Thank you for standing by, and welcome to the conference call on the proposed merger between Erytech Pharma and Pherecydes Pharma. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during this session, you'll need to press star one one on your telephone. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Gil Beyen, CEO of Erytech. Please go ahead, sir. Thank you very much. Good afternoon, good morning. [Foreign language]. Thank you for joining us for this conference call and webinar to discuss the proposed merger between Erytech Pharma and Pherecydes Pharma. I'm here with Thibaut du Fayet, the CEO of Pherecydes Pharma, Eric Soyer, the CEO and COO and CFO of Erytech Pharma, and Didier Hoch, who is the Chairman of Pherecydes Pharma. Thibaut and I will present the proposed merger, and the four of us will be available for Q&A afterwards. We announced the intended merger yesterday evening, and the press release, the presentation can be found on the investors page of both companies' website and via the link provided in the press release. Going to slide two. Before starting, as usual, I'd like to draw your attention to the disclaimer to remind you that today's call includes forward-looking statements. As you know, they all involve risk and uncertainties that could cause actual timings and results to differ materially. Slide three, quick introduction of the presentation of the speakers for the people new to the Erytech story. I'm Gil Beyen, CEO of Erytech, almost 10 years now. Before that, I was CEO of another biotech, TiGenix. Just a small point, anecdote, I'm by training, a bioengineer industrial microbiologist. The field of what we will discuss is of strong interest to me. Let now Thibaut present himself. Yes, thank you, Gil Beyen. I'm Thibaut du Fayet, Pherecydes CEO, and I've been working in the pharma industry for more than 20 years, mainly at Transgene, a biotech in oncology, and then bioMérieux, an IVD company. Thank you. I think we can go to slide four. The agenda, three items. Quick context and rationale for the proposed merger, then a deeper view on the strategic goals for the combined entity, and finally, a presentation of the transaction terms and milestones. First, the context and the rationale, going to slide six. Quick for anyone new to the two companies and for completeness, a slide with, in short, an overview of both companies. Starting from the left, Erytech. Erytech is a company based in Lyon, in France, has a U.S. affiliate based in Boston and is listed on Euronext Paris and Nasdaq in the U.S. Erytech is focused on red blood cells. It's focused on the development of red blood cell-based cancer therapeutics, and this since its founding in already 2005. Erytech is a clinical stage company, performed more than 10 clinical trials in different oncology indications. Unfortunately, you know the story, our ambitious phase III trial in second-line pancreatic did not read out positively. This was towards the end of 2021. We then immediately launched what we called our plan B which consisted of launching a process to investigate strategic alternatives. This was with the support of a specialized advisor. In April, this led to, in April, to the sale of our U.S. manufacturing facility. We also performed a deep restructuring process, all in making sure that we keep the core R&D team and the core support functions that we thought could be attractive for a potential partner. Content-wise, we shifted the focus of our preclinical team to the development of red blood cell-derived extracellular vesicles, exosomes. It's a carrier technology that we thought had the most promise for the future of the early stage development. We have since that announcement, evaluated a large number of potential partner options. It's been a long process. We are now very pleased that we can announce this proposed merger with Pherecydes. We believe there is a great complementarity and fit between the two companies and so will explain more. Before I do that, I let Thibaut briefly introduce Pherecydes. Thank you, Gil. A few words regarding Pherecydes. Pherecydes is a company headquartered in Nantes, in France, and also located in Paris, Romainville. We are listed on Euronext Growth in Paris. Our company is a leading European player in phage therapy against resistant bacterial infection, considered the major public health issue. We are currently developing three major phage families: Staph aureus, Pseudomonas aeruginosa, and E. coli, which are considered as 2/3 of the occurring bacterial resistance infection. With these three families, we have a kind of robust and large IP portfolio. We are at a clinical stage with an ambitious development strategy around these three programs. I would like to highlight the most advanced clinical trial, which is in the phase II, targeting prosthesis-associated-infection patients, which is called PhagoDAIR, whose enrollment has been initiated previous year, which is on track and for which we expect clinical results in Q1 2024. Our treatments have already been used in real life in the setting of compassionate treatments for more than 65 patients and with very strong support from regulatory agencies and already demonstrating, first the tolerance of the phage and also kind of promising first clinical benefits considering that around 75% of the patients have controlled infection at three months. For this clinical positioning around PJI, we have also received from ANSM, which is the French regulatory agency in June 2022, this AAC status, which stands for Autorisation d'accès compassionnel, enabling us to get first level of indemnities for the treatment. That presents the two companies. Going to slide seven and this where in fact, you see the heart of the rationale for this transaction. As I mentioned before, Erytech has been looking to strategically partner for some time, because after the halt of our lead program, we were a late-stage company, but without a late-stage asset, still having cash, still having a core R&D team, still being listed on Euronext and Nasdaq. We were indeed sort of missing this late-stage clinical program. Our strategic partnering was really to find a company that could be complementary to us, bring us again a clinical stage asset, synergies in a promising area of medicine. This is what we found in Pherecydes. Pherecydes is, as Thibaut mentioned, active in antibiotic resistance. It's an area of critical medical need. They're in phase II, and we see a very strong fit and compatibility and complementarity also between the two companies on several aspects. Thibaut will go over them in more detail, but at the top level, in the middle, in the four points, in the middle of the slide, the four major areas where we think the proposed merger really can contribute to value creation is one, the fact that this merger will allow to accelerate the already ambitious clinical plan of Pherecydes in the AMR field. The proposed merger is also intended to bring complementary technology platforms together and teams together to really reinforce the efforts for further developments in the phage technology and potentially also in AMR and potentially beyond. The third one is complementarity and synergies on the management, the team and the infrastructure level. I will let also we'll come to that in more detail. Last but not least, obviously the fact that the proposed merger is expected to enhance the financing capabilities, a more visible company, sort of with listed both in Europe and in the U.S. To summarize, the whole idea is to create a true leadership position in an area of critical medical needs by building on highly complementary capabilities and by exploiting potential synergies. We'll now zoom in on the different areas, starting with Thibaut, who will explain the clinical plan and how this can be accelerated. It's on slide eight. Yes. If I move to slide eight to illustrate this complementarity regarding our clinical strategy. Pherecydes is developing phage therapies to fight against resistant bacterial infection, as already said. Consider that this major public health issue and mainly owing to a generalized misuse of anti-antibiotics. We are now for a few years facing this wall of the antibiotic resistance, which is an issue for two main reasons. The first one is that very few innovative antibiotic have been developed over the last past years, as you see on the left part of the slide, to be able to cope with this surging antimicrobial resistance. On the other hand, the mortality rate is anticipated to boom over the upcoming years, sorry. A recent report, 2016 Jim O'Neill report is forecasting global deaths to increase to up to 10 million deaths a year in 2050. As a benchmark, for instance, the COVID crisis induced around 7 million deaths. It means this amount of 10 million deaths per year is very significant. It's the reason why there is this urgent need for effective treatment and response. We consider that phage are among them. If I move to slide nine, that's the illustration of why we consider that this transaction will accelerate our ambitious clinical plan. The first major value driver consists in extending the sites and the countries beyond France for PhagoDAIR trial, which is our ongoing phase II. The one targeting PJI patient. We intend, thanks to this transaction, to extend the enrollment in other countries like Germany, Netherlands, and potentially other countries in order to be clearly positioned as a bacteriophage major European player, conducting clinical trials in the most important countries in Europe. The second important value driver is to be in a position to initiate new trials and two additional company sponsored phase II trials. One in a patient with endocarditis infection due to Staph aureus, expected to be initiated around mid-2023. The second one in patient with complex urinary tract infection due to E. coli, expected to be initiated in Q1 2024. The company expect to open centers in Europe as a whole and potentially, if possible, also in the U.S. You would understand that our strategy is clearly to have in the short term more and multiple proof of concept clinical proof of concept option, potentially impacting the value of the company. Thank you, Thibaut. Going to slide 10. Now from the clinical, Thibaut explained sort of to how can we further build on the platforms. Title says complementary platforms and capabilities. If you look at first sight, it's quite different. Red cells on the one hand, and phages on the other hand. If you zoom in more, there is indeed we found quickly that there are synergies and complementarities to be exploited in this transaction. I'll zoom in briefly on the bottom right corner, Erytech's platform. Erytech has two platforms in fact. One is the ERYCAPS, it's loading drugs, typically proteins can be antigens into red cells. The second more recent is what we call ERYCEV. It is making vesicles from loaded red cells, exosome-like technology, where we've mainly worked with antigens, and also potential we're working on RNA and other more gene type of delivery. Our app capabilities are drug delivery, clinical assay development. Obviously, most we've done is in oncology and then in protein engineering. Obviously, we've built thanks. Our lead program was a protein encapsulated in the red cells. That's Erytech. I'll let Thibaut explain the Pherecydes and how we think there are synergies between these two platforms. If you move to the left part of this slide, there is a short description of the phage technology. I mean, phage are natural viruses that we fish in hospital waste waters. In terms of mechanism of action, they have a natural tropism for bacteria that they naturally target. They have this unique mode of action, and they induce bacterial lysis by self-replication after they have introduced a genome in the bacterium. Once the bacterium has been lysed, they systematically search for other bacteria to kill. Linked to phage, we have endolysin. Endolysin is a, is a protein which is encoded in a gene of the phage genome. It's why they are related to phage. It's why we speak in a way of endolysin of phage. When the phage is replicating into the bacteria, it produce locally an endolysin, which is lysing the wall of the bacterium, the way it works. If we move to the slide 11, I will explain in a few words the complementarity of phage technology and Erytech capabilities. Yes, complementary to phage mechanism of action, it's potentially for us relevant to use endolysin technology not as a phage protein expression as I've just explained, but as a recombinant protein in itself. This protein induce as well the lysis of bacteria wall like the phage, but with a different mechanism of action to phage as not being replicative. One of the major advantage of endolysin also recombinant protein, is also that they are not generating any resistance, which is a potential limitation of the phage. With this endolysin recombinant protein, we can target also complementary to phage, the anti-infective field. It may be also of interest in AMR field, but also beyond like, you know, domain like cosmetics or other domain for which the replication of phage may be regulatory wise, an issue. In Pherecydes strategy, this technology is very important to develop complementary to phage, and it's why we see here a major complementarity. As Erytech has this strong expertise in protein engineering in terms of characterization and also manufacturing. That's why we could rely on Erytech expertise here to help us to generate endolysin candidate complementary to our phage candidate. On the top of this, techno-endolysin technology complementarity, we consider that Erytech will also bring to Pherecydes very much high value in research, first due to additional resources, enabling us, as you see on the top of the slide, new targets, new phage. We are currently working in research, but we could also accelerate the research to identify and to generate this new pathogen to the one that we're currently developing. Beyond these additional resources, Erytech will also bring high value expertise in skills like immunology, enabling us to better understand mechanism of action of phage or endolysin. They have acquired this expertise as coming from oncology. Erytech, that's the last point, has also developed this platform that Gil introduced, ERYCAPS and ERYCEV. It's an outstanding know-how and expertise in innovative drug delivery solution and formulation. We could also leverage for phage and endolysin this platform for optimized deliveries. It's an option also to use this platform as a whole to develop the carrier technology, including this platform, but also potentially considering phage as vectors, as carriers. This aspect is also highly synergetic and of high value for our development. I hand over to you, Gil. Complementarities on the platforms, the technologies. If you now move to the slide 12, we also see strong complementarity and synergies on the management, the team level, and even the infrastructure level. Maybe starting with infrastructure on the right-hand side of this slide. The whole idea is that the combined company will be headquartered in Lyon. Teams from Romainville and from Nantes to move to Lyon, where these synergies can really materialize and where indeed Lyon is a major infectious diseases hub in Europe, where we can capitalize on the presence of these institutes that you see here, like BIOASTER, HCL. There is also an opportunity. We sold our GMP facility in Princeton, U.S., but we still kept our somewhat smaller facility in Lyon. Still investigating, there is a potential here that indeed this can serve in the upscaling of the manufacturing of the phage technology. Like always in biotech, U.S. is important. The fact that we have this established U.S. presence adds to the combined company. We build from that footprint to really get access to both these different stakeholders, both regulatory, clinical, and investors. In terms of team, first of all, the boards on the left-hand side. We are composing a board with four people from each side. Indeed you already see no final selection has been made, we see a lot of synergies. The board, it's mentioned here, will be chaired by Didier Hoch. I will have the honor to co-chair with Didier. That will, we already see this working well together. Even I would say even more striking on the management team. You see here very balanced mix of people from the Pherecydes team and from the Erytech team. Didier will be the CEO of the combined company. Eric remains COO, CFO, and DGD, it's a delegated general manager of the delegated director of the company. Mix from... In In fact, we didn't have to force anything. It was quite fluid, the combination of teams. Very, very much synergy on the different fronts. That in terms of the management and the infrastructure. On the financing capabilities quickly. The combined company will have a cash position of approximately EUR 41 million. In fact, had a cash position because this was at the end of December, and audited figures, but approximative. Obviously, we'll be careful with the money so that we indeed with this cash, there is a runway into the third quarter of 2024, enabling to develop the programs as were described. Obviously the dual listing, the fact that this is the Erytech listings both in France on Euronext and on Nasdaq, will provide access to a broad investor base both in Europe and in U.S., which obviously will be important as we have a ambitious further growth plan. That's about the main, the main object, the main sort of rationale for the deal. Now to the goal. What is the goal of the whole transaction? I will go to slide number 14. Let Didier explain the ambitious corporate strategy. Yes. I'm on the slide, 15. 15, sorry. Yes. This transaction, as you see, is to position the combined company as a leading global player in phage therapy with an ambitious corporate strategy. I would like here to highlight just five points to synthesize. The first one, the expansion of the clinical portfolio in AMR, as we have just said, around the PhagoDAIR acceleration and potential preparation of a phase III. Initiation of two new anticipated phase II this year and early next year, to deliver a high clinical value to our company. Clearly, the second point, clearly, positioning the company as the main player through an intensified international development by opening new sites in Europe, potentially in the U.S., and also leveraging on Erytech's presence in the U.S., which is a major asset for our company in the upcoming months. The third point, as already explained, is really to boost R&D competencies and capabilities by leveraging on Erytech's platform, resource, and capabilities on the top of the one that we have. The fourth point, we have not that much spoken about this, but it's implementation of a consistent global manufacturing strategy, consistent with our international development, but considering first potentially to leverage on Erytech's Lyon's facility, but also consolidating our strategic industrial partnership that we have with specific CMOs. The last point, which is not the least, it's the intensification of the business development activities, and I will come back just afterwards on this point, through new research collaboration beyond AMR. Also the acceleration of our market access strategy, consisting just beyond the development of the asset strategy that I've presented. We have the status. We are interested in considering other option to enabling early access market launch. This AAC status, which is the first regulatory registration, is also for us paving the way for early access pathway. It's really something that we want to push. If we move to the slide number 16. Yes. I just would like to comment a bit our business strategy. Our business strategy is really to create value in the clinical AMR core business. Our core business remain to conduct clinical trials in AMR and leveraging in this first origin on our extensive phage portfolio to look for, you know, robust and comprehensive clinical proof of concept demonstration. Beyond AMR, we also have a strategic objective to complement this core business strategy, leveraging on the phage technology value proposition, as already explained, made of phage, endolysin and carriers. That we can now, and that we will thanks to Erytech, propose in the context of a strategic combination between Erytech and Pherecydes. As you see on the slide, in human health, we could consider potentially microbiota. But in the non-human field, cosmetic, agro, veterinary, different domain in which, specific regulatory constraints or customer needs, may push, endolysin versus phage, or in which specific carriers might be developed for phage or endolysin. And in this respect, red blood cells or vesicles, developed by Erytech or even phage, are very interesting carriers platform to investigate. In this area, the objective is to establish in the upcoming years, 2023, 2024, strategic research collaboration with industrial leader, valuing this technological assets portfolio made of phage, endolysin and carriers. Valuing in a way as a whole all our developed capabilities. Just another slide I would like to comment. I'm not going too much in detail. With such a strategic combination, our objective as a company is really to create multiple value creation points in 2023, 2024. Number one, it's of course in clinic with FPI in two new phase I, II in the year 2023, 2024. The completion, of course, of PhagoDAIR, which is our most strategic trial, again, expected for Q1 2024. Number two, in research, to be in a position to deliver end of year 2023, a newly characterized target, new program. To be moved to pre-clinical development, in addition to the one that we are currently developing. Number three, in terms of business development, have established a strategic research collaboration beyond human health, as already explained, leveraging on our technology value proposition, thanks to the newly acquired and developed capabilities. That's the main catalyst that we could anticipate. You will now, Gil. Okay. Going to the third and the last section of the presentation, a view on the transaction details on slide 19, key terms. It is a merger of equals, although technically it's an acquisition. It's a merger by absorption, fusion-absorption, through which Erytech will hold 50.5% of the shares of the combined company. The Erytech shareholders and the Pherecydes shareholders 50.5% versus 49.5% on a fully diluted basis. This ratio needs to be further validated by the merger appraiser that will be appointed soon and is also subject to the approval by the general assembly and obviously also subject to the works council consultation. We need the opinion of the works council. This is at the Erytech side. We expect that all can be done by the June timeframe. There is work to be done in between. Actions to be performed before the general assembly is, first of all, there will be a capital increase on the Pherecydes side. The Pherecydes investors will bring EUR 1.5 million in capital increase with historic shareholders. There will also be a capital increase at the Erytech side. In fact, 10% of our shares, we will increase by 10% of our shares through a contribution in kind from Pherecydes historic shareholders, which will lead to approximately 10% holding of Pherecydes. We will also start really preparing the future and doing as much as we can to really already start working on the synergies of the two companies and to hold that in good shape and to manage that, we formed a joint strategic committee. The composition is the four of us, Didier, Peter Scher, myself, and then Thibaut and Eric. The four of us will meet on regular basis to really follow the whole process between now and the approval at the general assembly. We'll make sure that we do this operational integration of both companies. It's a merger, and we will also have a new future with a new name. There's also the work to be done on finding the new name for the combined company. That's on the key terms. This will have impact on the shareholder structure. There we also see synergies in a way. Erytech, after the setback at the phase III, sort of had become a very diluted share ownership. No large shareholders, after our large shareholder, BVF, sold their remaining shares. 95% free float, that's the positive side of it. Pherecydes is almost opposite, strong shareholderships, the 20% like blocks from different shareholders and only 20% free float. The combined company will have close to 60% free float and good shareholder base, sort of, the core investors base that you see here on that third pie chart. That's, I think, another advantage of this merger. To summarize, as we said in the press release, that this is a transaction that will to benefit for all shareholders, and I can also say for stakeholders and for the employees. For the shareholders, starting in the middle of the higher financial visibility, two companies with a new story, larger market cap, with increased share volume and liquidity, with value creation through the milestones that Thibaut mentioned, clinical R&D partnering. We think that also can lead. We'll do it in an ambitious way, as we have to with the Nasdaq listing also. Trying to get growing interest from new investors from M&A, most obviously, this all by accelerating value creation through the different plans that we mentioned. With this, we think it's a unique opportunity for the shareholders, the stakeholders of both companies. With this, I think we come to the end of the presentation. I'd like to open up for Q&A. Certainly. Ladies and gentlemen, if you'd like to ask a question at this time, please press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, please press star one one again. One moment for our first question. Our first question comes from the line of Jacob Mekhael from Kempen. Your question, please. Hi there, and thanks for taking my question. First of all, congrats on the deal. I just had a few questions on the phage technology. If I understand this correctly, is this a therapy that will be personalized for each patient's strain? If so, how scalable is the process, and how long does it take? How long does the end-to-end process take? My second question was also, do you plan to commercialize the treatment internally or is there a plan to find a partner as the trials progress to later stages? I had one more question on the ongoing phase II trial in joint infections. Is there a plan to expand this trial to the U.S. as well, or would you then plan to do that if you initiate phase III? Okay. Thank you, Jacob. Yes. Okay. That's for Thibaut. Many questions, but yeah. We'll start with the first one. Is phage approach personalized? I mean, we are developing a different approach at Pherecydes. The first point, and it's why we call this approach not personalized, but precision phage therapy. First in research, we select a few phages per family so that we can ensure maximize coverage of the patient incidence. It's been that for our Staph aureus family, we have potentially three Staph aureus phage. It comes to the second point. It enables us to have off-the-shelf products that are GMP manufactured because here there is a main difference with other philosophy considering a personalized approach. We are making the phages therapy enter the pharma industry with GMP manufacturing. It's why we have these off-the-shelf lots. The last point, the third point is that we have developed an IVD solution which is called Phagogram, and for which we are confirming in vitro the efficacy of the phage that we have developed. In that we are just administering to the patient, the phage that are found to be positive in vitro. In that, with the kind of pre-confirmed efficacy of our phage. It's why in terms of lead time, it's quite short because currently we have a central lab in which we are operating this testing. It lasts not more than 48 hours. After that we can administer the relevant phage or the relevant combination of phage to the patient. That was the first question. If we want to commercialize our product, this option, you know, it's not yet decided. It's open for discussion. As and it comes to your third question, will you find partners? Currently we are biotech. I would say that the two strategies are open. To find, you know, a potential pharma partner, once we have demonstrated the proof of concept or vertical integration down to commercialization. As an example, you know our main competitor in the U.S., Adaptive Phage Therapeutics, they want to be vertical integrated, and they intend to commercialize our product. I think it's not. It's still a decision to be made. What we can tell you is that our early access pathway that we can leverage, it's also for us a very key point to consider because it could enable us to commercialize our product in not such a long timeframe. It's why it's a work to be done. Then, the, your fourth question related to phages therapy to trial. Currently, the phase II trial is in Europe, mainly, in the countries I've just spoken about. Our intent currently is to initiate a phase III, pivotal phase III in Europe and in the U.S. That's our current plan. For other trial, there is an objective also to consider the U.S. for new sites. Is it answering your question? Yes, it does. Yeah. I appreciate that. Thank you. Also I just had one more question about the phages. Where do you obtain those phages from? Is there a library that you use? Is there some competitive advantages that you can gain from that versus other competitors? Yes. We have internally a library of phage. We are regularly fishing phages. As I've said, we find them in the wastewater of hospital. We have this library of phage that we are selecting and characterizing, so that we select the most relevant one. Again, this library is large and regularly updated. Okay. Thank you very much. Thank you. Thank you. Once again, if you have a question at this time, please press star one one on your telephone. I'm not showing any further questions from the phone lines at this time. I thank everyone for your participation and attention today. You can imagine that we will be busy in the coming weeks and months, obviously we will keep you posted on our progress. In the meantime, we wish you all a good rest of the day and speak soon. Thank you very much. Bye-bye. Thank you. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.