Michel Detheux. La création d'une spin-off en Belgique

First of all, I would like to thank Baron Jot and the Collège Belgique for the invitation. It is a real privilege for me to be here in the presence of people who matter a lot and who have followed me over many years. I will tell you the story, so I will continue after this introduction by Benoît. I will approach the project differently and I will take you by the hand. I will make you relive the last few years from the moment we decided to create this company and where we have arrived now, thanks to collaborative work and collaborators who have allowed the project to advance, most of whom are here in the room. To complete what Benoît said and to make some reminders, I will first remind you that cancer is a disease that concerns everyone. It is not very reassuring, but you have to realize that currently there are almost 13 million people diagnosed with cancer today, and especially that one in two men and one in three women will have cancer in their lifetime. Most of these cancers can be treated, and that is where the notion that Benoît insisted on comes in, but rarely cured. So we manage to treat these cancers to delay them, but at some point the disease takes over. So we started iTeos at a time, perhaps by chance, perhaps by opportunity, at a time when there was momentum and a concept that was becoming more and more evident: that if one day we really want to cure cancer, the immune system, as Benoît explained, will have a very important role to play. In fact, this publication, an article in the New York Times in 2011, was followed by a Nobel Prize given to people who worked on cancer immunotherapy, and as Benoît said, in 2013 one of the most prestigious magazines effectively named cancer immunotherapy as a major recent discovery. It is in this context that we were able to create iTeos and develop iTeos. iTeos, like many adventures, is a combination of two different profiles. It is important for me to find the most performant scientific excellence to be able to build the company, because it is a real challenge. If it were not possible to find scientific excellence, we would not have been able to develop the project. So we had the opportunity, Benoît and I, to collaborate through a BN project that started in 2006, was funded between 2008 and 2012, and in 2010 Benoît called me one morning, actually in December 2009, asking if we should create a company. It took me about 3 seconds to say yes, let's go. So it took some time to set up the project, and that is where I will accompany you. Baron Geumot made an extremely flattering introduction of my background. I would say I characterize myself as a scientist with a tendency towards business development, and you will excuse my Franglais this evening, but I think my strength is being able to bridge science and business, which is essential for developing a spinoff project. We were also supported by the Walloon Region. I left my position as director at Euroscreen at the end of 2010 to obtain a post-doctoral grant for 2 years, which allowed me to finance this project, to be funded to set up the company. iTeos, I will answer the question right away because we are asked every time: where does the name iTeos come from? Eos is the dawn, so it was the symbol of a new day, and IT is for immunotherapy. So we had that. It is one of the fun exercises when creating a company: finding a name, finding a logo, etc. We spent a lot of time on it. Our wives helped us, who ultimately chose, as for many important things. iTeos is above all the combination of the expertise of Ludwig and Benoît introduced this prestigious institute that has existed for more than 40 years, which has invested more than 2.5 billion dollars in cancer research, and also the combination of the de Duve Institute, where there was very important expertise on the tumor microenvironment and the interaction between the immune system and cancer in humans. So we managed to combine the two. It did not happen directly; we first had to convince the Ludwig Institute to invest in a Belgian project. We are a spinoff of Ludwig worldwide, not just the Belgian branch. So we went to New York, where the headquarters are, in March 2010 to try to convince the Americans of the relevance of the project. They were quickly convinced. I had a 2-year funding that allowed me to live and sometimes survive thanks to the support of the Walloon Region, which was very important, and Ludwig also helped me at that time. We entered what is called the preparation of a business plan, which is an essential element. You cannot go see investors without a business plan, even if it is very virtual or very theoretical. You must have a project with a vision that will tell you: with the money raised, we will be able to develop or reach such a stage of value creation and thus develop the company step by step. So we initially had three projects: IDO and TDO, which Benoît will talk about, and another project that I will briefly mention, which concerned another enzyme also involved in immunosuppression mechanisms. We had enormous support from the Walloon Region. In fact, we received the largest subsidy ever attributed to a start-up by the region. We received more than 6 million euros from the Walloon Region, and I will show you that it was a huge support that allowed us to set up the project and to set it up with an ambition to become a world-class player. Then we had to find investors, and that was very complicated because even though we came from prestigious institutes, there was initially relatively limited intellectual property. It was mainly know-how that we were going to use and valorize in the project. So initially, investors were extremely reluctant. They said, 'That's nice, but come back when you have solid intellectual property, patents, etc.' So it was an exercise of more than a year. I met dozens of investors in Europe and the United States to try to convince them to take on the project. Finally, I will show very quickly, it was thanks to a close circle, to friends, to passionate people that we were able to finance the project, also with local investment funds, notably that of UCL, that we were able to finance the project. But it was impossible at that time to convince reference investors to invest in this type of project. What is also important to me is that beyond the targets we put in place, we selected and developed a platform that allows us not only to develop drug candidates but also to develop know-how that would allow us in the long term to integrate new targets and attract pharmaceutical partners to develop projects targeting the metabolism of the tumor microenvironment. So what we also decided was to concentrate this expertise here in Belgium on this tumor microenvironment and to outsource everything else. It was not the ideal business model I had wished for, but it was also an economic reality. We decided to keep in Belgium what makes us different from competitors, and everything else is outsourced either in Europe, the United States, or Asia with partners we have selected, which I will talk about. So beyond this association between scientific excellence and this entrepreneurial vision, we had to very quickly find investors. Ludwig, for the first time, invested cash in one of its projects in addition to technology transfer, which is another advantage in addition to the support of the Walloon Region. So we managed to raise 9 million euros. 9 million euros is both a lot of money and very little. It is a lot of money for a project in Belgium, it is very little for a drug discovery project. So we have a series of partners: the investment fund Desiclean, founder, Tromogenic, the investment fund of UCL, a Belgian-Luxembourg investment fund, and a series of private individuals, some of whom are here, who were, I would say, courageous to support the project, who were convinced by the potential of the project, but who are really in the circle we call friends, close ones, and fools. Those who really believed there would be a way to do something. It is thanks to them that we are here today, and it is thanks to them that we will continue to develop. So it was an essential step. But beyond this investment, beyond this entrepreneurial vision, beyond the science, you have to realize that there are dozens of areas of expertise necessary to set up a project. So there is everything related to intellectual property, even if we didn't have much at the start, it was important to very quickly secure the intellectual property we were going to develop. There are strategic aspects: what type of partner will we choose, what will we choose to develop in Belgium, what will we choose to give in partnership. There is everything related to finance and accounting because we are what is called a cash-burn model, meaning that every euro we spend is one that will make us live a little less long. So managing our expenses is extremely important. There is everything regulatory. I must say it is not always easy in Belgium. My collaborator, when she talks to me about well-being at work, all the regulations, work permits, and all that, it is good that it will be an important sensitivity for me because it will take us a lot of time and it doesn't always help us move forward. So it is an extremely important aspect but takes a lot of energy. There is also everything related to human resources. If the project is a success, it will be due to the collaborators, to all the partners. So human resources are extremely important to manage. Everything related to business development: how will we position ourselves with pharmaceutical partners? Everything related to interaction with biotech and pharmaceutical companies. After 15 years of experience in the pharma-biotech world, I had an address book that I was able to quickly valorize. And everything related to licensing and contracts. All these areas of expertise we had to integrate into the company in the form of consultants, networking, privileged relationships, to be able to build a core with sufficient critical mass to move the project forward. The project must also be supported by a series of committees or councils that will help build the governance of the company. This includes notably a board of directors, whose composition is defined here, with an independent chairman who is an anesthesiologist who worked in the pharmaceutical world, the biotech world, and the venture capital world. I decided to take a French person because I also had to associate American investors with Belgian investors. So I decided to take someone who was independent, and he has done an excellent job in pushing the company forward, developing the company. We have a strategic committee chaired by Jean Stéphenne, the former CEO of GSK Biologicals, who is also one of our investors. A scientific committee, which Benoît chairs and which is extremely important to continue associating our biotech development with a scientific foundation. A compensation committee, a finance committee, the management team that I lead, and then we continue to have a privileged relationship with the Ludwig Institute, not only in Belgium but worldwide, which is managed by a committee composed of both iTeos representatives and American representatives. All this allows us to structure the company, to allow it to build its strategic vision for 3 months, 6 months, 1 year, 2 years, and as far as we can. The project is above all the people. Most of my collaborators are here. In green are the collaborators who work in Belgium. Benoît devotes a significant part of his time despite all his academic responsibilities. So there is also a conflict of interest to manage, which we have managed very intelligently so far, and Benoît manages to devote part of his time to make the company benefit from all his know-how. Sandra joined us from KU Leuven. I will insist, I will show you until the end that unity is strength. So I am a graduate of UCL and ULB. We are now installed in a biopark that is mainly ULB, but I think the country is so small that it is important to cross all borders and to succeed in finding expertise wherever it is. Grégory comes from ULB, Marie-Claire and Virginie come from UCL. Marie is French, and Stefano is an Italian who trained in England, worked 10 years in Switzerland, and I attracted him to Belgium. He is sometimes a bit lost but does an excellent job. He brought his expertise, 10 years in the pharmaceutical company Merck Serono, to put it at the service of our activities. So here we have most of our collaborators who work on the pharmacological aspect. I will show you what that means: how do we characterize these molecules in vitro, in vivo. And then I have a chemist who is sometimes a bit alone and who directs these chemists in China, a company called Sundia, who make the molecules daily, who send us molecules every week, and the molecules are tested by the team here in order to identify which are the most promising molecules. And beyond this hard core, there are all the skills I told you about. So all these people, the acronyms here are a bit barbaric, I won't overwhelm you, and I will explain later what they mean, but all these people have completed our know-how with experience in the pharmaceutical company, in biotech, of several decades. So this is really what allows iTeos to advance today, knowing that we also have the support of our American colleagues from Ludwig, both for animal models, medicinal chemistry, preclinical development, regulatory aspects, and clinical development. We have a whole series of American experts who continue to help us daily. To get to the heart of the matter, when you create a company, you have to install it somewhere at some point. I told you we had enormous support from the Walloon Region, so I had only one constraint, which was quite understandable: we had to be in Wallonia. In Wallonia, there was the possibility of being in different places, but very quickly Gosselies appeared as an adequate place. So this is a helicopter view. We are in this building. We currently have 120 m² of office and lab space. I admit that at the beginning, the business plan was to work for 4 years with 4 people. If all goes well, by the end of the year, next year, I don't want to stress my collaborators, we will be around twenty. So things are developing significantly. But we were able to find within this infrastructure in Gosselies, so we are on the Biopôle of Gosselies in this building, we found adequate laboratories. What was most interesting is that in the lab next door there is a medical imaging center that is one of the most efficient in Europe, there is one of the best infrastructures in Belgium for animal handling. I am sorry to say that we are forced to use animals, but we have one of the best animal facilities, whose director is here today, who helps us enormously and allows us to develop world-class expertise. There is also a partner partially funded by the Walloon Region called Uniness, whose director is also here, who helps us with all genetic and cellular analysis. So ultimately, the advantage for me of settling in Gosselies was that I did not have to invest in walls or infrastructure, but I could afford to invest in science and people. That is the reason why we are currently in Gosselies, and we will continue to develop either from this base or in a place where we will have the best opportunities to grow the company. It is sometimes a bit complicated, and we test the traffic jams a lot, but we remain in privileged contact with the Ludwig Institute, obviously, notably for all clinical trial analysis, and we have some of our collaborators who work there and will continue to work there. So iTeos today is structured like this. iTeos is also a series of partners. I told you about Ludwig. We have a privileged partnership with UCL, obviously, of which we are a spinoff, and the de Duve Institute. But alongside that, we have a series of partnerships, whether in Belgium with ULB, the Institute of Medical Immunology, but also ULg, a series of hospitals. So we started collaborating with Brugmann, we started collaborating with Saint-Luc, but also with Ghent, and we also started a collaboration with Liège. We also have more distant international collaborations: Johns Hopkins in Baltimore, Heidelberg in Germany, and Roswell Park Institute in the United States, which has a large cancer center for gynecological cancers. So we have a constellation of scientific partners who continue to help us develop our scientific excellence and will continue to help us develop this scientific excellence. Alongside these academic collaborations, we also have a series of partners who help us in the different areas of expertise that are essential for this drug discovery program, which I will start to enter into vividly. So we had to do screening. I will explain right away what that is. Here is an American partner, here an English partner. We do a lot of chemistry. The partners circled in blue are Belgian or Chinese. Sundia also. We must test these molecules for properties that I will explain with a series of partners in Europe and China. We also have a whole series of partners who help us with models, either specific models or who help us increase our capacity, with here notably quite a few Belgian partners. And this partner gives us access to a very high-quality animal facility on the Gosselies site. So that is iTeos today and all the constellation of collaborations we had to put in place to reach a critical mass that allows us to be visible internationally, if not globally. We also have a French partner who manages our intellectual property, which is really our safe where we build and develop all our intellectual property, which will be the essential tool to create our valuation now and in the future. Now let's enter this drug discovery program. Ultimately, you see a drug when it arrives for most of you in the form of a capsule or injection in a box. Here we will go back in time 20 years upstream. So I will talk to you about activities that are 20 years before a market launch. So you have here from bench, and what Benoît explained is here the scientist who has an idea up to the bed and up to the medicine. This process takes 20 years, and this process for decades has been managed extremely efficiently by the pharmaceutical industry, whose roots go back to the end of the 19th century and whose largest players currently have more than 100 years of existence. And then you see an interesting diagram here. You see here the number of NMEs, meaning new molecular entities, that have been developed per billion dollars invested. So you see that in the 1950s, when you invested a billion dollars, you got, this is a logarithmic scale, about 30 new molecules. And then you see that dramatically, as we approach the present time, per billion invested, we are at less than one molecule. The current cost of developing a new drug is on the order of several billion dollars because you have to take into account all the failures. So you see that when you do an economic calculation, even if pharmaceutical companies have considerable financial means, these pharmaceutical companies quickly realized, notably from the 1980s, with the emergence of biotech companies, that it might be interesting to take less risk and concentrate their activity on what they do best, that is, large-scale clinical assets, and then everything regulatory, everything production and manufacturing, and marketing and sales, and to let biotech companies do the first riskiest steps. So they ultimately sit on the bleachers, wait for biotech companies to develop something interesting, and then buy the program or make a partnership with the biotech company to associate and finalize the development. So you have to keep in mind today that a biotech company is not just a company that will make recombinant proteins or do very exotic things. It can be a company that does the same thing as a pharmaceutical company but in a very focused way. That is what iTeos does today. iTeos is a micro pharmaceutical company, and we do exactly the same thing as a large pharmaceutical company. So how does it work? You have here a funnel. You have here a certain number of years. So ultimately, you have to keep in mind that a patent has a lifespan of 20 years. So from the moment you identify a new molecule and patent it, which we did this year, the patent lifespan is 20 years, sometimes it can be extended by 5 years, but let's say it's 20 years. So you have a discovery process that will take roughly 11 to 13 years, and so there will be 7 to 9 years left for the pharmaceutical company to valorize its investment. Afterwards, generics will enter into competition, and I think that is something positive, but you have to realize that generics will enter into competition, the pharmaceutical company will see its revenues melt if not completely disappear. So you have a funnel where when you start, and I was telling you about iTeos which is in the wide part of the funnel, iTeos will one day probably reach a phase 2 but will not go further. And iTeos between this stage and this stage will find a pharmaceutical partner to make a strategic alliance, and with this partner continue the development, but the pharmaceutical partner will take the lead and assume the development up to market launch and the reimbursement procedures, which take another number of years. So I will mainly talk to you about this. So iTeos today has existed for 2 years and 1 month. The first employee arrived on September 1, 2012. We are currently at this stage. We are exactly there. So we gained a bit of time on our first project, and we are at a stage where we consider we could enter the clinic by the end of 2015, beginning of 2016. So I will talk to you about these different stages. Do not believe that it is something extremely sophisticated, that it is rocket science as the Americans say. It is something extremely elementary that is identical in the process for almost 40 or 50 years, if not more. You take a series of molecules that you will test. I will explain a bit how we will do it. Then we will find a molecule or molecules that are promising. Then the chemist will start to change the characteristics of these molecules to transform them into a molecule that will work in vivo, in animals, and then a molecule that will finally be adequate to enter clinical trials. Then you will have clinical trials, and I will explain a bit what the different stages of clinical trials are. You often hear about phase 1, phase 2, phase 3. I will try to explain. So a drug, I come back here to tell you that when there are 100 projects that enter here, there are two that arrive there. So 98 projects will fail at some stage between here and there. And I admit that there are still projects that fail here. So there are projects that fail when the reimbursement is not high enough for the pharmaceutical company. So it may be dramatic, but you have to realize that projects can stop at all stages, and especially in these stages, for 10 projects that enter here, there is more or less one that will enter here. And then in the 10 that enter here, there are two that will come out there. So a company like iTeos, like many companies in Belgium, whether it be Euroscreen, Galapagos, Ablynx, arGEN-X, and others, will be especially active in this zone, will take the risks. Now there are high risks, and then I will also show you some significant payment figures. So why will a product stop? I have listed here a series of reasons. Because it is not effective, first of all. You will take a product, you will develop it, it will work very well in mice, you will get to humans, it no longer works at all. So that is a problem. It may be toxic. The product can certainly, especially in oncology, kill cancer cells, but if at some point there are side effects so important that it has a toxic effect on the patient, it will not be adequate. The product can have a safety problem. You have all heard of Vioxx. It was not toxic as such, but in some patients with a certain profile, it could cause cardiac arrests, notably. So there is a safety problem. There can be, and you see that it is relatively important, a market problem. A pharmaceutical company will invest, and then 5 years, 10 years later, will realize that a competitor has taken the lead and will stop the project. You see that a certain number of projects are stopped for these reasons. Pharmacokinetics, I will explain, is a product that is not sufficiently active in humans. Cost is important. Formulation: it is useless to give a patient a pill that weighs 30 or 50 g per day; it will not work. And then there can simply be strategic reasons. So to try to manage these risks, we started the project, and I put here a value chain, value creation, and then time, investment, risks that can be put on the same scale. We decided to start iTeos with three different projects. HO1 was a project that came from Cambridge in England under the aegis of Ludwig, which was the repositioning of molecules that had already been tested in humans in clinical trials for metabolic diseases and that we wanted to reposition as immunomodulators. So there, the toxicology risk was limited, the safety risk was limited, and ultimately there was a much greater potential for value creation for a relatively limited investment and time. Then we had IDO, which Benoît told you about, a project that had already been initiated by American competitors. So there we had a strategy, we always have a differentiation strategy. I will talk about it a bit because we have to differentiate ourselves from these American competitors, who are between 100 and 1000 times larger than us for at least one of them, and who have considerable means and started with 5 years of advance. So we have to do things differently. And then we have TDO, this target that Benoît talked about, which for the moment has never been developed by a pharmaceutical company. So there, obviously, the risk is much higher, and value creation is much more uncertain. So we started iTeos with these three projects, trying to manage the risks differently to be able to create value and attract investments that would allow us to continue when the 9 million were used. So very quickly, after 9 months, we made the decision, which I would not call suicidal but courageous, to stop the first project, which was supposed to give the most return on investment. Some investors were extremely troubled by this decision, and I can tell you today that it was the right decision because we concentrated our resources on the other two projects. We were also able to show that we had the ability to stop a project despite its potential, to make the right decisions, and to focus on projects that were more promising. So this evening I will illustrate the preclinical development process through the IDO project. The IDO project, to resynthesize what Benoît said very quickly: you have this T lymphocyte, which is ultimately the agent in the body that can fight the tumor cell. And these tumor cells have made themselves invisible by synthesizing, by producing this enzyme IDO. This enzyme IDO degrades tryptophan in the tumor microenvironment and produces a molecule called kynurenine, which is toxic to the T lymphocyte. So you have a process where when the tumor cell expresses IDO, you will have a decrease in tryptophan in the tumor microenvironment, an increase in kynurenine, and the concomitant effect of these variations will lead to a paralysis of the T lymphocytes. So that is what we want to reverse. By inhibiting IDO, we want to reverse the process, restore the concentration of tryptophan, decrease the concentration of kynurenine, and allow the T lymphocyte to attack the cancer cell. The physiological role of IDO, Benoît explained, is mainly maternal tolerance. When you give an IDO inhibitor in an animal model of pregnancy, you get a direct and very rapid abortion. So this maternal tolerance is extremely important. The validation of IDO was substantial. Beyond the initial seminal publication by Benoît on the role of IDO in cancer in 2003, there have been more than 780 publications, many animal models even if these are sometimes very difficult to reproduce, and many cancers expressing significant amounts of IDO. So IDO is clearly an interesting target. When we started the project in 2012, there were two known competitors. Currently, there are more than 15. So there is an extremely aggressive competitive environment, and we must position ourselves in relation to this environment. Incyte, which is a former DuPont de Nemours, the pharma branch of DuPont de Nemours, and the number 1 currently, started the project more than 5 years ago. We have managed to position ourselves almost as number 2. NewLink is another company that is also in clinical phase but is much more controversial. So for the moment, we are number 2. We must valorize this momentum or this timing because it is possible that in 2 years we will be overtaken by large pharmaceutical groups that have much more significant means than others. So what have we done in 2 years? First of all, you start the process with screening. What do you do? I told you it was not rocket science. In fact, imagine that the box here, the cube, is the chemical space of all the molecules that exist in the world. So you have to find a chemical molecule that will be able to have the effect you want to develop as a drug. In our case, we want to find a chemical molecule that will inhibit the IDO enzyme, and we had no idea at the start of the type of molecule we were looking for. So you have to find in this chemical space, which you can imagine here as a set of molecules as diverse as possible, and it is one of the great challenges: to be sufficiently diverse to be able to fish by chance, it is really a fishing expedition, for the molecule that will be a good starting point for the medicinal chemistry program.

With an English collaborator who had a library of about 180,000 molecules, you have to realize that large pharmaceutical companies can screen several million molecules, so it's extremely difficult to have a sufficiently representative library. We identified a partner who seems to have an interesting library. This is done in a robotic environment that I illustrated here, which involves millions of euros in investment. So again, it didn't make sense for us to invest in this platform. We found a subcontracting partner who was able to do it, who could also bring the molecules and the screened library. And you have this type of format: it's a plate about the size of a wallet, in which each well contains a different molecule. Using a recombinant enzyme or a specific cocktail, you arrange to have a signal here—a light signal, you see different colors—that can be read by detectors of this type. This allows you to screen these hundreds of thousands of molecules to identify which ones have an effect on the target you want to characterize. In our case, we want to inhibit the IDO enzyme. For example, an orange well is one in which a molecule is positive. So we carried out this screening: we screened the 180,000 molecules, we found about 1,000 active molecules, and the chemist had to start analyzing all these molecules and try to identify the most promising ones. Generally, when you finish this screening, you have a molecule with a certain potency and affinity. But for this molecule to be interesting—we're talking about a hit from primary screening—it must be soluble; if it's not soluble, you'll never be able to administer it to a patient. It must be metabolizable but not degraded too quickly. It must be absorbable orally or intravenously, able to pass through the stomach and intestine and reach the site you want to modulate. It must not be toxic, obviously. It must be selective: your molecule must not only target your target, like IDO in this case, but also not target other isoenzymes, otherwise you'll have undesirable side effects. So you start with one property, knowing you'll have to make compromises so that all these characteristics are as good as possible. The chemist has this permanent obsession: 'What do I do if I improve this but at the same time decrease or increase toxicity?' So it's always a compromise. The chemist starts from a hit and then grafts on extremities or makes chemical modifications. You have chemical groups here. When he has experience, as is the case with Stefano, he can leverage his 10 years of medicinal chemistry. This is what we call medicinal chemistry: some groups are more promising than others, or some won't work because they'll be toxic right away or have poor solubility. But all this design comes from the chemist, who will synthesize or have a series of molecules synthesized. We do this in China mainly for economic reasons, but also because it's not an essential activity for developing our proprietary know-how. These molecules are synthesized in China and come back to Belgium every week. We also have other approaches, such as with a German partner, where we made a crystal of the enzyme we're interested in—X-ray crystallography. This crystal was made in the presence of molecules, either competitors or promising molecules. Don't ask me to explain, but chemists can see in this type of molecular infrastructure how the molecule places itself, how the inhibitor places itself, and think, 'If I put a slightly bulkier group here or a slightly smaller one, I'll improve the interaction with the enzyme.' So there's real design with these molecules. Then these molecules come back to us. It's an experiment we did: a proliferation of lymphocytes—these are white blood cells responsible for the anti-cancer effect. In collaboration with Saint-Luc and Ludwig, we tested our best inhibitor compared to that of a competitor. You have a dose-response: you increase the concentration here, and you get a beneficial effect. You see that we measure all the molecules synthesized so far—more than a thousand have been characterized by our team through a series of tests to identify a molecule that now begins to have an interesting profile. We keep the activity, which is obviously important. It's sufficiently soluble to work, to be injected into an animal. It's not metabolized too quickly or too slowly. It's properly absorbed. It doesn't have major toxicity, and it's selective for our project. This takes months, if not years. So there have been a series of syntheses and tests. The chemist analyzes the test results, redesigns the molecules, thinking, 'I made a mistake in my design here, that's a good idea there, that seems like an interesting path, let's explore it.' There are iterative synthesis cycles that take weeks and months. We receive molecules every week that we test to try to refine the profile and arrive at this profile. Once you're there, you have what we call a lead. This lead, obtained through iteration, must then be tested in vivo. In vivo, you have a double challenge: the pharmacokinetic challenge—we often talk about ADME. What is ADME? It's an acronym for absorption: how will the molecule be absorbed in the patient? Distribution: will it go directly to the foot? That's not what interests you. Will it be in the urine, in the feces? Will it be distributed homogeneously? Metabolism: how will it be metabolized? Will it go back to the urine? Will it go elsewhere? How long will it take? And excretion: how will it be excreted? So those are the pharmacokinetic properties. Then you have the pharmacodynamic properties: how will the molecule interact with the target in vivo? You have to combine both: you need the pharmacokinetics—a molecule that stays in the body long enough to have an effect—and the pharmacodynamics—at what concentration it will have that effect. You generally see that you need relatively high concentrations to have an effect, but the molecule won't stay very long; it won't accumulate in the patient or the animal model. And when it accumulates, it's usually toxic. So you again have to find a compromise between pharmacokinetics and pharmacodynamics to find the doses that will be most promising for both animal models and subsequent patient treatment. There's a whole experimental work that has been done, notably by the team. Benoît talked to you about tryptophan metabolism. Tryptophan is an essential amino acid; we can't synthesize it ourselves; it's provided by food. 95% of tryptophan is degraded into kynurenine by the activity of IDO and TDO. So in this case, when we inhibit IDO, what happens is that we modulate the concentration of kynurenine in the blood. This is an experiment we did at iTeos. We compared our best molecule to a competitor's. We measured kynurenine in the animal's blood. You see that when we give the molecule by oral administration, we measure kynurenine 2 hours later—the product of the reaction. We see that if we inhibit the enzyme, we cut the tap, we significantly decrease the concentration of kynurenine in the blood of animals treated with increasing concentrations of the inhibitor, reaching a level of inhibition that is almost maximum. The good news in this experiment is that we had concentrations or an effect close to the competitor's inhibitor, which is currently in the clinic. So that's already very good news. We got these results around the end of last year, and it was a first step for us: our molecule works in vivo. So we have what we call a lead. Now, we worked during 2015 on animal models. Again, it's an obligation; if we could, we wouldn't do it, but we have to work with animal models because we analyze the interaction between the immune system and the tumor, and that can only be done in animal models. The team worked for months, 7 days a week, twice a day, continuously. There was enormous work from all the teams to develop a series of models, some of which were transferred from Louvain-la-Neuve. We first used the model that Benoît presented with the vaccine. This model allowed us to see that in combination with our inhibitor and a vaccine, we had a beneficial effect. The immune checkpoints are what Benoît mentioned as antibodies capable of cutting the brakes that prevented lymphocytes from developing. But also chemotherapy: we were able to show that we had an additional or additive effect when combining our inhibitor with chemotherapy, as we did with the vaccine and immune checkpoints, and other types of vaccines in combination with Johns Hopkins or Roswell Park. So these are all the animal models we are working on. You have to realize that these animal models are a 4 to 6 week job where you have to give the molecule twice a day to the animal. These are very long experiments. Here's an example: you have the tumor size. It's a vaccination model. Here you have the animal that was vaccinated; you see the tumor developing over time to reach very significant sizes. Then you have the vaccine given at the same time as the competitor's inhibitor, which gives a significant effect. And then in this experiment—I chose the most aesthetic one, I admit—we have an even more significant effect when we combine the vaccine with our own inhibitor. So for us, this was, excuse my Anglicism, a breakthrough. It was a decisive step. These are results we obtained a little before the summer or at the beginning of the summer. This allowed us to position ourselves by saying, 'We not only have a lead, but we have a development candidate.' So we have a molecule that—you see I've expanded the slide with other characteristics—has very significant activity, significant efficacy as I showed in the animal model. We have a molecule that is selective, and we did a whole series of tests to show that our inhibitor only targets IDO. We have a molecule that is not toxic, or at least in preliminary studies appears to have high safety and few or no side effects. We have a molecule that is relatively stable. We have a molecule whose metabolism and degradation are compatible with human application. So I come back to these ADME principles: absorption, distribution, metabolism, excretion. It was also very interesting that we managed to secure intellectual property that allowed us to consider that our molecule could one day be licensed to a pharma partner and transformed into a drug. And the synthesis is extremely easy, as is production. Stefano isn't here today; he's in China to validate the synthesis of a clinical batch that should be finished next week. Where are we today? We are here—excuse me, the slide is a bit complex. Pharmacokinetics: how the molecule behaves in a living being. We tested mice and rats; we have very good results. We tested dogs; in dogs, it's not adequate; the molecule is directly degraded due to dog-specific metabolism. We worked with minipigs, which have become a standard in Europe because we can no longer work with monkeys in Europe. But we also tested monkeys, and we worked on isolated hepatocytes from human material. We obtained molecules with extremely promising characteristics. I'll come back to pharmacodynamics: how our molecule will modulate kynurenine concentration in the blood. We obtained very good results in mice, as I showed you. Minipigs are ongoing; monkeys we are still working on. And for humans, we have a very good prediction. Animal models—you have to realize they are not predictive. An animal model will give you a series of information but won't predict what happens in humans. But we obtained very good results thanks to the relentless work of the team and our collaborators. We also tested selectivity through partnerships or subcontractors. We tested more than 300 other enzymes or proteins to show that our molecules—and I should put 'finished' here—were completely specific, notably for a protein called hERG, which causes major cardiac problems in humans. We have no activity. CMC: chemical manufacturing cost. We have a molecule that is very soluble, easily given in gel form in humans, whose formulation will not pose a problem. We are lucky to have a molecule that can be synthesized in one step, whereas often molecules require 10, 15 steps, and the more steps, the more expensive it is. We have the extreme opportunity of a molecule that is synthesized in one step. And we have a GMP batch currently being synthesized this week to be ready to enter clinical trials. Toxicology: we are advancing; that's what remains for us to do before entering clinical trials next year. We have no gene toxicity. We also finalized toxicity in rats; we obtained very good results. We are now doing the toxicity that will allow us to receive authorization from the FDA or the European Medicines Agency to enter clinical trials. We are finalizing this. We also have a Phase 1 protocol ready, and we have selected clinical centers. We think, if we continue to develop without a pharmaceutical partner, we will collaborate with Saint-Luc and Bordet to do Phase 1 here in Belgium very soon. So that's what we've managed to do in the last 18 months. How do we differentiate from the competitor? I remind you, this competitor is Incyte; they are in Phase 2, they have partnered with the four largest pharmaceutical companies in the world. So we come like little Tom Thumb, but we come with ambitions. I took two characteristics: how our molecule modulates lymphocyte proliferation—which is really the mechanism of action on cancer. These numbers are very close to each other, indicating that the molecules have similar potency when testing activity on human blood from healthy volunteers. We also have very close numbers indicating comparable potency. However, what's interesting is when we look at how the molecules compare in monkeys, the species closest to humans. In monkeys, clearance is how the molecule is eliminated. Here, the higher this number, the faster the molecule is eliminated. We see that our molecule is eliminated 6 to 7 times less quickly than the competitor. The half-life of our molecule is 3 to 4 times higher. And if we predict the half-life in humans, our molecule's half-life will be 6 to 7 times higher. That's extremely important: do you give a molecule once a day, twice a day, three times a day to a patient? Will this drug have an effect all day, for 3 hours, for 5 hours? Our molecule is much more interesting. And when we take this number, which is ultimately the concentration reached in the blood, we see that our molecule reaches concentrations 15 times higher than the competitor, while its activity is similar. So we expect a molecule that will have much greater activity than the competitor. Additionally, our molecule penetrates the brain, which is generally a characteristic we try to avoid, but in the case of cancer, it could allow control of the development of brain metastases, which are often a very poor prognosis for patients. So we now need to enter clinical trials to show that the toxicity of our molecule is not significant. Our competitor observed significant toxicity in a clinical trial with anti-CTLA-4, which Benoît mentioned. They had to reduce doses from 300 mg to 50 mg. That's our advantage: not only does their molecule have lower coverage, but they also had to reduce the doses they wanted to use. We also have a TDO program that would allow us, for certain types of cancer, to evaluate the combination of an IDO inhibitor with a TDO inhibitor. So that's where we are today. Here, for example, is the elimination profile over time of the molecule when given orally in monkeys. We have the competitor's molecule here; this is the concentration reached in the blood. We have our molecule. You see, even for non-specialists, that here the molecule—the blue curve—gives a much greater effect than the red curve. Benoît showed that IDO is expressed in many cancers. So I've shown you that we developed a molecule, and now we have a major question: in which type of cancer will we start our clinical phases? This is also extremely important. I want to remind you that, to summarize the situation, we have a program that makes the tumor detectable for other types of treatment. These types of treatments are immune checkpoint inhibitors, therapeutic vaccines, and also chemotherapy. When you give these treatments alone, as Benoît indicated, you have a partial effect because in most patients, the tumor is invisible. So the concept is to give a combination treatment: our IDO inhibitor with one of these treatments to make the tumor detectable and more easily attackable by one of these treatments, to get the best possible response. This concept must be integrated with the IDO expression profile. This work is currently being done in collaboration with Ludwig by Nicolas and Camille, who are here. We need to choose certain types of cancer. You see, for example, endometrial cancer: there are 1,300 cases per year in Belgium. It has a fairly unfavorable prognosis in women. You see enormous IDO expression. However, for this cancer, there is no easily accessible combination. So we have an inhibitor that could work very well there, but there is no combination available. So there's a whole strategy: among these different tumors, which ones could be the most promising and allow for interesting combinations? Benoît mentioned melanoma and ovarian cancer. I'll tell you simply: for ovarian cancer, it's no longer possible to recruit patients. When you talk to key opinion leaders in Belgium about ovarian cancer, like Dr. Vergote at UZ Gent, he tells me, 'For ovarian cancer, I have 600 patients per year, I have 52 ongoing clinical trials.' So everyone is lining up, excuse the expression, to try to recruit patients. On the other hand, for endometrial cancer, I have 1,300 patients per year and two ongoing clinical trials. So you have all these dimensions that must be integrated to choose which indication you will select for your clinical trial. Clinical trials—and I'll almost finish with this—have different phases. For oncology, it's very specific because you start directly with patients; you don't go to healthy volunteers. Here you have the number of patients, the success rate, and the cost per patient, more or less, which can vary by 10 to 20%, but it gives you an idea. So a Phase 1, in our case, will be about 20 to 30 patients over a year to a year and a half. We will give increasing doses to these patients after verifying that the molecule is not toxic in animals. We know we can measure kynurenine in the patient's blood. We want to verify that the molecule has good safety and no toxicity. We also want to verify the ADME parameters: I told you we predicted a half-life in humans; we need to verify that's the case. We need to verify that it won't be different between a man and a woman, that it won't vary between a young and an older person. So we need to verify all these effects in Phase 1. Efficacy is very rarely obtained; it's not in a Phase 1 that you'll cure a patient—it happens sometimes, but it's extremely rare. However, you have a whole series of immunological parameters that are extremely important to refine. We are currently collaborating with Saint-Luc and Bordet to try to determine which parameters we could already determine in Phase 1 to prepare for Phase 2, where we will try to achieve efficacy. In Phase 2, we will go to between 50 and 100 patients. When you have a startup like iTeos, it can take up to 2 years. There, we will test our molecule alone, but we will directly go with a combination. I explained to you just before that it was important to aim for combinations. So we will try to find the right combination, with efficacy, at what concentration our molecule will work, whether we will have toxicity—I told you the competitor observed toxicity when combining their molecule with an anti-CTLA-4—what the side effects will be, what dosage we will choose. So that will take 2 years. Many projects fail at this stage; it's called the proof-of-concept stage in humans. Then we move to Phase 3, where very few biotechs dare to go. GSK, for example, in its SMA program, invested about 150 million euros. Imagine the type of investment needed. That's when we will look for a pharma partner. It will take 1 to 4 years. We need to have varied populations in different centers. We need to compare with a placebo. Again, we want to see safety and side effects. There's a whole statistical analysis: what happens with a patient who takes another drug in addition to the one we want to give, who takes an antidepressant, a painkiller, etc. So you see it becomes extremely complex. There, we will have data that will allow us to prepare for registration, which will take another 1 to 2 years. And then after the drug reaches the market, we continue with what we call a Phase 4, which takes several years. In fact, we continue to monitor what happens in treated patients to ensure there are no effects that were not identified initially in very specific patient populations, to ensure the drug is safe. So now you understand why a drug can cost more than a billion euros. How are we going to prepare our next round? I told you we raised 9 million. These 9 million give us a certain financial visibility. In fact, if I take the time scale here, what we are doing, we have two options. Either we focus on one program—and for now, IDO is more advanced; TDO is still at the lead stage. With the money we raised, the 9 million, in blue, we can reach the end of 2015 with the completion of preclinical development. We could be ready to enter clinical development, but we need additional investment to do Phase 1 and Phase 2, to continue the second program, and to leverage the platform and know-how we've developed to develop new projects because there are other targets in the tumor microenvironment that would be interesting to address. A strategic decision we made about 3 weeks ago at the board level: do we take the risk of developing two projects in parallel and by mid-2015 need cash to continue and secure financing to develop two projects in parallel? We decided, given the latest results at least from September, to focus on this option. I'm telling you this because it's important: you've understood that cancer is not one disease; it's dozens of different diseases. I won't give you a headache, but the cancer cell is capable—you have IDO here—of developing a series of mechanisms that make it invisible to the immune system. So iTeos has a promising future ahead if it manages to finance itself and continue its activities because we have other targets here that would be interesting to leverage or develop by leveraging all the know-how we've accumulated thanks to the technology transfer from Louvain-la-Neuve and the expertise of... So, for example, here is a target. This is a series of cancers; it's a quantification of RNA. You see this target, which I won't mention here, is an enzyme responsible for the degradation of another amino acid other than tryptophan in the tumor microenvironment. You see that in normal tissues, the scale of 10 generally indicates low expression; it's barely expressed. On the other hand, in tumor cells or in different types of cancer, you see that some cancers, like ovarian, have very high expression. Well, I would be able to develop this within iTeos in the coming years. So now, let's talk about what we can do with the 9 million we had. Obviously, less than 9 million remains since the start of our activities. We can finalize the preclinical development of IDO. We could obtain an optimized lead for TDO, but we need additional financing. Since the beginning of the year, I've met about forty investors and spoken to about thirty pharmaceutical companies, whether in Europe, Japan, or the United States. So if we raise 5 million more in addition to what we have now, we could finalize a Phase 1, reach the stage of preclinical development for TDO, and start developing a new program. If we raise 8 million—it's not cumulative; it's 5 or 8—to go further in our Phase 1, develop a second program on IDO, what we call a backup, so if the first molecule has a problem and stops at some point, we have a fallback position to continue the program. We could finalize a Phase 1 on TDO and push a new program or several new programs to feed the process. And if we want to do everything I showed you in the previous slide and finalize a Phase 1 and a Phase 2 on IDO and TDO, then you need 24 million. When I say I need 24 million, people usually smile or laugh and say, 'Come back in a few years; that's not an amount of money you'll find.' So there is an alternative. This is the capitalistic aspect. The 8 million, we are on the verge of finding it, and the current investors, who have extreme confidence in us, are ready to follow us. So it would be possible to do the 8 million, but that means in 2 years we have to start again, find money again, and that takes enormous energy and time. So the alternative is to say, 'Is the project mature enough to attract a pharmaceutical partner already now?' So we enter another configuration: we enter into a strategic partnership. Some will say, 'Yes, but you're already selling the crown jewels.' I would say no: we are partnering with a partner that allows us to have greater ambition and develop our project. So, I told you that the risk is on the side of biotechs. This is a scale that covers different development stages: Discovery is where we are for TDO; Preclinical is where we are for IDO; then Phase 1, Phase 2, Phase 3. When you give a program in a strategic partnership to a pharma, here are the amounts you can hope for, in millions of euros. But attention: these are 'bio euros' in the sense that these amounts are only obtained if the project reaches the market. I told you that only 1 in 10 projects reaches the market, so you have to realize that you don't automatically get these euros; it's a percentage, a probability. But you see that a partnership with a pharmaceutical company can give you an upfront payment, research funding, and then milestones that can reach hundreds of millions of euros depending on the development you achieve, and then a percentage on royalties. What is this percentage? Each time the pharma sells a drug, 12% of the sale price, minus all manufacturing costs, goes back to the biotech. So you see that financially, it can be extremely attractive. Why would it also be interesting for a company like iTeos, which is in cancer immunotherapy? I told you we work in a field where we need to combine our molecules with other treatments to identify the most effective treatments in certain therapeutic indications. So if we take this timeline where we have the means to reach the beginning of a clinical phase, if I have an investor who invests the 8 million I mentioned, and then later another 16 million, we can easily do a Phase 1. We are almost ready to start; we have excellent contacts with Saint-Luc and Bordet. We could determine safety and toxicity. However, for Phase 2, where we want to identify a combination, we will need to find a combination that is already available on the market. We're not going to knock on the doors of Merck, BMS, Roche, or AstraZeneca, which are currently the four most advanced pharmas, and say, 'Will you give us access to your portfolio to test our combinations?' That won't be possible. So we have to do a Phase 2 with an immunotherapy that has already been approved on the market. That limits the indications and the combinations. On the other hand, if we do a partnership in the coming months with a pharmaceutical company, value creation could be much faster, obviously for the pharma partner but also for us, because not only would we have access to a portfolio of combinations that we could start testing in the coming months, but we could also have a more complex or smarter approach to immunotherapy. We could combine not only with vaccines but also with antibodies or other approaches like modified CAR-T cells, as Benoît indicated. By collaborating with a pharma partner, we would not have just one indication, as we could do here with our financing, but several indications. We could also develop a diagnostic test in parallel with the drug discovery program. And we could also develop a whole series of backups. So today, I admit we are in discussions, and I hope before the end of the year you will have the pleasure of seeing a press release. We are in discussions for both scenarios; we are always studying both scenarios. I am extremely supported by our board of directors, and we think before the end of the year we can concretize something that will truly transform iTeos and allow it to realize everything we've dreamed of for almost 4 years now. So Benoît and I thank all our partners, our collaborators, everyone who has supported us—they are numerous in this room—and those who know me well know that I like to use mottos. I love the Belgian motto: 'If it's a success, it's because unity makes strength.' And it's thanks to the combination of expertise from UCL, Louvain-la-Neuve, ULB, other universities, and a whole bunch of passionate people that we have arrived at what I've shown you today. I also want to thank my wife for her support.