Good day, and thank you for standing by. Welcome to the Vivoryon Therapeutics Half Year Results 2023 Earnings Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please note that today's conference is being recorded. I would now like to turn the conference over to your first speaker, Anne Doering, Chief Strategy and Investor Relations Officer. Please go ahead.
Thank you, Roz. Good afternoon, and thank you for joining us today for Vivoryon's conference call to discuss the company's first half 2023 results and operational progress. This morning, Vivoryon issued a press release reporting its first half 2023 results, which is posted on the company's website at www.vivoryon.com. On the call with me today are Vivoryon's new Chief Executive Officer, Frank Weber, and Florian Schmid, our Chief Financial Officer. Also with us on today's call and available for questions is Michael Schaeffer, our Chief Business Officer. We will begin today's call with opening remarks from Frank on Vivoryon's clinical and operational progress. Then Florian will review the financial results for the first half of 2023. I will then walk you through key catalysts, and Frank will wrap up. Following the prepared remarks, we will host a Q&A session.
Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning the development of Vivoryon's core technologies, the progress of its current research and development programs, and the initiation of additional programs. Should actual results differ from the company's assumptions, ensuing actions may be different from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. With that, I will now turn the call over to Frank.
Yeah, thank you, Anne, and thank you everybody for joining our conference call today and your interest in Vivoryon. I feel honored to lead Vivoryon through its transformational phase, with VIVIAD results expected in the first quarter of 2024 and its growth beyond these results. As Chief Medical Officer also, I'm working on varoglutamstat program for more than 10 years, and I'm fully aware of the responsibility of the new function for the patients with Alzheimer's disease and their families and caregivers, for our Vivoryon team and the organization, and for the shareholders who have trusted, thankfully, the company for a long time. I'd like to start by emphasizing that Vivoryon has a unique asset in clinical development for treating patients with early AD. The small molecule varoglutamstat inhibiting the glutaminyl cyclase and thereby blocking the production of pyroglu-Abeta.
Or better yet, the neurotoxic peptide being considered the culprit for starting the disease and driving its progression. And this pyroglu-Abeta does this also in aggregate forms, together with normal Abeta molecules. This keeps or actually even enlarges the toxicity. These states are called oligomers or even bigger aggregates like protofibrils. Pyroglu-Abeta is now recognized as a validated target, and Vivoryon is one of the pioneers and scientific leaders in this field. Our approach by blocking the production of pyroglu-Abeta with varoglutamstat is unique, and we are confident that this is more promising than binding this neurotoxic peptide once it has been produced. So monoclonal antibodies bind soluble forms of pyroglu-Abeta or protofibrils, or bind them when they're deposited in the plaque. From our point of view, our approach has a clear advantage.
It attacks the problems at the root before it can cause damage in the synaptic space and in the neuron. It comes without drug-associated adverse effects like ARIA or infusion-related reactions, because we have an oral application. Furthermore, this mechanism to tackle the problem at the root cause also affects positively other pathological processes observed in Alzheimer's patients, like the tau pathology and inflammation. Why is this? This is because these other processes have been shown to be downstream of pyroglu-Abeta. Now, downstream is a little bit of elastic expression, but what it means is that they happen as a consequence of pyroglu-Abeta production, or at least amplified by pyroglu-Abeta-induced toxicity. Now, moving forward to the next slide, please. Looking at our development program, we're gonna ask, who does it and, or who oversees it? And we have done some changes.
In order to stay today and tomorrow laser focused on the execution of the clinical studies of varoglutamstat in early AD, as I think is our most important task. And this is done by a strong team, and we are convinced that the recent additions to the management and the board level, with the nomination of Anne leading IR and strategy, and Morten and Kugan as non-executive directors, coming with a huge expertise in science, healthcare, investment, and management, prepares us very well for all tasks we have ahead of us. Finally, we have funds reaching into the second half of 2024, well beyond VIVIAD results.
So we believe that having the right mix of expertise and management skills is a very important success factor of our company at this stage, which means with all the multiple tasks ahead of us, including science, communication, company growth, and defining the pathway to the market, and the best position of the drug in the treatment in the area of Alzheimer's, we are well equipped. We have expanded and diversified our team from both the management and board level, and we are working trustfully and transparently together, which I consider as a very important success factor. Vivoryon will hold an extraordinary general meeting on Friday, September 15th, 2023, related to my appointment as CEO and as a member of Vivoryon's board of directors, as well as Anne's appointment as a member of Vivoryon's board of directors. Let's switch to the next slide, please.
Here we go a little bit more in granularity of our achievements in the first half of 2023, and the post-period highlights. The first thing I want to point out in the first block is that actually, the dose of varoglutamstat has been defined, and that is very important, and that is actually behind the essence of a positive DSMB decision in the second quarter of this year. Now I want to be a little bit more detailed why that's important. As you might know or remember, about a year in May 2022, the DSMB recommended to select the 600 milligram dose, given twice daily, for the continuation of VIVIAD study. Subsequently, from 2022 onwards, mid of the year, all patients on 300 milligram were then shifted blindly to 600 milligram.
Now, a year later, the DSMB looked again at the data when all the patients were at least 9 months or longer on 600 milligram. And what we wanted to know is from the DSMB, whether there are concerns with the long-term safety of 600 milligram. And they responded clearly, there are not at all. They said, "Continue unchanged and don't come back until your study results." So we consider this a huge win because we have settled now on a high dose of varoglutamstat with nearly 90% target occupancy, meaning inhibition of the enzyme in the CSF, which seems based on unblinded DSMB review and blinded management safety review, is very well suitable and tolerated for long-term treatment. But there will be more on this in a later chart.
In the US VIVA-MIND trial, we are also advancing well, and we have completed recruitment of the 600 milligram cohort with a positive, regular DSMB review. We will provide an update on VIVA-MIND in the fourth quarter of this year. This will be also interesting because in the US, we have a different titration scheme compared to the EU study, VIVIAD study. The question here will be not whether 600 milligram is safe or not. That question is, I think, already answered. But whether the accelerated titration is also a therapeutic possibility. That will be the update in the fourth quarter. Now, going back into achievement of the first half of 2023, we are pleased to have secured EUR 25 million private placement in May, bringing in both new and existing high-quality institutional investors.
This financing was important because it provides the foundation to extend our runway into the second half of next year, well beyond our exciting upcoming inflection points in the first quarter, namely the VIVIAD study. And then have, let me have a short word on the Scenic IP licensing agreement. This agreement concerns the oncology indications, and it does not affect in any way our proprietary rights. By agreeing on a license, we actually secured the broadest potential application of our projects, patent protected, even in areas we are currently not active, but we may pursue those later, and so we have secured an agreement. So now into, the next chart, and here I want a little bit illustrate where we are today in order to bring you, into our view of the roadmap, to the end of the phase two data.
So we had a very successful discovery in research phase, on which the well-designed phase IIb program, with VIVIAD and VIVA-MIND builds.... And I think we should mention here that for a small biotech, we have a very rigorous approach of research and development. We had a huge discovery program with lots and lots of experiments, driving the science around pyroglu-Abeta and varoglutamstat. And we have an extremely robust early development program with excellent non-clinical translational medicine and randomized and blinded early clinical trials. And we follow this route and principles with the studies we are currently conducting. Now, moving to the next chart, slide. This is just a summary of the previously concluded phase IIa SAPHIR study. So what we find there, and I do this rewind in this earnings call to better explain in the next charts, the findings we have now in VIVIAD.
So in SAPHIR, we generated evidence that varoglutamstat shows signs of synaptic recovery within 12 weeks of treatment at 800 milligrams twice daily. That's about a 93% target occupancy. And we saw these indicators in three different methods or parameters: in working memory, as measured by the Cogstate Test Battery, in improving resting EEG parameters, like reducing the theta wave and improving the connectivity in the alpha band, and by reducing neurogranin, which is a marker of neuronal injury. All three together gave us confidence of a target engagement and proof of concept, and helped to design the long-term VIVIAD study. Next slide, please. Now, the first thing when we look at VIVIAD, is to ensure that the right patients have been included with MCI, with mild cognitive impairment due to AD, and with mild AD.
We did this by using the MMSE, which is a standard in studies, but also the DSST or WAIS-IV, and that is a novelty. And of course, we have mandatory Abeta/Tau CSF levels measured for each patient by the most modern and accurate methods, the Elecsys. So what we can show today in this data in front of you is that the recruitment is completed, and the baseline criteria of the patients randomized in the VIVIAD study are basically mature. And we confirm that with early AD, our patients really meet the criteria of having minimal cognitive impairment. The MMSE is 24.5, the average, and the median is 25. By using the WAIS-IV or DSST criteria, which I use synonymously, so sorry about this.
For inclusion in VIVIAD, data which we shared at the AAIC, we ensured that patients are included really having minimal cognitive impairment, and this correlates very well with impairment of working memory. We published this data, and we believe that the strategy of matching the right patients in order to better measure efficacy, will allow, allow us to better represent the early AD population in our study. So we have the right patient in our study, we know that already. Now, going to the next slide. There's another thing we know already, and that is the last slide of the first part of my presentations, and it deals with discontinuations due to adverse events, which are burdensome and risky for the patients.
They prevent that the patient can continue to take the treatment, and if the number would be high, they impair the interpretation of the efficacy of this data of the study. They should be avoided as much as possibly, specifically in elderly and fragile population like AD. In VIVIAD, we did, I think, a very smart move. We designed the titration scheme at the start of treatment, which results in discontinuation when we are looking at blinded data in that graph of only 1.2% in the first 12 weeks after randomization, and in only 1.5% discontinuation in the first 6 months. This is not additional one point five, this is a total of 1.5% in the first 6 months.
This compares extremely favorable to the figure we observed in SAPHIR, where we saw discontinuations about 17% within the first 12 weeks of treatment, the blinded data set. That's about a tenfold reduction, and we think that is very important, confirming our strategy, selecting the 600 milligram dose. Why are these data so important, and what I said already? Firstly, we have an excellent tolerability profile at this high dose of 600 milligram, ensuring a target occupancy of nearly 90%. Secondly, these are mature data. What does that mean? All patients in VIVIAD, still in the study today, are already beyond week 24, so there will be no more patients added into this period. Please don't misunderstand me here. Mature data are not final data.
We still need to clean data and control this data before looking at the data, blocking the database, and minor changes can occur. But the data of our varoglutamstat you see on the chart today indicate that it's very well tolerated and very suitable for the treatment of early AD patients. This is also seen in the discontinuation rate, staying low and stable throughout the study, due to AE is around 3.5%.... So these are, I think, very competitive and interesting data, which show that our drug is ready for the use in AD patients from a safety perspective. Now I want to hand over to Florian, leading through the financial results. Thank you.
Thank you, Frank. The first year of 2023 was a period of driving our clinical studies forward and securing additional capital. This is reflected in our interim financials. Research and development expenses with EUR 6.3 million in the six months ended June 30, 2023, decreased by EUR 4.8 million compared to the six months ended in June 30, 2022. This decrease is primarily attributable to a EUR 2.5 million lower expenses related to our clinical trial, VIVIAD, and EUR 2.2 million lower manufacturing costs for study drug production. General and administrative expenses in at EUR 4.4 million for the six months ended June 30, 2023, compared to EUR 2.3 million in the six months ended June 30, 2022.
EUR 1.3 million of this increase is attributable to higher costs of the non-executive board, including share-based payments and change of compensation of EUR 0.9 million, and one-time severance payments of EUR 0.4 million. The remaining EUR 0.8 million of the G&A increase was largely due to higher consulting and personnel costs. As in previous periods, our finance result was predominantly driven by the FX result on US dollar cash and the US dollar receivable in our balance sheet. The income tax reported related exclusively to deferred taxes that have to be reported in accordance with IAS 12, but the company does not pay any taxes due to existing loss carryforwards.
All this together resulted in a net loss for the six months ended June 30, 2023, of EUR 10.7 million, or -EUR 0.44 per share, compared to EUR 12.6 million or -EUR 0.60 per share for the six months ended June 30, 2022. On the next slide, I would like to highlight selected KPIs. On June 30, 2023, total assets amounted EUR 45.4 million, and total equity was EUR 41.5 million. The company held EUR 29.6 million in cash and cash equivalents as of June 30, 2023, plus a term deposit of EUR 9 million, which is disclosed under financial assets. As of December 31, 2022, the cash and cash equivalents position was EUR 26.6 million.
The increase of liquid funds in the six months ended June 30, 2023, is mainly due to a private placement completed on May 26, 2023, placing 1,708,785 registered shares at an offering price of 14 EUR per share, with gross proceeds of EUR 25 million. As of June 30, 2023, the company's issued share capital increased to EUR 25,961,892, including the exercise of share options. This brings our cash runway into the second half of 2024. This guidance does not include potential milestone payments from development partnerships, potential payments from licensing agreements, and/or additional financing measures as exercise of the options granted in connection with the private placement announced in September 30, 2022.
With that financial overview, I will now turn the call to Anne, who will touch upon upcoming catalysts. Anne?
Thanks, Florian. I'm excited to share with you an overview of Vivoryon's multiple value-generating catalysts and the near-term events following a strong first half of the year. We've got a lot to look forward to, and we're positioned to share multiple facets of our progress throughout the remainder of this year and into next year. We're planning to host a virtual R&D day with key opinion leaders in the fourth quarter of 2023, where we're intending to focus on the company's scientific approach, varoglutamstat, and study design. Of course, we're also looking to maintain a consistent presence with our investment community throughout the remainder of the year.
As Frank mentioned, for VIVIAD, following the DSMB decision to move forward with the 600 milligrams twice-daily dose for the second part of the study, we are well on track with 22 active sites in five countries, gearing up the final readout in the first quarter of 2024. And for VIVA-MIND, the study is also progressing nicely through the phase IIb portion, and we're on track for its next update in the fourth quarter of this year. With both of these studies progressing well and according to schedule, we're also working towards an end of phase II meeting with the U.S. FDA. Finally, while our focus remains on VIVIAD and VIVA-MIND, we're committed to generating future value from our pipeline and varoglutamstat. We have several future opportunities that we continue to think about in the background, including potential combination studies with antibodies and Alzheimer's....
Also potential follow-up clinical programs beyond Alzheimer's. There are also additional development opportunities coming from our partner, Simcere, in Greater China. Overall, we've got a lot of exciting opportunities, both with the near and long term, and with a strong team in place and a promising asset in varoglutamstat, Vivoryon is positioned for robust value creation. With that, I'll turn it back over to Frank to close.
Yeah. Thank you, Anne. Thank you, Florian. I want to close this earnings call presentation in summarizing the position of our assets. Pyroglu-Abeta is now a validated target for the treatment of early AD, and pyroglu-Abeta needs the glutaminyl cyclase to get produced. So by inhibiting this enzyme, we solve the problem at the source and target the improvement of the outcome of AD. The VIVIAD study will also address some wider issues in R&D of Alzheimer's disease, but also in the future treatment landscape of AD. And we will answer, notably, a question whether small molecules with intracellular effects are more effective than monoclonal antibodies. Can they reach efficacy beyond the approximately 30% reduction of the rate of decline of cognition, which has been observed so far in the best studies of monoclonal antibodies in Alzheimer's disease?
That is something which we'll answer in the first quarter of 2024. Let me end by thanking you for your attendance and interest in Vivoryon, and we hope you will follow us in the exciting times ahead. Let me also thank the team to prepare that call and to help us through this call. Let me also thank and recognize the prior leadership of our company and the employees which have carried the program so far. That includes the founders, Konrad Glund and Ulrich Demuth, who drove the pyroglu-Abeta science and discovery of varoglutamstat. Inge Lues, who led varoglutamstat study through the late research and early development phase, and the former CEO, Ulrich Dauer, who initiated the phase IIb program we are looking at right now. We will open the call now to take questions.
I want to thank you again, and expecting your comments, suggestions. Thank you.
Thank you, sir. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one. And once again, please press star one and one for any questions or comments that you may have and wait for your name to be announced. We are now going to proceed with our first question. The question comes from the line of Christian Ehmann from Warburg Research. Please ask your question.
Hello, everyone, thanks for taking my questions and welcome to our conference call. I have two questions. I was hoping that you could give us some more details about the potential scope of the VIVIAD, VIVA-MIND update in Q4. So what kind of data we can expect in more detail a little bit? And the second question is a more broader one, but I've noticed when I looked at the FDA minutes from the approval of lecanemab and so on, that the FDA is quite has quite good propensity on using plaque reduction as a surrogate marker for potential cognition improvement.
When I look at your, let's say, secondary endpoints, I see an MRI scan, but I see, I don't see any PET scan, so maybe you can correct me on this, but I think you don't actually look exactly at the plaque reduction. And if this is true, what do you think are your chances to getting a potential partner for varoglutamstat in the first half of next year and so on, if the results are obviously positive, given that this might trigger some pushback from the FDA? Thank you.
So probably I start taking that question now. I hope I can remember the first part, which was,
VIVA Mind.
Ah, VIVA-MIND update. So there is probably no scheduled VIVIAD data update anymore before the readout, so that was not said. What was said is, the VIVA-MIND will be updated, and what was said is that we will have an assessment of the titration phase of VIVA-MIND once the 60 patients, randomized 1:1 between placebo and 600 milligrams, have been completed actually 20 weeks. So the DSMB looks after 20 weeks of the last patient randomized in the first cohort, at the tolerance of that titration regime, which is an accelerated one compared to the EU, and says, "That is also good," or, "That is not so good." And that is what we will release in the fourth quarter. Is that answering your question on the first part?
Yeah, thank you very much. I misspoke and mixed up-
No, no, sorry. Sorry. I mean, it's important to get things clear, so thank you. Yeah, yeah. So then I think it's important, and I think the second questions are right to the core of study design, and I think they are super important. And I think we believe that they are so important that we probably cannot answer them fully in this call, so we have an R&D day scheduled, as Anne mentioned. So where we address all these points more in detail. But let me summarize our position on this. We have designed the study with world-leading expert and regulatory guidance, written regulatory guidance, like the FDA draft guidance or the EU guidance for disease-modifying therapies in Alzheimer's disease. That concerns both the inclusion criteria, the patient selection, the stage of the disease, and the endpoints.
And what the FDA want to see is an effect on cognition and an effect on function of the patient. Now, there are several scales to do this. PET is none of those. PET is a surrogate. PET is a surrogate which you can discuss loosely in a group level, very loosely on a patient level, correlates with an improvement of cognition. We measure directly the cognitive function in the Cogstate test battery. Now, the Cogstate test battery is approved by the FDA as a medical device, as the CCB test. You can look it up. It measures cognition, is an approved device. So we can piggyback build on this, and we, I think, have much stronger data from our cognitive tests than any PETs would provide. I think the data we deliver are much better than PET tests. Then why don't we do PET on top?
PET is something for a drug which fishes out the neurotoxic peptides from the plaques and the soluble space, and you can measure that fishing expedition, where basically the antibody binds to the peptide, shuttles it to the microglia or to the macrophage and get digested there. That leads to complement reactions, that leads to inflammation, additional, and, and the side effects, but you can actually measure it. We don't have that pathway. We have the pathway that we block the production. Subsequently, we expect also the concentration of the plaques and the CSF space go down, but the injury of the neurons and the synapses don't happen in the plaque. They happen in the cell, and we stop it there. So for us, it's, I would say, a secondary interest.
We have studies planned to measure also PET, because one point in time we want to do it, but it is not for our mechanism mandatory. Now we have also the Amsterdam scale of functional outcomes in Alzheimer patients in the VIVIAD study. So we look at functional outcomes. We don't only look at cognition, we look at functional outcomes, and as a key secondary parameter, which we specify. So, so we will be able with VIVIAD not only to answer the question on how much do we see a cognitive improvement or reduction of cognitive decline? We also see how much does the patient functionally improve or deteriorate less than on placebo. And these are the two questions which are important to answer, and I think we have the most sensitive scales you can have on the market currently to measure the change in our studies.
Having said that, of course, everybody will grill us on the CDR sum of boxes. Why don't you use it? And what are you against it? Or so we're not against it. It's a quite a, you can say, crude scale or a high-level scale on measuring both functional and cognitive outcome in Alzheimer's patients in a single scale, and we do it as well. When you look in our VIVA-MIND study protocol, it's the primary endpoint of the VIVA-MIND study. But this requires a higher sample size. You will see that in VIVA-MIND, we have 420 patients to be randomized, and in VIVIAD, we have only 260. And it also requires probably a treatment period of 72 weeks, which is standard. And in VIVIAD, we have flexible treatment periods between 48 and 96 weeks.
We think we did the right endpoints and the right study, and we have everything together, except of PET, which we think mechanism-based is not as important for us. Is that answering your question?
Yes. Thank you very much.
And then the partners, I mean, I don't know. I mean, everybody has a different view. The FDA is not a... I mean, a stakeholder, but our feedback from when I talk to my peers and to other companies is that clearly, this study will deliver interpretable, important, and clear results. Every expert knows with this data, what to think about the drug and how well it performs. And we will do a lot to make that transparent and clear, not only to experts, but also to all the shareholders and the patients and the patient associations, and we will not be agnostic of the need to make it simple. So we will take care of all this. Let us a little bit of time. The R&D is the first step, and then we follow up on this.
Thank you.
We are now going to proceed with our next question. The questions come from the line of Joseph Hedden from Rx Securities. Please ask your question.
Good afternoon. Thanks for taking my questions. Firstly, one on the accelerated titration of varoglutamstat. I realize that you're running this accelerated titration, and that you, in VIVIAD, you switched patients from 300 up to 600 last year, but that was before you completed full recruitment of VIVIAD. So did the remaining patients in that have they already experienced this accelerated titration protocol, or is it an enhanced version even from that?
So thank you for the question. I think I have misexpressed myself a little bit. The different titration regimes are really separated by study. So VIVIAD has a titration regime which goes from 50 milligrams to 600, or to 300 in 12 weeks, and then to 600. And that is used throughout the study. The only question is, we had to the DSMB, is the final dose of that 300, or is the final dose of that 600? Are there safety differences between 300 and 600? And they said a year ago, "No." And now we ask them again, "Are you sure?" And they said, "Yes, we are good." So that is VIVIAD.
Now, because we thought from a commercial aspect, going from 50 to 300 and then to 600 over three months, while the patient in Alzheimer's all the time for doing this, it's probably from a, let us say, medication handling perspective of a slightly memory-impaired patient, not that good. So in the US study, we have a titration regime which starts at 150 milligrams twice daily, goes to 300 milligrams twice daily, and then after eight weeks goes up to 600. And that is much faster and basically only requires a 150 milligram tablet strength, where the other one would require at least a starting package for smaller strength. And we thought it is important to study these two titration regimes in two different studies. And so we have not...
To answer your question, in the VIVIAD study after the DSMB, we never tried a different titration regime. We just put everybody on the dose of 600 who was on active randomized, and the placebo patients, of course, stayed on placebo. That was what we did. Could I clarify your question?
Okay, thanks. Yeah, yeah, that's, that's very clear. Thanks very much. And then if I could just talk about the open label extension or the potential open label extension, in terms of the patients who might go from VIVIAD into that study. So VIVIAD has been designed so patients have a mean treatment duration of 82 weeks. Does that mean that patients in VIVIAD, no matter when they're recruited, have maintained that they're being treated until the top-line readout, and then they just seamlessly progress into the open label? Or is there going to be a gap in treatment for some of those patients?
Ah, it's very clear there's a gap in treatment, but that is not-
Right
... error or problem. I think it's an ethical must, because you cannot keep and propose patients a treatment duration of three years without having clear efficacy data. Those patients who exit the VIVIAD study earlier, of course, need to have access to other studies. They may choose another treatment, another study, another whatever, and then they can come back into the VIVIAD open label study once it is open for recruitment. We will open the study for all, or that's the plan at least, we will open to all participants of VIVIAD and VIVA-MIND an open label study, but it's stage-gated by positive VIVIAD study results. So if the drug doesn't work, we will not offer it, and I think it's also not useful to offer it. And, to propose continuous treatment of two, three, four years without efficacy is probably not even possible.
I think it also would be unfair. So that's the plan. Now, how do we deal with the gap in the data analysis? So the patient will have new baseline data, and we, of course, and that's common science because we are not the first one who do this and had several programs where that gap happens. You look at the treatment period of the patient in the study, you look at the progression in the gap, and you then have a new baseline, and from that baseline onward, you look what the treatment is. Of course, it's open label anyhow, so the evidence for efficacy is probably limited, but it's very valuable for doing health outcome research, for pricing later, to add some PET studies, which was discussed before. Is PET needed or not?
We will add in the open label some PET studies, if possible, specifically on those patients coming from placebo, to see whether we have a plaque reduction, secondary or not. Not that, that we think it's necessary, but I think the scientific world and also the investors want to know that at one point in time.
Okay, great. That's very clear. Thank you. And perhaps the final one from me, just on the financials. On the R&D expenses, they were quite a lot lower than I expected. And I realize that some of that is manufacturing costs that perhaps haven't repeated this half, but still, VIVIAD is now fully recruited and you've recruited more patients into VIVA-MIND. So, can we expect a bonus of costs in H2, or is something else going on - is something else going on in terms of the phasing of R&D costs?
Thank you, Joseph. Let me answer this, this is Florian speaking. I think you already summarized it very well. So our main study is approaching its end, so we don't have these excessive costs than we had last half year when we were still recruiting. On the other hand, our study in the U.S. is not fully up to speed, so we don't have those costs like in the last half year. And as you already mentioned, our API production this year is not at the same level as last year, because last year we had two supplier strategy. We have finished those projects and we didn't start a new one. So that's the reason for the decrease of the research and development expenses.
Sorry. Let me say a word on this. I think Florian didn't mean excessive costs. Actually, the VIVIAD study has a very fair, complete price agreement, and I think we have an excellent price. It's just the amount which we get billed for that total amount we have agreed on is not anymore as high as it was before, because it's milestone-driven, of course, and, of course, at a certain point in time, it goes down. The second thing is, in the US, also, the costs are still low because, the study is financed by the NIH. So all the costs we have, or not all, but the vast majority of the costs of the VIVA-MIND study in the US are funded by an NIH grant, and so, we still profit from this.
Okay, that's clear. So do you think that perhaps 2023, then the R&D level might not reach the same level as 2022, but they're all going well with VIVIAD, you're gonna be going into phase IIb with VIVA-MIND or even phase III. Those costs will pick up again in 2024, because presumably, the NIH grant was $15 million, so it will have run down by the time you get to phase IIb.
So in 2024, all depends on the VIVIAD results. That stage gates our investment. And if we go full speed into the long-term extension, if we enlarge the VIVA-MIND or accelerate or change the extent, the geographic, regions, because currently it's a US study, we may think about going to Europe also in terms of diversity, maybe an Asian country or Australia or whatever. If we do this, of course, the cost will get up again. But until the VIVIAD results in first quarter, I think we have a very strict cost control in place because, of course, investment needs positive outcome and data in VIVIAD. Is that what you want to know or?
Yes. Yeah, that's, that's great. Thank you. That's great. Thank you.
Once again, as a reminder, to ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We are now going to proceed with our next question. The next question comes from the line of Alexander Galitsa from HAIB. Please ask your question.
Yes, good afternoon, and thank you for taking the question. Maybe one on your partnership with Simcere. If you could give us an update on where you stand with regards to this partnership, have you had any discussions with them as to the timeline and the RDC to start a phase one trial? And so what's your confidence level, I guess, that this, that the, that Simcere will still to enter the global trial, please?
Yeah. Hi, Alex. That's Michael. Nice, nice talking to you again. Yeah, I mean, you know, we are, or you can guess, we, we are in constant contact with Simcere, on, on, on all that, on the full program, basically. I mean, again, the situation is like that they are responsible for the development within China. And you might remember, let's say, there has been a change in terms of, you know, where quickly they would want to join in. So in the earlier phase of our agreement, it, it was, the European study, they picked best to join. Then in essence, actually, they were not quick enough on their end to join it in time because the European study did run very well.
And then we changed it to the US study, which has also, I have to say, other benefits for them in terms, for example, that the US study run with the CDR sum of boxes, kind of, acknowledged FDA endpoint, if you will. So, well, yes, of course, we, as I say, we are in discussions. Due to this change, I mean, they had also to change a bit the application with the Chinese authorities. So they did this, but this is actually an answer to that is kind of still pending. And, yeah, we of course expect that they will start a phase one study in time, obviously, also to join them a global study, which would then be the VIVA-MIND study, and that's the plan at the moment.
Understood. And then also a question on your settlement with Scenic. I wonder whether this brings you any closer to potentially partnering this oncology program? And another question is, if there is an interested party for this program, why would it not partner with Scenic instead of you guys, given that they are presumably more advanced in the development program and also have the access to relevant IP?
Yeah, well, let me first say that so with the settlement with Scenic, I mean, I think that's definitely a really beneficial point for us, actually, a positive point, because, I mean, we have gained basically freedom to operate in the oncology field. So that's a very good thing. And then also to say that, as you know, I mean, this was a long years discussion, well, not fight, but a long years discussion, which was, you know, drawn out by certain circumstances which had also to do actually with the Dutch court. So I don't want to go into more details there. It was more personal thing of one of the judges also, where some rulings were delayed.
So then we entered into the settlement, and, yeah, I mean, in the end, I mean, we are the company that has the composition of matter on really good QPCTL inhibitors, and we are—we have the most advanced compounds in hand. So that's what my argument would be for anybody who would say, "Why should I partner with Vivoryon, or should I partner with Scenic in this regard?" On the other hand, of course, I mean, we live in a free world, so everybody can decide what he likes to do, but I think we are very well positioned in that context.
Thank you. Then I have just two questions left. One of them would be on your pyroglu-Abeta antibody, whether you could provide any update, any color of whether there have been any progress done on finding a partner or going into an alliance with somebody. That's number one. And the last question, just to confirm on your VIVIAD study, if I understood it correctly, that you basically expect this readout in Q1 2024 to deliver a conclusive message, message basically as to the drug's effect on cognition and its clinical benefit. And so with that, the open label study would realistically be able to start even ahead of the VIVIAD, VIVA-MIND, VIVA-MIND readout?
So to the last question, yes, we expect the VIVIAD readout to be conclusive. The open label study actually should start, as Frank elaborated, I mean, it cannot start immediately after the VIVIAD readout, but it should start, you know, as soon as possible. There are obviously some regulatory things you also have to, have to, take care of, but it should start as soon as possible. And that this will be before the VIVA-MIND readout. Yes. So if that was the question, I think. And, the other question was on the antibody, right? Well, the antibody, of course, we are, we are in, in, in talks with, with the relevant companies in the AD space, I would say.
As you know, the antibody is a preclinical product, which also requires some more investment into production and refinement of production, let's say. It's a little bit an early on target, but in essence, we are, as this what I can tell you, we are in negotiations at any time, basically, on this antibody. I cannot, of course, deliver you any detailed, concrete updates basically on that.
But what you're saying is basically the antibody program is too early in its development to be partnered. Is that?
No, that's not what I have said. It's not too early, it's early. So of course, there could be a possibility to make a deal, but on the other hand, you have to see that, for example, you have donanemab upcoming on the market in close time. So of course, I think people will just, you know, consider their thinking about that. And, as I said, or as we say, the antibody is definitely designed to circumvent or to be better with the ARIA question. However, I have to say, and this should be obvious, the ARIA question itself can only finally be answered in the patient. So, you know, again, it's a preclinical product, so it has not seen a patient.
So we have to, yeah, that's the situation we are in, but I would never say it cannot be partnered. So, if this would be the case, we would not talk to anybody, and we do, and we have interests.
Thank you.
... We are now going to proceed with our next question. The question comes from the line of Bo Zhang from Intron Health Research. Please ask your question.
Hi, thank you for taking my question. I want to ask about the option for investors to purchase the EUR 15 million of shares following the raise in September of last year. I'm wondering, is there any particular deadline associated with that option? And then can you comment on how likely that may be exercised going forward? Thank you.
Yes, let me answer this, please. The options from September last year can be exercised until the first point in time would be after the data readout of our clinical trial VIVIAD. And after the final results are definitely available, then you have a period of, I think, three months, and then they have to be executed until that time. After that, it won't be possible. But you can look that up in our annual financial statement. It's very detailed described there. There are some minor additional rules to that.
Okay. Thank you.
We have no further questions at this time. I will now hand back the call to Mr. Frank Weber for closing remarks.
Yeah. So thanks to the management team, thanks to the operator, and specific thanks to all who dared to ask your questions, because I think this is how we live with you together. It makes it really interesting to understand what you need to know about us. We try to reach out and stay in touch and try to inform you as transparent and as correct as possible. Yeah, let's work together in the future. Thank you for your attention to us. Goodbye. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you.