Altimmune, Inc. (ALT) Earnings Call Transcript & Summary

Greetings to all. I'm Scott Harris, Chief Medical Officer of Altimmune, and I welcome you to Altimmune's R&D Day. We're delighted that you can join us for this exciting afternoon of presentations as we review our ongoing clinical development program, our 2 new indications and our program catalysts. By way of logistics, we will be holding 2 Q&A sessions during today's meeting. [Operator Instructions] Let me pause briefly on our forward-looking statement. Here is the agenda for today's presentations. First, we will commence the day with a brief introduction by our CEO, Dr. Vipin Garg, and then move through our program in obesity and MASH. This will then be followed by presentations of our 2 new indications and a summary of the day. We're delighted to have 4 world-renowned speakers to join us today to present on each of these topics. Each is the principal investigator of the planned and ongoing studies in each of these indications. Dr. Louis Aronne, Professor of Medicine at Weill Cornell Medical College, will provide an overview of pemvidutide for obesity and its comorbidities. Dr. Mazen Noureddin, Professor of Medicine at Houston Methodist Hospital, will provide an overview of pemvidutide for MASH and the upcoming Phase IIb readout that is expected in the second quarter of 2025. We'll then have 2 speakers in our 2 new indications, alcohol use disorder and alcohol liver disease. Dr. Rohit Loomba, Professor of Medicine at Cornell University (sic) [ University of California ], San Diego will provide an overview of alcohol liver disease variably referred to alcohol liver disease, alcohol-associated liver disease or alcohol-related liver disease and review the Phase II program in ALD that is expected to commence in the third quarter of this year. Dr. Henry Kranzler, Professor of Psychiatry at the University of Pennsylvania will provide an overview of alcohol use disorder and its complications and the use of pemvidutide in this condition. Finally, Dr. Garg will provide a summary of the day and the future of Altimmune and pemvidutide. As mentioned previously, there will be 2 Q&A sessions at the conclusion of Dr. Noureddin's presentation of MASH and at the conclusion of Dr. Loomba's presentation on alcohol liver disease. I will serve as the moderator for the first half of today's sessions, which will include the overviews on obesity and MASH. And then I will then turn the microphone over to Dr. Sarah Browne, our Vice President of Clinical Development, who will moderate the session on AUD and ALD. I want to express our excitement and enthusiasm over our MASH top line data readout next quarter and our 2 new indications, AUD and ALD. There is a strong mechanistic rationale for pursuing AUD and ALD that Dr. Kranzler and Dr. Loomba will review in their presentations. It is recognized that GLP-1-based agents can moderate or eliminate alcohol misuse in both AUD and ALD. And given that pemvidutide may have some of the most potent effects on liver fat and its associated inflammatory activity of any agent in development, we believe it would be particularly effective in ALD as the condition appears to be driven by fatty liver and fat-induced inflammation. We have seen class-leading reductions in liver fat with pemvidutide in clinical trials, and we believe these benefits would translate to mitigation of inflammation in both MASH and ALD. As we will see obesity and alcohol are also closely interrelated as each factor negatively impacts outcome in MASH and ALD. Therefore, with 1 drug, we would be addressing the 2 most frequent liver diseases and reasons for liver transplantation in the world. The common theme here is that pemvidutide is designed to be the best-in-class for MASH and obesity-related comorbidities. Each of these conditions will be pursued in individuals who have obesity or overweight, therefore, patients who received pemvidutide would benefit not only from the treatment of their primary condition with the comorbidities of obesity which add to negative outcomes. And as you would surmise, with this approach, we are only adding to our franchises in both liver disease and obesity. The INDs in both AUD and ALD have cleared and based on the extensive information accrued with pemvidutide to date in MASH and obesity studies, the FDA allowed us to go directly into Phase II in these indications. With this, I would like to hand the microphone over to our CEO, Dr. Vipin Garg. Vipin?

Thank you, Scott. Good afternoon, and welcome to Altimmune's Investor R&D Day. I would like to take a few minutes to introduce pemvidutide and to set the stage for this afternoon's presentations. As most of you know, pemvidutide is a GLP-1/glucagon dual receptor agonist. What is important to note is that pemvidutide has been uniquely designed to have a 1:1 ratio or 1:1 potency of GLP-1 and glucagon. GLP-1 has direct effect on GI and the brain and works through the suppression of appetite and cravings and reduces inflammation. Glucagon on the other hand, has direct effect in the liver. In fact, there are no GLP-1 receptors in the liver. In contrast, the liver is loaded with glucagon receptors. Glucagon increases energy expenditure and significantly increases the burning of fat. In other words, glucagon works synergistically with GLP-1 and improves the quality of weight loss with additional beneficial effects on cardiometabolic risk factors such as liver fat and serum lipids. Our plan this afternoon is to review with you the compelling clinical data that we have generated across multiple trials that demonstrate clinically meaningful weight loss, class-leading lean mass preservation, class-leading liver fat reduction and significant reductions in serum lipids. Now to our 2 new indications, AUD and ALD. As Scott mentioned, we are very excited to share with you that the FDA has recently cleared INDs for the study of pemvidutide in 2 additional indications, alcohol use disorder, AUD, and alcohol liver disease, ALD. Both of these indications represent compelling opportunities and address major unmet medical needs. We believe that pemvidutide is ideally suited to address each of these conditions. And the scientific rationale for pursuing development of these indications will be discussed by our distinguished KOLs, Dr. Kranzler and Dr. Loomba. You will also see how these indications fit well with our ongoing development in MASH and our vision to become a leader in the treatment of liver and cardiometabolic diseases. Now our product pipeline. We have always believed that pemvidutide has the potential to be a pipeline in a product. Our KOLs will discuss each of these opportunities with you in details this afternoon. For obesity, we completed a successful end of Phase II meeting late last year and obesity indication is now Phase III ready. For MASH, we are expecting Phase IIb top line data in the second quarter of 2025 and are eager to share that data with you once available. For the 2 new indications, AUD and ALD, we have clearance from the FDA to initiate the Phase II program, and we are actively moving forward to open enrollment in these trials, and we'll keep you posted as developments occur. I'll now turn the call over to Scott Harris to tell you more about AUD and ALD and then introduce our KOLs. Scott?

Thank you, Vipin. It gives me great pleasure to introduce Dr. Louis Aronne, who is our next speaker. Dr. Aronne is the leading authority in -- is a leading authority in obesity and its treatment. He is the Sanford I. Weill Professor of Metabolic Research and Director of the Comprehensive Weight Control Center, a state-of-the-art multidisciplinary obesity research education and treatment center in the Division of Endocrinology, Diabetes & Metabolism at Weill Cornell Medicine. A graduate of Johns Hopkins University School of Medicine. Dr. Aronne is a founder and past President of the American Board of Obesity Medicine and a past President of the Obesity Society. He is the Founder and Chief Scientific Adviser of IntelliHealth, a cloud-based weight management system that delivers as obesity treatment online as Flyte. In 2024, Dr. Aronne was the principal investigator of the Altimmune Phase II obesity trial and presented the results of this study at the 85th Annual Meeting of the American Diabetes Association in June of 2024 and the American (sic) [ European ] Association for the Study of Diabetes in September of late last year. Dr. Aronne?

Thank you very much, Scott. It's really a pleasure and an honor to be here to talk to you all about pemvidutide for obesity and it's many, many comorbidities. Obesity, a growing epidemic. I don't think I need to tell you what's going on in the world of obesity and the continual increase in prevalence, and when we look at this slide showing the dramatic increase in the rates of obesity from 1990 to 2030, at least half, this says nearly half, it will be half of all Americans will have obesity by 2030. But a greater concern is that 10% of Americans will have severe obesity, a BMI of 40 and above. In other words, they would qualify for bariatric surgery. And that level of obesity, everyone would agree is a severe illness, a severe illness, which requires treatment. Even now in this era where we're battling it out with insurance companies about coverage, every insurance company when we show that there's someone with a BMI of 40 and above, especially when they have comorbidities, we are seeing coverage for the medications that we currently have. So I think that when we look at the number of people who are going to need to be treated in the future, it's massive. And this is the tip of the iceberg. The rest of the world is having the exact same problem. In fact, in certain countries, the prevalence of obesity is growing even faster, but it's starting at a much lower level. Now managing the comorbidities or what some people have called clinical obesity is essential in the treatment. It's not just getting people to lose weight, but it's treating these underlying problems, which is really what we're talking about when we're treating obesity. So if we look on the left, 65% to 70% of people with obesity have dyslipidemia of one form or another. And ultimately, that's part of what leads to coronary artery disease. If we look at MASLD and MASH, again, a substantial number of the population, amount of people with obesity have either of those illnesses or both in some cases. And then hypertension. At least half in most cases of people with obesity have hypertension. And the thing about obesity that is so powerful as a disease-causing entity is that people have multiple illnesses at the same time. So that -- if you look at the leading cause of multimorbidity as some people have termed it, it's obesity. Now thin people may have hypertension, others may have dyslipidemia. But in obesity, you have the whole package of illness, and that is what we think is causing so many of the problems we associate with obesity. So there remain unmet medical needs. When we look at what we currently have, we have 2 really breakthrough drugs, semaglutide and tirzepatide. We use them clinically on a daily basis, and we see how effective they are. But we also see their limitations. We're doing really an amazing job in treating people, but we also see -- especially at our center where we tend to collect nonresponders, we're seeing that there are people who could do better if we had drugs that work in a different way. And some of the things that we've seen that we think need better results are: Number one, enhanced effects on lipids and liver fat reduction. Some of us think that liver fat reduction is going to be critical to increasing the benefit in insulin resistance and other cardiometabolic risk factors. So we have great results already. Many of us think we could do even better by getting fat out of the liver. Preserving muscle. That's another hot topic we talk about constantly. Some of the therapies we have right now, again, these are breakthrough therapies that have proven cardiovascular benefits. We're not knocking them and again, we use them vigorously. But we've seen the loss of lean mass of 35% to 40% with some, and that's a concern, especially in certain parts of the population, like older people, we are concerned, could they lose too much muscle mass. And that's something that we may be able to deal with in a better way. We've already studied this in certain ways, and you're going to see some very exciting results. And then finally, improved tolerability. When we look at the rates of discontinuation from gastrointestinal side effects. Let's think about it, if we had a compound that also increased energy expenditure at the same time as reduced appetite, you could use a lower dose, so it reduced appetite less but still get the same kind of robust weight loss, I think that's where we're headed towards drugs that have dual effects. And we already see that drugs with dual effects can be more effective, I think we're going to see that they're also going to be more tolerable as well as more effective and produce these other metabolic benefits. Now we know that patients with fatty liver or steatotic liver are at a higher risk of having cardiovascular events. This is a well-known relationship that has been sorted out over the years. And in fact, from this data here, you can see there's 70% increase in cardiovascular risk in those patients who have hepatic steatosis. So reducing hepatic steatosis, we would surmise is one way to reduce cardiovascular risk. And that's part of what we will be exploring in the studies of pemvidutide in the future and in the future studies of other related compounds. So the combination of effects that we see already, that we've seen already in our Phase II trials, weight loss of 15% -- of over 15%, at 48 weeks, it was 15%. But in the highest dose, we could see that the slope was still going down as it has been with others like tirzepatide. Where is it going to go after 1.5 years or 2 years? We don't know yet, but we believe there's going to be significantly greater weight loss than 15%. Liver fat reduction of 75%, again, excellent result, which should produce cardiovascular benefit and also benefit that you'll hear about on MASH and other of the liver complications. And finally, a 15% to 20% reduction in LDL that is comparable to some of the statin drugs. So multiple beneficial effects, all of which are going to impact cardiovascular risk and also the other health risks that we associate with obesity. So I just want to go over a little bit of the data that we have from our MOMENTUM Phase II trial. And here, we see the waterfall plot from the Phase II trial and in the top left corner, we have the placebo response, and you can see there's some weight loss. But in a number of people, there is actually weight gain and this is something that we've seen in almost all the trials that we have done of the new compounds. If we look at the pemvidutide 1.2-milligram dose, the lowest dose, we see very good weight loss across the spectrum. So an important point is that the lowest dose of pemvidutide is an effective dose. It produces clinically significant weight loss. So when we think about the primary care use of these drugs, one of the biggest issues is titration. I mean, we hear about this constantly in our center from our primary care colleagues. How do you titrate this stuff? I started somebody and then I want to increase it. You have to get another approval, another prior authorization. But we now would have a drug here that has got an effective weight loss with even the lowest dose. The 1.8-milligram dose produces greater weight loss. And then finally, the pemvidutide 2.4 had 1/3 of the subjects losing 20% or more of their body weight, a very robust weight loss over the 48 weeks of the trial. And again, the slope with the 2.4-milligram dose continued to be negative. So we expect a greater weight loss. Now when we look at the quality of weight loss, this has been a big topic of discussion for the past few years, and we've been working on other compounds that can be added to the currently available drugs to try to improve the quality of weight loss. But what you can see in the left table is that pemvidutide in our Phase II MOMENTUM trial had a lean loss ratio of 21.9%. In other words, of the weight that was lost, 21.9% was lean mass. This is as opposed to semaglutide in their Phase III 68-week trial, it was as much as 39.9%, just about 40%. Tirzepatide was about 26% in their 72-week trial. And that is about what we have seen in the past with dietary interventions. So that is a number that we think is about normal. But for people who are older and who are many of the people that we're treating, losing any muscle mass is not necessarily a good thing. So having less than the standard is probably a good idea. And finally, at the bottom, retatrutide, which is the so-called triple-G with 3 different effects, we see 37.7% weight -- lean loss ratio, again, higher as we would expect as we saw with semaglutide. And why we see that is still not entirely clear. Another important point about a GLP-1/glucagon dual agonist is that glucagon has an effect on visceral fat as well as liver fat. And we know that visceral fat is another risk indicator for cardiovascular and other complications, cancer, for example. And what we see in the right panel is a preferential loss of visceral fat, greater visceral fat loss than subcutaneous fat loss. And this is very exciting. That's where we want people to lose weight. We don't -- subcutaneous fat is relatively benign, believe it or not. And it's one reason why women may be at lower cardiovascular risk than men, given that at the same weight, they're at less risk. Losing visceral fat is where it's at when it comes to reducing comorbidities. And what we saw in our Phase II MOMENTUM trial was a really great result in visceral fat loss. And probably as a result, we see an improvement in the lipid profile, triglycerides, down between 35% and 56%, total cholesterol reduced substantially, and LDL reduced the same amount. And again, the LDL and cholesterol is equivalent to what we see in statin trials. So really a very robust broad spectrum reduction in lipids. And when we look at the profile, we see that these compounds, compounds that do GLP-1 and glucagon as well are going to be very exciting. And I've been waiting for this for a long time. It's very -- like I can't wait to get a hold of a GLP-1/glucagon dual agonist because I know that there are patients who we cannot treat effectively right now with our current agents, and we will be able to do an even better job when we have this broad spectrum of weight loss, better quality of weight loss, an improvement in serum lipids, easier -- ease of dose titration, we'll have better tolerability and safety has looked terrific so far in our Phase II trial. There are no MACE events, no imbalances in arrhythmias or other cardiovascular safety issues. So with that, I'd like to turn it back to Scott.

Thank you, Dr. Aronne. It gives me great pleasure to introduce Dr. Mazen Noureddin. Dr. Noureddin is Professor of Medicine at the Lynda K. & David M. Underwood Center for Digestive Disease Disorder. J.C. Walter Jr. Transplant Center and Sherrie and Alan Conover Center for Liver Disease and Transplantation at the Methodist center -- Houston Methodist Hospital in Houston Research Institute and as well the Chairman of the Board (sic) [ Board member ] for Summit Clinical Research and Pinnacle Clinical Research. Dr. Noureddin is internationally known for his research in the area of MASLD and MASH and MASH-related cirrhosis. He's published more than 260 papers and journals such as the New England Journal of Medicine, the Lancet, Nature Medicine and Science and has conducted more than 70 investigational clinical studies of novel treatments for MASH. He's also the Chair of the AASLD MASLD special interest group, a member of the Editorial Board for a number of major GI journals. Most importantly, he is the principal investigator of our IMPACT MASH trial that we'll read out in the second quarter of this year. Mazen will be speaking about the use of pemvidutide in MASH and the upcoming data readout in our IMPACT trial. Mazen?

Thank you, Scott. I would like to thank Altimmune for being here. It's a great honor. And I share Lou's excitement about having dual GLP-1/glucagon, especially for hepatologists, as Vipin said earlier, they are glucagon receptors in the liver. So let me share with you some of my excitement on why pemvi is very important for us in MASH. So I'm sure like everyone in this call know about the pandemic or epidemic of MASH. And on the left, I show you a study showing you the increase or the expected increase in prevalence of MASH by 63% between 2015 and 2030, up to 27.5 million people will have MASH. On the right, I share with you, data that most of these patients are F2, F3 and F4 patients, the patients that need to be treated because they have increased prevalence of morbidity and mortality. Indeed, there will be 0.5 million people requiring liver transplantation, which, as you know, is very expensive for our health care system. And of course, it's very morbid to our patients. Here, I want to share with you the concept that MASH is associated with other comorbidities. As Lou mentioned, obesity is a major factor for MASH, up to 80%, 90%, you see them obese or overweight. There's elevated triglyceride, dyslipidemia, hypertension, highlighting that we don't just need to address the liver but also weight loss and the comorbidities in such patients, which is very important to hit multiple etiologies and comorbidities in our patients. This -- a very important point that our patients with MASLD or MASH, even MASH with advanced fibrosis, F2 and F3, they don't just die from the liver. Indeed, the most common cause of mortality is cardiovascular. So on this study, it shows you here in MASH in F2 and F3, cardiovascular mortality is more than liver-related mortality. And thus addressing these both mortalities with medications that mitigate both of them is extremely important. I want to walk you through this slide. Kind of to set the stage for the principles in our MASH world on the response that we see in our Phase III trial, which is usually the pivotal trial and the histology trial. Multiple data now are showing that decreased fat fraction of what we have used now for many, many years, MRI-PDFF, lead to improvement in histology. More specifically, more than 30% lead to MASH resolution and fibrosis improvement. More than 50% reduction, which is higher than the 30% lead even to greater MASH resolution and fibrosis improvement at the same time. And we have seen this -- or we have seen more proof in a recent Phase III pivotal trial, where MRI-PDFF reduction especially with 50% has led to significant MASH resolution and fibrosis improvement. So it gives you reassurance that you are going the right path. So you hit both endpoints with fat reduction. Also on the right, Lou mentioned weight loss is important. And those are data from MASH showing you more than 10% weight loss, up to 81% of our patient regress their MASH. So these concepts of fat reduction in MRI as well as the weight loss are very important and the principle and the seeds for success for Phase III. Now let me share with you why this year is special and why I'm excited about pemvidutide in particular. It's the previous data. Let's go through it. Look at the left. This is a relative reduction of MRI-PDFF in our MASLD-MASH patients. It was up to 76% of the patients that have -- 76% relative reduction in fat. And on the right, let's break it down by that 30% reduction, 50% reduction and one is very hard to get and exciting, which is normalization of liver fat by less than 5%. So if you start with the 30% reduction, which is where we started many years ago, and we thought it was really, really good. Here you see up to 100% of patients have 30% reduction within only 24 weeks in the previous study. 50% reduction, much higher bar, 85% of patients achieved that. This is a very high bar to achieve. And excitingly, half of our patients have would normalize the liver fat or reduces to less than 5%, which is normalization within this week 24. Those are very exciting and powerful data. They say a picture is worth 1,000 words. Let me give you an example of particular patients from this trial. Again, I showed you the very high numbers. But on the left, you see that liver is full of orange. This is a baseline. And if you look at that scale, that translate into 32% of fat in the liver. That's high fat in the liver, the high fat proportion. This is at baseline. Look at week 24, it normalized, and it's actually now to low level, 1.7%. And you see that orange full of fat liver turn into a nice blue with a low percentage of fat. And this is what we really look in our patients such a nice normalization of their disease. Other things. Let's look at inflammatory biomarkers. You ask hepatologists, we always look at the ALT. And ALT has been a universal biomarker for hepatologists for many, many years. When we look at all subjects, we -- in that trial, we saw a reduction on ALT, but then we took those -- that they were elevated more than 30, and we saw a very important landmark point, which is dropped by more than 17 units on all doses up to 20. Why 17 units is important? It's because data has shown that if you drop your ALT, you also have improvement in histology. Now we have multiple evidence here, the MRI-PDFF significant reduction pointing toward MASH resolution as well as fibrosis improvement, ALT, and let's take a look at others. There's another biomarker, especially MRI, called the cT1 and cT1 correlated with improvement in MASH histology as well as the worse the cT1, there was an increase in cardiovascular risk factors and this study shown on the left. So what you want to do also, you want to show that MRI cT1 signal is decreasing in your population. So I've already showed you the MRI-PDFF, I've already showed the ALT. Here, I show you decreasing in the signal. CT signal is reduced in over 80% of the subjects in this -- within 20 -- 12 weeks. That's also a very high bars that achieved with cT1, another very strong signal. So the -- I want to remind you of the magnitude of fat reduction, 30% where we started, we're very excited. 50% is a very, very strong signal from MASH resolution, fibrosis improvement. Pemvi was up to 75% of liver fat reduction within only 24 weeks. So ladies and gentlemen, this is a very important slide. Here, I compare liver fat reduction across multiple agents. And you can see clearly that pemvidutide led to probably the most significant liver fat reduction comparing to many other agents. Not even that. This is 24 weeks only. Many of other agents here I'm showing you, they had that reduction that is less than pemvi at a later point, such as week 48 and week 52. Again, this is a very strong signal for pemvi giving confidence of the coming IMPACT trial within the 24-week data. Look at this figure, where you want to be, you want to be on the upper right. So we have agents that they have a direct liver effect, but they don't affect the weight, none whatsoever or maybe tiny, tiny bit. There are other agents that they affect weight loss and lead to some good reduction, but they don't affect delivery. But pemvi on the upper right, showing you where the dream of each patient or each hepatologist want it to be, which is reduction in the weight as well as have direct liver effect on MASH resolution and fibrosis improvement. Now let me share with you why 2025 is very exciting for pemvidutide and the MASH landscape. Pemvidutide will report the IMPACT Phase IIb in Q2 of '25 and a top line data readout and look at the design of this study. This design is there are 3 arms, 1.2 milligram, 1.8 milligram and the placebo. We're reporting week 24 data on paired liver biopsy, and the patient will continue to weak 48. So we have more data coming down the road, but this is the primary endpoint, the week 24. Secondary endpoints are weight loss and noninvasive testing, which, as you know, very important, the primary is a histology. And I'm very excited about this design. The reason why, the amount of the fat reduction I have shown you in MRI-PDFF, it is expected that we'll see greater biopsy response overall. The study is very well powered, and we have followed a very thorough, similar to Phase III, readout pathology methodology using 3 readers in a way that we believe that we're going to minimize the placebo response and have a strong delta there. So in general, pemvidutide is a foundation for MASH therapy. It's an exciting year for us, the hepatologists. And the successful trial, the IMPACT trial would become -- that will become the first incretin-based agent to achieve statistical significance on fibrosis improvement only within week 24. And I showed you all data such as the MRI-PDFF, the 30%, 50%, the normalization, less than 5%. The ALT reduction and the cT1, all point toward that with a comfortable margin. The first -- it's going to be the first therapeutic candidate in my class to achieve statistical significant fibrosis improvement and meaningful weight loss, again, within 24-week data, giving us a big chance to move quickly to the Phase III. I think with that, I will stop here, and I will pass it back to Scott Harris. Thank you.

Welcome back. I want to welcome to our panel, Dr. Vipin Garg, CEO of Altimmune as well as our prior 2 speakers, Dr. Louis Aronne from Weill Cornell Medical College and Dr. Mazen Noureddin from Houston Methodist Hospital. But in addition, we'd also like to welcome Dr. Henry Kranzler from the University of Pennsylvania and Dr. Rohit Loomba from the University of California, San Diego. We're delighted to take your questions. And I'm going to turn the microphone over to the moderator for the session to bring the questions in. Moderator?

[Operator Instructions] And with that, our first question comes from the line of Yasmeen Rahimi at Piper Sandler.

I guess I think investors are trying to understand as we go into the IMPACT data readout. Obviously, this robust effect of showing a histological and benefit across MASH resolution of 1 point, improvement of fibrosis at 24 weeks, as you noted Dr. Noureddin, is the first one at that time point. But I guess, let's say, IMPACT achieves that, how will you and your colleagues prioritize pemvidutide's utility versus other agents that are either approved or in development? So where does that put that in your choice of agents that you could work with? If you could share some color around that, that would be really helpful. And then secondly, as a MASH physician, how much emphasis is there to control weight in conjunction to the liver manifestations present?

Thank you, Yasmeen. Dr. Noureddin?

Yes. I mean, Yasmeen, glad to hear from you. Let me start with the weight. If I talk to any patients, they really want to lose weight in addition to the liver effects. So that's very, very, very important to our patients. They always worry [ about ] weight. There are other comorbidities. So cosmetic is very important. As I mentioned, like 24-week data, if we hit the MASH resolution and fibrosis improvement as expected, that will put pemvi on the top of the line as one of [ diverse ] agents. As I mentioned, we're going to continue beyond 24 weeks. But if I can get my patients to have their histology improved within only 24 weeks, and I can kind of sit like in a comfortable spot and continue to work on their weight and eventually cardiovascular outcomes, I will prioritize this drug on many others. And of course, there will be combination therapy and all this we talk about, but it set itself for to be one of the first drugs to be used if it achieves the primary endpoint, which is expected.

Dr. Loomba?

Thanks, Mazen. I completely agree. And Yasmeen, I think a really important question, as we see, we have Phase III data, subpart H end points presented at AASLD for semaglutide. And based upon that, we know at 72 weeks, sema is giving us MASH resolution and also fibrosis improvement. So compared to that, another GLP-1 agonist that has a direct liver effect based upon glucagon agonism. Within 24 weeks, if you are seeing similar results, you can obviously see that there will be a lot of excitement. On top of it, I think, as Lou pointed out, I think the issue about preserving skeletal muscle would become more and more important as we develop further data with these weight loss agents. So I completely agree with Lou that not only improving liver fat, where we do see pretty significant relative potency. We also see improvements in visceral fat, which will be important for CBD risk and on top of it, if we can preserve muscle mass in our patients as they lose weight. I think there's substantial advantage. So I think that's sort of how we view the advantages that you could see with these Phase IIb results if they were to be successful.

Our next question is coming from Ellie Merle at UBS.

So can you just first maybe walk us through the time lines for the biopsy re-reads, is that ongoing now for the MASH Phase IIb? And then into that data, I guess, how should we think about what would be competitive from a tolerability perspective, particularly to get use in, say, the F2 patients. And in terms of the weight loss, I guess, how much weight loss would you want to see, or they are expecting from this MASH study?

Thanks for the question, Ellie. So yes, the re-reading is occurring now. But as you know, it cannot be complete until the final patient is biopsied. So this is very important, as Dr. Noureddin mentioned, to really improve the quality of the read out, in particular, reduce the placebo response. Now we've observed excellent tolerability of pemvidutide in individuals with diseases. It really contrasts individuals with obesity who come into the trials. It appears in general that individuals who have diseases tolerate GLP-1s much better than those that don't. So for example, in our MASLD trial that Dr. Noureddin talked about, we saw a very low adverse event discontinuations. In the diabetes trial that we conducted, we saw no adverse event discontinuations. And in fact, at the same 1.8-milligram dose that we have in the current Phase IIb IMPACT trial, we saw no nausea or vomiting reported at all. I mean that's really very striking, especially for a drug that's not dose titrated. I don't think that any other of the incretin drugs in the class could achieve it. And also remember that there will be a number of diabetics in the IMPACT trial. So all of this, we think, is going to result in an excellent tolerability profile. In terms of the weight loss and your question about that, as you're aware, the weight loss within 48 weeks, with pemvidutide is very similar to semaglutide. And we also have the mixture of diabetics in the trial. And as you know, diabetics lose less weight than patients without diabetes in the trials. So we think as an approximation, the weight loss we'll see will be similar to the weight loss that was seen in the semaglutide trials. But also to point out that we're not coming into this trial with our best dose for weight loss. We are coming in with our best dose for liver fat reduction in MASH. We saw the dose response curve for that phenomenon leveled off very clearly in all of our biomarkers at the 1.8-milligram dose. So for study efficiency in Phase II, we elected not to use the 2.4-milligram dose in Phase II, something that we can certainly add in Phase III as we build the target product profile. And as Dr. Noureddin mentioned, because weight loss is very important to patients, even though we don't think we would see additional MASH benefits, by adding the weight loss, we build the prescribing information for the drug.

And for our next question, we've got Annabel Samimy at Stifel.

Maybe for Dr. Aronne, how would you consider the use of pemvidutide in your population. I mean, I think you're treating mostly obese patients. But given the overlap, 80% to 83%, would that simulate you to conduct further diagnostics to identify whether these patients have liver disease and try to seek usage of pemvidutide over some of the other incretins, obviously, given the overlaps. So I'm just trying to think about from a -- from an obesity specialist looking at patients who may have a significant amount of liver disease and not having been fully diagnosed. How would you approach these patients?

Dr. Aronne?

So right now, we don't do much to further the diagnosis. We know that a substantial number of the patients we see have fatty liver disease and steatosis. We absolutely know that. Because we don't have many options, we use what we have. But in the future, when we have options that are specifically targeted and which we know will be better for those with a steatotic liver, I think we'll do more investigation in order to find that out. So that doing things like a fiber scan, in our center, we don't do that routinely, but I would very much want to do that if I had a compound that I know is specifically going to be better for that type of patient. So I think that our practice will evolve as time goes on and education occurs of physicians who are doing this kind of work.

And if you allow me -- if you -- go ahead.

Just as a follow-up, does that, I guess, make you wish that there was a potentially higher dose to go to? The 2.4, even though it's not -- does it concern you that it's not maximized for weight loss as opposed to maximized for liver fat reduction, which you like the option to be able to have greater weight loss.

I think that we may have the higher dose at some point. So it may be that the higher dose is available as indicated in obesity. And so if someone has both obesity and liver disease, we might progress to the 2.4. So it's not that I don't think it will be available. You'd have to ask company, but I think that they will ultimately make it available for obesity. And if we had both of those conditions, we would go to the 2.4 if necessary.

Dr. Noureddin, why don't you answer the question? I know you had some comments and let me add some comments after you speak.

Yes. Maybe we're having the same comment. I just want to also pin on the point you said that those is not maximized for liver fat reduction. The 1.8 milligram that I showed you, it did as good job as the point 2.4 milligram in reducing the 50%. So from my standpoint, that was a very sufficient dose. I want to comment on the liver and weight loss, in particular, and I don't know if Lou agrees, we have seen with multiple sponsors now that they're coming to us, the liver doctors, and they're talking to us as like weight loss percentage is varying a little bit between all drugs. We're seeing the cardiovascular improvement. We're seeing the kidney improvement. Eventually, if you did the trial, it will be there. Eventually, the sleep apnea with the weight loss. But many of them, including those that they were not excited about the liver, they're making now a u-turn coming back to the liver because they think it's going to be the differentiator. Rohit gave the example of sema results at week 72, we want to see better. And we think this is going to be the dual mechanism of GLP-1 and the glucagon in particular that is going to affect the liver. So I guess from a hepatology standpoint, in these weight-loss drugs, the liver could be the differentiator at the end of the day between all these drugs that you really have a competition versus easier goals to achieve.

Thanks, Dr. Noureddin. And I wanted to add some additional comments, and then afterwards go to the next question. The dose response curve for liver fat appears to be different than the dose response curve for weight loss. As you're approaching 100% liver fat reduction, there's really no place to go. And as you see, we're already approaching that. So it's not surprising that by going to 2.4 or above, we would see diminishing effects. Now we can always go higher with pemvidutide for weight loss but recognize that we're very happy with the weight loss we're achieving. A 15% weight loss, you're essentially reversing all of the comorbidities of obesity and that's really important. I would also point out that if you look at the prescribing information of the other drugs, and I'll focus on tirzepatide, the average weight loss in a period of 1 year is about 10%. The average dose -- the most commonly prescribed doses are 5 milligrams followed by 10 milligrams. So patients aren't out there to lose 25% of body weight. They're out there to have meaningful weight loss. That 15% would be very meaningful to them, would have the most impact on their health. But cosmetically, they're seeking about 10% weight loss. So the bottom line is, yes, we could go higher with weight loss, that would be something we could pursue in the future. We don't see the value now. We think that we have achieved the best effects in MASH at the 1.8-milligram dose. However, in building out the target product profile for MASH, we can conceive of adding the 2.4 milligram dose back in Phase III to expand the entire target profile to maximize not only the master effects, but the weight loss effects as well.

Before we take our next phone question, we've got a web question from Roger Song at Jefferies. Roger is asking what we would consider to be clinically meaningful fibrosis benefit at week 24?

Yes, Roger, I'll start with that, and I'll turn the conversations over to our 2 liver experts here. Dr. Noureddin and Dr. Loomba. So the treatment effects are really all over the place, and they depend on the placebo responses, which are quite variable here. So to pick for you, a treatment effect and a placebo effect, could be very, very different. Here is the bottom line as we see it. None of the incretins have read out before 48 weeks. In fact, we know that semaglutide conducted a Phase II study of about the same size as our current study and failed to achieve fibrosis improvement at 72 weeks. So by achieving statistical significance of fibrosis improvement, at 24 weeks, we will best all of the incretins that are currently in development for MASH. Now the reason for this is the direct effects of pemvidutide on the liver, and that is due to glucagon. We have other direct-acting agents like the FGF21s. The bottom line is to get the potent effects on MASH, you need to have direct action. The indirect effects from the other drugs take much longer to achieve and you may not have that time in an advanced patient with F3 going on to F4 fibrosis. But in contrast to the other direct acting agents, namely the FGF21s and also resmetirom, we also have late weight loss. And this is differentiating. So to answer your question, we see the achievement of statistical significance on fibrosis improvement of 24 weeks as being extremely meaningful and a real milestone to be able to achieve this with an incretin. But I'll turn the discussion over. I think Dr. Noureddin has some comments.

I would agree with that, Scott. I mean, I remind everyone, fibrosis takes many, many years to happen. And it's -- we have to respect fibrosis development. It's a very long process a lot of pathways are involved and any clinical significant difference to me is meaningful at week 24. Remind you, we're going to see also week 48 data. So it's not like we're not going to know what's going to happen down there. That's even before the Phase III is going to happen. MASH resolution is also important to me. So we will see both of them. And anything that at 24 for fibrosis improvement is very respectful.

Dr. Loomba?

Thank you. I completely agree with both of you. As Mazen said, 1 stage progression based upon our studies, takes about 5 to 7 years in MASH. So improving that within 6 months is definitely clinically significant improvement. I would say treatment effect deltas ranging from 10% to 20% are clinically meaningful and also significant. So this is sort of our expectation at 6 months. And based upon the PDFF responses that we've seen, again, we've pulled data from 7 different trials on PDFF across the board, we expect that the results should translate into fibrosis improvement.

And one point I would add before turning to the next question is that the effects are only going to grow with time. We've seen that in the Akero data with efruxifermin. So what we see at 24 weeks will just be a preview of what we see at week 48, and we can use the noninvasive tests that we have in the study to try to estimate what that effect would be at the end of the trough.

Going back to the phones, we've got Liisa Bayko from Evercore.

I would like to ask a little bit more about your choice of methodology for analyzing the biopsies. I know you've chosen a 3-reader approach. And it seems like we've seen very different placebo rates. That's really what I wanted to get to. And sort of, I guess, first question is kind of what was your rationale for choosing this particular way of analyzing the biopsies? And then, I guess, for the physicians on the panel, how do you -- when you kind of look at these different MASH drugs across the landscape, how do you kind of compare and contrast and think about efficacy in the context of pretty wide differences in placebo rates. And what do you think is the best method?

I'll start with that, and then I'll turn the mic over to Dr. Noureddin and Dr. Loomba. So we gathered a great deal of advice on this trial from experts like Dr. Noureddin and Dr. Loomba, who made it very clear the best way to control the placebo response is re-reading the biopsies, scrambling the biopsies at the end of the trial, de-identifying them to the readers, not letting them see the time of the biopsy and letting them re-read. There seems to be a bias over time in patients who have their initial read, the reading tends to be up red and then down red later when the pathologists think they're seeing treatment biopsies. So we think that the re-reading method is the best for reducing the placebo response, we know that in some trials where they did not re-read the biopsies, they were seeing placebo responses as high as 30%. So we think it's critical to reduce the placebo response. We think we've identified the mean of doing it, not only the re-reading of the biopsies, but the [indiscernible] method, and this should give us a better readout in the second quarter. But I'm going to turn it over to Dr. Noureddin to get his opinion follow-up by Dr. Loomba.

I'll make it quick and simple. And I'm going to add our belated friend, Stephen Harrison before his passing also, and I use one of the quotes that I heard in the last couple of days reminded us of him, when he agreed with us on doing this, his opinion was get the information that would get you closer to the truth. What we're doing here is exactly what the FDA is asking us to do in Phase III study. So I'm going to deliver a reading to you that I'm going to go to Phase III and say, this is easily replicated. And other programs didn't include it before, they had 1 reader or whatever, to go fast with their Phase II. We wanted to do it, the closer to the truth, so we have confidence in our results and how it's going to translate to Phase III. That was the bottom line.

Thank you, Dr. Noureddin. Dr. Loomba?

Yes, I agree. I think having different readers, making sure that once patients have finished their treatment. We don't have a temporal association between the first biopsy and the second biopsy. All these are good practices, and this is how endpoint assessment should be done regardless of what the endpoint is. So I'm very confident that we will be able to get to an excellent treatment effect delta. In most of the trials, I think the most important thing to me is the treatment effect delta, not just looking at 1 response, but really looking at how things are playing out in the end based upon the sample size assessment and the protocol instituted. And it's also really important to follow the protocol that's been instituted. So I'm confident that the safeguards that have been put in this program will result in credible findings at the end, and we should be able to see a significant result based upon our hypothesis.

Thank you, Dr. Loomba.

Before our next phone question, we've got an online question from Seamus Fernandez of Guggenheim. Seamus is asking if the KOLs can comment on what percentage of their obesity and separately, their MASH patients are diabetic.

Dr. Noureddin?

I mean I'll give you the numbers from the trials. We see between 40% to 55% in the clinical trials enter with type 2 diabetes. Of course, the prediabetes is way more than that and overwhelming. It's -- Lou might correct me, the prevalence of prediabetes is 55% or 50% in the U.S., while diabetes is way less. But in our trials in general, they're enriched with type 2 diabetics for a reason because they're more likely to progress to F2 and F3s, and they're between 40% and 60%.

So if we look at the prevalence of type 2 diabetes, it's in the range of 12% to 14%. And as far as prediabetes, at least twice that high, maybe up as high as 50%. So it is quite common.

Dr. Loomba?

Based upon our study called the diabetes observational study, we observed 700 patients with type 2 diabetes. 75% of them have MASLD, about half of them have MASH and about 30% to 40% have Stage II or Stage III fibrosis. If you flip that question as to among patients with NASH, Stage II or III, how many -- what's the prevalence of type 2 diabetes? In our population, it's about 56%. So these are coexisting illnesses. If you ask in patients with obesity, what is the prevalence of MASLD, based again upon our study, it's 75% have MASLD among those who have obesity. And among those, about 50% of those with MASLD have Stage II or Stage III fibrosis. So really, enrichment occurs, particularly in the setting of obesity and type 2 diabetes significant NASH, Stage II or III.

Thank you, Dr. Loomba.

And our next question is coming from Alexandra Ramsey at William Blair. She is asking how pemvidutide's dual GLP-1 glucagon agonism compares to that of other dual GLP-1 glucagon agonists in development.

Yes. I'll take that one. So pemvidutide has the highest ratio of glucagon to GLP-1 of any molecule in development, and that's 1:1. And it was specifically designed that way to maximize the effects of glucagon, but at the same time, maintaining glucose homeostasis, and it does that by the 1:1 ratio. That was demonstrated in animals, and we've consistently demonstrated that in all of our trials. And the acknowledgment of that was the end of Phase II meeting that we had with the FDA, where they stated clearly, they were not seeing an aggregate glycemic signal. And in fact, they did not find any safety signal at all in the program and allowed us to go through with efficacy trials going into Phase III. Now there are other compounds in development. Remember, I mentioned pemvidutide is 1:1. Survodutide, which is in development, is 8:1. It has very little glucagon in it. It does have liver fat reduction, which is prominent, but it achieves it by pushing the dose of the drug. So, in order to get the glucagon effects, it gives effects that lead to great intolerability. And we see that in their clinical trials, despite the fact that they have 20 weeks of dose titration, and remember that we have none, at least at the 1.2-milligram and 1.8-milligram dose in the IMPACT trial. This provides 20 weeks of titration. Even at their lowest dose, remember, where they're pushing it hard, that lowest dose represents a 20% adverse event discontinuation rate. So it has glucagon in it, but it achieves this effect by going to doses that no other drug is realizing. That drug also has minimal effects on liver fat. The amount of LDL reduction they see in clinical trials between obesity and MASH is very variable. In the obesity trial, they actually had a small increase in LDL cholesterol. There are other drugs in development as well. There is the drug mazdutide, which has a 3:1 ratio. We don't have very much information on it because it's predominantly been studied in the Asian population. And then there's a drug called efinopegdutide that has a 2:1 ratio. They also have good effects on liver fat, but we have the best effects in liver fat. And I also think that we have the best tolerability given the fact that those other 2 drugs were titrated over a much longer period of time.

And our next question is coming from the line of Mayank Mamtani from B. Riley.

And appreciate the level of detail here. Maybe for Dr. Noureddin, quickly, if you could put in context the correlation of liver fat normalization with what we've seen on histology endpoints with other agents and your expectation for pemvi here. And I'm just thinking also, if you think of this as induction and maintenance both? Or are you thinking of this more positioned for induction given the depth of liver fat? And then I do have a follow-up to doctor.

Dr. Noureddin?

Yes, if I understood you correctly, that less than 5% within week 24 have been looked at and other agents here and there. This is one of the highest, if not the highest, if we have not seen. Most of the prediction of MASH resolution and fibrosis improvement came from -- Rohit worked on this data, initially started working on it at 30%, and then, we pushed each other, and we said, like, what is better than 30%. And then we looked at the 50%. And I think he and I here are sitting comfortably looking at MASH resolution, and I don't want to bite my tongue, but I'm very comfortable that we'll achieve both statistical significant MASH resolution and fibrosis improvement. Based on data we have seen over and over and over, and it was just replicated with resmetirom, MAESTRO-NASH trial, where PDFF was the best predictor of MASH resolution and fibrosis improvement. And your observation is quite spot on is that, that 50 -- less than 5%, it even adds more confidence to us where we were sitting here. In terms of you're going to maintain it or not, I think if the patients keep their weight low and follow a healthy diet after that normalization of fat, it should be, but I think we need to look at more data. The data is from GLP-1 coming now. After you stop them, the weight bounce back. So I think that's more research to be done, what happens to that less than 5% if incretin discontinued. I expect it to sit -- stay still for some time. But over time, if people regain weight and all that, it's plausible that they were -- they're going to put it back in the liver.

Mayank, you said you had a second question.

Yes, but for maybe Dr. Aronne. I was just curious, how does having a drug like this have you more proactively look for active liver disease among your obese patients, Dr. Aronne? And I wonder how many of the early F1, F2 patients get missed in the system, where obviously being overweight and type 2 diabetes could help sort of the early diagnosis piece.

So the short answer is we're not looking actively for liver disease in our patients. We sit right next to the hepatologists who have their own program. So when someone comes to us, we know that getting them to lose weight will be able to do the best we can with the compounds that we currently have. So we are not actively looking. But again, being on this panel, I may start to actively look and change our protocol in the future.

And let me add also to that. Part of it also the FibroScan is not available on the primary care physicians. It's yet not implemented as one of the quality metrics. The discussions now in -- from the leading liver society around the world that hopefully, this liver will be one of the quality metric eventually such as A1c as looking at the retina or protein in the urine. And we know that we have to make it easier than just like chasing of the FibroScan. It's easy, but the cost is there. So there are blood tests now started spreading out in addition to the FIB-4, which is very easy to implement. There are some blood tests that are starting to come out in the market. They're multiple now. And I think that will change over time once we make it better and easier for our primary care physicians that they are quite overwhelmed with multiple comorbidities.

And before we take our final phone question, we've got 2 more from the online audience. First from Patrick Trucchio at H.C. Wainwright. Given the growing role of noninvasive biomarkers like MRI-PDFF and cT1 and MASH drug development, do you anticipate the FDA allowing a potentially biopsy-sparing pathway for a Phase III trial? Or will histological endpoints remain the regulatory gold standards?

I'm going to turn that question over first to Dr. Noureddin. I know Dr. Loomba wants to weigh on that as well.

Yes. Rohit and I have been working on this for some time. I want to say the FDA is very open-minded for that. There is or there have been multiple workshops in defining the path to that, including the definition of reasonably likely to predict outcomes, NITs. And we're putting out data over and over. For instance, in the last year, they were couple of pieces in the literature, one from the NASH CRN by the NIDDK and the NIH, showing NIT's improvement. We showed before that the worsening lead to worsening of outcomes. This year, we showed that the improvement in NITs from the NASH CRN led to improvement in outcomes. There were other data from international group that was published in JAMA showing also improvement in couple of scores, Agile 3 and Agile 4, will lead to improvement to outcomes. So the -- we'll get there, I think, now. And we have to talk to FDA about this, but they previously said, if you design an NIT-based study now, which is Phase III, and try to go for outcomes, they will take that. The only problem what we're doing -- why we're not doing that is because outcomes are very slow occurring. So that trial will require probably 4,000, 5,000. I don't know what's the exact number, between -- it's 3-plus probably, and that required huge resources. But I would not be surprised in the near future if we see NIT-based study that can lead to outcomes. And I'm also aware there are discussions with the FDAs about certain programs. We'll see how that mature.

Dr. Loomba?

Thanks, Mazen. This is a really important discussion that's happening between all stakeholders. And the most important concept that's emerging is currently the way NASH drug development is working is we have a subpart H assessment on histology show improvement in fibrosis or MASH resolution and then continue for long-term clinical outcomes. Could we replace that subpart H assessment with something called, which Mazen just mentioned, RLSC, reasonably likely surrogate endpoint? So reasonably likely surrogate endpoint needs to predict a delta increase predicts worse survival and a delta improvement improved survival. So as you rightly mentioned, we have really strong data on MRI-PDFF and cT1 showing improvements in histology. But what FDA regulators are also interested is long-term clinical outcomes. Based upon the long-term clinical outcomes, the highest level of evidence that we have now, as collectively as field generated, is on liver stiffness measurements. This will come later on today also. So LSM improvements or progression, as a field we agree, would lead to a prediction that we can replace biopsy potentially in future with a reasonably likely surrogate endpoint. So I think that's the future that we are predicting, and it's likely to happen, and you might get more information within the next several months to a year.

Thank you, Dr. Loomba.

And our final online question for the first half of today's program is a follow-up from Alex Ramsey, William Blair, asking how the dual GLP-1 glucagon agonists compare to GLP-1 monoagonists from an adverse event perspective.

I believe that the profiles are very similar. The primary driver of adverse events appears to be the GLP-1. And the dual agonists typically have about the same amount of GLP-1 across molecules. So just based on that, the adverse event profiles would be similar, but I would stress that it's not apples to apples. And the reason is, is because you have variable amounts of dose titration based on other aspects of the molecule. For example, with pemvidutide, it is specifically designed to enter into the bloodstream slowly, its time to maximal concentration is 70 hours. It has a Cmax. It's only about 1/3 of what we believe semaglutide at an equivalent dose would achieve. So it's more gentler in terms of its peak concentration. And that's extremely important for driving tolerability. So it's not just simply a question of GLP-1 and glucagon, glucagon does in some ways replace the effects of GLP-1. It takes the pressure off of pushing the dose, and that could lead to better adverse events. But clearly, you have to look at other factors such as the pharmacokinetics.

I can take a little bit additional angle on this one. What we heard with the glucagon -- initially adding the glucagon, there might be additional side effects. In the Journal of Hepatology paper, efino compared to sema, there were, I think, numerically more adverse events with efino compared to sema. But to pemvi's point, we're pleasantly surprised with the tolerability of this drug and the side effect. So it seems much cleaner. And in your example, you're correct, it compares to the GLP-1, not worse for sure. So that's an important question. But others, at least from that JHEP paper, efino had a little bit more adverse events compared to sema on that trial, more effects for sure because of the glucagon effect on the liver.

And I want to add one other point before the last question. In Phase II, you spend Phase II pushing the dose. That's the time that you want to find out what your dose range is and then you refine it for Phase III because you're moving towards approval and your target product profile. So we were aggressive with pushing pemvidutide early on. Now 2 things that we did not allow compared to other drugs. The first is that we did not allow dose reduction and recognize that in other programs and specifically the semaglutide and tirzepatide programs, in each program, about 30% of patients either fail to achieve the target dose and stopped early or when they got there, turned around and dose reduced. We did not allow that in our program. And the other thing is that at the 1.2-milligram and 1.8-milligram doses, we've not had dose titration and a very small titration of 4 weeks at the 2.4 milligram dose. So look at the optionality here of improving that profile going into Phase III. We are allowing dose reduction in our IMPACT trial. There is a question about the tolerability we predict on that. And we think by adding that, the tolerability is going to get even better. But we have optionality for extending the titration or introducing it in Phase III. We believe that based on the pharmacokinetics and what we've seen so far, especially in MASLD patients and patients with diabetes that going into Phase III and approval, we could have the best tolerability profile amongst the -- all the drugs in the incretin class.

And before we conclude the first half of today's program, we'll take a question from Jonathan Wolleben at Citizens Bank.

Just a simple one for me for Dr. Noureddin and Dr. Loomba. If we're talking about treating F2, F3 patients, do we -- do you guys care at all about MASH resolution rates? Or are we only focused on fibrosis improvement? And how should we think about interpreting MASH resolution data when we're looking at clinical trials these days?

Dr. Noureddin, do you want to go first?

We should care about MASH resolution. It's what we use in the hepatology world. It's the engine that drives the fibrosis improvement, one. Two, it's one of the 2 endpoints that the FDA will allow you to go on the market. So if you don't get fibrosis improvement and you get MASH resolution, you're good to go on the market because we think fibrosis takes time to regress. Now to your point, as a hepatologist, yes, I'll be more excited if I see the fibrosis improvement because it correlates directly with comorbidity and mortality. And if you remember a few years ago, we -- the bar was much lower, and now, it's getting higher with the fibrosis improvement we're seeing in the market. But we do still care about MASH resolution, as it's the upstream driver of the fibrosis improvement, and it's a very good signal for us as well.

Dr. Loomba?

Thanks, Mazen. I agree with Mazen. I think the idea is really looking at credibility of results. So you see a 30%, 40% improvements in MASH resolution, you'd say 10% to 20% improvement in fibrosis, that's a credible finding. And that's why looking at both of these outcomes on a same assessment, which is histologic, really helps us to say that this therapy along with the rest of the NIT package, is likely to improve the disease that my patient has. And so I think this totality is really important, although I agree with you in terms of the hierarchy of these endpoints, we definitely put fibrosis improvement and treatment effect delta at a higher platform compared to MASH resolution, but both are important.

Actually, a perfect example is the efruxifermin data in the cirrhotics. We did not get to fibrosis improvement at earlier endpoints, but we got to MASH resolution, and fibrosis improvement was closed, and we knew that through indirect mechanisms of efruxifermin and direct mechanisms was pulling down the MASH resolution as well as affecting the fibrosis, and we eventually saw the fibrosis improvement. So you cannot have fibrosis improvement in general without MASH resolution. The other way around, you can see MASH resolution first, and then, fibrosis improvement eventually happens.

Thank you. I want to thank the panel, and we'll move on to the next part of our session. I want to turn our attention now to AUD and ALD. We're excited to share details of these 2 additional high-value indications for pemvidutide is uniquely positioned to make a significant impact. As will be discussed, pemvidutide is optimized to address significant unmet needs in AUD and ALD and halt the progression of AUD to ALD. AUD and ALD represent major unmet medical needs in high-value markets, where effective therapies are lacking. More than 28 million Americans suffer from AUD and over 6 million Americans have ALD. Alcohol contributes to nearly half of cirrhosis-related hospitalizations and over 40% of liver transplantations. And ALD accounts for nearly half of all liver-related deaths. AUD and ALD are distinct indications, but clinically intertwined. They are conditions in which pemvidutide can treat the cravings in the alcohol-related fatty liver damage as well as halt the progression from AUD to ALD. Pemvidutide's dual mechanism of action, driven by GLP-1 and glucagon dual agonism position it to be a first-in-class therapy for both AUD and ALD, decreasing alcohol consumption and reducing the liver fat that leads to liver inflammation. Pemvidutide has an attractive profile for both physicians and patients. We conducted market research with healthcare practitioners, patients and payers who confirm the high unmet needs in AUD and ALD and the limitations of the current standard of care. 75% of healthcare practitioners were eager to prescribe pemvidutide and 84% of patients were ready to start its use. Pemvidutide's reductions in cravings and liver inflammation were compelling both to healthcare practitioners and patients. Weight loss and serum lipid improvements were both viewed as additional positive attributes. Pemvidutide is optimized for steatotic liver diseases and their primary causes. MASH, AUD and ALD are interrelated, and pemvidutide is optimized for its use across these indications. Obesity exacerbates the progression of MASH and ALD while alcohol accelerates the progression of each of these 3 indications. Publications have shown a direct linear relationship between alcohol consumption and MASH outcomes. In fact, individuals with AUD and ALD are at a 1.5-fold greater risk for liver disease and a 2-fold greater risk for death. By providing therapies for these conditions, we have the opportunity to be the leader in the entire steatotic liver disease space and capture the prevailing portion of the liver disease market. Obesity is also recognized as a major risk factor for the progression of ALD. And with this introduction, I will turn the microphone now over to Dr. Sarah Browne, our Vice President of Clinical Development, to moderate the second half of today's presentation and introduce the next speaker. Sarah?

Thank you, Dr. Harris. Good afternoon, everyone. It's now my pleasure to introduce Dr. Henry Kranzler. He is the Karl E. Rickles Professor of Psychiatry and Center Director for the Studies of Addiction at the University of Pennsylvania Perelman School of Medicine. He is also the co-associate Director for Research in the Mental Illness Research, Education and Clinical Center at the VA Medical Center in Philadelphia. His research focuses on the genetics and neuroimaging and pharmacologic treatment of substance use disorders. He has been consistently NIH and Veterans Affairs Medical Center funded throughout his illustrious career. He's had more than 700 peer-reviewed journal publications, book chapters and books. We are thrilled and honored that he is here today to talk to us. But not only that, he serves as an adviser for us and principal investigator on our Phase II alcohol use disorder protocol, which he'll be walking us through today. Dr. Kranzler take it away.

Thank you, Sarah. It's a pleasure to be here. I've learned a great deal already, and I hope that I can provide some information of utility to the audience. Alcohol use disorder is one of the largest known healthcare treatment gaps. There are more than 28 million individuals in the U.S. who have the disorder and less than 10% receive treatment. And of that number, less than 1/4 receive medications approved to treat the disorder. So this is a real opportunity to develop a new novel agent such as pemvidutide for treating this population. There are only 3 approved medications for the disorder, and these are decades old. They are limited in terms of their effect sizes. I'll talk a little bit more about that. There's not consistent adherence with these current therapies, and that explains, in part, why they're not widely prescribed. Alcohol use disorder is a significant societal burden. It's the third leading cause of preventable cancer after tobacco and obesity. There's been a lot of talk recently since the Surgeon General's report January of this year about alcohol and cancer risk. Alcohol use is the seventh leading cause of death and disability globally. In the United States, annual costs attributable to alcohol misuse exceed $500 billion. The $249 billion estimate is from 2010, and in 2025 dollars, it's roughly double that. In addition to the alcohol use disorder itself and the behavioral aspects, which are problematic, alcohol use disorder patients have significant medical comorbidities. There are about 90% of people with AUD will develop liver steatosis, 2/3 are overweight or have obesity, nearly 1/2 have hypertension and nearly 1/4 have hyperlipidemia. It's been decades since the last approved alcohol use disorder medication. The first was disulfiram, approved in 1949. Disulfiram causes an adverse reaction and is kind of punitive. It's not widely used. Naltrexone was approved 5 years later and is relatively widely used given the fact that these medications overall are not. Acamprosate was approved 10 years later. And then in 2006, an extended release formulation of naltrexone was approved. And that's been taken up more along with treatment -- its treatment of opioid use disorder. But these agents have small effect sizes. As mentioned, there are compliance challenges with the extended release formulation, which is an intramuscular one. There are administration limitations. And these medications don't treat any of the associated metabolic or weight-related risk factors. Pemvidutide in preclinical models shows a nice reduction of alcohol consumption in a free-choice model. The animals were -- hamsters, actually, were trained to consume alcohol 15% and then administered pemvidutide. And you can see that there's a very robust reduction in their consumption. This sets the stage for a Phase II clinical trial, which has been approved by the FDA to move forward. As shown here, this trial will be initiated in May of this year. There are 3 dosage levels. It's a parallel group's placebo-controlled design: 4 weeks of the 1.2-milligram dose, 4 weeks of the 1.8-milligram dose and 16 weeks of the 2.4-milligram weekly dose. There will be a total of 100 subjects with obesity or overweight and moderate-to-severe AUD according to the DSM-5. The key endpoints will be change in heavy drinking days. Secondary endpoints will be changes in biomarkers of alcohol consumption, Foremost among which is phosphatidylethanol, which is a highly sensitive and specific measure of alcohol consumption that nicely augments self-report. The other secondary outcome measure is going to be weight loss. Now I will turn this over to Dr. Loomba or actually to Dr. Harry -- Dr. Browne, sorry.

Hello, again. Thank you, Dr. Kranzler. And now it is my pleasure and honor to introduce Dr. Rohit Loomba, who is Full Professor and Chief of the Division of Gastroenterology and Hepatology at the University of California, San Diego. I really won't be able to do justice to Dr. Loomba's myriad accomplishments over the course of his career. But just to note a few examples, he's Founder and Director of the Cutting Edge MASLD Research Center. He is extensively and consistently NIH funded with multiple R01 NIH brands. He's on the editorial board for multiple high-impact journals in both hepatology and gastroenterology. He's authored over 500 peer review publications, and he is consistently among the top 1% cited scientists globally. Along with this, he serves as an adviser to our program and is principal investigator on our Phase II alcohol liver disease study. Dr. Loomba, it's all yours.

Thank you, Sarah. Really delighted to be here and talk to you about Pemvidutide Alcohol Liver Disease program. Alcohol-associated liver disease results from chronic excessive alcohol use. Similar to MASH, as Dr. Noureddin talked about earlier, disease progression begins with hepatic steatosis, which may lead to fibrosis and ultimately cirrhosis. Patients with ALD have higher rates of progression to cirrhosis, and complications of ALD can lead to high short-term as well as long-term morbidity and mortality. We think there's a critical unmet need in this area. Up to 6.6 million Americans are affected by ALD. There are no approved treatments and very few in development. Particularly obesity significantly accelerates disease progression and leads to worse outcomes. Here, I'm showing you data on the joint effects of obesity and alcohol use. In individuals who have obesity and who also consume alcohol excessively, the risk is not just additive, but it's multiplicative and synergistic. This has now been identified across the board in liver disease societies, and there's a new recognition of the entity that we call MetALD, where it's combination of metabolic dysfunction on top of alcohol use. We would really like to address that issue and how best to mitigate the effects of both obesity and alcohol use in our patients who are suffering from complications of both of these risk factors for liver disease, morbidity and mortality. This is the rationale and justification for use in alcohol-associated liver disease. As Dr. Noureddin pointed out earlier, with pemvidutide, we see a significant reduction in liver fat, ranging from 56% to 76% compared to 14% of placebo, not only improvements based upon MRI-PDFF, where across the board, we have shown that these are associated with histologic improvements. We also have noted the improvements in an MRI-based biomarker called corrected T1, which gives us an idea about fibro-inflammation in the liver. Pemvidutide can lead to significant improvements with 75% to 100% of patients achieving cT1 response compared to placebo patients. Therefore, we expect improvements not only in liver fat, but also in liver inflammation. We also noted significant improvements in ALT. Across the board, these 3 independent parameters have noted to be linked to improvements in liver histologic response. Therefore, we believe that this should translate to improvements in alcohol-associated liver disease, particularly with pemvidutide establishing the rationale for this trial. This is the study design. It's a randomized double-blind placebo-controlled trial, about 100 subjects with obesity and alcohol-associated liver disease. Key eligibility criteria will include liver stiffness measurements by FibroScan of 10 kilopascal to 18.5 kilopascal, body mass index of 25 kg per meter square and heavy alcohol consumption. Patients will be randomized 1:1 to pemvidutide or placebo, and pemvidutide would be titrated 1.2-milligram, 4 weeks, to 1.8-milligram to 2.4-milligram. Primary endpoint will be at week 24, change in liver stiffness measurements by FibroScan. Other key endpoints will include weight loss and change in alcohol consumption. At week 48, we'll continue the treatment and look at changes in liver stiffness measurements as well as weight loss and changes in alcohol consumption. This trial in totality should give us good evidence to see whether to proceed to a Phase III program in alcohol-associated liver disease. The field is really excited about these new developments, particularly in the setting of ALD. Pemvidutide could integrate AUD and ALD care. The current treatment paradigms are in silos, where you can see patients with AUD have limited treatment options. They are managed by addiction specialists, but the ALD or the liver disease part goes unnoticed, and therefore, untreated. ALD patients see a liver doctor. There are no approved treatments for ALD. They are managed by liver specialists, and they may under-recognize and may under-treat AUD. Therefore, we need holistic and integrative care of our patients. Potential future paradigm would be AUD patient and the ALD patient. Pemvidutide unifies treatment option for these patients, streamline management across specialties, including primary care physicians and addiction specialists and liver specialists and holistic treatment approach of AUD, ALD and associated cardiometabolic complications associated with obesity and alcohol use. Therefore, we believe that this could be a pathway where we could transform therapy across the spectrum of steatotic liver disease. Patients who have obesity, MASH, ALD and AUD, all could be targeted, and we could approach in a unified manner and develop a treatment pathway for these patients. Now I would like to pass it back to Dr. Sarah Browne.

Thank you, Dr. Loomba. That was really great. We have got the whole team back now, and I'd like to moderate our final Q&A session for the day. Lee, what you got?

Before we open up the phone lines, we'll take a question online from Dominique Semon of Merlin Nexus. He'd like the physicians to comment on the potential liability of glucagon agonism for diabetic patients given its role in stimulating the liver to release glucose.

Thanks for the question. I'd like to start with Dr. Lou Aronne, who has a lot of experience with this.

Sure. Thank you, Sarah. So the question of glucogonergric stimulation and what will happen in patients with diabetes. What we've seen so far is very, very comforting information, but a lot more work is going to be necessary. So we're going to need a Phase III program, where we can examine this in more detail. I think that's basically what we can say about it. Right now, I'm comforted by what we've seen in the Phase II trial, but you need a lot more patients to make sure that things are safe.

Thanks. Dr. Harris?

As we mentioned earlier, pemvidutide was designed to maximize the effects of glucagon, but to be glucose neutral. That was seen in animal studies, and it played out the same way in human studies. As I mentioned before, FDA extensively reviewed our data package at an end of Phase II meeting, and they found no increase in glucose levels in these patients. So consequently, the goal that we set out on was achieved. We should point out that the field of obesity has been very heavily oriented towards diabetes for years. And in fact, when I went to medical school, glucagon was vilified. The classic experiments of Roger Unger showed you give glucagon in diabetics if glucose goes up, and that was taught across fields for many years. But now we're vilifying insulin because it leads to a vicious cycle of weight gain and more insulin resistance and more needs for insulin. And in the ADA meeting in 2022, there was a change in heart where type 2 diabetes was no longer defined as an endocrine disease, but a disease of obesity, and in fact, extolling the future of glucagon for reversing that. The GLP-1s grew up in the diabetes space. The first drugs that were approved in the turn of the decade were for the treatment of diabetes. But then, in 2020, we saw the advent of obesity treatments with the semaglutide trial, and the field has taken off ever since. Only -- as Lou mentioned, only up to 20% of patients with obesity have type 2 diabetes and about half of those are well controlled. So there is no further need for glucose reduction or hemoglobin A1c reduction in those patients. And in fact, if you look at diabetics, they don't die predominantly of the hyperglycemia. Yes, the hyperglycemia causes an endarteritis, it has microangiopathies with effects in the kidney and also the retina and also neuropathies, but diabetics die predominantly of the dyslipidemia. They die of heart disease. They die of coronary disease. And consequently, the best drug for a diabetic as a drug like pemvidutide that brings down the serum lipids as well as the liver fat.

Thank you, both. Go ahead, please.

I will add small thing. It being PI and seeing the patients in multiple MASH studies with the duals that was initial concern. We're not seeing it thus far. So...

Thank you so much, Dr. Noureddin. Lee?

Turning to the phones, we've got Liisa Bayko from Evercore.

I want to better understand a little bit more about sort of the induced disease liver versus the MASH liver. Are these like kind of very distinct? If you see, we've seen tremendous benefit in MASH with pemvidutide and some of the other drugs as well in the category. I've always thought that this makes a ton of sense to go into alcoholic liver disease, but I'm wondering about the kind of common ground there and what is different. And if you see, like how much read-through should we expect to see?

Thanks, Liisa. Appreciate the question. Dr. Loomba?

Thank you, Liisa. I think this is a really important question. So I'll start with patterns of liver histologic injuries. So when we study liver injury, we have various patterns and one predominant pattern is called steatohepatitic pattern, and that pattern of injury is common across all steatotic liver diseases. So when we look at a liver biopsy in a patient with alcohol-associated liver disease or patients with MASH, it looks very similar. The pattern of injury is very similar. The mechanisms are also very similar. It's just that what we see with ALD, the rate of progression is faster, and the severity of injury is faster because majority of our patients with ALD, as I mentioned, have obesity underlying risk factor, potentially type 2 diabetes, which is really increasing the damage to the liver. Therefore, I do believe that the therapies such as pemvidutide, which not only will improve cardiometabolic risk, but has an impact potentially on AUD or risk of craving for alcohol. So it's going to really strike at all 3 things that are important in ALD; cardiometabolic risk, liver-specific risk and the risk of craving for continued alcohol use. If we can address all these 3 things, I think we should look at a credible improvement in our patient outcome. And that's really the justification for wide studying, both in AUD and the ALD.

Can I ask a follow-up?

Yes, please. And then we'll hear from Dr. Noureddin, too.

No, just to be clear there, as Rohit mentioned, there's a lot of common pathways, but they're completely distinct 2 diseases. One is like you cannot drink and the other one is you're drinking. So it's a different pathway, different indication, different FDA regulatory pathway. So that's an additional indication.

Thanks, Dr. Noureddin. Liisa, you had another question?

Yes. I'm wondering what have you seen -- I'm assuming you've looked through the data collected so far about cravings for alcohol use. Have you seen reports of reductions in cravings and that kind of thing? I was curious about that. And then also, how are you going to manage that in the study? Is that going to be sort of like lifestyle intervention kind of stuff along, it's just kind of like you do on the obesity side? I was curious.

Sure. I'd love to hear from a couple of people. Dr. Kranzler?

Right. The first question is what the literature shows. At this point, there are a number of quasi-experimental studies looking at electronic health records data using comparison groups from the electronic health record. And they're pretty consistent in showing reduced alcohol consumption, reduced hospitalization risk, reduced alcohol withdrawal. There is one clinical trial with liraglutide. That was published in -- that was done in Denmark by Novo Nordisk that showed no reduction in drinking unless the patients -- except in the subgroup that's overweight or obese. However, there was a recent semaglutide study that was published, and it was a small pilot study, human laboratory study and clinical trial that showed reduced drinking in human laboratory setting and then reduced drinking in a standard follow-on clinical trial. So the literature is clearly developing, but it's very promising.

Thanks, Dr. Kranzler. I'd actually love to hear from Dr. Aronne because we were just chatting about this yesterday.

Yes. That's right. I'm going to tell anecdotes. I told Sarah 2 very interesting anecdotes from when we first got a hold of GLP-1 medications. We have one patient who is a wine collector and has a basement full of wine and put him on it, and this was before we knew anything about the impact of GLP-1s on alcohol. And he comes back to the next visit and says, "What's in this stuff? I have this whole basement full of wine, and I don't want to drink any of it. Could they be related?" That was our first indication. And the second one was something -- a situation you might be able to relate to, which is we had a patient who is a lawyer, and he entertains clients all the time at his golf club. And he had told us initially that drinking was a big part of the entertaining at the golf club. We started him on medication, and he pointed out when he came back that he had to stop the medicine the week before he took someone to the golf club because, otherwise, he didn't feel like drinking. So as long as he took it, he did not drink at all, but because it was a liability for his business, he had to stop before. So it's a very prominent effect, not in everybody, but we see this day in and day out. It really is a dramatic effect in many, many people.

Thank you, both.

And also in the pemvidutide data, specifically.

Well, we don't have any clinical data about this. Dr. Kranzler showed the preclinical data showing the very prominent suppression of alcohol intake in animals. And to our knowledge that's the only preclinical study that's been published looking at that, but we think it's very convincing and bodes well for the use of pemvidutide in the clinic when this is formally studied.

Next up, we'll bring back Yasmeen Rahimi from Piper Sandler.

Yes. I think both of these indications, as you guys highlighted, high unmet need. I guess we would love to understand in both studies what is considered a clinically meaningful difference in both, in the change in the heavy drinking in days as well as in the liver stiffness measures that sort of one in terms of what PoC data could establish warranty moving forward to Phase III. And then Part B is what is the regulatory framework for both of these indications? Are they determined? Or is that something that you would need to work with the agency closely post-positive data, if you could just opine on both of these thoughts for success as well as next steps, registrational path? It would be very grateful thought.

Absolutely, yes. I think there's a few people who want to answer this question. So we'll start with Dr. Kranzler.

Right. This is a very interesting area. It's evolved quite a bit. When I gave the presentation earlier, I mentioned phosphatidylethanol, or PEth, which is a real boon to the clinical evaluation of medications for treating alcohol use disorder because of its high sensitivity and specificity. That's not the primary outcome in the trial that we'll be starting soon. The primary outcome is reduction in heavy drinking. The active group with the alcohol clinical trials initiative, which was -- which has been going on now for about 15 years, finally convinced the FDA to approve a third outcome measure for alcohol use disorder medications. The first 2 were complete absence to proportion of each group in a chi-square kind of an analysis. The second indication that they approved was no heavy drinking, again, a proportion comparison. The third indication, which is very new, and I just learned of it myself, from Sarah, what was -- is a reduction of 2 levels in the World Health Organization risk drinking levels. And those are calculated based on alcohol -- mean alcohol consumption, and a 2-level reduction is now approved by the FDA as an outcome measure for efficacy studies. And that is built into the planned trial. So that will probably be our primary outcome.

Thanks, Dr. Kranzler. Yes, that was a really exciting development for the field, I think. Dr. Loomba, can you speak to the liver side, please?

Thank you. Yes. I think, Yasmeen, as we previously mentioned in the previous Q&A session, the endpoint that is reasonably likely surrogate endpoint across the spectrum of liver disease, particularly in alcohol associated liver disease as a field is coming to be liver stiffness measurement by FibroScan. And the reason for FibroScan is because it's clinically available and also generalizable. And if we show significant benefits, then the clinicians can directly use that test in their clinical practice. FDA is really interested in moving away from biopsy-based study. And particularly, they understand in the setting of alcohol associated liver disease, that may not be practical. And so this endpoint was discussed in accordance with FDA, and we're really excited that FDA wanted us to move forward with an NIT-based assessment, with the idea that we show improvements, and then, this could lead to a Phase III program development. So we are excited. I think in the field, we have data in improvements in LSM as prognostic measure, not only for worsening of disease, but also improvement in disease across a spectrum of chronic advanced liver diseases, and that's exactly the patient population with ALD that we are targeting here.

Let me add a couple of points to Rohit's great summary. So just mean 30% reduction in VCTE stiffness is one of the things that we have been talking about or decrease by 5%. The FDA has been involved in these discussions throughout various conferences, and they're very excited. One difference between ALD or MetALD and NASH, why we're going to do -- why it's easier to do a Phase III study without a biopsy because the event rates with the MetALD and ALD or ALD in general are much higher than NASH. So we think the sample size will be more reasonable to get there without a liver biopsy, and we hope that will be the way to go.

One more comment from Dr. Kranzler, please.

I'm not sure I fully answered the question as it was posed as I think about it. Using the World Health Organization risk drinking levels and a 2-level reduction, the FDA will look for statistical significance between the 2 treatment arms, but the clinicians are looking for something a little more clinically meaningful. And that, I think, is one of the reasons that medications for treating alcohol use disorder are not widely used. The effects that are observed are small. They're small effect sizes. They're significant, but they're clinically small. I think what we would look for is a medium effect size, something on the order of probably a 25% reduction in -- or a 25% greater proportion of people who meet that reduction of 2 levels on the RDLs would be a clinically meaningful and something that could be -- that would be appealing to clinicians.

Thank you, Hank. I mean you made the point to me that most of your patients don't actually want to achieve abstinence. And so this endpoint is really clinically meaningful and something that we can do in the protocol.

Next up, we'll bring back Annabel Samimy from Stifel.

Just for the follow-up, just for Dr. Loomba or Dr. Kranzler, maybe you can help explain the rationale for the inclusion criteria? I believe it was BMI of greater than 25%. Or did I hear that incorrectly? And how did you push it that low?

Sure. Why don't we start with Dr. Kranzler?

Well, actually, it's 27, greater than or equal to 27. And I am not entirely clear on the rationale for that, but what comes to mind for me was the liraglutide study that I mentioned that Novo Nordisk ran in Denmark. And that was the group in which they saw clear reductions in drinking with liraglutide. I think that the newer drugs are much more potent and pemvidutide is going to be a much more potent GLP-1 agonist than liraglutide. So I think that we can reasonably expect a robust effect using a population with both overweight and heavy drinking.

Annabel, let me make a comment here as well. We spoke very clearly, the panelists, I did about the interrelationship of obesity and alcohol. Obesity clearly makes alcohol worse and vice versa, particularly alcohol's effects on MASH. They're entirely interrelated. A patient with MASH who drinks alcohol has far worse outcomes and vice versa. An alcoholic or person with alcohol misuse who is obese has far worse outcomes. So what we're describing here is a holistic approach to the treatment of obesity. We have obesity in some of its major complications. We have MASH. We have cardiovascular disease. Alcohol and ALD are all part of it. So we envision all of our program here to be an obesity program, and we think the most susceptible, vulnerable individuals with AUD and ALD in the ones with the worst outcomes are going to be the same patients. The obese and overweight people will also have the worst outcomes in the other conditions.

Thanks, Scott. Dr. Loomba, I believe you wanted to comment.

Yes. No, I think we do believe that this approach would lead to improvements across the spectrum of steatotic liver disease. And there's really a big unmet need in ALD. And if we can position a drug that has benefits across the cardiometabolic spectrum, across the spectrum of steatotic liver disease and also in AUD, then I think we are hitting all the 3 cardinal aspects of treatment of a patient who suffers from alcohol-associated liver disease. And also, this is the #1 leading indication for liver transplantation in United States now. And if we see, 50% of all liver-related mortality and morbidity may be attributable to ALD, and we have nothing for our patients. And that's really why we are positioning this inclusion criteria and the patient population that we are interested in.

Thank you, Dr. Loomba.

Before next question on the phone, we've got an online submission from Patrick Trucchio at H.C. Wainwright. Patrick has asked if we could elaborate on the mechanistic rationale for pemvidutide in AUD and ALD and provide some additional color on the endpoints that we'll be prioritizing in the upcoming Phase II trials.

Thanks. Sure. Thank you. I think I'll let Dr. Harris start with this.

Well, we have a molecule, pemvidutide, a dual glucagon -- a GLP-1 glucagon dual receptor agonist, and there is a great deal of accumulating data as described by Dr. Aronne and Dr. Kranzler that GLP-1 suppresses alcohol intake, and that's the cardinal feature of both AUD and ALD. And as we know, patients with AUD have liver function abnormalities go on to ALD and go on to cirrhosis. So it makes implicit sense to use a GLP-1 agent in both conditions. But in particular to ALD, we have the similar pathophysiology, as Dr. Loomba described, between MASH, a disease of fatty liver, and ALD, a disease of fatty liver. And it makes a great deal of sense to treat that fatty liver with one of the most potent defatting agents known to date, which is glucagon. So with ALD, you get the effects of GLP-1 in reducing alcohol intake, which is cardinal, but then on top of that, healing the liver with the glucagon. I believe the second question was related to the endpoints that we would be assessing in the trials. So I think Dr. Kranzler, with AUD, went through that in a good deal of detail in terms of abstinence, absence of heavy drinking days in the new WHO classification and gave us some guidance as to what he felt would be a meaningful change. He quoted a 25% achievement rate of patients achieving a 2-level drop in the NHO -- WHO, excuse me, severity score, and that's very meaningful. And we need to have ongoing discussions with regulatory agencies who are very favorable to both of our INDs. And the same with ALD, we think we're in an excellent position with liver stiffness measurement. We think the overwhelming data suggests that it's probably the best noninvasive marker in MASH, as well as in ALD. I'll let Dr. Loomba comment more about that. And when we went to the agency, we got no pushback on that. They didn't say, well, you have to do a biopsy trial. Now we have to engage in the proper endpoint, but there's a good basis for this, as Dr Noureddin mentioned that a 30% reduction in liver stiffness measurement by transient elastography is very meaningful in MASH. And we would suspect that would also be an ALD. Ultimately, there'll need to be outcome studies performed, but there's a huge unmet need and a motivation for the FDA to move ahead with some kind of endpoint that's not going to be a biopsy. Being a trained hepatologist myself, I was speaking to Dr. Loomba saying that I don't recall in my career when I did liver biopsies, ever doing a liver biopsy in an alcoholic. In fact, I was scared to do it because it had contraindications. So we think there's real motivation here to find a noninvasive test. We think we have an excellent basis for the discussion with the FDA. We believe we're going to generate positive data and then have that end of Phase II discussion with the FDA.

Dr. Loomba?

Thanks, Scott. I completely agree. I think just to simplify the why, for AUD, it's the GLP-1 action. And for the ALD or liver-specific aspect, it's the glucagon action on top of the combination with GLP. So across a spectrum of GLP-1 agonists, there is preponderance of evidence as pointed out by Dr. Kranzler that it reduces the craving for alcohol and then it may reduce overall alcohol consumption, GLP-1 effect. Glucagon effect in combination with GLP will improve liver disease, and that's the idea of using both of these for ALD.

Thank you, Dr. Loomba. Dr. Kranzler?

From a mechanistic point of view, I think it's a very interesting question. I don't know if you were thinking neuropharmacologically, but I think there's increasing evidence that mu-opioid receptor availability and dense and occupancy varies with weight. And we're actually doing PET studies using carfentanil, a mu-opioid receptor ligand to look at changes in mu-opioid receptor availability with GLP-1 agonist treatment. And that would tie together -- in areas of the brain that are implicated in mediating craving and subjective effects of alcohol. That would tie together the whole notion of craving and alcohol consumption and response to these with the GLP-1 agonist.

Thank you all.

And with that, we'll go back to the phones and bring up Ellie Merle from UBS.

I guess, how are you thinking about development next step after the Phase II studies? So I mean I think the clinical rationale is sort of straightforward. So can you end up showing this reduction in heavy drinking and AUD and the reduction in liver stiffness and ALP? I guess, do you then move both into Phase III? I guess, which of these 2 would be the priority? And I guess how would the scale and scope of like these potential Phase III programs here look, I guess, relative to obesity? Is ALD a space that you could say, pursue on your own?

Sure. Thanks for the question. Dr. Harris?

Thanks for the question, Ellie. So as we've announced, these are indications that are full speed ahead for us and that we can take all the way to approval. It require, we think, a more limited budget and a more preferable timeline than MASH and that we can move ahead in these and commercialize on our own. And we've also said the same for MASH. We've also announced that we were -- would like to move ahead in obesity with a partner, and that's still our plan. We would also say that we believe that we're in the forefront here. There are some other sponsors that are interested in this. Novo Nordisk and Lilly have announced their intentions in this area as well recently. It's an acknowledgment of the importance of the field and the feasibility of moving ahead in this space with a dual agonist such as pemvidutide. So we believe that we have the right endpoint going forward. We'll have an end of Phase II meeting with the FDA, presumably we have positive data. We're very excited about these indications. We think the probability of success in these indications is very good based on the mechanisms that we described. And we would create a plan to discuss this with the FDA and get their agreement about Phase III. We haven't conceived of that program at this time. We have to have the agreement with the agency, but I think we're in a firm foundation for moving ahead.

Dr. Garg?

Yes. Ellie, I just wanted to elaborate a little bit more on the overall rationale here. As you know, we've been talking about the GLP-1 glucagon dual effect that we've been focusing on. So we're going after indications where both of these benefits can be brought together and really complement each other. And as you can see, we are focusing on liver diseases because, again, that's where glucagon's direct effect in the liver is important, and GLP-1, where weight loss is important. So everything we are doing going forward has both of these components in it. We believe that ultimately, even for a weight loss -- successful weight-loss drug, one needs to treat comorbidities of obesity, which is what we are doing here. 80% of the patients with MASH have obesity. So that fits well. As you've heard from our KOL panel here that both AUD and ALD, they are intertwined. But -- so on one hand, we are improving craving for alcohol, but on the other hand, we are also improving the liver health, which is very important ultimately for getting good outcomes in these conditions. So that's really our focus. As Scott mentioned, these are indications we can develop on our own, and that's our plan is to move full speed ahead. It actually allows us to expand the indications for pemvidutide, and it really goes back to the whole idea of having a pipeline in a molecule. So we're very excited about this.

And in our market research, the clinicians were really, really excited about the benefits of liver health, both on -- in patients with AUD and patients with ALD, and we know the patients want to lose weight, so our drug brings it all together.

Great. And just a follow-up question. So I guess what's the proportion of patients that you expect in that ALD Phase II to be cirrhotic? And I guess how do you expect sort of the efficacy of the glucagon component to be in patients, let's say, a cirrhotic liver versus, say, F2, F3?

Yes. Well, first, I want to start by saying that we have a great deal of interest in moving ahead in F4 in MASH. But we're not going to make announcements on that until we first had that discussion with the agency, but that's clearly in our sights to move ahead in F4. And we believe we'll be successful in F4 because the patients that have seen success in F4 have been patients who have had liver fat going into the trials. They tend to be in their earlier phases, and they respond to therapies such as the FGF21s and also to glucagon. So we are very interested and excited about an F4 program and hope to have that discussion with the agency in the upcoming future. In this particular trial, because it's a Phase II trial, much like the precedent of MASH, we'll start with patients without cirrhosis, but as we move ahead, we'll add those patients to the program and try to accumulate data in those as well. But the overall intent is to include cirrhotics in this program, but not in the initial phases of this trial.

And in general, the agency likes to separate the cirrhotics from noncirrhotics and separate trials in general. So that's the rule of thumb for these studies.

Thank you, both. Dr. Loomba?

Yes. I think the way we've positioned ALD inclusion criteria in our patients, they have significant disease. We also want to make sure that we include the patients who would show the likelihood of benefit, and they also need treatment. And then it's also easy to translate that into clinic when we are thinking about positioning the treatment. So I think with the first Phase IIb study, I think the 10 kilopascal to 18.5 kilopascal gives you the sweet spot of patients who need treatment and who could benefit, and we could also show treatment response without getting into more severe advanced disease, as Scott mentioned.

Go ahead, Lee.

Before we turn to our next question, we've got Seamus Fernandez at Guggenheim, asking if we could elaborate a bit on how we're applying dose titration in the AUD and ALD studies and provide some rationale for why we're pursuing that titration plan.

Sure. Dr. Harris?

Yes, I'll start, and maybe we can have comments from our investigators. So this is an opportunity to pursue additional titration mechanisms going forward. We're quite interested in seeing what the improvement of the tolerability profile would be if we introduced a slightly longer titration at the higher doses. So it's a 1.2-milligram dose in both trials, and this applies both to the AUD trial that Dr. Kranzler is leading and the ALD trial that Dr. Loomba is leading. We will not have dose titration at lower doses, but the key doses are the 1.8-milligram and the 2.4-milligram. We'll have a 4-week titration at the 1.8-milligram. And we'll have an 8-week titration at the 2.4-milligram. And that will allow us to examine the tolerability in this population. We're also aware this population is a bit more vulnerable, may have also tolerability issues in combination with their alcohol. So we'd like to assure that we at this stage of development achieve the best tolerability profile going forward. So there'll be learnings about this that we could obviously apply to programs going forward in the future.

Thanks. I'd like to hear from Dr. Aronne because he does this all the time in clinic.

Sure. I agree with Scott as far as the importance of titration when it's necessary. I mean what we've seen in the Phase II trial is that the majority of people don't need that. But in trying to maximize tolerability of these medications, what we've learned is you need some flexibility. There are people who are extremely sensitive to these drugs, and they don't need a higher dose. So let's say, you have somebody who is very sensitive, they are on 1.2-milligram, but they're randomized to 2.4-milligram. And as you go up, is that person going to be thrown out of the trial? I've argued with the sponsors of the trials to let the person back down all the way, wherever they need to go. And our approach in obesity is if someone is losing weight at a lower dose, we let them continue to lose weight, and we don't increase the dose until necessary. And that could be either when their weight plateaus or when they start getting a little bit hungrier. And again, that's to maximize tolerability. The fact is that when you're doing a clinical trial where weight is the primary outcome, you may not want to do that because you only have a certain amount of time to get the result. And you can see from the data we have with 2.4 milligram of pemvidutide over 48 weeks, we still had not hit the plateau. We still have more weight to lose. So it's a little bit complicated. What's going to happen in clinical practice may not be what's going on in these trials. But rest assured, there are ways to make compounds of the GLP-1 class more tolerable for patients in the long run.

Thank you.

And with that, we'll bring back Jonathan Wolleben from Citizens JMP.

Wondering what percentage of MASH patients are trying to get in the study, but are excluded because of over-alcohol use? And then can you discuss any specific challenges in running clinical trials in an alcoholic population and how to mitigate those specific challenges?

Thanks, Jon. Dr. Noureddin?

Well, they don't get excluded. When they come to us, we first try to define if this patient is MASH patient or more on the right spectrum of the steatotic liver disease, which is MetALD and ALD. In general, we ask them the number of the drinks that they have. And it depends how you look at it. But in general, women should have 1 drink a day and men 2 drinks max. So less than 7 or 7 and less and 14 and less to be a MASH patient. And more than that, it goes from the right spectrum for SLD, MetALD and then ALD. The literature have shown that we get some contamination sometimes, and this is based on PET data that has shown in one of the trials that about 10% to 15% of patients could have increased amount of alcohol that they are sneaking into the MASH trials. They're usually not quite obvious ALD patients that they drink heavily, but there might be some population there that is already in or sneaking in that could have been excluded. Now, as mentioned earlier, it's like we're very excited about the ALD indication because I'm throwing my hands in clinics usually with these ALD patients saying, "Hey, you got to stop drinking, go to psychiatrist, go to behavioral therapy." And we know they have a liver disease. We have so many minutes in the clinic that we need to move to the next visit, and we're just like having this one-on-one behavioral therapy conversation. So it's quite excitement. It's a totally untapped indication and unmet need that we're going to encounter. But it's -- there's a distinct population that is ALD that is not MASH, very separate that we need to have treatment for it.

Rohit?

This is a really important question, Jonathan. We started a study called San Diego Liver Study, where we have patients with overweight and obesity coming in. We do advanced MRIs on everybody and also assess their alcohol consumption and do PET assessment. Based upon that study, if you only look at the questionnaires that the patients provide, 75% of this patient population has steatotic liver disease or fatty liver based upon MRI. 80% to 90% of those have MASLD. And then, it's 10% to 15% that are either MetALD or ALD. If you then start confirming their questionnaire data with the PET data, what we find is there are 23% underreporting, which means that you could have -- among steatotic liver disease, up to 23% of those patients can actually have MetALD or ALD. And so that could be the potential population of patients walking into a fatty liver clinic. But if you look at the AUD population that Dr. Kranzler is seeing or patients with excessive alcohol use, this population would be much bigger. Overall, we think about 7 million to 8 million people may be candidates who would have significant liver disease within this patient population. And as we bring in more biomarkers such as PEth in clinical assessment, which now as hepatologists, we are routinely using, we will identify a bigger pool of patients with fatty liver who drink excessively, but we are not able to pick them up by just asking them how much they drink.

Thank you.

Jon?

Should I talk about the challenges?

Go ahead.

Right. So you've raised a very good point. Not everybody wants to do studies, not everybody wants to even treat people with alcohol use disorder because they can be challenging. What we do to mitigate those challenges is, first, we create an environment that is nonjudgmental. They don't have to fear coming to see us because we're going to criticize them for what is obviously a disease. And you'd be surprised how far that gets you in working with patients because nobody likes to be treated disrespectfully. But there are many more things that one can do. Our recruitment focuses on a higher socioeconomic population because they are more educated, more dependable in terms of visits and more suitable for clinical trial. We use a variety of reminders. We pay people for information visits. We don't pay them to participate in the study per se, but for giving us information to maximize our -- the information available so there's less missing data. And we use PEth, which is, as I mentioned, highly sensitive and specific. And people know that we're measuring PEth. So I think it encourages more accurate self-report.

And for liver disease in general, believe it or not, they actually keep coming back because they are measurements, ALT, AST, the liver fat, they -- people are worried about their liver in general, especially when they're drinking. It's a little bit more than MASH if you look across both of them. I have been involved in -- the ALD studies are trickling in liver disease, and I've been involved in 2. And I saw a lot of enthusiasm by the patients that there are drugs that they can help them decrease the crave, help the liver as well as the weight. So we're still early days, but I think the compliance, sure, will be questionable, but probably better than what people think that they're difficult population now that we have options for them.

And we've seen it before with other stigmatized diseases, obesity, fibromyalgia, depression, where there's a huge untapped market, all of a sudden, you develop an effective treatment, and it's a positive feedback cycle where the patients want the treatment, and then, it gets destigmatized.

And we've got one more phone participant. Before we take that, I'll relay our final online question for Dr. Garg from Patrick Trucchio at H.C. Wainwright. With $131.9 million in cash on the balance sheet as of December 31 and runway into the second half of 2026, can you please share a bit about your strategy for moving forward with AUD and ALD as well as the Phase III trial in MASH?

Yes. But thanks for the question, Patrick. As you will see, we've got a number of exciting catalysts coming up here in 2025. And what we're trying to do is really increase the appeal of pemvidutide by expanding its utility in multiple indications, so we -- these studies can be done at a relatively modest cost. And we think the value that they can create in a short period of time while we are pursuing MASH into Phase III, it can be very significant and very meaningful. So that's really the rationale here for moving forward with these. Time is of the essence. These indications, as you've heard, there's no treatment for them right now. If we can be at the front end of this, we can really have an impact and really make a very attractive value proposition for pemvidutide.

And to wrap up today's program, I'd like to bring back Mayank Mamtani from B. Riley Financial. Mayank?

And to keep it short, if you could quantify event rates per year for MetALD versus what we have for MASH F2, F3 and also F4 MASH? I think it's like low single digits. And glad to hear, obviously, F4 MASH is part of the pemvi program. And maybe specifically, if you could comment on enrollment timelines for the AUD versus ALD study? I know the number of patients are different and time points are also different. If you could provide some color on that, it would be helpful.

Thanks, Mayank. I think there were a couple of questions there.

I think 6.

We'll let Mazen start. He is sitting on top of it.

Which one of them? It's a...

Well, let's see, there was endpoints, right, timelines.

The endpoints for which program, the ALD program or...

Mayank, you may need to reiterate your question.

Speak on one at a time.

Yes. First part was the event rates per year.

Event rates.

MetALD and ALD versus MASH, F2, F3 and F4. And -- yes, that was the first part.

Yes. I mean, you're right on. It's like -- Rohit and I have been involved in many meetings recently. There is this famous slide that's looking at the events rate. And as you would imagine, it varies where F2, F3 and F4. And then also they looked at it from stiffness, 10 to 15, 15 to 20. And as you would imagine, the higher the F score or the stiffness, the more likely the events rate. In general -- I think we need more data on MetALD. But in general, it's -- for MetALD, it seems to be at least double. It could be -- go up to triple for ALD, but the data are in collection at the current moment. But that translates into a much smaller size and much encouraging Phase III. Definitely, we're trying to avoid liver biopsy, and it seems the regulator has the same desire to do so.

I'd love to hear from Dr. Loomba, and then, I think Dr. Harris can comment on the timelines.

Sure. So for a patient with Stage II or III, the most likely event that is clinically significant and clinically meaningful is progression to cirrhosis. Progression to cirrhosis can happen. Typically, for clinical events, we have a subpart H biopsy followed by a long-term biopsy that we may do or we may identify cirrhosis noninvasively. To do those, we're looking at a 20% progression in those who have Stage III fibrosis to cirrhosis in the placebo and reduction in those on treatment. And then, for Stage 2, it will be somewhere between 10% to 12%. And so you can pull that. Depending on the patient mix that you have in the trial, you can then get your pooled estimate for how many are going to progress to cirrhosis. Hepatic decompensation is lower, particularly in those with Stage 2 or 3 because they will have to go through cirrhosis to then have hepatic decompensation. Stage 4 patients, you can have a pretty variable and high rate of decompensation depending on the patient population you choose. As Mayank, you might have noticed, there are certain trials where we're looking at regression of fibrosis in Stage IV patients. And right now, I'm only discussing NASH context. In those, you want to include patients who have Stage IV, but really compensated that are likely to improve their fibrosis because FDA has indicated that they would be interested in looking at regression of fibrosis, even in Stage 4 as a potentially approvable endpoint. Now if you're looking at long-term clinical outcomes and you want full clinical approval in Stage IV disease, you will want to put people who are compensated but actually closer to decompensation. We can pick those people based upon their baseline ELF score, enhanced liver fibrosis panel, of, say, 11.3 or higher, but haven't decompensated yet. We know the event rate based upon that is going to be 20% over the next 2 to 3 years. So it's not as easy as you just threw that question in designing these trials. And so this is the event rate encapsulated for the patient population that you choose in NASH. As Maz pointed out, in alcohol-associated liver disease, the rate of decompensation would also depend on the dose of alcohol and the severity of the present liver disease that you bring in. So you can have a range of decompensation or range of clinical outcomes that could range from twice what you would see with NASH for the same level of disease coming in to 4x, depending on the alcohol consumption of that group.

Really exciting stuff. Thanks for a great discussion, everyone. Thanks for fantastic presentations. And now I'd like to turn it back to our CEO, Dr. Garg.

I'd like to just take a couple of minutes and remind everybody of all our milestones and near-term catalysts that are coming up. We're very excited about 2025. Obviously, the biggest catalyst is the IMPACT Phase IIb readout, the 24-week data that everybody talked about today. We also plan to initiate our Phase II AUD trial in the second quarter and initiate Phase II ALD trial in the third quarter. With regards to the IMPACT trial, our plan is to -- actually, we are already preparing for our end of Phase II meeting with the FDA. Our plan is to have that meeting on the back of the 24-week readout and not wait for the 48-week data. We'll be able to supply that data later on. So we plan to have an end of Phase II meeting by the end of this year and be ready to start a Phase III program, registrational trial for MASH in the first half of 2026. So stay tuned, and we're looking forward to updating you on all of these developments. Once again, I want to just tie it all together. We're focused on obesity, which is Phase III ready; MASH, which we talked about. We really think -- we think about it more like MASH with obesity. 80% to 90% of patients with MASH have obesity. So really, what you're treating, you're treating MASH, which is the liver-focused disease and obesity at the same time. And so we'll continue to generate data in obesity. Same thing applies with AUD and ALD, where it's -- AUD is the major cause of liver damage. So, again, we are liver focused there as well as reducing cravings. And for ALD, as we talked about, there is no approved therapy, a drug that's going to address both weight loss as well as liver health would be highly desirable. So our vision really is to develop pemvidutide as a transformational therapy across multiple indications and really bring together liver diseases and cardiometabolic risk factors, all into one package. With that, I would like to thank our panel. It's been a fantastic afternoon. Thank you very much. And I'd also like to thank the team -- internal Altimmune team as well as the production team to put together this program. Thank you, everyone. We look forward to catching up soon.