DBV Technologies S.A. (DBV) Earnings Call Transcript

Welcome to the DBV Technologies Third Quarter 2026 Results and Business Update Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kevin Gardner from LifeSci Advisors. Please go ahead, sir.

Thank you. This afternoon, DBV Technologies reported financial results for the third quarter of 2026. This update is available in the Press Releases section of the DBV Technologies website. Before we begin, please note that today's call may include a number of forward-looking statements, including, but not limited to, comments regarding our forecast of estimated cash runway, clinical and regulatory development plans, the design and conduct of our clinical trials, our expectations with respect to the timing and results of interactions with and decisions by regulatory agencies and the ability of any of our product candidates, if approved, to improve the lives of patients with food allergies. These forward-looking statements are based on assumptions that are subject to risks and uncertainties that could cause the company's actual results to differ significantly from those suggested by these statements. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Please refer to the company's filings with the SEC and the French AMF for information concerning risk factors that could cause the company's actual results to differ materially from expectations, including any forward-looking statements made on this call. Except as required by law, the company disclaims any obligation to publicly update or revise any forward-looking statements to account for or reflect events or circumstances that occur after this call. Joining me on the call today is Daniel Tasse, Chief Executive Officer of DBV. I will now pass the call over to Daniel. Daniel?

Thank you, Kevin, and thank you all for joining us today. On the call today, I'm joined by our CFO, Virginie Boucinha; our CMO, Pharis Mohideen; and our Chief Operations Officer, Kevin Malobisky. Kevin is responsible for product engineering and development. He's responsible for manufacturing and for quality at DBV. The third quarter of 2026 was a continuation of the work involved in becoming a commercial company. The highlight of the quarter was the filing of our BLA in 4 to 7-year olds, for which I will have to give a big shout out to the DBV team, to our investigators and to the food allergy community who have all been exceptionally supportive of our efforts. I also wish to recognize the FDA's constructive engagement in the last few months and look forward to working closely with them during the review process. In tandem with this important regulatory work, DBV's manufacturing and quality management teams have been working closely with Fareva Amboise, the company's contract manufacturing partner. That work, which includes extensive collaboration with third-party expert consultants, follows the April 2026 FDA Warning Letter to Fareva. As we previously disclosed, the letter resulted from a September 2025 inspection of the manufacturing of a veterinary product and it included some observations focused on quality management operations and systems, which makes the Warning Letter have site-wide implications at Amboise. It is understandable and reasonable that there may be questions about this and what this means for our review process and the potential approval of VIASKIN Peanut Patch in 4 to 7-year olds, and I hope to use some of our time today to discuss them. So let me introduce Kevin to provide more details of the remediation process and our Pre-Approval Inspection preparation.

Thanks, Daniel. As Daniel mentioned, my name is Kevin Malobisky, and I am the Chief Operations Officer here at DBV. By way of a brief introduction, I've been in the pharmaceutical and biotech space for nearly 40 years, focusing my career on regulatory affairs and quality programs as well as building and leading teams through innovative development and operations. I joined DBV about 4 years ago. And as Daniel mentioned, I lead the global quality, development, manufacturing and Reg CMC teams here. I would like to start by outlining and reviewing the responsibility and process for successfully addressing the Warning Letter received at Fareva Amboise. The responsibility for satisfactory remediation of the findings cited in the Warning Letter resides entirely with the company that received it, in this case, Fareva Amboise. Since receiving the Warning Letter last April, Fareva has both accepted and embraced that responsibility and is working with DBV and our chosen third-party consultants on the remediation plan for the elements that could be applicable to manufacturing the Peanut Patch. Remediation of a Warning Letteris an established, standardized regulatory process, and I would like to take a few minutes to walk you through that and how Fareva has responded to the FDA and how FDA -- I'm sorry, and how DBV has been involved in the remediation process. There are four parts. First, within 15 days of receiving a Warning Letter, our company provides a robust written response detailing the remediation plan. This plan includes proposed corrective and preventative actions or CAPAs, and the cadence on which they will provide the FDA with written updates. This is typically every 30 or 60 days until the remediation is completed. In this case, Fareva submitted their written response and their plan to the FDA within the 15 business days and has since provided monthly written updates to the Agency. Second, as you may know, the remediation process is typically supported by external consultants and teams having remediation expertise. Many of these specialists bring deep knowledge of quality management systems and often include former FDA personnel. Where a question is highly technical or specific to a product, the remediation team can bring in additional subject matter experts. As I mentioned earlier, DBV's manufacturing and quality management teams are working closely with both Fareva and third-party consultants on remediation efforts that directly impact the manufacturing of the VIASKIN Peanut Patch. Third, the work is managed against a detailed project plan developed by the company's management team and the remediation experts together with the company's quality teams. All progress is monitored against the plan and is the basis for the monthly updates provided to the FDA. In this case, Fareva shared its detailed project plan with DBV, allowing our teams of experts and our consultants to support elements of the remediation plan that may be applicable to the manufacturing of VIASKIN Peanut Patches. This collaboration has allowed Fareva to focus their resources on site-wide remediation, while also giving the DBV quality team direct access and line of sight into the work that matters most for the VIASKIN Peanut Patch production. Finally, as remediation progresses and the company is confident in the date when the remediation will be complete, they will invite the FDA to reschedule a reinspection. Now, what does all of this mean for our BLA? To be clear, the review of our application and the remediation of Fareva's Warning Letter are separate and distinct processes. Where they converge is with the Pre-Approval Inspection or the PAI, and its readiness. As is standard with FDA filings, DBV included a target date for PAI readiness within the BLA submitted to the FDA. That PAI readiness target date is after Fareva expects to have completed their remediation. This background is important to understand how we are collaborating with Fareva and to reinforce how committed we are in the remediation process with them, specific to the elements relevant to the VIASKIN Peanut Patch. I thank you for your attention and now hand it back to Daniel.

Thank you, Kevin. It should go without saying, the work Kevin and his team are doing is a priority for the company and will remain so until the remedial efforts -- the remediation efforts are complete. It's also very important that we not lose sight of the progress being made across DBV, and would now like to provide an update on our Toddler Program. Over the last few months, we have also discussed with FDA our upcoming filing in toddlers aged 1 to 3 years as we're preparing to submit our BLA for children aged 4-through-7 years. These discussions included a potential rolling submission of the 1-through-3 BLA. Now we welcome hearing the FDA's perspective as we have a very unique dynamic here. We have two distinct BLAs to be filed in relatively quick succession. As we previously stated, no analogs exist for VIASKIN Peanut Patch. It's novel. We are building a breakthrough therapy on unique biology and a novel mode of action. Now both BLAs share things and differ in many ways. Both BLAs share similar approaches to clinical development, although, it's an important although, although with two distinct populations and two large data sets. There are meaningful differences between the two clinical sectors. VIASKIN Peanut also, as you know, is a drug-device combination delivering a biological API. Thus, both CMC modules for both BLA -- for each BLA are large and complex, while still having important content overlap between the two. But all of this background I'm sharing with you on commonalities and differences between the two BLAs matters because most importantly, both BLAs will be reviewed by the same team at FDA. And although there are obviously efficiencies to the overall review of the two BLAs, we do not want to create a review bottleneck and wedge two BLAs in parallel, potentially putting us at risk of doing just that. Our goal is to solve for an expedient and efficient review of both BLAs as the outcome. We have discussions with the Agency and in those discussions, the Agency indicated that starting the 1-through-3 review shortly after the 4-through-7 review will allow them to build on the important learnings from the first review and also benefit from the efficiencies we expect given the meaningful content overlap between the two BLAs. But not only that, it will also give DBV and FDA an opportunity to align on the form, on the content and on the best timing of the components of a 1-through-3 submission, all in support an efficient review of both BLAs. And DBV is in full agreement with FDA's approach. To give you a real example, we have asked for Priority Review in 4-through-7, and we certainly don't wish to take FDA's attention away from completing that review first and completing it efficiently. The efficiency of the subsequent review in our 1-through-3 application will clearly benefit from this well-coordinated sequential approach. We'll continue our dialogue with the FDA over the next few months and expect to submit a toddler BLA in 2027. We will provide an update once the FDA discussions of these elements have been finalized. And as a reminder, the FDA previously issued written communication confirming an accelerated approval pathway for the VIASKIN Peanut Patch in toddlers. Now before opening for questions, I'll ask Virginie to take us through our third quarter financial results, cash position and highlights. Virginie?

Thank you, Daniel, and good afternoon, everyone. We ended the third quarter with USD 165.7 million in cash and cash equivalents. This includes $50 million in gross proceeds from the sales of ADSs to RA Capital under our refreshed ATM program. Following the BLA submission, we updated our operating and liquidity forecast. And on this basis, we estimate that our existing cash will fund operations into the third quarter of 2027. This forecast reflects a stage-gated approach to investment. Our spending assumptions are milestones-based, so the timing of certain expenditures is aligned to regulatory developments, while we keep funding what the FDA review and a potential launch require. This means continued investments in Medical Affairs, Market Access, Marketing, Account Management and Pharmacovigilance as well as in our launch infrastructure. Now turning to our P&L. Year-to-date operating expenses were USD 164 million -- USD 166.4 million compared with $107 million a year ago. That is an increase of $59.4 million. About half of this increase went to the clinical and regulatory work behind the BLA filing itself. And this investment also reflects the ongoing advancements of COMFORT Toddlers, its open-label extension, VITESSE open-label extension and THRIVE. The other half of our investments went to building a commercial-ready company. Sales and marketing grew from USD 1.9 million to $15.7 million as we build our commercial expertise and launch infrastructure. We also continue to build pre-commercial inventory and scale the corporate functions that will support commercialization. The third quarter was a quarter of execution. We submitted the BLA and laid the foundation to become a commercial organization, and we will keep pacing our investment to regulatory milestones. With that, I'll turn it back to Daniel.

Virginie, thank you. In closing, the third quarter represented an important step forward for DBV. With our BLA for children aged 4-through-7 now submitted, we are focused on supporting an efficient FDA review, working with Fareva and advancing manufacturing readiness and preparing for the potential commercialization of the VIASKIN Peanut Patch, if approved. At the same time, we remain committed to expanding the potential reach of our technology to younger children through our Toddler Program. We recognize the important work ahead. We'll enter the next phase with clear priorities, energy and disciplined execution. We look forward to keeping you informed of our progress. So we can open the line for questions now, operator.

[Operator Instructions] And our first question comes from Kristen Kluska of Cantor Fitzgerald.

Really appreciate all the color you provided today on the manufacturing progress. I had a few questions there. Just understanding the process, is Fareva sharing with you the monthly updates that they have in terms of what they're submitting to the FDA and what the feedback has been? And then, are you able to say whether or not the actual FDA reinspection has been scheduled? And just trying to understand when we, the public, might be able to understand when that is and what the outcome eventually is?

So Kristen, I'm going to take that one. They share with us a lot of the monthly report, but understand they have 70 customers, they make 100 products. A lot of these things are not for competitors or other companies to see here. So we're quite satisfied with the extent of what they share with us. It's more than adequate for us to be comfortable with the progress, but we don't get to see everything for those reasons. Makes sense? To your second question, the FDA visit has not been scheduled yet, but it would be a bit premature to do that. Again, as these things progress, that would be part of what we'll be happy to share with investors as we cross those steps. Does that answer your question, Kristen?

Yes.

Our next question comes from Sushila Hernandez of VLK.

Just to clarify, so is Fareva currently tracking its detailed plan? And is there sufficient time for complete remediation with a potential buffer for potential delays before the preapproval inspection? And second one, have you completed and analyzed the data of the COMFORT safety study in toddlers? And last question, so is this then -- will you submit the toddler BLA only after a complete review of the children BLA? Could you elaborate on that?

Thank you. The last two questions on toddlers, I'll have Pharis answer them, while we'll answer your question about the remediation process afterwards. So Pharis, do you want to walk us through where we are with toddlers and the dialogue to come on what is the form of submitting that data since that discussion is not taking -- yet fully taking place with the Agency. So Pharis?

Yes. So if you recall, COMFORT Toddler recruitment ended in the second quarter. It's a supplemental 6-month safety study. So you can add up the timing for that. I think the important point, as Daniel mentioned, is going to be related to the ongoing dialogue with the FDA related to the timing of the 1-to-3 BLA relative to the 4-to-7. And to emphasize what Daniel said, we've been in close correspondence and dialogue with the FDA. The last thing we want is the 1-to-3 to create a bottleneck or a delay in their ability to deliver the Priority Review for the 4-to-7 BLA. Of course, nothing stops us from submitting the BLA if we want to, from a regulatory legal standpoint, but that's not the spirit of the relationship we have with the FDA. So I'm not sure if that exactly answered your question, Sushila, but I think behind what you're asking and getting to is what Daniel had addressed.

Yes, that's clear.

Okay. And Sushila, if you could repeat your first question? So if we give you a precise answer, would appreciate that.

Yes. So is Fareva tracking its detailed plan that they have laid out? Is it on track with all the steps? And is there sufficient time for complete remediation before the Pre-Approval Inspection?

I'll have [indiscernible] Kevin answer that one. So Kevin?

Thanks, Daniel. Yes. So as I mentioned, we work very, very closely with Fareva, as well as a number of consultants on a daily basis, and we're quite comfortable with the progress that they're making in terms of the remediation. The timing of that reinspection as it relates to the timing of our PAI we're also very comfortable with in terms of the buffer that would be there.

Our next question comes from Jon Wolleben of Citizens.

I might have missed this, but can you discuss what the Warning Letter details included, and what remediation activities are still ongoing? And then, any thoughts on getting a second manufacturer to have redundant supply? Or is that something that is a little too late in the game at this point?

Let me start with the second half, and I'll have Kevin answer the question here on the remediation process. We need a second manufacturing unit somewhere in the world to support the other years of our forecast that we shared with investors here. So we need more capacity, but that's investment we're making to support the full site of the product at approval. Setting up a new facility takes about 3 years, whether it's a CDMO or your own site here. So that obviously is not the backup plan to Fareva. Our plan with Fareva, and again, we're confident, is to work through the remediation and launch essentially the product out of their capacity. Does that make sense? To your first question, Kevin, can you answer it? Or do you need Jon to restate the question?

No, I can answer it. So the focus of the FDA inspection that led to the Warning Letter, as Daniel had mentioned earlier, was on a veterinarian product and an aseptic manufacturing process at their site. It's completely separate from the work in -- that's ongoing on the VIASKIN Peanut Patch. That being said, the remediation against a site-wide look at how potential impacts to the aseptic filling and the citations against that may or may not relate, is what's ongoing in the remediation. And again, we're very comfortable with the progress that Fareva is making and the expertise that we have on hand to continue to track that closely.

And by the way, that Warning Letter is available publicly, Jon, and we can save you some clicks of the mouse and send it to you. But it outlines essentially exactly that and observations around general quality management systems and training and that -- but those comments are common in a Warning Letter. And when such comment is made, obviously it touches every product made there as opposed to simply limiting it to the original observation, which was this veterinary product. I hope that was helpful as an answer.