This is Carl-Johan Dalsgaard from Vicore Pharma. Welcome, everyone, to this webinar following the announcement of the collaboration between Vicore Pharma and Alex Therapeutics to develop new prescription digital therapies for patients with IPF. I will be joined today by Jessica Shull, who we recently recruited to head up the digital therapeutic program. She brings more than 20 years experience in the development and adoption of digital healthcare technologies and has provided expertise on digital health best practice and policies for WHO and the Digital Therapeutics Alliance. We're very pleased with that recruitment, and she will also be part of this webinar. I will also be joined by John Drakenberg Renander, the Founder and Chief Executive Officer of Alex Therapeutics, who will share the insights to what these devices actually can bring about for us. If I have the next slide, please.
This is a true collaboration between Vicore Pharma and Alex Therapeutics. Vicore, of course, as an expert in IPF, in pulmonary pharmacology and medicine, together then with the development expertise in digital therapeutics, artificial intelligence, and psychology coming from Alex Therapeutics. We will then embark on a joint development to develop cognitive behavioral therapy for these patients. There is certainly a need for treatments beyond the drugs, and there's certainly need to focus beyond the lung volume and fibrosis and the technical aspects of the disease. The CBT, the cognitive behavioral therapy, well-established therapy for the mental aspect, the mental health conditions that comes along with such a severe disease as IPF. The terms that we have announced is that Alex receives a little bit more than SEK 8 million up front, and then we have undisclosed milestones and royalties on the sales in the future.
Vicore will remain the owner of all rights to the product, VP04. As I said, we have now appointed Jessica Shull as head of digital therapeutics, and of course, she will be the third leg of this development and be working in between and making sure that the development from Alex Therapeutics and the input from us will result in products that also will reach the patients and the market. Can I have the next slide, please? This is, I think, very much a natural continuation of the portfolio that we are developing for IPF patients. We've always been saying that Vicore Pharma is a rare disease company focusing on patients with rare disease and rare lung disorders, not only the disorders themselves. I think this is another evidence for that.
DP-01 program is the phase II proof of concept for IPF that's aiming to reduce or even, if possible, stop the fibrotic development with C21, our first-in-class compound for the angiotensin II type 2 receptor. Recruitment is ongoing and still keeping to schedule despite some difficulties due to COVID-19. Far, we have no safety concerns, meaning especially GI, which has been really a setback for both the products that are on the market, but also for some of the competitors that are doing studies in phase II and phase III. So far, we haven't seen that with our compound, which is, of course, a great benefit. The VP02 program is an inhaled IMiD to treat the IPF-related cough. Cough is the symptom that has the greatest impact on quality of life for these patients.
This is, of course, also in line with concerning about the patient and making life more bearable to them. We are there in the phase where we're doing the GMP synthesis. We're planning for phase I at the beginning of next year. We have a follow-on program with new molecules addressing the same receptor, the angiotensin II receptor. That's for ILD, for interstitial lung diseases, and also for other broader indications. Those three programs together will now be complemented by the development of a digital cognitive behavioral therapy in collaboration with Alex. Can I have the next slide, please? Why is digital therapy and cognitive therapy needed for IPF?
I think if we put ourselves in the shoes of a patient who has been coughing and having a little bit short of breath during the last year, a 60-year-old man, he suddenly gets the diagnosis or trying to get the diagnosis that it is idiopathic pulmonary fibrosis. That is a death sentence in itself. He has a three to five years life expectancy, and there are drugs available. They reduce the speed by which you deteriorate, but they have a poor tolerability, and especially on the GI side. This patient will, from that day on, never feel any improvement in his condition. He will just deteriorate a bit slower if he's taking the drug, but to the price of the side effect profile, of course.
He will have daily reminders of the symptoms and the limitations of his life, frequent relapses or infrequent relapses, but still moving to the next phase of the disease. It's also social distancing from friends and family, maybe due to having a terminal disease. Apart from the physical symptoms that he experiences, it's a lot of burden on his mental health as well, of course. Vicore will here provide an integrated care solution for these patients, develop a product that they aim to relieve the associated anxiety, depression. It's not only by appointment, but actually 24/7. When needed, it's there. It's all about behavior changes, handling the situation, avoid the mental anguish, to structure day, to learn about the condition, abilities, to find the balance in activities and recovery, and to live with disease with the highest quality possible. That's what the ambition is.
If we have the next slide, I'll be happy to introduce John Drakenberg Renander , to go through what the product will a little bit look like. You will get a feel for that. Please, John.
All right. Thank you, Carl-Johan. We are at the early concept phase, I will give you just an overview of the different concepts that will be brought into this product. You can see three pictures in the lower section on the slide here to get an idea and feel for what it could look like in the future. The mission really is to improve the lives of these patients. We will develop a fully autonomous and standalone digital therapeutics that can be prescribed by doctors to patients and focus on the mental health conditions of these patients, for example, anxiety and depression. The product will be certified and registered as a Class IIa medical device. That means that we are developing this product under the Medical Device Regulation, MDR, in the EU, as well as under FDA in the U.S.
It's a rigorous development process that we have to go through to ensure that we have the highest possible standards for safety, for protection of data, for instance, and also for quality overall. To this, we have an AI engine, and that AI engine will be delivering the personalized aspect of this treatment. There will be no psychologist involved in the treatment. There is an AI engine who will personalize the aspects of the treatment. It's built on evidence-based cognitive behavioral therapy, which has decades of evidence behind it. One of the important parts of this kind of treatment is that the support is continuous. It's 24/7 support all year round, and we can maintain the positive effects of this CBT treatment over a large period of time. Very excited about this, and I'll leave it over to the next slide. Thank you.
Thank you. I think this is my slide. This is Jessica Shull, the new Head of Digital Therapeutics for Vicore. What I'd like to explain here is that digital therapeutics are, in fact, medical devices. They are regulated, as John mentioned, under MDR and require a CE mark as a medical device in Europe. We can say that there are 300,000 health and wellness apps out there, but these are not in that realm. There are about 200, 250 products which actually qualify as a digital therapeutic because it's not just what the patient sees on their phone. It's also about the clinical evidence required to actually create an interaction that moves the clinical endpoint.
These products have to go through regulatory channels, through CE mark, as well as FDA approval to prove their safety, first of all, but also reliability, everything that John mentioned about data security, cybersecurity , all of that, plus clinical efficacy. That will, of course, require a clinical trial and more parts to providing evidence. In general, the industry has been around for more than 10 years, and there's a growing base of evidence for the effectiveness of these kinds of products. These products have been developed for all kinds of conditions. Psychology and mental health is one, but also for circulatory diseases, for neurology, pain management, and respiratory disease. There are products on the market currently being used in countries in Europe and the U.S. for COPD and asthma. Endocrinology as well.
There are many products for both type 1 and type 2 diabetes and oncology for not the cancer itself, but the sort of psychological aspects and the attention and well-being of patients who are going through cancer treatment. There are probably 15 more examples to give of disease areas, but this is a short list. Can we have the next slide, please? This is a list of examples of DTx, digital therapeutics partnerships, which are currently ongoing. These are large pharma companies, big pharma, which have partnered with digital therapeutics companies to provide a product to their patients. Sanofi and Happify Health are developing something for multiple sclerosis. Pfizer and our Alex Therapeutics has a production line for a product addressing nicotine addiction, there are several products here, you can see that Otsuka and Click Therapeutics are doing major depressive disorder.
This is, of course, mental health in the area that we're speaking about. These do exist. They are in use. They're in progress. In the U.S., Insider Intelligence has estimated the DTx industry to be worth $56 billion within the next five years. The momentum for this is only growing larger. DTx products are priced as medical products. They're not free products that you download. They are medical products. They are often described as companion products to a drug therapy. They can also be used as standalone treatment or as a companion with another device. There are a few modalities that are currently in use.
For the next slide. This is the DP-04 path to market in the sense that there will be, of course, a design and development phase. We will have to engage with patients, physicians, and healthcare systems to know what will work for patients, how physicians will be interacting with this product, and how healthcare systems can incorporate, and of course, pay for this product. The DTx features and interface will have to meet all the standards, regulations to comply with software as a medical device, SaMD regulations, according to IMDRF. The design and approval phase for the clinical trial will begin in 2022. That trial will, of course, be run and the results published in a peer-reviewed journal.
Certification as a medical device. The CE marking, once you are certified as a medical device through the notified bodies, through this very structured system within the EU, this certifies the product for sale in every EU country. This opens an over-the-counter pathway in 27 markets. It's not given that patients will pay for this out of pocket, that is one possible pathway. Products in general, like any digital therapeutic, has that option. The reimbursement pathways also exist through national reimbursement. When that part of the plan is launched, there will also be real-world data gathered as the products are in use. This is the most, I suppose, innovative part of a digital therapeutic, is that it's not just a pill that you give and sort of forget about. You know every day afterward what the patient is doing, how they're engaging, what's been effective, where improvements need to be made. It's a constant indication of efficacy, it's actually required as part of the Medical Device Regulation for a Class IIa or IIb product.
In many countries, the final point there is that price negotiation after one year of use, for instance, in Germany, this can be detailed, and they look nationally to see what the actual effect was, and the final price negotiations are based on that. I will pass now back to Carl-Johan, and thank you very much.
Thank you, Jessica, for this introduction to our product and to digital health. I'll just flip to the next slide, please, and try to explain what the value of DTx is for Vicore. We certainly believe that part of it, there's a paradigm shift we're looking to in the way we engage, support, and collaborate with patient communities and healthcare systems. This is especially true in the rare disease arena, where patient communities are strong and where this is the way of working together. It kind of formalizes and extends the value of what Vicore is already doing, and we're building a patient-facing product together. The benefits of this addition to a revenue stream is, of course, that we will get patient familiarity, trust, and backing engagement with KOLs, physicians, and patients and families.
As Jessica Shull pointed out, we will learn to evolve products through the understanding of the disease from each and every individual patient. As kind of final remarks for this presentation, I think it's worthwhile saying that, again, iterating that patients with IPF are suffering from much more than shortness of breath and a reduced lung volume. With VP04, the digital therapeutic, we came to address the mental health issues that are part of IPF, inherited part of a severe disease. When we did our patient interviews when preparing and discussing this some time ago, I still remember one of the interviews where the woman at the end of the interview said, "When can I have this?" I think that kind of prompted us to move on, and we're very happy to announce the starting of this endeavor together with Alex. I open up for questions.
Thank you. Thank you. As a reminder, if you do wish to ask or call your question, please press zero one on your telephone keypad now. Our first question comes from Fredrik Thor from Redeye. Please go ahead. Your line is now open.
Hi, thank you for taking my question. I was just wondering if you could elaborate a bit more about the experience of CBT in IPF patients today. Yeah.
Yeah, there's a lot of experience in CBT, not so much specifically for IPF patients, but in related diseases, in lung disorders, and including COPD, also including IPF. There is no digital therapy development in IPF. I think it's also known that for these patient categories, the more intense CBT works better than not so intense. Of course, with the digital approach, you will have a 24/7 access, and you will also have the opportunity then to adjust in a much more fine-tuned way based on the artificial intelligence. There's certainly evidence for CBT in all the mental health components of IPF, and we're convinced that this will be true for these patients in our studies as well.
Also, with this in mind that it's relatively new for IPF patients, how tailored will it be specifically for Vicore and how different will it be from the other projects in Alex Therapeutics?
It's completely different from the other projects in Alex Therapeutics. It is a very specific medical device for IPF patients that we developed together, Alex Therapeutics, Vicore, and patients, doctors. It will be very specific. Of course, it will engage the patients, and it will engage the doctors in the development. That's a good way to make sure that we're developing the right product and that we meet the needs of the patient and the physicians.
Finally, the clinical trial. Can you say anything about the costs for this development and compare it with the regular products?
Yeah, I think we're in the planning phase and discussing, we will not have an exact figure. This will be a very different study, so it will be much less cost than a regular clinical IPF trial. It will not be doctors' visits and so forth. It will be a digital trial in a sense. We will have to come back with the exact cost, but we certainly expect the cost to be lower than a conventional IPF trial.
Yeah. Thank you. That's all for me.
Thanks.
Thank you. Our next question comes from Dan Ekströmt from Pareto Securities. Please go ahead.
Hi, everyone. Thank you for taking my questions. First one, I was wondering if you would include this maybe in a phase III trial in IPF of C21 to increase the amount of data you generate also on the quality of life side of VP01?
It's an option. Our intention is to make this as a standalone therapy. Having said that, of course, we can include it in a phase III trial. We haven't planned the phase III trial. I think it remains to be seen. It's certainly a good idea that we will look into.
Okay. You mentioned that there's no psychologist involved.
Oh, they are. They are in the development of this program. They reside in Alex Therapeutics, so that's their area of expertise. They do have the psychology, they have the technical development, and the artificial intelligence development. We have the medical bits and pieces. Then Jessica Shull's experience from regulatory and marketing of DTx.
Okay. Patients have access to psychologists if they wish to do so through the app?
Not any person.
Okay.
It is not that kind of application at all. It is only based on their interaction with the app, so to speak.
Okay.
Maybe-
Can I add to that?
Jessica wants to add there.
Yeah. I can just add that, in a sense that computing power has become so powerful that you can basically have a therapist. The AI is the therapist. This all has to be designed, but it's meant to meet their needs and anticipate their needs. In a sense, a psychologist or actual person shouldn't be required. That's the idea.
Okay. Thank you. One last one, departing a bit from that. Would you also consider to include in your IPF trials the lung function value test such as forced vital capacity, et cetera? There are also these respirators that you can use and then feed into an app to collect more data points than normal visits. Do you consider that to further digitalize your pipelines?
It's a good point. We have a little bit of difficulty with home-based spirometry to start with, and I think we should look upon the mental health aspects of depression, anxiety as the first step, and then what will come in the future remains to be seen. It's very important not to have it too [grap] or too big bite, so to speak.
Okay. Thank you very much. That was everything from me.
Thanks.
Thank you. As another reminder, if you do wish to ask an audio question, please press zero one on your telephone keypad now. Okay, there being no audio questions, I return the conference to you for any further questions.
Yes, we have received a few questions that have come through per email, so maybe start with the first one, maybe for John. How will you secure the application from fraud such as spyware? John, do you take that question?
I don't know if John's on the line.
Okay, sorry. Yes. I'm still here. Was a hiccup. Great. Thank you for that question. We take security and data protection extremely seriously, of course, at Alex Therapeutics, and there are several ways how we deal with that. First of all, it's integral in the development process. Since we are a medical device, as has been said before, we are under the MDR, and one of the big main purposes of MDR is to ensure that the quality and the safety standards of the product, which is of course, for good reasons. That's one step. We build in an entire development process as we build the product. On top of that, we have done and succeeded and we will continue to do so, attack and penetration testing on the platform and on the products to make sure that we are safe. The third point I should add is that we can also localize data, so we can set up servers for specific countries to ensure that data don't travel across country lines. We can control for that.
Okay, thanks, John. Another question, maybe for Carl-Johan. Are there any competitors in the same area?
Not that I'm aware of.
Okay. Another one for you. How do you plan to perform the actual integration with Alex Therapeutics in terms of performing the digital trial?
Well, I'm not sure I really fully understand the question, but it is a device that is developed by Alex Therapeutics that we will then perform a clinical trial with, and the device will then be registered and sold and marketed by us. If that's the answer to the question.
Okay, another question for Jessica. Can you share some granularity on how a clinical trial works within this area, maybe in terms of size and number of patients?
Sure. A clinical trial for a DTx is similar to a drug trial. You have to determine what patient population, how many, what clinical endpoints, and develop your control arm. All of that will have to be decided. It's a bit early to say right now how many patients we'll be able to recruit. We'll also, of course, be looking at the countries that are the first markets of entry, where the trials will be run. We haven't determined the number of countries yet, but all of that will be known very soon.
Okay, great. Thanks, Jessica. Another question for you. Will the clinical trial take place multi-nationally?
Yeah. I guess that sort of leads from the same question. It's likely that it will be more than one country, yes.
Thanks. I think that's it from a Q&A perspective. Maybe turn back to Carl-Johan.
If there are not any more questions online, I would like to thank Jessica and John for their contributions to this webinar and, of course, everyone who has listened in and posed questions to us. Thank you so much, and have a nice afternoon and evening.