Medincell

Hello everyone, I am David Osez, Director of Communications at Medincel. Welcome to this video conference that follows the publication of the financial results of our 2021-2022 exercise, which was closed on March 31. A press release is available on our website. So, I am today with Christophe Douat, President of the Directorate of the Society. Good evening, Christophe. Good evening, David. On your side, Reymar Angot, our Financial Director. Good evening, David. And on my left, Joël Richard, our Scientific Director. And today, we have the pleasure of welcoming Richard Malamute, our new Medical Director, who joined us two months ago.

Good evening, David.

Alors, comme d'habitude, vous pouvez envoyer vos questions en utilisant le petit module à la droite de votre écran. Nous allons essayer de répondre à un maximum de questions après la présentation que nous allons faire durant cette conférence qui est prévue pour durer 45 minutes. Sans plus attendre, je me tourne vers toi, Christophe, avec une question simple. Christophe, que pouvons-nous retenir du dernier exercice fiscal ?

Merci David. Tout d'abord, qu'on s'approche d'une étape fondamentale pour la société, la commercialisation d'un premier produit. Je vous rappelle que l'été dernier, Teva a fait le dépôt de demande de mise sur le marché américain de notre programme le plus avancé, MDC-IRM. Début novembre, Teva présentait les données au congrès de psychiatrie de San Jose, Texas. to all specialists and the results are sometimes even described as spectacular. Kerr Schultz, the CEO of Teva, even describes them as phenomenal. So these results are a sign of a significant commercial potential and Richard will come back and describe them in the rest of our presentation. But as you know, the regulatory process has been shifted from 8 to 10 months with the request for additional information from the FDA. Teva is working very actively to prepare a new submission file that should be submitted in the coming months and anticipates an approval for the commercial launch in the first half of 2023. Teva also made it public that MDC-IRM would be used and developed in a new indication in neuroscience, which it keeps confidential for the moment. This is obviously a very good signal. They have been actively preparing for months now the start of phase 3 of the second product in collaboration with Teva, MDC TJK. And we are waiting for the go for phase 3 in the coming months. And finally, Teva has allowed us to say that the teams of Teva and that of Medincel were working very actively to identify opportunities to develop additional products to what we are doing today, without schizophrenia, so new indications. Vous savez aussi que ça avance du côté d'un partenaire canadien AIC. Celui-ci est maintenant prêt à lancer le prochain essai de MDC-CWM. Et Richard y reviendra dans les minutes qui suivent.

Alors effectivement, on y reviendra avec Richard Christophe. On a essentiellement parlé des programmes les plus avancés qui sont actuellement en clinique. Il y a d'autres choses qu'on peut retenir de cette année ?

Yes, of course, because in parallel, everything has progressed and has progressed very well. First of all, a part of our resources was obviously devoted to the support of our partners, Teva and IC, to advance our more mature programs. We now have three pre-clinical programs that should enter clinical phase in 2023. Nos équipes préparent l'essai pivot de MDC-KPT en santé animale et notre phase de oral Ivermectin-TTG contre le Covid avance très bien au plan et on attend des résultats en Q4 de cette année. You know, we mentioned it, but that since last fall, we had been working on funding for high-end utilities. and we did it in scenarios where MDC and IRM would be delayed or there would be shifts. Well, we learned from it because it is the case, but above all, since the beginning of the year, you see that all biotechnologies, technologies in general, suffer a lot in the stock market with less than 30% since the beginning of the year. and these doletif financing efforts are beginning to bear fruit. Rameh will come back later. Last point I would like to mention, we continue to structure our ESG efforts. We have set up, created an ESG committee which emanates from the Council of Supervision.

Thank you Christophe, thank you for this clarification. You will address different points on which we will come back a little later. Regarding the ESG, so what we call RSE in French, I take this opportunity to say that the RSE report of the Society will be available at the beginning of July. It will be widely broadcast at that time, it will be available in French and English. Without further ado, I propose to move on to the financial results with you, Raimé. Les détails des chiffres sont disponibles sur le communiqué qui a été diffusé aujourd'hui, mais peut-être que Rémi, tu peux nous faire un point sur la situation financière et les événements importants ?

Absolutely, David, with pleasure. Like most companies, we have adapted to the pandemic so that the activity will resume normally from September 2020. This is naturally translated by an increase in our expenses, which reached 32.2 million euros versus 27.1 million euros during the previous exercise. It should be noted that three quarters of these expenses have been devoted to research and development activities. They have, in particular, allowed us to advance our programs in pre-clinic with ambitious objectives, as mentioned by Christophe. We have also launched the clinical study to demonstrate the concept of our MDC-TTG product. As a reminder, two of our current programs in the portfolio are supported by large foundations that finance ongoing activities. The first is MDC-WWM, which is in contradiction with the Gates Foundation. We have obtained a grant of 19, which can reach up to 19 million dollars. What is interesting about this program is that Medancel preserves all commercial rights, including... A grant is a subvention. And the second one is MDC-STM against malaria with UNITED. But at this stage, it is an exclusively oriented program for global health.

So these two programs that you just mentioned with the Gates Foundation and with UNITED are the origin of some of our revenues.

Indeed, our revenues from our ordinary activities reached 8.3 million euros versus 11.8 last year. La moitié de ces revenus correspond aux prestations de service que nous avons rendues principalement à la fondation Gates et à United. Et l'autre moitié de nos revenus, c'est le crédit import recherche qui a atteint 4,2 millions d'euros. On the key exercise, we have not touched on the development milestones of our partner Teva. We must remember that in the previous year, which ended on March 31, 2021, we had reached $ 5 million for the MDC-IRM product following the positive results of phase 3. Et pour rappel, nous anticipions aussi un paiement de milestones pour le passage du deuxième produit avec Teba en phase 3 MDC-TJK. Nous devrions finalement le recevoir pendant l'exercice qui est en cours. Notre consommation de trésorerie au cours de l'année a été de 21,4 millions d'euros. C'est légèrement supérieur à ce que nous avions prévu And this is normal, given what I have just explained about the shift of MDC-TJK. And I also take this opportunity to emphasize that for the exercise that is in progress, we anticipate a significant decrease in our cash consumption while maintaining a strong dynamic of our activities. Des étapes créatrices de valeur devraient être atteintes, franchies, plutôt dans les 18 prochains mois, donc avec plusieurs de nos produits dans notre portefeuille.

Merci, Rémi. Alors, maintenant, je te propose de faire un point sur notre position de trésorerie à la fin de l'exercice, c'est-à-dire au 31 mars dernier.

Au 31 mars, nous comptions sur 27,2 millions d'euros, composés d'une part par 24,6 en trésorerie et 2,6 dans des actifs financiers non risqués. We have today, while I am speaking to you, a good financial visibility that leads us to September 2023. But as Christophe mentioned earlier, since last fall, we have been working on several levels to extend this financial visibility. Le premier de ces leviers, c'est la restructuration de notre dette avec la Banque européenne d'investissement, la BEI. Je vous rappelle qu'en mars 2018, nous avons obtenu un prêt de 20 millions d'euros. Et une première étape a déjà été franchie au 1er juin, donc post-clôture, avec un changement dans les termes de cet emprunt. Parmi les changements, Il y a le décalage de six mois dans le paiement de la première tranche de juin 2023 à décembre 2023. Et aussi un changement dans la rémunération variable due à la BEI. Ce dernier changement va générer des charges financières qui vont être comptabilisées lors de l'exercice en cours. But beyond that, what is most important about this amendment is that it is a first step. This first step was really necessary to open the way to complementary discussions with the BEI. And I hope to be able to tell you more soon. And the second lever is access to funding non-dilutive, complementary, and we are also working on it very actively. So, you have understood, I think, an increase in capital is not envisaged today. It should also be emphasized that in our cash forecasts, In our scenario, there are no new collaborations that could happen either with new partners or new programs that could happen with our current partners.

Thank you. Thank you, Rémi, for these precisions. So, all this, all that you just described, concretely, where does it take us in terms of financial visibility?

My objective, it is very simple, David. With these two non-dilutive levers, I aim at financial visibility until the end of 2024.

We are working, as you know, on different scenarios. And this situation with the CRL was a scenario that was envisaged.

But without that, with the predictions that we already knew, we were quite conservative, with a launch in the second semester of this year, 2022, but with the information that we know from our partner, this launch should take place in the first semester of 2023, so a few months delay compared to our initial predictions. Le potentiel commercial de ce produit reste toujours aussi important. Et je vous rappelle aussi le terme de cette collaboration avec Teva. Chacun de nos produits avec Teva peut atteindre des milestones qui peuvent arriver jusqu'à 122 millions de dollars dans des milestones de développement et de commercialisation. Donc les trois combinés, ce serait un maximum de 366 millions de dollars. For our first MDC-IRM product, with its commercialization in 2023, the next development milestone should be 4 million dollars. And beyond these milestones, there will be royalties that we think, from its commercialization, will be reached from the first semester of 2023.

Merci, merci beaucoup Rémi. On a reçu quelques questions concernant les finances, on les adressera après, mais tout de suite je vais me tourner vers Richard. I speak English, so we have an interpreter. I will still address the question in French. But before asking him questions to talk a little bit about clinical developments in progress, I will still remind myself of three things. The first is that, Richard, you were part of the Society's Medical Council. You were also part, as a censor, of the Society's Council of Supervision. Et tu nous as définitivement rejoint il y a deux mois de ça. Tu es basé aux Etats-Unis, où nous menons la plupart de nos activités réglementaires et cliniques, actuelles et à venir. Mais surtout, tu connais très bien nos programmes. and the problems that we are developing with Teva in particular, because you were vice-president in charge of clinical operations in different areas at Teva, for psychiatry, pain, oncology, and what we call the new therapeutic entities, in fact, the innovative treatments. So, Richard, in light of all this, can you come back to the events of this year concerning our programs with Teva, tell us where we are and what we are heading towards?

Thank you, David. So, as a reminder to everyone, Teva filed the NDA for the Long Acting Injectable Respiradone Program in June of 2021. In November, they published results or made public results of their Phase 3 study that they filed as part of the submission. And while there was an expectation

So there was an expectation that the study would reach a statistical significance or importance, but in fact it would be quite important for this product when it is finally approved. And in relation to other products on the market, on the long-acting injectables, we will continue until there is a certain minimum number of patients. And that took more time than we thought. And so the result was that more patients were treated for two years in studies with placebo, with double-blindness, So what gives long-term data means that these patients have been treated with long-acting injectables. Thus, the results of these studies have shown significant benefits on quality of life. And in April 2022, TEVA received a complete response letter from the FDA. Again, this is not the end. It's not something that we want, but it doesn't mean the end of the program. A CRL, that is, a complete response letter, just means that the FDA would like to have answers to some of the questions they ask. And then... As soon as we received this complete response letter, we started working to answer these questions. So the program is that these questions will be taken care of and once we have satisfied their questions and answered all these points, there will be a submission. We also know that in the CRL, there was no mention of manufacturing processes or made-in-cell polymers or other technical issues. So, that's it. So whenever the NDA is submitted this year, the FDA will do six months to review, and that's when we'll receive a decision from the FDA, hopefully, a favor. So Teva has been quite enthusiastic about the MedCell technology and has actually been developing the cell and in fact develops a second antipsychotic product, olanzapine. And so risperidone is the most commonly prescribed antipsychotic, but for the most severe cases of schizophrenia and the most severe symptoms, it is olanzapine, and it would be quite complementary with risperidone. We are studying the pharmacokinetics issues and the most important concerns.

In the third quarter of this year, there is an appointment with the FDA to discuss new components of the resubmission, in any case, of the new authorization request.

And we will be able to hear from Teva once they have submitted this request and how we can move forward. So Teva is also looking at an additional indication for going after Cedra and Laura's herd and what I can share with you. and another indication regarding the long-term injectable with the Risperidone. So I'm not going to go into more detail regarding these indications, but in fact it's to give you an idea of the confidence that Teva has in regards to these technologies. And so...

Sure.

Sure.

AIC, our partner, is a company based in Toronto, Canada, and developing, in our collaboration, an injectable coxib, intra-articular coxib. placed into the knee at the time of surgery for a total replacement. And we know that there is a mission with opioids after surgery. And we also know that the minimal time that we would like to have the effect is three days. After that, before that, it ends up that many of these patients end up on opioid therapy for Marlon and his entire AIC developed and ran a phase two protocol using the intravenous Celecoxib, which shows favorable results for safety and efficacy, and not just for two-day time point, but also one week and two weeks after injection. So quite value patients and quite attractive for pre-injection. The study design of the next study is quite critical to the success of the program and so AIC has been in active discussion, the FDA as well as external experts in the field to develop a protocol which will be inducted in the beginning of the third quarter of this year. The study is a 150-patient study, assessing safety and efficacy. Results from the study will then dictate further and who will then give the tone on which studies will be required for the development of this program. But know that positive results will be quite important and interesting for the physician.

And for the patients.

So thank you, Richard.

or in formulation.

I'll let you speak. Yes, indeed, David. All teams are at work today to develop and advance our product portfolio. Our objective, it is clear, is to be able to launch in 2023 the clinical activities of the three human health programs, WWM, GRT and STM, as well as the pivot studies of our first animal health program. I would like to remind you that for animal health, the pivot studies are the last step before a market share request. Nous avons aussi lancé, comme déjà mentionné par Raimé et Christophe durant l'exercice écoulé, une étude de phase 2 visant à démontrer de manière rigoureuse l'efficacité prophylactique de l'Ivermectin contre la Covid-19 et ses variants. Et de plus, nous avons une formulation trois mois de notre produit qui est prête à rentrer en développement réglementaire. Nous attendons les résultats définitifs de cette étude vraisemblablement à l'automne pour décider des prochaines étapes du programme. Et puis, autre point important, nous avons aussi travaillé à l'extension des capacités de notre technologie de manière à élargir le champ des possibles en termes de formulation. Le travail effectué par les équipes de recherche est vraiment remarquable et nous devrions voir dans les prochains mois les applications concrètes de ces recherches qui sont fondamentales pour l'avenir de la société.

Thank you very much, Joël. I think we've said a lot of things, but we also have a lot of questions. So we have 20 minutes in front of us. We're going to try to address them. So I'm just going to ask you to answer clearly, obviously, but also quickly, as far as possible. So I'll take the first question from Gérald, who tells us that we shouldn't put all these eggs in the same basket. and who asks us to clarify how we have anticipated the delay with the FDA approval. We have already talked a little about it, but maybe we can come back to it very quickly.

Yes, of course. So, as I said earlier, we have worked well in different scenarios. It was obviously not the preferred scenario, but beyond working... Let's say, to think about the scenario, the most important thing is to act and to be ready. And that's what we've been doing since last year, since last fall, to think and start to make actions. And as I said, I mentioned it earlier, there are these actions that are already beginning to bear fruit. with the restructuring of the DEI debt and also in non-dilutive instruments on which we are working very actively today. Exactly. Thank you, Rémi.

So I'll move on to the second question. So, I don't know who's going to answer. Maybe Richard, we're wondering if we think the FDA could answer the first quarter of 2023. I would say, basically, could we have an approval on our product? Translated? We have someone who translates for us, Christophe. Richard, do you have the translation? So, is it possible?

Yeah, I'm happy to answer that. So, everything has to follow in a given timeline. And so, what we have, we know that the FDA has made a decision six months from the time we received the submission at the end. So, the when there'll be an approach to a decision is 100% dependent upon when we have a complete support. At what point will they respond? It depends 100% on when they received the answer. Because once they received it, they have to write the letter the day it was submitted. In fact, it starts the retroplanning six months. Once we have that detail, we can answer the question of when the FDA will respond.

Merci beaucoup Richard. Alors je passe à la question suivante, je ne sais pas qui va y répondre. Les nombreuses embauches et promotions au sein de Médencelle reposent sur quelle stratégie et surtout objectif, surtout s'il y a un échec avec le dépôt Teva qui est un projet prioritaire chez Médencelle ?

Christophe, maybe? Yes, I can answer. First of all, I remind you that we have structured the company for four years now, with the arrival of Joël, to bring regulatory and clinical skills, which are now taken over by Richard, and that it was necessary to support our partnerships, but also to develop our own products. So recruitment is stabilized today, since we have reached this level, at least for the rest of the events. There was a word about the promotions, I think, Adelie?

Yes, exactly.

The promotions, we have a whole process of professional development that has been put in place by our Chief People Officer, Franck Pouzache, who is not here tonight. a rigorous process of evaluation and which allows people to develop within the company and when they are promoted to be rewarded obviously in consequence and we see besides we saw it on LinkedIn that there was recently a certain number of promotions which we can be extremely proud of Parce qu'à Medincel, les gens se donnent à fond, ils sont tous actionnaires et travaillent tous pour les objectifs de la société. Et je tiens à remercier d'ailleurs et à féliciter toutes ces belles promotions qu'on a eues récemment.

Merci, Christophe. Alors, la prochaine question, je vous la pose telle quelle. Avez-vous des avancées avec d'autres laboratoires, notamment français, sur de nouveaux partenariats? Christophe.

Oui, c'est une bonne question. Je disais dans une de nos réunions précédentes que j'attendais ce moment depuis des années, ce moment où on avait des résultats de phase 3 positifs. Thank you very much. Thank you. To illustrate the interest that pharmaceutical companies have in Médincel, our teams have more than 75 qualified appointments with pharmaceutical companies. Of course, Joël and Richard will not all be able to achieve this in collaborations, but this is a good omen for the rest of the events. And of course, the approval of MDS-IRM will allow us to push the trigger and continue in this direction. And now I know, we know that we have at our fingertips the necessary skills to deal with this new collaboration and then also to scale up if necessary and when it will be necessary.

Alors, du scale-up, genre la montée en puissance, en fait. Montée en puissance, tout à fait, voilà. Je passe à la question suivante. Alors, je ne suis pas sûr qu'elle soit très claire. On nous dit, vous avez signé un partenariat avec un fabricant pour quel projet et dans quel but. Donc, je vais l'orienter un petit peu et je vais dire qu'on parle de Corbion. Probablement.

So, I'm going to take a step back here. So, our formulations that make it possible to do an injection in Gaxion are extremely complex. You can imagine, it's to control the release of a drug over a very long period of time. It goes up to six months in contraception, but on average it's around 20 months. And to have this diffusion that allows to have an agreement of the FDA, whatever the patients who will be injected. The core of these formulations are our famous polymers, these 10 polymer tri-blocks, based on pharmaceutical exceptions, that we regulate for each application in order to define the formulation. These polymers are not only the heart of the technology of the company, but they are absolutely essential to the quality of our products and to obtain the comfort of the FDA, since we can imagine that quality variations on polymers could influence changes in the release of drugs. So it was essential to master the manufacture of these polymers and now, ten years ago, we have made an alliance with the number one in the world of biopharmaceutical polymers, Corbion, a Dutch company, which, by the way, has built a second production unit to secure our partners. They now have one in Holland, one in the United States. This has allowed us to work with polymers that are already in pharmaceutical quality, to be able to allow our partners to have access to these polymers easily, de les sécuriser et puis aussi, en passant, de contrôler la propriété intellectuelle de ces polymères. Les polymères, c'est une matière extrêmement complexe à fabriquer. L'usine de Corbion aux Etats-Unis, c'est une usine qui fait trois fois la hauteur de cette salle sur peut-être 50 mètres carrés de surface. Une usine vraiment impressionnante. Et cette usine nous permet dès aujourd'hui, grâce à notre partenaire, de fabriquer des bâches de 100 kilos, donc environ un million de doses, Merci Christophe.

Alors je passe à la question suivante, réunie peut-être. On nous demande si on a une idée précise sur le réel pourcentage de flottants. Avec un petit commentaire, la variation du cours est très importante, notamment due à ce faible flottant.

To answer this question, I will explain a little bit the shareholding today. Okay, but quickly, because we have a lot of questions. So, as Christophe mentioned, the employees of the company are shareholders of the company. This represents about 48%. On a des investisseurs internationaux, français, etc. Et en théorie, il y a 85% qui est du flotant, mais en réalité, le retail, ce que j'appelle le retail, en français, tu me diras. Les individuels, quoi. Les individuels, représentent à peu près 13% de l'actionnariat aujourd'hui de Medencelle.

Thank you for this clarification. Question about our COVID program. If this program succeeds, will there be a partnership with a laboratory or a commercialization of its own? Christophe? With pleasure.

So, as I said, the results of this oral phase will be available normally in Q4 of this year. In parallel, Joël and our teams have done a remarkable job to make a three-month formulation. La cible que l'on souhaite adresser, je le rappelle, c'est les patients immunosupprimés, qui aujourd'hui constituent 40 ou 50% des gens en réanimation, qui n'ont pas de solution, qui sont toujours à très fort risque. So today, we will privilege the search for a partner, obviously, to go as quickly as possible on this indication. A partner who is an international partner. But it is possible that the first steps will have to be taken in parallel to advance the program. These stages, in particular, of manufacturing preparation for clinical trials.

Merci Christophe. Alors je passe directement à la question suivante, à laquelle on a déjà répondu, mais c'est peut-être important de repréciser les choses. On nous demande ce qui nous rend confiant, que la revue de la FDA prendra entre 8 et 10 mois, et pas plus d'un an. Vous mentionniez 14 mois en moyenne dans les produits neuro. Avez-vous eu plus de détails sur les raisons mentionnées dans la CRL ? Merci. Richard, certainement ?

Yeah, I can answer that.

So again, you know the six months, that's a fixed time. And so the variable is how long will it take to address the FDA concerns. And recently, we have the FDA. So a lot of things could have been addressed in the CRL, which would have taken more time to run another study. And having to have a science section to map So, in fact, having inspections regarding their manufacturing, having data already submitted on which the FDA wants to have information, the times are different regarding that. That's why... To know, in fact, to have more information about the CRL makes us confident about the fact that our calendar will be a little shorter than these 14 months and that we will be rather below these 14 months.

Thank you, Richard, for these clarifications. I would also like to point out that we are also relying on Teva's words to provide this information. We have received several questions regarding the BEI loan and the restructuring of the loan. First, what is the cost of the reimbursement report? Est-ce qu'on le maintient si finalement la FDA donne son approbation en début d'année 2023 ?

Okay, I will try to be simple in my answer. So, yes, this report of reimbursement of the first tranche of 9.6 million euros is maintained even with the approval of MDC-IRM. In terms of capitalized interest, it is a cost of about 200,000 euros. But there will be, as I said, there will be a change in the variable remuneration due to the BEI, because we will also integrate future flows of revenue with debate. And there, it's a little bit complicated, maybe, to explain here, but it will generate charges which are at a consolidated level, so IFRS, these are accounting standards, a bit of complex calculations, so there will be charges, but the cash impact will come in the coming five years.

So we'll get to know him at this point. Yes. Okay. Thank you, Rémi. I hope that was clear and simple. I hope so. For everyone. A question for Richard. Are the innovations of Medincel huge in various projects? The real question, in fact, comes after. Could we make new deals with Teva, launch new programs with Teva? We've answered a little, but maybe we can elaborate.

Yes. Yes, so again, as I mentioned, Teva is quite interested in the Medincel technology, and we know about the long-acting injectors. I told you about me with the NPA to discuss a phase 3 study with the long-acting Lanzopin. I was involved with that, the... They are also interested in additional indications in neuroscience, in general, in spheridin. Beyond that, yes, I think we are quite open to discussions with Teva, other opportunities with other molecules, Teva or elsewhere, to further promote our partnership develop our partnerships, our collaborations, but I would also like to add that all this is to be able to bring significant benefits to patients. We can actually make new forms, but it has to be translated into a patient benefit, in the end. And that's what we're looking for, and that's what our molecules produce.

Christophe, do you want to add something? Yes, yes. In French, in French. Sorry.

Maybe we can translate it like that. Yes, we could, but... No, I confirm that there are advanced discussions on products, both in the field of our current cooperation, but beyond, which, after, will have to start the first stages of feasibility, then at the point of formulation. but these are topics that are extremely active in our discussions with Teva.

I don't think I can comment on Teva, but it is a public company.

I invite you to visit the website of Teva, the investor side, and there are the presentations that Teva makes to these investors every quarter, where we can see the free cash flow that is generated every quarter by Teva. Thank you, René.

Yes, I would perhaps add a point, David, that we had already mentioned in the past. It is that this project, this program is strategic for Teva. There has not been a single meeting of the CEO of TEA with its analysts for 18 months without mentioning this product in very enthusiastic terms. He said in these meetings that it should be the preferred product for schizophrenia patients. that the results were phenomenal, that the sales forces were ready. So this product is fundamental and that's what reassures us about all the efforts and the energy that Meteva puts in to reach approval.

Thank you. Joël, a question concerning our veterinary program. What is the schedule for the results of the Pivotal study and a possible authorization to put it on the market?

Yes, so our animal health project will start its Pivotal studies at the end of 2023 and we are considering a file deposit at the end of 2024.

Thank you very much for this clarification. We have three or four questions left. One minute, we will try to go very quickly. Rémi, what do we want to obtain in our next discussion with the BEI following this first stage? I will take another question. What is the level of confidence in obtaining non-dilutive financing in a particularly difficult market context for biotechs?

Indeed, the context is very difficult and that is why it is necessary to anticipate. It is necessary to anticipate as long as we have financial visibility, as long as we have the resources. Now, in specific discussions with the BEI, as you mentioned, we are in advanced discussions. I don't think I can give more details on this, but our objective, as I mentioned initially, is to be able to restructure the debt, to save time from the main reimbursement. So, advanced discussions, well advanced. A suivre. Merci.

Je vais prendre les deux dernières questions. Je vais te les adresser, Christophe. La première qui est un peu provocante, qui nous demande pourquoi il n'y a que des hommes autour de cette table.

Alors, c'est une bonne question. D'ailleurs, une question que je prends avec beaucoup de sérieux. Je vous rappelle que très récemment, on a augmenté la taille de l'équipe exécutive, ce qu'on appelle la Mediancel Leadership Team. with four people, three of whom are women. Our director of alliances, Hélène Martin, our portfolio director, Kitri de Beauregard, and our general counsel, Julie Halimi. and which has allowed us today to have 30% of our executive team represented by women. It turns out that the themes we are addressing today are specific themes for the different departments that are represented. By the way, we are talking about it with David. We are considering making them participate. You will get to know them. extraordinary women who helped bring Medincel where Medincel is today and we will present them to you and they will participate in some of our next meetings.

I add that the parity is respected at the level of our supervisory council with as many women as men.

And then David, the percentage of women in Medincel, remind me, we are more than 55%?

Yes, I think it's 55%. Christophe, the last question will be a conclusion. I'll ask it to you right away. So, Mr. Douate, what is your vision of the future of Medincel?

Very well. Listen, as I said, we are a few months away from a first approval. And so, with this step, we will have our first revenues, which are really related revenues, commercial revenues related to product sales via royalties. Our objective, obviously, is to bring profitability to the company. I remind you that Médincel has a rather particular history, since we were a profitable company that had grown up to the IPO without any dilution. So we know what it is to manage companies, to bring them to profitability. And now we have that in line with MIR. Et puis, on l'espère, j'espère avec ce premier produit, et puis les autres produits successifs permettront d'amener des couches supplémentaires, des bidats, de financer la recherche de nouveaux produits, etc. Ça, c'est d'un point de vue financier. From the point of view of impact, you know that the impact of our products is really at the heart of the DNA of society, this theme of humanist pharmaceutical companies. So you see that we have 10 products today in the pipe, at successive stages. All of them, as Richard said, will have an extremely significant impact on patients, and even on health systems, to make them more sustainable by ensuring the observation of patients. And we obviously plan to make sure This formulation that we have built, that we have put in place, to develop this impact in as many indications as possible, in all the countries of the world. And it's really important to Medincel. We already have two projects with humanitarian vocation. So it's one impact, two that will obviously translate into financial performance, which will ensure the future of society and also the happiness of all of us shareholders.

Merci sur ces bons mots, Christophe. Il est temps de vous dire au revoir. Merci à tous. Merci, messieurs. Prochain rendez-vous le 8 septembre pour l'Assemblée Générale de la Société.

On se trompe de réunion.

Je pense qu'on organisera une autre téléconférence quelques jours avant pour pouvoir présenter les résolutions qui seront mises au vote. Je vous souhaite à tous une bonne soirée. Merci, messieurs. Et dans quelques minutes, on enchaîne avec une session en anglais. Merci. Hello, I am David Euse, Head of Communication at Medincel. So, welcome to this video conference which follows the publication of the financial results for our 21-22 fiscal year ending on March 31st. So a press release is available on our website. So today I am with Christophe Douat, CEO of Made in Cell. Hello, Christophe. Hello, David. With us, Rémi Arango. Hello, Rémi. Hello, David. Joël Richard. Hello, Joël. And Richard Malamut, our new chief medical officer who joined us two months ago.

Bonjour, David.

So as usual, if you have questions, you can share it with us by using the chat module on the right of your screen. This conference will last 45 minutes maximum. And to start, I turn to you, Christophe, with one single question. So what were the main events for the past fiscal year?

Thank you, David. Well, we are getting closer to a very important milestone for the company, the approval of our first product. done and developed by TEVA. I remind you that TEVA filed for an application for approval and market authorization last summer. In November, TEVA showed the data of MDC IRM at the Psychiatric Congress in Texas in the States. The data is spectacular. The CEO of Teva even describes it as phenomenal. And Rick, Richard, will... I was told not to call you Rick. Sorry, Richard.

It's Rick to my friend, so you can call me Richard.

Thank you. And, you know, this data... gave us a direction to show that this product could have a very, very significant commercial potential. However, as you know, the regulatory process was extended by 8 to 10 months. The FDA requested some additional information. TEVA has to resubmit the filing and anticipates an approval in the first half of 2023. All the lights are green with TEVA, something you don't know yet, but you may have seen on its website, is that TEVA has made public the fact that they would develop a new indication for MDC-IRM in neurosciences. Teva also authorized us to mention that we were actively discussing new collaborations outside of schizophrenia in new indications. In the last few months, they've been preparing for the phase three of the second program we have with them, MDC-TJK, and we expect to go to phase three in the next few months. Last but not least, our Canadian partner AIC is ready to launch its next clinical trial of MDC-CWM, and Richard will tell us about this and the other clinical stage programs in a few minutes.

Thank you. Thank you, Christophe. As you said, we will discuss this program with Richard later. But maybe you have something else to say about what happened last year.

Yes. Well, everything else has moved very nicely. Of course, you know, a lot of our teams were busy supporting our partnered programs, TEVA, AIC, especially on the polymer side. Three programs that are in preclinical, should reach clinical stage in 2023, MDC-GRT, MDC-WWM, and MDC-STM. The team is also preparing the pivotal trial of MDC-KPT in animal health. Our phase two with oral ivermectin as part of the MDC-TTG program is going well, and we expect final data in Q4. Last fall, as we always do, we looked at different scenarios. And in the case where MDC IRM would experience a delay, we had decided to look for complementary non-dilutive financing. Jaime will give us some information. It's a great thing that we did, because as we all know, the biotech and tech sectors have really suffered since January with an average of minus 30%. And so it's a great thing that we started to work on these non-dilutive options, which will bring fruit in the next few weeks. Last, we kept working on our ESG initiatives, and one of the biggest initiatives is that we created an ESG committee that depends from our Conseil de Surveillance, a board of directors, and that committee is now fully active.

Thank you, Christophe. I take this opportunity to point out that our 2022 ESG report will be available in French and English in July. I suggest now to move on to financial results with you, Rémi. Details of the figures are available on the press release we issued today. But Rémi, can you tell us more about the financial situation of Medinsel?

Absolutely, David. Hello, everyone. Well, let me start. Like most companies, we had to adapt to the pandemic so that we could resume normally all our activities. This resulted, of course, in an increase in our expenses. They reached 32.2 million euros versus 27.1 in the year before. Three quarters of those expenses correspond to research and development activities. They made possible for us to advance our programs in preclinical with ambitious objectives for the next year, as Christophe just mentioned. We also launched during the past year the clinical study to demonstrate the concept of our product MDC-TTG. As a reminder, in our portfolio we have two programs that are supported by major foundations, which are MDC-WWM in contraception with the Bill and Melinda Gates Foundation. They gave us a grant that can reach up to $19 million. What is interesting about this program is that Medincel keeps all commercial rights. The second program is MDC-STM for malaria, financed by UNITED for an envelope of maximum $6.4 million. But this is exclusively a program for global health.

Thank you, Remy. So we get some of our revenue from this program supported by the Gates Foundation and UNITED.

Right. Our income from our ordinary activities reached 8.3 million euros during the year versus 11.8 last year. Half of those revenues come from our collaborations and the service that we render to the Gates Foundation and UNITAID. The other half corresponds to the research tax credit that we can benefit in France that reached 4.2 million euros. Right. For the past financial year, we did not receive any development milestone from our partner, Teva. However, let me remind you that at the closing of the 31st of March 2021, we had received a milestone payment of $5 million for the positive results of the Phase 3 of MDC IRM. As a reminder, we had anticipated a payment of milestone for the second program with Teva, MDC-TJK, going into phase three that we were expecting in the beginning of the year. Now we're expecting that in the second half of this year. Our operating cash burn was of 21.4 million euros at the end of March 2022. This is slightly higher than what we were expecting, and this is normal given the new phasing that we have with MDC TJK. I take also this opportunity to specify that for the current financial year, we anticipate a significant drop in our cash burn, while maintaining strong momentum in our activities. In the next 28 months, we're expecting to reach several value-creating milestones for the products that are today in our portfolio.

Thank you. Thank you, Rémi. Let's talk now about our cash position. Can you tell us what it was at the end of the last fiscal year?

Right, so on March 31st, 2022, we had 27.2 million euros composed of 24.6 in cash and cash equivalent and 2.6 in non-risky financial assets. As of today, we have a very good financial visibility that takes us until September 2023. But the efforts that we have put in the past few months since last autumn are bearing fruit. We're working on two main levers. The first one is to restructure the current debt that we have with the European Investment Bank, or the EIB as I will call it in the future. I remind you that in 2018 we obtained a loan of 20 million euros. Now, on June 1st, we reached a significant and an important first step in order to restructure this debt. What it means is that we did an amendment to the current loan. And part of that amendment includes postponing by six months the payment of the first tranche to the EIB from June 2023 to December 2023, and also changing the variable remuneration that is due to the EIB. This change in the variable remuneration will generate financial expenses during the current fiscal year. But what is important with this amendment is that this first step is essential and paves the way for further discussions with the EIB. And I hope I can tell you more about that sooner. Very, very soon. The second lever is to access additional non-dilutive financing, and we're very actively working on it. So I believe that you have understood that a capital increase is not being considered today. I should also point out that in our hypothesis for the cash visibility, we are not including revenues that could be obtained from new collaborations with new partners or new programs that could be added to the pipeline with our existing partners. Thank you, Remy. So where does it bring us in terms of cash visibility? Well, my objective is quite simple, David, and that means that with these two levers, we are targeting to have a visibility until the end of 2024. Thank you, Remy.

So the commercialization of our first product by TIVA should be delayed by a few months following the CRL received by our partner. So what impact on the company finances?

Right, so... First of all, we like to work on a scenario basis. We evaluate the different scenarios, but more important is that we act upon the different scenarios that reach upon us. So receiving the CRL was a considered scenario. However, of course, not the preferred one. But in any case, We were being cautious or conservative about the numbers. We were expecting MDCRM to be launched in the second half of this year. So with the information that we have from our partner, we're expecting then the product to be approved in the first half of 2023, which means a delay of those revenues of a few months. Now, the commercial impact of this product remains very important, and let me remind you the terms of this collaboration with Teva. So each product can receive milestone payments in development and commercial milestones that can reach up to $122 million. Now we have three products with them, so that makes a total of maximum $366 million. The next milestone that we are expecting from MDC IRM is of $4 million. for the approval. And in addition to these milestones, we will be receiving royalties from the first product that is sold. So regular revenues, we're expecting that to start kicking in as of the first semester of 2023.

Thank you. Thank you, Remy. So I suggest now we get a regulatory point of view with you, Richard. But before that, I just want to say that, Richard, you are a former member of our medical advisory board and an observer of our supervisory board. And for two months now, you have joined the company as chief medical officer. You are based in the United States where we conduct most of our regulatory and clinical activities. And I just want to remind everybody that you know perfectly our program with TIVA. because you oversaw the early clinical strategy of MDC-IRM as you were senior VP of global clinical development for pain, neuropsychiatry, oncology, and new therapeutic entities, which means innovative product, at Teva. So, Richard, can you help us to understand clearly where we are with the ongoing regulatory review of MDC-IRM?

Sure, happy to do so, David. So just a quick reminder and to highlight some of the things Christoph mentioned about the long-acting injectable risperidone product, TAVA filed the NDA in June of 2021 and made public the results of the Phase III efficacy study in November of 2021. And perhaps not surprising that statistical significance was reached on the primary endpoint of relapse rate. But what was unexpected were some of the additional findings seen in the study that provide strong differentiation for the long-acting injectable virus. risperidone product versus other long-acting injectable antipsychotics on the market. So the data was supposed to run for six months. That was the primary endpoint. But the study was to continue until a minimum number of relapses were recorded. And as the number of relapses was less than anticipated, the study went longer in duration, but the benefit was more patients ended up being treated for the full two years that was available to them. And so this study, for the first time, demonstrated efficacy on relapses and other endpoints over a two-year period in a double-blind, placebo-controlled fashion compared to a much shorter time for marketed products. The other thing the study showed was a statistically significant difference on quality of life measurements. Very difficult to show in studies in all indications, but even more so in psychiatry and other CNS indications. Further, the study showed that after the run-in of risperidone, oral risperidone, to control all the patients entering the study, the patients who were randomized to placebo had the expected worsening of relapse. But what was surprising was that the patients who received the long-acting injectable risperidone continued to improve on their scores and measures of schizophrenia. So as this product moves through the regulatory process and hopefully is approved, we see quite a bit of value for patients and for physicians who prescribe it. Now, what was not desirable was the complete response letter that Teva received in April of 2022. And I think it's important to understand that a complete response letter is not the end. It's not the end of the program. It's part of the regulatory process in which the FDA identified issues that they had with the submission and the program and provides suggestions on how to address them. And so TEVA has been working since they received the complete response letter to try to address the FDA concerns and are planning to meet with the FDA very soon to discuss their suggestions as to how to address the FDA concerns. This will be followed by a resubmission of the NDA. When that happens, it's six months from the resubmission date until the FDA renders their decision, hopefully in approval. I should also mention that through communication with Teva and our own understanding that there were no concerns with med and cell product, the formulation, the polymers, or the manufacturing sites. We also know that through TEVA that there are no plans to repeat any clinical studies, which certainly would provide a longer delay than what TEVA is providing publicly. So Teva is enthusiastic about the MedSol formulation, and this is evidenced by the fact that they're moving to an FDA meeting to discuss another antipsychotic, olanzapine, again in a long-acting injectable formulation. Teva has completed testing. a phase one study with a long-acting injectable formulation of olanzapine, which showed no safety concerns, and acceptable pharmacokinetics. They will be meeting with the FDA sometime during the third quarter of this year to discuss their proposed protocol and discuss the development requirements to move that product towards an NDA submission. And, you know, with risperidone hopefully on the market, a long-acting risperidone, the question might be why do we need another antipsychotic like olanzapine? And the answer is that while risperidone is the most prescribed antipsychotic for schizophrenia, olanzapine is often reserved for more severe symptoms and more severe cases of schizophrenia. So they will be quite complementary. Okay. And then the third thing that Christoph has mentioned is the new indication for long-acting injectable risperidone. What we can disclose is that it will be in the neuroscience area. We're not able to disclose additional information about a specific indication, but again, displays Teva's confidence in the med and cell formulation.

Thank you, Richard. And what about the other program with our partner, AIC, who will reach the next clinical stage soon?

So AIC is a company based in Toronto, Canada, who, in collaboration with us, is working to develop a formulation of Celecoxib to be injected intra-articulately in the setting of knee replacement surgery. And the value there is that we know that pain relief is important in the first days after surgery and that if pain relief can continue for a minimum of three days, there's an impact on the need for opioids beyond that. And we all know the impact and the problems with opioids when taken for longer than the few days after a surgery. So further, AIC has conducted a Phase II study in which they demonstrated that an intraarticular formulation of salicoxib demonstrated separation from standard of care not only at three days, but also at seven days and at two weeks. So a product that can demonstrate analgesic efficacy for more than a few days after surgery and as much as two weeks would be quite valuable to clinicians and lessen risk to patients. So study design for the next studies is quite critical to the success of any program. NAIC has had extensive discussions with the FDA. and external experts in the field to discuss the design of the next protocol. And so AIC is planning to initiate a 150-patient safety and efficacy study in the third quarter of 2022. Results from that study will dictate next steps and additional studies on the path to submission of an NDA and hopefully ultimate approval.

Thank you, Richard. So now I talk to you, Joel. You're the chief scientific officer at MedenCell. We won't describe all activities of your team in the last past year, but maybe you can give us an update on the portfolio of programs at regulatory stage, preclinical stage, but also at formulation stage.

Sure, David. So actually, all our teams are working at the present time to develop and advance our portfolio of products. And you know, our goal is to be able to launch the clinical activities of three human health programs in 2023, as well as the pivotal studies of our first animal health program at the same time. I would like to remind you that actually for an animal health product, pivotal studies are the last development step before filing a new drug application, so we are progressing very well on this program. We have also launched during the past financial year a phase two study aimed at demonstrating the prophylactic efficacy of ivermectin against COVID-19 and its variants. And in addition, a three-month formulation of our product is now ready to go to regulatory development. And we will wait for final analysis of this clinical study, probably in the fall, to decide on the next steps of the program. And then, I would also like to mention that we have worked a lot on extending the capabilities of our technology to broaden the range of possibilities for new formulations. And the work carried out by the research teams is really outstanding. And in the coming months, We should see the concrete applications of this research coming to development, which is really fundamental for the future of the company.

Thank you. Thank you, Joël. So, John Clement, you stay with us because we received a few questions. The first one is about the program with AIC, and it's for you, Richard. So the question is, is the next clinical trial part of a phase three? If the results are good, what will be the goal of the additional trial? And when can we expect this product to be on market? Thanks a lot.

Well, so a lot to talk about there. So again, the FDA has moved away from calling studies phase two or phase three and prefer instead to look at the statistical plan of the study, the number of patients in the study. And so even a study that's called a phase two can contribute to a submission, and a study that's called a phase three may not. So what's more important is what's in the study. And so this is a larger study than the Phase II study that was completed. It will include robust safety and efficacy endpoints, and then results from the study will really dictate what the next studies are. whether they're an additional efficacy study and to submission, whether additional work will need to be done. Development is a stepwise progress, and we use data and build on data from each successive study to determine next steps. And so to answer the final part of the question in trying to determine when this would be approved, Well, a lot depends on the study that will start very soon. And I think once we have results from that study, we will be able to be a little more certain about what the next steps would be and then give you a little more definite in the way of timelines.

Thank you, Richard. Next question is for you, Remy. Can you please outline your anticipated R&D spend this year? How much will be spent on clinical development versus other R&D spend?

Right. We do not disclose all this detail about the clinical and the other R&D spend. However, what I can tell you is that we are anticipating our expenses to go up between 10% and 15% this year. As I mentioned earlier, however, our cash burn for this year will be lower than the 21% that we reached at the end of March 2022, as we're expecting also further revenues, high increases in revenues coming in this fiscal year. And, yeah, the growth will be driven by the different activities in development, mainly.

Thank you, Remy. Next question for you. What are the non-dilutive financing options evaluated at the moment?

Yeah, I'm terribly sorry, but I cannot disclose the different discussions that we are having today. Things are moving forward. And, yeah, we keep on moving very actively on that. We remain positive about the outcomes. But I'm sorry, I cannot tell you more. We will have to wait. We will have to wait.

Okay, thank you. Richard, next question for you. What has TIVA delayed the start of the phase three for the second program, considering you had anticipated it early this year?

Well, some of that has to do with a little bit of a delay in the regulatory interactions and obtaining a meeting with the FDA. We know that the FDA, like many parts of the world, are under-resourced And so that leads to delays in reviewing documents, granting meetings, and so on. I don't think it reflects a lessening of Teva's enthusiasm about the program. Know that once a decision is made to assess whether a Phase III study should be conducted and an FDA meeting is decided to be requested, there would be a disincentive to delay on Teva's part to move that forward. So I believe that the reason for the delay is simply based on regulatory timelines.

Thank you, Richard. So next question. Still for you, what is the new timeline for the filing and expected approval of NDC-IRM TV46000 after receiving CRL in April 2022? You already said that, but maybe we can.

Yeah, no, I'm happy to say again. So, again, the fixed timeline that we know about is a six-month approval time from the day the FDA receives the resubmission to the day that they render their opinions. The variability is going to start with the meeting that Teva will have with the FDA shortly, in which the FDA will confirm that Teva's proposals to address the concerns in the CRL can be met. Once that's confirmed, Teva will perform the work needed to address those concerns. The variability as to how long that will take will depend on the discussions with the FDA. and then that's followed by writing the relevant parts of the NDA and submitting. So I apologize, I can't give you an exact date or even month when it will be approved. I think once we know that the NDA has been resubmitted, we'll have a little more certainty around six months from there.

Thank you, Richard. And the last question to that, I don't know, maybe Christophe, you will answer it, but back in 2017, Medincel started a collaboration with Sandoz to evaluate the use of BIPO technology in oncology. What happened since? Is this research still ongoing? Is this, sorry? This research. Partners? Yes, with Sanders. With Sanders.

No, it's not. At the time, we were working on a drug, an active principle, which was extremely difficult to handle. and we had underestimated, you know, the complexity of handling that drug. And one promise, actually, I made to, at the time, the CEO for Sandoz US, Peter Goldsmith, was that it would never happen again. And we actually... And he acknowledged the fact that it was also Sandoz's responsibility to have chosen such a difficult API. But what we've done now is that every time we start and work on a new program, we evaluate all the risks, what we call technical assessment, in a specific unit of Joël's department. And within six months, we understand the risks, what needs to be done, can we reach a formulation, and what needs to be done. And so every single program that we do today goes through that technical assessment. Actually, we just recently signed several feasibility studies that are going as we speak in technical assessment. And every future program that we are discussing today, whether with Teva or a new partner, will go through that step as well.

Thank you, Christophe. I think we reached the end, but Christophe, I leave you the floor for the conclusion.

Well, it's truly too bad we cannot celebrate yet the approval. In Montpellier, we do that usually in what we call piots on the beach, but we're going to have to wait a few more months, and I don't know if it's going to be a good idea in the winter, if it happens in the winter, Richard.

We'll see, we'll see.

But anyway, you know, there is a delay. It's a delay. And as Richard, Jaime and Joel described it very well, the company keeps moving forward. The next 12 months, you know, should be instrumental, should bring the company forward. Within a new dimension, you know, with the approval of MDC-IRM and the phase three of TJK and the new clinical trial of CWM. So lots of things going on. I would really like to thank all our employees for really working hard to bring the company where it is. I would like to really thank all of you, individual shareholders, institutional shareholders, employees, former employees, for your support.

And we will be talking to you soon. Thank you. Thank you, Christophe. Thank you, gentlemen. Thank you, everybody, for joining us today. Thank you. And see you soon. Thank you.