Altimmune, Inc.

Good day, ladies and gentlemen, and welcome to the Altamune Inc. Second Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. To ask a question during the session, you will need to press star 1-1 on your telephone. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Rich Eisenstadt, Chief Financial Officer of Altamune. Rich, you may begin.

Thank you, Gigi, and good morning, everyone. Thank you for participating in Altamune's second quarter 2023 financial results and business update conference call. Members of the Altamune team joining me on the call today are Vip and Garg, our Chief Executive Officer, 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 2023 financial results was issued this morning and can be found on the investor relations section of the company's website. Before we begin, I'd like to remind everyone that remarks about future expectations, plans, and prospects are constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Autoimmune cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. For discussion of some of the risks and factors that could affect the company's future results and operations, please see the risk factors and other questionnaire statements contained in the company's filings with the SEC. I would also direct you to read the forward-looking statement disclosure in our press release issued this morning and now available on our website. Any statements made on this conference call speak only as of today's date, Thursday, August 10, 2023, 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, our Chief Executive Officer.

Thank you, Rich, and good morning, everyone. We appreciate you joining us today for the discussion of our second quarter 2020 Financial Results and Business Update. We are excited about the progress of our lead product candidate, Pembidutide, a GLP-1 glucagon dual receptor agonist in development for both obesity and NASH. We recently announced the initiation of our Phase IIb IMPACT biopsy-driven trial to evaluate the efficacy and safety of Pembidutide in NASH. Given the compelling 12- and 24-week data, from our Phase 1b trials in subjects with NAFLD. We expect to achieve significant rates of NASH resolution and fibrosis improvement at data readout from the IMPACT trial, which is anticipated in Q1 to 2025. The data from our NAFLD trial demonstrated a greater than 75% relative reduction in liver fat at 24 weeks. with over 50% of subjects achieving the high bar of normalization of liver fat in the 1.8 milligram dose group. Subjects also had a mean weight loss of up to 7.2% at 24 weeks in the 1.8 milligram dose group, with weight loss continuing at the end of treatment. We also achieved significant reduction in serum ALT and MRI-based corrected T1 imaging, both important markers of NASH improvement. We believe that a robust reduction in NASH activity combined with fibrosis improvement and meaningful weight loss will be essential for a competitive product in the NASH marketplace. With regards to obesity, we look forward to reporting top-line 48-week data from our phase two momentum trial in the fourth quarter of this year. The momentum interim results of 160 subjects reported earlier this year showed weight loss of 10.7% at the 2.4 milligram dose and 9.4% at the 1.8 milligram dose compared to a 1% weight loss in subjects receiving placebo after only 24 weeks of treatment. These robust reductions in body weight together with the effects of pembidutide on serum lipids and blood pressure without cardiovascular safety signals suggest that if approved, pembidutide can be an important treatment option for patients with obesity, especially those with NAFLD or dyslipidemia. It's important to point out that these two comorbidities are prevalent in 60% to 75% of the obesity population. Finally, we have to have a data readout from our Phase II clinical trial of hep T cell in chronic hepatitis B in the first quarter of 2024. Recall that this trial is designed to show evidence of antiviral effects against hepatitis B virus and establish the role of hep T cell in combination therapy for the treatment of this unmet need. They're excited about the progress of pambidutide in hep T cell and the upcoming results of these ongoing trials. With that, I now turn the call over to our chief medical officer, Dr. Scott Harris, to discuss our clinical plans. Scott?

Thank you, Vipin, and good morning, everyone. First, let me tell you about the initiation of our IMPACT Phase 2b NASH trial. This biopsy-driven trial is being conducted at approximately 60 sites in the United States with Dr. Stephen Harrison, medical director, Pinnacle Research, and adjunct professor of medicine, Oxford University, serving as the principal investigator. We are planning for approximately 190 subjects, both with and without diabetes, to be enrolled. Subjects will be randomized to pembidutide 1.2 milligrams, Pemvidutide 1.8 milligrams or placebo in a 1 to 2 to 2 ratio and will be stratified for fibrosis stage in the presence or absence of diabetes. Therefore, approximately 38 subjects are expected to receive Pemvidutide 1.2 milligrams, 76 subjects Pemvidutide 1.8 milligrams, and 76 subjects placebo. To be eligible for study participation, subjects will be required to have a BMI of at least 27 kilograms per meter squared, a liver fat content by MRI-PDFF of at least 8%, and a NAFLD activity score of at least 4 on a pretreatment liver biopsy. They're also expected to have either F2 or F3 fibrosis, with at least 50% of subjects required to have F3 fibrosis. The primary endpoints of the IMPACT trial will be the dual endpoints of achieving either NASH resolution with no worsening of fibrosis or fibrosis improvement with no worsening of NASH, with the primary treatment comparison being the 1.8 milligram dose versus placebo. Secondary endpoints will include achievement of both NASH resolution and fibrosis improvement, liver fat reduction by MRR-PDFF, corrected T1 or CT1 response rate, serum lipids, and noninvasive biomarkers of disease activity. Importantly, weight loss will also be assessed as a key endpoint. All endpoints will be evaluated a week 24 of treatment and subjects will continue to be dosed and followed for an additional 24 weeks to a total of 48 weeks for safety and additional biomarker responses. We plan to employ a consensus read between two pathologists with a third who will adjudicate if consensus is not reached. A plan has also been developed to correlate noninvasive tests with NASH resolution and fibrosis improvement the biopsy endpoints, and to commence discussions with FDA regarding the use of these biomarkers as primary endpoints in Phase III. We anticipate reporting top-line results at 24 weeks in the first quarter of 2025. Now let me talk about the Phase II Momentum Trial of Pembedutide and Obesity. The trial was designed to enroll approximately 320 subjects without diabetes but with obesity, or overweight with at least one obesity-associated comorbidity. Dr. Luoroni from Weill Cornell Medical School, a leading authority in obesity and obesity clinical trials, is serving as the principal investigators. Subjects were randomized one to one to one to one to pemphidutide 1.2 milligrams, pemphidutide 1.8 milligrams, pemphidutide 2.4 milligrams, or placebo, administered weekly for 48 weeks in conjunction with diet and exercise. Prespecified interim analysis was performed when 160 subjects completed 24 weeks of treatment. Weight loss of 10.7% at the 2.4 milligram dose and 9.4% at the 1.8 milligram dose was achieved compared to a weight loss of 1% in subjects receiving placebo. Approximately 50% of subjects achieved at least 10% weight loss, and approximately 20% of subjects achieved at least 15% weight loss by week 24 at the 2.4 and 1.8 milligram doses. Significant improvements or positive trends in cardiometabolic risk factors were observed. Importantly, these effects were achieved without arrhythmias clinically meaningful heart rate increases, or other safety signals. We look forward to the top-line 48-week results from the momentum trial in the fourth quarter of this year. We expect to see continued weight loss beyond the double-digit levels noted in our 24-week interim analysis. Other top-line readout parameters will include subject disposition, adverse events, vital signs, serum lipids, and glucose control. Also, as we have previously announced, we have completed enrollment in our Phase II multicenter clinical trial of hep T cell in patients with chronic hepatitis B. Chronic hepatitis B continues to represent a serious unmet need in the United States and worldwide and represents a significant commercial opportunity. Hep T cell is an immunotherapeutic designed to activate T cells to fight the hepatitis B virus infection. The Hep T cell trial was designed to enroll approximately 80 subjects with an active chronic hepatitis B and low hepatitis B surface antigen. The primary endpoint of the trial is a one log reduction or clearance of the hepatitis B surface antigen. We expect to announce the results of this trial in the first quarter of 2024 once all subjects complete the six-month treatment period. It is generally believed that an effective therapy for chronic hepatitis B infection will require both direct-acting antivirals and immunotherapy. And we believe that hep T cell is highly differentiated and may provide for a functional cure of chronic hepatitis B infection combined with novel direct-acting antivirals. I will now turn the call over to Rich Eisenstadt to give an update on our third quarter financial results. Rich?

Thank you, Scott, and good morning again. For today's call, I'll be providing a brief update on Altmean's second quarter 2023 financial and operating results. More comprehensive information will be available in our Form 10-Q to be followed with the SEC later today. Altmean ended the second quarter of 2023 with approximately 160 million of cash, cash equivalents, and short-term investments compared to $184.9 million at the end of 2022. Research and development expenses were $13.3 million in the second quarter of 2023 compared to $16 million in the same period in 2022. Approximately $7.4 million of this total for the second quarter of 2023 were direct expenses for the conduct of our clinical programs, including $5.6 million in direct costs related to development activities for Pemvidutide and $1.8 million in direct costs related to development activities for Hepticel. General and administrative expenses were $4.8 million for the three months entered June 30, 2023, compared to $4.4 million in the same period in 2022. The change is primarily attributable to increased stock compensation and other labor-related expenses. Approximately $3 million of our quarterly operating expenses, non-cash expense, primarily stock compensation. Interest income was $1.8 million in the second quarter of 2023 compared to $300,000 in the same period of 2022. Net loss for the three months ended June 30th, 2023 was $16.1 million or 32 cents net loss per share compared to net loss of $20.1 million or 42 cents net loss per share for the second quarter of 2022. We estimate that our existing cash funds us through the 24-week biopsy results from our IMPACT Phase IIb NASH trial expected in the first quarter of 2025. Our financing also funds completion of the 48-week Momentum trial and the HeptiCell trial. I will now turn it back over to Vipin for his closing remarks.

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?

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Seamus Fernandez from Guggenheim.

Hi there. This is Alana. I'm for Seamus from Guggenheim. Thanks for taking our question. We were just curious as far as your expectations for weight loss at 48 weeks. Are you still targeting mid to upper teens? And secondly, any thoughts on what Merck presented with respect to their glucagon at easel recently? Thank you.

Sure, Ilana. Good morning. Scott, do you want to take that?

Yes, thank you for the question. Yes, we still are expecting weight loss in the mid to upper teams. We think that in view of the select readouts, which showed that to be associated with a significant reduction in cardiovascular risk, that's a very significant point to achieve. But with regards to select, I would point out that that was achieved with GLP-1 monotherapy alone. And with the glucagon effects, we believe that with the reduction in serum lipids and also hepatic fat that we can achieve even better results than those achieved by semaglutide in that trial. With regards to Merck, we believe that the findings validate our continued hypothesis and results that glucagon is extremely important. for reducing liver fat. So we were happy to see confirmation of that information. But several things I would point out about that trial was number one, they had to go through a significant titration period. We're not doing that. We have no titration at the two doses that we're employing in our upcoming trial, NASH trial. And the second is that compound has also been associated with significant heart rate increases which, as I mentioned in my opening remarks, those have not been seen in our program.

Great. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Yasmine Rahimi from Piper Sandler.

Good morning, team, and thank you so much for all the great updates. I think this morning, as you know, the select data this week has really emphasized how the demand for new novel therapies for obesity continue to increase. I think we saw also this morning another acquisition by Noble. So this raises the question sort of if you could just kind of give us an update on how the M&A interest is evolving. I think we have seen in the last month two acquisitions of therapies of where they brought a novelty and that it's not just about weight loss. So I would love to get an update on how M&A interest is growing and what do you expect the impact on SELECT will be in your discussions with potential partners around obesity. And then secondly, there are two additional key readouts upcoming in the first half of 2024. biopsy data from tercipotide as well as the glucagon compound from BI in Zealand. So, would love to hear your thoughts on how you're thinking about how those results could provide color or detail or translation or anything around that. I think a lot of our clients may not be realizing that Those two readouts are really key. So we'd love to hear if you could tackle M&A, tackle what do you expect to see in these two biopsy readouts with two incretins in the first half of 2024. And I'll jump back into the queue. Thank you.

Yeah, thank you. Yes, thank you for the questions. Let me take the M&A question and then I'll turn it over to Scott Harris to talk about the data coming out in the first half of next year. So As you know, we've been saying all along that obesity is going, the whole market is going to segment. There are going to be multiple mechanisms that people would want, the physicians want, the patients want, and they would benefit from it. And that's basically what we're starting to see now, that this is not game over with just the first generation of obesity drugs, but we are going to need additional mechanisms. And that's exactly what we bring to the table. by adding glucagon to GLP-1. We think that really provides some additional differentiation from just GLP-1 alone. The fact that we are seeing profound improvement in serum lipids, very class-leading liver fat reduction. If you look at this patient population, the first wave of diabetes treatment is really designed for of obesity treatment is designed for patients with obesity and diabetes, but there's many more patients that don't have diabetes but have other comorbidities such as dyslipidemia and high liver fat content. So we think we fit really nicely there. We've been very encouraged. There's lots of interest, as you've seen already from two recent acquisitions, in novel obesity mechanisms and compounds. And Glucogon is going to have a seat at the table. We're seeing that from large pharma, from their internal programs, the data coming out on Glucogon. So we are very encouraged with our ongoing discussions and the data from Momentum, upcoming data from Momentum, and the fact that we've initiated impact is going to further catalyze those discussions. So we're very excited about the prospects of having a partner on board before we start phase three development in obesity sometime next year.

Yeah, Yasmin, and I'll take your second question about the terzapetide and the Boehringer-Ingelheim-Zeland readouts in the first half of next year. I think it's important to point out that terzapetide has no glucagon activity, and the glucagon activity in the Boehringer-Ingelheim-Zeland compound is pretty minimal. The compound is highly biased to GLP-1. The ratio is 8 to 1. And as evidence of that, they're not seeing meaningful effects on serum lipids. And for that matter, nor is terazepatide. And that tracks directly to the absence of having glucagon. In contrast, we have glucagon. We're not only seeing a very significant reduction in serum lipids, but also liver fat as well. In their non-invasive study, terazepatide at the 15 milligram dose, their top dose, only achieved a reduction in liver fat content at the end of an entire year. of 39%, and we think that reflects what I just said about glucagon. Zeeland has not come forward with any non-invasive data about the liver fat, but we think it would follow in the same pattern. So we still believe that glucagon is key to the rapid reduction of liver fat. We think the rapid reduction of liver fat is important for retrieving not only NASH resolution and fibrosis improvement on the biopsies, and we think that the results that we get from our impact trial will significantly exceed those from either of those two compounds in the first half of next year.

Thank you so much, team. I'm really excited on the continued progress. I'll jump back into the queue.

Thank you. One moment for our next question. Our next question comes from the line of Roger Song from Jefferies.

Great, congrats for the progress as well and thank you for taking the question. Maybe a couple questions mostly related to the obesity. First of all, maybe can you comment on your readiness for the phase three for the obesity trial in terms of the dosing and maybe some of the consideration after you've seen the phase two 24-week data at the minute that you're still waiting for the 48-week, but just curious the preparation for the phase three in conjunction with the partnership discussion. So that's number one. Number two, very interesting. And you mentioned this comorbidity with obesity, pretty high percentage. Just curious, given the very differentiated glucagon addition to the mechanism, how likely you think you can do some creative design for the trial, maybe enrich those comorbidity patients to demonstrate even bigger treatment effect or the benefits? for those patients with the comorbidity. Thank you.

Absolutely. Scott, you want to take the comorbidity question first?

Yeah, Roger. Thanks for the question. So obviously, we're deeply in preparations for phase three. And we have not been public about what those specific plans would be. But we have talked about the fact that based on the prior programs, we think the safety database would be about 5,000 subjects with about 3 quarters of those receiving active drug and about one-quarter receiving placebo. It appears that it's the size of the safety database that matters. The agency appears to want to study in non-diabetics and diabetics. Beyond that, there's been some options about looking at, for example, osteoarthritis, looking at the comorbidity and the like, and we're in active discussions right now. We've been getting feedback from partners about that as well as what their preference is. would be. So as soon as we have additional information about that, we'll share that with investors. Vipin, did you?

Yeah, I mean, a couple of things. First of all, in terms of being phase three ready, our plan is to be phase three ready in the second half of next year. So obviously, we have to wait for the 48-week data before requesting a meeting with the FDA, which we plan to do. So we're putting all the plans in place for that. And again, our goal is to have a partner lined up before we start phase three. So from a timing perspective, that kind of fits nicely, gives us the first half of next year to both line up a partner as well as have the phase three ready program as soon as we have the end of phase two meeting with the FDA. In terms of enriching patients for comorbidity, comorbidities, as Scott mentioned, it's going to be a fairly large phase three campaign anyway. So we really don't have to go looking for these patients. These patients are there. I mean, the prevalence of these two comorbidities is even higher than diabetes. So it's not hard to find these patients. So we're in a good shape in terms of having access to those patients. in the obesity subpopulation, if you want to think of it that way. Scott?

Yeah, Roger, what I wanted to add, and I was waiting for Vipin to finish his comments, was that the best place to look at those vet-enriched populations is in an outcomes trial, because actually that's the endpoint, right? And you want to make sure that it's adequately powered. So, as I mentioned in the opening remarks, the select trial is extremely important for showing that obesity improves the outcomes of patients at risk. And as I also mentioned in the opening remarks, we think that with comparable weight loss, we will do better than that because of glucagon's effects on serum, lipids, and hepatic fat content. So that trial will be enriched with those patients. We think that's probably the best place to analyze those results because of the number of subjects and the power in the trial and what the outcome actually is.

That's great. Thanks for all the comments. I really appreciate it. That's it from us.

Thank you. One moment for our next question. Our next question comes from the line of Corinne Jenkins from Goldman Sachs.

Good morning. This is Craig on for Corinne. So I wanted to build on a point that you just highlighted, specifically that about finding a partner to develop invidutide. And I guess what I'm wondering is, can you describe what your ideal partner would look like? And specifically, are you looking for someone to contribute to the development of NASH and obesity, or just individual indications?

Absolutely. Good morning, and thank you for the question. So, I mean, the best way I can describe it, that we're talking to fairly large universe of companies, all of the companies that you would expect us to be talking to and then some. In terms of looking at the indications, we don't believe that a partner would want to split indications given that it's the same molecule, it's the same drug for both NASH and obesity. So, yes, our ideal partner would be somebody who is interested in both of these indications. And the good news is that they're both metabolic diseases, so we are finding that people are interested in both indications and even additional indications for incretin-based compounds. So overall, we have flexibility. We can structure the deal in various ways, but I think both of these indications or perhaps all indications would be included in that partnership. The key for us is to really get the full value for the asset. So we are very encouraged with conversations, and we'll keep moving forward.

Got it. Thank you very much.

Thank you. One moment for our next question. Our next question comes from the line of Mayank Mamthani from B. Reilly Securities.

Good morning team. Thanks for taking our questions a few from us. Um, so staying on this, uh, team of based therapeutics being complimentary to a number of programs out there. Just, uh, I was curious if there's any work underway. Regarding combined ability with, um, I assume your Nash face to be is, uh, you know, assuming some sort of background rate of, you know, either diabetes or obesity level. Not sure if you can comment on what those rates are. Sorry, I haven't been able to dig out your clinical trial design yet on CT.gov. Not sure if that's posted there. And then I have a couple of follow-ups.

Yeah. Mike, we believe that pentadutide would be safe on top of existing GLP-1 therapy. It's something that we've certainly looked at as potentially studying at some point in the future, but our current feeling is that there would be no problem if a physician wanted to combine those therapies using them concomitantly.

And more importantly, we should see additional benefit of putting pembidutide over and above any of the baseline diabetes treatments, again, because of the glucagon component and having a direct effect on hepatic fat.

like posting GLP-1 activity should only be helpful, like GIB does. And then on momentum quickly, the baseline characteristics there for the full patient cohort, you know, relative to the interim analysis population cohort that you reported on in March, um, Any insight you have there on differences? And I was also curious about, you know, there were certain sites that may have contributed to a higher discontinuation rate. So was there like a ratio that you can share what the full population versus the entire analysis population looks like in those sites?

Yeah, Mike. We announced when we completed enrollment and momentum, and I believe that was in the September of 2022, we announced that we had done a comparison of the full population versus the interim analysis population, and that we had made public statements that the demographics were comparable in terms of age, BMI, body weight, gender ratio, and the like. So there's been no additional information. That was really a snapshot we took when the trial completed enrollment. Regarding the discontinuation rates of trials, yes, there has been some sites that had out-of-place rates of discontinuation that clearly were higher than other sites. For example, Dr. Aroni's site had no discontinuations at all. And it showed that the careful management of patients really controlled or mitigated the discontinuation rate. So yeah, that is something. And we've taken a look at those sites and whether they would really be sites that we would consider for future trials.

Okay, got it. And I have to ask a quick select CVOT trial question. Obviously, we have to see the full results there. But since, you know, this was a non-type 2 diabetes patient population and everyone's trying to understand, you know, the HPA1C independent mechanisms at work. So I was just curious about the CRP biomarker, you know, as we know, the inflammatory underlying state that can help with outcomes. Is that a marker you're looking at in your NASH study that is starting out or even in the obesity study if you'd report on that?

Yeah, we hope to have that information in the future. We don't have information to share at this point.

Okay, and last one for Rich quickly. On the R&D spend coming down quarter over quarter, obviously as you ramp up with this NASH study scaling up, we should I have that sort of trend back up. I was just curious if any manufacturing capacity related investments that also kind of feed into that because, you know, obviously you are probably making sure that you are making, you know, investments for phase three ready supply of the drug.

Yeah, all that is true, Mike. The spend did come down as some of the other trials, the NAFL trials we ran last year and the diabetes, the drug-drug interaction trial rolled off. So Q2 was pretty much just momentum trial expense, a little bit of investment into the impact trial. Looking at the second half of this year, the impact trial expenditures should increase. And as you point out, We also will have some manufacturing expenses to get the phase three materials ready. All that will probably lead to some increase or rebound back to the old R&D expenditure rates, but that should be just temporary or temporal as momentum completes and patients are rolling off that trial now. So as we complete that, there's always a big expenditure towards the end of the trial as we do the data analyses, and such forth, but that will end up rolling back out in 2025, or 2024, I'm sorry. Understood.

Thanks for taking our questions.

Thank you. One moment for our next question. Our next question comes from the line of John Wilbin from JMP.

Hey, good morning, and thanks for the update and taking the questions. Two for me. You mentioned expectations for weight loss after 48 weeks, but I was hoping you could talk about what you think you'll see in terms of tolerability, GI adverse events, especially within the context of the trial design. And then also, Scott, you mentioned heart rate a couple times. Wondering, you know, what you view as that threshold between acceptable and unacceptable heart rate increases for the class. Thanks.

Yes, thanks, Jonathan. Regarding the first, you know, we're still blinded to the data. We certainly are not seeing anything that would indicate that we would have any worsening of any adverse events. We think there's only this prospect of this continuing to get better, but we'll have the data in 48 weeks. One thing to point out as we go into phase three, that there's learnings in phase two. We've seen that with all of the companies. We saw 20% adverse event discontinuation rates with the Oral JLP1 program, the Lilly program. We saw it with the triseptide, excuse me. We saw it with the retitutride program, and it was also, as we've mentioned in prior calls, seen in other phase two programs. So we think that these companies have clearly addressed this, and we think that our dose reduction strategy is something that will really bring this down over the course of time, especially in Phase III. Regarding the heart rate increases, it's not really known what the actual threshold is, but one of the things I would point out is the concern that in the RETA-2 TRI trial, that heart rate increase is also associated with arrhythmias, and the two could be linked. In the RETA-2 TRI trial, phase one studies, they were seeing heart rate increases that were quite high, as much as 30 beats per minute early on. The data that they're reporting out is really at the end of the trial. So there's a lot more to learn as that data comes out, but I would flip to the positive and say that we're not seeing that with our data. We're not seeing any heart rate increases. We're not seeing any imbalances of arrhythmia, and we really think that that distinguishes us from Retatutride and other compounds in the field.

And mechanistically, you'd expect that to happen early on in treatment, so if we didn't see it at 24 weeks, unlikely to see it at 48?

That's a difficult question, but there does appear to be higher heart rate increases early on. There appears to be adaptation over the course of time. So what's important to understand with regards to, say, those arrhythmias is not that they occurred, but when they occurred during the course of the trial. Now, the trials that are being conducted in phase two are, by clinical development standards, relatively small. They're supposed to be in phase two. But these are the kind of events that come out in outcomes trials when you're studying 15,000 subjects. We feel very comfortable with our cardiovascular safety profile. But, you know, as you start taking any drug with any kind of signal and expanding the population, you may be seeing something in a large outcomes trial, especially one that's enriched with patients at risk. That's helpful, Scott.

Thanks again for taking the questions.

Thank you. One moment for our next question. Our next question comes from the line of Patrick Truccio from HC Wainwright.

Hi, good morning. Luis here, on for Patrick. Thanks for taking our questions. One question regarding the NASH program, and are 24 weeks enough to see a benefit on NASH resolution and fibrosis improvement? And do you think you can already have some clinical data that could predict that? And then I have another question on the hep C cell program.

Right. Thanks for the question, Louise. We do have preclinical data in animal models of NASH showing fibrosis improvement, and that's been accompanied also by gene expression studies showing reduction in those drivers of cell-late cell activity in fibrosis. Regarding the 24-week endpoint, several companies have shown the ability to achieve NASH resolution and fibrosis improvement at 24 weeks. And we believe that with our class-leading liver fat reduction effects and with the link between liver fat reduction and the factors that you just mentioned, we think we have a very high likelihood of achieving success in those endpoints at 24 weeks.

Yeah, it's important to point out that it's not just the magnitude of the effect. It's also how fast you get there. So also not only is class-leading in terms of overall success, reduction in liver fat, but the speed of it, very fast reduction in liver fat, we believe gives plenty of time for the liver to heal in 24 weeks.

Thank you. That's helpful. Can you discuss the antiviral mechanisms that you believe will be most complementary to the hep T cell? And what do you need to see in the hep T cell data to to have more confidence to move the program forward to a larger trial? Dr. Robert, do you want to take that? A combination trial, potentially.

Sure. Dr. Robert, do you want to take that?

Absolutely. Yes, Louis. So, you know, the mechanism of hep T cell itself, which is an immunotherapeutic, is to stimulate T cells that are able to recognize the HPV virus and in that way help clear the virus from the infected cells. As you know, the recent antivirals, siRNAs, monoclonal antibodies against surface antigen have been very effective at dropping the surface antigen level, but removal of those agents causes a rebound in the level of that surface antigen and the immune-tolerant state that results from that. So that's why it's generally believed that the combination of a direct antiviral to lower the surface antigen levels and take the pressure of the immune suppression off the immune system together with an immunotherapy to rev up the now-released immune system could be an effective way to treat this disease. And so we believe that hepti-cel, with its ability to stimulate responses against very conserved portions of the HPV polymerase and core antigen, will be an effective immunotherapy that, when combined with an effective direct-acting antiviral could yield very interesting effective therapy. As far as what we're expecting in the Phase II hefty cell study, the efficacy endpoint is set at the one log reduction in the surface antigen. We believe that that's readily achievable. Really, any sort of convincing effect of monotherapy with a hefty cell would then align us and prepare us for a follow-on study with the direct antigen nanoviral.

Great. Just a quick follow-up on that. Would you have any other types of analysis on the antigen presenting side on the potential effect to have not just a stronger response but a broader response with the type of CDAT cells that are required to clear those infected cells?

Well, especially with respect to breath, that's really one of the differentiating aspects of hep T cell. It's the epitopes that we've selected to include in the peptides that constitute hep T cell. And so with respect to breath, because these epitopes are largely in hydrophobic regions and are highly conserved between the different genotypes, we feel that the immune response, which we've demonstrated preclinically to be broad against genotypes A through D, would extend through all of the known genotypes right now. That's what the bioinformatics would suggest, and we do have the preclinical data showing a very broad response.

Great. Thank you.

Thank you. At this time, I would now like to turn the conference back over to Vipin Garg for closing remarks.

Thank you. 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.

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