Skye Bioscience, Inc.

Ladies and gentlemen, thank you for standing by. My name is Jael, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sky Bioscience Year End 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. I would now like to turn the conference over to Bernie Hertel, head of investor relations. Please go ahead.

Hello, and thank you all for participating in today's call. Leading the discussion today are Puneet Dhillon, SCEI's President and CEO, and Caitlin Arsenault, SCEI's CFO. Before we begin, I'd like to caution that comments made during this conference call will contain forward-looking statements under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements about SCEI's expectations regarding its development activities, timelines, and milestones. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely, and reported results should not be considered as an indication of future performance. These forward-looking statements speak only as of today's date, and the company undertakes no obligation to revise or update any statements made today. I encourage you to review all the company's filings with the Securities and Exchange Commission concerning these and other matters. I'll now turn the call over to Puneet Dhillon.

Good afternoon, everyone. Thank you for joining us today on Sky's fourth quarter and year-end 2024 earnings call. We appreciate your interest in Sky, and thank you to our shareholders. Joining me is our entire executive team, and they'll stay online for the Q&A portion after the prepared remarks. At the start of 2024, we identified critical questions about perfectly restricted CB1 inhibition and implemented a clear vision and a plan for executing an ambitious clinical trial to demonstrate proof of concept of our novel CB1 inhibitor, Namasmab, in patients with obesity and overweight. This plan led to a $90 million investment from top life science institutional investors in the early part of 2024, ultimately allowing Sky to execute on its goals for the year. I'm happy to report that not only did our team meet, but we exceeded our expectations. First, we submitted and received clearance of our obesity IND in January 2024. Second, following the completion of our $90 million fundraising, we immediately initiated planning of our clinical operations activities for namazumab, which culminated in the initiation of CBON in August of 2024. And third, our team's ability to execute efficiently resulted in rapid enrollment into the CBON clinical trials and I'm proud to announce that as of February 28th, we have completed our enrollment with 136 patients and over-enrollment from our originally planned 120 patients. And as a result of this accelerated over-enrollment, we now expect final top line data from all patients in late Q3 or early Q4. This is potentially three months earlier than our prior guidance, allowing us to forego the originally planned interim analysis and instead report the full 26-week data ahead of schedule. Fourth, on the manufacturing front, we transferred the manufacturing process for Namastamab to our manufacturing partner and have initiated GMP manufacturing runs, as well as implemented plans for optimization, scale-up, and commercial capabilities for Namastamab. Fifth, the excellent safety profile established in Namastamab's phase one trial continues as our independent data safety monitoring board The DSMB has held two meetings to review the Phase IIa safety data and recommended that we continue the study as planned. The study remains blinded through to the completion of the 26-week treatment and the 13-week follow-up period, and a third DSMB review is scheduled for April this year. To support Sky's increasing focus on the development of the Masumab, we made the strategic decision in 2024 to discontinue SPI-100 development following the Phase IIa clinical trial. We believe that the reallocation of our resources from SBI 100 to NMASMAP was a valuable step to help us to reach the milestones that we've achieved. Separately, 2024 also showcased important progress in the field of CB1 inhibition. Phase IIa clinical results from monolunoban, nova nordisk, small molecule CB1 inverse agonist revealed valuable insights for the class and for us, avenues of differentiation for NMASMAP. Ahead of our all-important forthcoming namazumab clinical trials, our preclinical and modeling work continues to paint a favorable picture of namazumab's safety advantage, as well as support the idea that peripheral CB1 inhibition is sufficient for weight loss. To briefly reorient you on our preclinical findings, the first question relates to efficacy and whether a true peripherally restricted CB1 inhibitor like namazumab can lead to meaningful weight loss. This is a reasonable question, as the first drug approved for weight loss in this class, remonivant, preferentially entered the brain and was originally believed to mediate its effects via central CB1 inhibition. Since then, we've learned so much more about the sufficiency and importance of peripheral CB1 inhibition versus the role of central CB1 inhibition. If you haven't already, I would encourage you to listen to our webcast from July 2024 and November 2024 where our clinical advisor, Dr. Marcus Goncalves, and our CSO, Dr. Chris Twitty, elegantly explain why we believe that peripheral CB1 inhibition is not only sufficient, but necessary for weight loss based on the mechanism of CB1 inhibition. Supporting this thesis, we announced in November 2024 the first demonstration that namazumab can drive significant weight loss in a diet-induced obesity-mearing model, and to our knowledge, This data is the first to describe that an antibody that does not cross the blood-brain barrier and preferentially targets CB1 receptors in the periphery can cause weight loss in a DIO murine model. We look forward to sharing even more data that demonstrates the ability of namazumab to not only drive weight loss, but also impact multiple metabolic processes associated with obesity and its comorbidity. The second, and we think most important question for this class of drugs, relates to safety. As we know, remonivant was ultimately taken off the market in Europe because of a significant rate of neuropsychiatric side effects, and importantly, a higher rate of suicidal ideation compared to placebo. The concerns around this mechanism were further exacerbated by the announcement by Novo Nordisk that while significant weight loss was noted at 16 weeks, there were dose-dependent increases in neuropsychiatric side effects with monolunaband. At Sky, we believe namazumab is uniquely positioned to potentially be the safest of the CB1 class of drugs because of its superior restriction from the brain. As we have reported previously, we saw no neuropsychiatric side effects from our Phase I study that treated over 60 patients with namazumab for four weeks. And as highlighted earlier, the Phase IIa study has a quarterly independent data safety monitoring board review of safety data. Our original investment and continued efforts to develop Namastamab is based on the premise that neuropsychiatric concerns still hinder small molecule CB1 inhibitors, whereas to date, Namastamab's truly peripheral mechanism has demonstrated meaningful weight loss without the safety liability seen with even the perfectly restricted small molecule CB1 inhibitors. As mentioned earlier in our press release, we announced that we have implemented a protocol extension for the ongoing CB1 trial. Specifically, with enrollment now complete, patients in all four treatment arms will have the opportunity to continue receiving therapy for an additional 26 weeks, increasing our treatment period to 52 weeks compared to 26 weeks previously. This means that by Q2 of 2026, Sky will have substantially greater safety and efficacy data, which we believe will significantly bolster our regulatory package and help discern the MasterMaps therapeutic profile and differentiation. Where 2024 was about successfully implementing our clinical operations plan and completing enrollment for CBEYOND, 2025 is about data. First and foremost, our clinical data from CBEYOND but also data from our R&D efforts, which we hope will continue to demonstrate the impact of namasmab in the DIO model. Our ongoing preclinical research aims to highlight a further understanding of how namasmab's differentiated mode of CB1 inhibition acts peripherally to promote coordinated modulation of hormones and inflammatory mediators, lipid metabolism, and glycemic control to ultimately yield significant weight loss and a productive metabolic homeostasis. We anticipate that these efforts will yield additional data in the upcoming quarters, enhancing our understanding of namastumab's capabilities. Additionally, we are advancing our research to explore other metabolic indications where inflammation and fibrosis play a significant role in disease progression. By utilizing translational models, we aim to identify new therapeutic applications for namastumab. Looking ahead, we plan to engage with regulators to align on our Phase 2b Dose Escalation Study, which we anticipate initiating by the second quarter of 2026. And concurrently, we're strengthening our manufacturing capability and evaluating alternatives to bring down our cost of goods sold. These efforts are crucial for maintaining our development pace and preparing for potential commercial demand. We remain focused on the MasterMap's attractive market opportunity. And based on our ongoing assessment of both current and future market dynamics in obesity and overweight, combined with the latest developments underscoring the appeal of some of the novel mechanisms in obesity, we continue to view Namastamab as a differentiated alternative to enable weight reduction while addressing the limitations of incretin-based therapy. And with the translational workflow in full swing, we not only aim to identify new therapeutic applications for Namastamab, We're also focused on the development of next-generation GPCR targeting molecules to address various metabolic disorders, which could potentially lead to innovative treatments in this field. Our overarching message is simple. We believe obesity and overweight conditions are extremely heterogeneous, demanding multiple effective therapeutic options, while the GLP-1 receptor agonist space, whether we're speaking of oral or injectable drugs, is becoming crowded and competitive. Recent industry deals do in fact acknowledge the merit and value of alternative anti-obesity mechanisms to start evolving the weight loss world beyond increments. And Sky is uniquely and strongly positioned with another promising alternative mechanism and highly differentiated product with potential to fulfill the unmet needs of this diverse and massive patient population, rather than fighting for the same first-line thoughts of a well-established mechanism. So we encourage discerning investors and other stakeholders to look under the surface and understand these dynamics. We believe namazumab is uniquely positioned to play a role as a part of an inevitable broadening of the anti-obesity toolbox. With an important phase two inflection point this year, now is an opportune time to evaluate CB1 targeting. At our June event during ADA, ahead of the top line 26-week data, we will review our plans along with additional preclinical data that demonstrate Nimacimab's unique advantages. We look forward to sharing these new insights with you. I want to thank all of the patients, physicians, and clinical coordinators who are participating in the C-Beyond trial. Without them, we would not be where we are today. They are a vital reason why companies like Sky are able to potentially bring life-altering drugs to the market. Thank you for your continued support as we advance Nimacimab and work to solidify Sky's position as a pioneer in peripherally restricted CB1 inhibition. With that, I'll turn the call over to Caitlin, our CFO.