Vivoryon Therapeutics Stock

Good day, and thank you for standing by. Welcome to the Vivoryon Therapeutics 2026 H1 Results. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Julia Neugebauer. Please go ahead.

Thank you, Marilena. Good morning or good afternoon, everyone, and thank you for joining us today for Vivoryon's first half 2026 results call. Earlier today, we issued a press release reporting our first half 2026 financial results and business update, which can be found on Vivoryon's website at www.vivoryon.com.

On the call with me today are Frank Weber, our Chief Executive Officer; Marcus Irsfeld, our Chief Financial Officer; as well as Michael Schaeffer, our Chief Business Officer.

Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning future transactions, the development of Vivoryon's core platform, the progress of its research and development programs and the initiation of additional programs as well as results of operations, cash needs, financial conditions, liquidity prospects and strategies.

Should actual results differ from the company's assumptions, ensuing actions may differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.

As you can see on the agenda for today's call, I will begin with an overview of our progress throughout the first half of 2026 as we continue to advance our strategic priorities and strengthen the body of evidence for varoglutamstat in kidney disease. I will then hand the call over to Michael, who will share some new preclinical data, which provides further insights into the mechanism of action underlying the compelling data we have seen with varoglutamstat in clinical studies. Frank will then share details on the growing momentum behind our strategic partnering discussions. He will be followed by Marcus, who will review the first half 2026 financial results before we conclude with Frank. Following the prepared remarks, we will open the call, and we'll be happy to take your questions.

I would like to start by providing a high-level overview of our progress throughout the first half of 2026. Throughout the reporting period, we have seen growing momentum and increased strategic interest around varoglutamstat from a range of external parties, and we are aware of the market's focus on latest developments. We obviously can't go into too much detail, but what we can share is that there are multiple strategic discussions progressing, including advanced term sheet negotiations for a potential licensing agreement.

Frank will provide a more detailed strategic update in a few minutes. On the R&D front, we continue to present and generate interest at important international medical conferences in the kidney space. In March, we presented a poster at the World Congress of Nephrology in Japan, further validating glutaminyl cyclases as promising targets in diabetic kidney disease, in short DKD. We previously showed in the Phase II VIVIAD and VIVA-MIND studies that varoglutamstat had a greater beneficial effect on kidney function in elderly participants with diabetes than in those without diabetes.

At WCN, we built on these findings by showing that the effect was maintained or even higher in participants with diabetes who had lower baseline kidney function. This is extremely important because it shows that varoglutamstat has a beneficial effect in those patients with the highest risk of or already impaired kidney function. These data continue to support our rationale too as a next step in development, pursue a dedicated Phase IIb study in advanced DKD, where there remains a significant unmet need for therapies that can stabilize or improve kidney function.

As many of you know, varoglutamstat is differentiated from other approaches in development in spanning multiple pathways that underpin inflammation and fibrosis, key drivers of kidney disease progression. Throughout the first half of 2026, our science team has continued to expand the preclinical data set around varoglutamstat's mechanism of action in kidney disease. Previously, we had shared work that we have done to better understand the molecular mechanism, including data highlighting varoglutamstat's role in collagen maturation, and in reducing reactive oxygen species. As a reminder, if you would like to learn more, there's a detailed scientific webcast on our website under the Our Approach section.

In a pathway analysis, we have now investigated the effect of varoglutamstat on endothelial cells. These cells are a crucial important part of the kidney filtration barrier and their integrity is an essential factor in maintaining proper kidney function. Michael will highlight some of the key findings, which we believe further support varoglutamstat's potential to be a game changer for kidney disease.

The target molecules of varoglutamstat, that glutaminyl cyclases play an important role in a number of pathways related to diseases of the kidney. Our continued progress in understanding how varoglutamstat supports and potentially restores kidney function further strengthens the link between its mechanism of action and the exceptional clinical results observed to date. And we have already seen this deeper understanding support our discussion with potential partners.

Finally, based on our current planning, we maintain the expectation that our cash runway will extend into the fourth quarter of 2026, and we continue to actively explore strategic and financing options to strengthen our financial position. Overall, we believe we are in a strong scientific and strategic position to advance varoglutamstat and to realize the next phase of value creation.

And with that, I would like to hand the call over to Michael. Michael?

Thank you, Julia. So welcome, everybody, also from my side. Yes, well, as we have been reporting in the past, we are continuously analyzing data from preclinical activities to deepen our understanding of molecular mode of action of glutaminyl cyclase inhibitors. And we have informed you also in the past about the comprehensive scientific validation showing that the downstream actions of our glutaminyl cyclase inhibitor, varoglutamstat are predominantly mediated by reducing the activity of pro-inflammatory and pro-fibrotic molecules ultimately resulting in reduction of inflammation as well as tubulointerstitial fibrosis and glomerulosclerosis.

And now we report here a new finding. The further analysis and RNA profiling from CKD animal models showed that in addition, varoglutamstat is improving endothelial cell function via the HIF pathway activation. HIF or hypoxia-inducible factor is a transcription factor that when activated kicks off a cascade of events, including metabolic reprogramming and modulation of innate and adaptive immune cells, both resulting in cellular protection and metabolic integrity.

So let us get this all into the framework of our current MOA overview. Next to the downregulation of inflammatory and fibrotic signals reported earlier, we now must add a third layer here for varoglutamstat effects, which is the activation of the protective HIF pathway. Some of the expected benefits of HIF pathway activation include reversal of capillary rarefaction by promoting the growth of new and healthy endothelial cells to rebuild the capillary network in the kidney, improved oxygenation and survival by activating the vascular endothelial growth factor, VEGF and its receptor, supplying starving renal cells with necessary oxygen and nutrients, reduction of interstitial fibrosis by relieving chronic tissue hypoxia and breaking the cycle of inflammation and extracellular matrix protein deposition, which otherwise would lead to permanent kidney scarring.

So to sum up, it is really worthwhile to note that in the entire scientific community, the full understanding of the HIF pathway-induced changes on immune cell metabolism and associated changes in cell function is still somewhat in its infancy. However, at the same time, it's true that HIF is a rather new but already validated therapeutic drug target. GSK's Jesduvroq and Akebia's Vafseo are just 2 examples of FDA-approved HIF activators, which are prescribed for anemia associated with chronic kidney disease.

And with this, I'd like to close and now on to Frank for an overview on current activities.

Thank you, Mike. Thank you, Julia. So I will talk about the strategic imperatives and priorities of Vivoryon. It will be a very concise and short presentation. The objective is to give you a correct update where we are as a company, but also keep the confidentiality of the communications and negotiations with other parties, which is in the best interest of Vivoryon and the other involved parties.

So let's go into details. Vivoryon follows multiple tracks to secure development of varoglutamstat in kidney disease. The company, Vivoryon is currently in advanced term sheet negotiations for a licensing agreement for varoglutamstat with the pharmaceutical biotech company. We hope and expect that these negotiations will continue and be successfully completed in the upcoming weeks. We also are evolved with a specialist kidney investor who is independently assessing varoglutamstat's potential in kidney disease for a potential investment.

Also here, we expect updates and the conclusion within the next couple of weeks. Additionally, further discussion at various stages with additional strategic parties are ongoing to maximize the full potential of the QPCTL platform in kidney diseases. While we expect, hope and believe that we can conclude those negotiations successfully in the next couple of weeks, I want to remind you that there is no guarantee that there will be success.

With that, I will hand over to Marcus.

Thank you, Frank. I will now walk you through the financial figures for the first half of 2026. Research and development expenses in the first half of 2026 amounted to EUR 1.7 million compared to EUR 2.8 million in the first half of 2025. The reduction of EUR 1.1 million was largely attributable to a decrease in clinical development costs of EUR 0.6 million related to kidney research and reduction of associated patent and consulting fees of EUR 0.2 million.

We have seen a decrease in G&A expenses with costs of EUR 1.7 million for the first half of 2026 versus EUR 2.8 million for the first half of 2025. The decrease of EUR 1.1 million was largely attributable to lower noncash effective share-based personnel costs and a decrease in legal costs. All of this resulted in a net loss for the first half of 2026 of EUR 3.4 million compared to EUR 5.5 million for the first half of 2025.

The company has EUR 2.4 million in cash and cash equivalents as of June 30, 2026, compared to EUR 5.6 million as of December 31, 2025. We have maintained our cash runway into Q4 2026, which does not include any funds from the standby equity purchase agreement. Our spending plans continue to support the kidney disease strategy, and we continue to actively pursue additional financing and partnership opportunities.

Before we come to the Q&A, I would now like to hand the call back to Frank for wrap up.

So let me summarize where we are today. And the strategy is to developing new therapies with aim to preserve kidney function and prevent progression of kidney failure. There is an important significant unmet medical need in diabetic kidney disease, and that includes the latest portfolio events in other companies where we are sure that nobody is ahead of us with a similar or competitive data.

There are many millions patients in the U.S. and Europe with diabetic kidney disease Stage IIIb and IV. And the primary goal of our new treatment is to stabilize and improve kidney function long term. We have compelling data with our lead program, varoglutamstat, both clinical and preclinical. We have a differentiated mechanism of action targeting pro-inflammatory and pro-fibrotic pathways, and we showed today a new avenue of a pathway where we also positively affect endothelial function in kidneys.

We are targeting to be the first oral agent to show improvement and long-term stabilization of kidney function. Altogether, Vivoryon and varoglutamstat is an attractive opportunity with defined value creation steps. There's substantial market creating a blockbuster potential. And we are in advanced partnership negotiations, which are ongoing. And I have already commented about how things are and how they go forward. And due to the confidentiality also in the Q&A, we cannot further elaborate on this, and I'm sorry about this. Thank you.

[Operator Instructions] And this question comes from the line of Sushila Hernandez from Van Lanschot Kempen.

So this is [ Anna ] on for Sushila. So you further elucidated the mechanism of action of varoglutamstat. And it would be great if you could just give some color on the mechanics and specifically on whether the HIF-VEGF activation acts as a direct driver of the endothelial benefit or more of a downstream consequence of the broader effects? And also related to that, do you have any early data or expectation on whether this is localized to the kidney or whether it could also be showing up systemically?

I did not get all of your question, unfortunately. So it is localized in kidney, yes. And there are, of course, multiple factors in the HIF pathway, VEGF, the VEGF receptor, [ HIV-2 ]. There are other molecules we've been looking at where we found activation of those molecules. Again, this is pretty new findings also, so we are still about to elaborate this further. I don't -- I'm not sure now whether this answers your question because I didn't get really the first part or if you have further needs for information.

And just to circle back to the cash runway into Q4. How confident are you that the licensing deal or the financing from the kidney-focused investor will materialize? And would you draw the SEPA deal to extend your runway?

Yes, maybe I take this one. So we are confident, and I think we have good progress in advance, but there is never certainty because these events are in the future, and nobody can predict the future. So there can always happen a thousand things. But the strength of our approach is that we are working on multiple layers and multiple opportunities. And we believe that at least 1 or 2 of those should bear success in the next couple of weeks.

We are now going to move to our next question, and this one comes from Joseph Hedden from Rx Securities.

It's exciting to see you talking about advanced negotiations on a potential licensing deal.

Joseph, you are very faint. We can barely hear you. Sorry.

Can you hear me now better?

A little bit better.

So it's exciting to hear you talking about advanced discussions regarding a potential licensing deal. Appreciate confidentiality prevents you from saying too much. But just broadly, in terms of structure, is this a deal that would allow you to conduct the Phase IIb study as planned? Or would it then be completely in the hands of the partner? And just on that, is the potential partner experienced in the kidney disease space?

So we will not do any further comments on those because from all those can be drawn conclusions. And I think these are good and valid questions. In the interest of the company and the shareholder and the agreed confidentiality with other companies, we do not comment further. Yes. Sorry about this. But I think it is a very favorable setting for the company overall. So we try to preserve shareholder value and create shareholder value and company value with such an agreement, but I have to stop here.

We are now going to move to our next question, and this one comes from Tom Rosenfeld from Intron Health Research.

A couple of questions from me. The first on the licensing negotiation and the equity investment. Do you view these things as mutually exclusive? Or is one likely to be contingent on the other?

I mean we -- mutually exclusive means, well, we will only do one deal for varoglutamstat. I mean it's clear that we will not license the drug to several companies, at least not in the same region. There may be regional considerations, but one drug for one company. But we thinking about financing and other strategic collaborations, which then would not include varoglutamstat directly but more the QPCTL platform or our company, and that can be different parties.

I think I was maybe not quite clear there. So I'm more asking whether you see any future fundraising being contingent on you having signed a licensing deal?

We haven't decided on this because we are still negotiating the deal. So there have been no planning for future fundraising, capital increasing. This is neither yes nor a no. It is just not decided yet.

Sure. And then one on the specialist kidney-focused investor. You mentioned that he's conducting or they're conducting an independent assessment of selected aspects of the program. Could you give any more color as to which aspects? And if they were to make an investment, would you expect it to allow you to fund the full Phase II program yourself?

Well, we are in discussions with that investors, and they have been mentioning of a larger funding. But let's see step by step. The assessment is ongoing. These are clearly new aspects, which we have not yet covered. So we wait also for new information, and that should come in the next couple of weeks. And then we will look at the volumes and the timing.

[Operator Instructions] We have one more question at the moment. And this one comes from [indiscernible] from [ Pharos ] Investment AG.

Thank you for the update and that you are in advanced negotiations, which is reassuring. I wonder, you're talking about blockbuster potential for the drug. And I suppose you also had to analyze the commercial potential of the drug for the negotiations which are ongoing. My question is who did this analysis? And what is the estimated peak sales potential of the drug?

Julia, can you take this?

Sorry?

Yes. So I mean, obviously, we're always looking into peak sales potential. I think at that point, as a company, it is a bit too early to comment on that. I think when we look into external sources, this clearly confirms blockbuster potential. I think this is also what our analysts see if you look at their research. And this is obviously also then the basis for our discussions with the potential partner.

And blockbuster means more than EUR 1 billion sales -- peak sales.

True.

Yes. That means more than EUR 1 billion in peak sales.

We have in U.S., I mean, when you look into the current standard of care diabetic kidney disease, all drugs which are currently used and patent protected or have been patent protected have reached EUR 1 billion. And the magnitude of effect these drugs provide for the patients are lower than those in our target profiles and which we have observed in our current -- previous studies. So we are very confident that when the drug makes it to the market, we will have a very substantial sales. That is good for us.

And one follow-up -- one follow-up to this strategic kidney investor. Is he like then in competition to the potential pharma company financing or closing a license agreement? Or -- I know the question was asked before in a different kind of way. But I wonder if you have 2 parties now, both wanting it, what makes you decide for A and make you to decide for B?

No, I think we try to structure it to make it complementary. And we see it this way, and we have discussed with the parties the corresponding potential strategic avenues we have taken, and that's very transparent, and that's okay. And then we see how it goes on. I mean, at that stage, as we go on, and we have said that before, we always pursue multiple avenues to secure the future and the best outcome of the company.

And does this include the follow-up molecule you were mentioning? Or would that be again a separate discussion?

This is probably part of the current discussion, but can also be separate. So there is always more than 2.

We are now going to take our next question, and this one comes from Tom Rosenfeld from Intron Health Research.

One more question from me. I wanted to ask about the Phase IIb trial. And assuming you secure funding, how ready are you to start the trial? Has the protocol been finalized? Have you received scientific advice? And do you have clinical trial material ready? Or would you have to manufacture new material?

So I'll start with C, clinical trial material is ready. B, scientific advice, we have discussed the study design with multiple international experts, both in Europe and U.S. and we have narrowed down the science. And A, is the protocol ready? It is ready in the sense of an extended synopsis, which we can hand over to our CRO, who completes the study protocol once we have committed the resources.

And then just one follow-up on the CTM. Is there a shelf life on that?

Is what? Sorry?

Sorry, on the clinical material, does that have a shelf life that you're working towards?

Yes, it has a shelf life. Every material has a shelf life, but it's sufficiently long to complete the study of at least a 1-year duration. The drug is really -- is very stable, and we have no shelf life issues, which basically are creating issues of reproducing quickly and permanently.

There are no further questions for today. I will now hand the call back to Julia for closing remarks.

Thank you all very much for your continued interest and support. We appreciate your time today and look forward to speaking with you again soon. Bye-bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to Vivoryon Therapeutics Full Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Julia Neugebauer. Please go ahead.

Thank you, Sandra. Good morning or good afternoon, everyone, and thank you for joining us today for Vivoryon's Full Year 2025 Results Call. Earlier today, we issued a press release reporting our full year 2025 financial results and business update, which can be found on Vivoryon's website at www.vivoryon.com. On the call with me today are Frank Weber, our Chief Executive Officer; Marcus Irsfeld, our Chief Financial Officer; as well as Michael Schaeffer, our Chief Business Officer.

Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning the development of Vivoryon's core platform, the progress of its current research and development programs and the initiation of additional programs as well as the results of operations, cash needs, financial conditions, liquidity, prospects, future transactions and strategies. Should actual results differ from the company's assumptions, ensuing actions may differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements which speak only as of the date hereof.

As you can see on the agenda for today's call, I will begin by highlighting our progress throughout 2025 and the recent weeks as we continue to build a robust body of evidence for varoglutamstat in kidney disease and to drive our strategic priorities. I will then hand the call over to Frank, who will walk you through our progress in more detail and share some new data we're particularly excited about because it nicely addresses some of the important and deep diving questions our shareholders as well as potential biopharma partners have been asking. Building on a compelling new analysis of our study data, Frank will highlight additional evidence supporting the potential of varoglutamstat in a high unmet need population, including a meaningful treatment effect in patients with risk factors such as hypertension and diabetes and therefore, at risk of progressive kidney disease.

Many of you already know that the mechanism of action underlying the compelling data we see with varoglutamstat in our clinical studies is what truly differentiates our assets from other approaches. After Frank's remarks, Michael will share with you additional new data on the mechanism of action, showing how varoglutamstat targets drivers of loss of kidney function simultaneously at 2 levels. After this, Marcus will review the full year financial results. Following the prepared remarks, we will move to Q&A. Now let me talk you through our key achievements for 2025 and the recent months. Starting with clinical evidence, we have continued to build a robust and consistent data package for varoglutamstat in kidney disease, which is strongly supporting our partnering efforts. We presented compelling kidney function data, including a meta-analysis of our clinical studies at the world's key nephrology meetings such as ERA, ASN Kidney Week and most recently, WCN in Japan.

Importantly, the beneficial effect of varoglutamstat on kidney function is most pronounced in patients with diabetes and lower baseline eGFR. This supports our decision to advance varoglutamstat into a Phase IIb study in the target population of Stage IIIb and IV diabetic kidney disease. Varoglutamstat is differentiated from other approaches in development because QPCTL inhibition addresses multiple key drivers of disease, spanning both inflammatory and fibrotic pathways. Frank and Michael will share details on some of our latest findings, including data highlighting varoglutamstat's role on collagen maturation and in reducing reactive oxygen species, reinforcing its potential to impact fibrosis and podocyte injury.

As a reminder, we also continue to see a clear evidence of synergy with SGLT2 inhibitors like, for example, dapagliflozin, which remains highly relevant in the context of the established standard of care. On the corporate side, we have further strengthened our position to execute on our strategy. Our intellectual property is protected in the U.S. until at least 2044 with the potential for further extension. In October 2025, we successfully raised EUR 5.1 million, strengthening our financial flexibility as we continue to advance partnering discussions.

We are seeing strong and growing interest from both biopharma companies and investors with multiple discussions and active due diligence processes underway. At the same time, over the last year, we have further strengthened our leadership team, ensuring we have the right capabilities in place to execute. And finally, based on our current planning, we have extended our cash runway into the fourth quarter of 2026. Overall, we believe we are in a strong position scientifically and strategically to advance varoglutamstat and to realize the next phase of value creation. And with that, I'd like to hand the call over to Frank. Frank?

Thank you, Julia, for a great summary, and good afternoon to the audience. My name is Frank, I'm the CEO of Vivoryon. I will dive into the varoglutamstat opportunity, what we did last year in detail, why we did it and where the company is heading. We are aiming to develop a new therapy to preserve kidney function and to prevent progression of kidney failure. And what we did, we looked at the market, and we understand with the actual data from the U.S. that the number of patients with end-stage kidney disease in U.S. is stable and more than 100,000 new patients with end-stage kidney disease come every year on top of what we have today. That results in annual Medicare spending for end-stage kidney disease of EUR 52 billion and for CKD overall for EUR 77 billion.

So despite there are therapies out there, which are approved for treating chronic kidney disease and diabetic kidney disease, the number of patients doesn't decline, and there is a huge unmet medical need. Most patients still progress on the current standard of care. We generated compelling data with our lead program, varoglutamstat in kidney function, and it is positioned to be the first oral treatment to show improvement in long-term stabilization of kidney function. And we have generated already data on this, and I will go a little bit deeper on the next slide on this. We feel and are convinced that we have a very attractive opportunity with very defined value creation steps. We designed a program where we can confirm the findings of the previous studies in the 24-month study with an interim analysis after about 50 months.

And let's don't get it wrong. Our objective overall is to get a partner for that development step. In order to get this partner, we, of course, need to generate more evidence because also we get more questions from these potential partners during the diligence. And I want to share you a few findings which we have generated first, together with the University of Hamburg-Eppendorf and Professor Tobias Huber on podocytes. Now podocytes is a cell type which basically creates the glomerulus. It is the one which filtrates the blood into urine and it gets really defective and stressed during chronic kidney disease and diabetic kidney disease. And what the team in Hamburg found out is that QPCTL inhibitors like varoglutamstat or new molecule 2149 improve the respiratory reserve of the mitochondrium. The mitochondrium is the energy machine in the podocytes and it's critical for podocytes functioning and survival. And we improved that energy machine as seen in significantly as seen in these podocyte results.

We also reduced the number of reactive oxygen species, that's the bad guys who actually annoy and kill these podocytes and our drugs can really have a significant reduction. These are new findings, which differentiate varoglutamstat further from other mechanism of actions and show that the drug is really truly innovative and has a completely different mechanism of action to what has been seen before. Further on, on the next chart, these are data we also generated during due diligence, which are ongoing with pharma companies. And the question here we answer is, does the drug generally increase eGFR in all subjects indifferentiable or does it have a differential effect dependent on the underlying disease or so-called pathophysiology of the patient.

And we have here a couple of graphs, and I'll walk you through step by step. The first one shows all patients we had in our Phase IIb program, VIVIAD and VIVA-MIND on 600 milligram and placebo. And the active is the blue and the yellow is the placebo. And these are slope analysis. So that's the one the FDA and the regulators want to see. And what you see that in average, there is only a mild improvement of eGFR above baseline with varoglutamstat, about 1.1 milliter per year. And there is a mild worsening in the totality of the population of 2.1 millimeter.

Adding in 3.2 milliliter data, which we have shown so far already, of course, much more than any other drug, but still quite modest. Now when you go in the first gray shaded area, we look here in a subgroup of patients with either hypertension or diabetes. And what you see in the shaded area is that the effect size of varoglutamstat doubles in these patients compared to the overall population. It goes to 2.2 milliter. And the placebo patients because they have risk factors for chronic kidney disease, of course, worsen more, so they go down by 2.7 milliter. The corresponding group, which has neither diabetes nor hypertension shows virtually no improvement on the drug and only a mild age-related decrease of kidney function, which is typical of 1.5 milliter.

So you can conclude from this chart that varoglutamstat has a differential action of mechanism based on the pathophysiology. If the patient is ill, it works good. If the patient isn't ill, it works virtually very little. And in diabetic patients, which is the second gray shaded area, you see a much stronger effect even. You see that the drug improves eGFR by about 4.1 milliter per year, whereas the placebo patients dropped by 3.2 milliter average a year. So those are patients who are likely going to chronic and diabetic kidney disease. The corresponding population, again, with no diabetes shows only a stabilization of eGFR under varoglutamstat and a mild decline in the nondiabetic patient, which is expected age-related in that population with an average age of 70.

In summary, we can show that the drug works specifically well if the patient has an inflammatory and fibrotic background and kidney function is worsening. Now further on, on the next chart, the next question was asked to us, how predictive are the data for the next study? Because, of course, in the Alzheimer's studies from which we generated these data, patients had relatively high baseline eGFR data and many didn't qualify for Stage IIIb/IV diabetic kidney disease, that is the stage where we want to run the next study. So what we did is we created severity percentiles. So patients 50% worst percentile to the 20% worse, the 20% worst are the worst of the worst and looked whether the effect size was conserved in the worst population and similar or even better than in the not so severe population.

And when you go from left to right, you see the same graph as in the past slide, you see blue varoglutamstat and yellow placebo. And you see that varoglutamstat, the severe the patients get still has a significant increase of eGFR above baseline around 3 milliliter in average or 3.3, 3.4. And the placebo group, the more severe the baseline is as expected, declines faster going from 1.62 to the worst patient, 4.7, 4.3. That means that the data we generate are predictive for a future outcome in a Stage IIIb/IV study, where we can expect a treatment difference probably about 7 millimeter when we follow this graph here displayed. In summary, on the next slide, we are convinced that we have a significant commercial opportunity with varoglutamstat and the number of diabetic kidney disease patients is around 1.5 million in U.S. and probably around 2.5 million EU in the Stage IIIb/IV. That is a huge population, which progressively goes to end-stage kidney disease and which requires treatment.

The large and growing problem in patients with kidney disease is known and has been accentuated and many experts look for treatment and many pharma companies are interested in getting a new mechanism of action treatment under their umbrella. So as a consequence, we are currently engaged in multiple discussions and active due diligences under CDA with potential biopharma partners to fund the upcoming Phase IIb study. Substantial progress has been made. And personally, I'm very optimistic that we can conclude an agreement in the near future. With that statement, I want to hand over to Mick.

Thank you, Frank. Yes. So let me first remind you in a bit more detail on the truly unique mechanism of action of varoglutamstat, a selective and potent oral small molecule inhibitor of glutaminyl cyclase enzyme QPCT and QPCT/L. In the human body, QPCT and QPCT/L are the only 2 enzymes that are catalyzing the ring formation of glutamate or glutamine amino acids on the very end terminal end of the substrate molecules. Under physiological conditions, this ring pyroglutamyl or in short PE formation makes proteins and peptides modified like that more stable and active and also is crucial for the binding of some signaling molecules to the specific receptors.

As several of the substrate proteins and peptides of glutaminyl cyclase are crucial inflammatory and fibrotic players, blocking the enzymatic activity of QPCT and QPCT/L by varoglutamstat leads to down regulation of inflammatory and fibrotic processes and ultimately to improvement of kidney function. Now the work over the past 2 years as well as earlier research now allows us to shed more light on the mode of action of varoglutamstat in kidney diseases on the molecular level. So let's start here on the left side with the diseased kidney. Mechanical stress by hypertension and/or increased stress on the cellular level by underlying diseases like diabetes leads to inflammatory and fibrotic responses, which are also amplifying each other and ultimately leading to kidney failure.

Our work and the work of others show that several of the proteins crucial for inflammation and fibrosis are substrates of glutaminyl cyclase. Thus, varoglutamstat inhibits such processes at several points and on 2 separate levels, inflammation and fibrosis, which is in clear contrast to earlier approaches targeting just one chemokine or other signaling protein exclusively. Substrate proteins and peptides of glutaminyl cyclase like some CCL-type chemokines, collagens and other molecules are crucial inflammatory and fibrotic activators, respectively. So blocking the enzymatic activity of QPCT and QPCT/L varoglutamstat leads to down regulation of the most active PE versions of these substrate molecules and thus of inflammatory and fibrotic processes and ultimately to improvement of kidney function.

In this context, I'd like to direct you to 3 talks we just have posted and you will find a link in the -- our approach section of our website. Professor Tobias Huber of the UKE in Hamburg, Stephan Schilling of Fraunhofer Institute in Halle and our VP Discovery, [Stefan Hassler] will talk in much more detail about the most recent data on the mode of action of QPCT/L inhibitors, including first-time findings around collagen processing. In this update today, let me just very briefly summarize some data from animal model investigations collected in the past year or so, showing the anti-inflammatory and anti-fibrotic impact of varoglutamstat. The preclinical models we have been using are complementing each other.

We are addressing tubular inflammation and intestinal fibrosis with the ADI-CKD model, and we go closer to the diabetic setting and podocyte injury with the rein ReninAAV DKD model on the right side. In both models, we could show the significant downregulation of fibrotic markers in immunohistochemistry analysis here exemplified with CD11c, a marker for pro-inflammatory M1 macrophages. We also could show this reduction in the tubular injury marker, KIM-1 in the ADI-CKD model that this effect was not seen in the ReninAAV DKD model is fully in line with expectations as this model does not reflect tubular injury. So switching to fibrosis. Here as well, significant downregulation of fibrotic markers by varoglutamstat could be shown, exemplified here by the fibroblast activation marker, alpha-SMA as well as for the collagens 1 and 3 on the right side.

We then went on using the ADI-CKD model to investigate potential combination effects with standard of care and to compare once daily versus twice daily dosing. We conducted a series of experiments in several groups, including SGLT2 inhibitor dapagliflozin alone, dapagliflozin with varoglutamstat on top, both with once twice daily dosing. Readout included a broad panel of blood parameters and immunohistochemistry markers and kidney samples to analyze inflammatory and fibrotic events and kidney function. We found highly significant synergistic effects for the combination treatment of dapagliflozin and varoglutamstat over a broad panel of markers. You can see here that the combination treatment achieved statistically significant improvement versus the dapagliflozin only treatment. Just as examples here on the left side is the CD11c indicating a beneficial impact on inflammation.

You also see this very well in the 3 histograms here where we -- where the combination with SGLT2 inhibitors normalizes this marker down to the control level when you compare here the histograms left and right. On the very right side of the slide, you see the same effects for fibrotic markers, alpha-SMA and collagen I. Moreover, comparing both of the green columns, which is once daily versus twice daily dosing, you see they are quite similar, which clearly supports a once-daily investigation in our planned clinical study.

Now to sum this up, targeting inflammation fibrosis in DKD could provide a complementary layer to existing treatments targeting metabolism and hypertension. And why we are, based on the significant improvement of eGFR we found clinically, positioning varoglutamstat as a stand-alone therapy, our preclinical models clearly show strong synergism in combination with the standard of care SGLT2 inhibitor, making glutaminyl cyclase inhibitors candidates for a co-medication approach. And with that, I'd like to hand over to Marcus for providing you with the 2025 key financial figures. Marcus?

Thank you very much, Michael. I will now walk you through the financial figures for the 2025 business year. Research and development expenses in 2025 amounted to EUR 4.3 million compared to EUR 14.1 million in 2024. The reduction of EUR 9.8 million was largely attributable to a decrease in clinical development costs from the VIVIAD and VIVA-MIND as well as a reduction in manufacturing costs. R&D expenses in the reporting period mainly occurred for kidney-related research. We have seen a decrease in G&A expenses with cost of EUR 4.8 million for the full year of 2025 versus EUR 6.9 million in 2024. The decrease was largely attributable to lower personnel and other legal costs with the decline in personnel costs primarily attributable to a decrease in noncash effective share-based payments.

All of this resulted in a net loss for the year of EUR 8.9 million compared to EUR 20.6 million in 2024. As of December 31, 2025, the company held EUR 5.6 million in cash and cash equivalents compared to EUR 9.4 million as of December 31, 2024. In October 2025, we completed a private placement of new ordinary shares to selected investors with gross proceeds in the amount of EUR 5.1 million. Including these proceeds and based on our most recent financial and business plan, we now expect that our cash and cash equivalents will be sufficient to fund our operating plans into Q4 2026. Our spending remains focused on strengthening our intellectual property position and on advancing strategic financing and partnership discussions. In our kidney disease focus area, R&D activities are undertaken selectively to drive sustainable value creation with further development dependent on additional financing and strategic partnerships. Before we come to the Q&A, I would now like to hand the call back to Frank for a wrap-up.

Thank you, Marcus. And let me summarize where the company stands today. We are now based on high-quality science in clinical and nonclinical area for chronic kidney disease and diabetic kidney disease. We have generated additional high-quality evidence that the QPCT/L approach in kidney disease is very promising. We have further corroborated that the medical need is still extremely high and progression to end-stage kidney disease is a therapeutic problem, which needs to be addressed and that QPCT/L inhibition and varoglutamstat is a potential new innovative and disease-changing solution.

In order to add quality and value to our approach, we could extend the IP runway for varoglutamstat to 2044, and we have worked also an additional indication, including opportunities in orphan diseases based on the podocyte findings of the University of Hamburg. In summary, all this should lead and enable us to find an attractive partnership with the pharmaceutical companies in the upcoming future. I thank you for your attendance.

[Operator Instructions] We will now take the first question from the line of Sushila Hernandez from Van Lanschot Kempen.

This is [indiscernible] for Sheila. To start off, I was just wondering on partnership or funding discussions. We've seen various meta-analysis of the VIVIAD and VIVA-MIND study data. So what is there left to show potential partners or investors without actually starting a Phase IIb? And what are the key discussion topics? And also, I was wondering if you want to start a new trial, you've currently been looking at the use of SGLT2 inhibitors together with varoglutamstat. Would you also be looking at some other standard of care such as like the inhibitors?

I'm not sure I have understood your question correctly. But what we're currently doing is a risk reduction or a probability increase for the next study. And those questions, of course, come in from various partners we are talking, and we wanted to share publicly and transparently the findings and the answers. And I think the answers are excellent and the quality of our data analysis and research is excellent that will increase the probability of having a good partnership. And the next study, of course, going to be based on those findings on the clinical and nonclinical science.

And that will take into account to design a study, which is a very high likelihood of a successful outcome. And that is, of course, in the interest of our shareholders. but also in the interest of potential future partners. They want to have a successful development and not a failed one. So all the investments we did in the last year to better understand the data, to generate new data, to generate evidence has to be seen in that perspective. And that's the rationale why we did it -- or were asked to do it.

So then to the SGLT2 inhibitors, SGLT2 inhibitors have an inflammatory component or an anti-inflammatory component in the mechanism of action, which is not fully understood. And we just did this combination study with our varoglutamstat and QPCT/L inhibitors with SGLT2 inhibitors to ensure that the combination is additive and synergistic and not antagonistic because if you don't know why SGLT2s are anti-inflammatory and you cannot pin down that mechanism exactly, you can, of course, analyze whether there is a synergism antagonism. So we did that study, which Mick presented and which you can further drill down in the webcast we have published, and we can ensure that there is an additive and synergistic effect between the 2 mechanisms. So varoglutamstat can be given in future trials on top of standard of care and add a significant benefit to that.

We will now take the next question from the line of Samir Devani from Rx Securities.

I think I've probably got 3. I just wanted to continue the comment, Frank, that you made about the SGLT2. You presented some sort of subgroup analyses with the results today. And I was just wondering how many of the diabetes patients in VIVA-MIND had run SGLT2 anyway? I guess that's the first question.

So a couple of had, but the number was too small to do a specific subgroup analysis on SGLT2 alone. In average, diabetes patients had about 2 antidiabetic medications and at least 1 or 2 antihypertensive medications and usually a lipid lowering and an anti-inflammatory drug. So they were treated according to standard of care, which can be expected from the U.S. and Western European population. But we didn't -- we couldn't run really a subgroup analysis by type of concomitant medication. That was the reason why we did the preclinical study to make sure that we are on the right track.

Okay. That makes sense. And then just on the proposed Phase IIb trial, you've highlighted that there will be an interim readout at 15 months. I just wanted to check, is that going to be just the futility? Or will there be some efficacy data that you'd release at that point? And if it's an efficacy analysis, is there going to be a statistical penalty on the final primary endpoint calculation?

Yes, that's a good question. Thank you for that one. 15 months, first of all, is a good time when we probably have around 70, 80 patients at least treated for 6 months. And you know that our onset of action is not super fast. We don't have a hemodynamic effect or a dip like the SGLT2s. Our effect size builds up over about 6 months. And so we need to wait until some patients have completed 6 months. The treatment effect size we have shown you today is so big that after 6 months, you can already see a p-value. And any penalty we would have until the final analysis is, I wouldn't say meaningless, but it is, in that sense, not very meaningful because the effect size we power that study is around 3.5 to 4 milliliter.

The true effect size probably is more around 5 to 7 what we expect. And that is much more than when we need for the p-value of 0.005. So we can divide alpha easily, alpha spending between interim and the final one. The interim is also more not meant to terminate the study for success. It is meant to enable the planning of the Phase III study because you don't want to wait with the Phase II results until you at the last moment, lift the lid and say, oh, now we know and then start the planning. So the interim analysis is meant to allow about 9 months before the full results to start the detailed planning of the Phase III and not to lose time.

Okay. That's great. And then just finally, obviously, the market is focused on delivering some sort of commercial deal. But I'm just -- in terms of the sort of next-generation asset, 2149, what sort of ongoing work is happening with that right now? And what can we expect? Can we expect any more data, preclinical data this year?

I think we're carefully investing into QPCT/L inhibitors and 2149 is always a part of our let us say, a series of inhibitors we test. We currently focus 80% to 90% of our energy on the partnering and the advancing of the company and the remaining 10% on new science. We are going ahead. We have some ideas which I cannot really talk about with 2149 because they are subject to future patents and new mechanisms we are working on. Whether there will be -- I expect that there would be more data this year, but I cannot promise that. But there is new stuff going on, which is super exciting, but it's not disclosable right now.

Our next question comes from the line of Tom Rosenfeld from Intron Health Research.

I just got one question on trial design for the upcoming Phase IIb trial. It looked like in the annual report, you envisage the primary endpoint being the eGFR change from start to week 48. Have you received advice or feedback from the FDA or EMA on that? What's the rationale between over choosing that over eGFR slope?

Well, the principal analysis for regulatory pivotal studies is always eGFR slope. And that's the general guidance for pivotal studies. Now when we want to understand the onset of action and the evolution over time of our effect size. So what is happening in the first 6 months, what has happened in the 6, 7 -- 6 months and so on, then, of course, the slope analysis is not very helpful because it depicts the totality of the results over a year or over 2 years.

So in order to have some additional findings what happens after 6 months to 12 months, how big does the effect go and what happens, then you do a change of baseline analysis and to understand how big is the change from baseline. That is very similar to what we have shown today in the call where we showed what is the change in the slope up and down. We can do it as a slope or you can do it as an MMRM change from baseline. I think for the Phase II, both are possible and viable. We will anyhow do both. We expect both to be significant. But as the Phase II is a more understanding confirmatory design, that may be the better primary endpoint.

[Operator Instructions] There are no further questions at this time. I would now like to turn the conference back to Julia Neugebauer for closing remarks.

Thank you for your continued interest and support. I would like to reiterate that we are seeing clear progress for varoglutamstat in kidney disease and most importantly, on the partnering side. We remain focused on advancing to the next steps of our growth. We appreciate your time today and look forward to speaking with you soon again. Thank you, and bye-bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Vivoryon Therapeutics 2025 Third Quarter Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Julia Neugebauer, COO. Please go ahead.

Thank you, [ Razia ]. Good morning or good afternoon, everyone, and thank you for joining us today for Vivoryon's Third Quarter 2025 Results Call. Earlier today, we issued a press release reporting our third quarter 2025 financial results and business update, which can be found on Vivoryon's website at www.vivoryon.com. On the call with me today are Frank Weber, our Chief Executive Officer; Marcus Irsfeld, our acting Chief Financial Officer; as well as Michael Schaeffer, our Chief Business Officer.

Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning the development of Vivoryon's core platform, the progress of its current research and development programs and the initiation of additional programs as well as results of operations, cash needs, financial conditions, liquidity, prospects, future transactions and strategies. Should actual results differ from the company's assumptions, ensuing actions might differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements which speak only as of the date hereof.

On Slide 3, you see the agenda for today's call. I will begin by highlighting our progress throughout the reporting period in recent weeks as we continue to build a robust body of evidence for varoglutamstat in kidney disease and beyond. I will then hand the call over to Frank, who will provide an overview of how we are advancing steadily on our strategic priorities, including a very interesting new data analysis that further substantiates the potential for varoglutamstat to become a convenient, widely available new oral therapy to transform the treatment of kidney disease. After that, Marcus will review the third quarter financial results.

As previously reported, Marcus has assumed the role of acting CFO during Anne Doering's temporary partial leap of absence. You will have seen in our financial results press release this morning that Anne will be stepping down as Vivoryon's CFO in December 2025. On behalf of the entire management team, I would like to thank Anne for her exceptional work and her invaluable contributions to Vivoryon over the last 2.5 years. Marcus will succeed Anne taking over the role of permanent CFO. Prior to taking the acting CFO position, Marcus has been a strategic consultant to Vivoryon since December 2024 and is an experienced finance executive with deep life science expertise. We would like to welcome him to the team in his new capacity and thank him for the excellent support and collaboration over the past months.

Following the financial update, I will wrap up the call, and then we will move to Q&A, where we will also be joined by our Chief Business Officer, Michael Schaeffer.

The compelling data that we presented so far for our lead program, varoglutamstat in kidney disease is clearly outstanding. It continues to create very much interest and excitement within the scientific and medical community, and this is reflected in our interactions with international nephrology experts. In early November, we presented a late-breaking poster in Houston at the American Society of Nephrology Kidney Week, the world's premier Nephrology conference. As a reminder, so-called pyroglutamate peptides produced by QPCT/L are a central part of the pathways that mediate inflammation and fibrosis in kidney disease. Varoglutamstat works by blocking the production of these molecules.

The poster at ASN 2025 showcased additional analysis from the total study population from our Phase II study, VIVIAD, assessing on an individual patient basis how levels of one of these pyroglutamate peptides, the biomarker pE-CCL2 correlate with kidney function as measured by eGFR slopes. Notably, a reduction in pE-CCL2 was significantly correlated with improved kidney function, providing yet another strong data point towards explaining why we see the exceptional results we see with varoglutamstat.

Today, we will share results from a new analysis that addresses a key question, how do patients with impaired kidney function respond to varoglutamstat? Frank will walk you through the findings in detail, but in short, we observed a consistent and meaningful treatment effect across all patients. And importantly, this benefit was also evident in those with more impaired kidney function. These results further reinforce our confidence in our plan to advance varoglutamstat into a Phase IIb study in Stage IIIb and IV diabetic kidney disease. Building on the beneficial effect on inflammation and fibrosis that we're observing with varoglutamstat, we see potential of this promising drug class to be relevant across a broader range of immune-mediated diseases. Our core expertise and differentiated platform of oral small molecule QPCT/L inhibitors allow us to selectively explore additional development and partnership opportunities alongside our primary focus of advancing the DKD program.

Concluding the key achievements with a brief corporate update. In October, we successfully completed a private placement of new shares to existing and new shareholders with gross proceeds in the amount of EUR 5.1 million. With these additional funds, we now expect our existing cash to support our operating plans well into the third quarter of 2026. We continue to see increasing momentum both within the kidney space and beyond with interest from a broader set of biopharma companies and strategic investors.

And with that, I'd like to hand the call over to Frank, who will cover our strategic priorities in more detail. Frank?

Yes. Thank you, Julia, for your nice presentation.

Dear ladies and gentlemen, we look at our strategic priorities and ASN as well as constant exchange in the expert field of Nephrology allows us also to look where does our product stand compared to others. And we conclude at the current point in time that there is rightly the search for products which stabilize kidney function and partially reverse it and the field moves to combination, but none of those approaches has yet shown to really halt or reverse the kidney function impairment.

Best data shown at ASN were Phase II data of an autologous cell therapy, which had an effect size of around 4.5 milliliter in diabetic kidney disease and keep that number in mind when you look at later analysis of our data from Phase II. So the medical need still is for convenient therapies to stabilize and improve kidney function in those patients who progress to end-stage kidney disease. And varoglutamstat is a premier opportunity for those patients in the future to be used as the current data are highly promising and show a very pronounced effect.

And I want to show you in the next slide what we mean by this. We have analyzed the data of our Phase II studies for patients with the most severe impairment of eGFR at baseline. And you see on that slide on the left side, the total population in our Phase II program for varoglutamstat and for placebo, and you see a slope analysis where you see the annual rate of decline in the placebo arm of around 2 milliliters and the active arm improves about 1 milliliter per year. That makes a difference of 3.2 milliter in the total population, which is, of course, highly significant.

And then we look on the right side, in the worst 33% of the patients. So those with the 33% at baseline, which are the worst. And you see an identical picture, patients in the placebo group decline and patients in the active arm improve. And the effect size is nearly identical and the p-value is highly significant. That means the drug works as good in impaired patients as in the total population.

More importantly, we did another analysis in our core indication, which is diabetic kidney disease, and you see that graph in the next slide. Here, we did a very similar analysis. We looked at the worst 50%, worst 33%, worst 25% and worst 20%. So 20% is really the worst of the worst and 50% is the half of the worst basically. And what you see, you see that the worst the population gets when you look at the lower part of the chart, the eGFR, the mean eGFR of that population, of course, drops to the worst 50% have a 65 milliliter eGFR at baseline, the worst 20% have only 55.8 milliliter and in the middle of Stage IIIa diabetic kidney disease.

And then you look at the graphs and you see what the drug does in terms of improvement and you see what the placebo group does in terms of worsening. What you see is that the active arm continuously shows an improvement between 3 and 4 milliliter independent on how severe the population is. Even in the most severe population, we can show an improvement of about 3 milliliter. Whereas the placebo arm, of course, gets worse, the worse the baseline is. That's clear that patients who have a bad baseline have a much higher progression than those which have a normal baseline because those with a bad baseline have, of course, really inflammatory and fibrotic kidney disease and they progress much faster than those at the beginning of the disorder. And that shows you the placebo group is, of course, worsening the worse the baseline is.

And when you look at the difference between the blue, so what the active does and what the yellow, what the placebo does, you see you come up with about 7-milliliter difference between active and placebo for those who are really affected by diabetic kidney disease. And now I come back to the loop. That is, of course, much better than any so far published Phase II data in diabetic kidney disease. And this comes from, of course, placebo-controlled study, our data and was an exploratory endpoint. So these are robust and I think very comfortable finding for our drug.

On the next chart, we're going to show our priorities. And we have evolved a little bit our priorities because we see beyond diabetic kidney disease and don't misunderstand diabetic kidney disease is our core indications. We see very promising data -- this is where we see the biggest and the fastest value for the company. But we need to evolve the company further and see what other opportunities we may have with our compounds and our platform. And as previously said, we're working continuously on orphan kidney diseases as a near-term opportunity, including Fabry, Alport, FSGS and cystic kidney diseases, where we continue our preclinical research in order to come up with a strategy how to approach those rare kidney diseases in the clinic.

But we also see midterm opportunities in other immune-mediated diseases because QPCT/L inhibition has a major role in immune defense, inflammation and fibrosis. And we have already data in-house for various compounds where we see improvement of metabolic associated steatotic liver disease in a mouse model. We also see benefits in cardiovascular diseases in a mouse model. We see benefits in inflammatory bowel diseases in a mouse model and in septic arthritis and even in an MS model. So there is opportunities for QPCT/L inhibitors much beyond what we are currently looking at diabetic kidney disease.

But as a small company, of course, we need to keep the focus. We need to do first things first, and that is focusing on moving diabetic kidney disease forward. researching other rare kidney diseases and then looking at a broader application, what can QPCT/L inhibitors cells do and where are they unique and what can they provide.

With that, I hand over to Marcus to his first quarterly welcome fully to the team. You were always part of the team, but now you're on front stage. And yes, to you.

Thank you very much, Frank. I will now walk you through the financial figures for the first 9 months of 2025. Research and development expenses amounted to EUR 3.7 million in the first 9 months of 2025 versus EUR 12.6 million in the first 9 months of 2024. The reduction of EUR 8.9 million was largely attributable to a decrease in clinical development costs from the VIVIAD and VIVA-MIND studies as well as a reduction in production costs.

R&D expenses in the reporting period mainly occurred for kidney-related research. We have seen a decrease in G&A expenses with costs of EUR 4 million in the first 9 months of 2025 compared to EUR 4.9 million in the same period last year. The decrease was largely due to lower personnel costs resulting from a reduction in noncash effective share-based payments. All of this resulted in a net loss for the first 9 months of 2025 of EUR 7.6 million compared to EUR 17.1 million for the first 9 months of 2024. By the end of September 2025, the company held EUR 2.5 million in cash and cash equivalents compared to EUR 9.4 million at the end of 2024.

As already mentioned, in October, we completed a private placement for -- of new ordinary shares to selected investors with gross proceeds in the amount of EUR 5.1 million. Including the proceeds from this private placement, we now expect that existing cash and cash equivalents will be sufficient to fund our operating plans well into Q3 2026. Our spending plans continue to support the kidney disease strategy and the strengthening of our intellectual property position. Furthermore, we continue to actively pursue strategic financing and partnership opportunities, primarily to fund planned Phase IIb study.

Before we come up to the Q&A session, I would like to hand the call back to Julia for wrap-up.

Thank you, Marcus. As said, before we move into Q&A, I'd like to conclude with a few comments. The kidney space is highly dynamic, but as Frank mentioned, despite recent advances in the field, there remains a substantial unmet need for therapies that can stabilize or even improve kidney function. Our lead program, varoglutamstat is well positioned to address this gap. We have compelling data from 2 Phase II studies in an elderly patient population and new analysis demonstrate a consistent beneficial effect in patients with impaired kidney function. Importantly, this profile is paired with convenient oral dosing and patent protection extending at least until 2044, making it a unique asset within a dynamic space.

Beyond the planned study to evaluate varoglutamstat in patients with diabetic kidney disease, we're also seeing rising interest in our platform of oral small molecule QPCT/L inhibitors for other indications. We will continue engaging actively with the scientific and investment communities, including at several upcoming international medical and investor conferences in the first quarter of 2026. And with that, we would like to open the Q&A session.

[Operator Instructions] we are now going to proceed with our first question. And the questions come from the line of Lucy Codrington from Jefferies.

Just going back to the data you showed in terms of the patients with the lower baseline eGFR. What -- I guess, can you tell us what the average eGFR was in that lower tertile of patients? And then perhaps I'm misunderstanding, but I think you kind of confirmed it with what your comments on the diabetic patients in the next slide. How would we not -- why was it that the decline in eGFR was less in the patients with impaired kidney function relative to the total population, I would have thought based on what you then said about the diabetic patients that you would have expected a greater decline in the patients with more severe baseline disease.

And then just when it comes to your discussions with potential partners, is the focus on the fact that you've shown this eGFR increase, is that what they want to see replicated in the Phase IIb? Or is the general acceptance that a stabilization of eGFR will be considered good enough based on precedent so far?

Yes, Lucy, thank you for your question. The first one, I think we have to be a little bit in a dialogue because I didn't fully get it. But when we -- we showed 2 data charts. And what I understood is what is the baseline on the first chart basically on the old patients what is the baseline in the worst 33% tertile. And that is written down in the chart, it's 72 milliliters. So the worst 33 patients of all patients independent of what type of disease, so diabetics and nondiabetics, everything included, has 72 milliliter, whereas all patients have 80. So the worst 33 have 72 in average, all on the left side have 80. So that's an explanation. And there is not a big difference in the mean of this. There's 8-milliliter difference, and you see that the effect is also very comparable between the two. So if you go down by 8 milliliter or 10 milliliter, you see the same effect. That's probably the explanation for the first chart, which I showed with the 2 graphs. Did I answer that question and then we go to the diabetics one?

Yes. There wasn't a question about the diabetics. It was just more that when you looked at the decline in the placebo group, 1.85 milliliter in the patients with the worst kidney function is actually less than the decline you saw in the overall population. And I would have thought you would have had a greater decline in the patients with the lower baseline eGFR, which is what we did see, I think, on the next chart where you show that the patients with the lower baseline eGFR have a greater decline relative to those.

Yes. But this is only the difference between 80 and 72 milliliter. So I would think it is a very similar population. So if you go in the worst 33% in the total population, you're very similar to the average to an 80 milliliter. There's not a big difference. And of course, we can drive it more and more down. But if we drive it more and more down, let's say, we take the last 20% of the total population, you basically land more or less in the diabetic population. And this is why we then show the diabetic population.

And in the diabetic population, the difference, of course, is much bigger in the baseline because the diabetic population, the total diabetic population in our studies has also a baseline of 80 milliliter. But the worst 50% have only 65 milliliter, has a 15 milliliter difference. And the worst 20% have 55 milliliter, has a 25 milliliter difference. So here, you can drive down the eGFR in the worst population quite a lot. And then, of course, you see the placebo group really reacting.

But you also need to acknowledge that the placebo group in the worst 50% and 33% actually doesn't drop. If you look at correspondingly, the total population, you look at the worst 33%. It's very similar to the total population. If you look at into diabetes, the worst is the 33%, it also only declines by 2.1%, which is really similar to the total diabetic population. So that means only really bad patients with a baseline probably below 60 milliliter have a higher decline. And that is in line with what you expect in the science.

Patients who have manifest diabetic kidney disorders like IIIA and worse, they show the worst decline. And this is what our data show in the placebo group, and this is why I think they're credible. And this is why we show those data. Only by cutting the baseline a little bit by 8 milliliter, you do not worsen the population significantly. I think that's what you want to comment on. And I would say I agree. By going from an 80 milliliter to a 72 milliliter mean eGFR, you don't change the population much and you basically have a very similar picture. Only if you drive the eGFR down below 60 milliliter, then you see, of course, a much higher placebo drop. And then you see comforting enough the same effect of our drug. And I think these data are highly credible and predictive for the next study.

The reason why we did this data is actually to look on the translational value of the data for the new study, how much can current study data predict the outcome of a future study, and this is why we did it. Did I answer your question? That's the first part.

So I think the data are consistent and in line with what you expect from clinic and science, and they are very consistent between diabetics and nondiabetics when you look at the 33 percentile, which you've rightly got. The question is what do the partners say? What do companies want to see? I think the attractiveness of our company is that we are best-in-class. And medically, you would say it's enough to stabilize patients fully. If you don't see a decline anymore in average, that's the best outcome for the patient. And an improvement by 3 or 4 milliliter like we show here in our graph is neither feelable nor meaningful. Whether you have 3 milliliter or 4 milliter or 5 milliliter, nobody can feel a 5 milliter or 3 milliter eGFR improvement.

But in the terms of a best-in-class data set, that becomes relevant because you can, of course, promote it and you can also see that this mechanism leads to a partial recovery of the kidney function. That means that the anti-fibrotic and anti-inflammatory effect we see in the kidney actually translate into a better kidney function than the patient has before. And that, again, is relevant from a conceptual point of view. So when you look at from a patient basis, you would say stabilization is good enough. We look at from a mechanistic positioning of the drug, a best-in-class, which can lead to a partial recovery of the kidney function is a unique feature, which I think is highly appreciated by everybody. So that's a little bit of complicated answer on a simple question, I'm sorry.

We are now going to proceed with our next question and the question come from the line of Sushila Hernandez from VLK.

So you've presented a number of additional analyses from the Phase IIb study supporting your pivot into diabetic kidney disease. Are you testing any other hypotheses that could further add to the data generated so far and also support partnering discussions? And then the second question, with the funds raised in the private placement in October, can you already prepare for a start of the Phase IIb? Or what kind of activities are included that takes your cash runway into Q3 next year?

So are we doing more with the data? Yes, we are currently constantly working on the data, and this is not because we only have new ideas, but of course, we get external input. Part of those analysis, of course, are requests from other parties, I would say. And of course, we want to share that with you in order to be very transparent where you are and what is the current state of discussion. So there will be more analysis for sure because there will be more ideas what to do.

The second thing is, do we progress in the Phase IIb preparation. We have progressed in the sense that we have internally decided which CRO we would go, but we don't disclose it, but we have done a CRO selection process. And we have also a synopsis, a fully fledged synopsis in-house for the study. And now it's a little bit of fine-tuning with third parties to that synopsis in order to execute it.

We are now going to proceed with our next question. And the questions come from the line of Joseph Hedden from Rx Securities.

Just going back to Slide 9, where you showed the participants with diabetes and reduced kidney function. So is this kind of pattern of response, do you think unique to varoglutamstat? Or would you expect to see this kind of response across declining eGFR groups at baseline with SGLT2s, for instance? That's the first question.

Okay. That is a relatively easy answer. I think this is a completely unique situation that you can preserve kidney function independent on the severity of the pathophysiology or the disease progression. We have seen that many drugs basically reduce the progression, but still there is progression about 3 milliliter, 4 milliliter that you go in these very progressive patients, which have 4 milliliter, which is a typical decline of those progressive patients, nothing unheard of when you look at the literature in Stage 3 and 4, 4 milliliter is a typically observed eGFR progression per year.

And you look into what currently GLP-1s or SGLT2 do in this, there is probably a benefit of milliliter or 1.5 above the 4 milliliter. So they may decline 2 or 2.5 milliliter. None of the drugs has ever shown to be above baseline or at baseline for a year or 2. And this is, of course, 2 years data. These are not short-term data of 6 months. We show here data with the treatment duration up to 2 years. So I think it's a very unique data set and it comes to the best-in-class approach we are pursuing here.

Okay. And then just on potential applications in orphan diseases, subject to financing, is the idea there that you could still proceed with a basket trial to kind of tease out which indications might be best suited?

Yes. I think it's a very good question, and that's really also in our mind. And we haven't really made the decision whether the basket trial is the best solution or from our preclinical data, we can pick 1 or 2 of the orphans where from a mechanistic and preclinical perspective, the data set is the most compelling and the likelihood of success is the highest.

So we are like shall we really go for a basket? Basket study is, of course, attractive because you cover more indications. But the interpretability of the data sometimes is not so easy. Whereas if you say, "Look, we go for 1 or 2," and we focus on those, you can, of course, make a much more precise study and the interpretation and the value of the results usually are higher. And the guidance on how we come to the decision, what type of study we do will be delivered by ongoing additional preclinical evaluation, which probably reach until the first or maybe the second quarter next year. That's the current time line. And I hope we are then in the situation to make a final recommendation and decision on how to move forward in the office.

The data so far are very promising. The mechanism seems to fit to a couple of orphan renal disorders, which are currently not in the center of the market hype. You know that some of kidney disease, there are many compounds currently either developed or already commercialized. We are focusing on those where it's very little or none. And we have a couple of very good, I would say, results and concepts there and the data, and then we will make the decision when we have the maturity of everything. And of course, we will share that publicly.

[Operator Instructions] We have no further questions at this time. So I'll hand back to you for closing remarks.

Thank you for your ongoing interest and support. With clear progress and growing momentum in the kidney disease space, we remain firmly focused on driving the next stage of our growth. We appreciate your time today and look forward to updating you again soon. Goodbye.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines.

Good day, and thank you for standing by. Welcome to Vivoryon Therapeutics 2025 Half Year Results Earnings Call. [Operator Instructions] Please be advised today conference is being recorded. I would now like to hand the conference over to your first speaker today, Julia Neugebauer. Please go ahead.

Thank you, Nadia. Good afternoon, and thank you for joining us today to discuss the company's first half 2025 results and operational update. This morning, Vivoryon issued a press release reporting its first half 2025 financial results and also share an update on the progress we're making in advancing Vivoryon within the kidney disease space. This press release is posted on the Vivoryon's website at www.vivoryon.co. On the call with me today are Vivoryon's Chief Executive Officer, Frank Weber; Vivoryon's Chief Financial Officer, Anne Doering; and Vivoryon's Chief Business Officer, Michael Schaeffer.

I will begin today's call with an overview of the unmet need in kidney diseases and highlight our most recent key achievements. I will then hand the call over to Anne, who will review the first half 2025 financials. After that, Michael will provide insights into new mechanistic in preclinical data supporting the development of varoglutamstat in diabetic kidney disease as well as in rare kidney diseases. Finally, Frank will wrap up the call with a summary and an overview of the next steps to advance our strategic priorities. Following the prepared remarks, we will host a Q&A session.

Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning the development of Vivoryon's core platform the progress of its current research development programs and the initiation of additional programs as well as a results of operations, cash needs, financial conditions, liquidity, prospects, future transactions and strategies. Should actual results differ from the company's assumptions, ensuing actions might differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.

Our aim at Vivoryon is to transform the treatment of kidney disease. Despite recent advances in the field, there remains a significant unmet need for effective treatments for kidney diseases including chronic kidney disease and diabetic kidney disease. These conditions often progress to end stage kidney disease and kidney failure. Current standard of care therapies can only slow disease progression, they cannot pause it or improve kidney function. Chronic kidney disease is not only a growing global health challenge but also one of the largest unmet medical needs. By 2040, it is expected to become the fifth leading cause of years of life loss worldwide, underscoring both the human and economic burden.

Chronic kidney disease is marked by a steady decline in kidney function, often leading to disability in premature death. Diabetes is a major driver with diabetic kidney disease being a leading cause of end-stage renal failure. Importantly, inflammation is a key pathway driving disease progression. This represents a critical area where innovation could really change the standard of care and where we are focusing our efforts with varoglutamstat. Taken together, these dynamics highlight a significant opportunity for new therapies that address the underlying biology and position us to make a meaningful impact in a large, growing and underserved market.

The last 2 years have been pivotal for Vivoryon as they market the transition into a company focused on development of varoglutamstat for patients living with chronic and diabetic kidney disease. As many of you know, varoglutamstat is an oral first-in-class potent in selective QPCTL inhibitors designed to prevent inflammatory and fibrotic processes by blocking pyroglutamate formation. It has demonstrated outstanding benefits on kidney function in Phase II clinical studies and is uniquely positioned within the evolving kidney disease landscape.

In 2023, we laid the groundwork by amending the VIVIAD study protocol to include kidney function biomarkers. This decision was driven by a strong scientific rationale to explore varoglutamstat beyond our industry focus on Alzheimer's business. In 2024, we generated exciting data. Kidney function benefits were first observed in the VIVIAD Phase IIb study with particularly strong effects in the diabetes subgroup. These results were further confirmed in the VIVA-MIND study and the data were presented at the ASN Kidney Week last year. We're very well received by the nephrology community.

Building on this foundation, the first half of 2025 was marked by several important achievements. We presented compelling kidney function data, including a meta analysis from our 2 Phase II studies, VIVIAD and VIVA-MIND in an oral presentation at the European Renal Association Annual Congress 2020 side. Across all analysis, varoglutamstat consistently demonstrated statistically significant and clinically meaningful improvements in kidney functions compared to placebo.

We secured a new U.S. composition of meta patents for varoglutamstat, supporting market exclusivity through 2044 with the potential for further extension. Complementing the clinical data, we also showed a synergistic effect when combining varoglutamstat with an SGLT-2 inhibitor in a preclinical model. And today, we will show new preclinical data from a diabetic kidney disease mouse model further validating varoglutamstat mechanism of action in diabetic kidney disease.

Preparations for a dedicated Phase IIb study of varoglutamstat in patients with diabetic kidney disease are already well underway. And finally, we nominated our QPCTL inhibitor VY2149, which has an improved pharmacokinetic profile as a potential follow-on compound for development in DKD, CKD and rare diseases. Together, these achievements highlight both the near-term clinical opportunities for varoglutamstat in kidney disease and the long-term potential for our approach. And with that, I'd like to hand the call over to Anne for the financials. Anne?

Thank you, Julia. I will now walk you through the first half 2025 figures. Research and development expenses amounted to EUR 2.8 million in the first half of 2025 versus EUR 10.3 million in the first half of 2024. This reduction of EUR 7.5 million was largely attributable to a decrease in clinical development costs from the VIVIAD and VIVA-MIND studies as well as a reduction on production costs. R&D expenses in the reporting period mainly occurred for kidney-related research.

We have seen a decrease in G&A expenses with costs of EUR 2.8 million in the first half of 2025 compared to EUR 3.5 million in the first half of 2024. The decrease of EUR 0.7 million was mostly due to lower personnel costs and a decrease in legal and consulting costs. All of this resulted in a net loss for the first half of 2025 of EUR 5.5 million compared to EUR 13.6 million for the first half of 2024. The company held EUR 4.8 million in cash and cash equivalents as of June 30, 2025, compared to EUR 9.4 million as of December 31, 2024. We have maintained our cash runway into January 2026, which does not include any funds from the standby equity purchase agreement announced in April 2025.

As of today, we have not initiated any tranches of the SEPA. Our spending plans continue to support the kidney disease strategy and the strengthening of our intellectual property position. And we continue to actively pursue additional financing and partnership opportunities, primarily to fund the Phase IIb study.

Now I would like to take this opportunity to update you on a temporary change in the finance team. I will be taking a temporary partial leave of absence from the CFO role in the coming months to attend to a serious family health matter. Vivoryon's continued success and the company's stability and continuity are crucial to me. And therefore, I am pleased to announce that during this period, Marcus Irsfeld will assume the role of acting CFO, ensuring this continuity in financial operations and supporting the company's strategic objectives.

Marcus is an experienced health care finance executive and CFO, who has been supporting Vivoryon as a consultant since the end of 2024 and will require little effort to ramp up on the CFO task. This is a solution that I believe strengthens the finance and Vivoryon team. Activities will continue uninterrupted during the period of my temporary partial leave, and we will work seamlessly together. Marcus brings deep life sciences expertise, including 5 years as CFO of iOmx Therapeutics. He has led companies through all stages of growth from founding and early-stage financing to exits and M&A. We would like to welcome Marcus to our core team, and we look forward to the added knowledge and experience he will bring to the management team.

I'd now like to hand the call over to Michael Schaeffer, our Chief Business Officer, to provide insights into new mechanistic and preclinical data for varoglutamstat.

Thanks, Anne. Yes. Welcome, everyone, and thank you very much Anne for your words. Now let me continue with an update on the most recent R&D findings. Our lead product in development, varoglutamstat has a truly unique mechanism of action. By blocking the glutaminyl cyclase enzymes, QPCT and QPCTL, it effectively tunes down several proinflammatory and profibrotic signaling molecules by making them less active and stable. Now let me go a bit more into detail with this because the subcellular localization of these enzymes is also an important component in this context.

Proteins and peptides are synthesized on the endoplasmic reticulum. Some proteins are already fully functioned active then. However, another set of proteins requires further shaping in a process for post-translation modification, which happens in the so-called golgi complex. You can see here the blue structure within the cell. And what's important for us now is that a small number of proteins like selected chemokines of the CCL family, namely CCL2, 7, 8 and 13 as well as some other chemokines and signaling proteins require the activity of QPCTL for further maturation.

All these QPCTL substrates carry a specific signaling sequence, which guides them to the golgi, where QPCTL resides and where it catalyzes the formation of pyroglutamate forms or PE variants of these substates.

Now why I'm telling all of this? I'm telling you this because any drug with a purpose to effectively inhibit QPCTL has to not only go into the cell itself, but within the cell, it has to enter the golgi complex as well. And that is what varoglutamstat does at the doses we have been testing. And we were able to show this very nicely with a new and highly sensitive assay we have developed recently. This method uses liquid chromatography and mass spectrometry, which has the advantage to make detection antibody specific for every single PE variant obsolete, saving a lot of time, money and providing increased versatility.

We have been benchmarking this assay with VIVIAD study samples and can show you here that it's a 600-milligram dose, varoglutamstat effectively reduces pro-inflammatory cytokines pECCL2 and pECCL13 in plasma. And for pECCL2, the reduction was statistically significant. And we obviously were specifically interested in CCL2 as we have already seen and reported a dose-dependent reduction of pECCL2 in VIVIAD. So these changes are consistent with our previous analysis. And right here, as a reminder, we have shown this data to you before, the change from baseline at week 48 is depicted on the left on this slide. It correlates well with a dose-dependent improvement of the kidney function measured for eGFR in patients treated with varoglutamstat, shown on the right side.

While this analysis here combines the values of study participants in respective dose groups, we recently also have analyzed the data on a single patient level in more than 200 individuals. And with this waterfall plot here on the top left, you get a very good vision showing that varoglutamstat treatment decreases pECCL2 in majority of participants here in purple, while most of the participants on placebo here in orange, show increased pECCL2 levels, all depicted in the algorithmic scale here as a change from baseline.

And below, you see the correlation with a clear improvement in eGFR in the vast majority of patients on varoglutamstat, where the purple varoglutamstat bars show increased eGFR levels compared to the orange placebo bars showing decreased levels. And the right panel of the slide shows a statistically significant correlation between change in pECCL2 level in serum at week 48 and the individual slopes in eGFR over time in a scatter plot that's typically used for such correlations.

This might look a bit complicated, but what you should focus on is that most of the purple circles are in the upper left quadrant, while most of the orange ones are in the lower right quadrant. The so-called Spearman's coefficient calculated from this reveals a medium inverse correlation, meaning that also statistically the reduced levels of inflammatory pECCL2 correlate well with the decrease in eGFR kidney function. This is also telling us that the majority of participants treated with varoglutamstat has a positive eGFR score, i.e., increased eGFR above 0, again, corporating earlier findings. So in summary, we show here very clearly that improvement of eGFR correlates with reduction of pECCL2, not only if measured in dose groups, but also on the individual patient level.

Now I would like to shift gears and turn to recent data from our preclinical models. As a reminder, we have previously shown a beneficial effect of varoglutamstat on inflammation, fibrosis and kidney function in the ADI-CKD mouse model. We are now very pleased to report that we can incorporate these findings in an established model specific for diabetic kidney disease, the reninAAV-DKD model. I should mention that this is a very harsh model using diabetic mice with an increased induced hypertension and only one kidney left.

Now based on this MOA, varoglutamstat does not directly address diabetes or hypertension, 2 of the important risk factors of the CKD/DKD reflected in this mouse model. But at the same time, you can clearly see here that QPCT/L inhibition with varoglutamstat resulted in a very impressive statistically significant reduction in inflammation as measured here by CD11c, fibrosis as measured by the glomerulosclerosis index and the kidney biomarker, plasma creatinine supporting an improvement in kidney function.

So seeing the effects in the severely impaired mice is another confirmation for the potential of our approach and underlying our prior findings in the ADI-CKD model. These are highly encouraging preclinical results in a model specific for our initial target disease, diabetic kidney disease. In addition to diabetic kidney disease, we are investigating further opportunities for our kidney function improving approach. And together with our collaboration partner, the University Hospital in Hamburg-Eppendorf, Professor Tobias Huber's team, we have been looking into kidney-specific cells called podocytes in Fabry disease.

Now Fabry disease is an X-linked genetic lysosomal storage disorder affecting more than 1 in 15,000 people. It is a rare disease which affects all ethnicities and is also recognized as being heavily underdiagnosed. This is characterized by deficiency of a specific enzyme, which leads to an accumulation of certain metabolic products, which in turn triggers a cellular stress response, including generation of reactive oxygen species or ROS in target kidney cells, the podocytes. This in turn resulted in multi-organ dysfunction and chronic inflammation that particularly affects the cardiovascular and renal systems.

Disease-modifying treatments such as enzyme replacement therapy and oral capperone therapy have limited efficacy, particularly in advanced disease, which means that there's a significant need for new innovative therapeutic approaches. The current life expectancy for affected people even with the current treatment is 50 to 60 years. Now our partners at UKE have investigated Fabry podocytes and specifically, they have looked at ROS levels, which are indicator for chronic inflammation. We have just received preliminary data for the effects induced by varoglutamstat and VBY-2149 in this model.

And here on the right, you see for both compounds a significant and dose-dependent reduction in the ROS levels as opposed to untreated cells. Again, these are very preliminary data, but we are seeking for confirmation shortly from an additional assay using a technology that directly measures the oxygen consumptions of the cellular level. These are very promising results, and we will help -- and they will help us and our partner to design follow-on experiments towards additional therapeutic applications for our glutaminyl cyclase inhibitors in rare diseases.

And with that, I'd like to hand over to Frank for the strategic summary and outlook. Frank?

Thank you, Mick. Thank you, Julia and Anne. There's no doubt that there is a high medical need for therapies that can improve or cure kidney function in a majority of patients. And with varoglutamstat, we have an excellent opportunity to become a unique, convenient new oral therapy for these patients with a high medical need and to transform the trajectory of currently always progressing kidney disease to a stable situation. The opportunity is accompanied by an impressive product profile. We have already compiled.

Varoglutamstat is a first-in-class single agent that has shown already to stabilize and partially recover the kidney function. And it is already at that stage, we are a highly derisked development asset. Why is it derisked? Because, first of all, there is a clear development path to the market in diabetic kidney disease. There is no risk on the endpoints. There's a clear regulatory pathway, which we can follow. The second derisking is product specific. We have statistically significant and clinically meaningful data already on eGFR, which is the primary regulatory endpoint for approval.

We have observed that effect independently in 2 studies, and we have done our homework by identifying the most promising subgroup that is patients with diabetic kidney disease, which -- a larger effect size than seen in other subjects. We have already established an excellent safety profile with treatment duration over across 2 years. And we have also seen synergistic effects on top of the standard of care in diabetic kidney disease, SGLT-2 inhibitors in a mouse model.

Further on, we promised previously that we work on rare diseases, rare kidney diseases. And Mick just has presented the first very promising data in Fabry disease, which opens new opportunities both for varoglutamstat, but also for the follow-up compound.

Then where are we today? We have already a compelling body of evidence. We have an innovative compound. We have a unique asset, and we have consistent data. In summary, we are a mid-stage clinical company with a strong proof of concept that varoglutamstat improves kidney function. And we have the mechanism identified and we dig deeper, further and we will continued on scientific excellence as shown, Mick with the new data. And the data we see in the preclinical assays and experiments are very consistent with what we see in the clinic. So we have a strong translational evidence level.

The only limitation we see today is that the clinical data are generated in subjects with Alzheimer's disease, which have not been preselected for their kidney disease. And therefore, for an advanced kidney disease, we have not yet robust data. And this is why we are planning the upcoming milestone, and that is designing a Phase IIb study to confirm the effect in those advanced DKD patients, which are prospectively selected. That study is efficient and relatively short. And within 24 months after initiation, we should have the top line data for that study.

Now how do we get there? There is 2 opportunities and options to move forward with that study. One is financing and one is partnership because the new study, of course, requires funds, which we don't have yet. We are actively pursuing both pathways, financing and partnership in parallel. We have received significant interest from pharma companies, and we are under CDA with BD activities ongoing. The opportunity is good and the quality of the data and the results are well received and confirmed by independent reviews and analysis. And we get, of course, important input by pharma companies on the next step of deliverables for the next study. Ideally, for a partnership, we would present the data of a future Phase IIb study to engage in a final collaboration.

So where are we today? We have final steps to select the CRO for planned Phase IIb DKD studies. We are minimizing the time and cost to the actual start of the study once we have secured financing, and we are discussing protocols with kidney experts to ensure the best outcome. We have also secured the study medication supply for that study. So we are one step before the next milestone. And now we are looking forward that we can complete and initiate that program in the upcoming future.

Thank you for your attention, and we're open for Q&A.

[Operator Instructions] Now we're going to take our first question, and it comes from the line of Sushila Hernandez from Van Lanschot Kempen.

This is Meredith for Sushila. My first question is on the planned Phase IIb in diabetic kidney disease, how are your protocol discussions progressing with the experts? My second question is about, could you provide an update on how your partnership discussions are progressing? Has the mechanisms of action in kidney disease been a key topic given the additional analysis you have conducted? My third question, have you entered late-stage preclinical development with VY2149? And my last question, could you remind us by how much you would extend your cash runway if you draw under the SEPA? And do you currently meet the criteria to initiate these tranches?

I'll start with the last one, and then you may need to remind me on the others because a lot of questions. So the first is the SEPA. We have no intention currently to -- in the near future to activate the SEPA. That's what I can say. That there is no plans on the table. Therefore, theoretically, the framework would allow us to engage for EUR 15 million over 3 years, but there is no step taken and no decision taking to start that in the immediate future. So then -- that I can tell you.

Then on the follow-up compounds, we are -- you see that we are working deeper and further and continue to work on scientific excellence. That is, I think, a prerequisite to be successful in any science and any drug development, but we have not completed the nonclinical program. Also, this requires additional funding because the regulatory part of the nonclinical program is probably quite expensive and will be -- have a low single-digit million number or mid-single-digit million number, which we would need to identify in order to advance that program.

Then the partnership discussions, I think we have been very specific and we made a slide on it. I think it's not wise to go deeper and further because we don't want to disclose to the companies we are talking to our strategy and how many and whatever that is not by a situation. So we keep -- we don't say more than we have said, but I think it's clear we are talking about it. We're looking at the best shareholder interest to see what is possible and reasonable at that stage. And this is what we're doing, and there is interest. There's no question that there is interest.

Then the protocol discussion, and that is a little bit more a story we can talk about because depending on which expert you talk about, you get very different advice. And there are people who say, look, you're a new standard of care in diabetic kidney disease, do an all-comer study. So just except everybody with Stage IIIb IV, don't make the criteria too narrow because the data you have provided this is just a new standard of care and don't care about what the patient else get.

And there's people who say you should bring a little bit more order in your patient criteria and at least stratify them according to what they get as a baseline therapy because your effect may be different and too much heterogeneity may affect your statistical power. So there is a little bit of discussion how people see the data. what we can generally say there is excitement about the data, and there is a big willingness to continue and participate in the study. And then I don't know what else did you ask? I think I missed one question, I think, maybe.

I think about have you entered late-stage preclinical development with the VY2149 drug?

What I said is we have not completed the preclinical package because we would require some funding additionally to this, which we are currently identifying. So -- and also, I have to say we have not spent and dedicated resources on it yet because we were waiting for the first orphan disease data, because we're considering that the follow-up compound may be particularly suitable for orphan diseases. And we needed the first data, which were presented today in Fabry disease. So we are encouraged by this, and this is probably giving an additional push for the follow-up compound.

[Operator Instructions] The question comes from the line of Joseph Hedden from Rx Securities.

One on the pECCL2 data that you presented today. Just interested, would you expect to see a reduced pECCL2 with other DK drugs that are slowing -- DKD drugs that are slowing decline on eGFR? Or is this specific to varoglutamstat?

Well, I think there is no evidence that any other DKD drug would reduce pyroglu-CCL2 because that is very specific for a glutaminyl cyclase inhibitor. The pyroglu formation of CCL2 is something with 80% to 95%, 99% done by the enzyme. There can be spontaneous dosing, but they won't be influenced by others either. As you know, there has been futile attempts to reduce CCL2 itself and not pyroglu-CCL2 by other companies in the past. We don't think that CCL2 is a valid target in kidney disease. You need to address the pyroglu version of CCL2 in order to get a result. And that I think Mick showed in a clear correlation, that correlation we don't see with CCL2.

So first of all, to make it very clear, there is no evidence that any other drug would reduce pyroglu-CCL2. Secondly they may or may not effect CCL2. In the past there have been developer programs but from our point of view, that makes no sense at all because changing CCL2 does not change the disease trajectory in kidney disease, which is already confirmed by other programs, which didn't deliver results, but also from our data.

So I think we are in a particularly unique situation. Of course, science has to learn it. Pyroglutamization is a form of protein maturation or protein modifications are not the standard of science yet in everybody's lab, but people have to learn that these maturations have a very important effect on how these peptides work and how active they are and what cascades they trigger and whatnot. And there are a big difference between CCL2 and pyroglu-CCL2. So that's probably what I can say.

Okay. And then on your ERA Congress presentations, can you just give any color, did you get any feedback that you can incorporate into your future plans? Or did it lead to an uptick in interest in your BD discussions or any investor -- increased investor interest?

Yes, I can confirm everything, and we have one of the parties showing up there. We have -- it is one of those, which we have continuous discussions under CDA. And I think it is important to present the data. And I think it is -- it gives additional stimulus and it clearly shows the evidence and it's a validation of the data. I think it was a very successful congress for us.

[Operator Instructions] There are no further questions for today. I would now like to hand the conference over to your speaker, Julia Neugebauer, for any closing remarks.

Thank you all very much for joining. We really appreciate your ongoing interest and support. We've shown clear progress, and there is a growing momentum in the kidney disease space. So we are firmly focused on advancing to the next stage of our growth journey. Thank you very much, and goodbye.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.