Poxel S.A. (POXEL) Earnings Call Transcript & Summary

Welcome to the Poxel KOL Investor Event Conference Call. My name is John, and I'll be your operator for today's call. [Operator Instructions] And I will now turn the call over to Thomas Kuhn, CEO of Poxel. Thomas, you may begin.

Thank you. Hello, everyone. Thank you for joining us today. And I'm Thomas Kuhn, the CEO of Poxel. And alongside me is David Moller, Executive Vice President and Chief Scientific Officer of Poxel. The event today will feature presentations from Poxel and 2 NASH key opinion leaders: Dr. Kenneth Cusi, Chief of Division of Endocrinology, Diabetes and Metabolism in the Department of Medicine at the University of Florida; and Dr. Stephen Harrison, the Director of Summit Clinical Research. Thank you again, Ken and Stephen, for your -- for taking your precious time to be with us and to discuss our NASH pipeline. The webcast today will cover detailed results from the Phase IIa STAMP-NAFLD study of PXL770 for the treatment of NASH, with a specific focus on the new analysis from the high-risk tied to diabetic population, the Phase IIb plan for PXL770 and the status of PXL065, Poxel's deuterium-stabilized R-pioglitazone for NASH. Let's move to Slide 3. Before we begin, this is our forward-looking statements. Forward-looking statements are subject to inherent risks and uncertainties beyond the company's control that could cause the company's actual results or performance to be materially different from the expected results or performance expressed or implied by such forward-looking statements. Certain information can be found in our most recent regulatory filings. So on Slide 4. Poxel is a metabolic disease-focused company with a mission to discover, develop and commercialize novel and innovative therapies for serious chronic disease, such as NASH and type 2 diabetes. Our thesis, which differentiate us from other players in the field, is on targeting defects in cellular energy homeostasis, which can in turn lead to end organ protection via modulating pathways affecting inflammation and other pathology that contribute to tissue degeneration and cell death. Our early-stage efforts include leveraging of our 2 internal platforms, plus access to new externally derived programs in order to continuously expand our pipeline into new areas of unmet medical need relating to endocrine and metabolic pathophysiology. As you can see on Slide 5, Poxel is a global company based in France, with operations in the Boston area and Tokyo in Japan. We have 3 mid- to late-stage first-in-class drug candidates with novel mechanism of actions and differentiated development strategies. We have partnered Imeglimin with Sumitomo Dainippon Pharma, the #1 diabetes commercial company in Japan. Japan is the second largest single market outside of the U.S. with an estimated $4 billion to $5 billion in sales for diabetes therapies. We are also advancing 2 Phase II programs for NASH that both have novel mechanism and differentiated development strategy. In addition, our AMP kinase and deuterated TZD platforms have the potential for expansion into other chronic and rare metabolic diseases. Our cash run rate is through 2022 with our current business plan. As you can see on Slide 6, Poxel's pipeline include our most advanced drug candidates, Imeglimin, which is currently globally partnered for the treatment of type 2 diabetes. Through our partnership with Dainippon Sumitomo Pharma, and NDA is currently under review in Japan and Sumitomo is currently targeting a product launch in their fiscal year 2021. We'll provide an update mid-January for the plans for Imeglimin in the U.S., Europe and other countries covered in the [indiscernible] agreements. Based on the recent Phase IIa result for PXL770 for the treatment of NASH, we will also cover in detail today, we plan to advance it into a Phase IIb trial. For our second NASH program, PXL065, we initiated the DESTINY 1 Phase II study in early September. We will also provide an update of this program today. Finally, we have an agreement with a new pharma for an [indiscernible] agonist program, which is currently in a Phase IIa program. As you can see on Slide 7, our 2 overall first-in-class NASH programs are novel approaches to control key pathways that lead to liver injury, and we are using innovative development strategies to advance them to key value detection products. For PXL065, we are utilizing the 505(b)(2) regulatory pathway and leveraging the extensive knowledge of pioglitazone in order to streamline and expedite its development. For PXL770, we'll be focusing on NASH patients with coexisting type 2 diabetes, affecting approximately 50% of the patients. The Phase IIb biopsy-based trial will aim to confirm the preferential efficacy profile seen in this key subpopulation in Phase IIa as well as other important histological objectives. PXL770 is also one of the only NASH development candidates that has the strong potential to also achieve better [indiscernible] control in these higher risk patients suffering from both NASH and diabetes. The underlying pathophysiological drivers of NASH are highly complex and support the need for development of novel therapies that address different targets and pathways. We believe that our NASH candidates have strong potential for monotherapy, but are also complementary with other agents, leading to the potential for combinations, which could provide for broad treatment of diabetes. I will now hand the webcast over to David, who will provide the scientific overview of our AMP kinase activator program, PXL770. David?

Thank you, Thomas, and hello, everyone. Thank you for joining us today. Let's go to Slide 9. Before diving into the AMPK activator approach, let me first emphasize a couple of points that pertain to both of our NASH programs. Both are first-in-class, as Thomas mentioned. The classic hallmarks that NASH has shown here, several other development candidates act primarily to reduce liver fat or steatosis with secondary benefits on inflammation and fibrosis. Importantly, our 2 approaches have the potential to directly target inflammation and potentially fibrogenesis in addition to reducing liver fat or steatosis. Going then to the next slide. You can see that AMPK is a master regulator of several important cellular pathways and it responds to changes in cellular energy homeostasis, suppression with overnutrition and activation with energy depletion. As I mentioned before, unlike other mechanisms, which act primarily to reduce steatosis, AMPK activation also has the potential to independently address each of the core aspects of NASH by virtue of its fix on lipid metabolism, inflammation and potentially protection of hepatocytes from apoptosis or cell death. In addition, AMPK activations has great potential to ameliorate root causes of NASH, like insulin resistance and to address comorbid conditions like diabetes and cardiovascular disease. The next slide highlights one key aspect of AMPK that I alluded to on the prior slide, and it's summarized in greater detail here. It's important to note that a substantial body of evidence also indicates that the level of AMPK activity in cells and tissues is lower in the context of increased energy supply, either glucose or lipids, and that AMPK activity is also lower in inflammatory states. The 2 graphs shown here demonstrate lower tissue AMPK activity in rats or humans with hyperglycemia or insulin resistance. Thus, endogenous AMPK tone is likely to be lower in patients with diabetes and liver and other important tissues like adipose, kidney or muscle. This concept predicts that an AMPK activator should work best in patients with lower AMPK tone, i.e., especially in patients with type 2 diabetes. Turning now to PXL770 on the next slide. This is a novel small molecule, a direct allosteric activator, meaning that it increases the activity of the enzyme complex by binding to a distinct site, shown on the far right panel, which is different from how physiologic activation occurs. As shown in the left panel, PXL770 is a potent activator, and it also protects the enzyme from dephosphorylation, which is illustrated in the middle panel. This, in turn, is a predominant mechanism for lowering AMPK activity. Moving to Slide 13. Here's a few examples of specific results from multiple pre-clinical studies performed with PXL770. These rodent NASH model studies have shown consistent and promising results with respect to each of the core elements of NASH, namely steatosis inflammation, ballooning and fibrogenesis. Overall, NASH scores are also substantially improved and plasma liver enzymes have been normalized. On the next slide, you can see some of our more recent preclinical data. There are 2 key points to note here. Firstly, PXL770 can reduce inflammation in fibrogenesis directly as measured by reduced cytokine release from macrophages and reduced activation of hepatic stellate cell, the major cell-type driving fibrosis. Thus AMPK activation affects -- it affects pathways that are truly independent from the reduction in steatosis, which could also lead to reduced NASH pathology. Secondly, these experiments were conducted in human cells providing greater confidence that these beneficial effects could translate into humans rather than having only studied rodent systems. On the next slide, you can see that in addition to the effects on NASH-related parameters, we have also generated a wealth of data implicating the potential of PXL770 to ameliorate hyperglycemia and insulin resistance. As summarized on this slide, PXL770 effectively normalized glucose and insulin sensitivity in rodent diabetes models and also mediated beneficial effects on lipid metabolism in both rodent and human cells. Effects on pathways that are predicted to contribute to insulin sensitization and to reduce liver steatosis. Next slide. Our preclinical data also highlights the potential of PXL770 to show even greater additive or synergistic benefits when combined with other agents in development. We studied several combinations, including semaglutide, a GLP-1 receptor agonist, obeticholic acid and FXR agonist and resmetirom, a thyroid hormone beta receptor agonist. As shown in the example here, co-administration with semaglutide resulted in further improvements in several parameters. Additive benefits were also observed with other agents studied to date. This study was presented in a poster at the AASLD liver meeting last month, and you can find it on our website. The results highlight the potential for complementarity of use with a broad range of other classes in NASH. Before shifting to the clinical data, I also want to briefly summarize our interest and efforts to pursue other indications with the AMPK platform. There are a broad range of other, both common, chronic and rare diseases where AMPK activation may be useful. Those of particular interest to us are noted here, including forms of adrenoleukodystrophy, which afflicts more than 10,000 people and where no therapies are currently approved. On the next slide, you can see some of our more recent data pertaining to these other indications. In an animal model of diabetic nephropathy, we observed that PXL770 exerts robust efficacy on renal function and on histology, as shown on the left. In models of adrenoleukodystrophy, we also demonstrated several beneficial effects of PXL770. 770 reduced pathologic elevated levels of very long-chain fatty acids or VLCFAs in mice with a mutant ABCD1 gene. These mutations are in the same lipid transporter gene that underlies the disease in humans. In cells derived from humans with the disease, we also saw reductions in VLCFAs along with an increase in the expression of 2 other important genes, ABCD2 and ABCD3, which are implicated in compensating for the loss of ABCD1 in this lipid metabolic disease. These results are prompting us to further pursue our platform of next-generation AMPK activators, and they underscore the systemic effects of PXL770 on adherent lipid metabolism and inflammatory or fibrogenic pathways. On Slide 19, I've summarized the clinical experience -- the early clinical experience with PXL770. In over 130 healthy subjects, we observed suitable PK properties and good safety and tolerability. In a more recent 4 week PK/PD placebo-controlled study in 16 likely NASH patients, we met our endpoint and objectives. PXL770 demonstrated a PK profile that was similar to the one observed in healthy volunteers, and it was also observed to be safe and well tolerated. Notably, we saw a statistically significant suppression of de novo lipogenesis. This effect is linked to AMPK and is known to be an important contributor to hepatic steatosis. A statistically significant improvement in glucose tolerance during a glucose challenge test was also observed in this nondiabetic population, and we observed additional significant improvements in several indices of insulin sensitivity. Thus, we confirm target and pathway engagement with PXL770 in patients. These results also represent the first human experience with any specific AMPK activator. I'd now like to hand over the webcast to Ken Cusi, Chief Division of Endocrinology, Diabetes and Metabolism at the Department of Medicine at the University of Florida. Ken?

Thank you, David, and it's a pleasure to be with you today. This is an exciting compound. And what I'm going to do is to present very briefly the results and what is the safety profile of this compound? So here in a nutshell is a summary at the clinical level of the pathophysiology of -- and the link between type 2 diabetes and NASH. Again, this is an oversimplification of how an individual goes from probably an underlying state of insulin resistance to developing steatosis, steatohepatitis and eventually, fibrosis and cirrhosis. Although this is not unidirectional, so it goes back and forth as we have learned from weight loss and lifestyle interventions and some pharmacological agents. The whole point of this slide is to highlight the critical role, as David, mentioned of AMP kinase. So you can see that once that you have an increased flux of nutrients or fatty acid in the setting of high glucose and insulin, this is a perfect storm for triglyceride accumulation and novel lipogenesis, new fat being made in the liver cell. And this triggers a number of toxic lipid products that cause inflammation, alter mitochondrial function, create metabolic stress and activate the [ Cooper ] and then the Stellate show. Bottom line, you can see those stars where, as David mentioned before, there is preclinical and clinical data suggesting that AMP kinase activation can reverse this. And coming from the endocrinology field, AMP kinase has been a long target of potential treatment. And you should remember that our most successful drug for diabetes is metformin. That's been out for a 60 years, it's an indirect in AMP kinase activator by changing mitochondrial state. The difference here is now we have a direct AMP kinase activator and -- which is exciting. So this slide is to just tell you, again, this audience is highly educated, but just to highlight some new data and the magnitude of the problem. So the patients with type 2 diabetes, particularly, are prone to NASH for a number of factors, including insulin resistance. And you see in the box on the left that there's a high premise that fatty liver diseases just came from a large database from Lilly in which they just measured liver fat by magnetic resins and imaging in 590 patients. You see that between 2 to 3 out of 4 patients with diabetes has a fatty liver. More importantly, the question has been how many of these have NASH. And you can observed that in a study that we also did in patient with that 2 diabetes with liver enzyme below 40, 26% of those had NASH. Now the other factor that seems to be common to diabetes and NASH is insulin resistance, which tend to be worse in patient with NASH, driving all the factors that I showed you in the prior slide. And in the second bullet to the right, you see that this is data that has not been widely available. It's -- I just received approves last week. It will be coming out in February. This is the first study just testing random patients with type 2 diabetes in outpatient clinics and 1 in 6 patients, 15% of patients, have a degree of fibrosis that would deserve therapy. So this is the potential market for any drug that is effective in NASH. Again, the other 2 bullets is something you know. There's a big clinical burden. Patient with diabetes and obesity progressed -- seem to have more rapid progression and also worse risk of cardiovascular disease. And in the last bullet, this is data also from this year from [indiscernible] team showing where they calculated the massive burden of the disease in terms of comorbidities, cirrhosis and the cost of the health care system and why discovering new drugs, like the one we're talking about today, will have a huge impact in the medical field in the future. Now let's get down to the study design. So the study design here, we can see in Slide #23. The key inclusion criteria for the IIa study, you see individuals with NAFLD that were identified either with that cap that comes from the fibroscan device greater than 300 or an MRI-PDFF greater than 10%. This group knows that these are standard criteria for noninvasive clinical trials in NAFLD. And minimum cutoffs of ALT patients had a run-in of 4 weeks and were randomized to the 3 doses that you can see right there, 500 milligrams once daily, 250 milligrams twice a day or 250 milligrams daily or placebo treated for 12 weeks in a randomized, controlled fashion and then following afterwards for safety for another week. I need to highlight that this is a multi-center randomized double-blind placebo-controlled 2 phase -- Phase IIa trial, conducted in 15 sites in the United States. Many were cutting line -- cutting-edge centers with a lot of expertise in these studies. The primary endpoint was a relative change in liver fat content. And the second endpoints are pretty -- were pretty standard and is obviously very aware as we're going to go -- discuss this in a moment. Here are the overall clinical criteria, baseline characteristics. You can see A1c overall was well controlled. About half of them had diabetes and the other half did not. The fasting glucose was between 112.0 to 120.0. Again, a mixture of patients with diabetes or not, I'll share the diabetes group in a moment. Liver fat between 15% to 20%; and liver enzyme, as you can see, between 30 to 40. Clinical abnormal will be greater than 40. So keep this in mind as the liver enzymes are expected to decrease less when they are within the normal range. So here, this is a busy slide. Now just concentrate on the blue with a little light yellow background to highlight patient characteristics of those with diabetes. Again, about 40 -- almost half of them had type 2 diabetes. And you can see that the A1c is very well controlled. We define diabetes by having an A1c 6.5 and greater. These individuals where we then fairly well controlled fasting glucose. We define diabetes having a fasting glucose of 126 or greater. This was ranked between 123, 140. Again, many of them were treated already with metformin. Liver fat content, again, in the range, as expected, between 15% to slightly above 20%; and liver enzymes between 35 and 47. Now when we look at the results, let's focus on the left panel. This is the overall change with the 3 different doses. And you can see a clear dose-dependent improvement in liver fat with the dose of 500 milligrams once-a-day of being a reduction of about 18%. Again, there was also a significant reduction in ASP with more significant with a higher dose and an improvement in the FIB-4, which is an indirect marker of change in fibrosis. Although here, we believe, was largely driven by changes in ALT. And here, we also see a change in the hemoglobin A1c of about 0.24%. Again, in the setting of having half of the patients without diabetes and near normal, this is hard to read a little bit, but I'm going to show you the data and patient with the IDs that will be more significant and clear to compare with other agents in the field. Remember that 18% is quite interesting, but the most exciting change is change that we see in the diabetes subgroup. We see that individuals with type 2 diabetes. Again, those -- that's the group that's more prone to more severe disease, had a 27.2% reduction in rapid liver fat. This compares fairly well to other compounds, and Steve is going to mention that. But with Madrigal's resmetirom of about -- in that range and Enanta's EDP-305, also Galmed's Aramchol or intercepts of the glycolic acid, which is in the range of about 20%. So this is an exciting finding, I think, for this clinical trial. We'll talk more about it later. Now if you want to be a little bit more granular, it's interesting to see the rapid change per individuals in the diabetes subgroup. And you clearly see that a significant number of individuals on the drug reached that cutoff of greater than 30%. And again, this is pretty exciting, with 58% being responders compared to 7% in placebo. And also, what is exciting is despite the fact that the ALT was -- we're now in Slide #29. In the left panel, ALT and AST were within the normal range for the most part, not in all patients but in a significant number of patients. We see that, again, sort of a dose response -- dose dependent response where you can see that the reductions at the 500 milligrams daily dose was 12.5 for ALT and 10.7 for AST and being highly significant compared to placebo. Now we're in Slide #30 where we can see, again, as an endocrinologist, we'd like to see the concept of an AMP kinase activator being a compound that can improve this problem the AMP kinase has in patients with obesity, diabetes. And it's very exciting to see even as the fast in base -- the baseline fasting glucose was -- if you focus on the 500-milligram dose, is 121, which is fairly normal in patients with diabetes, it still was reduced by 11.6 milligram per this liter on average and the hemoglobin A1c. Again, we're now in the right panel of Slide 30. You can see that despite the fact that in the 2 higher dose, the A1c was 6.6, 6.7. Still, there was a reduction of up to 0.44. If you look in the diabetes field and diabetes drugs that are now approved, such as our old metformin or the very widely used by primary care doctors, DPP-4 inhibitors, the most famous one being [indiscernible]. The reduction in A1C is more or less in this range for patients that are well controlled. So this is something quite promising. Finally, we -- as I mentioned earlier, individuals with type 2 diabetes or obesity or NASH tend to have severe enzyme resistance and there was reduction in the HOMA-IR, again given the small number of patients is almost were significant, but you can tell that the direction is the right one. And this is also something to take note of. Again, no changes in body weight. No changes in lipid parameters. As you know, some NASH drugs have causing freezing LDL, and that's something we, as endocrinologists, basically like -- nobody likes. And again, some markers is suggesting a reduction in inflammation. This deserves further examination. Turning to the safety profile. We are now on Slide #33. The medication was well tolerated at all doses. As you can see, the total number of experiencing adverse events were similar between the study drug and the placebo. The greatest most combination were GI side effects, mild diarrhea happening and this is treated with PXL770. And there were some 2 patients that had unrelated side effects, one with atrial fibrillation and sinus node dysfunction in 2 events of this patient. And again, one patient having sepsis and one with an elevation of ALT. So again, as proof of concept, small study, the safety profile was relatively -- was reassuring at this point. And again, here, we go to our -- my last slide, before moving on to Steve and putting this into context in the field of NASH agents. We've seen significant changes in liver fat content, improvement in plasma, aminotransferases, greater response in patient with type 2 diabetes, which is exciting as these are the patients with the worst long-term prognosis. This would be consistent with the mechanism of action of the drug and a target that is highly valued by physicians in the field of diabetes and NASH. Again, we saw promising changes in the glycemic control of these patients with potential improvement for insulin sensitivity and a safety profile that gets the green light for larger studies. So in summary, this is the first direct AMP kinase activator in humans. And these results support moving this concept further at this point. So with that, I'm going to pass it on to my friend, Steve, who's going to take it from here.

Hey, thanks, Ken, for that outstanding review of the Phase IIa data. And I want to take it over and just kind of briefly talk through where we're at and where we're headed. And before I do that, let me just say what you've seen so far is pretty exciting in the sense that this is an oral agent that does all the things we want a NASH drug to do in the sense that it's a master regulator of energy pathways, it works on lipid metabolism, inflammation, on macrophage function, stellate cells, reducing cell death. And here's maybe the biggest one, it improves insulin resistance. And there are a lot of drugs in development. You see from this slide here that there are multiple agents, even oral agents that are targeting liver disease in the setting of NASH. One of the differentiating factors that you'll see from this presentation is that the AMP kinase pathway is one that hasn't been studied before, it's novel in that sense. But it also improves insulin resistance. And that's a key component to NASH pathogenesis in the sense that if we can reduce lipolysis and free fatty acid flux from adipocytes into the liver, that is the major way by which fat enters the liver. So this slide really gets at what the 500-milligram dose daily -- once-daily Phase IIa results show relative to the selected competitors that are oral. This doesn't include the injectables. But as you can see here, some differentiating factors for PXL770 in the diabetic population are what happens with glycemic control and the side effect profile. In addition, there is good movement with liver fat content and ALT. It is highlighted that this is a relatively short-term trial, 12 weeks in duration, with baseline liver enzymes that were close to the "normal range" and to see drops like this, I think, are highly encouraging. So let's go to the next slide. So just to put this in perspective for you. As we progress from left to right, there is preclinical data to clinical data and the effects seen in the Phase IIa trial are noted in red on the right. So the direct effect of AMP kinase on inflammation and fibrogenesis are intriguing, and hopefully, that will translate into results from the Phase IIb trial that you see highlighted in the yellow box. We do need a biopsy study to confirm these results on inflammation, ballooning and fibrogenesis. So very positive preclinical and early Phase IIa results that now warrant further investigation in a paired liver biopsy Phase II trial. Next slide. So here, I want to just go through the PXL770 Phase IIb plan, both the rationale and its approach. So digging back into the Phase Ib PK/PD data as well as the Phase IIa result, we're getting target engagement. So you're impacting de novo lipogenesis, which is the second most common way to get fat in the liver as well as improving insulin sensitivity, which targets the #1 way we get fat in the liver. There appears to be greater efficacy in the type 2 diabetes subpopulation, as Ken outlined, very, very effectively. And we're going to be looking at the qday dosing, and we know that the 500-milligram dose was associated with the best efficacy. So moving to what these results have shown that support advancing into Phase IIb, well, we need to confirm the effects on histology. So we've seen positive preclinical in early Phase IIa data. Now we need to go to the biopsy and show that it actually is happening there as well. And that generally is done with a longer-term trial in 12 weeks. We don't do 12-week liver biopsy trials. We need to better characterize the glycemic and insulin sensitizing effects that we're seeing on the NASH population with diabetes and prediabetes and assess additional benefits to include blood pressure, body weight, et cetera. And we also need to better characterize the safety and tolerability profile and the nice thing about where we are in development with PXL770 is we have the opportunity to leverage our learnings from prior trials and apply a more sophisticated approach to enrollment, which is key, knowing that screen fill rates are high for NASH clinical trials and also to work on retention strategies that have been developed over the years to keep people on drug. And then finally, evaluating the histopathology, we've learned an incredible amount through trial and error on how best to minimize placebo response rates and get a proper histopathological assessment. Next slide. So we should be on Slide 39. And here is the proposed trial design. And here, it's important to note that the majority of patients will have coexistent diabetes, type 2 diabetes, and the remainder will have prediabetes as defined by specific HbA1c criteria. Now, not exactly sure if we're going to go with 1 or 2 doses of 770, that's yet to be determined, and the final dose selection is pending. The primary endpoint will be liver histology as noted by NASH resolution without worsening of fibrosis, and that is one of the conditional approval surrogate endpoints that the FDA has laid out very clearly. But there are key secondary endpoints that will be pivotal for this trial to include change in liver fat content. And as we've learned from other trials using other mechanisms of action, we've been able to show that MRI-PDFF can predict histopathologic response. So it's going to be interesting to see how that works with this mechanism as well. And then you see the additional secondary endpoints that will be key here to include the metabolic parameters, renal parameters and some key safety data as well. Next slide. So there is an option to perform a separate metabolic benefits trial that includes only type 2 diabetes with obesity. Now in this particular trial, this would allow us to better characterize the extent and durability of glycemic benefit in patients with type 2 diabetes who are not well controlled. Remember, from the Phase IIa trial, these patients were very well controlled, as Ken mentioned. So this would give us that opportunity to really look at what the magnitude of effect change could be on HbA1c that hopefully would be accentuated in a trial such as this. Other metabolic benefits could also be interrogated in a trial like this and here's a key additional benefit, we may be able to get a significant data readout before the Phase II biopsy results are in. Next slide. So here, I just want to summarize for you and recap what we've learned from Phase I and the Phase IIa trial. In the Phase I, we really looked at proof of target engagement. We see reduction of de novo lipogenesis and improvement in oral glucose tolerance and insulin sensitization, which I highlighted are 2 key mechanistic variables that are foundational for the treatment of NASH. And then in proof of efficacy, we saw from the Phase IIa trial, in only 12 weeks of treatment in a NASH like population, significant decreases in liver fat content and ALT and then improvement of glycemic parameters and a tolerable safety profile. So where do we go from here? Well, into Phase IIb, we're really going to be trying to confirm the efficacy with histological endpoints and then potentially an additional metabolic benefits trial that would be 4 to 6 months in duration. So just to summarize the trial durations, it would be 1 year of treatment in the histology trial and then 4 to 6 months of treatment if it were -- if another trial were to be done just in type 2 diabetics. Next slide. So now I want to shift gears and talk about PXL065. So in this particular -- with this particular mechanism here, PXL065 is derived directly from pioglitazone. Pioglitazone has been used for decades now to treat type 2 diabetes, extensively studied in the setting of NASH. Ken and I did initial trial on pioglitazone for NASH published in New England Journal back in 2006. He's carried the torch on many other clinical trials that you see listed here at the bottom showing the efficacy of pioglitazone. So knowing that, there are also some issues relative to pioglitazone. It's been limited in its use because of weight gain, fluid retention and bone loss. We know that pioglitazone is a mixture of 2 stereoisomers which have dramatically different properties. So when we look at PXL065, it's a deuterium stabilized R stereo isomer. So we know that if you look at S pioglitazone, it has strong PPAR gamma agonist activity, but it's also associated with some untoward side effects like weight gain and fluid retention. So when we look at PXL065, it's mainly stabilized R pio. So very weak PPAR gamma agonism, it's anti-inflammatory, but it retains its NASH activity in animal models so that's the positive. Now as we look towards this drug specifically in NASH, while it lacks PPAR gamma activity, it does have other positive impacts on histology, mainly working through MPC. So we'll talk more about that. The other thing to note from this is we can draw on the pioglitazone published data and so we can track this through a 505(b)(2) regulatory pathway, which is quite helpful. Next slide. So this really just gets to PXL065 and the mechanisms involved, specifically the nongenomic pathways. So what we know about pioglitazone and TZDs is that there's both genomic through PPAR activity and nongenomic mechanisms. As I mentioned before, PXL065 is deuterium stabilized single stereoisomer or NCE, which selectively mediates non-PPAR effects of pioglitazone. So through these nongenomic pathways, we see regulation of fuel selection, modified cell signaling and enhanced lipid metabolism and its anti-inflammatory effects as well. And these mechanisms of action, as you see in the little diagram on the right, partially inhibit the mitochondrial pyruvate carrier complex. This may be the first time you've heard about that, but it's important to note that in settings of increased nutrition that preventing pyruvate entry into the mitochondria actually has all of these downstream positive impacts. Next slide. So here, I just wanted to show where pioglitazone falls relative to other drugs in development on resolution of NASH. And for the purposes of clarity, this is the placebo-adjusted treatment effect for resolution of NASH without worsening of fibrosis. And in the blue bar on the far left, you see where pioglitazone currently stacks up with other agents, to include lanifibranor, which recently reported out and resmetirom, a thyroid hormone receptor beta agonist. So just having that as a backdrop, it sets up nicely to study PXL065 in a paired liver biopsy study. Next slide. So here, I wanted to just get at why we're looking for drugs for NASH and fibrosis. And we know historically, through 5 meta-analysis that have been published that fibrosis portends a worse prognosis. And here, you see the effects -- beneficial effects of pioglitazone through a meta-analysis on fibrosis. So this shows the odds ratio. And you want to look at something that's to the right of the one line and doesn't cross one. And here, you see through multiple different studies the effects specifically on improvement in advanced F3, F4 fibrosis. So it favors pioglitazone here, and I think that's an important concept to keep in the back of your mind. But there's more to the story than just fibrosis and NASH resolution in the setting of treatment of patients with fatty liver. We know the #1 killer of these patients is cardiovascular disease. And so pioglitazone also has shown positive cardiovascular outcome results from PROACTIVE, IRIS, PERISCOPE and other studies to include meta-analyses. And I think that is an important additional concept to keep in mind. Next slide. So I want to shift back to some recent results that have been presented at the most recent AASLD, which was last month. And here are some Phase I study results, looking at 15 milligrams of PXL065 versus 45 milligrams of Actos. And what you see on the left-hand side is -- and this is through a multiple dose Phase I study in healthy subjects. And you see in the solid line the results show that 065 dosing alters the ratio to the 2 isomers in favor of R on the left-hand side in green with no PPAR gamma activity versus S as identified in red on the right. So there's almost a 1:1 ratio with what we're seeing here. Next slide. So this is the Phase II paired liver biopsy study that is currently underway in NASH patients. This is looking at a primary endpoint of relative change in liver fat content. And the key secondary endpoints of NASH resolution without worsening of fibrosis as well as liver biochemical tests to include ALT, AST metabolic parameters, biomarkers and safety. The key inclusion criteria are biopsy-proven NASH patients with the NAFLD activity score of 4 more with F1 to 3 fibrosis and a liver fat content of more than 8% -- greater than or equal to 8% on MRI-PDFF. You see 3 different doses of drug being studied versus placebo. The treatment duration is 36 weeks. Next slide. So this trial is being conducted in the U.S. only through 28 different clinical sites under the Summit Clinical Research Network. And despite COVID and all the issues we were having with that, the enrollment is exceeding expectations, and it's encouraging to see the excitement that's being built around PXL065 because of all the things we've already alluded to. So we're anxious to complete enrollment of this and get to the results as quickly as possible. And with that, I'll turn it back over, and thank you for your attention this morning.

Well, thank you very much, Stephen. Thank you for your presentation. I will now provide a short recap of our NASH programs and our upcoming milestones. We'll then move to the question and answer sessions. So as you can see in this slide, we are very pleased with the consistency of PXL770 preclinical results. And to see a nice translation from the technical data to efficacy results in humans as demonstrated in the Phase IIa trial that Ken covered earlier. For the Phase IIb program, we're aiming to confirm the results seen in the Phase IIa, namely the improvements seen in the high-risk type 2 diabetic population as well as to confirm the preclinical results pertaining to direct improvements of inflammation and fibrosis, which will be measured through storage. On Slide 52, we're also very pleased with the progress we are making with PXL065, as Stephen just mentioned. In our streamline of Phase II study, our goal is to show a reduction in liver fat content and to confirm, as we've seen preclinically, that PXL065 will recapitulate the proven histologic benefits seen with pioglitazone in multiple prior trials. We also expect to demonstrate a little to no weight gain or edema and to leverage the Phase II results to make a dose selection for the Phase III registration trial. On Slide 53. So as you can see, we continue to make significant progress in the development of our 2 program for NASH. We are committed to advancing them to the next stage of the key value inflection points, which will include the results from the PXL065 Phase II trial and results for the PXL770 Phase IIb program. Our cash runway is through 2022 with our current business plan, and it has the potential to bring us through many important milestones, including the approval and launch of Imeglimin in Japan for treatment of diabetes. In the near-term period, we also anticipate a potential milestone payment from Sumitomo of roughly EUR 14 million and then to begin to receive royalty payments. Imeglimin approval will also allow us the option to draw down the sub-tranche of the IPF loan for an additional EUR 13.5 million. With that, I'd like to thank you all for your attention and interest in Poxel progress towards delivering innovative therapies for treatment of NASH and other metabolic diseases. We are now available to take questions.

[Operator Instructions] Our first question [indiscernible] Lucy Codrington from Jefferies.

Just a couple. Just with regards to the Phase IIb trial for 770, just interested, and will you be stratifying via patients with type 2 diabetes versus those with prediabetes and what proportion are you aiming for each? And then secondly, just interested in the decision for it to be a 52-week endpoint. Could you not have -- what made you not choose to go for perhaps 26-week biopsy endpoint, given that we've seen other drugs have fibrosis efficacy at that time point? And then just on the cash runway, does that include the Phase IIb trial for 770? And is that both the trials that you've now discussed?

Thank you very much, Lucy, for your question. So maybe I can ask Pascale Fouqueray and as well as Steven maybe to answer the 2 first questions on the stratification for type 2 diabetes and prediabetes as well as the study duration. Pascale, do you want to just initiate the answer?

Yes. Thank you for the question. Yes, for sure, we will stratify the type 2 diabetes and prediabetes at randomization so as to have the same representation in the 3-arm in this study. Well, we haven't definitely defined the ratio, but it might be something like 30% to 70%, but this will be still discussed.

And Pascale, on the trial duration?

I'm not sure I got -- the trial duration. So between 36 and 52 months -- weeks, sorry. Was that the question? I'm not sure I got the question.

It was just the choice of going for a 52-week endpoint and not considering something about earlier.

Pascale, do you want to answer this? Why 52 weeks and not 36 weeks or whatever?

Well, we have seen in this early study that AMP kinase, the PXL770, might act more slowly than other compound. And if we want to get the full effect on the histology on the NASH resolution, we believe that 52 weeks will be the best duration and also we see the very classical duration, which is also recommended in the guidance.

Yes. This is Dr. Harrison. I'll just chime in there as well. I mean, to just [ pitstop ] what Pascale said, relative to the guidance that's coming out of the FDA, they would prefer longer-term Phase IIb trials. So I think given the mechanism of action, 52 weeks is a good trial link for this particular study.

Thank you, Stephen. And maybe, Lucy, I can answer on the cash runway. So as you know, our cash runway currently extends through 2022. So this has to be a trial plan. It's not included in the cash run rate. And so we are currently looking at different options there, including partnerships or further funding. As you know, there is a lot of very high level of interest from pharma and biotech for NASH. And so that's why we are currently in parallel of progressing the preparation of these studies because, of course, everything is in place today. We are also working on the different options.

Great. That's very helpful. And just to clarify, the likely 30% to 70% kind of rates stratification, would that be 70% type 2 diabetes?

Yes, absolutely, 70% actually. Yes, roughly 70% type 2 diabetes and 30% prediabetics, absolutely.

And we have another question from Andy Hsieh from William Blair.

Thanks for putting together this very informative event, and congratulations on those progress. So I have a question, really kind of high-level in terms of, I think, Dr. Cusi and Dr. Harrison had discussed during the event, which is patients with concurrence diabetes have a more rapid disease course. And I just want to kind of get your sense and help us put into context that one of the unknowns for NASH is really picking out which patient could potentially have a higher risk of disease progression in a more rapid pace versus someone who might have a more indolent disease. So just curious, by focusing on the union of these 2 diseases, NASH and diabetes, would you be able to potentially address this challenge, in your view?

Yes. Thank you very much, Andy, for your questions. I don't know whether Ken or Stephen, do you want to initiate really the answer.

Go ahead, Steve. Give it the first shot.

Okay. Yes. I mean -- so that's very insightful. For sure, we're learning about the drivers of fibrosis, about those particular patients that have rapid progression. We don't fully understand and know the rapid fibrosis progression population. There probably is a genetic component to this as well. Having said that, studying a diabetic population would give us a lot of insight into what's happening over time, particularly with a lot of our noninvasive biomarkers that we're getting along the way as part of the study. So I think, a, we're studying the right patient population that is in the at-risk group for rapid progression. And what we also know is that the more metabolic syndrome components that we can add to that, the higher the likelihood patients will progress as well. So one of the important things for a study like this is not to show -- not only to show what happens with liver histology, but also what happens in -- and specifically with liver histology, resolution of disease. Like what we're looking for in this trial, NASH resolution without worsening of fibrosis. But some of the other key important variables from a histology perspective or prevention of progression of disease. So I think there's a lot we can learn from the trial. Ken, do you have any other thoughts on that?

No. My only comment is that we really don't know exactly what these factors for progression or weight gain and maybe duration of diabetes, but the key thing here is that, in this case, I think the drugs that are going to have a greater [ bang ] for the buck in NASH. So those who treat not only NASH but can have favorable metabolic profile or help treat the diabetes. And I think in that sense, the structure fits well that profile.

Yes. And I'll just add to that one more. Again, getting at the fact that when we look at these people long term, and we have to -- while this design is targeting in its Phase IIb nature a very specific histopathologic outcome, that gets the drug into Phase III. And there in Phase III, we're going to be looking at outcome measures as part of a III/IV study design. And so the more we can hit on identifying potential benefits on CV outcomes, that will help inform the Phase III study design as well. So there are a lot of other important variables that could come out of this study besides just histology.

Got it. So another topic that's kind of related is really kind of the utility of liver enzymes status, like ALT and AST. So since the investment community, we don't really see patients. So could you share how you would use liver enzyme in a clinical setting? And how that would kind of guide your treatment choice? And maybe help us put into perspective the ALT reduction in the Phase IIa study. In your perspective, how clinically meaningful that is?

Stephen, yes, do you want to go ahead?

Yes. So when we look at noninvasive test, there are 3 ways to look at it. Number 1 is diagnosis of the at-risk NASH patient. Number 2 is measuring therapeutic efficacy while a patient is on trial or taking the drug, and number 3, measures of long-term outcome benefit. So where we have a growing body of literature for ALT is on the second context of use, that is measures of therapeutic efficacy. And we have 2 different values. We know that a drop of 10 unit per liter is predictive of histologic change and a drop of 17 unit per liter has actually been shown to correlate with improvement in the NAFLD activity score and other histopathologic benefits. So in a short trial duration of 12 weeks with PXL770 in type 2 diabetes, we saw almost a 15 unit per liter drop relative to placebo with drug. And remember this -- if you remember back to the baseline characteristics that Ken went through, the mean ALTs were somewhere around high 30s to low 40s. So if you were to extrapolate that particular data forward to a Phase IIb trial where we're including biopsy-proven NASH patients, typically, mean ALTs tend to be in the high 50s to high 60s range, somewhere in there. So we're actually -- and what we know with treatment is the higher a marker is at baseline, the bigger the runway it has to show improvement with treatment. So if we're seeing a 15 unit per liter drop in ALT with a mean ALT of around 40, if you jump that up to a mean ALT of around 60, which most Phase IIb trials have, then there's a potential opportunity to enhance that. And then also, we're treating the patients for 9 months longer as well. So what we're seeing so far is certainly early data. It's Phase IIa data. It's very typical of what we would see. But it's highly encouraging if you look at where this drug is relative to the other oral competitors that we showed previously.

Great. Yes. So one last thing. I guess this is probably a question for the hospital management, maybe Thomas. So in terms of kind of thinking forward, you mentioned that there could be 2 different doses that could be examined. So I'm just wondering, since the focus is now kind of switch to the diabetic population, is there kind of a change in the need to increase the dose that is kind of beyond the scope of your investigation of the Phase IIa study? Would you be able to look at a higher dose?

Yes. It's a good question, Andy, actually. And well, there are a couple of implications there, but we are still analyzing to really define the best dose going forward there. So as we said, there could be the potential for -- at a higher dose of an improved efficacy. However, on the other side, we know that there is a tendency to really have a saturation of the absorption at high dose there. So that's why potentially a higher dose could not lead to a significant -- significantly increased PK profile. And looking at this Phase IIa data, we know that, well, PK, as an influence, it's not the only thing. As you've heard, AMP kinase too now is an important component of the disease. As you've heard as well going into the diabetic patients, is also important there. The severity of the disease, also an important component. So we are really finalizing our assessments, whether an improved -- an increase dose could lead to an improved efficacy. On the other hand, the Phase IIa was performing with a capsule there, then we'll be able to move going forward to a tablet. One of the benefits is, of course, the utilization. But in our case, we also want to have a lower variability. And we believe the tablet could help really mitigate this. And so that's why we have some ongoing really experiments there that will help us to really define what the best dose going forward. You've seen that really the 500-milligram qd dose, as Ken and Stephen highlighted, is really triggering significant efficacy. And so the goal will be to be around these range there. I don't know whether Pascale or David, you want to add anything?

Yes. Maybe I could just put it at a slightly different way, Thomas. This is David. As you said, Thomas, we are exploring the potential to increase the dose, but there could be a limitation in terms of saturation. However, there's alternative approaches, including what you alluded to, Thomas, which is to change to a tablet formulation. So I think through one or both of those approaches based on the emerging data that we have today, I think we do have a pretty high level of confidence that going into Phase IIb, we can increase the net exposure to the molecule, at least modestly and probably clinically significantly. So it's clear from the Phase IIa, we really didn't reach a maximal plateau in terms of efficacy at the 500. So that's why the thinking is to potentially increase the exposure a little bit. And I think we have, through these 2 different approaches that we're pursuing, I think we're pretty confident we can do that as well without affecting the time line adversely relative to when we have delivery of drug supply.

I would just add and make a comment. This is Kenneth Cusi. Just a brief comment. I mean, the change in A1c is comparable to some diabetes drugs when you treat people with those levels of A1c. So I hope that in there now next trials and likely they will, that A1c will be slightly higher. Typically, it's 8% in diabetes trials when drugs are trying to get approved. So we can put it really into a real perspective. But the change that we have seen are pretty in line with the current drugs that or other oral agents, as I said metformin or DPP-4. So nothing to be too discouraged about there.