DBV Technologies S.A. (NASDAQ:DBVT) Q3 2023 Earnings Call Transcript

DBV Technologies S.A. (NASDAQ:DBVT) Q3 2023 Earnings Call Transcript October 31, 2023

DBV Technologies S.A. misses on earnings expectations. Reported EPS is $-0.1742 EPS, expectations were $-0.15.

Operator: Welcome to the DBV’s Third Quarter Financial Results and Business and Regulatory Update Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Katie Matthews, Investor Relations. Please go ahead.

Katie Matthews: Thank you. This afternoon, DBV Technologies issued a press release that outlines our financial results for the 9 months ended September 30, 2023. This press release is available in the Press Releases 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 design of our anticipated clinical trials, 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. Joining me on the call today are Daniel Tasse, Chief Executive Officer of DBV and Dr. Pharis Mohideen, DBV’s Chief Medical Officer. I will now pass the call over to Daniel. Daniel?

Daniel Tassé: Katie, thank you and thank you all for joining us on this call today. The purpose of today’s call is to first provide a business update on our 2 Viaskin Peanut program, including the receipt of DBV’s requested feedback from the FDA regarding remaining protocol design elements for our 2 pending supplemental safety studies which, as you know, are named COMFORT Toddlers and COMFORT Children and secondly, to review with you DBV’s financial results for the third quarter of 2023. Let me start by summarizing what has already been established regarding our 2 Viaskin Peanut programs in development before turning over to Pharis for an update on requested feedback we have received from the FDA and thus, the next steps in our clinical and regulatory work.

As you may recall, DBV is advancing in parallel, 2 clinical programs for Viaskin Peanut. Viaskin Peanut in toddlers, children aged 1 to 3 and Viaskin Peanut in children aged 4 to 7. And it’s important to recognize that Viaskin Peanut in 1 to 3 year olds and Viaskin Peanut in 4 to 7-year-olds are separate product candidates with independent clinical and regulatory path that we believe will ultimately support 2 distinct BLAs. Now let me pass it over to Pharis to share with you more details.

Pharis Mohideen: Thank you, Daniel. Let’s start with a brief recap of Viaskin Peanut program in toddlers ages 1 to 3 which you will recall, uses the original square Viaskin Peanut patch. We already completed our pre-BLA meeting for toddlers in April of this year. As we previously announced, the agency confirmed that our Phase III EPITOPE study met the prespecified criteria for success for the primary endpoint and therefore, did not request an additional efficacy study. The FDA did ask for a supplemental safety study with the original square patch to increase the total number of subjects on active treatment to approximately 600 per regulatory guidelines. The FDA did not raise any specific safety concerns associated with this request.

The 4-year to 7-year-old indication will also have a supplemental safety study to increase the number of subjects on treatment with the modified circular patch to approximately 600 subjects, when combined with the active subjects in the test, the ongoing Phase III efficacy and safety study. So we believe there is nice symmetry to the 2 BLA programs. The 1-year to 3-year-old indication has a completed efficacy and safety study in EPITOPE and a planned supplemental safety study in COMFORT Toddlers. We believe that this will constitute the pivotal studies needed for a BLA submission. Similarly, the 4-year to 7-year-old indication will have the test for efficacy and safety in COMFORT Children for supplemental safety. We’ve discussed the key design elements of both supplemental safety studies in the past.

But just to remind you, both studies will be 6 months in duration, double-blind, placebo-controlled, 3:1 randomization active to placebo and both will generate adhesion data. COMFORT Toddlers will include 400 subjects and COMFORT Children will be 270 subjects in total. These numbers have not changed. Okay. So that brings us to today. After receiving the Type C meeting feedback on the safety studies in July, we requested clarification from the FDA. There were a few remaining protocol design elements relevant to both safety studies as well as 1 of the inclusion criterion just for COMFORT Toddler that we felt needed additional clarity. I’m pleased to report that we have received written feedback from the FDA, clarifying those remaining protocol design elements.

A scientist in a lab coat, using a microscope to study a sample of cells related to the company’s biopharmaceuticals.

The protocols for both supplemental safety studies will have the same language guiding how the product should be used such as, each DBV712 250-microgram epi-cutaneous system is intended to be worn for a full day 24 hours. We believe that this language is more concise and simpler and harmonizing the language in both safety studies makes a lot of sense. Further to this approach, both supplemental safety studies will seek to enroll subjects that are as closely aligned with their respective Phase III efficacy studies as is feasible. For COMFORT Toddlers, this means using the same eligibility criteria as in the EPITOPE study. In EPITOPE, the main inclusion criteria centered around a documented history of peanut allergy, confirmed by immunologic markers, IgE and skin prick testing and a double-blind placebo-controlled food challenge.

We previously believed that no food challenge would be required for COMFORT Toddlers but in exchanges with the FDA, we chose these inclusion criteria options as the best way to ensure that we could recruit a study population that would be as similar to EPITOPE as possible. While there is a significant body of immunological literature in older peanut-allergic children, the same is just not true in the toddler range. Because of this, we felt that reliance on immunological parameters alone for the main inclusion criteria did not provide the same level of assurance as the EPITOPE eligibility criteria. However, for COMFORT Children, we will use a history of peanut allergy and immunologic parameters for the inclusion criteria. The medical literature supports this approach, as does our experience in the completed 4 to 11-year-old safety study REALISE which served as a supplemental safety study for PEPITES.

With this approach, we are confident that we can enroll a study population that will be similar to that of the test. There will not be a need for a confirmatory double-blind, placebo-controlled food challenge for COMFORT Children. Since EPITOPE was a successful study, meeting the prespecified criteria for success for the primary endpoint and we have received regulatory guidance from FDA, COMFORT Toddlers is our highest priority to get started as quickly as possible. Now that we have received clarification, we can submit the safety protocol to the FDA expeditiously and anticipate enrollment to begin in the first quarter of 2024. In parallel, the COMFORT Children protocol will be finalized and submitted to the FDA. Since it is a smaller study relative to COMFORT Toddlers and we don’t wish to compete with the test recruitment at this time, we plan to initiate enrollment in COMFORT Children after COMFORT Toddlers.

We are continuing to work diligently on appropriate study start-up activities for both COMFORT studies, while in parallel, continuing to advance the test, our Phase III study in 4-year to 7-year olds. To summarize, we are very pleased with the engagement and clarity of the feedback received from the FDA. We feel that harmonizing the approach to how the product should be used is even simpler and more concise than what previously existed. We are confident we can enroll subjects in our supplemental safety studies that will align nicely with the respected efficacy studies and we remain confident that this work will support BLAs in both age groups and potentially bring a new treatment option to clinicians and families. At this point, I’ll turn the call back over to Daniel to review the financial results.

Daniel?

Daniel Tassé: Thank you, Pharis. And now let’s briefly review the financial highlights for Q3 2023. Our cash and cash equivalents as of September 30 are $149.1 million compared to — sorry, $209.2 million as of December 31, 2022, a net decrease of $60.1 million, mainly due to the following: $66 million of cash was used in operating activities, mainly driven by clinical work and initiation of the VITESSE trial where the first patient was screened in March of this year. And then $7 million of net proceeds on the issuance and sale of new ordinary shares in the form of ADS’ which took place on June 16, 2023, pursuant to the company’s at-the-market program which was established in May of 2022. You can see we continue to maximize the efficiency of our spend.

We remain highly committed and disciplined in our cash management. We have a lot of clinical work to do by next year. We anticipate we’ll have about 1,400 patients or subjects enrolled in Viaskin Peanut Phase III studies. So we’ve covered a lot today and if you allow me to recap. Pharis’ team is working diligently to implement the feedback we requested from the FDA into the COMFORT safety study protocols for submission to the agency. We expect to submit the finalized COMFORT Toddlers protocol in the next few weeks, anticipate initiating the COMFORT Toddlers study in the first quarter of 2024. We believe that the successful completion of the supplemental COMFORT Toddlers safety study would be an important step towards filing a BLA seeking marketing approval in the U.S. of this potential novel therapy for peanut allergenic toddlers and their families.

As Pharis mentioned, initiation of COMFORT Children is expected after the start of COMFORT Toddlers and in close alignment with VITESSE recruitment. And we are continuing to advance VITESSE, successful completion of which will be an important step towards filing a separate BLA seeking marketing approval in the U.S. for this potential novel therapy in peanut allergic children aged 4 to 7. I want to thank everyone on the phone and on the webcast for joining us today. And I will now ask Pharis to join me for Q&A. Operator, if you can open the line, please?

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Q&A Session

Operator: [Operator Instructions] Our first question will come from Rajan Sharma with Goldman Sachs.

Rajan Sharma: So firstly, just on timelines and I was just wondering what impact do the need for food challenging COMFORT Toddlers have on your anticipated timeline? So I’m going to say you mentioned that the duration of the trial itself is not changing but just wondering if you expect the need for food challenge to impact enrollment timelines or kind of these which you could enroll that trial? And then I just have a follow-up as well, please.

Daniel Tassé: Sure. Pharis, do you want to take that one?

Pharis Mohideen: Sure. So as I said, Rajan, we anticipate first patient to be enrolled in the first quarter of 2024. We expect that the food challenge could add some time through recruitment period. But we know our sites well and they know how to do food challenges well. And we believe that there’s more understanding of our product and this probably is generated from the New England Journal of Medicine publication. So it’s a really good time. And so once the study is initiated, we’ll have a better understanding of the timeline and we’ll come back with more details. But right now, we’re not going to talk about the back end until we get the study up and running and go in and see how things are going. But we’re confident that we can get this done.

Rajan Sharma: Okay, perfect. And then, the follow-up was just around costs and just wondering if the food challenge requirement impacts the potential cost of the trial and whether you’re comfortable that you kind of have sufficient run rate to fund through to completion of all of the required trial?

Daniel Tassé: So the addition of the food challenge will not add significantly to the cost of the trial. So that’s not a factor here. And as we’ve guided, Rajan, we have sufficient cash to go into 2025. That is not enough, we need to complete all of those trials but we’ll be looking at raising capital at 1 point in time but no rush to do so and as Pharis said job 1 for us right now is to get those studies up and running which we can do rather expeditiously. So this is what we say when it comes to the financial position. We’re in a good position to be able to we think it is right by the business and look at access to capital in due time but we’re in no rush to do so.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Daniel Tasse for any closing remarks.

Daniel Tassé: I just want to thank everybody again for joining us today, important development for us. And as always, we’re always available for continued conversations. Thank you. And I wish also all those of you with little ones, happy [indiscernible]. Have a nice evening.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.