Hi everyone. My name is Kayla McGuick. I'm a member of the banking team at Morgan Stanley. I'm very happy here to host the fireside with Ahmed Mousa, CEO of Vicore Pharma. Just before we get started, a couple of important disclosures. Please see Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, I think Ahmed, maybe we get started. If you could just give a brief overview of who you are, who Vicore is, and where you are, then we can dive into some of the specifics around the pipeline.
Wonderful. Thank you for having us, Kayla. It's great to be here. Vicore Pharma is a publicly listed company on the Stockholm Exchange in Sweden, so a historically European biotechnology company. The company's been working on understanding the renin-angiotensin system and the angiotensin II pathway, which we believe can be quite a potent intervention for a number of fibrotic and inflammatory diseases. We've zeroed in around targeting a receptor called the angiotensin II type 2 (AT2) receptor, which we think can be quite a potent, not just anti-fibrotic, but rather a mechanism that drives tissue repair and fibrosis resolution. The particular fibrotic disease that we've been focusing on is idiopathic pulmonary fibrosis, which is a disease with quite a high unmet need and also a very significant commercial opportunity. Currently, we've taken our lead compound through phase I and phase IIA data, which has been quite exciting.
Now we have an ongoing phase IIB, which is quite large and quite extensive to really demonstrate the potency of this mechanism broadly and, of course, the potential of this specific molecule in idiopathic pulmonary fibrosis.
Perfect. Maybe we'll just start a little bit on the mechanism because, I guess angiotensin is traditionally thought of as a cardiovascular target. What is distinct, and I guess what is the relevance for fibrotic disease and IPF in particular?
Yeah, absolutely. When a lot of folks think about the angiotensin II pathway, the angiotensin II is this peptide that actually activates two receptors, the AT1 receptor and the AT2 receptor. Essentially, these two receptors do the opposite thing from each other in a very simplistic way. The AT1 receptor drives fibrotic, inflammatory, and hypertensive pathways. That's a great natural response to infection, injury, insult. You could think about it as the body's rescue system. It has its own then built-in response mechanism, which is this AT2 receptor, which drives an anti-fibrotic effect, an anti-inflammatory effect, and a vasodilatory effect to really respond to the things that the AT1 system brings. What's been interesting is we've had incredible success as an industry in drugging the AT1 side of the angiotensin II pathway, and that's by blocking AT1 activation.
ACE inhibitors and ARBs, or angiotensin receptor blockers, are basically blockers of the AT1 system. You're right, Kayla, and a lot of people have seen the success of those and think about those as really good anti-hypertensive drugs for the vasculature. I think what we also forget is, in addition to these drugs being super well tolerated, they're also used in a number of other diseases that have other inflammatory or fibrotic components. For example, these ARBs and ACE inhibitors are quite popular and part of the standard of care in chronic kidney disease, for example, which certainly has a lot of fibrotic implications as well as other diseases. What's then interesting is, and we think highly under-explored then, if blocking the side of the equation that drives the fibrosis and inflammation and hypertension is interesting, what about actually activating that endogenous tissue repair and fibrosis resolution system?
We think the potency there can be quite attractive. We think, like, kind of modulation of the AT1 side, it can actually be quite safe and well tolerated. We're really excited about the broad potential applicability here. That's what we're trying to achieve with our lead candidate. Now, let's take this then into the context of the lung specifically, right? What exactly is activating this endogenous or built-in tissue repair fibrosis resolution system doing? What it's doing is it actually is agonizing this receptor, actually driving a functionalization and a proliferation of stem cells in the lung called alveolar epithelial type II cells. If you think about IPF and fibrosis generally, it's injury that causes this runaway wound healing or scar formation. In the lung, the injury's focal point is the epithelial layer. We actually have these type II epithelial cells that become injured.
They drive fibrosis as a result of that injury. Essentially, what this mechanism does in the lung is it protects and drives a proliferation, again, of these stem cells. By doing that, you're able to both regenerate the parts of the lung that have become injured, which we think is quite unique, but also you're then able to cut off that kind of fibrosis-driving signal at the very source, we believe. We think that's a very interesting way to go after the disease. What's also, of course, known about the AT2 receptor, as you said, Kayla, if nothing else, is that it has a vascular effect. I think we've seen recently with United Therapeutics' exciting data in IPF that actually having a drug that also impacts on the vascular access can be quite useful in this disease state.
Thank you, Ahmed. I think that's a perfect segue into the next topic. In terms of data, we've seen some failures earlier this year, but more recently with BI and United that you referenced, some positive phase threes. How do you see the current sort of treatment challenges in IPF? Where do you think the role is going to be for Vicore going forward, not least of all, given that we have seen some successful phase three readouts in the area?
Yeah, absolutely. I think first, just to look at where the market, you know, where the landscape sits today, there are two approved drugs for IPF, pirfenidone and nintedanib. These drugs are tough to tolerate, so quite poor tolerability. They cause GI side effects, diarrhea, some nausea, as well as photosensitivity. They also, at the same time, unfortunately, only slow the decline of lung function in this pulmonary fibrosis state. Just to put that into context, unfortunately, the survival after diagnosis with IPF is only around three to four years. That's even in view of kind of the available standard of care. You're talking about a disease that's worse than many cancers on average. Unfortunately, these two drugs that are available are so tough to take that only 25% of people in the United States who are diagnosed with IPF even initiate therapy.
The average time on drug, because it's poorly tolerated and because it has limited efficacy, is only 10 months. Even in view of all of those things, it's currently a $4 billion market as of last year, and it's expected to continue to grow. It could be multiples of that if you're able to actually have a drug that is easier for physicians to prescribe, patients to take, and is easier for patients to stay on for a longer period of time. Certainly, we're talking about a massive gap that sits today. It's also been great to see some recent phase III successes because there have been a lot of drugs that haven't worked in this space. You can imagine for this type of unmet need and commercial opportunity, there have been a lot of attempts.
We believe that one of the reasons why a lot of these attempts have been unsuccessful is because mechanistically, these kind of approaches have been more in the downstream blockade of fibrotic buildup. We think that potentially, you know, has the ability to be a little bit less efficacious than thinking about the kind of problem in a broader way, epithelial repair, as I was mentioning, and also thinking about the vascular components. BI's near and Demilasque readout, while a nice extra tool in the toolkit, is not expected to significantly change the treatment landscape. We just saw last week United Therapeutics with a positive readout. We'll have to see what the full details look like, but it does look like, at least from an efficacy bar, this is going to be the new threshold. That's really great to see for patients.
We're talking about a market and a clinical landscape that requires more therapies well beyond what inhaled propranolol will be able to offer, which will be great for patients. We're excited to contribute to that. Certainly, when you talk to clinicians and you look at the regulatory perspective, they would like to see combination therapy in this space. Even when you have a great therapy come out or something that adds to the landscape, looking at combining with them is certainly something that Vicore does. Vicore sees itself as a therapy that can be a frontline treatment, and we think that's the right place for our therapy. We also see that we can combine with the available standard of care at the time. That's how we're running our current phase IIB and certainly how we would think about it in the future as well.
I guess, you know, $4 billion, but plenty of opportunity given, as you said, only 25% of patients are treated, short duration of treatment. The loss of upside once more effective, and I guess tolerable treatments are available. Just coming back to the mechanism, and then I want to dive into, you know, the phase IIA data a little bit. I think you'd alluded to the importance of addressing the vasculature. I guess relative to treatments that are available, the phase IIIs that you've seen for PDE4B from BI and United Therapeutics, what do you think is similar or what would give you confidence, I think, in buloxibutid, I hope I pronounced that correctly, you know, leading into the phase IIB in terms of some of the data we've just seen?
Yeah, absolutely. I think that, as I mentioned, when you think about the disease that is idiopathic pulmonary fibrosis, at the distal end of the lung, you have millions of air sacs or alveoli. They become injured because of exposure to environmental factors plus genetic susceptibility. That injury then leads to apoptosis and dysfunction of these epithelial cells. They then start releasing that kind of fibrosis signal. You actually have that scarring buildup around the air sacs. What that does is it prevents oxygen from diffusing from the air sacs into the pulmonary vasculature. Also, that state of hypoxia or that limited availability then leads to pulmonary dysfunction. The vasculature tends to thicken and it tends to narrow. That means it's tougher for the oxygen to get through the air sac, through what they call an interstitial space, and then into the bloodstream.
A lot of the mechanisms that have been advanced historically for IPF have really focused on that middle part between the air sac and the pulmonary vasculature. That's not an invalid way in our view to go after this disease, but we do think it's not complete. We really are excited about the fact that on the epithelial side, we can actually repair the epithelium because in order for oxygen to go through your air sac, it needs to go through specific epithelial cells. If those have died off because of the injury that causes the pulmonary fibrosis, it doesn't really matter what's after that, right? You need gas exchange cells, type I epithelial cells, in order to be able to have the oxygen diffuse. That's really step one. We're really excited that our mechanism uniquely has an ability to drive that.
We've shown that in a number of preclinical experiments. What's also important is that your pulmonary vasculature has to be available to receive the oxygen as it diffuses. We think that's not a thing to be ignored. Certainly in IPF, depending on the population, up to 40% can also have diagnosed pulmonary hypertension. Even before there's actual pulmonary hypertension, we do believe that there's vascular dysfunction, which can interfere with the ability to oxygenate blood. We're excited about addressing all three pieces of the puzzle. You saw nintedanib and pirfenidone, which are probably focused more on the interstitial space, have some effect, but a little bit more of an incremental effect. Tyvaso, which has a vascular effect, maybe goes a little bit beyond that with a higher effect size initially shown. We believe we can then go even beyond this because we also bring in the epithelial repair component.
Perfect. Let's talk about the phase IIA data. You had pretty impressive improvement in FVC. How would you characterize the data? What are some of the sort of standouts for you? Based on that phase IIA data set, what gives you confidence in the phase IIB that you're running now?
Absolutely. In idiopathic pulmonary fibrosis, you know, the way that regulators and clinicians look at understanding whether or not there's an effective drug is they measure lung function by forced vital capacity. Essentially, that measures the lung capacity. Unfortunately, in idiopathic pulmonary fibrosis, as we mentioned, there's this kind of three to four-year survival, and that's associated with a decrease in your lung function in milliliters. It's measured in volume over time. You could think about, for example, about 180 to 200 milliliter decline over an approximately one-year period on average. It's also variable depending on the different data sets that you look at. Historically, we've seen the ability to slow that decline in lung function, to still have a decrease in milliliters of lung function, but maybe less than 180 to 200 milliliters.
What we saw in our phase IIA study of idiopathic pulmonary fibrosis patients, and this was a monotherapy study, so we just treated with our drug buloxibutid, is over a nine-month period, an improvement in lung function by 200 milliliters. Basically giving idiopathic pulmonary fibrosis patients approximately an extra year of lung function, which is really a data set that's never been observed before in this space. It certainly made me quite excited to join the company about two years ago. It certainly makes me excited about what we might be able to achieve in our larger and ongoing phase IIB study where we're also now combining with the available standard of care.
Ahmed, that was a single-arm study. You also looked at a synthetic control arm. Can you sort of talk about that? I think you've alluded to the 200 milliliters improvement as opposed to stabilization being a significant finding. Is there anything incremental around looking at that relative to a synthetic control?
Absolutely. As you mentioned, the phase IIA study was a single-arm open label study. I think what becomes then important is saying, okay, can we better contextualize what's happening here? If we were to actually pull IPF patients who had the same traits and characteristics as the ones that we enrolled in our phase IIA study, how would they perform, right? For example, our phase IIA study, as you might expect from an early clinical study, had slightly earlier stage patients in terms of their status relative to what you might see on average in a phase III study. For us, that was an interesting exercise. We actually leveraged a data set of 10,000 IPF patients.
We pulled from that basically groupings of IPF patients who best matched the inclusion criteria of our study and actually the actual baseline characteristics of the patients who were enrolled in our phase IIA study. We saw that that group of patients had a decline in lung function over nine months of 114 milliliters. Maybe a little bit less than you'd expect in a phase III study, but still a meaningful decline in lung function. It was very nice to have that type of a data set to really contextualize then the observed improvement in lung function that we saw, which is quite different. That's consistent with what you'd expect. In IPF patients, unfortunately, while it's a pretty heterogeneous disease, sometimes patients can be stable for a while before they decline. Sometimes they decline rapidly.
Unfortunately, the ultimate kind of fate of these IPF patients currently is a decline in lung function. For example, only a single-digit % of patients out to nine months would have a stable lung function without any sort of treatment or intervention or some sort of marginally improved lung function from what they'd measured at baseline. It really confirms that this is a real effect. It's able to provide additional confidence in it.
Switching gears onto the phase IIB ASPIRE trial. This is very different. It's a global study. It's big, 52 weeks. Can you talk a little bit about the design and anything? I guess once we've talked about that, it looks in terms of design and size almost like a quasi phase III. How are you thinking about it and what more you'll need in order to speak to regulators?
Absolutely. That's exactly how we thought about it, Kayla. We thought, look, we really want to confirm the signal that we saw in the phase IIA setting. We want to provide the greatest possible confidence around it as quickly as possible, relative to this high unmet need. We're also very cognizant of the fact that a number of drugs have worked in phase II and have not worked in phase III. We're certainly very interested also in just having a phase IIB that essentially was like a phase III. Our inclusion criteria are quite broad and similar to what we would do in phase III or what other companies would do in phase III. Our phase IIB endpoint is the regulatory or the phase III endpoint, which is the change in lung function as measured by FVC over a 52-week period.
Certainly, how we think about it is that it should provide a great deal of conviction in what we're able to achieve moving forward in a phase III setting. Of course, depending on the discussion with FDA, you might have to run one or two phase III studies. We've seen different examples of this over time. We believe that with the phase IIB data package that we will build as we execute this study, we should, with hopefully a positive phase IIB readout, be able to move towards approval with a single phase III study.
Perfect. Maybe just a quick update, recruitment timelines. What is the latest and what can you say?
Yeah, this is the most advanced IPF study that's currently enrolling. As we discussed, BI had a phase III readout recently and United Therapeutics just last week. BMS has the third ongoing phase III, but they've completed enrollment. We're very pleased to have great engagement with approximately 100 clinical sites across 14 countries that are enrolling our phase IIB study. We've seen some great progress on the enrollment side. We've now guided that we should complete enrollment in the first half of 2026 for a readout in the first half of 2027.
Maybe just switching tech. You have a partnership with Nippon Shinyaku in Japan. How does that work? How are you thinking about that partnership in the context of the broader plan for buloxibutid going forward?
Yeah, absolutely. We saw the opportunity to accelerate Japanese development of our therapy as a very interesting one. While we're interested in really seeing what the phase IIB data looks like before we seriously entertain U.S. or European partnership, we thought that could be a nice way to also drive greater acceleration of the overall development program and bring in a little bit of capital. That's been quite useful from that perspective. Nippon Shinyaku are also really experts in the pulmonary space. They actually discovered and developed one of the key pulmonary hypertension drugs, Optrevi, and actually licensed the ex-Japanese rights out. They are the developers and the commercializers of that therapy in Japan, so they really have the clinician and the pulmonologist relationships in Japan, the sales force in Japan.
The structure of this deal allows us to take advantage of both Nippon Shinyaku's skill set for Japanese development, but also with a financial contribution for the global non-clinical development costs. For example, we're now doing our phase III in commercial and manufacturing work, and we're doing that in financial partnership with Nippon Shinyaku. In addition to that, of course, Nippon Shinyaku will contribute to the global development as we move into the later stages with Japanese patients as well.
I think you touched upon it, but with respect to the plan for the rest of the world, Europe, U.S., other markets in terms of own commercialization, further partnerships, is that TBD once?
Exactly. I think it's TBD with readout. I think what's genuinely interesting and intriguing for us at Vicore Pharma in the context of IPF is this is a disease area from a commercial perspective where small biotech can commercialize. With a limited sales force in the U.S. and in other territories, that is quite tractable. We think that's an intriguing opportunity. Of course, we also want to do what's best for the drug and what's best for the company. Certainly we'll look at that as we move forward and see our phase IIB data.
You mentioned you made the decision two years ago to join a Swedish biotech, which remains a sort of solely Swedish-listed company. Just tell us a little bit about that. I mean, how are you thinking about presumably moving this forward as the U.S. will be a key market? Any sort of thinking more broadly about coming to the U.S. at some point?
Absolutely. I think that generally speaking, as European companies evolve and move into later stages, the opportunity to access the U.S. capital markets becomes quite interesting. Certainly, as I just mentioned, we have an ambition at least to look at being an independent company that would run a phase III and think about what it would mean to become a commercial company. I think that being in the United States is certainly helpful from that perspective. I'm U.S.-based. I'm based in Boston. Certainly, for me personally, I think that's also an interesting opportunity for us at Vicore as well.
On a related topic, just in terms of cash, where you are now, sort of how far that gets you, as you mentioned, there will be data following the recruitment and hopefully a successful phase IIB ASPIRE study. How are you thinking about that and sort of where are you today?
Absolutely. I think at the end of last quarter and last month, we reported $100 million cash on hand, which is sufficient for us to complete the phase IIB readout with additional cash runway. We're in a great position to have the finances we need to get this really impactful readout with even some runway thereafter.
Perfect. Actually, I think we've covered most things. Anything else in terms of the audience? Anything else you'd highlight? I think we've talked about the landscape, the opportunity, timelines. Any sort of take-home messages for the audience in terms of what we should look out for over the next, call it, 12 to 18 months?
Yeah, I mean, certainly for us, right? It's, you know, we're in a pretty focused execution mode. These studies are challenging to run. 100 clinical sites, 14 countries. We do try to be capital efficient. We're a 35-40 person team over the duration of this phase IIB to execute that study. That's certainly something that we'll try to continue. I also think that as we look at the broader landscape, as we talked about earlier in the discussion, it's been really interesting to see how mechanisms that go beyond traditional anti-fibrotic can do more. That's certainly why I joined Vicore Pharma. I actually worked on this mechanism when I was in my molecular biology days at the lab. I'm certainly a believer in it.
I think it's really exciting to see not just Vicore Pharma's efforts, but also the academic community as well as other biopharmaceutical companies start to really move beyond traditional anti-fibrotic, fibroblast antagonism approaches. I think that can be quite exciting for IPF patients and for the landscape more broadly as well.
If everything bears out in terms of your understanding of the target, the pathway, and the biology, this is potentially or ideally sort of disease modifying in a more meaningful way relative to what has come before or at least what's on the market.
Exactly. That's the signal we saw in the phase IIA. Certainly, that's the hope and promise over time that we can achieve therapies that are truly, you know, disease modifying in this space.
Excellent. Thank you, Ahmed, for attending. I think it's going to be fair to say a very exciting sort of next 12 to 24 months. The setup into, I think, the phase IIB ASPIRE data looks good. Lots of interesting points. Again, thank you to you and the team for attending. Much appreciated.
Thank you.