Okay. Good afternoon, everybody. Welcome to Cantor's Global Healthcare Conference, day one. I'm Kristen Kluska. Very happy to have Daniel Tassé, the CEO of DBV Technologies, with me today. Thanks so much for being here. Very happy to be here. Thanks for having me. Okay, great. Maybe just to kick off our discussion, do you mind providing a high-level overview of the company? We're a biotech company founded by two French academics who figured out that the human skin is a pretty powerful immune organ and found a way to use that to desensitize patients with allergies. By training pediatric gastroenterologists, they focus on food allergies first. Thus, we are an immunology company targeting the use of cutaneous tissues to treat food allergies in children. We've targeted peanut. Okay, thanks. To kick things off, let's talk about the peanut allergy landscape in more details. I think there have been some misconceptions out there related to the prevalence of peanut allergies as a result of medical guidelines that suggest that early introduction could help. Why is this not the case? While the LEAP study was indeed successful, how strict was the protocol, and how does this translate to difficulties following it in a real-life setting? Well, thanks. It's an important question. Let's start with data, what we know. Dr. Ruchi Gupta and her team at Northwestern have done the best work when it comes to surveying epidemiology. It's unchanged. Her survey 10 years ago showed 2%- 2.2% is the incidence of peanut allergy in American children. The survey she updated in April was 1.8%- 2.2%. It's unchanged. Introduction of peanut early as a means of essentially preventing developing peanut allergy is not a bad idea. The reason why it hasn't been successful, you touched on it. The seminal trial done by Dr. Gideon Lack more than 10 years ago, the LEAP trial, was testing one specific hypothesis. Children five to 18 months of age that already had eczema and had already been diagnosed either peanut and/or egg allergies. They were at very high risk of developing a peanut allergy. When we say prevention, it's prevention in high-risk children. The treatment was to give them peanuts regularly. What is lost in all of this is the treatment was to give these children one and a half to two teaspoonfuls of peanut butter three times a week for 60 months. That, unfortunately, some of it just does not translate for most families. Dr. Gupta, who authored the survey, famously said at the FDA Food Allergy Expert Panel back in February that this is medicalizing dinner, which is the reason why, again, although it may work, it has not turned out to work. Importantly, I'll add one thing. Introducing peanuts early has brought one important development. The age of diagnosis now of peanut allergy in children is younger than before. It's between the age of 18 months and three years, which is great, because the earlier you're diagnosed, the more plastic the immune system, the more whatever choice you have of therapy is likely to be successful. Okay, thank you. Bearing this in mind, what is the true prevalence out there today? What is going to happen eventually as patients age out of the range that Viaskin was tested for? How do we also account for the added incidents, especially if patients are getting diagnosed earlier? Yeah. So again, 1.8%- 2.2% is the number that has been in place now. That translates to children age one to seven, the population we are targeting with Viaskin Peanut to be a bit more than 600,000 kids in the U.S. So there is about 100,000 children per year of birth cohort mix of the population. Although our indication will be one to three and four to seven for our two BLAs, it is one to three at age of initiation and four to seven at age of initiation, so there is no aging out at seven. There is no need to change patch at the age of four. Okay. Does that answer your question? Yes, it did. What do you believe is the current appetite for parents to want to see treatments for peanut allergies for children? Yeah, the appetite continues to be very high. We've spent a lot of time talking to parents, talking to caregivers. Peanut allergy, of all the food allergies, is the highest order need. Many parents in market research, usually a father trying to be funny, so the dad joke kind of way would say, "If you can take peanuts off the table, that would be big news for us." Because peanuts are ubiquitous. They are hidden in many foods. The reactions are unpredictable. They can be quite violent, quite serious. You can avoid shellfish. You can avoid sesame. It's very difficult to avoid peanuts. Yeah. The appetite is unchanged for treatments that would make a difference in the quality of life of families. Okay. That said, what is the trade-off that these parents are willing to consider when it comes to safety? Considering things like anaphylaxis risk, the convenience, and then the time spent in the clinic, especially when we consider this isn't a chronic condition where patients can real-time feel and experience their symptoms every day. The last part of your question is really important, by the way. Thanks for asking it. Yeah. Because this is something, again, if you engage the right dialogue with parents and with caregivers. It's asymptomatic, except for the fact you live with fear every day as a parent. Today is the day I'm going to get a phone call from the school, from the basketball coach, from the dance recital teacher, and all of a sudden, our life has changed because my child has eaten a cookie, a brownie, or a handful of something they shouldn't have done here. So it may be asymptomatic. It's a presence daily here. The trade-off that parents are looking at is not really a trade-off, it's an addition. We are reading labels. We talk to the babysitter, we talk to the school staff. So we're vigilant. We have an EpiPen handy in the glove compartment, in the kitchen, on us when we travel. That remains. What parents want to know is if my child does accidentally consume peanuts, their reaction will be very little or nothing. Again, it's very often Viaskin Peanut presented as an airbag in your car. You wear your safety belt, you're following the rules of the road. If you hit that tree, you want that airbag to deploy. In some ways we're in the airbag business. Yeah. That is very comforting. I shouldn't be able to say that word, comforting. Comforting to parents. Yeah. Are the homebrew options that we sometimes hear about- Yeah common amongst clinics? What percent of doctors actually practice this, and is it something that requires time and capacity with their practice and everything else that they're doing? It does require time. There are 4,500 allergists in the U.S. About 100 of them practice OIT at scale. It's their business, they do oral immunotherapy to desensitize patients for any form of allergy, whether adults or pediatric. Their practice is set up to do that. This is what they do. They expect phone calls 24/7, so their staff is trained to answer them. Even how their office is set up is such as to make OIT easy, and most of that is homebrew. The other 4,400 allergists do very little OIT, and for patients who want to do that, they tend to refer them to those 100 clinics here. So we have a situation where a small percentage provide all that care because to provide that care, you have to commit to doing that at scale, and that's a choice that practices make. Most of them choose not to. Okay. That make sense? Yeah. Xolair, we hear that it's been a great addition for patients. Yeah. The scripts have gone up dramatically since adding food allergies to the label, but we do hear that it's more common in adolescents and adults and very little usage in younger patients. Why do you think that's the case, particularly as these patients may present with multiple allergens at once? Yeah. There's two schools of treatment strategy for food allergies. Desensitization, re-educate the immune system as to not recognize the allergen as being dangerous. That's what OIT is meant to do. That's what our product is meant to do. Our product is very much meant to do. The other one is blockade of IgE expression as to manage the symptoms if you do have that accidental consumption. Allergists and parents prefer desensitization in young children because their immune system is plastic. Disease modification is very much an opportunity. What we see is in the 1-7 population of children with a peanut allergy, whether peanut alone or peanut as part of a multi-allergy picture, the use of Xolair is about 1%. It's for children who have really, really severe disease and seems to be the best choice. That's what it's limited to. In younger children, desensitization is preferable. Our competition is really convincing parents to add our patch to vigilance and carry on. Okay. Thanks so much for the overview on the space. Maybe we can seg into your product, Viaskin, and the commercial outlook. Yeah. With your EPIT technology, can you talk a little more about how this works, even without the need to increase the amount of the allergen, Yeah which is what we typically see for others? Yeah. I'll give you the CEO answer as opposed to the Therasuit answer to this. Okay, yeah. We're obviously tapping into a complete different biology than OIT is. OIT requires this escalation of dose as to induce the sort of symptomatic reaction, fatigue, which is really what OIT does. In our case, we're trying to re-educate the immune system. The same dose, which is minuscule, 1/1,000 of a peanut kernel is what we give to the skin, into the skin every day. What happens is the patch allows this minuscule amount, 250 micrograms of peanut protein, to penetrate the skin, to be recruited by Langerhans cells, which are antigen-presenting cells. Through that, there's a distal mobilization of what is mostly a Treg modulated response that, again, just essentially re-educates the immune system so that when the patient is confronted with peanut protein in their diet, the reaction is significantly muted. It's pretty significant because the entry dose in OIT is 1 mg, and they may take it up to 310, eventually take it to a few thousand grams of peanut, mgs of peanut a day. 1 mg is the entry dose. Our patch is 150 micrograms. If some kid managed to rip the patch open and lick every last molecule of peanut protein, that's one-fourth the dose- Yeah of what would be the entry dose in OIT. So we're tapping into a complete different biology. No need for escalation. Again, the safety profile is pretty remarkable. As you can see I'm a fan. Yeah. I would hope so. How would you say that Viaskin's data and safety package to date compares with other therapies we've seen tested for peanut allergies? I think it tests best, quite simply. First of all, clinical studies are done differently with different endpoints and different- Of course, yeah. criteria, so we know very well to compare with a grain of salt here. But I am happy you linked together efficacy, safety, and ease of use, because you want an outcome. Right. In the therapies, it would be three, four, or five years of desensitization. You do not get an outcome unless there is treatment compliance. Yes, you want efficacy, but you want safety, you want ease of use. These kids can easily stay in therapy for many years and get the ultimate outcome that we want out of it, and this is where we have shown a fundamental difference towards anything else that is available over there. The first patch will be applied in the doctor's office with one hour of supervision, and after that, the rest of the treatment is entirely at home. You put the patch on your kid's back, you tussle their hair, or you dry them off after their bath, and be a kid. Chase the dog, climb a tree, go to basketball practice, which was not possible with OIT, still is not. I think the convenience at the intersection of efficacy and safety is the beauty of this product, is that will give you an outcome. I agree, and the way we think about it is that all three of those go together, right? There is no efficacy if you are not using the product correctly. There is no safety if you are not studying it every day. Well said. Thank you. I think one other thing that's been really fascinating to us is seeing the results beyond that first year in the clinical trial, which of course you measure for study purposes. Can you talk about some of the longer-term effects you are seeing? Yeah. Just to add to the point you made so elegantly a minute ago, you don't get long-term results unless patients are on long-term therapy. Yeah, exactly. So- If it's safe and you stay on it. and so that is what we are seeing here. The best data we have obviously is now three years of maturity from the data in one to three-year-old, the pivotal trial that will support a registration in children one to three. What we saw is after three years of treatment, seven out of 10 kids, or 68.2% of children putting Viaskin Peanut after three years could consume the whole food challenge, which is 12 to 14 peanuts worth of peanut protein Wow okay, without having an allergic reaction. So from kids who at entry reacted to a fraction, sometimes peanut powder at entry Right after three years of treatment, they could consume 14 peanuts and not an anaphylaxis, not have a reaction, is rather remarkable. Now, what we have to add to this is the sustainability of that result. Right. That is important, obviously. Data we have suggests that it is there, and we are running the THRIVE studies, as you know, on very little patients to make that dream. Okay. I think in a prior life, investors viewed Aimmune and the Palforzia product as the best comp when thinking about how do we properly value DBV shares. Why do you believe this comparison is perhaps inappropriate? Well, it is appropriate in some ways, not appropriate in one important way, if I may. One thing that is sort of forgotten in the Aimmune commercialization story is two important points that are validating to us. One, the product was quasi-universally recommended by allergists to parents of a child who had just been diagnosed with peanut allergy. So the willingness to prescribe in this emergent therapeutic area was high. Two, they did a pretty good job on market access. Yeah. They had a fair price. They had reasonable co-pays, reasonable buy-down programs, solid distribution through specialty pharmacy. So if a product is willing to be prescribed, a product is adequately reimbursed, but fails, maybe the problem is the product, not the willingness to. This is where the contrast between what OIT is with this imposition. The child has to be quiescent for three hours a day, has to avoid anaphylaxis on treatment, which most kids can not do, versus our product, 10 seconds, put the patch on and move on, is the fundamental difference between the two, and where the analog comparison sort of breaks down. Okay. Are there other comps or areas that we should maybe perhaps instead consider as a fair comp when thinking about market size, sales potential? Well, market size, it starts with 600,000 kids in the U.S. who have a peanut allergy. Most of them, once diagnosed, get an EpiPen or an epinephrine device. Sure. To us, as we factor the market, that marks if the child is allergic, and the parents are taking it seriously. Yeah. That is a marker of engagement versus the marketplace. When it comes to comps for market penetration, good work has been done by many analysts. Yeah. I have to give kudos where it should go here. The analogs that are the ones we are looking at, and I am not going to give you the specific analogs we are looking at because we are still doing the work here. Sure. Anything that is a pediatric condition where the consequence of not taking the medication is important. Compliance matters a lot to the outcome, we think are good analogs here, because that's what we need with our product here, is not symptom relief as much as this willingness to stay committed to therapy to get the right outcome. That leads us, again, to pretty high confidence that this product is going to be a blockbuster. Okay, thanks. Maybe let's shift on regulatory side of things. You've appeared to have a lot of thoughtful discussions with the FDA even before the BLA filing. I would imagine the breakthrough therapy designation probably helps with that. It does. What are you able to share with us about how your conversations are evolving? Yeah. So a lot and thoughtful, I think both adjectives are absolutely adequate here. The genesis of all of this is the breakthrough designation. The FDA will have to review a product that has no analog. Nobody else, epicutaneous immunotherapy is not a thing. It is a DBV thing. It is only us doing that. We are the only technology that does it. It is a drug device combination with a drug as a biological, so the regs are complex also. We welcome the dialogue with the agency to make sure that the BLA was not only complete, which is important, but also, given the size of it and the complexity of the product, built in a way that would make the review by the agency to be best. The two areas of focus were module 3, chemistry, manufacturing, and control, CMC, and the organization of the clinical data, and the biostats package estimate the ability of the agency to mine the data and interpret it to be the one they want to have there. So that dialogue has been very rich and very fruitful, and we are getting close to closing it out. Okay. What was the latest alignment you and the agency had about a package that would be deemed appropriate for submitting and potential approval, and have you completed these steps? Recognize you are still working on the module part of things, but like in terms of data- Yeah sets and trials. All the trials are done. We have whatever we need to support registration. The VITESS trial is large enough, obviously, more than large enough to support efficacy, large enough to support a safety database. The CMC dossier is complete and, again, organized to the FDA's satisfaction. Now there's a few questions to be finalized again on structuring the data, estimate the analysis by what is the vaccine division reviewing an allergy product to be helpful to them. That's what's left to do. Okay. Make sense? Yeah. Yes, it does. What are some of the steps you're taking as a company now to prepare for potential approval, and what steps might you just wait until you officially have an approval in place? It's an important question. Thank you. Well, there are things we're doing right now because you don't launch a blockbuster with a six weeks notice here. It's months and months and months of work here. Engagement with the medical community, medical affairs, KOLs around what the science is one thing we're doing. That's a big investment. Engagement with payers to think about price, strategic pricing, tactical pricing, as well as par on. That discussion is taking place also. We are starting to build up inventory of patches, obviously, to be able to support commercialization. We're also doing a lot of market research with parents, understand what's the best way to engage with them, because it'll be a big part of the decision. That's happening now, and part of our investment into the launch. Closer to launch will be obviously buying media, that's a given. Lastly, obviously hiring sales. Okay. We've been working hard at it for a good chunk of time now. Yeah. Going back to one of our earlier points, we mapped together that, one, patients are just frankly getting diagnosed a lot earlier, and two, the immune system might be the most plastic it is at such a young age. That introduces the THRIVE study, which is going to be really important for you to learn about desensitization, since you're introducing the allergen at a really early age. Yeah. What are you hoping to accomplish or learn from conducting this study? Yeah. Again, thanks for asking. We get into this business in biotech and want to explore new science because we want to change the world. This is the study we hope will show that EPIT is a great way to go, the best way to go, to bring what would be a lifelong desensitization, reeducation of the immune system in these patients here. The idea is to treat kids 6- 12 months of age that have a peanut allergy with the patch for 3- 4 years. There would be an assessment at three years of clinical response, maybe another year of therapy for ones who respond well, but not fully. After that, we have a number of endpoints that have to do with what we call ad lib consumption, the child's ability to live with peanuts the same way a child who has never been diagnosed with a peanut allergy can live with it here. It could be a mix of consuming a lot of peanuts in one sitting, consuming a handful of peanuts a few times a week. Importantly, this is where I think Pharis talking. By the way, Gideon Lack, who ran the LEAP trial, is one of our two Yeah co-PIs in this study here, so we are bringing his expertise as well as Dr. Peretz in Melbourne, Australia. I am trying to think. The idea here is to show whether or not this is the right way to expose a child's immune system to peanuts, as to not only show the ability to consume peanuts freely, but importantly, capture what matters to the parent. So we will be asking parents at the start of the study, "What is the quality of life endpoint that matters to you?" What we hear from parents is fascinating. "I don't want my child sitting at the peanut table at school. Yeah. That, to me, would be an outcome. I want to be able to send my child to camp and not lose sleep for those three weeks because the phone might ring in the middle of the night." So it is really important that we capture that also as part of the endpoints of the THRIVE study. It is five years of work, so we are many years away from the results. But if it is a study we expect it is going to show, we will have made a big contribution to the health of hundreds of thousands of kids. Yeah. Putting it all together, I think, looking at this audience, I bet every single one of us knows somebody personally impacted by peanut allergies. Yeah. You have de-risking phase III data. It is safe. It is a convenient product. What do you think the market is misunderstanding at this point that is leading to the Yeah undervaluation of DBV shares, and why should they look at the company today? Well, maybe I am a lousy CEO. No, that is not true. But I think there are two things here that we have to recognize and accept. First of all, I do not like my stock price. Right now, the company is worth a lot more than what we are right now, $ 1.3 billion, $1.4 billion of valuation. But people who have been close to the company understand that this is a factor of two things that will play out in time. One, we have had a long regulatory history. Yeah. I think we get to file acceptance. We can file approval, but I think file acceptance will be an important milestone of having this long, complex regulatory history behind us. Again, hats off to the agency for playing their role in us getting there, by the way. The other one is we need to raise capital to launch, obviously, this product. We are in a good position. We have cash for one more year. We are investing heavily in everything we need to do. But there is also a financing to come factor here that will play out naturally. The stock price will migrate to where it should be. But I think the value of the enterprise is more than we are right now. Okay. Any other closing comments? No, I'm happy you asked about THRIVE. It's an important Yeah study for us because, again, we get into this business because we want science to change the life of patients. Yeah. That study is very promising. Everything we know about our product, every biological marker we look at suggests that we can have this long-term benefit of bringing ad lib consumption. That study would be the cherry on top of everything. Okay. Thank you. Well, Daniel, thank you so much. We're rooting for you. Hopefully, next year, we can talk a little bit about what commercialization looks like at our fireside. Absolutely. Okay. Thanks for having me. Thank you. Thanks, everyone, for joining us today. Thank you.