Thank you for joining us for a presentation by Vicore Pharma. I'm Spencer Kent. I'm from the TD Cowen Healthcare Investment Banking team based in San Francisco. I'm pleased to introduce CEO Ahmed Mousa, who will be leading the presentation today, and I'll turn it over to the company.
Welcome.
Thank you, Spencer, and thank you, everyone, for joining. I'll refer to the typical forward-looking statement disclaimers. It would be great at the outset to introduce Vicore a little bit to you. Vicore is a biopharmaceutical company headquartered in Stockholm in Sweden. We're publicly traded on the Stockholm Exchange with about $200 million market cap and about $100 million US dollar cash position as of year-end. We have geographically team located in Stockholm, in Copenhagen, as well as in Boston, and I'm personally based in Boston as well. The pipeline of the company is highly focused on advancing a program into later-stage clinical development for idiopathic pulmonary fibrosis. This molecule is called buloxibutid, where we have a phase IIb study now ongoing that I'm excited to tell you more about. We also have Nippon Shinyaku as a Japanese partner for that program.
We also have a number of very interesting preclinical programs that are in the same pathway as our lead molecule, but I won't focus on those quite as much today. First and foremost, why is idiopathic pulmonary fibrosis an interesting indication for us to work on? I think that that really starts with the high unmet need. Pulmonary fibrosis and idiopathic pulmonary fibrosis is a terrible disease. It essentially slowly chokes off your ability to breathe by having fibrotic buildup in the interstitium, the space between your air sacs and the blood vessels in the lung that need to be oxygenated. The prognosis after diagnosis with IPF is only three to five years. It ends up being worse than many cancers. It's quite terrible. There are only two drugs that are approved for IPF, and unfortunately, they're not so great.
That prognosis I told you about includes consideration of those standard of care therapies. Ultimately, because of both the limited efficacy and a really tough tolerability profile, these drugs cause really significant gastrointestinal side effects, diarrhea, nausea, and others that really drive patients away from it, and it drives actually physicians to be hesitant to prescribe it. Only about 25% of patients in the U.S. actually even initiate an IPF treatment. The average time on therapy is only 10 months because of that limited tolerability profile and the limited efficacy. Now, notwithstanding everything I just said, the commercial opportunity is significant. Last year, the kind of two standard of care therapies collectively drove over $4.5 billion in sales.
Certainly then, if you can think about driving or developing a compound that would be better tolerated and more effective, you could certainly expand the market much beyond that. The challenge in IPF is not the unmet need nor the kind of commercial opportunity, but rather there have been a number of efforts in IPF that have not worked out, including in phase II and later-stage clinical development. The question is really, what do we learn from those prior failures, and why do we believe we have at Vicore the right approach to go after this disease? I think that really starts with kind of three key pillars. One is mechanism selection.
In many cases, and we'll talk a little bit more about this in detail, others have selected targets that are a little bit more downstream and associated with wound healing process and trying to block or antagonize those targets. That's not an invalid way to go after this disease, but we do think it has limitations in terms of efficacy and has potential safety and tolerability liabilities. The Vicore mechanism of action is much further upstream relative to those, and we believe that creates the potential for a much more potent effect with also a differentiated safety and tolerability profile, as we'll talk about more.
The second pillar then is really translating that interesting upstream mechanism into a phase IIA data set that we completed and reported on last year, where we showed a disease-modifying signal, the ability to improve lung function in IPF patients over an approximately nine-month study when you would typically expect the lung function to decline in untreated patients and for standard of care therapies to only really slow that decline, not even to be able to stabilize lung function, certainly quite a big contrast from the ability to improve it.
A third kind of pillar is really then taking that phase IIa clinical signal of efficacy and translating it into quite a robust study where we'll be looking at the regulatory endpoint for IPF in a relatively large patient population for this rare disease, 270 patients, and also positioning this therapy ultimately as a frontline treatment that you can take on top of one of the standards of care, nintedanib, or not on standard of care. Maybe looking at the first pillar, the mechanism that we're going after here. What we're trying to do is, or what we've done is we've created a small molecule that's an agonist or an activator of the AT2 receptor, which is shown in orange on the right. This is a natural system in the body that drives a series of anti-inflammatory, vasodilatory, and fibrosis resolution systems.
The idea is to harness this endogenous system and drive it against the disease that is IPF. This AT2 receptor exists as part of the angiotensin II pathway, and the angiotensin II peptide also signals then on this AT1R that is shown here on the left. The AT1R is actually the opposing force to the AT2R. The AT1R drives inflammatory, fibrotic, and hypertensive processes. This is actually the AT1R is a rescue system in the body. If you have a drop in blood pressure, infection, injury, insult, this AT1R system kicks in very quickly to address those kind of emergency types of situations. It is a very useful pathway, but at the same time, it has an opposing force built in in this AT2 receptor to resolve what fibrosis, inflammation, and hypertension it brings over time.
The angiotensin II peptide in activating both the AT1 and the AT2 receptor then becomes kind of its ability to drive the context for what's going on is based on the receptor expression profile. The AT1 receptor, this pro-fibrotic, inflammatory, and hypertensive system, is expressed very broadly in healthy individuals, so it can always be available if you do have one of those emergency situations, whereas the AT2 receptor is actually very selectively expressed. In most healthy individuals, you'll find very limited expression of this receptor, and it's actually only after you have some sort of fibrotic, inflammatory, or hypertensive event you'll have an upregulation of this receptor so that it can drive that resolution. It turns out that the lung is actually one of the very few organs where you'll find a lot of receptor expression of the AT2R.
We think that's evolutionarily because you're always breathing in some virus pollution. To have the system available to resolve the fibrosis and inflammation that comes from that, we think is advantageous. For whatever reason, it's there, and the idea then is that we can strongly activate it. Maybe then taking the system and placing it in the context of the lung, I think the first question you can ask is, okay, what cell types is this receptor expressed on in the lung, and in what parts of the lung is this receptor expressed that we're activating? You see here on the right-hand side a healthy alveolus, an illustration of an air sac, and there are millions of these at the distal end of the lung. The oxygen comes through these and then out into the interstitium and into the blood vessels.
The receptor that we're activating actually sits on a stem cell or a precursor cell called the alveolar epithelial type II cell. These cells have two key functions that we highlight. One is this is the cell type that differentiates into the gas exchange cells or the AEC1 cells. This is the workhorse of the lung. It's the cell type that oxygen comes through in order to go out into the bloodstream and carbon dioxide for exhalation. These cell types also produce what are called surfactant proteins. Surfactant proteins break up the natural surface tension of water. These proteins enable the alveolus to maintain its integrity. In the absence of surfactant protein production, the alveolus would collapse on itself because of that surface tension of water.
Then stepping forward, we can ask the question, okay, what happens to these alveolus in the disease that is IPF and to the rest of the lung, and what does our mechanism do about that? What we have here is an illustration of a cross-section of the lung where you have the air sac or the alveolus, the interstitial space, and then the vasculature, the capillaries that become oxygenated as part of the healthy breathing process. IPF, like other pulmonary fibrosis, is a disease where you have injury to the epithelial layer of the alveolus. You have injury to that air sac. That injury doesn't spare then these alveolar epithelial cells that carry our receptor, these type II epithelial cells. They become dysfunctional, and they undergo apoptosis. They start to die off.
The dysfunctional cells are then no longer able to replenish the type I gas exchange, so you have reduced gas exchange capability. They're also no longer able to produce surfactant. You have pre-fibrotic alveolar collapse, which is a known phenomenon of IPF that causes a loss in lung function. In addition to that, the type II epithelial cells in becoming damaged are actually one of the key cell types that release the wound healing signals to drive that wound healing and fibrotic process, and that's TGF beta-1. These AEC2s start spilling TGF beta-1 into the system, driving epithelial to mesenchymal transition, buildup of fibroblasts, new fibroblasts. They become activated. They migrate into the interstitial space. They transition to myofibroblasts, and they start depositing collagen, so buildup of fibrosis.
What's also tough about IPF is it's known that there are a number of enzymes called collagenase MMPs that could otherwise be available to break up collagen that become downregulated. So you have a buildup of collagen and an inhibition of the system that could otherwise process that excess extracellular matrix in your lung. In addition to that, vascular dysfunction is a known part of this disease, and 40% of IPF patients also have pulmonary hypertension, ILD. This involves a thickening of the vessel walls and also a constriction of those walls, so it makes it harder for the oxygen to diffuse and ultimately to achieve that healthy breathing. Now, on the right-hand side, we show a schematic of what our mechanisms postulated to do about this, and we have a number of translational experiments demonstrating these aspects.
First and foremost, by agonizing this type II receptor on these type II epithelial cells, we're able to refunctionalize them. They're now going to be a cell type that's available to replenish the type I epithelial population and bring back that gas exchange capability. It's also going to enable the production of surfactant protein again so that you're able to address that pre-fibrotic alveolar collapse. Also, when you refunctionalize a cell type, it's no longer producing that wound healing signal. You've actually attenuated the expression of TGF beta-1 from the dysfunctional cells, from the source that's driving that fibrotic process, which means you're downregulating the fibroblast activation, migration, myofibroblast transition, and collagen deposition.
We've also shown that our mechanism upregulates those collagenase MMPs, so now you have the enzymes to digest the collagen that's already built up in the fibrotic material that's already built up. Finally, we've also shown that this mechanism is able to vasodilate or to expand the vasculature and also to address the remodeling in the endothelial layer of the vasculature in order to allow for that healthy gas exchange. When you think about this mechanism relative to others, as I'd mentioned, antagonizing targets on activated fibroblasts and myofibroblasts is not an invalid way to go after the disease, but we really think that in order to have a disease-modifying effect, you need to think about that epithelial layer and the gas exchange in the alveolus as well as the vasculature.
In addition to that, we believe that activating this target, this endogenous tissue repair system, has a differentiated safety and tolerability profile. It's different than antagonizing targets that might be associated with not only aberrant wound healing, but normal wound healing, as well as normal extracellular matrix function. In addition to that, as I'd mentioned, the expression of our receptor is quite limited. On the left-hand side, this is data from the Human Protein Atlas . You see that the expression beyond the lung of the AT2 receptor gene is quite limited, and that's in contrast to some of these targets that others are going after where you're looking for targets on activated fibroblasts or myofibroblasts that might be expressed in broader tissues throughout the body.
In addition to that, one thing that we'd like to highlight is this drug candidate, buloxibutid, has now actually been dosed in over 350 healthy subjects or patients, and we've built a nice safety and tolerability profile, including over the nine-month phase IIa study that I'll talk about, where we don't have the significant tolerability issues that maybe have been observed with both the standard of care and some of the emerging therapies to date. With that background, I'll talk a little bit about the phase IIa as well as then the phase IIb study that we have underway. The phase IIa study that we completed was an open-label 36-week study where we evaluated 100 milligrams of buloxibutid twice daily. We looked at safety, tolerability, and we also, of course, then looked at lung function.
Now, this study did recruit treatment naive patients, so patients who had not yet received other therapies, and also was a monotherapy study, so it was not combined with other therapies. The objective here was then to really understand the efficacy and safety of this drug in IPF patients alone before combining it with other treatments. This phase IIa AIR study enrolled patients that are quite similar in characteristics to the phase III studies that led to the approval of nintedanib, so that's the INPULSIS study shown in the right-hand column as comparison to what we did in the AIR study in the left-hand column. It was nice to see that. In particular, I'd point you to the % predicted FVC at baseline, about 75% in our study, 79% in the INPULSIS study. Similar profile there.
In terms of then treatment, emergent adverse events, which are shown here on this slide in the right-hand column, you'll see that we have a very good GI tolerability, so we don't have the same signal as the standard of care therapies or the emerging therapies. We also have a low rate of IPF exacerbation and cough worsening, which is great to see, and no drug-related serious adverse events, which was also very heartening to see. The one feature of the molecule that we do observe in the phase IIA study that we also observed in the phase I is mild to moderate hair thinning or hair loss in a subpopulation of the study, and so this was observed in 19% of patients. The hair thinning was reversible, so hair came back after folks came off of therapy. It was also in most patients observed to regrow during the treatment.
You kind of have a period of hair shedding, but then it comes back as you're on drug nonetheless. We ultimately think that while we'd like to find strategies to remove this from the product profile, and I'll talk a little bit about that, we think this is an acceptable part of the overall package given the fatality of IPF and the patient population, which is largely older men. Maybe turning from the tolerability to the efficacy side of things, what we see here then is what the impact of our drug is on FVC over the 36-week study, and you'll see that there's a kind of stabilization of lung function over about 20-24 weeks, followed by a period of improvement in lung function out to about 36 weeks.
This is really nice to see, and we have, based on the literature, the contrast with what you'd expect in terms of lung function decline in untreated patients, and that's about 180 milliliter decay over that 36-week time period. Quite a different result from what you'd expect in an untreated population. In fact, when you look at the literature and look out to just untreated IPF patients out to 36 weeks, it's only a single-digit percentage who would have some stable lung function, 4-9%, or modest improved FVC over that time period. Quite an intriguing signal and quite an exciting one as well in this disease, especially relative to the limitations of the standard of care and emerging therapies. It was also really great to see that we had a dataset that was really robust to outliers.
Sixty-five percent of the patients in this study had improved lung function from baseline at 36 weeks, and that's a comparison to, in the standard of care, you might expect about a quarter of the population to have an improved lung function, and as I said, 4-9% in that untreated patient population. That was great to see. We also observed that 80% of the patients in the study had a better lung function than the expected untreated decline. Really a very nice signal of clinical activity here. We also had some nice kind of biomarkers consistent with this mechanism of action, a trend to decrease that TGF beta-1 expression in the plasma of the IPF patients in the study. We also had a significant increase in the collagenase MMP-13, which is one of the key collagenases that can resolve fibrotic build.
So great to see also, in addition to the lung function, some consistent biomarker signals as well. What we have now initiated is a gold standard phase IIb study in order to demonstrate the activity of this molecule in its ultimate positioning, which is kind of a frontline therapy on top of nintedanib standard of care and will also allow patients who are not on standard of care, whether that is because they do not have access or refused or do not tolerate that therapy. We are going to look at the regulatory endpoint and duration, so looking at change in lung function over 52 weeks, and we will be looking at two different doses. We will be looking at the 100 milligram twice daily dose, same as in the phase IIa, as well as a 50 milligram twice daily dose.
This is where the potential to clear the hair loss side effect comes in because this is a dose-dependent phenomenon. We are very interested to see how that arm works out in our study, in our phase IIb study as well. Just to give some context on how we are running this study, in terms of powering, we are powering this study quite conservatively relative to what we saw in the phase IIa. Of course, that was an open-label study. It was a smaller study. What we ultimately saw was something that looks like a 400 milliliter delta from expected untreated decline. You had that over 200 milliliter improvement. You would have expected that 180 milliliter decline. It is quite an exciting signal. Now, how we are powering the phase IIb is 80% power to detect a 125 milliliter difference between the treatment arm and the placebo arm.
What that essentially means is that there have been a number of different levels of lung function decline in placebo arms of IPF phase II and phase III studies, but even if we have the most mild placebo arm ever observed in an IPF study, we want to demonstrate the ability to stabilize lung function. That would be certainly a transformative therapy for IPF patients and certainly a very commercially attractive one as well. In terms of how we're enrolling this 270-patient study, IPF is a rare disease, so we're casting a broad net across 14 different countries and approximately 100 different clinical sites. We are very excited to have had this study underway since late last year, so still kind of in the starting-up phases of this big trial, but we're excited to continue to report on progress as we advance as well.