Director [5]

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Thank you, Anne. And again, thank you all for joining us today. I'm very pleased to report that we have made substantial progress advancing the company during the first half of 2019. I would like to begin this portion of the call reviewing our significant accomplishments. As Jonae mentioned earlier, slides for this call can be found on our website. I will point you to refer to them.

Starting with our major accomplishments of the first half of 2019, please move to Slide 9. So point number one, Imeglimin in Japan. I'm very pleased to report that we announced positive results for the Phase III TIMES 1 and TIMES 3 16-week portion of the trial. In those trials, the results were highly statistically significant, and we are extremely pleased with the outcome. These data are very important step towards filing the Japanese New Drug Application in 2022.

Point number two, finally in the U.S., Poxel and Metavant recently announced positive data from the PK/PD trial and this completes one of the key activities to prepare for the Phase III program in the U.S. and Europe.

Number three, for our 2 NASH programs, PXL770, a direct AMP kinase activator; and PXL065, targeting MPC inhibition, we have continued to make progress in advancing both programs. PXL770 in Phase IIa program, and we expect to begin the PXL065 Phase Ib program shortly.

Additionally, point number four, we continue to advance our early-stage opportunities, and we'll update you once we have clinical data to share.

Last but not least, point number five, on the corporate side, we established a U.S. subsidiary based in Boston and recently appointed Iman Barilero, Senior Vice President Global -- Head of Global Regulatory Affairs who will be based there. Iman strengthened our internal strategy and regulatory affairs and will be instrumental in leading our interactions with regulatory authorities globally.

Moving to Slide 10. The 3 Phase III trials will serve as the basis for the New Drug Application filing in Japan. Data from these studies may be also leveraged by Sumitomo for all the Asian countries covered under our partnership, including China.

As you can see on Slide 11 through 14, it highlights the Phase III positive results from both, the TIMES 1 and the TIMES 3 trials that we announced in -- during the first half of this year. As a reminder, TIMES, or trials of Imeglimin for efficacy and safety, is the name of the Imeglimin Phase III program in Japan, which includes 3 clinical trials to evaluate Imeglimin efficacy and safety in over 1,100 patients. In April, we announced TIMES 1's results randomized, double-blind, placebo-controlled monotherapy trial versus placebo for 24 weeks in 213 Japanese patients. The trial met its primary and secondary endpoints with HbA1c placebo-corrected mean change from baseline of minus 0.87%.

In June, we announced the TIMES 3 study results. TIMES 3 is a Phase III 16-week, double-blind, placebo-controlled, randomized trial to asses Imeglimin in combination with insulin for the treatment of type 2 diabetes in Japan in 215 patients. The trial met its primary endpoints and reached superiority versus placebo. For the primary endpoints, we achieved A1c placebo-corrected mean change from baseline of minus 0.60%. These data are fully consistent with the results previously observed in the Imeglimin TIMES 1 and the Phase IIb trial in Japan.

In addition, the adverse effect profile of TIMES 1 and TIMES 3 trials was similar to placebo and consistent with other Imeglimin clinical trials. We've been working very closely with our partner, Sumitomo Dainippon Pharma, and we'll remain on track for Japanese New Drug Application submission in 2020, which we anticipate will be followed by a product launch in 2021. For the agreement with Sumitomo, future potential development of milestone payments and sales-based payments of up to approximately $257 million with double-digit escalating royalties.

Moving to Slide 15. In July, Poxel and Metavant, the metabolic subsidiary of Roivant, announced positive top line results from the PK/PD trial for Imeglimin. The Metavant study evaluated the safety, tolerability, and PK/PD of Imeglimin in individuals with type 2 diabetes and chronic kidney disease stage 3b and 4. Imeglimin met the primary objective of being well-tolerated in this specific patient population, confirming the safety profile observed to date and demonstrating its potential in this patient population. Metavant will meet with the FDA in the fourth quarter this year to discuss the clinical development plans for the Phase III program. Diabetes is the most common cause of chronic kidney disease. In the U.S., there are approximately 2.4 million adults with type 2 diabetes and chronic kidney disease stage 3b and 4. This is an underserved population and many approved therapies are either contraindicated or require dose reduction or are not recommended in the presence of kidney disease. There is a very [usual] unmet need for this specific patient population.

We can see in Slide 16 that visually depicts and highlights the treatment limitations, which we believe provides accompanying opportunity for Imeglimin based on its current [advance] profile.

For the agreements with Roivant, in addition to the upfront payment and investment in Poxel, we have potential for up to $600 million in regulatory and development milestone payments and sales-based payments, plus royalties on net sales.

Moving along to our NASH programs on Slides 17 and 18. We continue to make substantial progress advancing our 2 differentiated clinical-stage drug candidates.

On Slide 17, it provides an update for PXL770, a first-in-class direct AMP kinase activator. The Phase II program is underway, with the objective to total demonstrate PXL770's potential in NASH and validate our hypothesis for AMP kinase activation more broadly. AMP kinase is indeed a major regulator of energy metabolism, and its activation is expected to show beneficial effects in a wide range of metabolic disease, including NASH.

The Phase IIa 12-week randomized, double-blind, placebo-controlled parallel group study will assess the efficacy and safety of 3 doses of PXL770 versus placebo. The study will include approximately 100 patients with nonalcoholic fatty liver disease, NAFLD, who likely have NASH. The primary end point of the study will measure the change in liver fat mass based on magnetic resonance imaging-estimated [by] proton density fat fraction or MRI-PDFF, an imaging-based biomarker that allows fat mapping of the entire liver. Data results from the Phase II study are anticipated in the second quarter of 2020.

In addition and tied to this Phase II study, a separate 4-week PK/PD study is ongoing. This study will assess the full PK and PD profile on target pathways and metabolic parameters of PXL770 in NAFLD patients. Data results are expected during the fourth quarter of this year, in 2019.

On Slide 18, there is an update [for -- so far in] NASH. PXL065 is the R-stereoisomer of pioglitazone. Pioglitazone, a drug which is approved for the treatment of type 2 diabetes, has demonstrated efficacy in NASH and is currently the only drug recommended in practice guidelines for biopsy-proven NASH patients. However, pioglitazone use has been limited in NASH due to its side effect profile, which includes weight gain, bone loss and fluid retention. Based upon [clinical] and Phase I result to date, we believe PXL065 has the potential to exhibit a better therapeutic profile than pioglitazone for NASH. A Phase Ib trial, which is expected to begin very soon, will assess safety, tolerability and pharmacokinetics in approximately 30 healthy subjects after 7 days of dosing with 3 doses of PXL065 versus 45 milligrams of pioglitazone Actos. This study aims to confirm the predicted relative exposure and dose proportionality of PXL065 and is expected to support dose selection for clinical stage. We anticipate completion of the Phase I program in the fourth quarter of 2019.

Early in the fourth quarter, we'll meet with the U.S. Food and Drug Administration to discuss the registration program and 5b2 -- 505(b)(2) regulatory pathways, which has the potential for expedited developments and accelerated regulatory approval for this product.

Moving on to Slide 19. The second half of 2019 and 2020 will be filled with several significant milestones that have the potential for significant value creation.

For Imeglimin, as detailed earlier, during the fourth quarter and beginning of 2020, there are many upcoming milestones for Imeglimin. We are very excited that Imeglimin data, including the TIMES 1 readouts, will be showcased at the symposium presentation at the European Association for the Study of Diabetes meeting on September 18. Professor Ralph DeFronzo, a well-known expert in the field, will be leading the discussion.

We expect the Phase III results for the TIMES 2 and TIMES 3 trials, which will mark the completion of the Phase III TIMES programs, in the fourth quarter. As a reminder, TIMES 2 is a 52-week open-label parallel group study to assess the long-term safety and efficacy of Imeglimin in approximately 700 Japanese patients with type 2 diabetes. In this study, Imeglimin will be administrated orally as a monotherapy; or in combination therapy with existing hypoglycemic agents, including a DPP-4 inhibitor, SGLT2 inhibitor, biguanide, sulphonylurea and GLP1 receptor agonist. The Phase III results for TIMES 3 trial will include the 36-week open-label extension period.

As mentioned, the Japanese new drug application submission is targeted for 2020, followed by the product launch anticipated in 2021. In addition, Metavant will meet with the FDA in the fourth quarter to discuss their [preclinical] plan, which is focused on patients with type 2 diabetes and chronic kidney disease stage 3b and 4.

For PXL770, the results from the PK/PD trial are expected during the fourth quarter of this year; and the Phase II results anticipated in the second quarter of next year, in 2020. We also anticipate TIMES 3 publications and presentations for PXL770 to be coming out later this year and in 2020.

For PXL065, I'm very, very pleased to report that PXL065 Phase I data was chosen for a poster presentation at the American association for the study of liver disease meeting in November, in Boston. As mentioned, we'll be meeting with the FDA in early fourth quarter to discuss the registration program and the 505(b)(2) regulatory pathway which has the potential for accelerated development and accelerated regulatory approval, as we anticipate that -- as we anticipate [certain] completion of the Phase I program during the fourth quarter.

As previously mentioned, we are currently commencing preclinical studies on other metabolic disease, and we will provide an update on these studies when information will become available.

In closing this call, I would like to emphasize that we are very excited about our progress; and the achievements [relating] to our robust, well-diversified mid- to late-stage metabolic pipeline targeting large market opportunities for type 2 diabetes and NASH as well as early stage metabolic programs advancing in development. We've made significant progress so far this year and I look forward to keeping you up to date through the remainder of the year.

I want to thank you for your support and will now -- would now like to hand the call to any questions from the audience. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We haven't any question for the moment. (Operator Instructions) We have first question from Bertrand Delsuc from Biotellytics.

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Bertrand Delsuc;Biotellytics;CEO, Founder, [2]

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Perhaps just 2 questions or perhaps 1. About the CMC [path] for 065, I guess you are well advanced because -- if you are already looking [at the base case], which would mean that you could leverage the 5b2 (sic) [505(b)(2)] pathway for the molecule. Can you talk us, can you tell us a bit more on this part of the CMC path ? How do you foresee the manufacturing of 065? Because I guess there are particularities due to the [trial in] production. And perhaps I will have a follow-up.

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Thomas Kuhn, Poxel SA - Co-Founder, CEO & Director [3]

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Thank you for question. So indeed we have made a lot of positive progress on the manufacturing process for 065 on both the drug substance as well as the drug product. And so as you have in mind now, 065 is a [regulator] for pioglitazone. So pioglitazone is indeed a (inaudible). And then we have new specific methods to produce this deuterium into the products to then produce 065 and (inaudible) R-stereoisomer of pioglitazone. So this has been developed and initiated by DeuteRx, and now we will continue by Poxel. And in parallel we have been also working on new drug products. And so originally, the Phase I was performed in the capsule. And we are now moving to tablets because, of course, it is much easier for the patients, to be prescribed with tablets. And so our team has been very actively working on the tablet manufacturing process using this deuterated R-pioglitazone so that it can improve the patient [experience]. So this is all ongoing. And of course, it will further progress during the clinical programs, but yes, I can (inaudible) that we've made real progress on this manufacturing process. Sébastien, I don't know whether you want to add anything on the subject.

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Sébastien Bolze, Poxel SA - Co-Founder, Executive VP of Non Clinical Development and Scientific Director [4]

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No, just maybe to confirm that the process, the manufacturing process, has been developed and is now under scaling-up to higher quantities. And as mentioned by Thomas, this is well controlled and we are moving ahead.

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Bertrand Delsuc;Biotellytics;CEO, Founder, [5]

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Okay. And has it been transferred into a CMO organization? I guess...

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Sébastien Bolze, Poxel SA - Co-Founder, Executive VP of Non Clinical Development and Scientific Director [6]

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Yes, exactly. We have partners, [CGMO], with who we are working to supply the material for the clinical trials.

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Bertrand Delsuc;Biotellytics;CEO, Founder, [7]

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Okay. And just follow-up one was about 770. The patient population for the Phase IIa is patients who likely have NASH. And I wanted to know a bit more about the -- how would you assess that? Is it only based on the MRI-PDFF as the baseline? And how should we consider that? And how do you expect the spread of the stages of the patients?

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Thomas Kuhn, Poxel SA - Co-Founder, CEO & Director [8]

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Yes. Thank you for the questions. So indeed we are not -- to confirm: We are not using biopsy. And so we are using MRI-PDFF as well as other biomarkers. Pascale, do you want to answer these questions?

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Pascale Fouqueray-Grellier, Poxel SA - Co-Founder & Executive VP of Early Development & Translational Medicine [9]

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Yes. This is exactly what you said. And the population in this study will be likely NASH patient, and we are not assessing their NASH stage using biopsy. So the most important assessment will be the MRI-PDFF. And we will characterize the status of the disease only based on the MRI-PDFF, but we will also assess other inclusion and exclusion criteria, one of them also being the liver enzyme [level].

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Operator [10]

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We haven't any question for the moment. (Operator Instructions) We haven't any question for the moment. (Operator Instructions)

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Thomas Kuhn, Poxel SA - Co-Founder, CEO & Director [11]

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Well, indeed that's mean no additional questions.

So once again, thank you very much all for attending the call. And so we will definitely update you on our future progress. And we have a lot of milestones coming in, in the weeks and months to come and we will definitely give you updates as soon as we know more.

With that, I'd like to thank you again for your support and for the time being and wish you a nice evening. Bye-bye.

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Operator [12]

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Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.