Good afternoon, ladies and gentlemen and thank you for standing by. Welcome to today’s Inventiva’s Full Year 2020 Results Presentation. At this time, all participants are in listen-only mode. [Operator Instructions] I must also advise you meeting is being recorded today on Friday, March 5, 2021.

And may I have hand the meeting over to your host today, Frédéric Cren, Chairman, CEO and Co-Founder of Inventiva. Please go ahead, sir..

Thank you, operator and welcome everybody. Good morning and good afternoon. And I am very pleased to launch this 2020 financial webcast. As you know, 2020 has been a fantastic year for Inventiva. I will be doing some – with my colleagues some forward-looking statements. So, please look at the regulatory documentation that is available on our website.

I will be sharing the floor today with Pierre, our CSO and Co-Founder with me, with Michael Cooreman, our new CMO he has been dialing from the U.S. and with Jean that will give us an overview of the figures. So, let me go immediately into the core of the presentation and just give you some highlights of this fantastic 2020.

So, if we start with landing our lead program in NASH, I don’t want to spend too much time detailing the fantastic achievement that has been done in 2020.

Pierre will go through the result of NATIVE that led us to obtain breakthrough designation into very positive meetings with both FDA and EMA and Michael will run you through the NATIVE 3 trial that is starting in a few weeks.

Nevertheless, we would like to point out a very important view that we got from FDA very recently it’s a couple of days old and that concerns the fact that the FDA has confirmed that the toxicology package is complete and acceptable to support NDA filing.

This is another step towards the lanifibranor and another step towards the potential commercialization of the product in NASH. If we turn to odiparcil in MPS, as you know, we are extremely thrilled of this program of the clinical data we published late 2019.

We also obtained in 2020 Fast Track designation from the FDA, but you have been following us and you know that we have decided to focus our resources go financially in human in NASH and decided to look for a new home for odiparcil to continue the program.

This evaluation of the strategic option is currently ongoing and we are confident we will be able to update all of you in 2021, about the future of this company. Looking to ABBV-157, I should say cedirogant, this is a new name that has been awarded by the WHO, following the completion by AbbVie on the international nonproprietary name.

We are truly excited by this program. We have seen regularly AbbVie giving updates at JPM or during their annual webcast and it’s great to see that when they speak about early promising compounds, they often mention cedirogant.

So that’s great and we are looking to obtain the result – the clinical proof-of-concept in Q2 2021, a slight delay compared to Q1 as previously announced due to COVID situation. Of the news, of course, you know that we are actively preparing the launch of the Phase 3 of lani in NASH and to do that, we have opened the U.S. subsidiary of Inventiva.

It’s open in live and we are building our team there. He is one of the first task of Michael who has joined us since a couple of months ago and he is actively building the team. We have also reinforced our cable network and we were extremely pleased of the collaboration we have established with Dr.

Sanyal who has been instrumental in our discussion with the FDA. Of course, financial also, we have been extremely busy with Jean and the rest of the team to reinforce our position. Several capital increases, several – also one agreement with the French government for €10 million, and especially the IPO in July on the back of the positive data.

Now, we have a comfortable and strong cash position, ensuring cash runway through Q4 2022. Let me now turn to lani and to Pierre who will go through the product and Michael will then present you the NATIVE Phase 3..

Yes, thank you, Frédéric. So, as you all know, lanifibranor is the only pan-PPAR agonist in clinical development for the indication and treatment of NASH and improvement of liver fibrosis. You know that it has an unprecedented chemical structure and unprecedented pharmacological profile.

It’s pan-PPAR agonist with moderate and well-balanced activity across those 3 PPAR isoforms, not fibrate. Recently, a few months ago, we obtained breakthrough therapy and Fast Track designations that was granted by FDA. Let me turn on to next slide.

So, preclinical investigations have shown that most if not all, of the pathological features of NASH can be addressed by lanifibranor through activation of several PPAR isoforms. So, for example, the PPAR delta and gamma activation leads to a strong anti-fibrotic activity.

These three isoforms are involved in the inhibition of inflammation and ballooning induced by lanifibranor, while the alpha and gamma isoforms are involved in the reduction of intrahepatic vascular resistance and portal pressure, which was observed in animal models of cirrhosis and data has been published recently. Next slide.

So, in non-clinical tox studies with lanifibranor, favorable tolerability profile was observed. This profile differentiated from what was previously reported by single or dual PPAR agonist from different chemical classes.

And as mentioned by Frédéric, it’s important to note today that recently FDA confirmed that this non-clinical tox package is complete and acceptable to support the filing of a new drug application. Next slide, please.

So, following the successful outcome of the NATIVE Phase 2b trial with lanifibranor in NASH, we have been this last month very busy discussing with the regulatory authorities at the EMA to finalize the Phase 3 design and Michael Cooreman, our CMO will present the details and the key milestones of this study.

To complete the clinical development plan of lanifibranor in NASH and besides the study in collaboration with Professor Cusi, evaluating the effect of lanifibranor on liver insulin resistance in diabetic patients with NAFLD, we are still working on the preparation of additional profiling studies evaluating, for example, the potential of lanifibranor in NASH compensated cirrhosis and this on the positive of – on the back of the positive preclinical finding.

And we also are working on estimating the potential of lanifibranor to be used in combination with other therapies to further strengthen its value proposition. Next slide. So, before going into the details of the Phase 3 trial design, let me recap on the outcome of the Phase 2b NATIVE trial.

As you all know, this study investigated the efficacy and safety of lanifibranor 800 and 100 milligrams once daily in non-cirrhotic NASH patients. Next slide, please. In the ITT population, all histological endpoints were met. The high dose adds a significant effect on improvement of fibrosis by at least one stage and no worsening of NASH.

And both doses had a significant effect on resolution of NASH and no worsening of fibrosis, as well as on the composite endpoint of resolution of NASH and improvement in fibrosis, where a responder is defined as the patient, showing both NASH resolution and improvement in fibrosis.

And for this composite endpoint, compared to placebo, we observed the 3x and 4x more responders in the low and high dose group respectively. Next slide.

If we actually focus on the F2-F3 subpopulation, which represented 76% of the patients in NATIVE 2 and will be the target population investigated in NATIVE 3, we can see that the overall picture is similar, with a statistically significant effect of the two doses on NASH resolution and no worsening of fibrosis as well as on the composite endpoint and a statistically significant effect of the high dose on the improvement of fibrosis with no worsening of NASH.

So, consistent with this histological data and the mechanism of action of lanifibranor, we also observed an effect on several circulating biomarkers that are relevant of NASH pathophysiology as exemplified here on fibrosis, apoptosis and inflammation.

The native biomarker database actually includes data on more than 80 circulating biomarkers and this database will be further analyzed by Professor Jérôme Boursier and his team in order to identify one, several or a composite score of biomarkers linked to lanifibranor histological response and these to be considered for use as the surrogate efficacy endpoint reasonably likely to predict histological improvement in the commercial setting.

The selected biomarkers or the biomarker competence score would then be validated during the upcoming NATIVE 3 trial. Next slide please. So, additional data from NATIVE Phase 2b trial on metabolic parameters of patients with NASH are following. So first, we see here the effect of lanifibranor on liver enzymes.

As you recall, we had a quite a quick normalization of ALT, AST and gamma GT that was sustained all over the study duration.

Next slide, consistent with the people, alpha and delta activation by lanifibranor, we also observed a positive effect on the lipid profile with an increase in HDL cholesterol, which achieved maximal effect already at Week 4, as well as a sustained decrease of circulating triglycerides and there were no signs at all in the LDL cholesterol in those patients.

Regarding glycemic control, so this is in diabetic patients, lanifibranor further improved glycemic control with the decrease of glycated hemoglobin by minus 0.5% that was already achieved by Week 14 phosphate. And this of course is a consequence of improved insulin sensitivity by lanifibranor. Next slide.

So in terms of safety, lanifibranor continues to show favorable safety profile. With dropouts due to AE well balanced between those three arms there was a moderate bodyweight increase which is a consequence of insulin sensitization and give you more details on that in the forthcoming slide.

And there were two adverse events, peripheral edema that we have considered are related in each lanifibranor dose group. Next slide. So regarding SAEs, when we – when excluding those linked to the biopsy procedure, we actually end up with serious AEs in the placebo group, 2 in the low dose and 4 in the high dose group of lanifibranor respectively.

So, peripheral edema, those were not flagged as a concern by study investigators for several reasons before, because they were limited, transient, mostly mild and the majority were considered unrelated and not requiring specific treatment. And you can find the details of this analysis on this slide.

Regarding bodyweight gain, the increase is consistent with insulin sensitizing pharmacology. There is scientific literature available on the topic, which indicates that the weight increase is not due to water retention.

And finally, based in our previous study in systemic sclerosis patients, where lanifibranor was administered during 1 year, we observed that weight gain was plateauing after 24 weeks of treatment. Next slide.

So, this data actually comes from work by Gastaldelli and Cusi in NASH patients, where we can see that insulin sensitization by pioglitazone leads to an increase in fat deposition in subcutaneous adipocyte, while decreasing visceral and ectopic fat deposition, here exemplified in the liver.

This distribution of fat actually comes with an improvement of NASH as shown by a decrease in that score. So, this weight increase actually signs a shift to help your metabolic status. Finally, we believe that pan-PPAR activation in NASH patients could lead to a reduction of the cardiovascular risk.

And this is based again on several studies published with pioglitazone, for example, the proactive study, which included more than 5,000 Type 2 diabetic patients, where pio led to a significant reduction of cardiovascular death, non-fatal myocardial infarction and stroke.

And this reduction in death, MI and stroke was also reported in the meta analysis of 19 randomized-controlled trials, including more than 16,000 patients with diabetes.

Finally, in the IRIS study, which was performing close to 4,000 non-diabetic patients with recent ischemic stroke, or transient ischemic attacks, pioglitazone reduced fatal and non-fatal stroke as well as myocardial infarction by 26%.

And regarding increased risk of heart failure, there are many studies listed here showing no increase in heart failure with pioglitazone in patients without already pre-existing or suspected heart failure. The next slide is to conclude this part.

The Native Phase 2b trial data has indicated that lanifibranor has the potential to address most, if not all, features of NASH in a safe and efficacious manner, justifying its breakthrough therapy designation and the start of NATIVE 3, our study in non-cirrhotic NASH patients.

And with that, I will leave the floor to Michael who will present the design of the Phase 3 trial. Thank you..

Thank you, Pierre. So, on slide – next slide to the Phase 3 trial is meant to achieve registration for the indication of NASH with F2-F3 fibrosis. Next slide. This is some large study.

It’s a randomized, double-blind, placebo-controlled multi-center, of course, Phase 3 study evaluating the long-term efficacy and safety of lanifibranor in adult patients with NASH and liver fibrosis. The study consists of two parts.

Part one is consists of treatment duration of 72 weeks, so 1.5 and part two is the extension period, which is defined by events or end of the study, so clinical outcomes essentially.

Inclusion is based on inclusion criteria, of course and critical years of screening biopsy to define the activity of NASH and fibrosis great and then patients who are randomized into three arms, placebo, lanifibranor 800 milligram once daily, lanifibranor 1200 milligrams once daily.

And we have two doses in Phase 3 study based on the results of the Phase 2 native study where two doses were shown to be efficacious. So, the inclusion criteria are based on the SAT score. This is a score that is focusing on the activity of NASH and fibrosis which is the criteria that are important for treatment of NASH.

And as I mentioned, randomization is one-to-one-to-one. So it’s an equal randomization to three groups and patients are stratified according to whether or not they have Type 2 diabetes. And as I mentioned, patients are F2-F3 fibrosis, the study will be conducted globally. At least a third of the patients roughly will be from the United States.

The study is powered for 90% power and that led us to a sample size calculation of circa 1,900 patients for Part 1. Histology, liver histology is so important for the inclusion and evaluation of efficacy. So there is a central biopsy review, which is done by two expert pathologists in the field. Next slide, please. Next slide.

So, Part 1 is designed to obtain accelerated approval in the United States according to Subpart H and conditional approval with the EMA in the European Union.

Primary endpoint is at Week 72 in those 900 patients and it’s a composite endpoint of patients having both resolution of NASH and fibrosis improvement of at least one stage and that is very important as it differentiates lanifibranor from other compounds.

Key secondary endpoints are NASH resolution and no worsening of fibrosis and improvement of fibrosis and no worsening of NASH, corresponding to the endpoints in the guidance of the FDA and EMA.

We have secondary endpoints, most important ones secondary and exploratory endpoints are listed here, glycemic parameters at during the study at Week 12 and Week 24 in patients who have Type 2 diabetes, who are not well-controlled.

So, proportion of patients who have that HbA1c back to normal composite endpoint of both NASH resolution and fibrosis improvement in Type 2 diabetes patients. NASH goes along as a metabolic disease with chronic kidney disease of the risk for chronic kidney disease. So, an effect on renal function is on an endpoint as well.

And then of course, the reduction of cardiovascular risk, including the MACE score or the major adverse cardiovascular events, which include non-fatal myocardial infarction, non-fatal stroke, cardiovascular death, and hospitalization for unstable angina and we have also included quality of life evaluations. So next slide, please.

Part 2 is the extension period. Just waiting for the slide, yes, this is in – the objective is to obtain full approval in the United States and European Union. Part 2 is the objective is to show an outcome benefit in addition to the histological improvement, which is accepted surrogate endpoint.

The key endpoints in Part 2 are based on clinical events, in a total of circa 2,000 patients and that sample size is calculated on the event, the expected clinical events. These include histological progression to cirrhosis.

We include patients with F2-F3, so progression to F4, all cause mortality, and then hepatic decompensation events, which is relevant clinical outcome.

These include hepatic encephalopathy, variceal bleeding as a manifestation of portal hypertension, ascites, new onset ascites during treatment and other complications of ascites such as spontaneous bacterial peritonitis, worsening of liver function, as measured with MELD score, an increase of 15 or more or liver transplantation, those are the outcome measures of Part 2.

And the trial ended is defined by and defined number of clinical events, which allow us to be detecting the effect size between active and placebo arms that is clinically significant.

The timing of the final biopsy which will evaluate the histological progression of the disease is based on – is done on a per patient basis and we have screening tools, which include imaging FibroScan, that give us an evaluation on the progression to cirrhosis.

So, it’s based on non-invasive testing or if there is no such progression on these non-invasive tests at the time the trial ends. Next slide please. Next slide.

Yes, the composite endpoint which combines resolution of NASH in fibrosis improvement differentiates from other compounds which are in advanced clinical development in NASH and primary endpoint addresses the major pathways of the disease, upstream metabolic inflammation and downstream fibrosis.

So, achieving both of these histological outcomes reflects a stronger impact on disease modification compared with improvement in either the steatohepatitis alone or fibrosis alone.

If met, a label for the treatment of NASH and the improvement of liver fibrosis of both these endpoints in adult patients with non-cirrhotic NASH will be requested just how lanifibranor differentiates with from two other compounds in Phase 3 currently, obeticholic acids and the HRV beta receptor agonist Resmetirom.

So, we look at resolution of NASH and improvement of fibrosis as the primary efficacy endpoint for obeticholic acid, that was a secondary endpoint and data has been made public on an interim analysis on this endpoint, fibrosis improvement and no worsening of NASH and NASH resolution and no worsening of fibrosis which are the components of the composite endpoint.

They are in our case, key secondary endpoints and they are primary for obeticholic acid and Resmetirom. So again, lanifibranor is the only compound here that looks really at resolution of NASH and the improvement of fibrosis. It’s a primary efficacy of readout.

Looking at patients who have Type 2 diabetes, so NASH resolution and fibrosis improvement in diabetic patients is a secondary endpoint in our study and given the fact that roughly 50% of patients with NASH have diabetes, showing that the efficacy of lanifibranor is compatible with non-diabetes patients is also a differentiating factor. Next slide.

The study is conducted globally. And this slide shows you the geographic areas where study will be conducted, so, North America, South and Middle America, Mexico and South America.

Several countries in Europe, South Africa and Australia are the countries where a total of 300 sites will be included in the study based on experienced clinical research sites. Next slide. Next slide is an overview of the timelines sort of the mentioned by Frédéric at the beginning.

So, the start is here, summer, the first patient first visit will be achieved with your planning and it’s planning is on track in the end of towards the end of 2022.

So, the second half will have the last patient first visit for Part 1, which is our goal which should enable us to have last patient last visit at the beginning of 2024 and headline results of Part 1 showed the basis for the submission for accelerated approval and conditional approval respectively, will be available in the second half of 2024.

So, next slide. This was in the summary of our plans with regard to the pivotal study aiming for approval of lanifibranor in non-cirrhotic NASH patients with fibrosis. A couple of other studies are being planned and considered. And one is actually an ongoing study in collaboration with Dr. Ken Cusi at University of Florida in Gainesville, Florida.

This study evaluates the safety efficacy mechanism of action of lanifibranor in patients with Type 2 diabetes and NAFLD, non-alcoholic fatty liver disease profiling study which we mean it will provide valuable information on how lanifibranor works in patients with metabolic disease and fatty liver disease and what the therapeutic benefits are based on a large battery of metabolic biomarkers.

The main objective is to show a beneficial therapeutic effect of lanifibranor on intrahepatic triglycerides. And as I mentioned multiple additional markers of this metabolism in patients who have Type 2 diabetes associated with NAFLD.

There are the study design there are 34 patients, which are randomized one to one to either lanifibranor 800 milligrams a day of placebo, patients with diabetes are well controlled that HbA1c is up to 9.5, so between 6 and 9.5 they have to have hepatic steatosis in this study defined as 10% or more is a fat measured by magnetic resonance spectroscopy, MRS and the sample size is based on an assumed 35 projection of intrahepatic triglycerides.

There is also a control arm of 10 matched healthy subjects. Now, these healthy subjects will not receive drug or placebo, they are actually – they will have the non-invasive tests or the tests to measure the metabolic and in the metabolic parameters through blood tests and imaging investigations.

So, it’s in Phase 2 profiling study in NASH Type 2 diabetes patients to demonstrate the efficacy of lanifibranor on biomarkers of metabolism relevant to NASH, NAFLD/NASH and therefore will be an important supportive study. Next slide. Primary efficacy endpoint is a decrease of intrahepatic triglycerides from baseline to end of therapy measured by MRS.

As I mentioned, responders defined as a patient who has a 30% or more reduction of hepatic fat from baseline and then there are a proportion of patients having intrahepatic triglycerides reduction to less than 5% at the end of treatment Week 24, that’s considered NAFLD resolution.

A lot of secondary endpoints to gain information about how lanifibranor works, metabolic endpoints includes insulin sensitivity, gluconeogenesis, de novo lipogenesis, glycemia control and then of course on the lipid profile. There are several of these patients given the fact that they have Type 2 diabetes NAFLD who will have liver fibrosis.

So we will also look at blood and imaging markers of liver fibrosis.

And the noninvasive measurements of changes in fibrosis include a panel of plasma markers of fibrosis and then take off the heart imaging methods, including ultrasound elastography, Fibroscan, Magnetic Resonance Elastography, MRE and also a multi-parametric MRI protocol to quantify fibrosis status and update on where we are in March 2021.

And as it is in 2020, there has been some delay in clinical research everywhere and possible different in the University of Florida. So 2020, the COVID epidemic has had an impact towards the end of 2020. However, clinical research activities have restarted again and are now really going back to normal levels as we recovered from the epidemic.

The sites in Florida, is actively recruiting, screening and recruiting and has some network of several other institutions, which help in screening patients, but given the impact of COVID-19, the study results are not expected in the first half of 2022 versus 2021 as originally planned. Next slide.

Within the large indication of NASH, we are also preparing for additional studies and potentially additional indications. And one is of course, those patients who do have cirrhosis, specifically compensated cirrhosis, which is a large unmet medical need.

So, we have data that provides a strong rationale for the study of lanifibranor in patients who have compensated cirrhosis based on in vivo data from the thiocetamide rural model of liver cirrhosis, which is an established animal model for liver cirrhosis and decompensation of cirrhosis.

And of course, there is the biology about the – biology of the hepatic cell and in the liver endothelial cells where PPAR signaling plays a role also in the vascular aspects of cirrhosis and in the fibrosis aspects. So, promising preclinical data or the basis for the rationale for a clinical study.

In the TAA model, lanifibranor has shown to improve, but importantly portal hypertension through a reduction in intrahepatic vascular resistance and to have significant effect on fibrosis markers, significant improvement in hepatic cell phenotype and activation of hepatic cells also from in vitro data.

In this animal model, TAA animal model, there is also beneficial effect which is on the liver cirrhosis with endothelial cells. And correspondingly, I think it’s an effect of both the effects on fibrosis and the vascular aspects of lanifibranor, the reduction in ascites in the number of animals which has ascites.

The data for both the TAA data of TAA induced cirrhosis drugs have been published in Journal of Hepatology in the December issue of 2020. So, the clinical options to evaluate lanifibranor in patients with compensated F4 cirrhosis are currently being discussed on regions. Next slide please.

Lanifibranor has to be – has the potential to be used in combination with other therapies to strengthen its value proposition combination in complex disease of NASH, it’s an approach that is seen as very valid way to improve the efficacy of treatments and several compounds are being combined.

So, in the case of lanifibranor, the potential benefits of combination use, includes complementary effects on the disease, on the multi-step disease of NASH given the fact that dysregulation of metabolism, insulin resistance, inflammation, fibrosis all play a role.

There is a lot of opportunity to combine with other approaches that will increase the therapeutic efficacy further.

And with regard to the histological endpoints, NASH resolution and fibrosis staging, so this is with regard to improving further the efficacy, at the same time selection of the right combination and the right compound to potential combination can manage the weight increase that has been seen with lanifibranor, the modest weight increase, which Pierre mentioned, which is metabolically healthy, but it is still perceived as weight increase.

So, that’s can be managed with in a combination setting. And of course, the combination can generate new IP protection and that’s an additional benefit to compounds that are attractive for combination therapy with lanifibranor, includes GLP-1 agonist, SGLT-2 inhibitors and ACC inhibitors.

So, the next slide details on these combination options to illustrate that this is supported by data that are available from the Type 2 diabetes field where PPAR agonists have been approved treatments.

It’s been shown that when a PPAR agonist is combined with SGLT1 agonist that the weight gain as you can see on the upper left slide can be compensated. In fact, you see in that weight gain – weight loss with in combination with the SGLT2 receptor agonist.

Similarly, when PPAR agonists and in this case, one use this pioglitazone is combined with an SGLT2 inhibitor, the weight gain on the right side, associated with a PPAR agonist sexually compensated for by the addition of an SGLT2 inhibitor and actually in net, these patients have weight loss and that’s been shown in several studies in total, several studies with different SGLT2 inhibitors in addition to an official tolerability profile is combination between combination of a PPAR agonist and an SGLT2 inhibitor has also shown to be further improving the efficacy of these compounds.

With regard to the PPAR and the ACC, in combination, that to this rationale to compensate for the modest weight gain and that is also based on animal data that we have obtained the expected therapeutic benefit you see here the results of rodent model where lanifibranor is combined with [indiscernible] and there is an increased effect on the NASH score when these two compounds are combined compared to each compound a lot.

So, that’s for the combination therapy and at the end of my presentation, so I will get back to Pierre – to Frédéric for the AbbVie collaboration..

Yes. Thank you, Michael. Very briefly on the AbbVie collaboration, I would say there are two key messages. The first one is that AbbVie has confirmed that the cedirogant proof of clinical trial – POC is expected introduced like delay versus Q1 due to COVID.

The second point once again is that this trial is really important and it includes the several efficacy biomarkers and the measurement of Week 4 which will give us – give AbbVie very valuable information in the pursuit of the development of this – of cedirogant.

So with that, I will hand the floor to Jean for a quick update on the financing position..

Good afternoon, everyone. Yes, as said in the intro, the year from the financial perspective has been a key and exciting year. We entered on the NASDAQ global market early July 2020 and just after and thanks to the positive results of the NATIVE Phase 2 study. We have reinforced our shareholders base with still U.S.

and European shareholders of reference with balance of 60% European shareholders versus 40% American. So, therefore, we have consolidated our cash position at €113 million. And this situation allows us to operate through Q4 2022.

We have in 1 year funded €120 million, of which of course, the $95 million on the NASDAQ, €15 million in Q1 ‘20 through an increase of capital, and a €10 million guaranteed loan from the French states, which leaves by the way a low level of indebtedness in Inventiva with less than 10% versus equity.

We have of course in this momentum extended the analyst coverage as you can see. And in terms of market value, we are at less than €500 million, €471 million and $538 million. We still know that there is a gap to close with our peers. Next slide, Frédéric, quick view on the profit and loss accounts.

So, it’s quite straightforward we still manage the expenses. They are under control. We had not expected revenues in 2020. Just to remind last year we got a milestone from AbbVie for next ones in the 2, 3 years and we also add revenue from Boehringer Ingelheim with the end of the collaboration last year.

The other income still made up of the R&D French credit increasing a bit. We took benefit of a very interesting change in the regulation following jurisprudence from the consent data with regards to the subcontracting studies and eligible expenses and it’s good for the company also. The key information is the decrease in R&D expenses at €23.7 million.

Remember that last year, we still had the [indiscernible] systemic study and we had also the full research population while in 2020 following the restructuring plan implemented after the halt of SSC last year. We have in 2020 the full effect of the savings in 2020 following the plan.

And we had not started full boost I may say the Phase 3 expenses, because still in construction, but we hope that soon we will increase expenses and the investments in this Phase 3 on lanifibranor, Also as a consequence of the NASDAQ transaction, we incurred increased expenses in G&A, plus 40%. And this was completely expected.

Also, this is now due to the first year of dual listing, compliance expenses in particular, as everybody knows, in insurance audit legal fees to fit with the requirements from this market. And the cash position again, I talked about it with a comfortable cash position to start this very exciting 2021 year with the Phase 3 on lanifibranor.

Should you have obviously as usual any questions, I will be pleased to answer and let the – I will let the conclusion to Frédéric..

Yes, thanks Jean. So, before we move to Q&A, just one last slide on the next milestone, when we talk about lanifibranor, of course, we are working day and night on the launch of the NATIVE 3 study for site initiation Q2 of this year with the immediate start of a patient screening and first patient first visit plan for Q3.

Odiparcil, we are optimistic and comfortable in saying that we will give an update on the strategy for odiparcil moving forward in 2021. And concerning our exciting partnership without AbbVie for cedirogant, we are looking forward to the – as the achieving clinical proof-of-concept in the current trial in psoriasis.

So, this concludes this presentation. And let’s now move to the Q&A session..

Thank you. [Operator Instructions] And your first question is from the line of Etzer Darout from Guggenheim. Please ask your question..

Great. Thanks for today’s update. Just a couple of questions for me.

Just wanted to know if you could talk a little bit about the timelines a bit, what it assumes about any sort of potential on delays with COVID, which we have seen sort of affect other trials and just overall kind of the pushes and pulls you assume for your timeline? And then if you could a little bit more color on what potential options you are exploring for compensated cirrhosis with [indiscernible] and where we could hear about them and maybe sort of what proportion of F4 patients do compensated cirrhosis patients that it represents? Thank you..

Etzer, for this question, so on the first one concerning the COVID impact on the trial, of course, this has been taken into account. Nevertheless, we are all aware that the situation is moving rapidly over the last weeks and months, positively duty to the beginning of the vaccination. So, all of this is taken into account.

We have also selected one of the few global – that are experienced in development of the global Phase 3 NASH. They have put in place many I would say tools and approaches to facilitate the monitoring of patients nevertheless ensure that we need the patient to feel comfortable in getting back to the hospital.

So, we need to continue the good trend that we have seen over the past week. Then concerning the F4 cirrhotic patients, maybe I turn to Michael or – yes I turn to Michael and maybe he can try that..

Thank you, Frédéric. And yes, I think the – on COVID-19 in addition to the ones that Frédéric mentioned has been also an adaptation of how clinical research is done in accepting more telehealth visits etcetera and lots of publications about that. So we are actually confident that 2021 will get to a normalization of clinical research activities.

F4, we aim to study lanifibranor in patients with compensated cirrhosis who have a normal liver function and that’s corresponding to the box in this field today.

So, the clinical outcome, the relevant clinical outcomes are on patients developing signs of decompensation, which are clinical signs such as ascites or worsening of liver function, which can be measured with the MELD score, for example, be little bit more to values measures. So, that’s the proportion of patients that we are aiming for.

The subpopulation of patients for which there is currently no treatment and less of not so much clinical research activity, but represents a very high medical need. Thank you..

Great and congrats on the progress. Thank you..

Thank you. Your next question is from the line of Lucy Codrington of Jefferies. Please go ahead..

Hi, there. Thanks for taking my questions. This is helpful for me.

And so just following up on the Phase 3 timelines, I just want to be clear, is there any room for an improvement on these or is that – is the timeline be given already a Blue Sky scenario for the trial? And secondly, I just wanted to confirm that the cash run-rate doesn’t include any anticipated milestones within that? And then finally, just on the central histopathology review in the Phase 3 is that – can you remind me is that standard practice in NASH Phase 3 trials or is that something that just you guys are doing? Thank you..

Okay. So, on the milestone, Lucy, so we are always extremely prudent. So we take into account all costs and we never take into account any potential milestone. So, if we receive a milestone from AbbVie or any other collaboration that would be an upside.

Blue Sky, I know this is I would say for the Phase 3, these are the realistic, what we believe is achievable. We have been I think working with the right CRO. We have selected the right number of sites. And we have been going through I would say reinforcing our team at all levels, of course, clinical operations both in Europe and in the U.S.

We are increasing the contracting team. We are increasing the regulatory team. So we feel confident as of today that we can achieve this – the timing as we laid them out in the – during the presentation.

Then concerning your question on the pathology approach, this was extensively discussed with the FDA, I will turn to Pierre, he can explain that more in-depth..

Yes. Sure, well, I will turn it to Michael afterwards, but it’s true that we had this was a topical discussion with FDA.

And I think that we actually made the proposal and that was accepted and makes a lot of sense and would really guarantee the good quality of the reading of the biopsies, but Michael, if you want to add on that please?.

Sure. But I can only confirm yes, it’s been – our procedure is discussed with and agreed with by the FDA. So that’s I think relevant point.

Histological evaluation of the therapeutic efficacy and NASH standard approach since the effect on fibrosis specifically has been shown to be or let me put this way, fibrosis progression is an accepted surrogate marker for clinical endpoints as the most relevant element that determines the prognosis of patients.

And the NASH activity reflects the necroinflammatory injury of the liver. So the combination of both reflects the entire spectrum of the disease, biology of NASH.

So this histological evaluation is accepted as a surrogate endpoint and our procedure the way we do it using two experts, pathologists, by which you mean pathologists who have been – who are recognized as really true experts in this field, one on each side of the Atlantic.

That’s certainly an accepted approach by the FDA following our discussions with the FDA. Thank you..

Thank you. Your next question is from the line of Derek Archila of Stifel. Please go ahead..

Hi, guys. This is Jack on for Derek. Thanks for taking our questions.

First on the cedirogant program, how do you view this program? And are you looking to develop the drug in plaque psoriasis or are you looking at like plaque psoriasis as more of a proof-of-concept? And if so, were you looking to take the drug forward? And then also, could you help us understand I guess how it could be differentiated from others in development?.

So from – first of all, from a contractual point of view, the development and strategic orientation isn’t the end of AbbVie, they will decide to where to position and how to develop this drug and is actually we view that as a great opportunity for us because AbbVie has been shown in the past great ability to be able to develop compounds in several indication in the autoimmune field.

So to your question, there is clearly a potential for cedirogant in moderate-to-severe psoriasis. Given its mechanism of action, it’s actually eligible to other indications such as IBD, Crohn’s, RA and others.

Then to the last question about how we differentiate, I think the easiest way to say that is just to summarize as AbbVie does, the target product profile of cedirogant in Humira in the field, so clearly due to the ROR-gamma mechanism of controlling IL-17 expression, we clearly think that cedirogant does have potential in the efficacy of biologics, but with the great advantage of in your oral once-daily pill and also we expect higher safety due to shorter life..

Great. That’s helpful. Thanks, guys and Congrats..

Thank you..

Thank you. Your next question is from the line of Lenny Van Steenhuyse of KBC. Please go ahead..

Good afternoon and thanks for taking my question. Pierre earlier mentioned of course an interest to explore lanifibranor applicability, so both in the compensated cirrhosis setting and potential combination therapies.

I was wondering for the short-term, is this mainly something that’s being looked at from the preclinical level or do you also consider clinical efforts and in the relatively short-term? And perhaps linking to that, given the current level of funding and budget for required for a Phase 3 NASH trial, are you confident that it’s going to have sufficient funding to support such broader development of lanifibranor? And is this included already in your cash runway guidance up to fourth quarter of ‘22? Thank you..

So concerning your question about the guidance, no, it does not include any potential clinical development of lani in combination with other drugs or in F4 patient.

And then to your question, do we – is this clinical or preclinical effort, I would say it’s more clinical effort that we have in mind with exploratory study that could confirm the benefit of combining lani with other anti-diabetic drugs or other NASH drug as explained by Michael in his presentation..

Alright, thank you.

If I may squeeze in a second one perhaps more on the R&D spending into 2021, I was wondering if we can expect similar level compared to 2020 given the end of the Phase 2b mid last year and likely to follow-on Phase 3 trial ramping up by middle of this year or should we expect some increases as the organization overall increases as well? Thank you..

Yes, so maybe I’ll turn to Jean that can explain we have modeled the cash runway and the increase or evolution of R&D spending moving forward?.

Sure. Yes, as Frédéric said, we have setup discussion with the current resources and with the current program on the Phase 3/4 F2-F3.

Also with regard to the existing cash position, it allows us to investigate really all the possibility to optimize our cash and you can imagine that there are some options to work out and we have the time to optimize those options.

So, obviously, the costs for ‘21 and ‘22 will increase with the Phase 3, you know how this kind of study can cause, but the increase in ‘21/22 is included in the guidance for the cash for time being.

And while are we talking 2 years from now, but we will probably be able to analyze additional funds that we will be able to get in the next year or so too much this very important Part 1 deadline..

Alright. Thanks very much for your comments..

You are welcome..

Thank you. Your next question is from the line of Jean-Jacques from Bryan, Garnier. Please go ahead..

Hey, Jean-Jacques Le Fur from Bryan, Garnier. Thank you for taking my question. The first one is regarding the biomarkers study, you started with Jérôme Boursier, In case if you – it would be positive if you can be able to identify some of them as really being linked to lanifibranor.

Could we think or could you seem to try to develop a sort of companion diagnostic for lanifibranor? And my second question is regarding the combo you want to study or you have in mind, and particularly the PPAR plus SGLT2 or lani plus SGLT2, since SGLT2 were not particularly natural, if I may say, with the clinical results we have enhanced right now.

So my understanding is that you want to use the SGLT2 to reduce the weight loss or to mitigate the weight increase from lanifibranor, don’t you think if it’s the case I may be wrong? But if it’s the case, it could be a very costly option just to control the weight gain or the weight loss? Many thanks..

Maybe for the biomarkers, I will let Pierre answer and then we will – Michael will answer the part about the rationale for developing lani with the SGLT2.

Without anticipating his answer, of course, there are beyond the potential control of weight many other benefits that could be expected from such a combination, but maybe first of all biomarkers, Pierre?.

Yes. So to your point – to your question related to biomarkers, so the objective of the combination we have put in place with Jérôme Boursier is that we are using the NATIVE database of 80 biomarkers and the results obtained in our patients under lanifibranor treatment is to identify when he will perform a multivariate analysis of this database.

And that should end up with the identification of the biomarker or several biomarkers or a composite score. That would help identify the patients that are currently responding histologically to lanifibranor.

Once we have made this hypothesis to this call, we will test this hypothesis during the NATIVE 3 trial to see if we confirm that the patients that are improving histologically show also the same biomarker signal.

I think that this is going to be very useful in the commercial setting, if of course when validated for what is discussions on pricing and reimbursement, because it’s clearly an asset, if you can provide as you say a kind of companion diagnostic to be able to monitor without doing a biopsy to monitor the responders on the patient, how the patient responds to the drug in the real life.

So, that is the overall objective of this work.

And Michael, regarding the combination with SGLT2, if you want to reprise?.

Sure, and thanks for the question. So, SGLT2 and lanifibranor indeed providing a good rationale for combination and I believe it’s both. It’s both the secrecy and the weight gain as mentioned.

So weight gain is perceived as something that is not desirable, even though we know that weight gain with lanifibranor is metabolically healthy in the sense that it’s not visceral fat, but less active or not active to visceral accumulation and subcutaneous fat.

Having said that, weight loss, given that or reduction in weight given that the majority of patients with NASH who are overweight is a benefit of the combination therapy, of course, but there is also the rationale to further improve the efficacy.

Lanifibranor is important on a self-standalone treatment and that’s shown by the Phase 2 study and the data of the Phase 2 study. There is still room to improve on efficacy for every pharmacological agent. So, that’s an additional benefit.

Now, the SGLT2 inhibitors by themselves as monotherapy for NASH are not very promising that is true and the non-clinical data have been done in that regard.

We are not strongly supportive, I would say, of developing this kind of compounds for NASH by themselves, but on the other hand, they are in part of combination treatment, where there is complementarity in addressing the underlying disease biology of NASH.

There is a good reason to anticipate that there is an improved effect of the combination on markers of insulin resistance glycemia control, lipid metabolism, where SGLT2 inhibitors too have an effect and which are important upstream mechanisms of NASH.

So, I do believe that the rationale is both to improve – to further improve the efficacy as well as to address aspects of weight gain. Thank you..

Okay, thanks. Very clear and congrats..

Thank you..

Thank you. Your next question is from the line of Zegbeh Jallah. Please go ahead..

Hi, guys. Thanks for taking my question. Just have two quick ones. So, the first is the FDA recently noted kind of being interested in prognostic or efficacy biomarkers and kind of has welcome data from sponsors to help build evidence around it.

So just wondering if you can give us a sense of how the EMA might be thinking about that, based on some of your recent discussions?.

To understand your question, Zegbeh, you are interested in understanding the regulatory position on the development of biomarker and now those could replace biopsy, is that the core of your question?.

Exactly..

I think the alignment between the two regulatory agencies, right, FDA and EMA..

Correct..

Yes. So, well, I think the EMA is really in the same line of same position than FDA, so very supportive of having sponsors exploring and developing biomarker, non-invasive technologies during the Phase 3 trial in order to optimize the use of those in diagnostic and prognostic or so in the commercial setting. So, those agencies are totally aligned.

And I think that the program that we have put in place within our NATIVE 3 trial totally match the expectations of those regulatory agencies..

Thanks, Fréd. And then just a quick one, the FDA also expressed an interest in seeing positive effects on lipids, glucose and so the cardiovascular benefits you showed in lani was really nice to see.

But we are just wondering from a commercial perspective, how differentiating the benefits on cardiovascular risk could be based on some of your recent questions that you have been having with KOL?.

Well, in terms of differentiation, so I think that if we simply look at the metabolic aspect of the drug both improving glycemic control and dyslipidemia in NASH patients with diabetes or NASH patients with insulin resistance which actually would represent close to 100% of the NASH cases.

This is clearly a differentiating factor over the current competition as I don’t think that – well beside maybe semaglutide or none of the other competitors are capable of improving glycemic control in those patients.

Regarding cardiovascular risk reduction, where I tried to say that, of course, improving diabetic condition, improving the dyslipidemic condition is something that would likely go into a reduction of cardiovascular risk, but there is also a past history with pioglitazone that you can refer to where in large studies like glycoactive or like high risk you actually see a reduction of cardiovascular death, number of myocardial infarction, reduction of number of strokes.

So, there is already a nice theory of clearly of reduction of cardiovascular risk with compounds activating PPAR gamma like pioglitazone, for example. So together I think that yes, with PPAR activation, there is a probably likelihood that we will also see an improvement in the cardiovascular risk in NASH patients..

Thanks, Fréd.

Looking forward to the Phase 3 study start and then can you just lastly let us know if you anticipate providing any regular enrollment updates or any updates on the study progress?.

Yes. Usually what we have been doing in the past is to communicate on key events. So, the NASH we view is as important will be the first patient, first visit and we certainly will communicate on when we achieve this important milestone..

Thank you..

Thank you. Your next question is from the line of Michael Morabito from Chardan Markets. Please go ahead..

Hi, team. Thanks for taking the questions.

First, I just wanted to know what type of data, what kind of readouts should we expect when AbbVie reports the initial clinical proof-of-concept data in the second quarter? And secondly, I was just wondering, can you clarify you mentioned that patients will be stratified in the Phase 3 NASH trial based on F2-F3 status? So, is this F2 versus F3 or F2 and F3 versus other levels of fibrosis that might enter the study?.

So, on AbbVie, so the current trial will include several biomarker efficacy including body score at 4-week and these are the – I would say the measurement that will allow to determine if the drug has achieved or not proof of clinical concept.

Concerning what level of communication AbbVie will do this I am unable to answer because of course they are in control of the communication in the data they want to release. Then on your question about the trial, I will try to give the answer. I think I know the answer. But if I am wrong, Michael, please correct me.

It’s going to be a certification, F3 versus F2 in the Richmond office, three patients I think we are targeting 55% of every patient in the study..

Yes, that is correct..

That’s it. Thank you very much..

Thank you. [Operator Instructions] And we also have a question here from the line of Ed Arce from H.C. Wainwright. Please go ahead..

Great. Hi, everyone. Thanks for taking my questions and congrats on all the progress lately. I have three. First is your surrogate primary endpoint for the Phase 3 depends on both NASH resolution and fibrosis improvement, really a precedent setting endpoint there.

In addition to the NATIVE results, which were clearly robust and positive, what gives you the confidence in lani’s activity on fibrosis, especially with regards to work that you have done that shows that lani has not just indirect effects on fibrosis, but direct effects? That’s one.

Two is why did you choose to evaluate both doses in the pivotal Phase 3? Is that perhaps to allow for titration or better ability to manage a disease on the label once approved? And then third and finally, given that your cash runway is through the fourth quarter of ‘22 and your readout is expected in the second half of ‘24, how do you plan on covering the shortfall for the Phase 3? I mean, are you perhaps looking at out-licensing certain regions or are there any potential options for perhaps non-dilutive financing? Thanks so much..

Well, thank you, Ed. Three, they are good questions. So maybe I will let Michael cover the question about the fibrotic of lani and the rationale for the [indiscernible] and I will cover the cash runway..

Yes. So, I will start Microlipid complete [indiscernible]. So, your point is the confidence in lanifibranor anti-fibrotic effect, I think is strong.

We have seen with the high dose that in 6 months we were able to meet the endpoint of improvement of fibrosis by one point without worsening of NASH in more than 40% of the patients treated with the lanifibranor high dose.

Looking at the biomarker data, we have seen that the 800 million produced a significant decrease in fibrosis related biomarkers such as PRO-C3. So we think actually that the low dose would be more anti-fibrotic on the longer term trial.

So by extending the duration of the trial from 6 months to 18 months, I think that would give a good sense for the low dose to a more potent anti-fibrotic activity than it did in the 6-month trial.

And finally, as you know, there is a lot of technical evidence supporting the direct anti-fibrotic effect of lanifibranor, we have notably published a lot of work done in isolated human hepatic steroid cells, where we see an inhibition of the activation of the cells by lanifibranor and the different type of stimulation and the TGF-beta or stiffness.

So there is quite a consistent biology between the in vitro, the in vivo clinical results and the clinical results, including histology and biomarkers, which for us gives us really good confidence that the drug would be able to have high chance, high probability of success in this composite surrogate primary endpoint..

Second question was about the rationale for the two doses and then the third question was for….

Cash runway..

Cash runway, so the cash runway and yes, you are right, so as Jean said, we have 113 at the end of the year, that’s more than enough to launch the NATIVE 3, but we need to close the gap if we want to find in that study until the readout of Part 1 and we are currently with the team with Jean looking at many options.

They go from innovative options, like going back to the market to doing licensing on lani for regional or global deal licensing for odiparcil. We are also looking at other more creative approach, such as depth or royalty deals.

And I would say that given our current cash position, which we have the time to analyze the several options and really take the right decision at the right moment. What is important to retain is that currently we have really not slowed down in anyway in the launch of the Phase 3 by our cash position..

For the question on two dose in Phase 3 so before – maybe Michael you can intervene, I would say that, of course we are aiming at the registration of the two dose. Because as you say this would bring a lot of flexibility in the clinic or in patients, investigators once the drug is on the market.

But maybe, Michael, you want to add some on this question?.

Thanks, Pierre. I think an important rationale to evaluate two doses is the effect on the relevant endpoints. And I would say fibrosis is important. So, the NATIVE Phase 2 study was half the year 26 weeks, we see in somewhat larger effect size up to 1.2 grams on fibrosis at that point.

So, there is an expectation that the 800 milligram may have an increase to the effect size on fibrosis, the longer you treat. So, we are taking two doses forward will give us a lot of information about the 800 milligram as well with regard to its efficacy compared to do 1,200 milligrams. Thank you..

Great, fantastic.

And then perhaps just one quick last one if I may, given the long lead up time for the Phase 3, I am just wondering if there is any opportunities for sort of interim results or is that perhaps really we are looking at milestones from perhaps other studies like in the F4 patient population?.

Yes, you are totally right. I think the key milestone and key news will come from other trial both with lani. So, we touch about some options that we are looking in combination in F4 patient. There is a study with Professor Cusi that will be an extremely interesting study confirming the strong anti-diabetic properties of lani.

We will also have updates on cedirogant. This is an important trial that is going on. If we obtain POC, the program will be much more visible in AbbVie pipeline and that will be certainly – and it’s an exciting stream of news from the – for the company. And then as I also said, we also have odiparcil.

We are convinced about the potential of this drug in MPS. We are convinced about our strategic decision to find a company that has the resources financially in human to carry it forward and that also will provide updates for the company..

Great, thank you so much, Fréd. That’s very helpful..

Thank you. There are no further telephone questions at this time. Please continue..

Very good. Thank you. Because I am looking is there any question on the net, but that is not the case and we have actually run out a little about our time. I just can only thank you for attending and following us. As you know, it’s been an extremely exciting 2020 and I can assure you that 2021 looks even better. So, we are very excited by the future.

And we are very grateful for your support and the time you have spent working with us. Thank you very much and have a great day..

Thank you. Bye-bye..

This concludes the presentation today. Thank you for participating. You may now disconnect..