My name is Roanna Ruiz. I'm one of the senior biotech analysts here at Leerink Partners. I just want to welcome you to our global healthcare conference. Today it's my pleasure to introduce Vicore Pharma with the CEO, Ahmed Mousa. Thanks for joining us.
Thanks for having me, Rowana.
Yeah, I'm really looking forward to you walking us through the story. I’ll pass the mic to you if you want to go through your presentation.
Wonderful, thank you. Refer to the standard forward-looking statement disclaimers. For a little bit of background on Vicore Pharma, we're a transatlantic company. We're actually headquartered in Stockholm and listed on the Nasdaq in Sweden as well. We have about a $200 million market cap, about a $100 million cash position, a large portion of our team in the Nordics and in Copenhagen, as well as in Stockholm, and also a small team here in the US as well, including myself. 90% of what we're working on is advancing a molecule called buloxibutid for idiopathic pulmonary fibrosis. That's primarily what I'll talk about today. We also have a number of interesting follow-on compounds that we're looking forward to discussing in the future as well. The starting point for maybe the conversation today is why work on idiopathic pulmonary fibrosis?
Really, this is a super high unmet need. The prognosis after diagnosis is unfortunately only a three- to five-year survival. It actually makes it worse than most cancers. There are only two drugs that are currently available. That prognosis is in view of those currently available drugs. Those drugs are both limited in efficacy, and they have really tough tolerability profiles. Most patients who go on these drugs experience tough GI side effects, nausea, diarrhea, and other side effects that make them tough to take. For those reasons, actually only about a quarter of US patients with IPF initiate any treatment, and they discontinue on average within 10 months. Notwithstanding what I just said, it's actually quite a significant commercial opportunity. Last year, the two approved drugs collectively did over $4.5 billion in sales.
You can only imagine then what it could be if you're able to generate a therapy that could be better tolerated as well as more efficacious. That is what we're trying to do here at Vicore. What we have then to go after this tough disease is, first and foremost, a quite upstream mechanism of action. IPF is quite a potent disease that drives a number of pathologies, as we'll discuss. We think this is the right way to go after this type of disease. We've been fortunate also to generate a really interesting phase IIA data set where we show disease-modifying potential or a signal of a disease-modifying effect, where not only are we able to stabilize the lung function of IPF patients, but we're also able to improve it.
We also see excellent GI tolerability, so we don't have those side effects that are associated with the standard of care therapies and some of the emerging therapies. What we're now doing on the back of that really nice phase IIA data is running a phase IIB study that's quite robust, the gold standard in this space, relatively large in size, positioning this therapy as a front line and using the regulatory endpoint to really drive conviction around what we're doing as we move forward. Now, I think first and foremost, when we're talking about IPF, the unmet need is clear, the commercial opportunity is clear. I think what's also clear is there have been a lot of failures in this space. Those failures have often come in the phase II and the phase III stage of development, so in the later stage development.
I think the first question we get from many folks is, why do you have conviction in what you're doing, and why do you believe it's going to be different than some of the other therapies that haven't panned out? I think the core of that is really the mechanism of action that we're driving. In many cases, companies are seeking to block targets that are associated with the buildup of fibrosis. While that's not an invalid way to go after this disease, we do believe it's incomplete. Instead, what we're doing at Vicore is going quite further upstream of that and activating an endogenous tissue repair system that drives fibrosis resolution, vasodilation, and an anti-inflammatory effect. That's this receptor that you see on the right hand, this orange receptor called the AT2 receptor that we're activating.
This AT2 receptor sits as part of the broader angiotensin II pathway. The angiotensin II peptide activates both this AT2 receptor system, but actually it also activates the opposing force, if you think about it in a simplistic way, to the AT2 system, which is the AT1 system. The AT1 system is the body's natural rescue system. It drives hypertension, inflammation, and fibrosis. That is quite a suitable response to a number of different infection, injury, insults, or other types of stimuli. When you have that system turned on for rescue, it drives those types of effects. The AT2 system is essentially intended to resolve what AT1 brings over time.
The other point that I'd make here is, as a drug industry, we've actually made a lot of efforts in blocking the rescue system side, but we haven't made a lot of efforts in turning on the kind of resolution system side. On the AT1R side, ACE inhibitors and angiotensin receptor blockers like ARBs are all designed to attenuate the hypertensive, inflammatory, and fibrotic things that the AT1R system brings forward. We think it's actually just as exciting to go after the other side of this pathway and will be quite potent. Now, placing this into the context of the lung, this AT2 receptor that I was talking about is actually highly expressed on the lung on alveolar epithelial type II cells, which are a stem cell that exists in the air sacs or the alveoli of the lung.
These type II epithelial cells play two key functions that we highlight. One is they replenish the gas exchange cells, the AEC1 cells, the type I epithelial cells. These gas exchange cells are really the workhorse of the lung. The oxygen comes through them, through the interstitium, and then out into the blood vessels so that you can breathe. Quite critical. The second thing that these type II epithelial cells do is they produce surfactant protein. Surfactant protein is very important to maintain alveolar integrity. You see this picture of an alveolus. It has this round shape. It is inflated. That is something that the surfactant helps to maintain. In the absence of surfactant proteins, this alveolus would collapse on itself due to the natural surface tension of water, which is relatively high.
Maybe stepping forward from there and saying, okay, we know what these type II epithelial cells do. What happens to them in IPF? And then what does our drug and our mechanism of action do about that? This illustration is kind of a cross-section of the lung. You see the air sac in the middle. You see this interstitial space in between the air sac and the vasculature that's also there. You see the capillaries, the pulmonary vasculature. First and foremost, when you have a disease like IPF, you have injury to the lung that drives this kind of runaway wound healing process. That injury to the lung starts at the epithelial layer of the alveolus.
You have the death and the dysfunction of those gas exchange cells, those type I epithelial cells, which basically now means that you have impaired lung function because oxygen can't even cross that barrier. What happens in the healthy state is the type II epithelial cells are supposed to differentiate into type I and replenish those. Now with this dysfunction, the type II epithelial cells are also not doing that anymore. They're also no longer producing the surfactant protein. What you have is, even before you have buildup of fibrosis, the injury is causing what's called prefibrotic alveolar collapse due to loss of surfactant production, which reduces the lung function of IPF patients.
What's even more insidious about that is now these type II epithelial cells, because they're dysfunctional, they're actually one of the main cell types that release the signal to drive the wound healing process, the scarring, the fibrosis. That's TGF beta. Now you have the release of TGF beta from these type II cells. You have that causing activation of fibroblasts and ultimately then collagen deposition in that interstitial space. In addition to that, vascular dysfunction is a known part of IPF. Actually, 40% of IPF patients also have pulmonary hypertension, ILD. That vascular dysfunction involves a constriction in the blood vessels and a thickening of the blood vessel walls, remodeling of the endothelial layer. All of those things also then prevent the oxygen from effectively diffusing from the alveolus, from the air sac, through the interstitium into the blood vessels.
Tough disease, a lot going on. You can ask, okay, what does our drug buloxibutid by agonizing this type II receptor on these type II epithelial cells do? You see this kind of on the right-hand side of the graphic. First and foremost, we provide a functionality or a functionalization signal to the type II epithelial cells. Essentially, you're inhibiting that apoptosis and dysfunction in that cell type. You're allowing these type II epithelial cells to then be able to continue to replenish the gas exchange cells, the type I. You have the ability for then gas exchange functionality, oxygen to come across the air sacs. In addition to that, you have the continued production of surfactant protein. You can address that prefibrotic alveolar collapse so that the air sac can stay inflated.
In addition to that, when you think about then that release of TGF- beta 1 from dysfunctional type II epithelial cells, when you refunctionalize them, you attenuate or you cut off that TGF beta production. You are stopping the production of essentially collagen deposition by blocking or by inhibiting that TGF beta signaling as well. In addition to that, again, this mechanism is the natural response to the type I mechanism and its hypertensive phenotype. What that means is it drives vasodilation and expansion of the pulmonary vasculature, as well as an addressing of the remodeling of the pulmonary vasculature so it can be easier for the oxygen to diffuse and be able to oxygenate blood; quite a potent way of going after this disease.
I would say that in most other cases, when you think about the mechanisms that are being advanced for IPF, they are tending to block some factor that might be associated with fibroblast activation, myofibroblast collagen deposition. That's not an invalid way to go after this disease, but we believe it's an incomplete one because it only addresses the interstitial compartment while leaving unaddressed the alveolar compartment as well as the vascular compartment. In addition to kind of having a very potent effect, we also think that there is a natural safety and tolerability advantage to this mechanism of action. First and foremost, we think there's a difference by activating an endogenous or natural tissue repair system versus blocking targets that might be associated with aberrant wound healing or scarring, because a lot of those targets are also involved in maintaining normal extracellular matrix.
They generate some safety or tolerability risks because of that. In addition to that, the expression of our receptor, which is kind of shown here on the right, sorry, on the left-hand side, is really limited to the lung by and large. That makes it also just safer from the perspective of where is this receptor expressed. Where is this drug going to be acting? That is really in contrast to a number of the other kind of current and emerging therapies for IPF, where the expression profiles from the Human Protein Atlas are shown on the right-hand side. In addition to that nice conceptual safety kind of piece, we've actually now tested buloxibutid in over 350 patients across a number of clinical trials for up to nine months.
We have seen that it is by and large safe and well tolerated with no treatment-related serious adverse events in clinical development to date. Moving from the concept to what we saw in our phase IIA study of buloxibutid in IPF patients, what we did in this phase IIA study is measure the impact of our drug on lung function over a 36-week period, approximately nine months. It is an oral small molecule. You take 100 milligrams twice daily. We wanted to study this drug in monotherapy in treatment-naive patients as a first step to understand how is this drug really working in IPF patients by itself before moving forward to look at combining with other therapies in future clinical development. I would say one key advantage of this clinical design is a lot of companies do 12-week studies of their therapies in IPF.
You can see the potential for an effect at that stage, but there's always a question about whether that effect will be durable. One of the challenges in IPF is sometimes you can have an anti-inflammatory effect, which will have a short-term benefit, but that'll be overtaken over the long term by a buildup in fibrosis. First and foremost, as we enrolled this phase IIA trial, one of the things that we thought a lot about was how does the enrolled population compare to typical IPF trials, other phase III trials that are out there? The phase IIA AIR study that we conducted is contrasted with the IMPULSIS studies, which are the phase III studies that led to the approval of nintedanib. You'll see that age, gender breakdown, percent predicted FVC at baseline are very in line with what you see in other studies.
Our study did enroll a larger population out of India. That is one difference we have from the IMPULSIS studies and other IPF studies. Here we see the treatment emergent adverse events, which are shown in the right-hand column. What's nice to see is we have very good GI tolerability. We don't have the signals of diarrhea and nausea that you see with nintedanib, which is shown for comparison on the left-hand side and other current and emerging therapies. We have a low rate of exacerbations and cough worsening, which is great to see. That's a tough side effect profile or set of even disease-related adverse events that are seen in IPF. In addition to that, we didn't see any treatment-related serious adverse events, which is great for a drug like this. We did see 19% mild to moderate hair thinning or hair loss.
That was a reversible side effect, which means that as patients came off therapy, the hair growth was restored. It was also in the majority of patients restored even when the patients were on therapy. You have kind of a period of hair shedding followed by regrowth. Next, on the efficacy side, what we see here really is unprecedented: a sustained improvement in lung function over a 36-week period. The drug is first stabilizing lung function out to about 24 weeks. You see this improvement in lung function. What's also interesting about this data set is that many IPF data sets can be driven by outliers, a few patients that did very well. Here, the majority of our patients, actually 65% of our patients, had an improvement in lung function over baseline at 36 weeks. 80% of our patients did better than expected untreated decline.
That's really contrasted with what you'd see in the standard of care, where about 25% of patients might have stable or slightly improved lung function. Certainly, an untreated population, only a limited number of patients would have stable or modest improvements in lung function over a 36-week period. Now, what we're doing with this outstanding data set is then running the gold standard trial in IPF with a regulatory endpoint change in FVC or lung function over a 52-week period. Relatively large size for an IPF study, 270 patients. We're now allowing patients who are on the nintedanib standard of care or not on standard of care. It can be kind of a frontline therapy positioning. We'll be testing the same dose that we did in the phase IIA, 100 milligrams twice daily, as well as a lower dose, 50 milligrams twice daily.
That is an opportunity to clear the hair thinning or the hair loss side effect, as this is a dose-dependent phenomenon. Of course, we'll have a placebo arm here as well. In terms of how we're powering this study, you'll see on the left-hand side here, there is a 400 milliliter delta between the effect that we saw in AIR and expected untreated decline. It was over 200 milliliter improvement when you would expect to see 180 milliliter decline in lung function. That is certainly an outstanding effect. We have actually powered our phase IIB study quite conservatively to detect 125 milliliter delta change in FVC between the treatment arm and the placebo arm. What that means is even if we have the most mild placebo arm observed, we would have a successful phase IIB readout.
We think a quite attractive product from a commercial perspective with stabilization of lung function. On the right-hand side, just showing the footprint for our phase IIB study, we'll be enrolling across 100 sites in 14 different countries. Actually, this study is now open and enrolling across 13 of those 14 countries as well. I'll stop there and happy to take any questions.
Yeah. I guess I can kick it off as the audience gets warmed up. Thinking about your product, and I thought it was really interesting you're going over the, it seems like a very multiplexed mechanism of action. I think you mentioned being higher in the pathway, et cetera. Do you think that gives a better chance of success in the future?
How would you compare and contrast that to other mechanisms that have been pursued in IPF?
Yeah, I think it does give a much higher probability of success. I think that the challenge with an upstream and a multimodal mechanism of action is that when you're doing your translational experiments, there's a lot going on. I think that that is one of the challenges that Vicore has been able to generate a number of translational models to work through. It can be much more simple and attractive to say, okay, I've identified one particular pathway, for example, a target that's expressed on a fibroblast, and I'm going to block it. Then I can show in a Petri dish that that blocks the fibroblast from becoming activated or migrating or a myofibroblast from depositing collagen. What we've seen over time with these clinical failures is that that doesn't work very well. I think there are a number of reasons for that.
First is you can have something work in a Petri dish, but in the real clinical setting, you often have compensatory mechanisms. You are blocking one kind of way that the fibrotic build occurs, but there might be other ways that happen in the body when that particular target is blocked. The other thing is that when you are trying to block a target that is associated with fibrotic build and you have a strong push to drive that fibrotic build with TGF beta, you really have to be able to then block the target 24/7. You have to make sure you have enough drug in the right parts of the lung to block that target all the time. You have to block every single receptor. That level of target coverage and receptor occupancy can be a huge challenge.
There isn't really a very good way of measuring that early on. Underdosing is a huge risk and a huge challenge in this space as well when you're working on antagonizing these targets. I would say that the Vicore molecule's approach is a big contrast to that because activating this upstream receptor actually doesn't mean that you have to sit on every single target. It certainly doesn't mean you have to be there 24/7. You're able to kind of hit this target, drive the downstream effect through a threshold level of your drug, but without needing to hit that higher bar. For a number of reasons, I do think that that upstream approach carries advantages.
Yep, got it. I wanted to dig in a little bit more. You mentioned your prior phase IIA AIR trial. I thought it was interesting. You talked about there's a little bit larger enrollment in India. How did that impact that study? What learnings could you take away from that that roll into the phase IIB?
Absolutely. I think IPF generally is a very heterogeneous disease. Every patient behaves a little bit differently. That's why even for a rare disease, you want to enroll relatively large-sized trials and actually have a broad geographic footprint. What's nice to know is that the kind of nature of IPF, and this has been published on in a number of kind of retrospective studies, the nature of IPF in India sits within that broader universe of heterogeneity. India is certainly used in other phase II and phase III IPF clinical trials. I think that there is, of course, always a risk associated with going from a smaller trial to a bigger trial. One of the ways that we try to address that is through a very conservative powering.
As I mentioned, even though we see this outstanding improvement in lung function, and we think that that's quite well anchored in our mechanism of action, we've also very conservatively powered the phase IIB for stabilization, even under the circumstances of a very mild placebo arm.
Yep. Yeah, I actually thought the signal in the phase IIA was really interesting as well. I was curious, for the audience, could you talk about some of the physician feedback, KOL feedback, on seeing that unprecedented signal?
Yeah, I think there's a lot of enthusiasm from the KOL community. I think first having a well-tolerated therapy because the tolerability profile of the current therapies is so bad that many physicians and patients decide to wait until their IPF is progressing before they start taking these drugs. In many cases, that's too late. That's a huge challenge. To have a drug that has a nice tolerability profile first is, I think, very exciting to physicians. I think that's exciting for them both in clinical development. I can give this to my patient. I can add it onto what's currently available without feeling like they're going to have a really additional disease burden.
Then on top of that, to be able to say that you have the potential to take a disease that's now fatal and turn it into one that can be managed is certainly quite exciting and quite attractive. Of course, the phase IIA is a really nice early signal. Of course, we'll need to demonstrate it with the phase IIB, but there's certainly a lot of enthusiasm. I think there's also a lot of enthusiasm behind conceptually it being exciting to go after a different approach than blocking these downstream targets for IPF as well.
Makes sense. I do not know if you mentioned this earlier, but thinking about the phase IIB, is there a possibility for that to be registrational? Or would you need to do a phase III? Where is your head at there in terms of interacting with the FDA and other regulatory bodies?
Yeah, so I would say first and foremost, we've designed this phase IIB much like a phase III in terms of inclusion criteria and point overall design so that with a phase III, there would be very limited risk. It would be about replicating the result that you see. Our base case is that we'll have to do one more phase III. Certainly, historically, the FDA has required two phase IIIs in this space in many cases. We're confident that we can do kind of one. In terms of thinking about things like accelerated approval or going more rapidly, I would say that's not necessarily in our base case. Of course, we'll have to see what the effect size is and engage with the regulator at that time.
Makes sense. Let's assume things work out and your product is approved on the market for IPF. How are you thinking about it slotting into the treatment paradigm? I know some of the work that we've done, like the standard of care, still has drawbacks and things that could be improved upon, I will say. Where do you think your product fits there?
Yeah, the way we've designed this clinical trial is that you can take nintedanib standard of care or not be on standard of care. Kind of like first-line therapy, and you can take other therapies on top of it. Many physicians really would like the IPF treatment paradigm to be much like PAH, where there are, in the future, a number of therapies available and different combinations can be doublets or triplets that can be utilized with the patient population. Certainly, we're enthusiastic to go for the top of the funnel and treat patients at the outset. I think that the tolerability profile and the efficacy signal give us the opportunity to do that. Because we're quite different from these other approaches, we think that there should be a lot of complementarity from an efficacy perspective as well.
Yep, yep. I know the phase IIB is ongoing. How are, I guess, whatever you can share in terms of how is enrollment going, how are you feeling about that trial execution, and what are you looking forward to see when that data eventually reads out?
Yeah, great questions. I mean, so far, so good, although it's early days for us. We're getting a lot of great enthusiasm from the clinical sites. As I mentioned, we're running the study in 14 different countries. We're now online in 13 of those 14 countries. We have a number of sites online, not all sites yet online of that approximately 100 that I mentioned. We will still have to see how enrollment goes overall. We are excited. It is a tough space in the sense that it's a more rare disease. It's a competitive landscape where there are other phase IIIs and certainly other earlier stage molecules in development here as well. That's something we'll have to be mindful. We will be doing a futility analysis during the trial. We're certainly looking forward to that as well after one-third of the patients have completed treatment.
Ultimately after that, a top-line readout on the final results.
okay, great. I think we're basically at time. I'll just close out with one last question. Anything that you think investors should look forward to on the Vicore story, data catalysts, et cetera, what should we be focusing on?
Yeah, we are really excited to continue developing this story. Certainly, we continue to do translational work where we look at how our molecule combines with the standard of care therapies and also how it compares to other therapies that are in the clinical development pipeline. We are looking forward to sharing more on that in the future. Certainly, we are also looking to share more in the future on our kind of follow-on pipeline. As I mentioned, this is an upstream kind of tissue repair system, fibrosis resolution system. There are a large number of diseases, including in the cardiometabolic space, chronic kidney disease, where we think this mechanism can play a significant role. We are looking forward to talking more about that in the future as well.
Great. We will look forward to it. Thanks again, Ahmed, for coming out. I appreciate the discussion.
Thanks very much.