VectivBio Holding AG

Ladies and gentlemen, thank you for standing by. Welcome to Vectiv's BIOS conference call to report full year 2021 financial results. My name is Livia, and I'll be your conference operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will fall at that time. As a reminder, this call is being recorded at Vectiv BIOS request. Now, I would like to introduce your host for today's call, Claudia D'Acosta, Chief Financial Officer, please go ahead.

Thank you and good morning, everyone. Welcome to today's call during which we will provide an update on the company and review our financial results for the full year ended December 31st, 2021. Earlier this morning, we issued a press release summarizing our financial results and progress across the company, which is available on our website. I would like to remind everyone that today's discussion will include statements about our future expectations, plans, and prospects that constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including the risk factors discussed in our SSE filings, and we are not under any obligation to update any forward-looking statements. Joining me today here in Basel are Luca Santarelli, Chief Executive Officer, and Omar Kwaja, our Chief Medical Officer. We estimate that our remarks will take about 20 minutes Then we will open up to Q&A, at which point we will be joined by Kevin Harris, our Chief Commercial Officer, who is based in the U.S. Now I'd like to turn the call over to Luca.

Thank you, Claudia, and thanks to everyone for joining us today.

As this is our first financial results call, I'll begin with a brief introduction to our company. For those new to our story, VectiBio is a late-stage biotech company developing transformational drugs for rare conditions with iron med need. We are a team of industry veterans with a successful track record in rare diseases, deep scientific expertise, and a relentless focus on the patient. Our purpose is to identify and develop therapeutics that are both transformational and tailored to patients' needs. In the short amount of time since our founding in 2019, we have made considerable progress on our way to achieving this purpose. Our lead molecule is apraglutide, a next-generation GLP-2 analog. As a result of enhanced pharmacology and innovative development programs, we believe apraglutide will unlock the full therapeutic and market potential for the GLP-2 mechanism of action. Afraglutide is currently in phase three in short bowel syndrome and intestinal failure, or SBSIF, and in phase two in acute graft versus host disease, or GVHD. SBSIF and GVHD are both underserved markets, representing a blockbuster opportunity for afraglutide. Regarding SBSIF, This is an established but yet under-penetrated market that we believe is poised for significant growth. There is only one approved drug for SBSIF, a first-generation GLP-2 analog called GADEX. Despite its limited adoption and persistency due to the short-off life and burdensome administration regimen, GADEX had an estimated revenues of approximately $670 million in fiscal year 2021. Our goal is to demonstrate that treatment with apoglutide results in better outcomes for SPS patients, leading to broader adoption and improved persistency. To that end, in just a few months, we will present interim data from our STARS nutrition study that aims to demonstrate that apoglutide can improve intestinal absorption in a subgroup of SPS patients with colon incontinuity, or CICs. And this is a patient subgroup where there is limited data support in the use of GADX. If positive, these results may substantially the risk the ongoing phase three study ahead of data next year, as well as offer promise for a broader adoption for apaglutide in CIC patients. In GVHD, Apraglutide aims to be the first non-immunosuppressive treatment to address GI damage, one of the most critical complications of this disease leading to significant mortality. This approach is supported by recent scientific discoveries that have established the therapeutic potential for GLP-2 in acute GVHD. Lastly, we have the financial runway to take us well beyond our main catalyst, the phase three redoubt in SBS and the proof of cost of study in GVHD. Now, looking back, 2021 was a very important year for us, and I can't overstate how proud I am of this team for the significant progress we made against key business objectives, including our successful IPO in April, The launch of the STARS program, a multi-study pivotal program to support the approval of Afraglutide in SPS intestinal failure. The initiation of STARS nutrition in CIC patients. The achievement or often drug designation and IMD clearance for Afraglutide in GVSD. The acquisition of COMET, a modular platform targeting a class of rare inherited metabolic diseases collectively affecting over 75,000 patients for whom there is no approved treatment. This platform has the potential to fuel our pipeline with multiple small molecule drug candidates, the first of which is due to enter the clinic next year. Also, 2022 is off to a great start. Since the beginning of this year, we continue to successfully recruit our Phase III study and our Phase II study within the STARS program, which will enable us to report interim CSU results later this year and Phase III top-line results by the end of 2023. OMAR will provide more details on our clinical strategy that has enabled us to stay on track even during the pandemic. We launched StarGaze, our POC study in acute graft-versus-source disease, currently recruiting patients in the U.S. and Europe. And just last week, we announced a Japan licensing deal with Azaikaze Pharmaceuticals for apricotide and a debt facility with Creos Capital. These two deals, combined with our current cash, provide a financial runway that takes us well beyond our main catalysts. The AKP partnership also provides external validation for the best-in-class potential of apraglutide and broadens our geographic footprint beyond U.S. and Europe.

Now, I would like to turn the call over to our Chief Medical Officer, Omar Khawaja, who will share additional details on our pipeline programs. Omar, over to you. Thanks, Luca, and good morning, everyone.

I'd like to further elaborate on three aspects of our apraglutide clinical development program. Firstly, why we believe apraglutide is the best-in-class GLP-2 agonist. Then how our STARS program aims to deliver a differentiated label in SBSIS to support broader adoption. And finally, why we think it will provide a novel non-immunosuppressive option to patients with acute grass-surface host disease who do not respond to steroids. Apraglutide was rationally designed to have enhanced pharmacological properties. such as increased receptor potency and selectivity versus other GLP-2 agonists, and an increased half-life of 72 hours. We believe that these properties not only enable weekly dosing, but also may translate into greater efficacy, increased tolerability and persistency of use, and potentially better outcomes. To support our belief, in head-to-head preclinical studies, apraglutide demonstrated greater intestinal pharmacological effects when compared to other GLP-2 agonists, a property that could translate to enhanced efficacy in the clinic. In Phase II studies, apraglutide was the only GLP-2 analogue to increase intestinal absorption after weekly dosing, as well as demonstrate statistically significant improvements in calorie absorption. We believe that the GLP-2 mechanism, with its potent effects on intestinal epithelium regeneration, healing, and maintenance of intestinal barrier function, affords broad clinical applications in severe gastrointestinal and liver disorders, and as such, apraglutide represents a pipeline in the product. To that end, we're pursuing a novel clinical strategy across a range of indications. We're beginning with a STARS pivotal program that will support a differentiated label and improved outcomes in SBSIS, a disease in which the GLP-2 mechanism of action is clinically validated. We've designed the STARS program with pre-specified primary and key secondary endpoints to differentiate apraglutide from competitors, to prospectively demonstrate meaningful efficacy in patients with colon incontinuity, to now represent the majority of patients with SBSIS. and so deliver increased value to prescribers, patients, and payers. We based our development and differentiation strategy on what has been learned in the last decade in SBS. GATEX was approved in 2012 based on its ability to reduce the volume of parental support, or PS, required by SBS patients. We believe that physicians also want to understand the clinical impact that PS reduction has on patients' lives. Treatment goals for SPS-IF should be the reduction of number of days on PS and, wherever possible, enteral autonomy, which is the elimination of the PS dependency. Our further assessment of real-world evidence, the clinical experience of experts in intestinal failure, and post-hoc analyses of the GAT-XA3 trials indicate that the response to GLP-2 in SPS is heterogeneous and highly contingent on the patient's remnant post-surgical anatomy. Fundamentally, there are two distinct subtypes of SBS-IF, patients where the remaining short and small intestine ends in a stoma bag, and patients where the remnant small bowel is connected to the colon, otherwise known as colon in continuity, or CIC. In designing the START program, we have prioritized clinically meaningful outcome measures, are assessing patient-reported outcomes, and have implemented a tailored approach to allow distinct assessment of stoma and CIC patients. Unlike previous studies assessing other GLP-2s in SPS-IF, the STARS program is the first to prospectively evaluate safety and efficacy in each subpopulation, stoma and CIC. In addition, with 144 patients and a duration of up to 12 months, it has power to detect improvements in natural autonomy and quality of life in each population. We're also enrolling patients in Start Nutrition, a supplemental first-of-its-kind metabolic balance study in SBS-CIC patients, to represent over 60% of the total SBS-IF population. We will be reporting interim results from this study at a scientific congress in the second half of 2022, including the quantitative effects of afroglutide on intestinal absorption and stool output. With the Phase II data already having demonstrated afroglutide's efficacy on these outcomes in the stoma population, we believe that STARS nutrition has the potential to highlight afroglutide's unique benefit to CIT patients. Should this data read out positively, it may substantially de-risk the ongoing Phase III study ahead of data next year, since improvements in intestinal absorption predict reduction in PS requirements. Let me conclude the STARS update with a short comment on our operational strategy that was designed to withstand the challenges faced during the COVID pandemic. We have so far activated 75 out of a total 80 sites planned across 18 countries, including the US, Europe, Asia, and South America. This broad footprint, combined with unique remote trial capabilities, has enabled us to stay on track with study recruitment, and I'm pleased to say we're able to maintain our guidance to report top-line data from the STARS Phase III study by the end of 2023. As Luther noted, beyond SPSIS, we're also developing afroglutide as a first-in-class regenerative and non-immunosuppressive treatment for acute GVHDs. Approximately 26,000 allogeneic stem cell transplants occur annually in the U.S., Europe, and Japan. Our target patients are those who develop acute GVHD, become refractory to first-line steroids, and present with severe GI symptoms of GVHD. A group we estimate comprises around 4,000 patients per year. GVHD of the gut results from damage from bone marrow conditioning to the transplant, as well as donor T-cell attacks on the GI tract. These insults cause severe damage to the gut epithelium, resulting in severe malabsorption and diarrhea, and loss of integrity of the intestinal barrier. Mortality among these patients is 50% at six months, and is driven in large part by the severity of GI symptoms. The rationale to develop acroglutide in this condition is supported by two data sets. VectorBio's pre-clinical experiment demonstrated that acroglutide can increase survival in the murine model of GVHD. In addition, there is recently published clinical data showing that GLT2 agonists can reduce GI symptoms and promote regeneration of the gut epithelium in patients with steroid refractory GVHD. Stargaze, our Phase II study, obtained regulatory clearance last year, and we've activated sites in the U.S. and Europe and expect to dose our first patients in the coming weeks. This study is evaluating apraglutide in combination with systemic corticosteroids and ruxolitinib in patients with steroid refractory acute GVHD. We look forward to reporting interim data from this proof-of-concept study in the first half of 2023. Turning finally to COMETS, Since the acquisition of the platform, we've made rapid progress in the development of our lead molecule, VB1197, for the treatment of severe, life-limiting organic acidemias, specifically methylmalonic and propionic acidemia, and are on track for entry into the clinic in 2023. We're very excited about the promise of our pipeline, and I look forward to updating you on these upcoming milestones in the future. With that, I'll now turn the call over to our CFO, Claudia D'Augusta, to discuss our 2021 financial results. Claudia?

Thank you, Omar. I will briefly comment now on the key financials for the year 2021. Our operating costs in 2021 were $87 million compared to $57 million for 2020, or approximately a 50% increase on a year-over-year basis. This $30 million increase includes an approximate $7 million increase in R&D expenses due to the progress of our STARS program, which encompasses certain offsets for accounting recognition related to contingent liabilities, and an approximate $22 million increase in G&A expenses. This G&A cost increase was comprised mainly of known cash personal costs related to long-term equity incentive plans as well as the costs involved in the preparation of the IPO and operating as a public company. We ended 2021 with cash and cash equivalents of $103 million. In addition, as Luca mentioned, the two deals we announced last week significantly strengthened our financial position. First, our collaboration agreement with AKP provides a $30 million upfront. as well as eligibility for $170 million in downstream development milestones, plus royalties and sales in Japan. Second, a credit facility with previous capital, providing flexible access to up to $75 million. Together, these two transactions, combined with our cash available of $103 million at the end of 2021, provide us with up to $220 million in near-term operating capital, and extend our cash runway beyond our phase 3 star stop-line results. So now I'd like to hand the call back to Luca.

Thank you, Claudia. We covered a lot of ground during today's call. And to close, I'd like to underscore the following points.

First, our lead molecule, apraglutide, is a next-generation GLP-2 that has a potential best-in-class profile, which we believe will result in better outcomes for patients, leading to broader adoption and improved persistency. Secondly, apraglutide is entering an established but yet underserved market that we believe is poised for significant growth. As a reminder, there is only one GLP-2 approved for short bowel syndrome, and despite limited adoption due to short-life and burdensome administration, it is generating approximately $670 million in fiscal year 2021. Next, the STARS development program will provide a robust dataset aimed at delivering a differentiated label to optimize launch and reimbursement. Also, in just a few months, we will present interim data from our STARS nutrition program with the aim to demonstrate that apoglutide is able to improve intestinal absorption in CIC patients, a patient population when there is limited data supporting the use of GALEX. If positive, these results may substantially de-risk the ongoing Phase III study ahead of data next year and also indicate that apoglutide has the potential to expand GLP-2 use. And finally, we are on track to dose our first patient in the Stargaze proof of concept study in acute GVHD this quarter. And we are on track to read out top line results during the first half of 2023. Coupling those factors with the financial runway to take us through the Phase III STARS readout, I'm sure you can understand why we are so excited about what the future holds for VectiBio. With that, we'd like now to open the call for questions. Operator?

Thank you. Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press the star, then the 1 key on your touch-tone telephone. You may withdraw your question by pressing the pound key. Again, to ask a question, please press star 1. Please stand by while we compile the Q&A roster. And our first question coming from the line of Thomas Smith with SVP Leerink. The line is open.

Hey, guys. Thanks for taking the questions. Hey, can you guys hear me?

Yes.

Okay, great. Yeah, thanks for taking the questions. Congrats on all the progress in the two recent deals. A couple questions on our end. First on the SARS nutrition study, can you talk a little bit more about enrollment and, I guess, any early efficacy signals you're seeing there? What data do you expect to have available for presentation later this year? And maybe just walk us through your expectations for this data set. Like, what do positive results look like here? Do you need to see a statistically significant change on energy absorption from baseline, or do you need to see changes in PS volume? So, just any idea what a good data set looks like from your perspective would be really helpful. Thanks.

Thanks for the question. So, the study is recruiting well, is recruiting according to schedule, and we anticipate reporting results later this year at a conference. We're encouraged with what we have seen so far, but we believe there is a benefit in letting the data mature and run the full analysis as opposed to a subset. So in terms of defining what success looks like, let me just remind that there hasn't been any prospective study, clinical trials, that have shown a response of a GLP-2 analog in CLC patients. What the study is designed to do, at least for the interim readout, is to demonstrate that apraglutide can improve intestinal absorption parameters in CIC patients. Our ability to demonstrate such an effect would be unprecedented, and it would bode well for the Phase III study because improving absorption parameters, such as fluids and nutrients, is key to drive the ability to reduce parental support, which, as you know, is the primary endpoint of the Phase III trial.

Okay, great. That's helpful. Just to clarify, Luca, I guess when we see data later this year, is it your expectation that we would have kind of that full cohort of 10 patients from the SARS nutrition study? And, you know, I guess what time points do you expect would be available for evaluation at that point?

Yeah, we will have 10 patients, and as communicated before, we will look at the four-week metabolic balance assessment. This is four weeks out of a 48-week study, and it's the same time point that we had performed as an assessment in our Phase II study in stoma and the same time point that has been used in the past with other GLP-2s in stoma patients. So it's a very early time point. At the same time, if we do see an improvement in absorption at such an early stage in treatment, again, this is very promising because, again, these patients, the CSE patients, are anticipated to take longer to respond than some patients. So if we see a response in absorption parameters at four weeks, this would be very promising. Okay.

Okay, got it. Understood. And then just a quick one on the Japan deal with AKP. Can you just talk a little bit more about the strategic rationale and the process here? Like how competitive was the process and why do you think AKP is kind of the ideal partner to drive success in Japan?

Thanks for that question. So the rationale for the deal was that we wanted to, it's multiple fault, but the primary rationale is that we wanted to maximize the value of apaglutide by accelerating access to Japan. And for that, obviously, we needed a Japanese partner. So over the last two years, we have committed to a commercial strategy to launch ourselves in the U.S. and Europe and to identify partners for other key markets. And in keeping with this strategy, we have implemented a phase three trial where we are recruiting patients globally, including Asia, Latin America, in addition to the U.S. and Europe. Now, the other advantage of this deal is that it provides us with near-term cash to fuel our business. As we have communicated, there are $30 million in upfront and near-term cost sharing that we're getting right away, and then additional milestones that we're going to get before the completion of the STARS program, and others that we're going to get later in development, as well as regulatory and commercial. up to a total of 170 million in milestones. In terms of AKP and why we have chosen them, this is a company that has a long experience of commercializing products that are generated in other Western countries and in partnering with Western companies. They have a proven history of successful drug development, commercialization in GI, in immunology, in hematology. And they have a hospital business with approximately 600 medical representatives. And they are also committed to expanding their rare disease business. And these are the reasons why we've chosen them. So just lastly to conclude, yes, this was a competitive process. We had several offers for our products. I can't disclose the details of that, but it was a competitive process which was organized and ran over the last six months and led to the choice of the best partner, both in terms of compatibility with our product, but also in terms of financial aspects.

Okay, got it. Super helpful. Thanks, Luca. Thanks, guys, for taking our questions. Thank you.

Our next question coming from the line of Tasreen Ahmad with Bank of America, Yolanda Sullivan.

Hi. Good morning, guys. Thanks for taking my questions. For the acute ADHD studies that you have the interim reading out in the first half of 2023, what are you looking for there? And what should we consider to be a good interim read from that study? And then secondly, Luca, maybe I wanted to ask you about the recent article from Zipan's CEO that I think appeared in a Danish newspaper where he specifically talks about their particular product, Lepagetide, for their, you know, attempts at treating short bowel syndrome. And what do you think it means that they're highlighting that particular candidate, and what do you think the read-through is productive on that? Thank you.

Oh, thanks for the question. Okay, let's get to the first question first. I'm going to have our chief medical officer, Omar Khawaja, respond to the question. That was about what are we going to read out in the interim analysis, describe what are the endpoints, and how is that relevant to the rest of the program in GVHD.

Yeah, great. Thanks, Sazine, for the question. I mean, maybe just briefly review what the study is. So it's a phase two proof-of-concept study assessing two dose levels of afroglutide in a blinded fashion in up to 35 patients with steroid refractory acute GVHD. The comparators and external control are partly derived from the REACH-2 pivotal study of ruxolitinib. At the interim, we anticipate reporting initial response data, both partial and overall responses, in patients at day 28 and day 56 in a subset of about 14 to 15 patients. And we'll be looking to benchmark that against our external control arm.

Okay. So this department,

Yeah, just to add on top of that, obviously the benchmark is the data set that came from a REACH-II study. It includes about 150 patients from the raxolitinib. And, of course, we know exactly what are the expected overall and partial or complete responses rates at day 28 and day 56. And that's really, obviously there's a lot of room to improve upon those numbers, and that's what we're going to be looking at. All right, so then the second question you asked, let me just ask the second question you asked was about the read-through from the interview in the Danish media. There was an interview mentioned in the Danish media where the the new CEO of Zila, the former CMO, singled out Glypoglutide. I mean, I think what he did say, and it was also in their public communications, is that they consider Glypoglutide the most valuable asset. And in that, all I can say is that we agree that I won't comment specifically on the context of that comment within the company, but I can say one thing is that one thing we agree, and that is that SBS is an incredibly valuable market. It's underpenetrated. GALEX is penetrated no more than 20% of it and has a turnover of close to $700 million last year. So I think I would agree that SBS and the next generation GLP-2 is a valuable opportunity for us without problem time.

Okay, thank you.

Our next question.

Thank you.

Our next question coming from line of Patrick D'Alesso with Lifestyle Capital. Your line is open.

Hi, thanks for taking the questions. So just if you can, you know, it'd be great if you could provide a little additional color in terms of just why STARS nutrition study was just delayed a little bit. Just curious about the largest contributing factors to enrollment. Is it competing therapies, COVID, just SDS-IF being a rare condition? And then as we think about the Pivotal Stars study, are there any implications on enrollment there? And then just curious if there's any overlapping sites and kind of how you've been prioritizing enrollment between those two studies. Thanks.

No, let me clarify. The study was not delayed. We are on track to where we want it to be. We are encouraged from what we have seen so far, but we think there is benefit in letting the data run the full analysis and mature as opposed to looking at the subset of data. And so we have decided that we'll do this in the context of a peer review conference in the fall rather than, you know, doing it earlier. But the recruitment progress with the study is actually as anticipated.

Got it. That's helpful. And then I guess if you could just speak to the unmet need in SBS-IF patients with renal comorbidities, considering dose reductions are required in this patient subset, just curious if responses are also suboptimal. And then if you could just provide additional color on the data that was recently presented in these patients using APRA. Thanks.

Yeah, I'll have Omar respond to that question. Omar, about the renal impairment patient.

Sure. So about 28% of patients with SPSIS have moderate to severe renal impairment. With GATEX, that requires a dose adjustment to half the dose. You know, there isn't evidence particularly on whether that makes a difference to efficacy. But what was important for us is, first of all, our presentation of apraglutide, which is a 5 milligram flat dose, that, you know, whether or not that would require dose adjustment in patients with renal impairment and it doesn't. I mean, that's the data that we presented, that, you know, we're able to use the same 5 milligram flat dose even in patients with severe renal impairment. I think what we hear from physicians is a concern about using GAPEX in patients with moderate to severe renal impairment. Even though you can use the dose adjustment, there are concerns about using it in renal impaired patients. And we think that the data that we presented at Aspen shows that Afroglutide is going to be suitable without a dose adjustment across the full range of patients with SPSIS.

Great, thanks for taking the questions.

And as a reminder to ask questions, please press star one. Our next question coming from the line of Tiago Fout with Credit Suisse. Your line is open.

Hey, thanks for taking the questions. So perhaps a potential differentiation in commercial questions. So I understand that it's hard to prospectively assess what the impact you can have in the CIC patient population, but Given that they do have lower baseline PS volumes, how important is it to establish a relative reduction versus a number of days where they don't have to take parental support therapy? And the reason I ask that is basically how may that actually end up looking in terms of claims in light of potential commercial scenario where you could have GATX generics available. So just trying to understand how much of that CIC differentiation could be a key selling point relative to the better dosing regimen. Thank you.

Okay, so I guess let's pass this question. The first part is how do we describe benefit in CIC considering that volume is an absolute is perhaps less relevant. Okay, let me just. state that I agree that, number one, it is important to differentiate therapeutic objective and outcomes and benefit between these two anatomical subtypes. That is exactly the basis of our study. We believe there is a difference in the therapeutic objective and how benefit is described among these two subtypes. In the CIC, as you correctly stated, The volume reduction, they have a volume of infusion that is approximately 30 to 40% less on average if you look across large data sets. And so the main goal in this population is to establish greater evidence of internal autonomy. And that's been the goal of our program and our study design. And that is basically from the reduction of dependency of pareto support by having fewer days of infusion a week all the way to elimination of the need for the infusion, which is described as full enteral autonomy. And that means you remove the dwelling catheter, you remove the consequences and the risk, the sepsis risk associated with that. So for this population, there is a big opportunity to establish a path towards reduction of dependency on parental support, which is not a mere expression in volume, but more in terms of internal autonomy. That's why we have stratified the study to conduct further secondary analysis in the two subgroups and the CIC, we also are running these patients up to 12 months because we know that the effect of the GLP-2 can accrue for a period longer than six months, especially in the CIC. And we are doing that with the objective of demonstrating that some of these patients can have a significant amount of days off and in some cases achieve full enteral autonomy. So that's the answer to the first question. The second question was about, I think it was about generic GADX, and what do we think about that? Well, first of all, we do not know when and if there will be a generic GADX in the U.S., why the exclusivity is scheduled to expire in the middle of next year. There are no disclosure of tentative approvals of any generics to the glutides to the ANDA mechanism at this point. And then even if a generic comes to market, it will still be at best like GALEX with all of its limitations. And we believe that apraglutide with a significant differentiated profile will make GALEX obsolete. So, to validate these conclusions, we actually conducted extensive payer research, and I actually would like our chief commercial officer, Kevin Harris, to tell you about this research we conducted. Kevin?

Yeah, thanks, Luca. We've had significant engagement with payers over the past two years, not only exploring this question, but how to appropriately position a pragmatide as a potential future standard of care. And we've got some very important insights from the payer community. You know, first is that they validate the fact that, you know, the generic GAD text will still obviously have the same clinical profile as a branded product. And given, you know, the nature of GLP-2 treatment today and the disease of SBSIF, that payers only believe one or two generics may in fact launch. And if they do launch, they would only launch at a modest discount to branded therapy and which today is about $43,000 a month in the U.S. In further exploration with these payers, they very much acknowledge the unmet need that exists today for patients with SBS-IF, and they also appreciate the fact that there's a very small budget impact that GLP-2 treatment today has in their plans. I think most importantly, when we show them our product profile, they really do see Apraglitide as differentiated in delivering a stronger value proposition. In particular, they really value the extra data that we plan on delivering with regards to Apraglitide's efficacy in both the stoma population and in the CIC population, particularly the enteral autonomy data is, I'd say, of the greatest value to the payer community. And all of the feedback we've gotten from the payers essentially reinforce the fact that, you know, we believe GATx will essentially become obsolete, you know, with the launch of a pragmatite.

Perfect. Thanks again for taking my question.

Thank you. And I'm showing no further questions at this time. I'll turn the call back over to Luca Centarelli for any closing remarks.

Thank you, and I want to thank everybody that has joined us today for our earnings call, and I'm looking forward to keeping everybody posted in the future on our progress. Have a good rest of the day.

Ladies and gentlemen, that's our conference for today. Thank you for your participation. You may now disconnect. Thank you.

Thank you. Thank you. you Thank you. Thank you.

Ladies and gentlemen, thank you for standing by. Welcome to Vectiv's BIOS conference call to report full year 2021 financial results. My name is Livia, and I'll be your conference operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will apply at that time. As a reminder, this call is being recorded at Vectiv BIOS requests. Now, I would like to introduce your host for today's call, Claudia D'Acosta, Chief Financial Officer, please go ahead.

Thank you and good morning, everyone. Welcome to today's call during which we will provide an update on the company and review our financial results for the full year ended December 31, 2021. Earlier this morning, we issued a press release summarizing our financial results and progress across the company, which is available on our website. I would like to remind everyone that today's discussion will include statements about our future expectations, plans, and prospects that constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including the risk factors discussed in our SSE filings, and we're not under any obligation to update any forward-looking statements. Joining me today here in Basel are Luca Santarelli, Chief Executive Officer, and Omar Kwaja, our Chief Medical Officer. We estimate that our remarks will take about 20 minutes, Then we will open up to Q&A, at which point we will be joined by Kevin Harris, our Chief Commercial Officer, who is based in the U.S. Now I'd like to turn the call over to Luca.

Thank you, Claudia, and thanks to everyone for joining us today.

As this is our first financial results call, I'll begin with a brief introduction to our company. For those new to our story, VectiBio is a late-stage biotech company developing transformational drugs for rare conditions with iron med need. We are a team of industry veterans with a successful track record in rare diseases, deep scientific expertise, and a relentless focus on the patient. Our purpose is to identify and develop therapeutics that are both transformational and tailored to patients' needs. In the short amount of time since our founding in 2019, we have made considerable progress on our way to achieving this purpose. Our lead molecule is apraglutide, a next generation GLP-2 analog. As a result of enhanced pharmacology and innovative development programs, we believe apraglutide will unlock the full therapeutic end market potential for the GLP-2 mechanism of action. Afraglutide is currently in phase 3 in short bowel syndrome and intestinal failure, or SBSIF, and in phase 2 in acute graft-versus-ost disease, or GVHD. SBSIF and GVHD are both underserved markets, representing a blockbuster opportunity for afraglutide. Regarding SBSIF, This is an established but yet under-penetrated market that we believe is poised for significant growth. There is only one approved drug for SBSIF, a first-generation GLP-2 analog called GADEX. Despite its limited adoption and persistency due to the short-off life and a burdensome administration regimen, GADEX had an estimated revenues of approximately $670 million in fiscal year 2021. Our goal is to demonstrate that treatment with apoglutide results in better outcomes for SPS patients, leading to broader adoption and improved persistency. To that end, in just a few months, we will present interim data from our STARS nutrition study that aims to demonstrate that apoglutide can improve intestinal absorption in a subgroup of SPS patients with colon incontinuity, or CICs. And this is a patient subgroup where there is limited data supporting the use of GADX. If positive, these results may substantially de-risk the ongoing Phase III study ahead of data next year, as well as offer promise for a broader adoption for apoglutide in CIC patients. In GVHD, Afraglutide aims to be the first non-immunosuppressive treatment to address GI damage, one of the most critical complications of this disease leading to significant mortality. This approach is supported by recent scientific discoveries that have established the therapeutic potential for GLP-2 in acute GVHD. Lastly, we have the financial runway to take us well beyond our main catalyst, the phase three redoubt in SBS and the proof of course of study in GVHD. Now, looking back, 2021 was a very important year for us, and I can't overstate how proud I am of this team for the significant progress we made against key business objectives, including our successful IPO in April, The launch of the STARS program, a multi-study pivotal program to support the approval of alpha-glutide in SPS intestinal failure. The initiation of STARS nutrition in CIC patients. The achievement of often drug designation and IMD clearance for alpha-glutide in GVSD. The acquisition of COMET, a modular platform targeting a class of rare inherited metabolic diseases collectively affecting over 75,000 patients for whom there is no approved treatment. This platform has the potential to fuel our pipeline with multiple small molecule drug candidates, the first of which is due to enter the clinic next year. Also, 2022 is off to a great start. Since the beginning of this year, we continue to successfully recruit our Phase 3 study and our Phase 2 study within the STARS program, which will enable us to report interim CSC results later this year and Phase 3 top-line results by the end of 2023. OMAR will provide more details on our clinical strategy that has enabled us to stay on track even during the pandemic. We launched Stargate, our POC study in acute graft-versus-source disease, currently recruiting patients in the U.S. and Europe. And just last week, we announced a Japan licensing deal with Azae Pharmaceuticals for apricotide in a debt facility with Creos Capital. These two deals, combined with our current cash, provide a financial runway that takes us well beyond our main catalysts. The AKP partnership also provides external validation for the best-in-class potential of apraglutide and broadens our geographic footprint beyond U.S. and Europe.

Now, I would like to turn the call over to our Chief Medical Officer, Omar Khawaja, who will share additional details on our pipeline programs. Omar, over to you. Thanks, Luca, and good morning, everyone.

I'd like to further elaborate on three aspects of our apraglutide clinical development programs. Firstly, why we believe apraglutide is a best-in-class GLP-2 agonist. Then how our STARS program aims to deliver a differentiated label in SBSIS to support broader adoption. And finally, why we think it will provide a novel non-immunosuppressive option to patients with acute graft-versus-host disease who do not respond to steroids. Apraglutide was rationally designed to have enhanced pharmacological properties. such as increased receptor potency and selectivity versus other GLP-2 agonists, and an increased half-life of 72 hours. We believe that these properties not only enable weekly dosing, but also may translate into greater efficacy, increased tolerability and persistency of use, and potentially better outcomes. To support our belief, in head-to-head preclinical studies, afroglutide demonstrated greater intestinal pharmacological effects when compared to other GLP-2 agonists, a property that could translate to enhanced efficacy in the clinic. In phase two studies, afroglutide was the only GLP-2 analog to increase intestinal absorption after weekly dosing, as well as demonstrate statistically significant improvements in calorie absorption. We believe that the GLP-2 mechanism, with its potent effects on intestinal epithelium regeneration, healing, and maintenance of intestinal barrier function, affords broad clinical applications in severe gastrointestinal and liver disorders, and as such, apraglutide represents a pipeline in the product. To that end, we're pursuing a novel clinical strategy across a range of indications. We're beginning with the STARS pivotal program that will support a differentiated label and improved outcomes in SBSIS, a disease in which the GLP-2 mechanism of action is clinically validated. We've designed the STARS program with pre-specified primary and key secondary endpoints to differentiate apraglutide from competitors to prospectively demonstrate meaningful efficacy in patients with colon incontinuity who now represent the majority of patients with SBSIS. and so deliver increased value to prescribers, patients, and payers. We based our development and differentiation strategy on what has been learned in the last decade in SBS. GATEX was approved in 2012 based on its ability to reduce the volume of parental support, or PS, required by SBS patients. We believe that physicians also want to understand the clinical impact that PS reduction has on patients' lives. Treatment goals for SPS-IF should be the reduction of number of days on PS and, wherever possible, enteral autonomy, which is the elimination of the PS dependency. Our further assessment of real-world evidence, the clinical experience of experts in intestinal failure, and post-hoc analyses of the GAT-XA3 trials indicate that the response to GLP-2 in SPS is heterogeneous and highly contingent on the patient's remnant post-surgical anatomy. Fundamentally, there are two distinct subtypes of SBS-IF, patients where the remaining short and small intestine ends in a stoma bag, and patients where the remnant small bowel is connected to the colon, otherwise known as colon in continuity, or CIC. In designing the START program, we have prioritized clinically meaningful outcome measures, are assessing patient-reported outcomes, and have implemented a tailored approach to allow distinct assessment of stoma and CIC patients. Unlike previous studies assessing other GLP-2s in SPS-IF, the STARS program is the first to prospectively evaluate safety and efficacy in each subpopulation, stoma and CIC. In addition, with 144 patients and a duration of up to 12 months, it has power to detect improvements in natural autonomy and quality of life in each population. We're also enrolling patients in Start Nutrition, a supplemental first-of-its-kind metabolic balance study in SBS-CIC patients, to represent over 60% of the total SBS-IF population. We will be reporting interim results from this study at a scientific congress in the second half of 2022, including the quantitative effects of afroglutide on intestinal absorption and stool output. With the Phase II data already having demonstrated Afroglutide's efficacy on these outcomes in the stoma population, we believe that STARS nutrition has the potential to highlight Afroglutide's unique benefit to CIT patients. Should this data read out positively, it may substantially de-risk the ongoing Phase III study ahead of data next year, since improvements in intestinal absorption predict reduction in PS requirements. Let me conclude the STARS update with a short comment on our operational strategy that was designed to withstand the challenges faced during the COVID pandemic. We have so far activated 75 out of a total 80 sites planned across 18 countries, including the US, Europe, Asia, and South America. This broad footprint, combined with unique remote trial capabilities, has enabled us to stay on track with study recruitment, and I'm pleased to say we're able to maintain our guidance to report top-line data from the STARS Phase III study by the end of 2023. As Luca noted, beyond SPSIS, we're also developing afroglutide as a first-in-class regenerative and non-immunosuppressive treatment for acute GVHDs. Approximately 26,000 allogeneic stem cell transplants occur annually in the US, Europe, and Japan. Our target patients are those who develop acute GVHD, become refractory to first-line steroids, and present with severe GI symptoms of GVHD. A group we estimate comprises around 4,000 patients per year. GVHD of the gut results from damage from bone marrow conditioning to the transplant, as well as donor T-cell attacks on the GI tract. These insults cause severe damage to the gut epithelium, resulting in severe malabsorption and diarrhea, and loss of integrity of the intestinal barrier. Mortality among these patients is 50% at six months, and is driven in large part by the severity of GI symptoms. The rationale to develop apraglutide in this condition is supported by two data sets. VectorBio's pre-clinical experiment demonstrated that apraglutide can increase survival in the murine model of GVHD. In addition, there is recently published clinical data showing that GLV-2 agonists can reduce GI symptoms and promote regeneration of the gut epithelium in patients with steroid refractory GVHDs. Stargaze, our Phase II study, obtained regulatory clearance last year, and we've activated sites in the U.S. and Europe and expect to dose our first patients in the coming weeks. This study is evaluating apraglutide in combination with systemic corticosteroids and ruxolitinib in patients with steroid refractory acute GVHD. We look forward to reporting interim data from this proof-of-concept study in the first half of 2023. Turning finally to COMET, Since the acquisition of the platform, we've made rapid progress in the development of our lead molecule, VB1197, for the treatment of severe, life-limiting organic acidemias, specifically methylmalonic and propionic acidemia, and are on track for entry into the clinic in 2023. We're very excited about the promise of our pipeline, and I look forward to updating you on these upcoming milestones in the future. With that, I'll now turn the call over to our CFO, Claudia D'Augusta, to discuss our 2021 financial results. Claudia?

Thank you, Omar. I will briefly comment now on the key financials for the year 2021. Our operating costs in 2021 were $87 million compared to $57 million for 2020, or approximately a 50% increase on a year-over-year basis. This $30 million increase includes an approximate $7 million increase in R&D expenses due to the progress of our STARS program, which encompasses certain offsets for accounting recognition related to contingent liabilities, and an approximate $22 million increase in G&A expenses. This G&A cost increase was comprised mainly of known cash personal costs related to long-term equity incentive plans as well as the costs involved in the preparation of the IPO and operating as a public company. We ended 2021 with cash and cash equivalents of $103 million. In addition, as Luca mentioned, the two deals we announced last week significantly strengthened our financial position. First, our collaboration agreement with AKP provides a $30 million upfront. as well as eligibility for $170 million in downstream development milestones, plus royalties on sales of actual site in Japan. Second, a credit facility with previous capital, providing flexible access to up to $75 million. Together, these two transactions, combined with our cash available of $103 million at the end of 2021, provide us with up to $220 million in near-term operating capital, and extend our cash runway beyond our phase 3 start-stop line results. So now I'd like to hand the call back to Luca.

Thank you, Claudia. We covered a lot of ground during today's call. And to close, I'd like to underscore the following points.

First, our lead molecule, apraglutide, is a next-generation GLP-2 that has a potential best-in-class profile, which we believe will result in better outcomes for patients, leading to broader adoption and improved persistency. Secondly, apraglutide is entering an established but yet underserved market that we believe is poised for significant growth. As a reminder, there is only one GLP-2 approved for short bowel syndrome, and despite limited adoption due to short-life and burdensome administration, it is generating approximately $670 million in fiscal year 2021. Next, the STARS development program will provide a robust dataset aimed at delivering a differentiated label to optimize launch and reimbursement. Also, in just a few months, we will present interim data from our STARS nutrition program with the aim to demonstrate that apraglutide is able to improve intestinal absorption in CIC patients, a patient population when there is limited data supporting the use of GALEX. If positive, these results may substantially de-risk the ongoing Phase III study ahead of data next year and also indicate that apraglutide has the potential to expand GLP-2 use. And finally, we are on track to dose our first patient in the Stargaze proof-of-concept study in acute GVHD this quarter, and we are on track to read out top-line results during the first half of 2023. Coupling those factors with the financial runway to take us through the Phase III STARS readout, I'm sure you can understand why we are so excited about what the future holds for VectiBio. With that, I would like now to open the call for questions. Operator?

Thank you. Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press the star then the one key on your touch-tone telephone. You may withdraw your question by pressing the pound key. Again, to ask a question, please press star one. Please stand by while we compile the Q&A roster. And our first question coming from the line of Thomas Smith with SVP Leerink. The line is open.

Hey, guys. Thanks for taking the questions. Hey, can you guys hear me?

Yes.

Okay, great. Yeah, thanks for taking the questions. Congrats on all the progress in the two recent deals. A couple questions on our end. First on the SARS nutrition study, can you talk a little bit more about enrollment and, I guess, any early efficacy signals you're seeing there? What data do you expect to have available for presentation later this year? And maybe just walk us through your expectations for this data set. Like, what do positive results look like here? Do you need to see a statistically significant change on energy absorption from baseline, or do you need to see changes in PS volume? So, just any idea what a good data set looks like from your perspective would be really helpful. Thanks.

Thanks for the question. So, the study is recruiting well, is recruiting according to schedule, and we anticipate reporting results later this year at a conference. We're encouraged with what we have seen so far, but we believe there is a benefit in letting the data mature and run the full analysis as opposed to a subset. So in terms of defining what success looks like, let me just remind that there hasn't been any prospective study, clinical trials, that have shown a response of a GLP-2 analog in CLC patients. And so what the study is designed to do, at least for the interim readout, is to demonstrate that apraglutide can improve absorption parameters, intestinal absorption parameters in CIC patients. Our ability to demonstrate such an effect would be unprecedented, and it would bode well for the Phase III study because improving absorption parameters, such as fluids and nutrients, is key to drive the ability to reduce parental support, which, as you know, is the primary endpoint of the Phase III trial.

Okay, great. That's helpful. Just to clarify, Luca, I guess when we see data later this year, is it your expectation that we would have kind of that full cohort of 10 patients from the SARS nutrition study? And, you know, I guess what time points do you expect would be available for evaluation at that point?

Yeah, we will have 10 patients, and as communicated before, we will look at the four-week metabolic balance assessment. This is four weeks out of a 48-week study, and it's the same time point that we had performed as an assessment in our Phase II study in stoma and the same time point that has been used in the past with other GLP-2s in stoma patients. So it's a very early time point. At the same time, if we do see an improvement in absorption at such an early stage in treatment, again, this is very promising because, again, these patients, the CSE patients, are anticipated to take longer to respond than some patients. So if we see a response in absorption parameters at four weeks, this would be very promising.

Okay, got it. Understood. And then just a quick one on the Japan deal with AKP. Can you just talk a little bit more about the strategic rationale and the process here? Like how competitive was the process and why do you think AKP is kind of the ideal partner to drive success in Japan?

Thanks for that question. So the rationale for the deal was that we wanted to, it's multiple fault, but the primary rationale is that we wanted to maximize the value of apaglutide by accelerating access to Japan. And for that, obviously, we needed a Japanese partner. So over the last two years, we have committed to a commercial strategy to launch ourselves in the U.S. and Europe and to identify partners for other key markets. And in keeping with the strategy, we have implemented a phase three trial where we are recruiting patients globally, including Asia, Latin America, in addition to the U.S. and Europe. Now, the other advantage of this deal is that it provides us with near-term cash to fuel our business. As we have communicated, there are $30 million in upfront and near-term cost sharing that we're getting right away, and then additional milestones that we're going to get before the completion of the STARS program, and others that we're going to get later in development, as well as regulatory and commercial. up to a total of 170 million in milestones. In terms of AKP and why we have chosen them, this is a company that has a long experience of commercializing products that are generated in other Western countries and in partnering with Western companies. They have a proven history of successful drug development, commercialization in GI, in immunology, in hematology. And they have a hospital business with approximately 600 medical representatives. And they are also committed to expanding their rare disease business. And these are the reasons why we've chosen them. So just lastly to conclude, yes, this was a competitive process. We had several offers for our products. I can't disclose the details of that, but it was a competitive process which was organized and ran over the last six months and led to the choice of the best partner, both in terms of compatibility with our product, but also in terms of financial aspects.

Okay, got it. Super helpful. Thanks, Luca. Thanks, guys, for taking our questions. Thank you.

Our next question coming from the line of Tasneem Ahmad with Bank of America, Yolanda Sullivan.

Hi. Good morning, guys. Thanks for taking my questions. For the acute ADHD studies that you have the interim reading out in the first half of 2023, what are you looking for there? And what should we consider to be a good interim read from that study? And then secondly, Luca, maybe I wanted to ask you about the recent article from Zipan's CEO that I think appeared in a Danish newspaper where he specifically talks about their particular product, Lepagetide, for their, you know, attempts at treating short bowel syndrome. And what do you think it means that they're highlighting that particular candidate, and what do you think the read-through is productive on that? Thank you.

Oh, thanks for the question. Okay, let's get to the first question first. I'm going to have our chief medical officer, Omar Khawaja, respond to the question. That was about what are we going to read out at the interim analysis, describe what are the endpoints, and how is that relevant to the rest of the program in GVHD.

Yeah, great. Thanks, Sazine, for the question. I mean, maybe just briefly review what the study is. So it's a two-proof-of-concept study assessing two dose levels of afroglutide in a blinded fashion in up to 35 patients with steroid refractory acute GVHD. The comparators and external control are partly derived from the REACH-2 pivotal study of ruxolitinib. At the interim, we anticipate reporting initial response data, both partial and overall responses, in patients at day 28 and day 56 in a subset of about 14 to 15 patients. And we'll be looking to benchmark that against our external control arm.

Okay. So just to comment,

Yeah, just to add on top of that, obviously the benchmark is the data set that came from a REACH-II study that includes about 150 patients from the raxolitinib. And, of course, we know exactly what are the expected overall and partial to complete responses rates at day 28 and day 56. And that's really, obviously there's a lot of room to improve upon those numbers, and that's what we're going to be looking at. All right, so then the second question you asked, let me just ask the second question you asked was about the read-through from the interview in the Danish media. There was an interview mentioned in the Danish media where the the new CEO of Zila, the former CMO, singled out glupaglutide. I mean, I think what he did say, and it was also in their public communications, is that they consider glupaglutide the most valuable asset. And in that, all I can say is that we agree that I won't comment specifically on the context of that comment within the company, but I can say one thing is that one thing we agree, and that is that SBS is an incredibly valuable market. It's underpenetrated. GALEX is penetrated no more than 20% of it and has a turnover of close to $700 million last year. So I think I would agree that SBS and the next generation GLP-2 is a valuable opportunity for us with that problem type.

Okay, thank you. Our next question coming from the line of Patrick D'Alesso with Lifestyle Capital. Your line is open.

Hi, thanks for taking the questions. So just if you can, you know, it'd be great if you could provide a little additional color in terms of just why STARS nutrition study was just delayed a little bit. Just curious about the largest contributing factors to enrollment. Is it competing therapies, COVID, just SDS-IF being a rare condition? And then as we think about the Pivotal Stars study, are there any implications on enrollment there? And then just curious if there's any overlapping sites and kind of how you've been prioritizing enrollment between those two studies. Thanks.

No, let me clarify. The study was not delayed. We are on track to where we want it to be. We are encouraged for what we have seen so far, but we think there is benefit in letting the data run the full analysis and mature as opposed to looking at the subset of data. And so we have decided that we'll do this in the context of a peer review conference in the fall rather than, you know, doing it earlier. But the recruitment progress with the study is actually as anticipated.

Got it. That's helpful. And then I guess if you could just speak to the unmet need in SBS-IF patients with renal comorbidities, considering dose reductions are required in this patient subset, just curious if responses are also suboptimal And then if you could just provide additional color on the data that was recently presented in these patients using APRA. Thanks.

Yeah, I'll have Omar respond to that question. Omar, about the renal impairment patient.

Sure. So about 28% of patients with SPSIF have moderate to severe renal impairment. With GATEX, that requires a dose adjustment to half the dose. You know, there isn't evidence particularly on whether that makes a difference to efficacy. But what was important for us is, first of all, our presentation of apraglutide, which is a 5 milligram flat dose, that, you know, whether or not that would require dose adjustment in patients with renal impairment, and it doesn't. I mean, that's the data that we presented, that, you know, we're able to use the same 5 milligram flat dose even in patients with severe renal impairment. I think what we hear from physicians is a concern about using GAPEX in patients with moderate to severe renal impairment. You know, even though you can use the dose adjustment, there are concerns about using it in renal impaired patients. And we think that the data that we presented at Aspen shows that Afroglutide is going to be suitable without a dose adjustment across the, you know, the full range of patients with SPSIS.

Great. Thanks for taking the questions.

And as a reminder, to ask questions, please press star 1. Our next question coming from the line of Tiago Fout with Credit Suisse. Your line is open.

Okay. Thanks for taking the questions. So perhaps a potential differentiation in commercial questions. So I understand that it's hard to prospectively assess what the impact you can have in the CIC patient population, but Given that they do have lower baseline PS volumes, how important is it to establish a relative reduction versus a number of days where they don't have to take parental support therapy? And the reason I ask that is basically how may that actually end up looking in terms of claims in light of potential commercial scenario where you could have GATX generics available. So just trying to understand how much of that CIC differentiation could be a key selling point relative to the better dosing regimen. Thank you.

Okay, so I guess let's pass this question. The first part is how do we describe benefit in CIC considering that volume is an absolute is perhaps less relevant. Okay, let me just. state that I agree that, number one, it is important to differentiate therapeutic objective and outcomes and benefit between these two anatomical subtypes. That is exactly the basis of our study. We believe there is a difference in the therapeutic objective and how benefit is described among these two subtypes. In the CRC, as you correctly stated, The volume reduction, they have a volume of infusion that is approximately 30 to 40% less on average if you look across large data sets. And so the main goal in this population is to establish greater evidence of internal autonomy. And that's been the goal of our program and our study design. And that is basically from the reduction of dependency of pareto support by having fewer days of infusion a week all the way to elimination of the need for the infusion, which is described as full enteral autonomy. And that means you remove the dwelling catheter, you remove the consequences and the risk, the sepsis risk associated with that. So for this population, there is a big opportunity to establish a path towards reduction of dependency on parental support, which is not a mere expression in volume, but more in terms of internal autonomy. That's why we have stratified the study to conduct further analysis, secondary analysis in the two subgroups and the CIC, we also are running these patients up to 12 months because we know that the effect of the GLP-2 can accrue for a period longer than six months, especially in the CIC. And we are doing that with the objective of demonstrating that some of these patients can have a significant amount of days off and in some cases achieve full internal autonomy. So that's the answer to the first question. The second question was about, I think it was about generic GADX and what do we think about that. First of all, we do not know when and if there will be a generic GADX in the U.S. Why the exclusivity is scheduled to expire in the middle of next year. There are no disclosure of negative approvals of any genetics to the glutides to the ANDA mechanism at this point. And then even if a generic comes to market, it will still be at best like GALEX with all of its limitations. And we believe that apoglutide with a significant differentiated profile will make GALEX obsolete. So, to validate these conclusions, we actually conducted extensive payer research, and I actually would like our chief commercial officer, Kevin Harris, to tell you about this research we conducted. Kevin?

Yeah, thanks, Luca. We've had significant engagement with payers over the past two years, not only exploring this question, but how to appropriately position a pragmatite as a potential future standard of care. And we got some very important insights from the payer community. You know, first is that they validate the fact that, you know, the generic GazTex will still obviously have the same clinical profile as a branded product. And given, you know, the nature of GLP-2 treatment today and the disease of SBSIF, that payers only believe one or two generics may in fact launch. And if they do launch, they would only launch at a modest discount to branded therapy. which today is about $43,000 a month in the U.S. In further exploration with these payers, they very much acknowledge the unmet need that exists today for patients with SBS-IF, and they also appreciate the fact that there's a very small budget impact that GLP-2 treatment today has in their plans. I think most importantly, when we show them our product profile, they really do see Apraglitide as differentiated in delivering a stronger value proposition. In particular, they really value the extra data that we plan on delivering with regards to Apraglitide's efficacy in both the stoma population and in the CIC population, particularly the enteral autonomy data is, I'd say, of the greatest value to the payer community. And all of the feedback we've gotten from the payers essentially reinforce the fact that, you know, we believe GAT text will essentially become obsolete, you know, with the launch of a pragmatite.

Perfect. Thanks again for taking my question.

Thank you. And I'm showing no further questions at this time. I'll turn the call back over to Luca Centarelli for any closing remarks.

Thank you, and I want to thank everybody that has joined us today for our earnings call, and I'm looking forward to keeping everybody posted in the future on our progress. Have a good rest of the day.

Ladies and gentlemen, that's our conference for today. Thank you for your participation. You may now disconnect.