Immunic Inc (IMUX) 2021 Q4 法說會逐字稿

Good morning, and welcome to Immunic's Fourth Quarter and Year-End 2021 Earnings Call. My name is Jessica Breu, Head of Investor Relations and Communications at Immunic. I will also be the moderator on today's call.

Speaking on today's call are Dr. Daniel Vitt, our Chief Executive Officer and President; as well as Glenn Whaley, our Vice President Finance and Principal Financial and Accounting Officer. For the Q&A session of today's call, we also have our Chief Medical Officer, Dr. Andreas Muehler on the call. (Operator Instructions) And this event is being recorded. (Operator Instructions)

Before we begin, I would like to remind you that this presentation may contain forward-looking statements. Such statements can be identified by words such as may, will, expect, anticipate, estimate or words with a similar meaning. And such statements involve a number of risks and uncertainties that could cause Immunic's actual results to differ materially from those discussed here.

Please note that these forward-looking statements reflect Immunic's opinions only as of the date of this presentation, and it undertakes no obligation to revise or publicly release the result of any revision to these forward-looking statements in light of new information or future events. Please refer to Immunic's SEC filings for a more detailed description of the risk factors that may affect Immunic's results and these forward-looking statements.

I would now like to turn the call over to our CEO and President, Dr. Daniel Vitt, to begin the presentation. Daniel, please go ahead.

Yes. Thank you, Jessica. I would like to welcome everybody on Immunic's year-end 2021 earnings call. I do not want to start this call without expressing our sympathy with the people in Ukraine and expressing our solidarity with them.

Despite of these developments, earlier this morning, we announced our financial results for the year-end of December 31, 2021, and highlighted recent activities as well as upcoming milestones to our clinical development pipeline.

During today's call, we will talk through our fourth quarter 2021 and subsequent highlights, financial and operating results as well as anticipated milestones. As Jessica noted, before we close the call, you will have the opportunity to ask questions.

2021 was another year of tremendous achievements for Immunic, marked by significant clinical progress across key pipeline programs, clearing the way for several important data readouts this year that are potentially transformative for the company. Notably, during the fourth quarter, we enrolled the first patient in our Phase III ENSURE program of vidofludimus calcium in patients with relapsing multiple sclerosis. We also completed enrollment in our Phase II CALDOSE-1 trial of vidofludimus calcium in patients with moderate to severe ulcerative colitis. We expect top line data for the induction phase of the UC trial to be available in June of this year.

For our second program, IMU-935, we reported positive unblinded safety, PK and PD data from the healthy volunteer portion of our ongoing Phase I trial. We also expanded the trial as planned to treat patients with moderate to severe psoriasis. Beyond this, we also initiated an open-label Phase I dose escalation trial of IMU-935 in metastatic CRPC and expect clinical safety data to be available in the third quarter of this year.

Finally, we hope to see the first clinical data from this (inaudible) part of the ongoing Phase I trial of IMU-856 in the third quarter of this year and expect to initiate the third portion of the trial in patients with intestinal barrier function associated diseases during the first half of this year.

That quick overview set, let me now walk through the fourth quarter 2021 and subsequent highlights in greater detail. Given the milestones we have achieved so far, our continued pace of development and ongoing interest in our key therapeutic focus areas, in October, we appointed Patrick Walsh to the newly created role of Chief Business Officer. This is a key position within Immunic, and Patrick has already proven to be a valuable addition to the team as we work to realize the full potential of our clinical programs.

Also in October, we started treating patients with moderate to severe psoriasis in Part C of our ongoing Phase I trial of IMU-935, representing the first time patients have been treated with our potentially best-in-class oral IL-17 inhibitor.

To enable the rapid conduction of the trial, despite COVID-19-related limitations in Australia and New Zealand, where the trial is exclusively performed so far, we have early initiated measures to randomize patients faster. This includes a potential expansion of the trial to one or more countries in Europe. Based on our modified projections, we expect initial results from the psoriasis patient cohorts now to be available in the second half of 2022.

Rounding out October's news, the key announcement was that we enrolled and randomized the last patient in our Phase II CALDOSE-I trial of vidofludimus calcium in patients with moderate to severe ulcerative colitis. At completion of patient recruitment, the trial had randomized a total of 263 patients into 4 arms, 3 active dose arms of 10 milligram, 30 milligram and 45 milligram as well as placebo. We currently expect the top line results of the induction phase to be available in June of this year.

Backed by promising results from our previous Phase IIa ENTRANCE trial performed in UC and Crohn's disease patients and the interim analysis of our CALDOSE-1 trial published in September 2019, along with vidofludimus calcium's already established strong safety and tolerability profile, we believe that the drug could become a preferred oral treatment option for patients suffering from ulcerative colitis and obvious alternative to biologics.

In November, we enrolled the first patient in our Phase III ENSURE trial of vidofludimus calcium in RMS. This was followed by enrollment of the first patient in the programs twin ENSURE 2 trial 2 months later in January. We have targeted an enrollment of approximately 1,050 patients in each trial. Dosing will be either 30 milligram daily of vidofludimus calcium or placebo. The primary endpoint for both trials is time to first relapse up to 72 weeks.

Enrollment in these twin Phase III studies comes on the heels of initiating our supportive Phase II CALLIPER trial in progressive multiple sclerosis. Together with these programs mark a significant milestones for Immunic, in particular, as we have now initiated our first Phase III program.

As we have noted before, based on the strong activity observed in our Phase II EMPhASIS trial in RMS and the drug's well-established safety and tolerability profile to date, we believe that the design of the ENSURE program provides a straightforward path towards potential regulatory approval of vidofludimus calcium in RMS. Despite the limitations of currently approved therapies, the global MS market exceeds $23 billion, and vidofludimus calcium is uniquely positioned to address the unmet need for MS patients.

Moving on. In December, based on the strength of preclinical data highlighting the therapeutic potential IMU-935 to affect castration-resistant prostate cancer, we enrolled the first patient in an open-label Phase I trial in this indication. The trial's principal investigator Dr. Johann Sebastian de Bono, is one of world's leading experts on the subject of CRPC. His expertise and deep understanding of the unique mechanism of action of IMU-935 provides important corroboration of this program within the scientific and clinical communities.

Also in December, we reported positive unblinded safety, tolerability and PK data from the single- and multiple-ascending dose portions of our Phase I clinical trial of IMU-935 in healthy volunteers. The data showed a very attractive profile for IMU-935 and are consistent with our preclinical data supporting our vision of establishing IMU-935 as a potentially best-in-class oral IL-17 inhibitor.

Additionally, we announced newly available preclinical in vivo data confirming that IMU-935 maintains normal thymocyte maturation in relevant acute and chronic mouse models. These data are consistent with previous preclinical in vitro data and support that we may have the first clinical-stage RORgammat inverse agonist, which circumvents thymocyte maturation issues. To our knowledge, such an outstanding selectivity hasn't been reported for any other RORgammat inhibitor so far.

More recently, just earlier this month, we strengthened our IP position with the receipt of notice of allowance for Composition of Matter Patents covering IMU-935 in the United States, in Europe and in Australia. These patents provide patent protection into at least 2038, with further extension possible through potential PTE in the U.S. and SPC in Europe, respectively.

Also in February, we presented preclinical data on the potent anti-inflammatory activity of vidofludimus calcium at the 17th Congress of ECCO. Highlights included: first, that vidofludimus calcium reduces pro-inflammatory immune cell response by inducing regulatory macrophages, reducing pro-inflammatory cytokine secretion and reducing T cell proliferation. Second, the vidofludimus calcium shows an additive to synergistic effect with anti-TNF antibodies. And finally, the DHODH is important in the fraction of cells that receive a strong immune stimulus and are highly metabolically active.

In conjunction with the ECCO Congress, we also announced the blinded baseline characteristics of our Phase II CALDOSE-1 trial of vidofludimus calcium in UC. Patients in the trial had active moderate to severe disease, and we were happy to see that only 17% of the patients were pretreated with biologics. The trial employed a central independent reader to evaluate the endoscopic eligibility criteria.

At baseline, 55% of patients had a modified Mayo endoscopy score of 3, and 45% of patients had a score of 2. We believe that these data of randomized patients and the methodology regarding endoscopic assessment used in the clinical -- in the trial contributes to ensuring an optimized study readout.

In our 10-K filed this morning, we also released final data of Cohort 2 from our Phase II EMPhASIS trial of vidofludimus calcium in RMS. We believe that this data set provides additional support for the previously determined dose selection for the ongoing ENSURE and CALLIPER trials in RMS and PMS, respectively.

Recall that our EMPhASIS trial comprise 2 cohorts. Cohort 1 compared the efficacy and safety of 30-milligram or 45-milligram once-daily vidofludimus calcium with placebo in RMS. While Cohort 2 compared the efficacy and safety of 10-milligram once-daily vidofludimus calcium with placebo in RMS. Full data from Cohort 1 was published in the third quarter of 2020, while 12-week interim data from Cohort 2 was released in the second quarter of 2021.

In the newly available Cohort 2 data set, the anti-inflammatory effects of vidofludimus calcium in the 2-milligram dose were observed to be lower than those on the 30-milligram vidofludimus calcium dose in the full Cohort 1 and 2 data, providing further support for the selection of 30-milligram dose in the ongoing ENSURE [trends] of RMS.

The final Cohort 2 data also provided evidence of dose proportional neuroprotective activity. For instance, the highest decrease of the biomarker serum neurofilament light chain was observed with 45-milligram dose of vidofludimus calcium versus placebo, with minus 26% median of difference between percentage change of serum neurofilament light chain. The substantial decrease was seen with a 30-milligram dose with minus 18%. While the smallest decrease was observed with 10-milligram dose of Cohort 2 with minus 9%.

The 10-milligram group of Cohort 2 also showed a signal with respect to improvement in EDSS, consistent with those signals seen with the higher doses of Cohort 1. However, all of these early signals need to be confirmed in larger patient populations with (inaudible) follow-up periods.

Taken together, these observations suggest that higher doses such as 45-milligram vidofludimus calcium may be preferred doses for clinical trials in which neuroprotective effects are the main mechanism for improvement, such as in PMS.

While the blinded treatment of Cohort 1 was completely right before -- was completed right before the COVID-19 pandemic started, final Cohort 2 data provided additional evidence that ongoing vidofludimus calcium treatment may reduce the risk of COVID-19 infections. In the anti Cohort 2 population of 59 patients, incidental COVID-19 infections in the active treatment group was 8.5%, were less frequent than in the placebo group with 25%.

Additionally, we recently obtained new preclinical data underlining that vidofludimus calcium shows potent anti-EBV activity at concentrations of 3.3 to 30 micromolar in a superinfection assay. A poster with the full data was presented at the ACTRIMS Congress in October.

We also confirmed that vidofludimus calcium can be detected to a noteworthy degree in the CSF of animals after oral dosing. We believe that this finding suggests that vidofludimus calcium may be able to act directly within the central nervous system.

For the next part of today's presentation, the financial overview, I would like now to hand over to Glenn.

Thank you, Daniel. We will now review the financial and operating results for the year ended December 31, 2021. Let me start with the cash overview. We ended the year with $86.9 million in cash and cash equivalents and also raised an additional $16.2 million through our at-the-market facility so far in 2022. We anticipate this cash balance to be sufficient to fund operations through the first quarter of 2023.

Regarding the operating results. Research and development expenses for the year ended December 31, 2021, were $61.1 million as compared with $38.6 million from the same period in 2020. The increase in costs for the full year reflect the continued ramp-up of clinical expenses related to our 3 clinical programs as well as increased personnel expenses related to the hiring of more people to support the company's growth. The increases were partially offset by decreased costs related to our Phase II clinical trial in COVID-19 that was finished in the first quarter of 2021 and a decrease in drug supply costs for IMU-856.

General and administrative expenses were $13.3 million for the year ended December 31, 2021, as compared to $10.3 million for the same period last year. The increase in cost was primarily due to noncash stock compensation expense as well as the smaller increases in costs across numerous categories.

Net loss for the year ended December 31, 2021, was approximately $92.9 million or $3.93 per share based on approximately 23.7 million weighted average common shares outstanding compared to a net loss of approximately $44 million or $2.81 per share based on 15.7 million weighted average common shares outstanding for the same period in 2020.

I would like to remind everybody that our 2021 net loss was impacted by the settlement agreement our subsidiary, Immunic AG, signed with 4SC AG in March 2021. Immunic AG settled its remaining obligation of a 4.4% royalty on net sales of vidofludimus calcium for $17.25 million. The payment was made 50% in cash, 50% in shares of Immunic stock. No further payment obligations remain between Immunic and 4SC AG.

With that, I'll turn the call back over to Daniel for an outlook on our upcoming clinical milestones. Daniel?

Thank you, Glenn.

As mentioned in the beginning of the call, we have a very exciting year 2022 with several significant milestones coming up. And I'm happy to walk you through this. One of our most important milestones in 2022 will be the readout of our Phase II CALDOSE-1 trial in patients with moderate to severe ulcerative colitis. We currently expect the top line results of the induction phase to be available in June of this year.

For our Phase I clinical trial of IMU-935, we expect initial results from the third portion in patients with moderate to severe psoriasis to be available in the second half of this year. The initial data will provide us with the first important look at IMU-935 safety and efficacy profile in this patient population.

In addition, we expect initial safety data from our Phase I dose escalation trial of IMU-935 in progressive metastatic CRPC to be available in the third quarter of this year. As a reminder, the trial is designed to establish a recommended Phase II dose and to assess safety, tolerability, antitumor activity biomarkers in pharmacokinetics of IMU-935 in this patient cohort.

Finally, we anticipate unblinded safety data from the single and multiple-ascending dose permits of the Phase I clinical trial of IMU-856 in healthy volunteers in the third quarter of 2022. An initiation of the third portion of the trial in patients with intestinal barrier function associated diseases is expected in the first half of 2022.

This brings us to the end of our formal presentation. Jessica, please open the call for the Q&A session.

Thank you, Daniel. We will now begin the question-and-answer session with Daniel, Glenn and Andreas. (Operator Instructions) Our first question comes from Jessie Vo at Piper Sandler.

This is Jessie on for Yas. I had a few on CALDOSE. Based on demographics on Friday, what do you guys expect to see placebo rates for clinical remission and endoscopy? And what aspects of the baseline do you expect to drive down placebo responses?

Jess, this is Andreas. Thank you very much for the question. I think we were very happy to provide you the data with the baseline characteristics because we believe we have worked hard to find a patient population where we have a very good chance of showing the properties of IMU-838 in the right setting, in ulcerative colitis patients.

What the baseline data showed that we had an active population. You can see this, for example, in the fecal calprotectin data but also in the amount of patients or proportion of patients that have a very high stool frequency and had blood in stool to a very large degree almost in every of their stool occurrences. So I think that, to my mind, the high activity seen in the baseline, I think, is the major driver for giving the drug a chance to show activity in this trial.

On top of it, I think the -- since the primary endpoint is a composite out of the endoscopic healing and symptomatic remission, we are also very happy that 60% or more than 60% -- almost 60% of these patients had a Mayo endoscopy score of 3, which is also, I think, important to limit the placebo response in any IBD trial. Because it is known that in IBD, you have a placebo response, including sometimes for endoscopy. And having patients with a very extensive baseline disease in endoscopy, I think, allows us to limit the placebo response as well.

So overall, I think we've been quite happy with the baseline data that we have presented. And we believe that this enables us to have -- give our drug a chance to really shine in this study. And I hope that, Jess, I addressed all of your questions and all the aspects.

Yes. I had one more follow-up. And if there will be a Phase III, do you plan on running it yourself or with a partner?

I think that's too early to tell. We do, however, are in the middle of preparing, of course, how a Phase III would look like. We're having a lot of very tight discussions with our medical advisers in IBD. We are very happy that we have a very large and also very well-known group of medical advisers for our IBD program. And over the years, we really have had a very close relationship with them. And basically, in anticipation for the study readout, of course, have a lot of ongoing discussions with them that target also, I think, the positioning of the drug, given what happened in IBD treatment over the last year or so, with the repositioning of the JAK inhibitors basically behind more or less as a medication -- behind biologics as a medication of last resort. And also I think we wanted to understand a little bit whether Ozanimod, the newest entrants into the market, had more or less been observed to be in the same positioning as JAKs for IBD patients as well.

And I think that also there's discussion about the positioning of a drug that has a placebo-like or a very favorable safety profile in IBD patients as compared to these previous entries of other oral drugs, how does this change the perception and also positioning of the drug. I think that is also very important to us in terms of planning a Phase III trial. So this is all ongoing. But I think it's too early to tell how we do it because I think you need the data for that as well. And also with whom we're doing it, whether alone with a partner, I think that's still open.

Thank you, Jessie. Our next question comes from Andreas Argyrides at Wedbush.

Can you guys hear me?

Yes.

All right. Two quick ones from us. So from the full EMPhASIS trial results, could you provide maybe some of your thoughts on the explanations on the lesion -- reduction in lesions but more robust change in the neurofilament concentrations at 45 mgs compared to 30 mgs? And then just I don't know if I missed it earlier, you mentioned a delay in Part C for the psoriasis trial. Just additional color, that would be appreciated.

All right. No, thank you, Andreas. I will address the first question maybe first and then maybe let Daniel talk a little bit about Part C for IMU-935. So in the EMPhASIS trial, which is, I think, for everybody to understand, this is the Phase II trial of IMU-838 in relapsing-remitting MS, where we had reported fantastic results from the Cohort 1 with 30 and 45 milligram. We added a Cohort 2 that explores 10 milligram and placebo to really understand a little bit better the dose response curve. And we had published the interim analysis with week 12 data in early 2021, which confirmed, I think, the dose for relapsing MS that we are using in Phase III, 30 milligrams. So I think, first of all, the data in the Cohort 2 readout now that we've published today, this morning, is confirming, I think, our conclusions for the dosing.

What was interesting, which I also find personally very interesting, is that we knew that from previous DHODH drugs in MS that they have a particular strength on the long-term readouts, on the variables that are responsible for the long-term outcome of patients, specifically disability worsening and brain atrophy. So things that are related probably more in terms of the EDSS readout, how much visibility you acquire over time in the long term for these MS patients.

And the interesting thing that I find very interesting personally is that in the Cohort 2 data with 10 milligram, you see a substantial effect in EDSS. And you see a substantial effect in, for example, disability worsens. This is all -- I think the study is too small and doesn't have a long enough follow-up to really make conclusions. However, I think it gives us a first hint that, I think the effect of IMU-838 on disability accumulation over time is potentially, again, I think very much in parallel to other DHODH drugs is very strong. Whereas the anti-inflammatory effect that is more or less related to lesion reduction, I think, is very strong at 30 milligrams.

But we haven't seen a strong effect as much in the 10-milligram dose. So I think there are some -- this -- really these results confirm that a drug like IMU-838 in terms of efficacy will likely have its strength in a neuroprotective effect and protective effect that are measured in disability accumulation or potentially also brain atrophy. And in that respect, I think these data for me are very exciting as compared to just having anti-inflammatory effects. And I think that, that's very important, I think, for the positioning of the drug in the future as well. So I'll hand over to Daniel regarding the Part C...

Maybe just one comment to what you said, Andreas. I think for us, it was really a positive surprise to see the EDSS data from the 10 milligram cohort. This was unexpected, honestly. And I think that, that speaks for the strength we have seen here relating to NFL data and so forth and all of that.

So but let's come to 935, to your second question. I think it's an obvious question. I think we are -- we (inaudible) our philosophy of being transparent, being early. And if you know us for some time, we usually try to react early if we see things not 100% aligned with our expectations. And therefore, we decided quite early this patient cohort of 935 trial just recently started. But we felt if we really don't want to have substantial delays, we should have -- consider entering another country just to have a broader set of dermatologists [congregating] patients. So that's something we decided and therefore want to share that with the market. I would not call it a delay.

Thank you, Andreas. The next question comes from Gobind Singh at JMP.

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

Gobind, I'm not sure I totally understand the remark about the timing of the interim analysis for Phase II and III. I have not seen anything in our releases that would even talk about the interim analysis. So I'm not sure maybe that was a misunderstanding with some of the things.

So just to confirm, the Phase II study in progressive MS will have its interim readout when half of the planned patients -- we have 450 patients, when 225 patients enrolled, and these 225 patients have reached week 24 to have enough data because we will basically report on neurofilament data as the interim readout.

And then for the Phase III trials, we said that we will have an interim analysis for the Phase III in relapsing MS when half of the events, meaning relapses, have occurred in the study. In terms of the Phase III interim readout, we have to look at the number of events and the frequency of events in this trial. And it's way too early to do this. So there's really no more precise timing of the interim analysis that I can give you at the moment.

We need a little bit more enrollment for that, a little bit more follow-up on these patients. But just to confirm, none of these interim analysis is expected in '22.

Your other question is about, I think, enrollment. I think we are very happy to have seen a good enrollment now in all of our MS studies, which are recruiting. All of our -- we have 3 studies that are recruiting, the Phase II study in progressive MS and then ENSURE 1 and 2 which are in relapsing MS. And they're recruiting very well and actually progressing with them as anticipated. So I think at this point, that's the only update I can give you.

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

Yes. Gobind, I think this is a very good question. And we have been, as a team, very excited about seeing more data and more information coming out about the role of EBV in MS. And there was always kind of a suspicion that EBV plays a role. And I think it became a lot more concrete now what the role of EBV is.

So I think the study that made the most splash, I think, in public is that there was the study in several thousands of U.S. military that were followed over, I think, 25 years or so and looked at how many of those developed MS and what basically was known about their health status and -- before that. And the interesting thing was this study for the first time could make a clear link between an EBV infection that becomes neurotropic, meaning you see before the -- with the EBV infection, you see an increase of neurofilament at the same time. And those patients who have an increase in neurofilament at the time of EBV infection develop MS.

And those, of course, I think 98% or so of the population has an EBV or made an EBV infection. But those who had an EBV infection and which was not neurotropic, that basically did not show a neurofilament increase, basically did not develop EBV. So I think there's no clear link between the EBV infection having a neurotropism of that EBV infection and developing MS.

So that's the onset. It doesn't necessarily have to say that EBV plays a role during the disease. It's the onset. But then there was also very interesting data that came out, probably had made less of a splash, but I think as equally important by a Stanford Group also in February, published in February of '22, that showed that they looked at the CSF, cerebrospinal fluid of patients during relapse. And it was always known that the CSF of patients and relapse contains some oligoclonal bands of immunoglobulin. But they did a lot more thorough analysis where this oligoclonal band of immunoglobin comes from and what it is.

So they found that, first of all, they have plasma blasts in the CSF at the time of relapse that are actually producing cross-reactive antibodies and that's the oligoclonal bands. They're cross-reactive means there's actually EBNA-1 antibodies. But they're cross-reactive to an antigen on glia, microglia in the brain that's clearly linked to neuronal destruction. And so these cross-reactive antibodies are increased -- produced by these plasma blasts.

The interesting thing, you asked about different interventions that probably could influence these plasma blasts. The interesting thing is that these plasma blasts were shown to be CD20-negative, which is kind of important because we're always thinking of EBV infection as these viruses are hiding in B cells. And you would think that, for example, CD20 -- anti-CD20 therapies or BTKs should be effective in eliminating EBV because they eliminate B cells.

At least, from this publication that this plasma blast CD20-negative, they concluded that you have to find other therapeutic strategies to really have an EBV-free B cell recovery. So that's also we believe it's very exciting for us because it could open the possibility of using, for example, IMU-838 with established broad antiviral activity and also an EBV activity to help in terms of EBV-free recovery, for example, when you think about deescalation after CD20 therapies and so forth.

So I think this is all hypothetical at this point. But I think the hint that we get from this publication, I think, are very exciting for a drug like IMU-838. This needs a little bit of time to spread, I think, in the scientific community and probably a few more confirmations of this. But at least, the data that came out about EBV were very exciting for Immunic and for vidofludimus calcium.

Our next speaker is Matt Kaplan of Ladenburg Thalmann.

Can you hear me?

Yes.

Well, congrats on the progress. Just a quick follow-up to the last question, if we remain on the topic. I guess how does the concentration that you studied and saw in -- in vitro in terms of the 3.3 to 30 micromolar correlate with the concentration that you're seeing with 838 in vivo in the central nervous system since you're getting across the blood brain barrier?

Matt, so I think -- thank you for this question. I think we have seen a lot of splash by companies that do BTK inhibitors claiming that they are the only drugs that really have a centrally acting medication for MS. And we always suspected that statement is probably not entirely correct as some of these smaller molecules should enter the CSF and the central component as well.

So these are preliminary data. We're working on expanding this and having more data and confirming a little bit more closer to the human situation what concentrations will it get. To answer really fully your question I think that you have is that are these concentrations enough to make a meaningful contribution also in terms of efficacy from the central component?

When you look at the relationship between serum concentrations and CSF concentrations, we see that we're at least on par, I think, with the data that were published with the BTK inhibitors. And we actually believe that the BTK inhibitors are not that unique in terms of being as a small molecule to act in the central component -- central compartment. And it may not be what sets them apart. So I think that, to me, was the main rationale for showing these [red] data. But we will continue to generate data that will show that I think IMU-838 or vidofludimus has access to the central compartment as well.

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

Yes. So I think we'll take a little bit -- we're learning a little bit from history, history in terms of the different drugs that had a full Phase II program in psoriasis where you look at how quickly, for example, things like the PASI score change over time.

Usually, the Phase II trials are done with a 12-week endpoint or a 3-month endpoint. And you see that after 4 weeks or after 1 month, you have a 1/2 maximum effect in terms of PASI as compared to 3 months. So I think you have -- the good news is I think you can very well estimate what the change in PASI score, not in the PASI 75 or so, but in the actual PASI score, what the change in actual PASI score, the average change should be.

And so when you look at this, I think you'll see that maybe the IL-17 antibodies, IL-23 antibodies,, they're in the range of 30% to 35% change that they have at week 4. With VTA pharmaceuticals, the RORgamma inhibitors some years ago, they found in their trial in moderate to severe psoriasis patients, I think they had 2 dose groups. And I think 1 dose group was somewhere between -- was somewhere around 20% change of PASI. And the higher dose was, I think, 28% change in PASI. So I think that's also the expectations that we have for our drug that we want to show that we're in the same range, somewhere between the VTA compound and the IL-17, IL-23 antibodies.

Of course, we measure much more in this trial. We do biomarkers. We have a skin biopsy where we do immunohistochemistry. We look at other clinical scores like, for example, in each component, which I think is very important also to see early efficacy and so -- but the PASI store is usually the most well-recognized assessment in psoriasis and everybody knows this. So that's why I think it's -- also, for us, I think it's the most visible outcome of this trial probably.

And Matt, one other comment to your first question, I think regarding the coverage, I think, is also referring to the EBV activity. We were surprised that just by accident, basically, we have seen this benefit for preventing COVID-19. It was a small cohort size and everything. But I think it was a quite remarkable, surprising difference between the active and placebo group on COVID, underlining the broad antiviral activity. And that also should into -- for EBV, the concentration should be in the same range, and therefore, we believe that, that's covered. And the [trough] levels really cover that in vitro data, which we presented.

Okay. Great. And just last question in terms of with the recent announcements and invasion of Ukraine. What's your exposure in terms of your clinical development programs in Ukraine?

So of course, that has been some concern to us over the last weeks already. Yes, this is -- I mean, it was an event that, of course, surprised the world. But I think we had looked at that. What we can say is that the CALDOSE study, our study in ulcerative colitis is completely unaffected. And the reason for that is that we had done -- we have been very specific of doing the data cleaning for all of the data up to week 10, which is our primary endpoint.

As quickly as possible, we have done all the monitoring visits. So that is all done. We basically have these data. And of course, it's not unblinded. So there are patients that are in extended induction, so we can't unblind the study yet, and that will go up to week 22.

But all of the data that go into the primary endpoint are already cleaned, sourced. They are verified. So in CALDOSE, we have actually no exposure.

Ukraine had been part of other studies, of course. Especially the MS studies are done in Ukraine as well. We have also started with countermeasure -- really, I think we have to look a little bit at the -- this is a dynamic situation. And of course, this is very unfortunate situation. But we have to monitor this, what kind of long-term repercussions this has for doing clinical trials in Ukraine. We have implemented some countermeasures ahead of time. We have to just see how this develops. And we anticipate that that's something that -- given the -- I mean it's hard to expect at this early time how long this and how severe this conflict will be. But I think the best thing we can do at this time is monitor the situation day by day.

Thanks, Matt. Next is Zegbeh Jallah of ROTH Capital.

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

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

And then I just have another follow-up here. What are your thoughts regarding the differences in the MOA of Ozanimod versus IMU-838? And what would you expect to see in terms of time to response between the 2 different drugs in the induction phase?

So Ozanimod as an S1P modulator has a very different, of course, mechanism of action. And you can see this on several things. For example, you see a -- so S1P modulator is basically more or less trapped lymphocytes in lymph nodes or in other lymphatic tissue and leads to a lowering of -- or basically leads to lymphopenia in blood. And you can see the effect very clearly in all of the trials. And that's part of their mechanism of action, which leads of course to, for example, infections, virus reactivations because you limit the ability of the immune system to respond. There's also now just at ECCO last week, there were presentations, for example, how vaccination efficacy and human response against SARS COV 2 infection is much lowered for patients using Ozanimod.

All of this is not the case for IMU-838 because we have very different mechanism of action. We have a very selective effect only on what we call the bad guys of the immune system, so the hyperactivated immune cells that are causing the autoimmune disease. And we leave the basically innate immune system and immune response against infections completely unaffected. And we have seen this now in several trials where we've seen that the rate of infections, for example, versus placebo control has not increased. And some of the studies was actually slightly decreased. So I think that may be 2 of the differences in MOAs.

The Phase II study and Phase III study I think use an induction period of 8 weeks in Ozanimod. I hope I'm correct. I've seen so many presentations last week that ECCO that I'm at an age where I can be confused, so that's -- but I think it's 8 weeks.

So we use 10 weeks. It's something that sometimes doesn't make a lot of difference, whether it's 8 or 10 weeks because often these curves in clinical trials in terms of response also have this kind of exponential curve. Most of the effect happens in the early weeks or in the early 2 or 4 weeks. And the way you define induction period often is to give the chance for the drug to work in all of the patients, maybe patients that are responding slower. We know from our Phase IIa trial, ENTRANCE trial in corticosteroids-dependent patients that the ability to withdraw corticosteroids was very quick. Within the first 2 weeks, I think, you could lower it to 20% of the baseline dose. So this is all published.

But the -- so we believe that also the our mechanism of action leads to a very good and fast onset of the disease. And again, the time point, 8 to 10 weeks is really -- doesn't make a lot of difference. It's just that in a clinical trial, you want to give the drug a chance to also work in most of the patients.

I don't want to put words into your mouth, so just for a clarification here, you do expect a fast onset of action? And then in terms of the magnitude of response, do you expect that to be similar? Or should we be looking at it more as a composite, meaning the efficacy, safety balance because you did mention how you expect 838 to come out better on the safety.

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

Yes, clearly.

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

And fast onset of action I think is also...

Yes. Fast onset of action, I think we have the data from the ENTRANCE trial that actually will indicate a very fast onset of this mechanism of action. What the expected efficacy results are, I think Ozanimod, especially in Phase II, hasn't shown overwhelming efficacy results if you look at other drugs. So you always look at this clinical remission which endpoint that is very similar to or identical to what we have here in this trial. For some reason, we called it differently. But it wasn't on the suggestion of the FDA. We call it a composite out of endoscopic healing and symptomatic remission, which is exactly the same definition as everybody is using for clinical remission.

And you've seen that you have data, let's say, for tofacitinib will have only 3% or 6% depending on the dose difference between active and placebo. And then you have the best drugs that probably have like 25% difference between active and placebo. And usually a look at the differential between active and placebo is important. Ozanimod was more on the medium end with I think it was like 13% difference, if I remember well. But I think we would like to come out with a strong efficacy. And we have talked to our medical advisers. And I think very consistently, they say, for your safety profile, I think you have to have around 15% of difference between active and placebo to really have an outstanding efficacy.

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

So the last question is very easy, no. The protocol is fixed. And also, we do rerandomization for the maintenance phase, which is kind of usual in many IBD trials because you expect that a maintenance dose may be lower than an induction dose. Because here, you -- in the induction phase, you take sick patients very quickly from active disease to nonactive disease. Whereas the -- in the maintenance phase, you maintain the nonactive disease.

And that has been done in several trials. tofacitinib, for example, also had a very different dosing for the maintenance phase. So the rerandomization is important.

In terms of going to Phase III, the induction data are really the important data. And this will decide whether you can go into Phase III. A Phase II study, and that has been shown by many other trials, doesn't necessarily have to include the maintenance phase. And many Phase II trials have not. We have decided to include the maintenance phase for the reason that you want -- that in Phase III, you have to show not only induction but also maintenance of effects. So it is obligatory in Phase III. And we want to learn a little bit more about Phase III planning, statistical effect size and so forth, and that's why we included this in the Phase II trial as well.

But I would not -- first of all, the readout that we have in June for the induction data does not include maintenance data because the maintenance is ongoing at that time. But also, it will be available thereafter. But it's more or less a tool for Phase III planning rather than a full-fledged efficacy readout for the study, for the Phase II study.

Thank you, Zegbeh. So we have 2 more questions in the queue. Next one is Boobalan Pachaiyappan at H.C. Wainwright.

Can you hear me okay?

Yes.

Awesome. Congrats on your progress. So to start off the discussion, with respect to your CALDOSE-1 trial design, I see that the 83% of the enrolled patients were biologically naive and 17% had prior biologic exposure. So I'm just curious whether the intention is to position IMU-935 after immunosuppressants but before TNF alpha inhibitors in the UC treatment paradigm?

So I think -- I would not draw that conclusion, but I think that would be a wonderful positioning, to be quite honest. In the discussion, I said that we have a lot of ongoing discussions with our medical advisers. That includes, of course, discussion on positioning. And over the last 3, 4, 5 years, there have been several oral drugs that went into whether approved or in late-stage approval process for ulcerative colitis. And there was always a discussion where they should position. They always -- they aim for positioning to basically prior to biologics and after immunomodulators.

And none of them really has achieved it, it had to do with the safety profile. And actually, it was very specific now, but all of the JAK inhibitors, and they actually named not only tofacitinib, they're very specific that this will apply the same positioning from their point of view, regulatory positioning would apply to really only after at least you had one biological failure. So it's more or less also seen in the minds of the gastroenterologist as a medication of last resort. And this will apply to all of the JAKs, including upadacitinib that is specifically mentioned in that FDA communication as well.

Ozanimod also has a considerable amount of safety challenges as well. And gastroenterologists see this as a disappointing entry into the UC market and IBD market that will probably also end up with more or less the same positioning as JAKs, which leaves kind of the therapeutic white space, yes, where everybody wanted to be, completely open. The drug that has a good safety so you can use it early and use it in many patients early on in their disease right after you use the 5-ASA and corticosteroids and before you use biologics.

And I think that's, when in our discussions with medical experts, they see as exciting for this program the 83% biologically naive is, I think, is a measure of maybe some of the countries and so we said we're in -- it was not intentional. I think the outcome is, but it was not intentional.

Got it. it so there is a French company called Inventiva. It's also developing oral RORgamma inverse agonists and that's currently in Phase IIb trial in psoriasis patients. So can you outline how your IMU-935 is differentiated from Inventiva's oral RORgamma agonist, inverse agonist?

Thank you. That's a good question. And I'm not sure if this refers to Cedirogant which is now in Phase II by AbbVie. If I get it right, so this was originally developed by Inventiva, if I get it right. That molecule is, I think, an interesting compound in Phase II. We have published a lot of data on our drug, tons of more data than ever published for the AbbVie Inventiva molecule about mode of action, selectivity, exposure, PK, safety and so forth. We are quite convinced that we have a best-in-class molecule. But let's wait a little bit until we get more data for Cedirogant.

And specifically, I would like to point to the publication we made in December, and if you can find it on the homepage. There was an update on the specifically the selectivity of our drug. So that we selectively suppress IL-17 or Th17 polarization, differentiation. We suppress IL-17 in a very potent fashion in human leukocytes. But totally absent of impacting thymocyte maturation. We have not seen any other company publishing such data. So we believe that still this is a quite unique feature for our drug.

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

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

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

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

Congrats on your progress.

Thank you, Boobalan. And finally, we have Matt Geren, so apologies if I pronounced this incorrectly, at SVB Leerink.

This is Matt on for Tom Smith from SVB. We have 2 quick questions here. So the first one regarding the Phase III ENSURE trial. What's the thinking behind the 18 month time point and the use of time to first relapse as the primary endpoint? And I have a quick follow-up.

Did you say 18 months end point?

Yes, 18 months (inaudible). 72 weeks, yes.

72 weeks.

Okay. 72 weeks. Yes, yes. The idea of the 72-week follow-up here, I think, is looked at in terms of being a placebo-controlled trial, getting enough -- having enough chance for enough relapses to happen in a longer follow-up period but having the follow-up period short enough to be able to do a placebo-controlled trial in as many countries as possible. So that's the short answer.

And then time to first relapses so the regulators ask for a relapse-related endpoint in a Phase III study, and that's been traditionally also done in all the other trials. The guidance has actually -- give you a choice of annualized relapse rate ARR, which was traditionally used in Phase III trials or time to first relapse. Time to first relapse has become more interesting as relapse rates in MS patients are, very well documented, go down over the last 2 decades and considerably going down so that ARR assessment becomes more and more difficult to do with a reasonable number of study population. So I think there have been actually published reports that compare these 2 endpoints and basically really highlight the advantages of the time to first relapse as an endpoint for relapse.

Got it. And another question regarding the Phase II CALDOSE-1 trial. Could you remind us quickly again like what are the specific like efficacy thresholds and clinical improvement to view this as a positive data set?

So I think the -- what we -- you mean in terms of statistical -- I just wanted to understand our statistical assumptions more or less what -- how is...

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

Yes. So we have made statistical assumptions that are very much in line with what I just outlined as the expected delta. And we also made assumptions, of course, for the -- we had to make some assumptions for the placebo response, yes? So we know that all of the -- for the clinical remission, and there's good summaries now available when you look at other trials, the placebo response is basically 10% or less, often considerably less. And we have basically been conservative and basically assumed also a placebo response of 10%, and then basically added a delta.

And we also assumed, for example, a dropout rate of 20%. And then we came up with basically the 240 patient sample size that we needed. So we've actually recruited 263. We had very good success. Especially at the end of the trial, recruiting very fast, so we had a little bit over-recruitment. And also the I think we haven't seen the dropout rate, we had seen less dropout. So we feel very comfortable that, I think, the statistical assumptions, I think, will lead us to success in this trial.

And if it comes to the effect size, maybe a comment from my end, if you look on the whole -- the plenty of molecules which are used here and also on the biologics, if you have something like the effect size of a vedolizumab or something like that, this would be a success, of course. And I think the biggest challenge in the last couple of years was more, as Andreas elaborated, on the safety concerns for drugs like JAK inhibitors, which were unexpected and, I think, limiting the use there, specifically in this big gap between the current baseline medications, like mesalazines and steroids and so forth and the antibodies.

Thank you, Matt. And thanks, everyone, for your great questions. This concludes our question-and-answer session. I would like to turn the conference back over to Daniel for any closing remarks.

Sure. Thank you, Jessica, and thanks for today's attendees for your insightful questions. We are very excited about the progress we achieved last year and the value inflection points we anticipate this year, including the Phase II ulcerative colitis data for vidofludimus calcium in June and initial patient data for IMU-935 in the second half.

With this, I would like to close today's call. Thank you very much for joining, and we're happy to answer any additional questions one on one.

Also from my side, thank you for joining Immunic's Fourth Quarter and Year-end 2021 Earnings Call today. The conference has now concluded. You may now disconnect.