Altimmune, Inc.

Good day, ladies and gentlemen, and welcome to the Altamune Incorporated Q2 earnings conference call. At this time, our participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require operator assistance, please press star, then zero, key on your touch-tone telephone. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Will Brown, Chief Financial Officer of Altamune. Well, you may begin.

Thank you, operator, and good morning, everyone. Thank you for participating in Altamune's second quarter 2021 earnings conference call. Leading the call today will be Vipin Garg, our chief executive officer. I will also be presenting during the call, as well as Scott Roberts, our chief scientific officer, and Scott Harris, our chief medical officer. Following the prepared remarks, we will hold a question and answer session. A press release with our second quarter 2021 financial results was issued last night and can be found on the IR section of the company's website. Before we begin, I would like to remind everyone that remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Altamune cautions that these forward-looking statements are subject to risks and uncertainty that could cause actual results to differ materially from those indicated, including those related to COVID-19 and its impact on our business operations, clinical trials, and results of operations. For a discussion of some of these risks and factors that could affect the company's future results, please see the risk factors and other cautionary statements contained in the company's filings with the SEC. I would also direct you to read the forward-looking statement disclaimer in our earnings press release issued yesterday and now available on our website. Any statements made on this conference call speak only as of today's date, Wednesday, August the 11th, 2021, and the company does not undertake any obligation to update any of these forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this conference call is being recorded and will be available for audio replay on Altamine's website. With that, I will now turn the call over to Dr. Vipin Garg, Chief Executive Officer of Altamine.

Dr. Thank you, Will, and good morning, everyone. We appreciate you joining us today for a discussion of our second quarter 2021 financial results and business update. I want to begin today's call by thanking our employees, our collaborators, and our investors for the tremendous dedication and support they have shown to Altimmune over the last 18 months. In January 2020, upon studying emerging reports of the devastating COVID-19 virus, our R&D team sprang into action in our labs and began creating a COVID-19 vaccine based on our intranasal platform technology. Our encouraging data with our Phase II clinical trials with NasoVax gave us confidence that an intranasal vaccine could be effective in protecting individuals against this new respiratory virus. Through the most uncertain days of the pandemic and quarantine, our employees and collaborators answered the call to this global crisis through extreme dedication to the task at hand that came with tremendous personal sacrifice of time with family and loved ones. I was proud and inspired by their resiliency and resolve. Through this work, our confidence was bolstered that ADCOVID could have great potential as a mucosal vaccine as we gathered positive animal data, including a potent induction of local mucosal and systemic immune responses and demonstrated efficacy against the SARS-CoV-2 virus. However, far too many times in our business, we see product candidates that work extremely well in animals, but do not translate to humans. And unfortunately, that was our experience. We were extremely disappointed at the phase one at COVID data, and we had to take an honest look at the viability of performing continued experiments and clinical tests at a time when the mRNA and other vaccine approaches were working so very well. And during an efficient vaccine rollout and update rate by the general public, that will surely stand as a remarkable achievement in the history of vaccine development. We applaud the efforts of the global pharmaceutical community in swiftly developing these new vaccines. With this backdrop of success and always seeking to be good stewards of the resources entrusted to us, we made the swift decision to terminate the AdCOVID program. As you have heard us say many times, one of the central tenets of our philosophy is to maintain and develop a diversified portfolio of assets to ensure that we are positioned for success no matter what transpires with any one of our product candidates. That philosophy has served us well in 2021 with the clinical development of Alt-801, our GLP-1 glucagon dual agonist for the treatment of obesity and NASH. As Scott Harris will more fully describe, we saw significant weight loss in just six weeks in our phase one study with no serious GI side effects. This fuels our enthusiasm and excitement for Alt-801, especially in light of the recent successful commercial launch of semaglutide for the treatment of obesity. It's further encouraging to compare our six-week interim results against other Phase I clinical trials with similar agents. noting that we are at the top of the class in terms of weight loss and tolerability at six weeks, and without the need for dose titration. With this data, we gained the confidence to launch an additional program with Alt-801 in obesity, and we expect to file an IND in the fourth quarter to enable a phase two trial in obesity, which will follow our previously announced IND for NASH in the third quarter. For the remainder of 2021, we look ahead to our phase one Alt-801 12-week data from Australia, which we anticipate reporting in September. Following this trial are several studies to further explore the effects of our drug in NAFLD and diabetic subjects, along with a study to test the interaction of Alt-801 with drugs commonly administered to obese and diabetic subjects. These studies will enable meaningful Phase II trials in both NASH and obesity, with large studies planned to begin in early 2022. Our other asset within the liver space is Hepticel, an immunotherapeutic for chronic hepatitis B that is in Phase II development. We have in Hepticel one of the most clinically advanced immunotherapeutic candidates, and we are in the midst of executing on this international trial. We currently have sites in Canada, US, Germany, and Spain to follow patients in a six-month dosing regimen. Considering the time to enroll HPV patients in this COVID environment and the duration of dosing, we expect to have data in the second half of next year. So in Q3 2021, We now turn the page to the next chapter of Altruism, with our focus firmly on obesity, NASH, and chronic hepatitis B, with exciting drug candidates and an enviable cash position with which we can quickly advance through several near-term data catalysts. With that, I'll now turn the call over to Scott Harris to discuss our six-week data, the upcoming 12-week data readout, and subsequent advanced trials. Scott.

Thank you, Vipin, and good morning, everyone. During June, we shared results from our six-week interim analysis of two cohorts from the ongoing 12-week Phase 1 placebo-controlled single and multiple ascending dose study of Alt-801. The study is being conducted in Australia and is enrolling overweight and obese volunteers. We reported two dose levels, 1.2 and 1.8 milligrams, that were administered subcutaneously once a week for six weeks. The six-week data reported weight loss and adverse events. The results we observed were very encouraging and have exceeded our pre-established treatment target of 2% absolute weight loss at six weeks. Employing a 1.8 milligram subcutaneous once weekly dose we achieved a placebo-adjusted mean weight loss of 6.3% in just six weeks of treatment with Alt-801. During the six weeks, Alt-801 was well-tolerated with low rates of nausea and other GI side effects. Importantly, there were no patient dropouts at the 1.8 milligram dose level, and the one patient at the 1.2 milligram dose that dropped out did so for reasons unrelated to drugs. This is particularly remarkable given the fact that we administered Alt-801 without the use of dose titration, which is the practice with virtually all other agents in the class, including the recently launched Wegovi. Gastrointestinal adverse events that have required these other GLP-1-based candidates to dose titrate, that is, to achieve the therapeutic dose only after slowly increasing the doses over 16 to 20 weeks to maintain adequate tolerability. While the six-week data focused on weight loss and adverse events, and we will certainly report these measures with the 12-week data, we plan to also report data on a number of other measures, namely pharmacokinetics, lean body mass, caloric intake, resting energy expenditure, glucose homeostasis, insulin resistance, lipids, and inflammatory markers. We believe that the 1.8 milligram dose is likely the level at which we show the most attractive combination of efficacy, safety, and tolerability. However, we are testing higher dose cohorts in the ongoing trial, and today we announced that we will be reporting 12-week dosing results for the 1.2 milligram, 1.8 milligram, and 2.4 milligram dose levels. We recently completed dosing in these groups, and it will take approximately four weeks to analyze and report the data. Accordingly, we expect to report the 12-week data on these cohorts in September, and we look forward to sharing this data with you. Looking ahead to further development, we are planning three additional trials to initiate this year. These trials are designed to address key questions regarding the activity of ALT-801 early in the drug's development. First, we are in the process of filing an ALT-801 IND in NASH to conduct a 12-week Phase 1b study of subjects with non-alcoholic fatty liver disease, or NAFLD, in the United States. This study will expand the enrollment criteria used in the aforementioned first in human study in Australia to include diabetic and older subjects and commence around the end of September. Based on the relationship between weight loss and liver fat reduction observed in other GLP-1-based studies and the additive effects of glucagon on liver fat metabolism, we are optimistic that Alt-801 will be an effective therapeutic agent for NASH and that the reduction in liver fat in the planned 12-week NAFLD study will parallel the impressive weight loss that we have observed. Second, we are planning to initiate a dedicated type 2 diabetes trial to study glucose homeostasis in diabetics in Q4 2021. The study will be 12 weeks in duration, and we'll study endpoints that will include continuous glucose monitoring, hemoglobin A1C, and measures of insulin resistance such as HOMA-IR2 and adiponectin. We expect the observations of glucose control in our current Australian 12-week study to hold true for the type 2 diabetes population as overweight and obese subjects like patients currently enrolled typically exhibit insulin resistance and prediabetes. Since later stage national obesity trials will likely include type 2 diabetics, we want to establish this conclusively. Finally, we are planning to initiate a drug-drug interaction trial. The FDA has expected sponsors of GLP-1-based compounds to conduct studies evaluating the impact of alterations of gastric emptying on the kinetics of drug absorption. GLP-1-based compounds with extended half-lives, like Alt-801, have not been associated with these changes. Alt-801 is a peptide, so no significant interactions with cytochromes or transporters have been observed to date or are expected. As previously announced, we plan to file a second IND for Alt-801 in obesity during the fourth quarter to create a parallel development path to our ongoing NASH development. This IND and the aforementioned trials will enable significant Phase II clinical development during 2022. At this time, we are planning a Phase II obesity study, along with a Phase II 52-week biopsy-driven NASH study, which could start in the first quarter of 2022. We look forward to updating you on our Phase II plans later this year. As ALT-801 is currently administered as a subcutaneous injection, our development plan includes the use of an autoinjector that can be self-administered by patients, and work is progressing on that front. Equally important, we have initiated development of an oral formulation for ALT-801. I'll turn it over to Scott Roberts, our Chief Scientific Officer, for that discussion. Scott?

Thank you, Scott. One of the advantages we have with a molecule like Alt-801 is that it is an attractive candidate for oral formulation. Several of the GLP-1-based drugs currently in development are not suitable for oral formulation owing to their large size. As Alt-801 is structurally similar to semaglutide, which has been successfully formulated for oral administration, we are optimistic about the eventual success of an Alt-801 oral formulation. We view an oral formulation of ALT-801 similarly to our improved tolerability profile and our ability to bypass protracted dose titration, advantages that increase patient interest and compliance. We look forward to updating you on our progress toward this endeavor in the near future. I would also like to provide a brief update on our chronic toxicology studies designed to support our longer-term obesity and NASH efficacy studies. The studies are progressing well, with overall observations consistent with the earlier, shorter-duration studies, and we expect these studies to be completed in the fourth quarter to support the Phase II obesity and NASH trials planned for 2022. I will now hand the call over to Will Brown to give an update on our second quarter financial results.

Thank you, Scott. For today's call, I will be providing a brief update on Altamune's second quarter 2021 financial and operating results. More comprehensive information can be found in our Form 10-Q filed with the SEC last night. Altamune ended the second quarter with a strong cash position, reporting a balance of approximately $218 million of cash, cash equivalents, and short-term investments. compared to 216 million at the end of 2020. The increase in our net cash during the current period is attributable to 52.4 million of net receipts during the year, primarily due to our utilization of the at the market or ATM offering program, offset by cash use for operating and investing activities. With these resources and the termination of the COVID vaccine program, we have sufficient cash to operate into 2023. Turning to the income statement, revenue in the second quarter was $137,000 compared to $720,000 in the second quarter of 2020. The change in revenue between periods is primarily due to a decrease in BARDA revenue as we wind up activities under the current Native Shield contract. Revenue attributable to the TCOVID program was completely recognized as of the end of Q1, and we are currently collecting the related accounts receivable as we complete the activities under that contract. Research and development expenses were $13.3 million in the second quarter, compared to $16.6 million in the prior period. The change in R&D expense was primarily the result of $13 million in higher non-cash charges in the prior period related to changes in the fair value of continued consideration liability connected with the acquisition and development of All Data 1. This was offset by an increase of $10 million related to development activities for AddCOVID and other programs. General and administrative expenses were $3.7 million in the second quarter of 2021 compared to $2.5 million in the prior period, primarily due to increased stock comp expense and additional labor-related costs. We recognized approximately an $8 million impairment loss on construction and process during the second quarter, which represents an impairment charge recorded for assets that were previously capitalized in connection with the manufacturing suite under construction at Lonza. We have not yet terminated that contract, and we are currently evaluating our options with respect to the space. Net loss for the three months into June 30th, 2021 was $24.8 million, or $0.60 net loss per share, compared to $16.8 million, or $0.94 net loss per share, for the second quarter of 2020. The difference in net loss is primarily attributable to higher R&D, impairment, and G&A expenses. I will now turn it back over to Vipin for his closing remarks. Vipin.

Thank you, Bill. Operator. That concludes our formal remarks, and we would like to open the lines to take questions. Could you please instruct the audience on the Q&A procedure?

Yes. At this time, ladies and gentlemen, if you would like to ask an audio question, press star, then the number one on your telephone keypad. Once again, that is star, then the number one. If your question has been answered and to remove yourself from the queue, please press the pound key. We will pause for just a moment to compile the Q&A roster. Your first question will come from the line of Seamus Fernandez with Guggenheim.

Great. Thanks so much for the questions. So, appreciate the update as it relates to the plans for the, obviously, the historical program now from a vaccines perspective. As you guys pivot to really driving the company towards being a metabolic disease company. You know, we've obviously seen the robust performance at six weeks. I think it would be helpful to just understand what you're hoping to see specifically in the 12 week data. And then in terms of the 2.4 milligram dose, I think that's right in line with our expectations for where, you know, you would increase the dose to. Again, I think most cases, the increase in a dose would be 30 to 50 percent. So, you know, right in line with expectations. But how should we think about the relative opportunity for the 2.4 milligram dose? Is this really an exploration of the, you know, sort of the upper dose range more than anything? Or is it your hope that you could see incremental weight loss above and beyond what we've already seen at the six weeks with the 1.8 milligram dose? Or is your expectation to really see more of a tradeoff of tolerability given the contributions of GLP-1 to the mechanism? And then I have a follow-up question on your oral approach relative to the kind of technology that's necessary to deliver a peptide orally.

Absolutely. Well, thank you, Seamus.

Scott Harris, do you want to take that?

Good morning, Seamus.

Our expectation for the 12-week data is that we'll continue to see a strong trend in weight loss. We haven't picked an actual number. I think the most important number is what we achieve, say, at 40 to 52 weeks. We did post on our corporate website the individual responses which show the trends. in the dosing, so we would project that those trends would continue through 12 weeks, which would signify those trends would probably continue to week 52, and that would be our expectation. And we'll also, as you know, have much more data that'll be more mechanistic, such as calorie intake, resting energy expenditure, and lean body mass, as well as glucose homeostasis, that'll not only project the efficacy of the compound, but really understand it and understand what we're achieving with dosing. Regarding the 2.4 milligram dose, as you know, the results that we achieved with 1.8 milligrams, which is less than 2.4, were already, in our opinion, spectacular. So it really didn't leave much to gain by dosing higher in terms of more weight loss. As we announced, the primary reason to dose higher was to establish the dose range within which we could work. As you go to phase two, you don't want to have phase one obligations. And if we hadn't dosed higher and for whatever reason decided to go to that dose later, we'd have to go back and do another phase one study or make a phase two study look like a phase one. So I think what we are really shooting for is greater tolerability, excuse me, the range of tolerability. and the accepted safety range rather than achieving higher weight loss. Now, if we achieve higher weight loss, that would be great, but it would be hard to believe that we could achieve much higher weight loss than we have got with 1.8 milligrams.

And just, I guess, on the oral, the technology that would need to be employed or can be employed to deliver, this peptide technology. Just hoping to get a better understanding of that. I think to our understanding, the Amisphere technology is now 100% owned by Novo Nordisk. And it was only a single amino acid change between liraglutide and semaglutide that actually allowed for that product to be delivered, and bioavailability, I think, is still, to some degree, a question for that product. So I'd just love to know the technical approach that you're taking and if you've licensed any technology to be able to do that, and if so, if you wouldn't mind disclosing which technology that is. Thank you.

Scott Roberts.

Sure. Hey, Seamus. One of the things that we saw right off when we were acquiring Alt-801 was its suitability, potential suitability for oil formulation. And with the six-week data validating the potency of this compound for weight loss and presumably get mobilizing fat out of the liver, as we'll see in the NEFLD study, I think that that only becomes more important and more reality for us. So we're very excited about this project. At a general level, the hurdles that have to be surrounded by anybody who's trying to make a peptide orally bioavailable is to get it through the stomach, first of all, and protect it from proteases. And then, essentially, you need to create a lipophilic environment for the peptide so that it can then cross the cell membrane in the intestine and enter the bloodstream and do its work there. So there are a number of approaches. Obviously, Novo Nordisk has used the SNAC technology to to achieve this. I'm not going to go into a lot of detail about our approaches that we're looking at here. We'll update you in the future. But suffice it to say that the similarity of our molecule to semaglutide, that is a small with a lipophilic chain, lends us to believe that we have a high likelihood of success here. So we look forward to updating you that in the near future.

Great. And Seamus, I can just... Just add that, yes, indeed, we are looking at a proprietary technology to make this work. But at this point, we'll disclose it at the appropriate time later on.

Okay, great. I'll jump back in the queue out of respect for the other analysts on the call.

Your next question will come from the line of Yasmin Rahimi with Piper Sendler.

Hi, team. Thank you so much for taking my questions and thank you for the updates. A few for you. Maybe a good place to start would be just providing us with some color on the size on how many patients per cohort we should be seeing data. I went back to your corporate deck and, you know, it refers to the obesity study to be 100 patients. You nicely showed the patient per patient weight loss in the 108 patients. 1.8 milligram, which is nine patients, and four in placebo. So as we head into September, can you draw, can you provide a color for me? How many patients are in placebo? How many are within each of the three dose cohorts? That could be very helpful. And then I have two follow-ups for you.

Right. Hey, Yasmin, good morning. So we are enrolling 10 to 15 per cohort. and the randomization ratio between those who receive ALTA to one and those who receive placebo is four to one. So it obviously varies a bit between cohorts, but that would be the general advice that we would give.

Okay. Another question for you is, you know, around expectations and weight loss going into week 12. So when we look at historical data comparing weight loss in an overweight population that is non-diabetic, you see the magnitude to be twofold. So I guess, why can we not make the assumption, maybe correct me wrong, you're getting 6% at week six. Should you be getting at least over 10% at week 12? And the significance of that. Is there a chance that that might not fall in and that there is not a linear relationship between week six and week 12? So if you could just comment on that, that would be helpful.

Right. So I think the most important thing is that to the eye, the trends are continuing. If we focus on specific numbers, especially with small numbers, we may not really get the right impression. So I think the most important thing is that visually, when you look at the data, you're convinced that it's linear, that it's continuing, and that we don't actually cite a specific number. And we think that that will be the right approach. I just don't want us to get hung up on a decimal place for success.

Thank you. And then can you comment on, as of right now, what your discontinuation rates have been? I know that when you reported six weeks data, there was one patient that discontinued. Are you able to comment on sort of the discontinuation rate as of right now?

Yeah, we haven't been public on that, Yasmin. We obviously will with the 12-week data.

Okay. And then I just want to understand maybe the thought process behind, I know you are, you had said that you're starting a 52-week NASH study in the first quarter. So as of right now, is the 52-week tox package complete or what is, at what point are you, so that you're on track as soon as IND is cleared to kick off the 52-week data? It's maybe a little not clear to me.

Yeah. So let's go through the timeline quickly. The IND for NASH will be filed imminently. As Scott mentioned during his presentation, we have completed, obviously, talks up to 13 weeks. That enables our 12 weeks of dosing. And we are in the process of completing the chronic RAT and CINO talks that will enable a long-term NASH study. So that will be completed later this year well in advance. That TOCS study will be completed later this year well in advance of either a 52-week NASH trial or a long-term obesity trial. So there's a comfortable timeline there that we feel comfortable about hitting.

Okay. Thanks. I'll jump into the queue. Thanks.

Your next question will come from the line of Kalichi Chikara.

Good morning and thank you. Just two questions on my end. I guess based on the current preclinical and clinical data, is your expectation that you would use the same dose in both NASH and obesity? Just trying to get a sense of that given that the glucagon component of 801 has beneficial effects on the liver. So just trying to determine there what the dose could potentially be.

Right. So the initial answer to that question, Kelechi, would be yes. We do expect the doses to be similar, but you brought up a good point that glucagon has independent effects over weight loss, so potentially the dose in NASH could be lower, but recognize that when you're treating NASH, you're not just treating the liver, you're treating the whole patient, so that we would think that we would try to administer doses to NASH patients that would not only achieve abnormal fat reduction in the liver, but also optimal weight loss because of the non-hepatic comorbidities.

Got it. Thank you. That's very helpful. And I guess my second question, big picture, wanted to get your latest thoughts on the development and potential commercialization of 801 in these two large indications, I guess particularly as it relates to partnering. Is that a possibility? Are you having those discussions right now? Based on those discussions, if you're having them, do you have a sense of the type of data, the type of data partners are hoping to see?

Hey, Kalachi, this is Vipin. Yeah, so in terms of thinking long-term strategically, as you can see, the kind of trials that we're designing, our goal is to answer as many critical questions as possible. And the idea really is to build significant value in this asset quickly At this point, we just have phase one data from six weeks. Obviously, 12-week data is important, but then we've designed a number of studies that will answer some critical questions. One thing we do know is that there is significant interest in assets like this from large players, from strategic partners. I can name a dozen companies that would be interested in this. At this point, we're keeping all our options open. We are in a good position to execute on this plan. So we've got a lot of optionality, and we will continue to monitor the situation. Our goal is to increase the value of this asset over the next 12 months, let's say 12 to 18 months, and as more data becomes available, there is no doubt that there would be interest in an asset like this from multiple players.

Got it, got it. That's very helpful. Thank you.

Your next question will come from the line of Mayamak. with B Raleigh Securities.

Thank you. Good morning team. Thanks for taking our question and appreciate the resilience and data-driven approach to advancing your pipeline. So just quickly on the ALT801 program, could you maybe just comment on whether the six-week, was there a built-in look for the six-week 2.4 mcdose level, or are you just going out to the 12-week there? There was no interim analysis there.

Right, Kalechi, there was no interim. Mike. Oh, I'm sorry, Mike. Mayank, there was no interim analysis on the six-week interim analysis on the 2.4 milligram dose.

Understood. And then on the, you know, trying to understand the expectation for the phase to be, excuse me, the 12-week NASH study, what could we glean out of, you know, this 12-week phase? obese, non-diabetic patients, if anything, given what their baseline LFC or liver enzymes might be, and should we be looking to learn anything on liver fat, for example, from this 12-week readout in September?

Right. So I'll start by saying that we think the results from this study will translate to other populations. We know that based on the subject profile, their age, and BMI, these attributes are translated in the semaglutide trials to very good results at long-term readouts. We did not assess liver fat content in this trial. So I really can't comment on that. And because this is not a NASH population, I wouldn't expect that we would have enough baseline ALT elevations to see much of a signal or make much sense of something that would predict results in NASH. I think that the amount of weight loss we're seeing will clearly, by itself, independent of any specific look at liver fat, based on the studies we know with, let's say, 10% weight loss, but that's over a long period of time, something that we could be achieving much sooner than that, that that should project to a beneficial effect in NASH.

Great. And then just on the preclinical docs work that is going on, particularly for the INDs, the two more visible INDs, and then maybe for the oral GLP-1, could you just comment on... You know, what might be the requirements here that are different for NASH versus obesity? I'm sorry if I missed that. Is it just related to the chronic talks, or is there something else that goes into it? And then maybe just comment on what might be the IND timelines for the oral GLP-1.

Yeah, so there are two questions there. The first would be that the talks that we're doing right now will enable both the NASH program, the NASH IND, and the obesity IND. Okay. Actually, the obesity, the national IND will be followed before the tox work based on the prior tox work. The chronic tox study will specifically enable the longer-term national obesity trials, but it will enable both. In terms of the IND for the oral formulation, we haven't been public on that. Obviously, we're doing studies right now to look at that. And once we have specific guidance and when we would be able to follow an IND, we'll let you know.

Yeah, Mayank, this is too early to project in terms of when we might be going into an IND on oral. We hope to update everybody towards the end of the year in terms of our progress with the oral Alt-801, and then based on that, we'll figure out what would be the timeline for filing an IND and update folks accordingly.

Great. And Vipin, just on the higher level vision here for the program, do you have any early thoughts on, given everything you'll learn on this next year at some point, what you may want to do internally versus what may be an effort by an external partner? Because you do have different indications, different formulations. Obviously, it's going to require a ton of capital to realize the maximum value here Any early thoughts on what may be relatively more attractive to you?

Yeah, so that's a good question, Mike. Obviously, first things first, we need to generate all the data that we are talking about. We are well-funded in terms of reaching all these milestones, and that data will really guide us should we proceed with obesity ahead of NASH, for instance. I mean, that question we will address right now we think there is value in both of these indications. So that's why we are pursuing them in parallel and generating all that data because that would be important for anybody to be able to value this program and make that determination as to do we go after both of these indications? Do we go after one before the other? So that's really the focus right now. But over time, as the data becomes available, we'll certainly be able to, you know, make a call in terms of which indication we pursue ahead of the other.

Great. Thanks for taking our questions.

Our next question comes from the line of John Willoughby with JMP Securities.

Hey, good morning, and thanks for taking the questions. Just a couple from me. When we think about the 12-week readout and the new biomarkers we'll be getting, I was hoping you could provide some color on which will be particularly informative and that could give more differentiation from 801 versus the other GLP-1 candidates we've seen.

Scott Miller Hey, John. This is Scott again. Thanks for joining the call this morning. You know, I think that all of the readouts will be informative. recognize they're based on small numbers of subjects. So, you know, based on the amount of variability we've seen within each of the measurements, they'll be higher or lower contributory to the overall program. You know, I think the things that we want to understand based on the readouts is glucose homeostasis at this point more for safety than for efficacy. We want to make sure that we're not being disruptive to glucose metabolism. Obviously, if we see a beneficial effect, it will be very helpful. We've talked about the fact that the best way to control diabetes over the long term is to lose weight. So we're optimistic that over the course of a year that we're going to have better control of diabetes regardless of what we see in the beginning. But I would emphasize that we haven't seen any evidence of any loss of glucose control in healthy volunteers we're studying right now. Mechanistically, we'll look at insulin resistance. That will help us understand the changes in or the glucose homeostasis that we're seeing. And we'll also get some mechanistic information that will help us look at the relative balance of the GLP-1 versus glucagon effects. And I think those are going to have to be interpreted rather than necessarily driving specific messaging. You know, calorie intake should track with the GLP-1 component. of the molecule, whereas resting energy expenditure in ketone bodies, let's say, would track with the glucagon component. And there'll be some other things that we'll look at, such as inflammatory markers as well. So I think all in all, all of them will probably give us a much better feel for the compound. But what we're emphasizing here is the primary readout of importance is going to be the weight loss. I think that's what's really driving how we're going to apply the molecule, how we envision the molecule, and how we design studies in the future.

Got it. And for the diabetics study, I know historically we see differential weight loss responses in diabetics versus non-diabetics. Do you have any sense on what degree you might see a difference there, if it's going to be in line with what we've seen historically, or there might be some differential response based on 801's activity or relative GLP-1 glucodons? specificity?

Yeah, that's a great question. Historically, if you take all the compounds, I'm talking about terzepatide, semaglutide, and to some extent, ketatatide, although it's really a GLP-1 with a little glucagon, typically seeing about 60% of the weight loss in diabetics that you would see in non-diabetics. That would apply to those compounds which are predominantly GLP-1 based. Would that translate to the weight loss that we would see in diabetics with our molecule? We don't know. It's a different molecule. It's somewhat unique in that it's not only a GLP-1 glucagon co-agonist, it's one to one. So I think that in terms of general description, yes, based on the literature, you'd expect to see less weight loss in diabetics, but we have a different compound. We're just going to have to see what we see. in diabetics and whether we get better weight loss than the other compounds that have previously been studied in diabetics.

And one more, if I may, just on timing of data. The 12-week phase 1B in NAFLD patients, do you want to see that data before starting the 52-week biopsy for any kind of information for design or inclusion criteria, or when is that data going to come relative to the start of the 52-week study?

Yeah, we'll have that data before the start of the 52-week study. Whether we wait for the full readout at 12 weeks or do an interim analysis to drive the decision-making, we'll have to make that decision. But right now, you know, we could wait for that data or we could take an interim cut to look at the data.

Got it. Thanks for the color. Yep.

At this time, there are no further questions. Do you have any closing remarks?

Yes. Thank you, everyone, for participating today. We appreciate the opportunity to share our results and outlook with you, and thank you for your continued interest. Have a nice day.

Ladies and gentlemen, thank you for participating. You may now disconnect.