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

Good morning, ladies and gentlemen, and welcome to the Altimmune conference call to review the top line data from the Phase IIb IMPACT trial of pemvidutide in MASH. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Lee Roth, President of Burns McClellan, Investor Relations Adviser to Altimmune. Sir, please go ahead.

Thanks, Michelle. Good morning, everyone, and once again, thank you for participating in the conference call to discuss top line results of the IMPACT Phase IIb trial of pemvidutide in metabolic dysfunction-associated steatohepatitis, or MASH. Joining me on the call are Dr. Vipin Garg, Chief Executive Officer; Dr. Scott Harris, Chief Medical Officer; and Dr. Mazen Noureddin, Co-Chairman of the Board for Summit and Pinnacle Clinical Research and Principal Investigator of the IMPACT trial. A press release summarizing the results of the trial was issued earlier this morning and can be found on the Investor Relations section of the company's website. A copy of the slide set that will be reviewed on today's call has been posted to the IR site as well. Following prepared remarks from Dr. Garg, Dr. Harris and Dr. Noureddin, Dr. Scott Roberts, Chief Scientific Officer; Greg Weaver, Chief Financial Officer; and Ray Jordt, Chief Business Officer, will join them for the Q&A session. Before we begin, I'd like to remind everyone that remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Altimmune cautions that these forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those indicated. For a discussion of some of the risks and the factors that could affect our future results and operations, please refer to the risk factors and other cautionary statements contained in the company's filings with the SEC. I'd also direct you to read the forward-looking statements disclaimer in our press release issued this morning and on Slide 2 of the presentation. Any statements made on this conference call speak only as of today's date, Thursday, June 26, 2025, and the company undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances that may occur on or after today's date. As a reminder, this call is being recorded and will be available for audio replay on the Altimmune website. With that said, I'd now like to turn the call over to Dr. Vipin Garg, Chief Executive Officer. Vipin?

Thank you, Lee, and good morning, everyone. We appreciate you joining us today for a discussion of the exciting 24-week results from the IMPACT trial of pemvidutide in MASH. During our call today, we will review the top line data from our successful trial, including the primary endpoints of MASH resolution and fibrosis improvement, led by a team of pathologists as well as AI, and key secondary endpoints, including weight loss, well-established noninvasive tests of liver fibrosis, safety and tolerability. We will conclude with brief remarks from Dr. Noureddin, the principal investigator of the study, before opening the call up to questions -- to your questions. With that, I'll turn the call over to Dr. Scott Harris, our Chief Medical Officer, to go through the results of the trial. Scott?

Thank you, Vipin, and good morning, everyone. I'm very excited to share with you the top line 24-week results of our IMPACT Phase IIb MASH trial. Let me start with the design of the IMPACT trial on Slide 3. Total of 212 subjects were enrolled. 3 treatment arms were employed, placebo, pemvidutide 1.2 milligrams and pemvidutide 1.8 milligrams, each administered weekly without dose titration for 48 weeks. Key eligibility criteria included F2, F3 MASH, a liver fat content of at least 8% by MRI-PDFF and a BMI greater than or equal to 27. The dual primary endpoints of the study, MASH resolution or fibrosis improvement were assessed by liver biopsy at week 24, along with noninvasive tests, or NITs, and weight loss. Noninvasive tests and weight loss will also be assessed when subjects complete 48 weeks of treatment, and we expect to present these 48-week results in the fourth quarter of this year. The next slide is a concert diagram that describes the disposition of subjects during the trial. The randomization was 2:1:2 with 85, 42 and 85 subjects randomized and dosed to the placebo, pemvidutide 1.2 milligrams and 1.8 milligram arms. In the second row, note the very low rates of discontinuations due to adverse events with rates of these events in the pemvidutide 1.2 milligram and 1.8 milligram arms being less than placebo. This speaks to the superior tolerability of the compound. Finally, note that only 9% of subjects discontinued therapy before 24 weeks of treatment. This is impressive given that discontinuation rates of up to 23% have been observed in other 24-week trials. The baseline demographics and disease characteristics are shown in the next slide. These include mean age of 52 to 54 years, female sex of 55 to 61, body weight of 109 to 112 kilograms, BMI of 38 to 39.8, 42% to 45% diabetics and 40% to 47% F3 fibrosis. The baseline ELF, VCTE liver fat content and ALT levels were also similar to previously conducted trials. The next slide shows the dual approach to biopsy reading that was employed. In the first approach, 3 pathologists independently scored biopsies using the [ Mode ] method, blinded to subject treatment endpoint time point of sampling. In the second method, AI-based readings, biopsies were scored without knowledge of treatment assignment or time point. AI analyses that will be reported were limited to the quantification of fibrosis, and it should be noted that additional analyses are ongoing. While a rereading of the biopsies was conducted at the end of the trial in an effort to control the placebo response, we discern no real difference between the reread biopsies and the original biopsy data set. And based on this, we decided to readout on the full trial data set. This allowed us to make apples-to-apples comparisons with other trials and to provide for a larger sample size. In the next slide, we have the first of the 2 primary endpoints, MASH resolution without worsening fibrosis, one of the FDA-defined endpoints. This was performed with an ITT analysis in which subjects with missing biopsies for treatment discontinuation and other reasons were considered nonresponders. We saw highly significant rates of MASH resolution up to 59.1% -- with up to 59.1% of subjects compared to 19.1% for placebo. In the table to the right, the results of a completer analysis and analysis using multiple imputations in which missing biopsy data was imputed are shown. Multiple imputation analyses have been employed for other compounds in previously reported trials. You can see when these latter 2 approaches were employed, the effects of drug were even greater. On the next slide, we compare these results to the results of other studies using the same ITT approach. The FGF21 trials reading out -- after reading out at 24 weeks of treatment are shown on the left and light background, while the agents reading out after 48 weeks of treatment or longer were shown on the right darker background. Although none of these were head-to-head studies, the results achieved in IMPACT were better than or comparable to the FGF21 compounds at 24 weeks and superior to the results achieved with other compounds at 48 to 72 weeks. These results are even more impressive in consideration in the rate weight loss and tolerability that will be described. The next slide shows the fibrosis improvement data based on pathologist reads using the ITT method. Although we saw positive trends in fibrosis improvement, statistical significance was not achieved on this endpoint. We'll dig into this further on the next slide. On the next slide, we compare these fibrosis improvement rates to other studies. The 34.5% absolute fibrosis improvement observed for pemvidutide at 1.8 milligrams was similar to other candidates, but the achievement of statistical significance was impaired by the higher-than-expected placebo response. The magnitude of the treatment effect on a placebo-adjusted basis was not dissimilar to that observed with other compounds. Based on the additional analysis that I'm about to show you, it is our belief that these effects, which were observed at only 24 weeks of treatment have the potential to amplify over time and that statistical significance could potentially have been achieved at week 48. The next slide shows the results of supplemental AI-based analysis that measures the proportion of liver with pathological fibrosis corrected for reductions in liver fat. As shown, statistical significance was observed for both the 1.2 and 1.8 milligram treatment arms at the 30% level of reduction and nearly 1/3 of the 1.8 milligram patients achieved a 60% reduction in fibrosis compared with 8.2% of placebo patients. It is important to note that in contrast to pathologist-based liver biopsy reads, which state biopsies in the basis of liver architecture, the AI reads evaluated total fibrosis across the biopsy field. It is evident from these results that the antifibrotic engine is up and running and that stage reductions in fibrosis as read by the pathologists could potentially have been achieved with a longer duration of treatment. The studies on the following slide further support these conclusions. Here, we show the results of established noninvasive test results of ELF and VCTE or FibroScan as well as a more stringent composite of the proportion of subjects achieving both a 0.5 point reduction in ELF and a 25% reduction in VCTE. As shown, there was little to no placebo effect and statistically significant differences were observed that were comparable to or better than compounds achieving fibrosis improvement. The 0.5% reduction in ELF and 25% reduction in VCTE are important because they have been shown to predict favorable MASH outcomes. The reduction in fibrosis in AI-based readings and its corroboration with established noninvasive tests suggests that pemvidutide has antifibrotic activity and that statistical significance on the fibrosis improvement endpoint could be achieved with longer durations of treatment. The next slide shows the composite endpoint of patients achieving both MASH resolution and fibrosis improvement. As shown, when more stringent endpoints are employed, the placebo response, which appeared are achieving statistical significance on the fibrosis improvement endpoint was minimized. In fact, in this analysis, the pemvidutide response was almost twice that observed with placebo and approached statistical significance with a P value of 0.07 at the 1.8 milligram dose. It is important to note that resmetirom and semaglutide, 2 drugs that are either approved or on the verge of approval for MASH, failed to meet statistical significance on the fibrosis improvement endpoint in Phase II trials, but met them in Phase III. In the case of resmetirom, success was achieved by extending the duration of treatment from 36 to 48 weeks, allowing the fibrosis improvement response further time to develop. And in the case of semaglutide by the reduction of the placebo response inherent when large number of subjects are studied as when Phase III studies are conducted. Moving to the next slide. Pemvidutide reduced liver fat content by up to 62%. There were also high proportions of subjects achieving 30% and 50% reductions of liver fat or liver fat normalization, all of which were statistically significant. The next slide shows significant reductions in alanine aminotransferase, or ALT, a key marker of liver inflammation. Reductions were noted as early as week 4, showing the rapid onset of drug effect. As shown in the next slide, significant weight loss up to 6.2% was observed with the 1.8 milligram dose at 24 weeks of treatment with the trajectory of weight loss showing no evidence of plateauing at that time point. It should be pointed out that pemvidutide 1.8 milligrams is not the most effective dose for weight loss as 40% more weight loss was observed with the pemvidutide 2.4 milligram dose in our Phase III -- excuse me, Phase II MOMENTUM obesity trial. Therefore, inclusion of the 2.4 milligram dose in Phase III would provide even greater weight loss. The weight loss achieved with pemvidutide is a major differentiator with pemvidutide compared to FGF21, which failed to demonstrate a significant weight loss effect compared with placebo in prior trials. The weight loss is a critical element of MASH therapy as the comorbidities of obesity and MASH account for higher mortality rates than the liver disease up to the advent of cirrhosis. In addition to these significant efficacy results, we also observed a potentially class-leading tolerability profile as shown on the next slide. Although there were a small number of serious adverse events in the trial, these were equally balanced across treatment arms and none were related to study drug. As mentioned before, virtually no adverse events leading to treatment discontinuation were observed despite the absence of any dose titration. Adverse event discontinuation rates approaching 30% have been observed in other trials even with those titrations out to 24 weeks. There were no adverse events of special interest and importantly, no imbalance of cardiac events compared with placebo and no arrhythmias. While dose reduction for intolerability was allowed in the IMPACT trial, this option was chosen by a small number of patients and the reduction was temporary in the majority of study participants. Looking at GI tolerability in the next slide, the rates of GI adverse events were comparable to what has been observed in other incretin trials, and this was achieved without dose titration. The majority of AEs were mild in severity and no severe GI adverse events related to study drug were noted. Turning to the next slide. Hemoglobin A1c was maintained in subjects regardless of diabetic status. These results are similar to the results observed in prior trials of pemvidutide. On the next slide, changes in blood pressure and heart rate are shown. As noted, significant reductions in systolic blood pressure were observed versus placebo, and minimal increase in heart rates were observed that were not significantly different from placebo. In summary, as shown in the next slide, pemvidutide was the first therapy to achieve statistically significant MASH effects along with weight loss at 24 weeks. The study demonstrated MASH resolution in up to 59.1% subjects in an ITT analysis in which subjects with missing biopsies for treatment discontinuations and other reasons were considered nonresponders with a high level of statistical significance compared with placebo. A level of mass reduction was achieved at 24 weeks that was not achieved by other compound -- that was not achieved by other compounds at 2 to 3x the treatment duration. It is important to remind you that based on FDA guidance, these effects alone would be sufficient for approval in MASH. We believe these data position pemvidutide well to achieve Phase III success and regulatory approval. Regarding fibrosis improvement, we demonstrated trends to improvement on pathologists reading of the biopsies, but in AI-based readings of the same biopsies, significant reductions in fibrosis were observed at both pemvidutide doses. This was supported by statistically significant improvements in well-established noninvasive tests of liver fibrosis, including ELF and VCTE. Collectively, these results build our confidence in the antifibrotic activity of pemvidutide and lead us to believe in the potential of meeting that endpoint had the biopsies been performed at 48 weeks. We also saw robust liver fat reduction of up to 62.8% and achieved weight loss of up to 6.2% at the 1.8 milligram dose with no evidence of plateauing at 24 weeks. In addition to these encouraging data, there were impressive safety results with discontinuation rates due to adverse events approaching 0% in both pemvidutide treatment arms. This was class leading among drugs in development for MASH. Impressively, this effect was observed in the absence of dose titration. There were no heart rate increases or differences in cardiac AEs between pemvidutide and placebo, and we saw that hemoglobin A1c was maintained regardless of diabetic status. Collectively, these data point to best-in-class potential of pemvidutide in the treatment of MASH. With that, I want to ask Dr. Noureddin for his comments on the data. Dr. Noureddin?

Scott, thank you so much for the great presentation, and good morning, everyone, from Houston, Texas. I was the PI of the study, but also one of the high enrollment in the study. So I had direct experience and observation of the drug in my patients. And Scott, I will start with congratulations to Altimmune of hitting the primary endpoint of the study at this early point, which is 6 months. And as you alluded nicely, the MASH resolution was one of the highest we have ever seen, again, noted at 6 months only of this study. The weight loss is something I look for in my patients. And again, congratulation on this amount of weight loss. And as you said, the 2.4 milligram will even take us probably further. I think I want to highlight a very, very important point here, which is the safety profile and the discontinuation rate as well as the titration. There was no titration in this study. The discontinuation rate was in 1 patient on the drug and 2 patients on the placebo. And I'm sure like our investor colleagues, they follow the obesity world, and there are many medications now in the obesity world, and what the obesity world is focusing on now which drug is tolerable. And this is the first time we see this in MASH that such a drug has such a low discontinuation rate and the titration is very favorable. So those are things I want to congratulate our patients of having it in this trial. I think the elephant in the room here, Scott, is the question we'll ask about the likelihood of achieving fibrosis improvement within 48 weeks and in Phase III study. And you said it nicely that just watch what happened with previous drugs with the resmetirom and semaglutide, they did not achieve fibrosis improvement statistical significance at week 36 and 72 weeks. Here, again, we're only at 24 weeks. Nevertheless, you said it correctly, the antifibrotic engine. I think the AI data, the statistical significant, especially in that 60% reduction is giving me a highly likelihood of achieving fibrosis improvement at week 48, not to mention, we can also have the 2.4 milligram with further fibrosis improvement and further weight loss. The NIT data is very strong, suggesting that it's corroborating with the fibrosis improvement seen in AI. So the totality of data showing me highly likelihood of achieving fibrosis improvement in week 48, especially with the 1.8 and 2.4 milligram. I guess the other question, I'll finish with a couple of 2 comments, the place of this drug within the MASH therapeutics. I think one thing to note in this trial, we shaved off another 6 months by doing 6 months only trial, and we're going to enter Phase III hopefully soon, and that will put us in a very competitive position with this drug. I think the drug is efficacious. We will hit both MASH resolution and high likelihood of fibrosis improvement at week 48. It has outstanding tolerability. So it has a very strong place as a very highly efficacious drug within the MASH drugs. The last comment is, Scott, you and I, we are considering and the Altimmune team are considering a unique design that we'll discuss with the FDA that will accelerate our enrollment in Phase III and to deliver this drug to our patients in the market as soon as possible. So again, congratulations. This is an excellent outcome and outstanding results, and I look forward to the Phase III.

Thank you so much, Dr. Noureddin. With that, I want to thank you for your attention and turn the microphone back over to Vipin. Vipin?

Yes. Thank you, Scott. To summarize, we are very excited by the data we are sharing with you today. The category-leading MASH resolution we achieved in IMPACT positions us well to continue our efforts to bring this potentially transformative therapy to MASH patients. Based on the positive fibrosis improvement trends observed and the highly statistically significant improvement in the noninvasive biomarkers, we believe that statistical significance can be achieved in both MASH resolution and fibrosis improvement in Phase III, which would not only put pemvidutide in position for a regulatory approval, but to become a foundational therapy in the treatment of this highly prevalent disease. That concludes our formal remarks, and we would like to invite Dr. Noureddin to the microphone as well to join the team as we open the lines to questions. Operator, could you please instruct the audience on the Q&A procedure?

[Operator Instructions] Our first question will come from Roger Song with Jefferies.

Congrats for the data. I have a couple of questions related to data. Maybe just start with the fibrosis. Can you just give us some context why the completer analysis even lower than ITT for fibrosis, while we see some improvement for the MASH resolution, understanding this is tougher to hit endpoint.

Yes, Roger, thanks for the question. It really depends on why patients didn't complete the study. If you look at other studies, completer analyses are better than ITT. And the reason is that more patients on the drug dropout, so that when you censor them and don't consider them, you get better results. I think that's the opposite case here because we have less dropouts with the drug than with the placebo.

Our next question comes from Lisa Bayko with Evercore.

I just wanted to understand a little bit more the placebo rate and your thoughts on the methodology you're using. I mean we've seen some pretty extreme placebo rates with this sort of 3 reads and then using the mode and rereading the biopsies. If we look at that methodology, overall, we've seen placebo rates as low as 7%, which really stand out and then 25% here, which is also a very high number. I'm just curious if you think that's the right approach. I'd be curious for everyone to comment on that? And then if that's something you'd consider for the Phase III? And then I guess my second question is, how are you thinking now about glucagon adding to the mechanism of action versus GLP-1? And I'm trying to distill out sort of fat exiting the liver and the liver naturally resolving itself from a direct antifibrotic effect, which I think we were hoping to see within the first 6 months as having a profound impact, but it seems like it's a little slower. So I'm just kind of trying to understand the direct antifibrotic effect that you're seeing here versus fat exits from liver.

Thank you, Lisa. Let me answer the questions in the reverse order. I also want to have Dr. Noureddin give his thoughts about the placebo response rate. Glucagon is clearly quite active here. It has very potent effects in liver fat reduction, as you've seen, and that's one of the drivers of the fibrotic response. I think that if you look at the AI and you look at the noninvasive test, glucagon is very active. And what we're seeing here is not a glucagon effect on fibrotic activity, you see the problems with the biopsy reads and not being able to observe it. But the ELFs and the VCET (sic) [ VCTE ] responses that were observed are as good as any compound at any time point. So based on the noninvasive tests and then the AI-based reads, glucagon is very active here. The problem is overcoming the noise in the biopsy reads. Regarding the placebo rates and the methodology and the [ Mode ] method, you did -- are correct in pointing out placebo rates between 7% and 25% on the slides. But in the semaglutide Phase II study, it was 32%. And quite frankly, we went to great extremes to try to control the placebo response, as you know, and we were not able to control it. I think the jury is still out on what the placebo response is with the biopsy readings and how we better control it. There's a lot of activity going on, much of which is being led by Dr. Noureddin to find alternative methods to the biopsy, such as the noninvasive test and AI reading, which we at Altimmune feel are going to be superior to the biopsy reads. Nonetheless, the pathology biopsy reads are still the point of approval for the FDA. But I'm going to stop there and ask Dr. Noureddin for his comments. Mazen?

Yes. Thank you, Scott. And I think, Lisa, right, you pointed correctly that the placebo rate was on the higher side. Just to give you an idea about that 7% you mentioned, that has seen -- that was seen in only one trial and most trials are not that. This is point one. Point number two, what you see between Phase II and Phase III studies a consistent story that the placebo response dropped in Phase III studies. And it could be because of the larger sample size, which will happen here. So if we just look at all Phase IIIs, those that failed and those that succeeded, the fibrosis response will drop in the placebo. In terms of the Mode method, you asked if -- what people will do in Phase III. And there's a lot of discussion now with the FDA about that method to do it or not, and we will be discussing that with the FDA. But I feel like if we -- once we conduct the Phase III study, if we are consistent with the other trials that will show better placebo response that has been seen across all other trials in Phase III.

Just one follow-up. What happens with the fibrosis response on drug? I know the placebo response goes down in Phase III. I understand the idea. And what happens with the treatment arm?

Yes, go ahead, Mazen, please.

In general, the delta -- I mean, this has been seen in resmetirom as well as the semaglutide. Overall, the trials, the delta increase between the placebo as well as the effective drugs.

Yes. And I would say that not only would the placebo response go down, the drug effect will go up. I think that we're seeing the engine up and running. And I think that the 35% response rate we saw at the 1.8 milligram dose is only going to grow with time. I think also you would note that going to more stringent endpoints, like the composite endpoint when you control the placebo response, you can clearly show the drug effect. We saw a twofold response rate on that composite of MASH resolution plus fibrosis improvement compared to placebo. And that just barely missed statistical significance with a p-value of 0.07. And we think that this truly represents the drug effect when the placebo response is controlled.

Sorry, just a follow-up [indiscernible] -- sorry, what was the p-value for the fibrosis change in this trial? I know that wasn't...

Yes, it was not significant, but I did mention the fibrosis improvement plus MASH resolution because it did come very close to it. The other values were not significant.

And the AIs, all of them were statistically significant, including the 60% reduction, which -- to me, that is equivalent to one stage fibrosis improvement at that method AI. But I'm not comparing apple-to-apple here, but it's an indication for me that that's a good delta there.

[Operator Instructions] And the next question will come from Yasmeen Rahimi with Piper Sandler.

This is Emma, on for Yas. I guess we're wondering that beyond the larger size in a Phase III and duration, what are some things you can do to mitigate the placebo response in the Phase III? And do you think that there is an opportunity for the regulatory like landscape to shift towards maybe accepting AI-based histological analyses?

Thanks, Emma. Well, obviously, we have one very successful strategy here, which is the placebo response will go down in Phase III. We're also looking for additional methods to control the placebo response given the biopsy reads. Obviously, more stringent endpoints like the one that was shown in the presentation will also improve the treatment effect. I'll let Mazen comment further on the AI. There's been a lot of movement in that direction. There is the belief that at sometime in the future, the FDA would accept AI-based readings, but I'd like to Mazen to expand on that further. Mazen?

Yes. And I want to also build up on what you said, like the other drugs that they met the fibrosis improvement in their Phase III, they did not change much in their designs or endpoints or anything. They just went for larger sample size, larger -- longer duration in the case of resmetirom, and that happened, the placebo went down. So as Scott said, we have strategy to mitigate the placebo response. In addition, the 2.4 milligram is a strong consideration for Phase III that it's possible that it will need larger fibrosis movement and more weight loss. I don't know what's in the public in terms of AI. I know what's in the public that PathAI has applied for FDA approval, which I anticipate it's not going to be far away from us. Rather that's in the clinical trials or clinical use, I'm not sure yet. But there is FDA process for PathAI to be approved by the FDA. And my understanding, it's far along in the process.

And our next question will come from Annabel Samimy with Stifel.

I had a question actually about the dose. You mentioned that you are going to be pushing the dose higher to 2.4 in Phase III. I guess one thing I was surprised by in certain of the measurements were -- was the reverse dose response. So I know you're pushing dose for more weight loss. Will you actually achieve any greater mass improvement or fibrosis improvement with a higher dose? And at this point, should we give up on this potential for pemvidutide to have differentiation based on the 24-week fibrosis improvement? Because if that's the case, does it differentiate sufficiently from semaglutide?

Right. Well, thank you, Annabel. So I want to point out that -- while there is potential for achieving higher weight loss and as Mazen mentioned, higher MASH effects with the 2.4 milligram dose, we have not made a firm decision on that at this point, and it has to be discussed with FDA. So it is a vision, but please be aware that there has not been a firm decision made on that point. Regarding what you're calling the reverse dose response, which you're probably seeing in Slide 8 on the MASH resolution, I'd point out several things. First, the 1.2 milligram dose, which has the appearance of beating the 1.8 milligram dose in that slide is 1/2 the number of subjects and 1 or 2 subjects would have made a big difference there. But also, if you look across the slides, with regards to fibrosis improvement, with the exception of efruxifermin dose response has not been seen on MASH resolution. And also, if you look ahead to Slide 10 on fibrosis improvement, the same could be made. And in fact, with pemvidutide, there is the appearance of a dose response. So I think this has to be shown with larger trials. This was 80 subjects per trial and Phase III will be considerably larger. No, we would not give up on pemvidutide results at week 24. The AI-based readings are extremely promising. And with larger sample sizes, that effect could come out very clearly in clinical trials, especially with AI-based reading. But I'd like to have Mazen add his thoughts to that. Mazen?

I'm going to add a few things to what you said, Scott. In terms of the 2.4, we're still making the decision, but I don't want to underestimate the 1.8 milligram. It has a likelihood of meeting fibrosis improvement at week 48 based on the AI data that I'm seeing here as well as the noninvasive testing that you have seen here. If you want to comment on the MASH resolution, along the same page, Scott, but I will say actually, the MASH resolution variation and not having the dose response is actually across all drugs. We're not sure why. It's probably variability on the biopsy. But still, like the MASH resolution, I'm not sure like 53% versus 56% make much difference in a highly variable field of biopsy. So that MASH resolution is across all trials actually.

Annabel, let me just chime in on the question regarding the differentiation. We've actually already established a differentiated profile, MASH resolution at 24-week and significant weight loss. That's a unique combination already that we are bringing to the table. We believe that we'll hit the fibrosis resolution improvement as well at 48 weeks. So if you combine all 3 of them, we would be highly differentiated from any other drug for MASH, where there is a combination of MASH effects and weight loss and the tolerability on top of that. So you put all that together, it's a very highly differentiated product profile that we believe we will have at the end of Phase III.

And our next question will come from Ellie Merle with UBS.

I guess curious for a little bit more color on how you're thinking about a potential Phase III design and what you learned from this data and how you're thinking about that and your base case for what the design would look like in terms of like specific doses and the length of the study? And then just a second one kind of on the design and prioritization, just the timing for when you would potentially start a Phase III and how you would prioritize the development in MASH relative to ALD and AUD programs.

Thanks for the question, Ellie. Well, I'll look over to Mazen, but it's likely that the FDA will, regardless of any data that we see here, ask for 52 weeks in Phase III all the other studies that are being conducted even with the FGF21s, which showed good results at 24 weeks are doing trials of longer duration, even one sponsor is doing 1.5 years. So the design is currently being formulated at this point. We're taking a good look at which doses we want to take forward. As Mazen mentioned, we're working with him to develop some very innovative strategies that will potentially shorten the time to the completion of the program. As you're aware, the Phase II study was one of the most rapid enrolling studies to date. We think that in the tolerability profile and the low dropout rates in the trial really speak to the great patient experience. And I think the investigators saw that as well when patients rallied to come into the trial. The funnel was very -- was always filled with patients trying to get into the trial. So we think that with innovative design, rapid execution, as Mazen mentioned, we were able to save 6 months by reading out at 24 weeks and still achieved a positive trial that will move us into Phase III that these things will accelerate the program. The other thing I would mention is that the safety database that we have of almost 700 patients coming into the end of Phase II meeting will help defray the number of patients needed in the overall program. And that by itself will cut down in the cost of the program and speed up enrollment. So we're looking to have the end of Phase II meeting in the last quarter of this year and launch the Phase III program in the first quarter of next year. Regarding the other indications, as you know, the AUD trial has already been initiated. We press released on that approximately a month ago. And while we are projecting that, that trial will read out in the third quarter of next year, the trial is enrolling rapidly, and we may have to adjust that estimate for the Street. And we'll be making an announcement on the initiation of the ALD trial very shortly. And we think that, that would follow in the tail of the AUD study readout.

And our next question will come from Jon Wolleben with Citizens.

Wondering if you guys had looked at responses based on F2, F3 fibrosis at baseline in diabetics and nondiabetics? If you saw any differential responses between those 2 groups?

Yes, Jon, we haven't been able to get -- to analyze that data to date, and we should be providing further information at a scientific meeting coming up later in the year.

Do you think that any differential response there makes these results better or worse?

We're just going to have to see the results, Jon. And we anticipate we'll present them and make determinations based on that data.

And the next question will come from Patrick Trucchio with H.C. Wainwright.

The first is for Dr. Noureddin. Just curious if you can talk about the learnings that have emerged from this data readout in terms of informing the Phase III program? And what you would hope to learn from the 48-week data? And then separately for the Altimmune team. With weight loss of 6.2% at 24 weeks and no plateauing, how do you see pemvidutide positioning against semaglutide and survodutide as well as tirzepatide?

Yes. I'm happy to answer the first question. So the first question is the 6-month trial in GLP-1s and duals in particular, and the duals with the glucagon are very, very important. As you know, this is the very first trial that does that within 6 months paired biopsy. So I think we are just on track to see what we see in other Phase III trials. So I guess the biggest question for us in this Phase III, should we use the 2.4 milligram or not? So that's one of the questions. At the week 48 data, I look forward to seeing the static and the fibrosis improvement, which I think will be the case. So I still think that the 6-month trials put us an advantage that we will enter Phase III sooner. And I'm very comfortable going to Phase III and with higher likelihood of meeting both.

Thanks, Mazen, Patrick. I'll take the second question. You had asked about the 6.2% weight loss and how that's positioned versus other drugs with weight loss such as semaglutide, survodutide and tirzepatide and the treatment of MASH. The first thing I would point out, as I did in the presentation, that in the MOMENTUM Phase II obesity trial, the 2.4 milligram dose achieved 40% more weight loss at 48 weeks than the 1.8 milligram dose. So you could take the 6.2% here and project what that weight loss would have been had we employed 2.4 milligrams in this trial. But this is very comparable to the weight loss seen with semaglutide. So we think the drug is well positioned against semaglutide. We think the rates of MASH resolution and fibrosis improvement. Let me start with MASH resolution. We'll be achieving at 24 weeks, better MASH resolution that semaglutide achieved at 72 weeks. We think the fibrosis improvement would follow in the same path showing superior MASH results. Regarding survodutide, it has to be pointed out that this drug is far superior in tolerability to survodutide. In their MASH Phase II trial, they titrated for 24 weeks and even with that, saw adverse event discontinuation rates between 22% and 30%. Ours were less than placebo, and we achieved that without dose titration. So we think that there is really no comparison between the 2 drugs in terms of the tolerability and the patient experience. And I would also point out that we've been to FDA in an obesity program, and we found the FDA identified no cardiac safety signals in our trial, in our data, in our compound in our program. I think you'd have to look at the survodutide program in question, with that there's a possibility FDA may have identified a signal on their programs. And finally, with regards to tirzepatide, we think that the same comparisons we made to tirzepatide in terms of the MASH resolution and fibrosis improvement rates that would be seen at 48 weeks. But to the best of our knowledge, the data has been out there for well over 1.5 years, and there's been no indication that the company will take tirzepatide into Phase III MASH trials. So we're not sure that compound should even be included in the spectrum of MASH therapies for comparisons.

I think I just want to add to that, that the key differentiation remains this combination of dual mechanism, direct metabolic effect through weight loss and direct effect in the liver with the glucagon. So that's really what we are bringing to the table, very compelling weight loss, very meaningful weight loss that MASH patients need. 80% to 90% of MASH subjects have obesity would benefit from weight loss. So we're bringing that. And on top of that, there is direct effect on the liver in terms of excellent MASH activity we've already shown and with fibrosis improvement, again, that would put together a very compelling package, highly differentiated from all other programs.

And our next question will come from Mayank Mamtani with B. Riley.

Most of my efficacy questions are being -- have already been addressed. Maybe if I could have you comment on safety and tolerability. What do you guys think drove a very low discontinuation number here? Is it the GI AEs mostly being mild, maybe not being persistent was only observed with initial few doses? Or is it just motivation of getting the weight loss that you get with this drug? And then one for Dr. Noureddin. With resmetirom uptake going well and sema approval expected shortly, how do you think of allowing for user background therapies? And if you could clarify in this study, was there any background GLP-1 use? I didn't see that information as part of the baseline characteristics?

Mayank, I'll answer the first question, partly answer a little of the second question, and then I'll turn it over to Mazen regarding the color on resmetirom. So we've always contended that pemvidutide is amongst, if not the best tolerated drug in the incretin class. And in fact, hey, based on this data, probably even the best drug in the MASH class, including all the other compounds in development. And we're getting this without dose titration, and that's based on the slow entry of the drug into the bloodstream. And we think that's highly differentiating because titration is a real problem in practice and also getting approval for the different steps of drug titration. So it's clear that patients who have diseases such as MASH and diabetes have lower adverse event rates and lower rates of adverse event discontinuations than in conditions such as obesity, where there's probably less motivation to get treated and other alternatives they can get without staying in a trial. The adverse event here, the major ones were GI. And as you pointed out, the majority of them were mild. They were transient, and they didn't require pharmacological treatment. And I think there was a great acceptance in the program of patients based on their experience. I think they like the therapies. They stayed in the trial. We got the same feedback from investigators. I'd be interested in Mazen's comment about that. Regarding the GLP-1s, we did allow low doses of GLP-1s in the program, in the study up to a semaglutide dose of 1 milligram, RYBELSUS 14 milligrams and other GLP-1s except for tirzepatide. Unfortunately, I don't have that data to share with you in terms of the numbers of patients or how these patients did in the trial. As I mentioned before, we did include diabetics. I don't have the response rate on that either. But I'd be interested in hearing Mazen's comments about his experience as an investigator as well as his color, Mayank, on your question on resmetirom. Mazen?

Yes. And just to follow up on that GLP-1 question. I don't -- if I recall correctly, we did not have a lot of patients in the trial with GLP-1, definitely on the lower side. And I think we stopped that at a certain point. This is anecdotally my memory. So I mean, I get this question always about like what do you think is going to happen in the field now you have resmetirom with a great uptick actually and semaglutide coming to the market. And it's just like it shows -- the uptick shows the appetite and how big gap we have in the field and how many patients we have out there that they're needing treatment. Now I always try to learn lessons from other fields, such as the type 2 diabetes field and the weight loss field. And what you see here is the -- you still have multiple drugs entering in these studies. And what they are trying to do is add effect, show superiority and show a tolerable side effect. And many of them, especially in the type 2 diabetes field, have multiple rooms and large patient population, especially when you add a combination therapy to each other, which we think the case in MASH. I think this drug is going to be great as stand-alone as well as for combination. I think the -- it has -- as a physician, I'm waiting for better drugs, more tolerable drugs, add an efficacy today already on the market drugs. So I think there's a lot of room for this pipeline of MASH. So I always say it's not competition, it's a harmony between these drugs for the patient's benefit. I will be surprised if patients with F3 in particular, will be on one MASH drug eventually like a MASH drug, F4, I will definitely say that we will see patients on combination dual or even triple sometimes because once I hit cirrhosis, I want to reverse that as soon as I can, as hard as I can. And of note, I would recommend to do the Phase III program, including the cirrhotics, and I'm comfortable that it will show results and higher likelihood there.

That is actually another important question we got like the plans for F4 cirrhotics. Is there anything formalized? Or are you guys still kind of contemplating that? I don't know if Mazen want to take that...

I mean, I just said I would recommend it. I think it's -- I'll leave Scott to answer that question. We did not comment on the design and the unique designs we have already been discussed because we need to discuss it with the FDA. But we're -- we have made very good plans thus far. Scott, do you want to add additional flavor to this?

Yes, Mayank. Yes, we think that we'd be very effective in phase -- in F4, and this is a population that we really like to study in Phase III, and that will be discussed with the FDA.

And our next question will come from Andy Su with William Blair.

I just have one for Dr. Noureddin. And it's really a follow-up on Emma's question on AI. So we know that there is a very clear and significant delineation between various fibrosis stages and liver outcomes, progression to cirrhosis and death. But do we have any data to suggest that the area of fibrosis is done by the AI in this case also has a strong correlation. And just kind of related to that, I'm curious about how that AI is trained? What are some of the training data sets that they use or you basically just kind of use PathAI kind of what they offered?

Yes. I didn't understand exactly what do you mean by the correlation in particular. But to talk about correlation, there is -- the PathAI studies in general showed that it's plausible that this 60% reduction is equivalent to one-stage fibrosis improvement. It's just done in a more careful and methodological way than the conventional one-stage fibrosis. Again, so in my mind, when I look at that 60% from the data across trials and discussions, that to me is the one-stage fibrosis improvement. The -- I think we have plans also to use Histoindex. I think that has not been finalized. And I think they have also a very solid method out there. As I mentioned, my understanding from PathAI that they are in the FDA sitting down for discussions, and I do predict that they will get FDA approval. Did I answer your question or I missed part of it?

It's really about kind of the area of fibrosis and outcomes, right? Obviously, from a regulatory perspective, that's what they want to see. And so we have that, and I think the FDA accepted that as a proxy, right, for fibrosis stage and outcomes. I'm just curious about whether you can substitute area of fibrosis as a potential alternative surrogate given some of the supportive data, right? So I'm just wondering whether that there's supportive data on the liver area of fibrosis with outcomes.

Yes. So the first data come to mind, not necessarily from the PathAI from the Histoindex. It was the SNOF score that I worked on with Histoindex and that SNOF score was in people with cirrhosis that we did from the Galectin trial. And that AI methodology, the SNOF score did correlate in particular with reduction in portal hypertension. As you know, there's not a lot of trials that showed outcomes yet. They are still ongoing. So I'm sure the AIs of the world will correlate that eventually with histology. The most data came from -- in cirrhotics, which are closer to outcomes from data from, for instance, the Galectin trial, and we have shown correlation with reduction in portal hypertension in particular. So more data is needed, but there is a hint there that it does correlate with outcomes. But I would love to have more solid data, but that's when we have the outcome studies.

Yes, I think you have to move to the next question.

I'm showing no further questions at this time. I would now like to turn the call back to Vipin Garg for closing remarks.

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

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