Theratechnologies Inc. (TH) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Theratechnologies KOL webinar on tesamorelin for the treatment of nonalcoholic steatohepatitis. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Theratechnologies' website following the conclusion of today's event. I'd now like to turn the call over to our host, Paul Lévesque, President and Chief Executive Officer of Theratechnologies. Paul, please go ahead.

Good afternoon. I would like to welcome everyone today for joining us. I believe we have a very good program for you highlighting the NASH disease area and Theratechnologies' Phase III development program evaluating tesamorelin for the treatment of NASH. The first part will be a panel discussion with leading NASH KOL, Dr. Rohit Loomba, Dr. Stephen Harrison and Dr. Steve Grinspoon followed by an audience Q&A session. Joining the panel for the Q&A sessions will be Christian Marsolais, Theratechnologies' Chief Medical Officer; and myself, Paul Lévesque, President and CEO. Before going any further, I would like to remind you that any business does carry a risk. Our business is not any different. So before making any investment decisions, please refer to the forward-looking information and Risk Factors sections of our corporate documents available at www.sedar.com and www.sec.gov. Now a few words on our company. Theratechnologies is a commercial-stage biopharmaceutical company with significant clinical development opportunities. Our commercial business recorded $66 million in sales in 2020 with our 2 approved medicines, EGRIFTA and Trogarzo. We have an oncology platform that is going through Phase I development at this time and was granted Fast Track designation back in January. But today, we will concentrate on our novel approach to decrease fat accumulation in the liver and our Phase III ready-to-go program evaluating tesamorelin in NASH. Without further ado, let me introduce our panel. Dr. Steve Grinspoon, Professor of Medicine at Harvard Medical School. Steve is also Chief of the metabolism unit at Mass General Hospital and the MGH Endowed Chair in Neuroendocrinology and Metabolism as well as director at the Nutrition Obesity Research Center at Harvard. Dr. Stephen Harrison. Stephen is a Visiting Professor of Hepatology at the Radcliffe Department of Medicine, University of Oxford, and he is also the Medical Director for the Pinnacle Clinical Research and the President of the Summit Clinical Research. He is internationally known for studies in hepatitis C and non-alcoholic fatty liver disease, and we are thrilled to have him joining us today. Finally, Dr. Loomba is Professor of Medicine and Director of Hepatology at University of California, San Diego. He is an internationally recognized thought leader in the management of nonalcoholic fatty liver disease and has established a thriving center for clinical research in NAFLD at UCSD. We are pleased and grateful to have Dr. Grinspoon, Harrison and Loomba with us today. I will now turn the event over to Dr. Loomba, who will moderate today's panel. Following the panel discussion, we will open to audience questions, which can be submitted via the webcast link. Dr. Loomba, over to you.

Thank you, Paul. Really delighted to be here talking about NASH therapeutic landscape. We have 2 great experts, as Paul mentioned, Dr. Grinspoon and Dr. Harrison. I'll start with Stephen, if you could provide us and walk us through the NASH natural history and state for those who do not know what the condition is, what's the prevalence in the United States. Why it is important?

Thank you, Rohit. It's an honor to be here today to help with this presentation. So I think that's a great kickoff question. Fatty liver disease is relatively ubiquitous in our country and around the world. It's the most common liver disease that exists today. Just looking at some of the more recent studies and meta-analysis done by [ Zoberio Nassi ] and his group, showed that about 1/4 of our population has fatty liver disease. A more recent prospective study we did in Texas showed that the prevalence of fatty liver by the gold standard MRI-PDFF amongst middle-aged Americans was really 37%. Sticking needles in the livers of those patients, we found that about 14% actually had NASH with about 5.9% having evidence of advanced liver disease in an otherwise completely asymptomatic cohort of patients. So I think the data is out there that this is a real problem. It is its own pandemic, if you will, speaking in the vernacular with COVID. So having said that, how aggressive is this disease? Well, I think you were intimately involved in publishing data showing approximately 1 stage of progression every 14 years if you have similar or isolated steatosis, if you have NASH, you can shorten that in half to around 1 stage every 7 years. If you look more broadly, we see that about 1/4 of patients will progress to cirrhosis over a lifetime. And then once you develop cirrhosis, the rate of progression to decompensation is around 2% to 2.5% per year. So it's a significant problem for sure. We're dealing with a population that is generally asymptomatic but we do have some clues as to who's likely to get NASH. That would be those patients with diabetes, obesity or metabolic syndrome are at increased risk for this disease. There's also a genetic component that links Hispanic ethnicity to NASH at an increased prevalence of disease as well. So it is a real problem and one that needs to be addressed quickly.

Thank you, Stephen. You mentioned a few points, and I'll just clarify for the purposes of the audience. NASH is the progressive form of fatty liver disease, as Dr. Harrison mentioned. And it's based upon specific features on histology. So not only the patient has fat in the liver, but as Stephen mentioned, progressive features such as lobular inflammation and ballooning on histology. And we need some degree of fibrosis to start thinking about that these patients are on a progressive journey to develop cirrhosis. So as you develop fibrotic disease, which can be staged from stage 0, 1, 2, 3 and 4 being cirrhosis. So thank you, Stephen, on that. What are the consequences of NASH and disease progression? Once people develop cirrhosis, are they at a higher risk of dying from cirrhosis due to liver disease?

That's another great question. They are. So as I mentioned in the introduction part of this, the rate of progression to decompensation in the setting of NASH cirrhosis is not fully delineated, but we think it's a little bit less than hepatitis C, but still relatively aggressive, a rate of around 2% to 2.5% per year. That is cumulative. An example would be, if you've been diagnosed with cirrhosis 10 years ago, your rate of decompensation today would be on the order of 25% to 30%. And that is additive every year. Interestingly, what we're finding when you look at how these patients present, most of these patients are presenting to the emergency room in a decompensated state, if you look at the claims data. So it is a problem that we need to get better at, at identifying patients before it's too late earlier on in the disease process, where we think we have some interventions that may actually be helpful.

This is really helpful, Stephen. One of the other features that we're seeing and everybody is seeing is there aren't a lot of therapeutic options that are available to our patients. And lifestyle intervention is something we utilize. Those who are overweight and obese, we try and ask them to lose wait and develop interventions related to that. Then there are the AASLD Practice Guidelines suggest using vitamin E, but there aren't any FDA-approved or EMA-approved therapies for NASH-related fibrosis. So if you could describe as to what has been the activity in this area and what are some of the mechanism of actions that are currently being studied to solve this major public health problem.

Thank you, Rohit. So first of all, you have to think of the liver, it's an organ that regenerates. It wants to live in a healthy state despite everything that's thrown at it. It gets injured and it repairs itself. And paradoxically, that can also be what leads it to trouble. So let me explain that. If you cut your skin, you get a scab, that scab heals and then it falls off and it looks normal. The same thing happens in the liver. You injure the liver, it forms a scab. We don't call it a scab, we call it scar tissue or fibrosis. Over time, if you don't take away what's causing that injury, scar tissue or scab can accumulate and lead to dysfunction of the hepatocytes. In the setting of NASH, what we see is that, that fat leads to what we call lipotoxicity. That lipotoxic fat leads to pro-inflammatory cytokines and mediators that ultimately stimulate the activation of stellate cells, which lay down the scar tissue that we call fibrosis. So in the setting of NASH, our goal is ultimately to get rid of what's causing the inflammatory milieu or the inciting event. So just like with hep C, if we can cure the C, we can suppress the B, treat the autoimmune. We want to help get rid of the fat. So there are 3 main ways you get fat in the liver. The main reason is by free fatty acid flux from sick adipocytes or insulin resistance at the peripheral adipocyte level. The second most common is de novo lipogenesis, and the third most common is nutritional components. So what we're aiming our targets at are actually multiple different mechanisms. Those that are showing a very nice benefit in early-stage trials are drugs that could prevent that free fatty acid flux from coming into the liver through the portal vein and reducing liver steatosis and therefore, being associated with the reduction in inflammation and scar tissue. So we have drugs that do that, and we're working on those currently. There are also medications that prevent the formation of fat in the liver through de novo lipogenesis. And then there are drugs that are targeting weight loss, such as the GLP-1 receptor agonist. So there's quite a bit of activity in the field. In fact, if you look at clinicaltrials.gov, you'll see many, many, many trials underway looking at over 15 different mechanisms of action. We do think ultimately that the treatment for this disease will be multimodal, multifactorial, multi-mechanism because there are just so many different ways that the liver can be injured in the setting of fatty liver that we think it will take a couple of different medicines in combination to get at the majority of this, just like we did with hepatitis C.

This is extremely helpful as you laid down the pathogenesis of disease and what sort of therapies are currently in play. Can you briefly describe as to how do we -- what are the end points that are needed to show for -- to develop a successful NASH therapy? We talked about NASH resolution, 1-stage improvement in fibrosis. If you could lay some light on that.

Sure. So just to be straightforward, the FDA has 2 approvable endpoints. We call those subpart H endpoints or conditional approvable endpoints. Those are histopathologic, meaning, number one, if you show resolution of NASH as defined by no evidence of balloon hepatocytes and minimal inflammation to no inflammation, that is NASH resolution. If you can show that, you can receive conditional approval for your drug. You still need to go on and follow those patients out to an outcome measure because we know the FDA approves claims, not drugs, and you have to show that your drug changes how a patient feels, functions or survives. Alternatively, another endpoint that you could hit is improvement in fibrosis by at least 1 stage with no worsening of NASH. Now why is that? Well, what we know is that fibrosis portends a worse prognosis. The more scar in your liver, the higher the likelihood of having a negative outcome. And we know clearly from multiple meta-analyses that have been done that, that tends to begin at Stage II fibrosis. So parenthetically, in our Phase III trials, we want to enroll patients with F2 or F3 fibrosis. There is a different pathway for cirrhosis and that involves enrolling well-compensated cirrhotic patients. But for the purposes of non-cirrhotic patients in Phase III, we're looking for enrollment in F2 and F3 patients. Now why NASH? Well, there is plenty of data out there now that shows that if we can improve the components of NASH, ballooning, inflammation that, that is linked to improvement in fibrosis. So the idea being if we can resolve NASH, that we will quiet down the stellate cells, that fibrosis would begin to regress and ultimately, that would lead to an improvement in outcome. So currently, that is the 2 ways that you could be approved as a drug in the U.S. to treat NASH today.

Thank you, Stephen. Now I'm going to ask a question that's -- I'll ask you to answer from a hepatologist's perspective. And then -- and maybe, Stephen -- Steve, you could talk about from an endocrinology perspective because really, we need to solve this problem together, and we may be missing some if we only have a liver-centric view. And the question is, why do we have so many clinical disappointments in terms of clinical drug development in NASH? And there have been several therapies that have been studied, but we haven't been really able to get any therapy at the goalpost where it could actually receive FDA or EMA approval. So Stephen, from a hepatologist's perspective, just wanted to get your insight and then I'll turn it over to Steve about his perspective. Maybe we were thinking it differently, there might be a different way of looking at it.

Well, that's the big question we're faced with today is how do we get a therapy across the finish line and have our first FDA-approved treatment. And I think it's important to realize that it's not just efficacy that matters, safety is also paramount here. So there was a drug that went forward, an FXR agonist, that was submitted for approval. And unfortunately, the regulators came back with the idea that the juice wasn't worth the squeeze with the data that they have been given. In other words, the concern over safety was high enough that it overcame any benefit of the drug, at least initially as it was submitted. And in that particular case, there was about 11% to 12% delta of drug over placebo as far as efficacy on fibrosis, but there were some concerns about safety that were still lingering. So the goalpost haven't moved as far as an approvable endpoint. However, what we see is that histopathology as read in its current semi-quantitative state by pathologists can be quite variable. If you take 1 set of slides and you have a pathologist A read it and then you have pathologist B read it, there's a chance you might get a different interpretation. And so what that leads to, at least in Phase II, is that potentially we're not enrolling enough patients to overcome that variability that might exist. The second thing to consider is that NASH is very heterogeneous and that what might work in 1 patient might not be the mechanism by which they develop NASH in a second patient, and therefore, your mechanism of action that you're studying might not be the right one for that patient B, that has NASH as well. And so we can get around that by combining different mechanisms of action or targeting mechanisms that are higher up in the pathogenesis of disease rather than targeting laser-focused, very specific mechanisms that we've looked at in the past, such as, for instance, ASK1 inhibition with selonsertib, it's very, very focused, or cenicriviroc, it's a CCR2/5 antagonist very, very focused. Alternatively, if we aim higher up in the spectrum, maybe where FXRs are, maybe where the THR betas are, maybe what we'll talk about today with tesamorelin that we're targeting pathways that are so high up in the pathway that you actually get pleiotropic mechanisms down field that can inhibit multiple mechanisms and ultimately lead to a broader efficacy in the patient population. So I think we're learning a lot about drug development in NASH, and there have been lots of shots on the goal. And while we haven't scored yet, we're actually moving the ball down the field and we're learning as we go. And I think we're getting where we need to be. But I'd love to hear Steve's perspective from an endocrine point of view.

Yes. Steve, if you could, are we thinking with some of these trials maybe deciding too late in terms of the targeting and maybe we need to think about upstream. So what are your thoughts?

Okay. Yes, I'd come at this from a very different perspective from both of you. For over 20 years now, we've been studying ectopic adipose tissue and we know that in obesity, in the conditions of liver disease, one of the hormonal systems that's most perturbed is the growth hormones system. For those of you who are not familiar with growth hormone, it is made in a pulsatile fashion. And tesamorelin is the hormone that stimulates growth hormone endogenously and can be given exogenously. So you have a situation in which ectopic adipose collects in tissues that are not supposed to have it such as the liver in a condition of low growth hormone. And so our focus has been, if you augment that through GHRH, which is a very natural physiological augmentation, and Stephen mentioned safety, this is a drug we got approved for lipodystrophy 10 years ago, and it's safe. So we've come at it from that perspective. Can we reduce fat by augmenting growth hormone access in patients with liver disease now after we've proven that we can reduce visceral fat? And the answer is yes. In fact, you can augment growth hormone through the use of tesamorelin. And as Stephen mentioned, not only do you get increased growth hormone, which itself oxidizes fat and decreases de novo lipogenesis, covering 2 things and lowering visceral fats at lower flux, it also increases IGF-1. And IGF-1 acts on those stellate cells that he mentioned and may have its own anti-fibrotic mechanisms. And in fact, in mouse studies, when you knock out the growth hormone receptor, you have up-regulation of inflammatory cells, lipid accumulation, decreased oxidation, all of which you can reverse, if you will, by augmenting growth hormone. So I think to follow up to what Stephen said, this really is treating a very specific physiological perturbation and it may be one of the most sort of targeted strategies, but also pleiotropic at the same time due to its multiple mechanisms of action. I think you're on mute, Rohit.

This is really helpful because we're trying to piece things together why there are certain failures and what could be potential ways of achieving success in this area. Just wanted to summarize some of the thoughts that we've heard from both the speakers here. One is the idea that for a drug to be approved through the subpart H approval NASH resolution, where it's defined as that you had NASH and Stage II fibrosis or higher at the beginning, you had improvement in NASH with achievement of NASH resolution without worsening of fibrosis, you don't see any ballooning and you can have a little bit of lobular inflammation 01. And then some patients could have 1-stage improvement in fibrosis without worsening of NASH. So if you hit either of these endpoints and they're statistically and clinically meaningful, then you have a shot at the gold and still you will continue to monitor patients for long-term clinical outcomes and long-term clinical benefits. With that idea in mind, I wanted to just get your opinion, Stephen, about is the field moving towards combination therapy. And as we move towards combination therapy, what sort of approaches are we thinking about?

I mean it's becoming relatively obvious that monotherapy is going to be limited in a broad scope to treat this disease. Some of our best Phase IIs that we've seen to date are hitting at best 50% NASH resolution, those that are targeting fibrosis somewhere lower than that in the 20% range, and then combination of NASH resolution and fibrosis improvement, the best we've seen relative to placebo are in the 15% to 20% range. So while we're seeing some positive traction on drug effect in this disease, it is becoming apparent, as we might expect, that we need to get combination therapy underway. And ultimately, I think like quite a few different diseases, it's going to take combination therapy to achieve the majority of patients achieving NASH resolution or fibrosis improvement. To that end, there are different ways of approaching it. There are a myriad of drugs in development, as we mentioned already from injectables to orals. And I think it's important to realize again that these patients are generally asymptomatic, when they're diagnosed. We're working significantly on developing noninvasive tests to identify these patients at an earlier stage. And so the hope is that we can target these people long before they develop cirrhosis with this therapy. So again, the hope is that we have therapies that are incredibly effective not only on fat resolution, but on inflammation and the liver cell injury we call ballooning and fibrosis and also to do it in a way that patients can take this therapy over the long term. This isn't short-term 12-week therapy. This -- the idea is that treating NASH is something that's going to be in the realm of antihypertensives or anti-hyperlipidemic therapy or diabetes management, we're in for the long haul. So the therapies also need to be well tolerated in addition to being effective.

Thank you, Stephen. I want to go back to a point that, Steve, you brought up in terms of how growth hormone might be important in NASH progression. And one of the things you said was that you have effective growth hormone on hepatocytes and also on macrophages or Kupffer cells in the liver and also stellate cells. So these are 3 important cell classes that are involved in pathogenesis of steatohepatitis and also fibrosis progression. So thinking about that, how do you think we could utilize this pleiotropic mechanism of action? And briefly, if you can summarize, you've shown that using tesa as a proof of concept, you could produce liver fats significantly on MRI, portend nasty fat traction and start showing improvements. So if you could briefly discuss that aspect and what sort of improvements and degree of improvement that you've shown in patients related to liver fat content reduction.

Yes. Well, I think you're right. And I think getting back to your other question, I think tesamorelin is a multimodal therapy, to be honest with you. I think you're giving growth hormone and IGF at the same time, it's almost, and IGF reduces glucose and reduces fibrosis. But I think that we have done proof-of-concept studies to show very significant reductions in liver fat in the order of 35%, 40% compared to placebo, both in HIV and in other populations, we've shown reductions in visceral fat as well. And I think that what we've also shown is that you get reductions in inflammatory markers like CRP. But most importantly, we've taken the time to do proteomics and transcriptomics and look at gene cell enrichment in liver biopsy tissue specimens. And I would refer you back to a paper in JCI Insight in which we looked very carefully at multiple pathways, inflammatory, oxidative, fibrotic and the effects were really positive in direction you would want, reducing oxidation -- sorry, increasing oxidation but reducing inflammation and reducing lipid synthesis and fibrotic pathway. So this is really a very interesting set of results that are mirror -- is mirrored in the clinical observations of reductions in CRP. And then we've also done proteomic studies to look at circulating cytokines and inflammatory factors such as factors like CSF1 that actually act on the very Kupffer cells that you're mentioning to reduce their activation. So I think this is really a paradigmatic effect across multiple pathways of augmenting growth hormone, reducing the lipid uptake, decrease -- increasing oxidation, decreasing inflammation and also decreasing fibrosis. And I think through the reduction of the fat and the reduction of the fibrosis and inflammation, you will likely have a very successful strategy to multimodally affect this disease.

So one more point I wanted to make, so you improve liver fat reductions, but there's no change in body weight, right, with tesamorelin?

Yes. So this is a really different kind of strategy. So tesamorelin selectively reduces visceral fat, which is absolutely fascinating. If you want to take a lesson back in biology, we all have fat in different places. And the FDA only sort of looks at BMI, the gross amount of weight. But in fact, you have good depots and bad depots. And visceral fat is a very bad depot. Subcutaneous fat is an excellent depot. It's associated with health. It's a sink that takes up fat in healthy ways. And so by selectively reducing visceral fat, you actually improve the cardiometabolic health of patients, and you reduce that very depot that, as Stephen mentioned, that fluxes to the liver. So you're leaving alone the subcutaneous fat, which is associated with positive health and reducing the visceral component and the liver component at the same time. Very interesting.

So Stephen talked about the combination therapy approaches. So we've got therapies that caused or improved NASH resolution mediated by weight loss such as GLP-1 and others, but there are no GLP-1 receptors in the liver. So potentially, that's one option for a combination approach, if you were to think about where you could use therapies that induce weight loss with something like tesa. Stephen, do you want to briefly discuss your thoughts on how this may play out as potential combination, which just might evolve?

Well, I just want to put some what Dr. Grinspoon alluded to, and that is this idea of visceral fat and the study that he published, I think it was New England Journal, wasn't Steve, a couple of years back on visceral fat in that -- in the HIV population with tesamorelin. And just to kind of add to that, we recently published this year in Liver International with Amalia Gastaldelli's and Ken Cusi's work with pioglitazone, again, showing that visceral fat accumulation is strongly associated to liver fat, ballooning, lobular inflammation and that the ability to modulate that actually goes a long way toward ameliorating the disease. So I think, again, you're hitting at a major driver of potent toxic fat that is intimately involved with glucose and lipid metabolism, and where you're able to target that, that actually has a unique mechanism relative to some of the other drugs that are in development. So I think it actually sets itself up very nicely as a potential backbone therapy if, in fact, the studies with tesamorelin show that it actually does well on NASH histopathology. I think it lends itself well to combination therapy.

Yes. And I think this is extremely helpful as we are trying to merge 2 different ideologies from endocrine perspective and liver perspective. Some of the data that you published, Steve, on MRI-based and MR spectroscopy-based liver fat reductions, we and others actually have shown that if you had 30% or greater relative reduction in liver fat content, it is associated with 7x higher odds of 2-point improvement in NAFLD activity score and 5x higher odds of NASH resolution. So thinking about these data in patients with HIV that you've previously shown, maybe if you could briefly summarize that and then I'll ask Stephen about how that relates to potentially its application in patients with NASH. So Steve, if you could briefly tell.

Sure. So we published in The Lancet HIV that in our -- in one of the trials in which we specifically looked among NAFLD patients with HIV, that 60% had more than that 30% reduction in liver fat that you've so elegantly shown and Stephen as well that is associated with morbidity. So 60% versus 15%. So that's right up there with the best of therapies in terms of that. Now we have done liver biopsies, as I mentioned, not only have we done transcriptomics, but we've also done histological analyses. And we've shown that tesamorelin and these proof-of-concept studies has prevented the progression of fibrosis. It also reduced markers of inflammation, as I mentioned. And it did not have a specific effect to reduce NASH because the studies were underpowered. But among those who got it, there was a relative decrease with respect to how much the liver fat went down versus the placebo group. So I think the signal is there, and it was clearly elucidated with the transcriptomic approach. As mentioned, we've also looked at this therapy in non-HIV patients. And the almost identical reductions in visceral fat we're seeing in the same selectivity with respect to subcutaneous fat. So I don't think there's anything special about the HIV patients. We started there because our research interests were there, and they're a very interesting model of selective adipose, atopic adipose and visceral fat that has a lot of NAFL, but I think it really just allowed us to accelerate and expedite our studies to show that this is a very powerful therapeutic.

Great. Stephen, if you can mention what is the relevance of that HIV data, liver fat reductions based upon the totality of data we have in non-HIV, nonalcoholic steatohepatitis, what are your thoughts in terms of how that applies to garden-variety NASH with Stage II fibrosis or higher?

Yes. I mean, I think Steve said it well. I mean what we're -- there's nothing necessarily magically different about an HIV patient with fatty liver than there is just a non-HIV patient with fatty liver disease. You're moving visceral fat, you're moving visceral fat. You're moving hepatic fat, I think that you're going to move hepatic fat in a NASH non-HIV patient as well. So I think that translates probably fine, the reduction in visceral fat, the reduction in liver fat. So really, the question is going to come down to how does that translate into underlying histopathology? And of course, you pioneered the work in that regard, looking at the probability of achieving not only a 2-point improvement in the NAFLD activity score, but also NASH resolution, as you alluded to. And ultimately, if you're able to get even more liver fat content reduction, there is a possibility that you might also be able to link that to fibrosis improvement, not quite as strong a data as you have in NASH resolution, but certainly, there is some data with resmetirom, for instance, where you've been able to link a degree of liver fat content reduction with not only NASH resolution but also fibrosis improvement. And so I think this -- as Steve mentioned, the reductions that we're seeing in the HIV population, 60% achieving a 30% relative reduction, I think bode well for what we're likely to see in a NASH population. And I think, again, setting itself up nicely for the study to show what we're going to see in histopathology but also potentially with combination agents as well that target different mechanisms that could augment the effects of tesamorelin in this disease.

Thank you, Stephen. One of the things that we as liver doctors feel is critical for any therapy with NASH. And I think the FDA and the regulators are keenly looking at that is the safety of a drug. And so I briefly want to touch on that. And Steve, can you talk about how that is important from an endocrine perspective and some of the data that tesa has been clinically utilized in patients with HIV from a long time and overall, where the data is on safety of the drug?

Yes. That's a really important point. And so based on the studies in New England Journal and other studies, tesa was approved to reduce visceral fat in HIV lipodystrophy in 2010, I believe. And so since that time, it's been an FDA-approved drug, and it's done very well. I'm not aware of major safety reports. It's been -- now withstood the test of time. The reason it has, by the way, is it's not growth hormone. If you want to run away from this sale, we'll just give growth hormone, that's not the right message to take away from this discussion because growth hormone has a very narrow toxic-to-therapeutic ratio, you can raise glucose. But when you augment growth hormone pulsatility with the use of tesamorelin, there's a feedback loop that's intact and you really get physiological increases. It's actually striking that you can achieve that 60% with such a modest increase in IGF-1 because of the pulsatile nature. And that means that you have less hyperglycemia, you have really little to speak of it, if any, and you haven't had major effects of excess growth hormone. So I think it is a very safe drug. And I think it's probably harder to prove safety in HIV population because they are on all different kind of medicines and have other problems, and it's been safe in that population. I cannot imagine it would not be safe in a less sick population, to be honest with you, because of its very nature, the physiological nature of it. And I think that's where we stand with that. At the moment, it's really been proven very safe. One of the thing is the FDA has asked for registries and there's nothing that's scrapped from those. And I think Theratech has even done studies in diabetics and shown that it did not augment glucose levels or diabetic retinopathy in diabetics, who will be the most nervous about and that was okay, too. So I think we tried to push the limits on this and haven't gotten the big safety signal yet.

Great. I'm going to switch gears a little bit and then come back to you for a comment. I will be getting Christian's input on -- just walk us through the current Phase III development program and trial design for tesa for NASH.

Thank you, Rohit. As you know, we did this design with the help of you and Stephen and many interaction also with the FDA and the EMA then. We think that we have a very good design. This is a large Phase III trial that the primary endpoint is on clinical events that are related to liver disease. But there's -- this large trial is divided in 2 parts. The first part will be focused on the histopathology results, and that will include a total of about 1,100 patients and it will be randomized at a 1:1 ratio. And that's something which is important because we want to ensure that we have enough placebo patients to decrease the background noise that we could see potentially on the reading of the biopsy. The primary end point for that study will be the proportion of subjects achieving NASH resolution without worsening of liver fibrosis at 18 months. And there are 2 things there. As it was discussed before by Dr. Harrison and you, the FDA is allowing this as a primary end point, normalize or resolution of NASH without increasing in fibrosis. And the other thing is the 18 months. The clinical trials that have been done so far included the 12-month period, but we're pretty much convinced that with the 18 months, that will be a further effect on liver fat accumulation. And after that, that first part should give us an accelerated approval by the FDA and the EMA, and we will continue with the clinical endpoint. And overall, and please, you can print that or the one listening print a copy of the design, but that's really the key message about the design of the study.

Great. Thank you so much, Christian. This is extremely helpful. I do like the way we've put together this study design. We've got a Part 1, where we're looking at 1:1 randomization. This gives us pretty strong power to detect a clinically meaningful difference. Once that's achieved, then we go on for long-term clinical outcomes, as Stephen earlier mentioned, where we will be looking at all-cause mortality, liver-related mortality, need for liver transplantation, MELD score of 15 or higher, progression to cirrhosis and complications of cirrhosis that are clinically important. We'll also be looking at exploratory end points such as MACE because, as Steve mentioned, there might be cardiovascular potential benefits that we may see because of reduction in visceral fat. So we would be interested in that as well in terms of additional benefits. You might see a long-term follow-up. And of course, patient-reported outcomes would be important, we will be looking at that. Looking at the -- this trial design, I just want to get a final thoughts from first, Steve, and then Stephen. Steve, what would the tesa potential benefit fit into the paradigm of treatment of NASH from your perspective?

Yes. I think 18 months is a nice long time frame, and I think will show a very, very nice reduction in liver fat. I think the study will be well powered enough to pick up on the signal that we got from the genomics and proteomic studies to clearly reduce NAS score. And as I mentioned, the higher your NAS score was in our prior studies, the more it went down in the treatment, but not the placebo. So I think we'll pick that up. And I suspect that we'll also prevent fibrosis and I think even reduce fibrosis in those with the most significant fibrosis. So I suspect that we might clearly improve NAS through our effects on liver fat and potentially prevent fibrosis or reduce fibrosis as well without aggravating NAS. So I'm very hopeful that the physiology will allow us to hit primary and secondary end points in a well-powered study that's conducted for an adequate point of -- period of time with well-defined patients and end points.

Thank you, Steve. Stephen?

Yes, I would agree. Again, I think this is a nice Phase III trial design. I think it derisks where you need to. You're getting a length of therapy that in the setting of a pleiotropic mechanism that not only attacks visceral fat but also hepatic fat and potentially has some direct stellate cell activation. So I agree with Stephen, looking at NASH resolution would be the endpoint of choice. But you may wind up hitting both. You may hit NASH resolution and fibrosis improvement because, again, your pleiotropic end mechanism, you're not just relying on reduction of liver fat to improve inflammation and then vicariously have an effect on stellate cells. I think there's an option to also have some direct effects as you alluded to already. So I think the sample size is of adequate duration. And as mentioned earlier, you're going to the FDA with a safety profile already intact. You're just trying to get safety data in this specific NASH population. So I think you already have one leg up with the agency and that you're assessing a already FDA-approved medicine for a new indication. And so there's a sense of a large body of safety data that's already collected. So we just need to focus on efficacy in this population. And I think it's set up nicely to show that.

Thank you, Steve and Stephen, for this thoughtful discussion. Now I'll move to Paul with the final question on why should Theratechnologies be confident that their Phase III program is strong in terms of reaching and obtaining their goals in terms of clinical and regulatory approval.

Well, thank you, Dr. Loomba, for the question. But I've heard quite a few reasons to believe that the mission is possible, quite frankly. But let me summarize maybe in 3 points. The first 1 is the safety, how many drugs are facing a Phase III clinical program? With that sort of safety record, it's got to be a clear advantage that we have going forward. The second one is this mode of action. We said that tesamorelin demonstrate an upstream mechanism of action, benefits of growth hormone but also in IGF-1, this is dual mode of action, so to speak. The liver fat reduction was already directionally pretty good at 12 months. At 18 months, may potentially be better. So that's really, really good. And the impact that has been demonstrated by the studies conducted on inflammation marker, that's compelling stuff. If you want to restore healthy cells, inflammation is something that you need to obviously take care of. And the last point is the learnings. There has been a lot of learning floating around in that space. And quite frankly, we've taken time to actually learn and ask good questions to specialists, but also from companies that have failed. And we've learned from them, and we have actually integrated those learnings into the protocol. So I think that we had less of a chance to actually trip over the complexity of biopsy reading, for instance. There's a way to have it right. There's a way to have it consistent. And I think the learnings in our protocols will actually be a big plus moving forward. Christian, anything that you would like to add?

Well, maybe no, because a lot of points were already covered to some extent. But the -- I'm in agreement with what was said. The other thing, I've been working with this product for more than 14 years now, then all of the results that we have seen so far are always very consistent from the first Phase III trial for lipohypertrophy to the second Phase III trial to the study that were conducted by Dr. Grinspoon in obese patient general population as well as in HIV NASH patient population. Then based on the efficacy results and the most recent compelling results from Dr. Grinspoon on genotyping and proteomics, I'm quite confident that we can show positive results in NASH and also based on the good safety profile that we have with the drug.

Thank you, Christian. Now I give the call back to Paul for final remarks and Q&A after that. Thank you so much.

No, we're going to do the Q&A right away. It's now time to answer your questions. I think, John, can you actually read out the questions coming from the audience and the panel, Christian and I will be happy to answer.

[Operator Instructions] First question reads as follows: do any combinations with tesamorelin make more intuitive sense than others?

Dr. Grinspoon, do you want to go ahead? You actually made a good point that tesa by itself could actually be a sort of combination therapy. But could you answer the question, please?

Yes. As I said, I think that there is very minimal risk of increased glucose because it's not growth hormone and because it increases IGF-1, which actually decreases glucose. I suppose that if a trial show that it did tickle glucose, then you could add a GLP agonist and that might make a nice combination. But I don't think we need to necessarily worry about that in advance of the trial, but it might be something that could be considered subsequently based on the data. So I think that might be one that one could consider sequentially if there was any kind of issue with glucose. We've not seen that so far, but we will be testing it in over 1,000 people, and we'll know for sure.

Dr. Harrison, would you like to complement?

Yes. I think one of the things we haven't talked a lot about today is the extra hepatic benefits. And we know that these patients die of cardiovascular disease, they're at risk of extrahepatic malignancy. There is some good data on growth hormone, receptor hormone agonism, looking at reductions potentially in various cancers. I think that's exciting. But just focusing, as Rohit mentioned, on MACE events, is there a combination therapy that would provide not only some synergistic histopathology along with extra hepatic benefits? You also want to make sure the drug is safe. You also want to make sure it's well tolerated because you're giving this for the long run. So if you have tesamorelin that's well tolerated, you don't want to necessarily tie it up with a drug that's not well tolerated because then the patient potentially would quit taking both. So I think in that regard, drugs that would make sense to me would be thyroid hormone receptor beta agonist. It's oral. It's generally well tolerated. It gives you additional lipid benefits. There are also other drugs such as structurally engineered fatty acids that have shown at least in early phase data or interim analysis data benefits on glycemic control as well as lipids. And so I think there are options out there to combine with. Initially, I think it would be important to see how this drug behaves in monotherapy. What kind of benefit are we getting histopathologically? Are we getting both NASH resolution and fibrosis improvement? And are there any extra hepatic benefits as alluded to with reduction of visceral fat that would make this kind of a backbone drug, if you will, and then we would potentially add something to that?

I couldn't agree more. I would proceed with the monotherapy because I think you have a very high likelihood of getting multiple end points. But then you can see and you could add where you might to augment it.

Thank you. John, next question?

Yes, next question reads as follows: the Phase III study includes a futility analysis. Are there any specific reasons to include this?

Christian, do you want to answer that question?

Yes, absolutely. We completed the program or a Phase II program in the HIV patient population. And we wanted to ensure to include the futility analysis to make sure that the study was directionally correct. Therefore, after approximately half of the patients enrolled in the Part 1 of the study, there will be an analysis to see if we should continue to complete the trial. And this is a way to derisk our Phase III program, ensuring that we're going in the right direction.

Thank you. John, next question?

Yes. Next question reads as follows: the clean safety of EGRIFTA was discussed. From a competitive perspective, can the KOLs discuss if some of the later-stage NASH candidates have a comparable safety profile to EGRIFTA?

Who wants to take that one? Dr. Grinspoon, Dr. Loomba, do you want to go ahead?

Sure. I think this is really important. I think what the question is relating to is probably semaglutide. That semaglutide has been utilized and it's got safety benefits there. And I think we've previously answered the question. I think sema improves NASH and NASH resolution related to weight loss. And here, we are getting benefits where we can target, as Steve mentioned very nicely, hepatocytes, Kupffer cells and stellate cells. So you can get benefits from semaglutide with weight loss improvements and glycemic control. But here, you can get liver-specific benefits with tesa. So in fact, both of them could be working in concert synergistically to potentially improve things. So I don't think that they're mutually exclusive, and it's good to have maybe more than one drug that's potentially clinically safe in this patient population.

Thank you. John, next question.

Yes. Next question reads as follows: it seems everybody in the NASH space expects a move away from biopsy eventually. Best guesses from the KOLs on when the regulators will make the switch from biopsy to NITs? It should be a positive for the whole NASH sector, but do you see any particular significances for Theratechnologies?

Absolutely. I think one of the things that we are working together, or Stephen and I, is pushing towards a noninvasive end points. And another way to look at that is solving that puzzle. We can look at a pharmacodynamic response that is linked to treatment response. So you can imagine right now, if we base just on MR-based modalities and even combining FAST or using FibroScan-AST and CAP or using NAS score, there are multiple ways we can identify patients who need to be treated who have NASH Stage II fibrosis or higher. You can even get a 95% positive predictive value, say with MR elastography and WEB Flow. So we can identify those who need to be treated. And then in terms of treatment response with certain drugs, you can see improvements in MRI-PDFF. So at 3 months or 6 months or a year, you could repeat that test and say, these patients are improving. These could be continued on therapy. And those that are not improving potentially could require additional therapies or might be beneficial for combination approaches. That's, I think, what is going to happen first. Eventually, we will replace the need for subpart H biopsy-based endpoint and remove that and change that with noninvasive biomarkers that might be a combination of serum plus imaging markers. For example, we might use a combination of say MRE, corrected T1, MRI-PDFF and maybe other serum-based markers and show that they could track improvement in survival delta change or worsening of survival delta change convincingly and potentially even better than the biopsy.

And I'll just add. I think you did a great job of mentioning a lot of NITs in development. I would just say very simply, when we can link a noninvasive test to an outcome measure and we can show that changes with therapy, we move to the NIT. We're not going to have to go through necessarily a liver biopsy paradigm to get there. I think it happens first with cirrhotics, and then it comes back to the F2/3s. But within a time line, I think we're within probably 3 to 4 years of having that NIT replace a liver biopsy from my perspective.

Yes. I would only add that there are candidate biomarkers, specifically for tesamorelin that we've shown in preliminary studies, which will obviously be assessed along in association with changes in liver biopsy to validate those. So I think we may be able to actually accelerate this process even by doing a Phase III trial to understand if there's noninvasive markers which we can use to predict the tesamorelin response.

And I'll read the next question. What have we learned from previous failed trials or other approaches in NASH? What might be done differently in a clinical study?

Dr. Loomba, do you want to start?

Yes, I think what we've learned from previous trials is that you need to have a well-powered study. And that's exactly what we've planned here. And you also want to be pragmatic. And so you want to cover the downside and that's why there's a futility analysis. So all those 2 things that have been put together in the study and then a robust end point, long enough duration. So those have been put together in this program in terms of assessing. And then at the end of the day, we still want to look at the data. We want to look at the data before we think that a particular drug is for use in patients with biopsy-proven NASH Stage II fibrosis or higher. So I think the plan is correct, it's laid down nicely and it has all the checkpoints that are needed to show robustly that you're moving in the right direction.

Great. We have time for one more question. The question reads as follows: this tesamorelin's MOA just working on liver fat reduction or liver inflammation and fibrosis?

Dr. Grinspoon, do you want to tackle this one?

It's certainly working on liver fat, for sure. I think additionally, it's working on inflammation and fibrosis. And I think that's based on the genomic and proteomic and other clinical data. So my guess is that it's more than just a reduction in liver fat and downstream improvement in inflammation and fibrosis, that there may be direct effects to modify inflammation and fibrosis. And I think a large well-powered study will be able to allow us to answer that question directly.

Great. Well, that concludes the question-and-answer portion of our program. I'd like to thank the audience for the questions and I now turn over -- turn it over to Paul for closing remarks.

Thank you, John. And before concluding, I would like to thank our panel today, Dr. Loomba, Dr. Grinspoon, Dr. Harrison. Thank you for your enthusiasm for tesamorelin. And I would certainly hope that in a few years, you have medicines that could be used to tackle this very significant disease. In summary, we've built a ready-to-proceed Phase III clinical program which has the support of leading experts in the disease space. We also believe our trial design integrates the latest learnings from agencies as well as from companies that have failed and shared their knowledge with us. Although our trial is ready to go, we have decided to pause and seek a partner who would want to team up at this time with additional capabilities and resources. While any Phase III program carries risk, we believe the body of evidence with tesamorelin will prove to be sufficient to meet primary end points, thus obtaining approval. I want to thank you for watching today, and please reach out. Should you have any additional questions, we'll be pleased to entertain a conversation with you. Thanks again.

Thank you.

Thank you.