Good day and thank you for standing by. Welcome to Inventiva’s First Half Financial Results Presentation. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today’s conference is being recorded.

[Operator Instructions] I would now like to hand the conference over to your speaker today, Frédéric Cren, Chairman, CEO and Co-Founder. Please go ahead..

Thank you, and welcome. Good morning, everybody. Good afternoon. And welcome to the first half 2021 financial results. So, as usual, I will be making, and the team will be making forward-looking statements. So, please refer to the regulatory filings that are available on our site or at the SEC or at Euronext.

Today, I’ll be, of course, sharing the presentation with Pierre, Pierre Broqua, our CSO and Co-Founder; and Michael Cooreman, our CMO will be presenting the latest on lanifibranor.

I will be speaking and introducing some very exciting news concerning our partnership with AbbVie and the recent progress of cedirogant, and Jean will be presenting, of course, the financials and our financial situation for the first half of this year.

So, without losing too much time, let’s look at what are the highlights of the very busy first half. So, if we turn to what was our ambition at the beginning of the year, we wanted and our goal was to add a pipeline by the end of the year with compound lanifibranor in Phase 3 and cedirogant in Phase 2b.

And I think, we are in a very well position to achieve both goals. So, on lanifibranor, you’ve seen that recently we have announced that we have started screening in the U.S. with our partner -- global partner and that we have qualified more than 330 sites in 25 countries.

So, we’re really pleased by the launch of this exciting Phase 3, and Michael will provide more background on the design and how the study is rolling out. The good news also comes from cedirogant, ABBV 157.

So, you followed during the Q1 -- AbbVie Q1 results that they communicated to have achieved clinical proof-of-concept during the Phase 1b in patients with psoriasis.

And we were extremely pleased and happy to see that on September 14th, on ClinicalTrials.gov AbbVie posted design of the upcoming Phase 2b with cedirogant in patients with psoriasis, very important study, 2000 patients, 45 sites, and especially they have confirmed that the study will be up and running in November, which should trigger milestone payment for us.

And, of course, we are already looking forward to the results of this important study which are scheduled for March ‘23. Concerning odiparcil, we’re continuing actively on the evaluation of the strategy of the best way -- best options to continue moving this program forward.

We’ll not be able to update the market in 2021, as we plan to do that in 2022. Concerning the other important event, of course, we have been able to launch Phase 3 also because we’ve been able to reinforce our team on both sides of the Atlantic. Michael is now leading the team in the U.S.

all devoted to the Phase 3, and also in France, we bring forth our key position, both in terms of support function, medical cleanup, and we’re really geared and prepared for this Phase 3.

Over the summer, we’ve put in place an ATM, as expected as many biotech listed on NASDAQ do, and this gives us an additional flexibility in order to reinforce our cash position with the possibility to exercise ATMs upto $100 million.

And then finally, we have reinforced our Board with the arrival of Martine Zimmerman, who will provide and is providing valuable regulatory expertise, given her position currently at Alexion. So, this was for the short intro, and now, I’ll give the floor to Pierre who will give a brief update on lanifibranor. .

Thank you, Frédéric. So, hello, everyone. So, as you know, lanifibranor is a pan-PPAR agonist, which is currently in clinical development Phase 3, for the indication treatment of NASH and improvement in liver fibrosis. It has an unprecedented structure and pharmacological profile.

It’s a pan-PPAR agonist with moderate and well-balanced activity across the 3 isoforms. It’s not a thiazolidinedione, it’s not a fibrate. This program has recently obtained Breakthrough Therapy designation as well as Fast Track designation from FDA.

And FDA has also confirmed recently that the nonclinical toxicology package is complete and acceptable for an NDA filing.

So, can we go to the next slide, please? So, following the successful outcome of the NATIVE Phase 2b trial with lanifibranor in NASH, we have started our Phase 3 in patients with NASH and fibrosis score of F2 or F3, and Michael will present the details and the key milestones of the study.

To complete the clinical development plan of lanifibranor in NASH and beside the study in collaboration with Professor Cusi evaluating the effect of lanifibranor on liver insulin resistance in diabetic patients with NAFLD.

We are also progressing on the preparation of additional clinical studies, evaluating the potential of lanifibranor in NASH compensated cirrhosis and this on the back of positive preclinical findings that we have recently published.

And we are also progressing in the preparation of study to evaluate the potential of lanifibranor to be used in combination with other therapies and this to further strengthen its value proposition. So, the latest two trials -- next slide, sorry.

So, the latest two trials indicated that after 24 weeks of treatment, the 1,200 milligram dose had a significant effect on improvement of fibrosis by at least one stage and no worsening of NASH.

And both doses, 1,200 and 800 milligrams, 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 responder is defined as station showing both NASH resolution and improvement in fibrosis.

Additional analyses were performed and communicated earlier this year at EASL. And these analyses indicated that in patients with NASH and F2/F3 fibrosis, lanifibranor also showed significant efficacy on the composite endpoint. And this subgroup observed more than 3 and more than 4 times more responders in the low and high dose group respectively.

We also observed in this subgroup of patients with F2 and F3 stage of fibrosis that markers of lipid metabolism, insulin resistance, liver injury, inflammation and fibrosis also improved with essentially [ph] treatment at week 24 compared to placebo. Go to the next slide, please.

So, based on the NATIVE 2 data, clearly, lanifibranor showed key differentiating benefits, compared to the current competition and particularly on insulin resistance and on fibrosis, which as are, you know, two important pathological features of NASH and the latter, fibrosis, being, as you know as well, the primary determinant of clinical disease progression in patients with NASH.

Next slide, please? Now, as can be seen on this slide and compared to the current competition, lanifibranor is the only drug having achieved statistical significance on the key regulatory histological endpoints of NASH resolution without worsening of fibrosis and fibrosis improvement without worsening of NASH and this with more than 30% responders for both regulatory endpoints.

Go to the next slide, please. So, with the NATIVE 2 results, we conducted interviews of hepatologists across U.S., UK, Germany and France. And these interviews indicated that the physicians value lanifibranor’s efficacy on multiple endpoints, as well as once a day mode of administration.

Next slide, please? The physicians also perceived weight gain as acceptable, considering the benefits on multiple decision points and suggested that weight gain could be offset with either proper patient counseling around weight loss or by combination therapy with, for example, GLP-1 receptor agonist or SGLT-2 inhibitors.

With that, I will now leave the floor to Michael, who will say a few words on that history..

Thank you, Pierre. And, move to slide 16. We have started recently the pivotal Phase 3 study. It’s conducted in patients who have NASH, of course, and who have stage of fibrosis F2/F3 that’s based on histology, and patients who are actually most in need of treatment.

The study consists of two parts and on the inclusion criteria -- the inclusion, exclusion criteria, or, very similar to the ones in the NATIVE Phase 2b trial in order to guarantee consistency. The two parts define actually the objective to obtain accelerated approval after a year and a half, 72-weeks of treatment.

That’s part one, based on surrogate end points, which is histology. And then, part two, which is a much longer, of course, up to seven years, which we’ll look at outcome. And outcome is the foundation for full approval, following accelerated approval. It’s a randomized, double-blind, placebo-controlled.

It’s multicenter, of course, evaluating the long-term efficacy and safety of lanifibranor in adult patients with NASH and liver fibrosis. We evaluate two doses, 800, 1200-milligram in the Phase 3 study that will give us the information about the efficacy of both doses when treatment is stronger than in the Phase 2 study.

So, a year and a half will be -- 72 weeks will be the evaluation of histology. The principal investigators, we have Professor, Sven Francque in Antwerp and Professor Arun Sanyal in Richmond, Virginia will be two principal investigators. The inclusion criteria -- well, they’re adult patients, of course, they have to have NASH.

And in order to make sure that patients have active disease, we use the so-called Steatosis Activity Fibrosis score, with an activity of more than -- 3 or more histologically and fibrosis F2 and F3 for the inclusion criteria. Randomization is 1:1:1.

And we do have the stratification according to type 2 diabetes and the staging of fibrosis in order to guarantee that in all arms, there is an equal amount of diabetes and fibrosis.

And in the part two, in order to also have defined projects -- the minimum amount of patients, who have F3, which will enable us to detect progression of disease and the effect thereof of lanifibranor. At least 30% will be patients in the United States. Statistical powering is stringent based on 90% power.

That’s the basis for the sample size calculation. And we have, established expert pathologists, who will read the biopsies for screening, for enrollment, for eligibility, and also then for the evaluation of the efficacy. So, in part one, the primary efficacy endpoint is histology. As I mentioned, roughly 900 patients will be enrolled in that study.

And we have set the bar according to the data from NATIVE. So, the primary efficacy endpoint is a composite endpoint of patients having both, resolution of NASH and improvement of fibrosis according to the CRN criteria, and that’s about that we met in NATIVE. And I think that is a very good sign of efficacy.

We have key secondary endpoints which are -- one each of those launch, so NASH solution and no worsening of fibrosis is one and fibrosis improvement and no NASH worsening is another one.

And then, there are of course, several other secondary endpoints, which are also based on the efficacy shown in NATIVE, selection of those most important ones from a clinical perspective are listed here.

Of course, we look at the beneficial effect of lanifibranor on metabolism, on control of glycemia throughout the study and 12 and 24 in patients with type 2 diabetes. As you know, a significant percentage of patients with NASH have type 2 diabetes.

And we look at the effect of lanifibranor on HbA1c, which is also a main, a major pathway solution in NASH progression. We look at the composite endpoints of diabetic patients having both NASH resolution and fibrosis improvement, that’s also again based on data we have from NATIVE.

We look at renal function patients with NASH, of course, also have renal -- the kidneys are also involved in this metabolic disease. So, that will be another relevant secondary endpoint.

And the reduction of the cardiovascular risk or in other positive term, improvement of cardio-metabolic health, we will measure quality of life at a number of questionnaires.

And together, these data, based on the primary efficacy endpoint, are according to the guidance of the FDA for accelerated approval in the United States, and conditional approval by the EMEA in the European Union. So, that’s the important part one.

Equally important is in part two, which is the longer duration to look at outcomes, as the foundation of full approval and outcomes are defined as progression to cirrhosis for their liver related outcomes, progression to cirrhosis, which probably is what we see most frequently in these patients who have cirrhosis.

And we have a screening methods in place to detect non-invasively when it’s probably the right time to do a biopsy to evaluate the progression to cirrhosis.

And other components of these endpoints are all cause mortality, hepatic decompensation events, when cirrhosis has occurred, or events like a portal hypertension encephalopathy, MELD score above 15 or higher. MELD score is a composite score including bilirubin and which reflects a liver function.

And then, liver transplant can also occur specifically if patients develop an HCC before they have cirrhosis and before they decompensate. So, the outcome improvement is the basis for full approval in the United States and EMEA.

Next slide? These primary endpoints where we look at both, resolution of NASH and improvement of fibrosis well certainly clearly differentiate from other compounds which are in advanced development.

It actually reflects the efficacy of lanifibranor as pan-PPAR agonist, acting beneficially on all aspects of the complex pathway or network of events that constitute NASH, starting with metabolism, lipid metabolism, glucose metabolism, insulin resistance, inflammation, fibrosis.

PPAR signaling has a beneficial effect all of that which is why we have seen this strong effect on resolution of NASH and fibrosis. So, that’s a competitive advantage. And that will also be the foundation of the label.

In the bottom of the slide is comparison with two other events, advanced obeticholic acid, and the HRV beta receptor agonist Resmetirom which is also in history. Lanifibranor is the only compound that meets resolution of NASH and improvement of fibrosis. And we have also, as you’ve seen, very promising data in patients with diabetes.

So, next slide? I mentioned at the beginning that the Phase 3 study has started. We have -- we do one pivotal study. That’s also because lanifibranor has received Breakthrough Therapy designation from the FDA.

The study is run in many geographic areas, as you can see, so the U.S., North America, South America, Mexico, large -- most European countries, South Africa and Australia. So overall, there are 25 countries and we have more than -- around 350 sites who are participating.

And we have a huge interest from sites some investigators in lanifibranor based on the positive results that we’ve published earlier. With regard to the timelines, the high level for the key milestones, the study has started, as I mentioned. First sites activated and first patients screened.

In the second half of 2022, we plan to have the last patient first visit of the part one of the study, so this first 900 patients who will provide the data for an accelerated approval. And then, first half of 2024 of patients’ last visits is anticipated, which then would provide the results of part 1 headline results in the second half of 2024.

And that’s then the foundation for the NDA and the request for accelerated approval. And my last slide, Save the Date for the AASLD, which happens in every year -- at the end of year, November of this year.

Unfortunately, re-virtualized, if you wish, as we initially planned to have a hybrid meeting but it’s still I would say, a good opportunity to hear the news and about NASH and investigational compounds. And we also plan to have a dedicated meeting to our leading hepatologists and gastroenterologists from around the world, so KOL meeting.

With that, I’ll give the floor back to Pierre..

Thank you, Michael. Actually, I’ll take over and I’ll present you a brief overview of AbbVie and I’ll try to convince you to convey the excitement that we have in this program and with the -- in the collaboration with AbbVie. So we are -- first of all, we’re scientifically excited.

This has always been the case, ROR-gamma is a fantastic target, because it targets IL-17 expression, it modulates Th17 differentiation. And IL-17, as you know, is a target that is clinically validated by many biologics that have been successful in many autoimmune disease and have reached, you’ll see it in the next slide, substantial effect.

The excitement also continues, when you look at where this target could apply. You know that we’re developing in moderate to severe psoriasis. But some of the preclinical work we have done with our partner AbbVie and that has been published, A9758 is the older compound at cedirogant, but same mechanism of action.

And you see results in several relevant models of course psoriasis, but also arthritis and therefore there is the possibility to develop cedirogant in the multitude of indications. And we know that AbbVie has the experience, the teams, the willingness and also the possibility to develop cedirogant in several indications.

So, this is why scientifically it’s exciting. It’s also exciting, of course, financially. It’s exciting, because from the financial point of view, the collaboration was setup with AbbVie and Inventiva to receive milestone and royalties. And the deal is back loaded. So, the royalties that we’ve received are not transformative.

The last one was for the initiation of the Phase 1b of €3.5 million. But, you see that it’s nice to have. It doesn’t change our financial situation. But instead, the royalties start at mid-single-digit and can reach double-digit are certainly very attractive, especially when you look at the sales potential that has been reached by some of this IL-17.

And once again, I remember, when we started that program, with our colleagues at AbbVie, the team used to call this program or the ambition of the program, Humira in the field with a better safety, if we reach that and convince that Inventiva will be able to receive double-digit royalties on the sale of cedirogant.

And the excitement also comes from the progress made by AbbVie and also by the quotation, the quote, what Mike Severino said during the Q1 results of AbbVie this year where not only they confirmed that cedirogant had achieved clinical proof-of-concept in patients with psoriasis by measuring PASI score, but even more by the fact that they believe that with cedirogant, they would be looking at an efficacy like Humira or greater, of course, with a good safety.

This is exactly what the ambition of the program. And then, the last, excitement comes from a very recent news published by AbbVie on ClinicalTrials.gov. So, please, if you want more details, do not hesitate to look at the filing, which we summarized here.

So, an important trial sponsored by AbbVie, which starts -- going to start very soon in November and Inventiva is entitled to a milestone when the first patient will be included in the study. The study aims to recruit 200 patients, which will be treated for a 16-week treatment period, in approximately 45 sites in the U.S.

So, you see an ambitious program, which is planned to finish in November ‘23. So also, one of the advantages for us is also the relatively short duration of this trial. On the right of the slide, you have various primary and secondary endpoints.

But for those who follow the space, I think you will be happy to see that typical measures that are included in this study are included, especially of course the PASI score. And then lastly, also the excitement comes from the overview about the competition.

Of course, as ROR-gamma is a very exciting target, many biotech or large pharma have tried to develop an oral ROR-gamma.

But, when you look today at the competition, you see that AbbVie with cedirogant is very well positioned to be a first-in-class and best-in-class, as many who have attempted to develop a ROR-gamma have failed, have failed, either because they were not able to develop oral formulations.

This is the case of GSK or Pfizer, or because they had a safety issue, like other. Overall, we really are pleased with the progress and we’re really looking forward now to the beginning of this Phase 2b with cedirogant. So this was the brief overview about this great program.

And so, I’ll give the floor to Jean, who will provide us with an update on the financial situation..

Thank you, Frédéric. Good morning, good afternoon, everyone. So, we are still relying on our solid shareholder base, rather unchanged since the NASDAQ IPO in July. They has been no financing activity, as you know, for this semester.

In terms of market value, we are, if we may say, back in the grind, after the little shift during the summer, when we announced ATM, but it’s all back to the value before the ATM, and we are in quite good shape. However, we are still believing that considering the potential of our programs, we are probably undervalued with peers.

And we hope we will improve that in the coming weeks and months. We can review now on the next slide, the key financials. In terms of, first of all, quite straight forward, and more importantly, it is in line with our budget trends and our operational roadmap. In terms of PNL, no revenues recorded during the semester.

But, as we said, we hope that this line will move by the end of this year with the enrollment of the first patient which is planned according the design of study, in November ‘21. The key information obviously is the strong increase in the R&D expenses with the €19 million compared to €12.6 million last year.

Obviously, it reflects the acceleration as far as we have seen, and which are dedicated mainly to the development of lanifibranor, and the preparation -- effective launch of the NATiV3 phase going along with the reimbursement of the development, clinical development [indiscernible], and the creation of our U.S.

activities where 100% of our staff there is dedicated to the study, and lanifibranor. Also, important increasing in G&A. Again -- yes, R&D expenses represent 75% of our operations -- operating expense. G&A increased as expected. This is exclusively due to the fact that since last July, we are listed on the NASDAQ with dual listing compliant.

But insurance, legal, audit, accounting, fully in line with budget, because here we are comparing this semester with a semester last year only on Euronext. And we are also implementing to much the U.S. regulation while implementing also the Sarbanes-Oxley [ph] to be ready in case we would switch under U.S. GAAP.

In terms of cash position, we are reasonable, cash position at €93.6 million compared to €105.7 million last year, driven obviously by consummation of the cash flow and operating at €19.8 million compared to €7.2 million, as it’s directly related to the trend of the expenses, especially in R&D.

The dynamic of the burn rate was €2.5 million per month during the last semester, now for the first semester up €4.6 million per month. And we are heading towards in average, €6 million by the end of the year, which is in line again with the developments of the strategy.

I will be happy to answer question -- more detailed question if needed during the Q&A session. Thank you..

So, if we look at the near term catalysts, of course, we feel very busy for six months with many of our objectives that have been met on the various programs.

Concerning lani, we will of course provide the regular updates concerning development of the pivotal Phase 3 and also we’re looking forward to the results of the study that is ongoing currently in the U.S. at Professor Cusi at the University of Florida. Odiparcil, I mentioned we’ll provide an update 2022.

And of course, on cedirogant, you should expect to hear from us once we -- once the trial is launched and we receive the milestone for the initiation of the Phase 2b. So, these are the news and updates we wanted to share with you. And I suggest we move to the Q&A session..

Thank you. [Operator Instructions] The first question is from the line of Lucy Codrington from Jefferies. Please go ahead..

Just firstly, on the anticipated AbbVie milestone, should we think about that as being in a similar ballpark to the milestone you received on the Phase 1 and psoriasis patient dosing, or given that this is a Phase 2b, is that likely to be a bit more? And secondly, do you have any insights into the recruitment status of Prof.

Cusi study? And accordingly, do you see any risk to the April 2022 from patients that’s suggested on their clinical trials entry at the moment? And then, with safety or oral treatments for psoriasis at the moment and focus given the JAK [ph] class, what are the key safety concerns when it comes to targeting ROR-gamma? And is safety the key risk to the Phase 2b over any concern regarding efficacy? And with that, I’ll jump back in the queue.

Thank you..

Thank you, Lucy. Well, I think, the question about the milestone and the situation of the Cusi study, and maybe Pierre if you can comment about the safety about the JAK class and any potential recruit on ROR-gamma.

It’s quite a good question, because it’s actually for us, when we look at the difficulties of the JAK class, we see as a great opportunity because not only we have now to deal with the replacement of Humira but also may be can calculate on the JAK class or JAK [ph] to achieve that, and therefore, cedirogant might become even more important to them.

But, we see what happens in the development of cedirogant. So, coming back to the milestone that is linked to the Phase 2b. So, once again, the milestones are not transformative.

What is really transformative in the deal are the royalties which are -- that can reach double-digit, which for a partnership that was established as clinical, it’s quite unexpected and quite high. And therefore, in terms of milestone, they of course increase over -- as most of the program will advance, but they remain relatively small and limited.

In terms of the Cusi study about the recruitment, so, this is an investigator led. So, it’s driven by Professor Cusi. So, he is in charge of updating the ClinicalTrial.gov. So, he is the one in charge of updating it. We can only rely on that.

I think what is important to point out about the study that it’s of course important to learn more about the lanifibranor, especially in a population that has Type 2 diabetes. But once again, it’s a different, not the NASH population. So, it’s a study that is supportive but has no impact on how we run and carry out our Phase 3.

Pierre, maybe on the potential talks or safety of ROR-gamma, any insight you want to share?.

Yes, sure. Yes. So, as we mentioned, we see -- as Frédéric said, there is a number of issues that have been considered, like serious health related events, cancer, blood clots. I would say that the facts are very, very -- quite ubiquitously expressed actually. So, they are reacting on multiple types of cells.

This is different from ROR-gamma, which is much more specific -- specifically distributed. And from the such experience we have on at least pre-clinical models, we haven’t seen any severe side effects at all. So, I think, clearly, the safety profile of ROR-gamma will be totally different from that.

I think, there was one ROR-gamma compound that has been terminated due to safety reasons, this is [indiscernible] probably. And I think the compound was very specific, not target related and specifically with an increase [indiscernible] of the patient is quite hard to do.

So, in a nutshell, I think ROR-gamma, it will be very, very different than what we have observed for JAK so far..

The next question is from the line of Lenny Van Steenhuyse from KBC Securities. Please go ahead..

Three from my side. Perhaps, first one for Michael. I was wondering to get some sense of potential patient recruitment. Could you perhaps remind us how many patients do you roughly expect that need to be screened for inclusion of the total first 900 patients of part 1? Next question is on broader clinical development of lani.

So, development in F4 and combination setting have been alluded to since the Phase 2b results. I was wondering, if there’s any visibility on when these could be initiated, or what events could trigger their initiation.

Also, in terms of scope, should we think about smaller proof-of-concept trials, mid-stage trials or immediately pivotal trials? Then the last question, I was just curious about the drivers behind the delay of the outcome of odiparcil strategic review? So, curious to hear your opinions on that. Thank you..

Yes. Thank you. I’ll answer the first two questions. And odiparcil, maybe Pierre or Frédéric can answer. So, NASH -- have had relatively high screening failure rates, of course, for reasons that have to do with the disease and the need to have histological diagnoses and staging and rating of the disease.

And there have been actually around 70% that actually has been relatively good, if you compare with other studies. We have just started our studies. So, we do everything we can of course to be efficient.

We have a number of, I would say, approaches to try to reduce the screen failure as much as possible, for example, by implementing imaging fibro scan before patients are considered for biopsy. And by the approach we hope that we can keep the screen failure rates low, lowest possible within the setting of NASH, of course.

So, it’s too early to say, of course, what our screen failure rate will be. But, we are aware of these challenges. And together with our partner and our investigators, we do expect to reduce that. The question about cirrhosis is a good one. Clearly, the patients with NASH would have progressed to cirrhosis or present a high unmet medical need.

I mean, because they are at risk for complications of cirrhosis and ultimately need for transplantation. And there has been not really, much success in that field yet. But, I should say that the efforts have been tried so far have aimed at regression histologically of cirrhosis from a histological stage at F4 to a lower histological stage, F3.

This is considered to be a high bar. And what matters for patients and for the outcome is actually how the disease progresses, and slowing or reversing the disease progression is actually what matters, with regard to the outcome of patients. This is also corresponding the guidance of the FDA, which I think makes a lot of sense.

The FDA does not recognize histological endpoints in cirrhosis patients as a surrogate endpoint. They actually require outcome improvement. And NASH cirrhosis, of course, both NASH and cirrhosis, sort of diseases driven by all the pockets of NASH and then the dynamism of cirrhosis itself.

So, I think, in that regard, lanifibranor has a very attractive position and a very good rationale I think to study lanifibranor in patients with NASH cirrhosis, because it doesn’t affect not just -- it does affect fibrosis, of course, but not only fibrosis, it has an effect on all the other pathways that drive this disease, metabolism and inflammation, et cetera.

It’s well known that, patients who have type 2 diabetes, for example, and NASH cirrhosis, progresses much more faster. So, the underlying metabolic abnormalities continue to play a role.

From the FDA’s angle, they have made a couple of public announcements confirming what I just mentioned about the -- not histology -- histological improvements of NASH cirrhosis being a high bar and also not being a surrogate endpoint, but on the other hand, offering an outcome improvement in NASH patients as a path to full approval, that would also cover non-cirrhotic NASH, assuming that the compound has received accelerated approval for pre-cirrhotic NASH.

So, that’s actually a very good plan or a strategy from the FDA. I think, it makes a lot of sense. And of course, we are thinking along those lines and we seek interaction with the FDA on that topic and consultancy. So, I hope that addresses your question.

I think, the proof-of-concept study in cirrhosis is quite difficult, because you have to then know what endpoint proves your concept. And the reality is that in cirrhosis, there’s not really one such endpoint.

So, I think the strength of lanifibranor in all these pathways that drives cirrhosis as a pan-PPAR agonist, right, and these are receptors that really have a programmatic effect on the spectrum of disease manifestations, gives us a very strong, a very good question, I think to look at an outcome improvement with lanifibranor in NASH patients with cirrhosis.

And that’s our current line of thinking..

Thank you, Michael, and the last question about odiparcil, the answer is just the fact that it’s just proven more time consuming than anticipated to find a solution for odiparcil that meets our objectives, which in a certain sense, are quite simple.

The first objective is to -- that we have is to find an option, the solution that ensures that odiparcil continues to be developed in the MPS VI patients, because there is really need and with a certain sense, we owe it to this patient. And secondly, also the solution that ensures a certain return and financial gain for Inventiva.

Because otherwise, if we do not meet these two objectives, we’re better off keeping odiparcil for our self, and once we have the time and resources, get back to work and get back on developing odiparcil. So, that’s why we want to -- we have more time to think what are the best options for odiparcil moving forward..

Thank you. The next question is from the line of Ed Arce from H.C. Wainwright. Please go ahead..

Great. Thanks for taking my questions. And congrats on the initiation of NATiV3. A few questions for me. Firstly, you mentioned there’s other areas and other trials that are part of your overall program and you’re considering.

So firstly, with the ongoing Phase 2 that’s expected to read out early next year in Type 2 diabetes, if you could just explain your thinking about that.

Is that an area where you believe ultimately could lead to a supplemental NDA, perhaps a label expansion or how do you see that program ultimately, evolving? And then, turning to combo studies, which particular mechanisms do you believe make the most sense for lanifibranor? And what areas specifically which you think makes the most strategic sense for you? And then, turning to the NATiV3 study, of course, there’s key differences with the Phase 2b longer treatment, 900 patients, and it’s only F2/F3.

But, I wanted to just focus on any of the other key differences beyond those, because I know that a lot of the thought behind it was to try to replicate as closely as possible the baseline of the Phase 2b. And then, I have a follow-up. Thank you..

Thank you, Ed. Maybe I’ll -- for the question about Cusi and what are the objectives of the study, I’d let Pierre. Maybe Pierre can also cover the rationale for developing combination study, and which mechanism of action would make it suited to be combined with lani. And for the development of Phase 3, Michael, if you can take that will be great..

Okay. So, Ed, thank you for your question. So, the Phase 2 Cusi is more I would say an exploratory study that would lead to mechanistic data relatively to mechanism of action of improving the particular insulin sensitivity.

And this is really something that, as I mentioned, can differentiate lanifibranor from several of our competitors, and I think is key also for improving the condition of NASH patients.

So, I would say that it’s something which is really wide study that is really purely mechanistic and aimed at understanding [Technical Difficulty] of course, this would be supportive data to be brought to the attention of regulatory authorities when filing an NDA for the treatment of NASH and improvement of fibrosis in patients with NASH obviously and also Type 2 diabetes.

So, that is the rational for this study, which is currently ongoing. Relatively to the question on combination therapy. So, I think, very interesting combination is actually lanifibranor plus SGLT2 inhibitor.

It can clearly improve, I would say, the efficacy of those issues to which you probably know are more so being investigated in type 2 diabetic patients with NAFLD or NASH, plus it has also the potential to offset the weight gain that we see in some patients treated with lanifibranor with -- due to the negative action of SGLT2 inhibitors, which is actually reducing the amount of the course, which can be used for being stored -- due to the increase urinary output because triggered by inhibiting SGLT2, plus -- SGLT2 inhibitors so far have been proven to be very safe, also to reduce -- well to have a lot of -- outcomes on cardiovascular events.

So, there is quite a strong rationale for developing these two products in combination, I would say. So, this is study that we are currently working on. And of course, as soon as we will have finalized the design, I think that we’ll share with you.

So, Michael?.

Yes. On the question on the differences between NATIVE and NATiV3, the Phase 3 study. Main difference is duration of treatment, which I think is actually to the advantage of the study. Basis was half a year, 24 weeks.

And we did see, as you know from the data, provides a strong effect on fibrosis, which is actually not always the case, right? Fibrosis histologically lags behind. And often in past, these effects have been seen -- or have required a longer duration of treatment.

So, six months of treatment actually is the strong duration to see an effect on histology, which reaffirms actually the efficacy of lanifibranor. Longer duration should of course play -- should enable us to see the effects on fibrosis more importantly, more strongly. That’s the expectation.

And I think, when we look at the multiple biomarkers that we looked at, that’s also what we can expect to see movements in these biomarkers that reflect fibrosis. That should translate in the strong histology further down the road. So, that’s the main difference.

You mentioned that the patient population is more restricted with regard to staging of fibrosis, F2/F3, whereas in NATIVE -- all fibrosis stages were enrolled other than F4, that is true. We have looked at the -- we have done certain analysis of course of patients with F2/F3 compared to the total population in NATIVE and essentially no difference.

So, the efficacy remains the same, when you look at the F2/F3 population study. So, that’s reassuring that the Phase 3 study actually NATIVE. And as I mentioned before, the patients who do have a certain degree of fibrosis advancements or the ones who are -- require treatments, most in medical need of treatment.

So, I think, by and large, we have the benefit. We expect the benefit from a longer duration of treatment in Phase 3 study and other than that most factors have been kept as stable as possible..

Great. And -- sorry. Go ahead..

No. I hope that answers your question..

Yes. That’s very helpful. Thank you. And if I may, one, further follow-up regarding cedirogant. You mentioned the JAK class and of course the safety issues that have recently come up with that class.

I’m wondering given the novel class that cedirogant is in, is there -- or are there particular classes or other drugs in development that you see particularly competitive, given the overall profile to date of cedirogant?.

I think, if you look at the state, of course, the TYK2 will evolve, but there will be a class to follow. But, I think that will not amplify the compounds or mechanism of action that can approach the potential of once daily overall ROR-gamma..

Thank you, Frédéric..

The next question is from the line of Zegbeh Jallah from Roth Capital Partners. Please go ahead..

I think, the first one for me is just a follow-up to the last question regarding future development for lani.

And I just want to clarify if the plan is to use the same doses that you’re currently using for both, the combo and for the F4 patients, because I imagine that would impact the development timeline?.

Well, concerning on doses, maybe speaking under the control of care and maintenance, I think, it is a bit too soon to project ourselves on what -- on what are the doses that are suited, either if we decide to develop a fixed combo or that are suited F4 development. So, let’s first focus on the current Phase 3 in F2/F3.

And then, once we have our plans for the other fixed dose combo or F4, we can communicate on the other quick dose..

And then, the last one here for me, and I think I’ve asked this question before.

But again, just wanted to clarify, for your sites that you’re currently using, are there ongoing studies at those sites? And then, again, how are you planning to kind of differentiate lani or how are doctors differentiating lani in terms of recommending patients for your study or for another study that’s currently ongoing at that same sites?.

Yes. Maybe Michael, you can take that..

Certainly. Yes, of course. NASH is a very competitive field, as many other diseases that represent a medical need, of course. So, it’s not unique. But it is very competitive. There are number of studies in different stages of results. And therefore most sites that have experience in NASH do have other studies. That’s obvious.

And how do you differentiate? Well, it’s a number of factors, right? I mean, first of all, I believe the most important argument is the fact that lanifibranor is a very promising compound to reach the market. Its efficacy data has been very -- and safety profile has been very convincing to the community.

And whenever I speak with pathologists in different parts of the world, they have -- lanifibranor is on their radar screen, very clearly. And there is demand for a compound like lanifibranor. And it has to do with the fact that it is pan-PPAR agonist that it really addresses the part of physiology of NASH at all levels.

And that’s not something that all compounds do. I think that is an advantage. So, we also, as you may see from publications that we have been presenting at EASL recently, looking at our data in the Phase 2 study in NATIVE, lanifibranor has a very, very convincing efficacy on all markers of cardio metabolic health, on lipids glycemia, et cetera.

So, these are important differentiators. We treat the liver disease, but also the entire spectrum of what constitutes metabolic syndrome with a compound like lanifibranor. And pathologists or physicians who are seeing these patients, they know that and they appreciate that. And I think that gives us leverage. Of course, leverage does not come by itself.

It should not make us complacent. So, we do -- we’re fully aware of the fact that there are other compounds which are also attractive. And so, we have -- we will continue to be present scientifically. We work on good working relationships with our colleagues, investigators to different sites, together with partners.

So, we have really -- where every day that you have to earn that leverage, if you wish. And that is part of the efforts we do to having very inefficient operations aspect of the study, which includes multiple levels of how we interact with sites and keep a good working relationship.

But, I think, the core of all it is really the strength of lanifibranor and how it addresses the disease..

Thank you. One more question on the phones, and this is from Del Le Louët from Société Générale. Please go ahead..

Yes. Hi. Good afternoon, everybody. Thank you for taking my questions.

I was wondering, how close are you from the AbbVie team regarding development? Because I’m wondering, do you have any view on the dosage that can be selected? We see the three are doses that did the activity in cedirogant Phase 2 trials, any chance that one of them may target pediatric patients? Do you have any view on that? Secondly, can you make secure of fact regarding the ramp up in terms of royalties? Jean, particularly, I don’t know if you -- previously disclosed this, but just to get an idea if it’s, let’s say common regarding the scale up to the double digit according to revenue, or if there’s anything we have to keep in mind? Regarding lanifibranor, we had some painful times previously in the recruitment.

So, what would be your communication? And do you have any idea on where you’re going to communicate regarding the number of patients included into the trial, or you remember previously, you were also communicating on a number of opening sites, screen patients, recruited patients, is it something that you’re going to continue, or you’re going to say, basically, at the end of the 900 patients, you’re there, just to get an idea.

On odiparcil, we had a previous question, but I do understand your response. But I was also really wondering, what is new that makes you think that you may have a different proposition than the one you’re having, if so, in the next couple of months, because there is no new clinical data, I guess no new interpretation of data.

So, what is the element that would trigger this additional year of strategic review? And finally, can we get an update on the oncology pipeline in the YAP-TEAD program that you were working on? Thank you very much..

So, first question about the AbbVie, of course, we’re -- with AbbVie, of course, we -- of course, a good relationship and then we have the contractual communication that we see and that allows us to have access to the cedirogant. Otherwise, must be clear that in terms of development strategy, this is fully in the end of AbbVie.

They are totally in control. And I have to say that I think, this is a great advantage because when you talk about which is a company in the world that can develop successfully a compound like ROR-gamma in the autoimmune disease space and who is strategically motivated to do so, I think, obviously AbbVie, of course, comes on top of the list.

Directly on your question about the pediatric priority, I don’t know. I suspect, nevertheless, but that’s my personal opinion, that they would have to run a specific study in pediatric patients. About lani recruitment, there are I think, what is would say required by the stock exchange.

So, if we are delayed, we believe this is, let’s say real information who will have to communicate on that. Otherwise, we will, during the recruitment period, make regular updates. We haven’t decided on that. We also need to be careful about competitors. So, we have not taken a decision.

And otherwise, we’ll always like to communicate on the DSMB, and of course, the safety, if ever something unexpected comes up. Then on odiparcil, these things evolve, competition can evolve. We also have the plan, the meeting with the FDA to discuss, to validate what it would take to get this product on the market.

So, this is probably an information that can strengthen our package. But otherwise, you’re right, in terms of data, we’re now planning to develop new data, of course, not in human and not preclinical.

And then on YAP, there I would turn to Pierre, because indeed they have been on the Hippo pathway, some exciting development, including certainly an oncology target that is getting more and more attention..

Yes. So, just to add on odiparcil, we have also a few papers submitted, being reviewed that will also share some interesting pre-clinical information to be published. And I think, this is also an important step. And regarding YAP-TEAD, so as you know, there are two biotech companies that have been working on this program.

We’ve been busy those days, comparing the portfolio of our compounds [indiscernible]. And we’ve seen -- I don’t how familiar you are but, it is actually -- has come up with bit the contact -- between YAP and TEAD. YAP has a kind of family member which is very close, called TAZ that can actually be activated when YAP-TEAD is inhibited.

And we have data showing that our compounds are inhibiting both YAP-TEAD and TAZ-TEAD, which makes this -- the profile of our compound very different from those that have been published and offers the opportunity to target many other cancers.

So, we’re currently working on this particular type of compound and improving the PK profile of those who are being in operation to enter in vivo studies..

And I think, there is other question for Jean.

But, can you repeat it?.

I was wondering regarding the -- not the milestone, sorry, the royalties run rate and the scale-up up to the double-digit.

So, I don’t know, if it’s something that -- I can’t remember, if that was previously communicated regarding the level of sales, targeted sales, is it something that we have in common with the rest of the industry? Is it the -- progressing one, but in terms of royalties rate?.

Thank you, Delphine. What we can say that, first of all, we cannot disclose anything about the conditions. What we may say in the control of regulated is that what it is reasonable to reach the double-digits. It’s not something which could be considered as very aggressive.

But, if the market will grow and how the launch, if there is the approval obviously, will behave. But I mean, it’s quite balanced, and impossible to reach..

Okay. Thank you. Thank you very much..

Okay. So, there are some questions on online -- several questions. So, I’ll to try to address. So, the first one concerns the ATM.

And the question relates to the fact, if we raise $100 million with the ATM, would that totally fine until Phase 3? So, I would say that, first, in the ATM, this is an opportunity that is available to companies open on the NASDAQ.

And it’s clearly something we would -- we wanted to benefit, because it happens that some long-term investor contacts us, they will to buy -- they want to build a position, they are not allowed -- or not allowed, not -- unable to do that, because the liquidity is limited.

In that case, we view that’s an opportunity to give us some financial flexibility. But, we have not decided to use the full amount of the $100 million. And yes, if we ever raise $100 million and we continue with the other option we are starting like loans, like a partnership, there is a high likelihood that the Phase 3 will be fully funded.

Then, ask about the partnership discussion, if we have discussion with potential partners. Of course, I cannot go into details. But of course, if we look at the NASH base, it remains an area totally unmet with the high potential.

And if you look at the drugs that have shown promising results that have met the two regulatory endpoints from the FDA and really stands out, of course we have the discussion with potential partners.

But always, first with the option that we do it on our own, and secondly and clearly we think lani has high chance to make it to the finish line, we want to keep a lot of -- or we want to keep value, especially in the U.S. market. So, this is for us a non-negotiable which we have. And this is something that I think is important for our shareholders.

Then a question concerning a cedirogant and more specifically the fact that there are out there compounds like Skyrizi that only require three or four injections per year and that therefore, maybe your oral -- oral drug, it might not be such a panacea or the solution.

I would say, first, the objective of cedirogant year regard is also to have an efficacy that is similar to Humira. If we look only at the psoriasis area, we see Otezla, certainly and inefficacy that is, I wouldn’t say minimal, but reduced compared to IL-17 or compared to Humira and still Otezla has made in 2020 more than $2 billion.

So, there is clearly a position or role for an oral drug. And then, AbbVie is commercializing Skyrizi, but they’re still very much motivated by cedirogant. So, there must definitely be a place for this drug. And then, we have one last question that tackles the R&D expense. And if we can give some projection about 2022. So, I’ll turn to Jean for that..

Okay. So, as you know, we cannot disclose any projections. But where do we stand today in terms of the Phase 3 momentum, we did not sign the contract Jan 1st with the CRO, CDMO. So, this year, we will not have a full year base in terms of expenses.

So, technically, next year, we should have like increase to take into consideration, full annual basis, also including the full year of our U.S. operations. So, I may say that it would be in continuity, slightly increasing for next year..

Thank you, Jean. So, this covers the whole Q&A session. I would like to, on behalf of whole Inventiva team, thank you for your support and for following us over the past year. And of course, we look forward to provide additional exciting news with our pipeline, lani, cedirogant, odiparcil and of course, YAP-TEAD. Thank you very much.

And have a great day..

Thank you. That does conclude the conference for today. Thank you for participating and you may now disconnect..