IMUX - NASDAQ

Daniel Vitt – Chief Executive officer, President & Director Glenn Whaley – VP of Finance and Principal Financial & Accounting Officer Andreas Muehler – Chief Medical Officer

Good morning and welcome to Immunic 's Fourth Quarter and Year-End 2021 Earnings Call. My name is Jessica Breu, Head of Investor Relations and Communications at Immunic. I will also be the moderator on today's call. Speaking on today's call are Dr. Daniel Vitt, our Chief Executive Officer and President, as well as Glenn Whaley, our Vice President, Finance and Principal Financial and Accounting Officer. For the Q&A session of today's call, we also have our Chief Medical Officer, Dr. Andreas Muehler on the call. Please note, all participants will be in listen-only mode and this event is being recorded. After today's presentation, there will be an opportunity to ask questions. If you joined a webcast via the

Thank you, Jessica. I would like to welcome everybody on Immunic's year-end 2021 earnings call. I do not want to start this call without expressing our sympathy with the people in Ukraine and expressing our solidarity with them. Despite of these developments, earlier this morning we announced our financial results for the year-end of December 31st, 2021 and highlighted recent activities as well as upcoming milestones to our clinical development pipeline. During today's call, we will talk through our fourth quarter 2021 and subsequent highlights, financial and operating results, as well as anticipated milestones. As Jessica noted, before we close the call, you will have the opportunity to ask questions. 2021 was another year of tremendous achievements for Immunic. Marked by significant clinical progress across key pipeline programs, clearing the way for several important data readouts this year that potentially trans-formative for the company. Notably, during the fourth quarter, we enrolled the first patient in our Phase III ENSURE program of either fully most cancer in patients with relapsing Maghreb discourage. We also completed enrollment in the Phase II CALDOSE-1 trial of [Indiscernible] in patients with moderate-to-severe ulcerative colitis. We expect top-line data for the induction phase of UC trial to be available in June of this year. For our second program, IMU-935, we've reported positive unblinded safety, PK and PD data, from the healthy volunteer portion of our ongoing Phase 1 trial. We also experimented the trial as planned to treat patients with moderate to severe psoriasis. Beyond this, we also initiated an open-label Phase 1 dose escalation trial of IMU-935 in metastatic CRPC and expect clinical safety data to be available in the third quarter of this year. Finally, we hope to see the first clinical data from the segment part of the ongoing Phase 1 trial of IMU-856 in the third quarter of this year, and expect to initiate the third portion of the trial in patients with intestinal barrier function associated diseases during the first half of this year. That [Indiscernible] over you set, let me now walk through the fourth quarter 2021 and subsequent highlights in greater detail. Given the milestones we have achieved so far, our continued pace of development and ongoing interest in our key therapeutic focus areas. In October, we appointed Patrick Walsh to the newly created role of Chief Business Officer. This is a key position within Immunic and Patrick has already proven to be a valuable addition to the team as we work to realize the full potential of our clinical programs. Also in October, we started treating patients with moderate to severe psoriasis in Part C of our ongoing Phase 1 trial of IMU-935, representing the first time patients have been treated with our potentially best-in-class oral IL-17 inhibitor. To enable the rapid conduct of the trial despite COVID-19 related limitations in Australia and New

Thank you, Daniel. We will now review the financial and operating results for the year ended December 31st, 2021. Let me start with the cash overview. We ended the year with $86.9 million in cash and cash equivalents, and also raised an additional $16.2 million through our at-the-market facility so far in 2022. We anticipate this cash balance to be sufficient to fund our operations through the first quarter of 2023. Regarding the operating results, research and development expenses for the year ended December 31, 2021 were $61.1 million as compared to $38.6 million for the same period in 2020. The increase in costs for the full-year reflect the continued ramp-up of clinical expenses related to our three clinical programs, as well as increased personnel expenses related to the hiring of more people to support the company's growth. Increases were partially offset by decreased costs related to our Phase 2 clinical trial in COVID-19 that was finished in the first quarter of 2021 and a decrease in drug supply costs for IMU-856. General administrative expenses were $13.3 million for the year-end December 31st, 2021 as compared to $10.3 million for the same period last year. The increase in costs was primarily due to non-cash stock compensation expense, as well the smaller increases in costs across numerous categories. Net loss for the year ended December 31st, 2021 was approximately $92.9 million or $3.93 per share based on approximately $23.7 million weighted average common shares outstanding compared to a net loss of approximately $44 million or 2.8 -- or $2.81 per share based on $15.7 million weighted average common shares outstanding for the same period in 2020. I would like to remind everybody that our 2021 net loss was impacted by the settlement agreement or subsidiary Immunic AG signed with 4SC AG in March 2021. Immunic AG settled its remaining obligation of a 4.4% royalty on net sales of vidofludimus calcium for $17.25 million. The payment was made 50% in cash, 50% in shares of Immunic's stock. No further payment obligations remain between Immunic and 4SC AG. With that, I'll turn the call back over to Daniel for an outlook on our upcoming clinical milestones. Daniel.

Thank you, Glenn. As mentioned in the beginning of the call, we have a very exciting year, 2022, with several significantly milestones coming up and I'm happy to walk you through these. One of our most important milestones in 2022 will be the readout of our phase 2 CALDOSE-1 trial in patients with moderate-to-severe ulcerative colitis. We currently expect the top line results of the induction phase to be available in June of this year. For our Phase 1 clinical trial of IMU-935, we expect initial results for the third portion in patients with moderate-to-severe psoriasis to be available in the second half of this year. The initial data will provide us with the first important look at IMU-935 safety and efficacy profile in this patient population. In addition, we expect initial safety data from our Phase lung dose escalation trial of IMU-935 in progressive metastatic CRPC to be available in the third quarter of this year. As a reminder, the trial is designed to establish a recommended Phase II dose and just a safety tolerability. And to tumor activity biomarkers and pharmacokinetics of IMU-935 in this patient quarter. Finally, we anticipate underlining safety data from the single and multiple ascending those permits of the Phase one clinical trial of IMU-856 in healthy volunteers. In the third quarter of 2022. In initiation of a third portion of the trial in patients with intestinal barrier function associated diseases, as expected in the first half of 2022, this rate due to the end of our formal presentation. Jessica, please open the call for the Q&A session.

Thank you, Daniel. We will now begin the question-and-answer session with Daniel, Glenn, and Andreas. As a reminder, if you join the webcast via the

Hi, team. Thanks for taking our questions. This is Jessie on for Yas. I had a few on top of those. Based on the, demographics Astex on Friday, what do you guys expect to see paper rates per clinical remission and endoscopy? And what aspects of the baseline do you expect to drive down placebo response?

Hi, Jessi, this is Andreas. Thank you very much for the question. I think we were very happy to provide you the data with the based on characteristics because we believe we have worked hard to find a patient population where we have their good chance of showing the properties of IMU-838 in the right setting in ulcerative colitis patients. What the baseline data showed that we had an active population. You can see just for example in the fecal calprotectin data, but also in demand of patients or proportion of patients that had a very high stool frequency and had blood in stool to a very large degree,

almost in every -- of the stool occurrences. So I think that to my mind, the high activity seen in the baseline, I think is the major driver for giving the drug a chance to show activity in this trial. On top of it, I think the -- since the primary endpoint is a composite out of the endoscopic healing and symptomatic remission, we are also very happy that 60% -- more than 60%, almost 60% of these patients had a bio endoscopy score of 3,

which is also, I think important to limit the placebo response in any IBD trial because it is known that in IBD have a placebo response, including sometimes for endoscopy and having patients with a very extensive baseline disease in endoscopy, I think allow us to limit the placebo response as well. So overall, I think we've been quite happy with the baseline data that we presented and we believe that this enables us to have -- given our drug a chance to really shine in these -- in the study. And I hope to just address all of your questions in all of your aspect.

Yes, thank you, Andreas. I had one more follow-up. And on the phase, if there's -- if there will be a Phase 3, do you plan on running it yourself or with a partner?

I think that's too early to tell. We do, however, are in the middle of preparing, of course, how a phase 3 would look like. We are having a lot of very tight discussions with our medical advisers in IBD. We are very happy that we have a very large and also very well-known group of medical advisers for our IBD program and we -- over the years, we really have had a very close relationship with them and basically in anticipation for the study readout, of course, have a lot of ongoing discussions with them that target also, I think, the positioning of the drug, given what happened in IBD treatment over the last year or so with the repositioning of the JAK inhibitors basically behind, more or less as a medication -- well, behind biologics as a medication of last resort. And also I think we wanted to understand a little bit whether [Indiscernible] the newest entrants in the market had more or less have been observed to be in the same positioning as JAKs for IBD patients as well. And I think that also there's a discussion about the positioning of a drug that has a placebo -like were a very favorable safety profile in IBD patients as compared to these previous entries of other oral drugs. How does this change the perception and also positioning of the drug? I think that was also very important to us in terms of planning phase 3 trials. So this is all ongoing, but I think it's too early to tell. How we do it, because I think you need the data for that as well, and also with whom we're doing it. Whether alone, with a partner, I think that's still open.

Okay. Thank you so much, Andreas.

Thank you, Jessie.

Thank you, Jessie. Our next question comes from Andreas Argyrides at Wedbush. Andreas, please unmute yourself and go ahead.

All right, Good morning. Can you guys hear me?

Yes Good morning.

Good morning. All right. Thanks. Two quick ones from us. So from the full emphasis, trial results, could you provide some,-- maybe some of your thoughts on the explanations on the lessons reductions and visions for more robust change and the neurofilament concentrations at 45 mix compared to 30 mix. And then just if I don't know if I missed it earlier, you mentioned in delay in Part cC for the psoriasis trial, just additional color that would be appreciate it. Thank you.

All right. No, thank you, Andreas. I will address the first question maybe first and then maybe let Daniel talk a little bit about part C for IMU-935. So it's in the emphasis trial, which is -- I think for everybody to understand, this is the Phase 2 trial of IMU-838 in relapsing-remitting MS, where we had reported fantastic results for the cohort 1 to 30 milligram and 45 milligrams. We added a cohort 2 that explored 10 milligram and placebo to really understand a little bit better the dose response curve. And we had published the interim analysis with week 12 data in early 2021, which confirmed I think the dose for relapsing MS that they are using in Phase 3, 30 milligram. So I think first of all, the data in the cohort 2 readout now that we published today, this morning, is confirming I think our conclusions for the dosing. What was interesting, which I also find personally very interesting, is that we knew that from previous DHODH drugs in MS that they have a particular strength on the long-term readouts. On the variables that are responsible for the long-term outcome of patients, specifically, disability worsening, and brain atrophy. So things that are related probably more in terms of the EDSS readout. How much disability you acquire over time in the long term for these MS patients. And the interesting thing that I find very interesting personally is that in the cohort 2 data of 10 milligram. You see a substantial effects in EDSS, and you see a substantial effect in, for example, disability worsening. This is all -- I think the study is too small and has doesn't have a long enough follow-up to really make conclusions. However, I think it gives us a first hint that I think the effect of IMU-838 on disability accumulation over time is potentially -- again, I think very much unparallel to other DHODH products. It's very strong, whereas the anti-inflammatory effect that is more or less related to lesion reduction, I think, is very strong at 30 milligrams, but we haven't seen a strong effect as much in the 10-milligram dose. So I think there's some -- these results confirmed that a drug like IMU-838, in terms of efficacy, will likely have its strength in neuroprotective effects and protect -- and effects that are measured in disability accumulation or potentially also in brain atrophy. In that respect, I think these data are very exciting as compared to just having anti-inflammatory effects. And I think that's very important I think for the positioning of the drug in the future as well. So I'm handing over to Daniel regarding the Part C as regard.

Maybe just go ahead and comment to what you said, Andreas. I think for us, it was really a positive surprise to the -- to see the EDSS data from the $10 million record. This was unexpected, honestly. And I think that speaks for the strengths we have seen here relating to NFL data and so forth and all of that. But let's come to 935 to your second question. I think it's an obvious question. I think we are -- we'll be full our philosophy of being transparent, being early. And if you know us for some time, we usually try to react early if we see things not 100% in line with our expectations. And therefore, we decided quite early is this patient in cohort of [Indiscernible] just recently started. But we felt if we really don't want to have substantial delays, we should add or consider entering another country that just to have a broader set of dermatologists contributing patients. So that's something we decided and definitely want to share them with the market. I wouldn't call it a delay.

I appreciate it, guys. Thank you all.

Thank you, Andreas. Our next question comes from Gobind Singh at JMP. Gobind, please unmute yourself and go ahead. Gobind. Yeah.

Great. Sorry about that. Well, congrats on the pipeline progress. My -- I guess my question would be, if I heard you guys correctly, I think there is the announcement that the interim results from the Phase 3 MS trials and the Phase 2 trial for progressive MS. Those are new and happening this year. So just wondering if you're hearing anything from your clinical sites that might add some color around the enrollment speed. And can you remind us what the bar is in terms of whatever kind of clinical results you're going to be presenting? What would be results that you guys would be excited and continued development?

Hi, Gobind. I'm not sure I totally understand the remark about the timing of the interim analysis for Phase 2 and 3. I have not seen anything in our releases that would even talk about the interim analysis. So I'm not sure. Maybe that was a misunderstanding with some of the things. So just to confirm, the Phase 2 study progressive MS will have its interim readout when half of the planned patients; we have 450 patients, we have 225 patients enrolled. And these 225 patients have reached week 24 to have enough data because we will basically report on neurofilament data as the interim readout. And then for the Phase III trials, we said that we will have interim analysis for the Phase III and relapsing MS, when half of the events meaning relapses have occurred in the study. In terms of the Phase III interim readout, we have to look at the number of events and the frequency of events in this trial. And it's way too early to do this, so there's really no more precise timing of the interim analysis that did I can give you at the moment, we need a little bit more enrollment for that and a little bit more follow-up on these patients. And but just to confirm, non-off these interim analysis is expected in '22. Your other questions about I think enrollment, I think we are very happy to have seen a good enrollment now in all of our MS studies, which are recruiting, all of our -- there are three studies that are recruiting, the Phase 2 study in progressive MS and then ENSURE 1 and 2, which are in relapsing MS and they are recruiting very well and actually progressing as anticipated. So I think at this point, that's the only update I can give you.

Thank you for that. I think that was my bad on the milestone side there. Just one follow-up for me as well on the MS studies with -- there are some recent studies that have actually been coming out about the role of EBV in MS. It's becoming more and more looks like that's causative relation and you presented some data I think recently, and today, you reminded the audience about your data in EBV with 838. Can you just help us connect the dots here in terms of how you think this is going to play out, and if you could relate that at all to the BTKs or any of the other -- the CD20s or any of the other drugs that are popular commercially or in development, and if they have any role on EBV, that would be great,

I think -- yeah, Gobind, I think that's a very good question. And we have been as a team very excited about seeing more data and more information coming out about the role of EBV and MS. And there was always kind of a suspicion that EBV plays a role. And I think it came a lot more concrete now what the role of EBV is. So I think the study that met the most backlash, I think, in public is there was the study in several thousands of U.S. military that were followed over I think 25 years or so And looked at how many of those developed MS and what basically was known about to help status and before that. And the interesting thing was this study for the first time could make a clear link between an EBV infection that becomes neurotropic. Meaning, you see before the -- with the EBV infection, you see an increase of neurofilament at the same time. And those patients who have an increase in neurofilament at the time of EBV infection develop MS. And those, of course, I think 98% or so of the population is -- has an EBV or made an EBV infection. But those who had an EBV infection and which was not neurotropic, that basically did not show a neurofilament increase, basically did not develop EBV. So I think there's no clear link between the EBV infection having a neurotropicin of that EBV infection and developing MS. So that's the onset. It doesn't necessarily have to say that EBV plays a role during the disease. It's the onset. But then there was also very interesting data that came out probably had made less of a splash, but I think as equally important by a Stanford group also in February and published in February of '22 that showed that they looked at the CSF. So it's cerebral spinal fluid of patients during relapse. It was always known that the CSF of patients in relapse contained some your flown events of immunoglobulin, but dated a lot more thorough analysis where there's only go clinical band of Immunoglobulins comes from and what it is. So they've found that first of all, they have to plasma glass in the CSF at that time of relapse that actually producing cross-reactive antibodies. And that's the older your clinical events. The cross-reactive means there's actually EBNA-1 antibodies, but they're cross - reactive to an antigen on microglia in the brain that's clearly linked to neuronal destruction. And so these cross-reactive antibodies are increased, produced by these plasma above. The interesting thing you asked about different interventions that probably could influence these plasma, the interesting thing is that these plasma of us were shown to be CD20 negative, which is kind of important because we are always thinking of EBV infection, as these viruses a highly in B-cells. And you would think that, for example, CD20 -- anti CD20 therapy is or BTK should be effective in eliminating EBV because they eliminate B-cells. At least from this publication that these plus CD20 negative, they concluded that you have to find other therapeutic strategies to really have an EBV, free, B-cell recovery as some that's also be believe it's very exciting for us because it could open the possibility of using, for example, IMU-838 with an established broad antiviral activity and also a EBV activity to help in terms of EBV -free recovery, for example, when you think about de-escalation after CD20 therapies and so forth. I think this is all hypothetical at this point, but I think the hints that we get from this publication, I think are very exciting for a drug like IMU-838. Just needs a little bit of time to spread, I think, to scientific community and probably a few more confirmations of this. But I at least the data that came out about EBV were very exciting for Immunic and for vidofludimus calcium.

Thank you. Our next speaker as Matt Kaplan, of lender [Indiscernible] Matt please unmute yourself and go ahead.

Hi. Good morning. Can you hear me?

Yes. Good morning.

Good morning.

Congrats on the progress. Just a quick follow-up to the last question if remain on our topic, I guess, how does the concentration that you studied and saw in in vitro in terms of the 3.3 to 30 micromolar correlate with the concentration that you're seeing with 33A in Vivo and in central nervous system. Since you're getting, across the main barrier.

Hi, Matt. So I think -- thank you for this question. I think we have seen a lot of slack companies that do BTK inhibitors, claiming that they are the only drugs that really have a central acting medication for MS. And we always suspected that that statement is probably not entirely correct as some of these smaller molecules should enter the CSF and the essential component as well. So these are preliminary data. We're working on expanding this and having more data and confirming a little bit closer to the human situation what concentrations we'll get. To answer really fully your question, I think that you have, is that are these concentrations enough to make a meaningful contribution? Also in terms of efficacy from the central component, when you look at the relationship between serum concentrations and CSF concentrations, we see that we are at least on par, I think, with the data that were -- the publishment of the BTK inhibitors. And we actually believe that the BTK inhibitors are not that unique in terms of being as a small molecule to act in the central compartment And it may not be what sets them apart. So I think that to me was the main rationale for showing these rat data. But we will continue to generate data that will show that I think IMU-838 or vidofludimus has access to the central compartment as well.

Okay. Very good. And then a question in terms of data that you're -- that we should be looking for in a strike cohort for 935 in the second half of this year. Can you give us a sense in terms of what you're looking for potentially in the efficacy profile of the drug and what you're modeling there and what we should be expecting?

So I think we'll take it as a little bit. I we're learning a little bit some history. History in terms of the different drugs that had a full Phase III program and psoriasis where you look at how quickly for simple things like deposits for change over time. Usually the Phase 2 trials are done with a 12-week endpoint or three months endpoints, and you see that after four weeks or after one month, you have a hot maximum effects in terms of [Indiscernible] as compared to three months. So I think you have -- the good news as I think you can very real estimate what's the change in positive score? Nothing. The positive 75 or so. But in the actual positives for what the change in extra positives for the average change should be. And so when you look at this, I think you see that maybe the IL-17 antibodies, IL-23 antibodies, they're on the range of 30% to 35% change that they have at Week 4. With Vitae Pharmaceuticals, the RORgamma inhibitor some years ago they found in their trial in moderate to severe psoriasis patients, I think that two dose groups and I think one dose group was somewhere between -- was somewhere around 20% change of PASI and the higher doses, I think, 28% change in PASI. So I think that's also the expectations that we have for our drug that we want to show that we're in the same range somewhere between the Vitae compound and the L1723 antibodies. So of course we measure much more in this trial. We do biomarkers or they have skin biopsy, where we do immunohistochemistry. We look at other clinical scores like for example an itch component, which I think is very important also to see early efficacy and so -- but deposits for us usually did the most well recognized assessment in psoriasis and everybody knows this, so that's why I think it's also -- for us, I think it's the most visible outcome of this trial probably.

Okay.

Matt, one other comments to your first question, I think -- regarding the coverage, I think there's also referring to the EBV activity. We were surprised that just by accident, basically we have seen this benefit for preventing COVID-19 and again --versus [Indiscernible] [Indiscernible] and everything. But I think what's [Indiscernible] remarkable, surprising difference between the active in placebo group on COVID underlining the broad antiviral activity. And that also [Indiscernible] for EBV, deconcentrationship in the same range and therefore, we believe that that's covered and the tough levels really covered at in Vitro data.

Great, And just, just last question in terms of the recent announcements and invasion, Ukraine, what's -- what's your exposure in terms of your clinical development programs in Ukraine.

Of course, that has been some concern to us over the last weeks already, yes. I mean, it was an event that of course surprise the world, but I think we had looked at that. What we can say is that the CALDOSE study, our study in ulcerative colitis, is completely unaffected. And the reason for that is that we had done -- we have been very specific of doing the data cleaning for all of the data up to week 10, which is our primary endpoint. As quickly as possible, we have done all the mountage during visits. So that is all done. We basically have these data and of course there's nothing unblinded. So there are patients that are in extended induction,

so we can't unblind the study yet. And that will go up to Week 22. But all of the data to go into the primary endpoint already cleaned source, they're verified. So in CALDOSE we have actually no exposure. Ukraine had been part of other studies of course, especially the MS studies are done in Ukraine as well. We have also started to compliment the -- I think we have to look a little bit at this is dynamic situation, and of course, this is very unfortunate situation. But we have to monitor orders -- What kind of long-term repercussions this has for doing clinical trials in Ukraine. We have implemented some countermeasures ahead of time. We have to just see how this develops and we anticipate that that's something that given the -- I mean, it's hard to expect at this early time how long this and how severe this conflict will be. But I think the best thing we can do at this time is monitor the situation day by day.

Okay. Thank you.

Thanks, Matt. Next is

Good morning, guys. Thanks for taking my questions and clearly a nice cadence of data readouts ahead. So I know CALDOSE is probably going to be of significant focus to investors. So I just had a couple of questions. I think the first one is, I know the study on gold biologically naive and biologically putrid to patients. So should we expect to see very different efficacy profiles in these patients? And then similarly, should we also expect to see differences in efficacy profiles between patients with different baseline Mayo scores coming into the study?

So this -- of course I can only take the history because this can differ from drug-to-drug occasionally based on the mechanism of action. Traditionally, I think the -- biologically experienced patients had shown less of response to excess treatments than the biologic-naive patients, so that's, I think the general wisdom in IBD that's say this way, and so that includes a lot of biologically naive patients. I think very consistent with the likely positioning of this drug is -- to me is good news because it gives the drug the chance to really show a good activity versus placebo to my mind.

Thank you. And then I just have another follow-up here. What are your thoughts regarding the differences in the [Indiscernible] of ozanimod versus [Indiscernible] what would expect to see in terms of time to response between the two different drugs in the induction phase?

As an S1P modulators that has a big different of course, mechanism of action. And you can see this on several things. For example, you see S1P modulators basically more or less trapped lymphocytes in lymph nodes or in other than lymphatic tissue, and leads to a lowering of basically use of lymphopenia and bloods. And you can see the effect very clearly in all of the trials. And does that's part of the mechanism of action which leads, of course to, for example, infections, virus reactivations because you limits the ability of the immune system to respond. There's also now, [Indiscernible] echo last week there were presentations, for example, health vaccination, efficacy and humor responds against [Indiscernible] infection is much lowered for patients using Ozanimod. All of this is not the case for IMU-838 because we have very different mechanism of action. We have a very selective effect only on what we call the bad guys of the immune system, the hyperactivated immune cells that are causing the autoimmune disease and relieve the, basically innate immune system and immune response against infections is completely unaffected and we have seen this now and several trials where we've seen that the rate of infections, for example, versus placebo control is not increased. In some of the studies, it was actually slightly decreased. So I think that maybe to the differences in MOAs. The Phase 2 study and Phase 3 study, I think use an induction period of eight weeks in ozanimod. I hope I'm correct. I've seen so many presentations last week. I think that I'm at an age where I can be confused sometimes. But I think it's eight weeks. So we use ten weeks it's something that sometimes doesn't make a difference for over two weeks because often these curves and clinical trials in terms of response, also have this kind of exponential effect happens in the early weeks or the early two or four weeks. And the way you define induction period often still gives the chance for the drug to work in all of the patients. Maybe patients that are responding slower. We know from our Phase 2 trial, entrants trial in quarter, dependent patients that the ability to withdraw corticosteroids was very quick. Within the first two weeks, I think you could lower to 20% of the baseline dose. So that this is all published. But the -- so we believe that also the -- our mechanism of action leads to a very good and fast onset of the disease and the -- again, the time [Indiscernible] eight to 10 weeks is really -- doesn't make a lot of difference. It's just in a clinical trial, you want to give the drug a chance to also work in most of the patients.

Thanks, Andreas. And I don't want to put words into your mouth. So just for clarification here, you do expect a fast onset of action. And then in terms of the magnitude of response, do you expect that to be similar or should we be looking at it more as a composite, meaning, the efficacy, safety, balancing as you get mentioned how you expect it the way to come out better on the safety?

So I think maybe just start with the back, the last statement. I would totally go with that. We always expect to be the safest drug in any indication.

Yes. Surely.

I think that we have learned now and we're very happy about this. And that's basically the foundation on which we build our efficacy results.

And first onset of action I thing that's also.

Yeah, first onset of action, I think we have the data from the entrance trial that actually indicate a very fast onset of this mechanism of action. What expected efficacy results, I think ozanimod, especially in Phase 2, hasn't shown overwhelming efficacy results if you look at other drugs. So you always look at this clinical remission, which endpoint that is very similar to or identical to what we have here in this trial. And for some reason, we call that differently, but it was on the suggestion of the FDA. We call it the composite out of endoscopic healing and [Indiscernible] a medical mission, which is exactly the same definition is everybody is using for clinical remission. And you've seen that you have data let's say for Tofacitinib we have only 3% or 6% depending on the dose difference between active and placebo, and then you have the best drugs that probably have like 25% difference between active and placebo. And usually look at the differential between active and placebo that's important. Ozanimod was more on the medium end, which I think was like 13% difference, if I remember it well. But I think we would like to come out with a strong efficacy and we have talked to our medical advisers and I think very consistently they say for your safety profile, I think you have to have around 15% of difference between active and placebo to really have an outstanding efficacy.

Thank you. And then just couple of quick follow-ups here. Folks, they kind of like to change the goalposts, assuming that the data from the Induction Phase comes out really good, how do you think that do risk the maintenance phase of the study? And then is it possible to make changes to the maintenance phase based on some things that you do observe in the induction phase of the study?

The last question is very easy, No. They did protocols fixed and also we do, we randomization for maintenance space, which is kind of usual in many IBD trials, because you expect that a maintenance dose maybe lower than reduction dose because here you and the induction phase, we take sick patients very quickly from active disease to non-active disease. Whereas the maintenance phase you maintain the non - active disease. And that has been done in several trials. [Indiscernible], for example, also is a very different dosing for the maintenance phase. So re-randomization is important. In terms of going to Phase III, the induction data are really important data and this will decide whether you can go into Phase III. A Phase 2 study, and that has been shown by many other trials, doesn't necessarily have to include the maintenance phase. And many Phase 2 trials have not. We have decided to include the maintenance phase for the reason that the we want -- that in Phase 3, you have to show not only induction but also maintenance of effect. So it is obligatory in Phase 3, and we want to learn a little bit more about Phase 3 planning, statistical effect, size, and so that's why we included this in the Phase 2 trial as well. But I would not -- first of all, the readout that we have in June for the induction data does not include maintenance data because the maintenance is ongoing at that time. But also, it will be available thereafter, but it's more or less a tool for Phase 3 planning rather than a full-fledged efficacy readout for the study, for the Phase 2 study.

Thanks, guys. Now I'll save my final question for a follow-up call as I know we're approaching the hour here. Thank you again.

Thanks,

Thank you,

Good morning. Can you hear me okay?

Yes. Good morning.

Hi awesome. Congrats on your progress. So just started the discussion with respect to your calories one trial design. I see that the 83% of the enrolled patients are biologically naive and 17% had prior biological exposure. So I'm just curious, better, the intention is to position IMU-935 off after immunosuppressants, but before TNF alpha inhibitors in the treatment paradigm.

So I think -- I would not draw that conclusion, but I think that would be a wonderful positioning to be honest. Into discussions. I'd said that we have a lot of ongoing discussions with our medical advisers that includes of course, discussion on positioning. And over the last 3, 4, 5 years, there have been several oral drugs that went into [Indiscernible] approved or late-stage approval process for ulcerative colitis, and there was always a discussion where they should position. They always -- they aim for positioning to basically prior to biologics and after immune modulators. And none of them really has achieved [Indiscernible], had to do with the safety profile. And the FDA was very specific now, but all of the JAK inhibitors, and they actually named not only tofacitinib deliver very specific that this will apply the same positioning from their point of a regulatory positioning would apply to really only after at least he had one biological failures. It has more or less also seen in the minds of the customer and the [Indiscernible] as a medication of last resort. And this really apply to all of the JAKs, including Lucitanib, that is specifically mentioned in that FDA communication as well. Ozanimod also has a considerable amount of safety challenges as well, and [Indiscernible] [Indiscernible] see it as a disappointing entry into the UC market and the IBD market that will probably also end up with a more or less the same positioning as JAKs, which leaves therapeutic white space, yes, where everybody wanted to be completely open. The drug that is -- has a good safety, so you can use it early and use it in many patients early on in their disease right after you use the 5 - ASA and corticosteroids, and before you use biologics, so -- and I think that's -- we're in our discussions with medical experts to see as exciting for this -- for this program. The 83% biologically-naive is a -- I think is a measure of maybe some of the countries -- and so we said -- we were in. It was not intentional. I think they all commit, but it was not intentional.

Got it. Thanks for the clarity. So there is a French company called Inventiva. It's also developing oral RORgamma inverse agonist and that's currently in Phase 2B trial in psoriasis patients. So can you outline how your IMU-935 is differentiated from Inventiva 's oral RORgamma agonist inverse agonist.

Thank you. That's a good question, and I'm not sure if this refers to a scenario again, which is known in Phase 2 by Anthony, if you got it right. So this was originally developed by inVentiv. I forget it, right? That molecule is I think an interesting component of interest to We have accomplished a lot of data on our track, tons of more data and then have a published for the [Indiscernible]. inVentiv molecule about mode of action, selectivity, exposure, PK, safety and so forth. We're [Indiscernible] we have a best-in-class and launching, but let's wait a little bit until we get more data for severe managed.

And specifically would like to point to the publication we made in December and you can find it on the homepage, there was an update on specifically in selectivity of our drug. So then we selectively suppressed IL-17 or Th17 polarization differentiation, we suppressed IL-17 in a very important function, human lymphocytes at totally absence of impacting thymocyte maturation. We have not seen any other company publishing such data, so we believe that this is a quite unique feature for our drive.

Great. And with respect to your ongoing metastatic CRPC trial, what do you need to see to more the program forward and what are your go and no-go considerations?

So this is a phase I in CRPC and we look at this as a Phase I trial where I think most importantly, we want to escalate those switch as something that you want to do, an oncology indications. And which -- and a dosing, of course on oncology is expected to be quite different from immunology indications. And of course, you also want to have maybe a first hint of the things are happening. I wouldn't call it efficacy, I would call it more that you have effect that you could translate into some efficacy in future trials. And that's, I think what we call expected Phase II dose. It's a dose that is large enough -- still be safe, but it's large enough to cause biologically effects that could translate into clinical activity in future trials. You've seen this in some other Phase 1 trials in oncology that you're not looking for systematic efficacy yet, but you're looking for biologically effects that you can see at this dose, that you can translate into efficacy in a Phase 2 trial.

Okay, one final question from me. I know you spoke about interim analysis for your Phase 3 ENSURE program. So I'm just curious. I know you will be assessing event rates, but will you be looking at other endpoints as well during the interim analysis period?

No, we're not looking at endpoints actually in the interim analysis. We're looking at events rates, and basically the what is the hazard ratio of events rates. Just whether our assumption what hazard ratio we get in this trial will be confirmed by this interim analysis. And really the idea is that you have to make assumptions here that drive the number of patients needed for this trial. I think we know from Phase 2 already that of course you have an effect on lesions, you have an effect on relapse activity even in this small population. But we need to see that our assumptions for the hazard ratio was the same. So we're not really assessing any specific endpoints in the interim analysis for the Phase 3. We're looking at the hazard ratio and see how this translates into patient population or patient numbers needed.

That's it from me. Thanks for taking my questions and congrats on your progress.

Thanks.

Thank you. Finally, we have net current, so apologies. If I pronounced correctly at SVB year in connected, please unmute yourself and going.

Hi, this is Matt on [Indiscernible] from SVP. We haven't two quick questions here. So the first one recording the festery entry trial on what's the thinking behind the 18-month start point. And the use of time to first relapse after primary endpoint and have a quick follow-up.

You said 18 months endpoint?

Yeah, 18 weeks. 72 weeks. Yeah. Yeah.

Yeah, yeah. Sorry. The idea of the 72-week follow-up period, I think, is looked at in terms of being a placebo-controlled trial getting enough -- having enough chance for enough relapses to happen in a longer follow-up period, but having the follow-up period short enough to be able to do a placebo-controlled trial in as many countries as possible. So that's the short answer. And then time to first relapses. Time to first relapses are -- the Regulators ask for a relapse related endpoint in the Phase III study. And that's been traditionally also done in all the other trials. The guidance actually give you a choice of annualized relapse rate ARR, which was traditionally used in Phase III trials, or time to first relapse. Time to first relapse has become more interesting as relapse rates in MS patients are very well-documented to go down over the last two decades and considerably going down so that ARR assessment becomes more and more difficult to do with a reasonable number of study populations. I think there have been actually published reports that compare these two endpoints and basically really highlight the advantages of time to first relapse as an endpoint for relapse.

Got it. And another question regarding the Phase 2 CALDOSE-1 trial, could you remind us quickly again what are the specific efficacy threshold and clinical improvement to view this as a positive dataset?

So I think the -- what we -- you mean in terms of statistical planning? Just wanted to understand. Our statistical assumptions more or less, what -- how we looked at the --

Yeah, like the efficacy threshold or the bar for success here.

Yes. So we have made statistical assumptions that are very much in line what I just outlined as the expected delta. And we also made assumptions, of course, for the -- we had to make some assumptions for the placebo response. Yes. So we know that all of the -- for the full clinical remission, and there's good summary is now available on there. Look at other trials. The placebo response is basically 10% or less, often, considerably less. And we have basically been conservative and basically assumed also a placebo response of 10%. And then basically added the delta. And we also assumed, for example, a dropout rate of 20%, and then we came up with basically the 240 patient sample size that they needed. So we have actually recruited 263. We had very good success, especially at the end of the trial, recruiting very fast. So we had a little bit over recruitment, and also the -- I think we haven't seen the dropout rate. We had seen less dropout. So we feel very comfortable that I think just statistical assumptions, I think will lead us to success in this trial.

And if it comes to effect size, maybe comment through mine end. If you look on the whole -- the plenty molecules which are used here and also on the biologics, if you have something like the effect size [Indiscernible] or something like that, this would be a success of course.

And I think the biggest challenge in the last couple of years was more, as Andreas elaborated, on the safety concerns for direct second JAK inhibitors, which were unexpected and I think limiting the use there, specifically in this big gap between the current baseline that many cases like to metallocene’s and steroids, and so forth and the antibodies.

Thanks again for the question

Thank you Nate and thanks everyone for great questions. And this concludes our question-and-answer session. I would like to turn the call back over to Daniel for any closing remarks.

Sure. Thank you, Jessica. And thanks to today's attendees for your insightful questions. We're very excited about the progress we achieved last year and the value inflection points we anticipate this year, including the Phase 2 after declining data for vidofludimus calcium in June and initial patient data for IMU-935 in the second half. With this, I would like to close today's call. Thank you very much for joining, and we are happy to answer any additional questions while online.