Veru Inc. (VERU) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Veru Inc.'s Investors Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Mr. Sam Fisch, Veru Inc.'s Executive Director, Investor Relations and Corporate Communications. Please go ahead.

Good morning. The statements made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, statements of the company's plans, objectives, expectations or intentions regarding its business, operations, regulatory interactions, finances and development and product portfolio. Such forward-looking statements are subject to known and unknown risks and uncertainties and our actual results may differ significantly from those projected, suggested or included in any forward-looking statements. Risks that may cause actual results or developments to differ materially are contained in our 10-Q and 10-K SEC filings as well as in our press releases from time to time. I would now like to turn the conference call over to Dr. Mitchell Steiner, Veru Inc's. Chairman, CEO and President.

Good morning. With me on this morning's call are Dr. Gary Barnette, our Chief Scientific Officer; Michele Greco, Chief Financial Officer and Chief Administrative Officer; Michael Purvis, our General Counsel and Executive Vice President of Corporate Strategy; and Sam Fisch, Executive Director of Investor Relations and Corporate Communications. Thank you for joining our Phase IIb QUALITY clinical trial top line results call. Veru is a late clinical stage biopharmaceutical company focused on developing innovative medicines for high-quality weight loss, oncology and acute respiratory distress syndrome. This morning, we announced positive top line results for our Phase IIb QUALITY clinical study. About 2 to 3 years ago, GLP-1 receptor agonist came on the scene as a very effective drug for weight reduction. About 18 months ago, new concerns were raised about the nonselective tissue composition and the total weight loss caused by these GLP-1 receptor agonist. Based on a step 1 semaglutide study, 40% of the total weight that was lost at 68 weeks was discovered to be lean mass loss. This is particularly worrisome for older patients who are overweight or have obesity and who may already have low muscle reserves. As a call to action a little more than a year ago, and based on our extensive clinical experience with enobosarm in improving body composition in older patients with age-related and cancer-related muscle loss conditions, Veru redirected the development of enobosarm, an oral, selective androgen receptor modulator as a treatment to preserve and to augment fat loss in older patients who are receiving a GLP-1 receptor agonist for weight reduction in the Phase IIb QUALITY clinical study. We have now completed the QUALITY study. It's also timely that the FDA has just released this month the new FDA guidance for industry entitled Obesity and Overweight: Developing Drugs and Biological Products for Weight Reduction. This updated FDA guidance plus our own previous 2 interactions with FDA provide clarity on how we view the development program for enobosarm as an adjunctive therapy to improve body composition by preserving muscle and augmenting fat loss in older patients who are overweight or have obesity receiving a GLP-1 receptor agonist for weight reduction. In this new guidance, FDA defines obesity as a chronic disease characterized by excess adiposity or body fat. So again, excess adiposity or body fat. They also provide their current thinking on the definition of weight reduction. FDA has stated "weight reduction is defined here in as a long-term reduction in excess adiposity body fat with a goal of reduced morbidity and mortality." FDA also has further advice in its new guidance "to ensure that the drug-induced or biologic-induced weight reduction is caused primarily by reduction in fat content and not lean body mass, a representative sample trial subjects should have a baseline and follow-up measurement of body composition by DXA or a suitable alternative." Conclusion, that we believe is to be drawn by this FDA guidance is that there appears a company's weight reduction program is disadvantaged if FDA's analysis by -- in FDA's analysis, if its drug has adverse effects on body composition, notably loss of lean mass. To avoid confusion between the regulatory development pathway for weight reduction drugs and for drugs to improve body composition, FDA states that sponsors seeking an efficacy claim related to changes in body composition we need to consult the FDA early in development to align on the clinical condition being treated, trial design, including appropriate choice of population and selection of endpoints that measure how patient feels, functions or survives. So the indication that we're focusing on older patients who have obesity or overweight, already may have low muscle reserves were receiving a GLP-1 receptor agonist for weight loss and we can benefit from a drug to improve body composition by preserving muscle and physical function while enhancing the loss of adiposity or body fat. We believe the market for this indication is quite large. Based on Medicare statistics, 22% of the U.S. population is over 60 years of age. And according to the CDC, 42% of these old adults have obesity in the United States and could benefit from weight loss medicine. Up to 34% of patients with obesity over the age of 60 have sarcopenic obesity, which means sarcopenia being age-related muscle loss. This large subpopulation of sarcopenic obese patients, especially at risk when taken GLP-1 receptor agonist drugs for weight reduction as they may already have critically low amounts of muscle due to age-related muscle loss. Because of the magnitude and speed of muscle loss while on a GLP-1 receptor agonist therapy for weight loss, GLP receptor agonist drugs may accelerate the development of frailty and muscle weakness in elderly patients who have obesity or overweight. Fortunately, muscle weakness may lead to poor balance decreased gate speed, mobility, disability, function limitations, loss of independence at high risk of falls and fractures. In fact, the safety section of the package insert for WEGOVY has been updated based on the recently reported SELECT cardiovascular outcomes clinical trial, which now highlights a 400% increase in pelvic and hip fractures that were observed in patients greater than the age of 75, receiving WEGOVY compared to placebo. That's 2.4% versus 0.6%. Fractures of the hip and pelvis typically occur because of falls, which increase with decreased muscle mass. Based on this updated FDA guidance, our interactions -- and our interactions with the FDA, enobosarm is being developed as a body composition drug to reserve lean body mass, augment loss of fat in older patients who have obesity or overweight and are receiving a GLP-1 receptor agonist containing drug for chronic weight management. Now we met with the FDA in designing our Phase IIb quality clinical trial to gain agreement on a regulatory path for potential marketing approval for enobosarm to treat changes in body composition. Primary endpoint, if lean body mass measured by DXA was acceptable for a Phase [indiscernible] enobosarm preserves lean mass and patients receiving GLP-1 receptor agonist for weight reduction, than a measurement of physical function by stair climb test power may be an acceptable performance study endpoint that captures the clinical benefit or the meaningfulness of muscle preservation. Today, we are pleased to announce the positive top line clinical results of the Phase IIb QUALITY clinical trial. Phase IIb QUALITY clinical trial is a multicenter, double-blind, placebo-controlled, randomized, dose-finding study to evaluate the safety and efficacy of enobosarm, 3 milligrams and enobosarm, 6 milligrams compared to placebo in 168 older patients, greater than 60 years of age, who are overweight or have obesity and who are receiving WEGOVY, semaglutide, a GLP1-receptor agonist for weight reduction. Purpose of the Phase IIb clinical trial is to select the optimal dose of enobosarm in combination with the GLP-1 receptor agonist that best preserves muscle and augments reduction in fat mass with better body composition. This is with an endpoint of 16 weeks of treatment. The primary endpoint for the Phase IIb clinical trial is a change in total lean body mass from baseline to 16 weeks and key secondary endpoints are the change from baseline to 16 weeks in total fat mass, total body weight and physical function is measured by stair climb tests. Now turning to these exciting top line results for the Phase IIb QUALITY [indiscernible]. Let's talk about the baseline characteristics. 14 clinical sites in the United States participated in the study. 168 patients were randomized to oral daily doses of enobosarm 3 milligrams, and enobosarm 6 milligrams of placebo. At the time they initiate WEGOVY or semaglutide for weight reduction. The study population baseline characteristics include 31% males and 69% females for age 80% between 60 and 70 years of age, 13% between 71 and 75 years of age and 7% greater than 75 years of age. For BMI, 40% was less than 30, 46% between 30 and 34.9, and 14% for greater than 35. For race, 48% were nonwhite and 52%, white. The dropout rates for the clinical study was 13%. In the press release, we have a table, top line results table that goes through the top line results focusing on the top line results. It's important to note Phase IIb QUALITY study is the first human study to report the effects of muscle preservation agent on body composition in older patients who have obesity or overweight and receiving a GLP-1 receptor agonist, first time. In the top line efficacy analysis, the Phase IIb QUALITY clinical study met its prespecified primary endpoint with a statistically significant benefit in the preservation of total lean mass with a 71% reduction in lean mass loss in all patients receiving enobosarm plus semaglutide versus placebo plus semaglutide at 16 weeks. The mean total lean mass percent change for baseline for all enobosarm plus semaglutide-treated patients with minus 1.2% with a N of 100 versus placebo plus semaglutide alone subjects minus 4.1% and N is 47, the p-value 0.002, least square means analysis. Secondary endpoint shows that the enobosarm plus semaglutide treatment resulted in a greater reduction in total fat mass compared to placebo plus semaglutide in 16 weeks. There was a 27% greater fat mass loss in all of the enobosarm-treated patients compared to placebo plus semaglutide alone. In the mean total fat mass percent change in baseline for all semaglutide -- all of enobosarm plus semaglutide was minus 10.9%, N of 99 versus placebo plus semaglutide, minus 8.6%, N equals 48, p value was 0.096. Now using absolute total body weight, it means all enobosarm plus semaglutide was 4.4 kilograms of weight loss, and N of 100. Placebo plus semaglutide was minus 4.7 kilograms, N of 48. To provide context, the difference in absolute weight between all enobosarm plus semaglutide subjects versus placebo plus semaglutide subjects was just 0.3 kilograms in total body weight loss. As there are only minor changes in total body weight between enobosarm plus semaglutide group and placebo plus semaglutide group for 16 weeks, this means that the enobosarm semaglutide treatment group compared to placebo semaglutide improved changes in body composition by preserving lean mass made up of the greater fat mass loss. In fact, the median percentage of total weight losses due to lean mass is 32% in the placebo plus semaglutide group versus 9.4% in the all enobosarm and semaglutide group. So in other words, of the total weight loss in 16 weeks, 30% of it contained lean mass, placebo semaglutide group and 9.4% was in the enobosarm plus semaglutide group. Therefore, enobosarm plus semaglutide improved change in body composition, resulting in a more selective and greater loss of adiposity that's fat than subjects receiving placebo semaglutide. So another way of saying that, is that you were able to spare muscle -- excuse me, spare lean mass and focus on removing the adiposity, which is what's the definition of weight reduction, getting rid of the adiposity and leaving the muscle -- lean mass alone. Interestingly, we decided to use the loaded stair climb test, which is an 8-step stair climb test, and it was conducted at baseline in a 16-week of study and this is for us to measure function. Climbing stairs is an activity of daily living, and the stair climb test measures functional muscle strength, balance and agility. The improvement in body composition and preservation of lean mass may be captured by measurement changes in physical function using the stair climb test. So the stair climb test had a responder analysis with fortunate subjects that lost at least 10% stair climb power in 16 weeks. So in other words, the client and function was the cutoff to decide whether the patient -- how the patient is doing with stair climb. Interestingly, and this is the first study to show this. No other study has done a functional study with a muscle preserving drug and semaglutide. But just semaglutide alone in the older patients, this study showed that 42.6% of the patients experienced at least a 10% reduction in stair climb power for baseline, demonstrating that for the first time a loss of physical function has been tested and observed with GLP-1 receptor agonist treatment. Now interestingly, in the all enobosarm plus semaglutide group, it was a 54% reduction in a proportion of patients with at least a 10% loss of stair climb power to baseline versus placebo plus semaglutide, and that p-value is 0.0049. So therefore, in the responders analysis, the proportion of subjects that loss greater than 10% stair climb power was statistically significant and clinically meaningfully reduced in the enobosarm plus semaglutide groups compared to placebo plus semaglutide. Now what does this mean? The Phase IIb QUALITY study is the first human study to demonstrate that all the patients who're overweight have obesity receiving with WEGOVY, semaglutide GLP-1 receptor agonist or at higher risk for accelerated fealty and functional decline. Lean mass loss was significant, is 32% of the total weight loss in 16 weeks with lean mass. Loss of lean mass also matters, as 42.6% of patients on placebo plus semaglutide had at least a 10% decline in stair climb power. Our Phase IIb quality study is also the first study to measure and to show the impact of lean mass on a common activity of daily living performance of stair climb test. The potential for further reduction in physical function because of ongoing lean mass with chronic GLP-1 receptor agonist therapy is worsen and wants to be evaluated. The expectation is that all GLP-1 receptor containing drugs will cause significant lean mass -- loss of lean mass in older patients, raising concerns about declines in physical function, mobility, disability, functional limitations, loss of balance with a higher risk of falls or fractures. Phase IIb QUALITY study is also the first human study to report the effect of a muscle preservation agent of body composition in older patients who will be have obese, overweight and receiving a GLP-1 receptor agonist. In the intent-to-treat group analysis of Phase IIb QUALITY clinical study met its primary endpoint with a statistically significant benefit and preservation of total lean mass and all patients receiving enobosarm plus semaglutide versus placebo plus semaglutide in 16 weeks. Secondary endpoint showed enobosarm plus semaglutide treatment resulted in total fat mass -- reduction in total fat mass compared to placebo plus semaglutide measured by DXA in 16 weeks. There appears to be minor differences in total body weight between the enobosarm group and placebo in 16 weeks. Therefore, the enobosarm in combination with semaglutide resulted in a better -- higher quality rate loss, defined as selective and greater loss of adiposity in subjects receiving placebo versus subjects receiving placebo and semaglutide. Further, the proportion of subjects that loss at least 10% of stair climb power was statistically significant and clinically meaningful, reduced in the enobosarm plus semaglutide groups compared to placebo plus semaglutide groups. In conclusion, we believe older patients who have obesity or overweight and are receiving a GLP-1 receptor agonist or an ideal patient population that has demonstrated in the Phase IIb QUALITY clinical study -- clinical benefit with enobosarm treatment to provide a greater quality weight loss as lean mass and physical function may be preserved with greater and selective loss of adiposity that is better body competition, weight reduction may be possible. Further, the expectation is that when patients are treated longer with enobosarm, which we hypothesized as a result in greater loss of adiposity, there would be also greater weight reduction than semaglutide alone. Safety. Well, as you know, the study is continuing as an extension study, and it's blinded. So safety data remains blinded in the ongoing study, and the unblinded safety data set will be available in the Phase IIb extension studies done in April of 2025. However, the aggregate blinded data has not shown significant differences compared to previous studies of enobosarm. Further, the Independent Data Monitoring Committee met in October of 2025 to evaluate the unblinded safety data and they made a recommendation to continue the study as planned. As a reminder, enobosarm has a large safety database, which includes 27 clinical trials involving 1,581 mostly older men and women, some of which included patients dosed for 3 years. In this large safety database, enobosarm was generally well tolerated with no increases in gastrointestinal side effects. This is important as there are already significant and frequent gastrointestinal side effects with a GLP-1 receptor agonist alone. Company plans to present the full clinical efficacy and safety data set for the Phase IIb QUALITY clinical study in future scientific conferences and publications after the Phase IIb extension portion of the study is completed and unblinded. Now how about our next regulatory steps. As a reminder, the Phase IIb extension clinical study where all patients have stopped receiving a GLP receptor agonist, but continue to take placebo in enobosarm 3 or enobosarm 6 for an additional 12 weeks is ongoing. The blinded Phase IIb extension clinical study is asking a different question than the Phase IIb QUALITY clinical study, which evaluated the ability of enobosarm to improve body composition changes associated with GLP-1 receptor agonist weight reduction and loss induction. The Phase IIb extension study will evaluate the maintenance of weight loss, meaning whether enobosarm can maintain lean mass and prevent the weight gain that occurs after discontinuing the GLP-1 receptor agonist. If successful, this would provide another important obesity-related indication for which enobosarm could be considered. The top line results of the separate blinded Phase IIb extension clinical study are expected in April of 2025. As the Phase IIb QUALITY study has positive clinical top line results, we're planning to move forward to request an end of Phase IIb meeting with the FDA. In the new weight reduction FDA guidance, FDA makes a regulatory path distinction between weight reduction drugs and drugs for body composition changes. And based on this guidance, enobosarm is being developed as a body composition drug to selectively preserve lean body mass and physical function and augment fat loss in older, obese or overweight patients receiving GLP-1 receptor containing drug for chronic weight management. We have previously have met with FDA to discuss our regulatory path forward as an improvement in body composition drug, and the FDA has provided general advice of the Phase III design. Based on the Phase IIb clinical trial, the proposed Phase III clinical trial design is currently expected to be a double-blind, placebo-controlled study in patients older than 60 years of age, patients who have obesity or overweight and who are eligible for treatment of a GLP-1 receptor agonist. The GLP receptor agonist may be either WEGOVY, which is semaglutide and/or Zepbound, which is tirzepatide. Patients will be randomized to oral daily doses of enobosarm or matching placebo. The proposed primary objective will be the effect of enobosarm and stair climb power as measured by the proportion of subjects that lose greater than 10% stair climb power from baseline. The proposed key secondary objectives will be to assess the effect of enobosarm on total lean mass, total body weight, total fat mass, bone mineral density, HOMA-IR, which is insulin resistance and hemoglobin A1c. The duration of the trial is expected to be 52 weeks, which allows us to also capture the benefits of enobosarm improvement on body composition for greater loss of adiposity and weight reduction. Based on responders analysis of stair climb power observed in the Phase IIb clinical study, the predicted trial sample size is expected to be approximately 470 total subjects with 90% power and two-sided alpha of 0.05. The estimated cost is approximately $40 million over an expected 18-month period for a single Phase III study of this design. We expect the end of Phase II meeting with FDA will occur within 90 days. As our financial position as of September 30, Veru had $24.9 million of cash on hand, and the company sold the FC2 business in December of 2024, which netted approximately $12.5 million. We have sufficient resources to get beyond April 2025 top line results readout as well as the FDA end of Phase II meeting, which is expected in the second calendar quarter of 2025 and beyond. For more clarity, please call your attention that we will be having an earnings call in February of 2025. With that, I now open the call for questions. Operator?

[Operator Instructions] The first question comes from Gary Nachman with Raymond James.

Congrats on the readout. So Mitch, can you provide any color on the 2 doses, the 3-milligram and 6-milligram and how they trended in terms of lean mass, fat mass, and function with the stair climb, which dose or doses would you pursue in the Phase III, are you contemplating just 1 dose with your proposed N of 470 patients. And then also on the total body weight loss that was roughly the same in the 2 groups with enobosarm, it was slightly less. Just how do you explain that? Was it because muscle weighs more than fat?

Yes. So I'll take your second question first. Again, you're talking about 300 grams in 168 patients difference. So I would say the same. And I would also say, well, that's pretty interesting because that means 38% in the semaglutide alone, 38% was muscle, and I guess the rest is fat and bone or something like that. Whereas the enobosarm group, it's 9%. So you had to make up for that difference to get to the same weight by losing fat. So that's great because you want to lose it, that's the word quality. So the quality is what's important. And so we hit our mark, right? I mean, we've been saying all along that the only way you can get to the same weight in 16 weeks, we got free falling. Remember, the way the curve goes, you free fall for 16 weeks and you hit a plateau and then you lose the other half of your weight over the next year. So the free fall was not interrupted. And you ended up with, what, 9% muscle and loss in the fat and in the weight total weight loss as opposed to 38%. And the other thing that teaches you is that muscle loss tracks with weight with semaglutide, remember, no one has really looked at what happens early on. All we know is that if you have a 40% loss of muscle -- 40% of the total weight loss contains muscle at 68 weeks. Well, what happened along the way. We now know that, it happens early. So to answer your question, so I feel pretty good that we've got a real body composition drug. And this goes in the heels of the fact that you talk about those. Now this is top line data. So I'm going to try to give you some clarity on dose so that you're going to have a feel for it. As you know, when we designed the study, the goal was to modify body composition. We know from the 1,000 patients of data in 5 clinical studies that the 3-milligram dose works. It works. It does a great job. We also know from our previous studies like the MAD study that if we keep going up on dose, you can hit a plateau, right? It makes sense because the 3 milligrams, you're really oversaturating the androgen receptor in muscle. So why Mitch, did you go to 6? Well, you've heard me say this before, we went to 6 milligrams because it turns out the androgen receptor sits in fat. And if it sits in fat then you need a higher concentration of drug to saturate those receptors in fact, because the fat compartment is so much larger. So that was the working hypothesis. And it turns out, that's exactly what we saw. So we're not kind of giving you the exact numbers, so I want to have some things to share with you later. The 3-milligram did beautifully. The p-value was less than 0.001, and so the 3 milligrams didn't disappoint, it worked. And in the 6 milligram, it was not better than the 3. So it's not a surprise I said that. And interestingly, for fat, there was a dose-dependent reduction in fat and the dose-dependent reduction in fat at 6-milligram was better than 3. Yes, that played out. So what was that p value. That p-value was 0.014. So in fact, you went from 27% to almost 48% reduction in fat at the 6-milligram dose. So it played out exactly as we set up the trial. So it gives you some flexibility as you think about the right dose, I won't be able to comment on what dose is the right dose yet until we get the full data set. But at this point now, 3 didn't disappoint in muscle and boy, it was a nice surprise to see more fat loss with the 6 milligram. As it relates to stair-climb function. Stair climb function we showed you the data based on the cutoff. As a responder analysis, you pick a point that you think that -- you pick a point that describes what you want to measure the individual patients can achieve. So if you think a minus 10% reduction in power function is meaningful, which minus 10% is pretty meaningful, than how many people fell in that bucket? And that answer is 42 point -- whatever number I gave you is 42% -- 42.6% of the semaglutide alone hit that. That's almost half of your patients are having a 10% decline at 16 weeks. I mean some criticism of is 16 weeks long enough to see a physical function. We saw it, it's there. Stair climb is a pretty sensitive valid and reliable way to measure this and it played out. The question is, how does it look for the doses? Well, for all of them, it was about a 50% reduction. And it turns out for the 6-milligram and for the 3-milligram, they were also statistically significant reduction in the number of patients in the enobosarm group compared to the placebo group, meaning that 50%, sometimes much higher percent of patients in the enobosarm group did not hit 20% -- excuse me, 10% loss of function, meaning that you had a reduction in the number of patients that were in that category by 50% to 60%, that number highly statistically significant with P values with 0.0-whatever. So [ not to put you ] exact. So I'm saving the actual details for future publications, but I wanted to give you some cover.

Okay. Great. If I could just ask 1 quick follow-up. So you expect the Phase II trial to be 52 weeks. How do you think the drug will trend when you just go further out from the 16 weeks on the key endpoints. Were you seeing continued improvement as you got to the 16 weeks? We obviously don't have the benefit of seeing the chart and the trend over the 16 weeks. But your confidence that you would see continued improvement when you go further out?

Yes. And continue -- so let's take that in pieces. So lean mass, the idea is to maintain lean mass, remember I keep saying I'm not trying to make body builders. So can we maintain lean mass. The answer is, it looks like you can maintain lean mass. So that trajectory looks like it's going to be fine. Next question is, can you lose more fat over time? Well, the trajectory is now pointing down, meaning you're losing fat. And if you're losing fat and you keep doing that for another 8 months, call it, for 52 weeks. So it goes for another 8 months, then the expectation is the weight loss that you're losing, it's 9% lean mass and 91% fat, you can be burning a lot of fat. Remember, the goal is to break through that plateau. So I'm feeling pretty good that the fact that we're seeing the fat is responding so nicely to the direct effects, it could be direct effects of the GLP-1 being able to work as a signal for muscle, it could be direct effects of enobosarm directly on the fat itself. It can be the fact you have more muscle, you burn more energy. All of that leads to the loss -- and we're seeing that. We're seeing that in this study. So the expectation is with longer follow-up that we're going to get a higher quality weight loss. And you could have potentially greater weight reduction at 52 weeks. But again, think about what we're doing in a body composition drug. We're not asking the drug to hit some magic number of how much more additional weight loss you need to hit it a year because the FDA doesn't even know what that number is, or if there is a number. However, we hit our functional endpoints for every one of our two doses plus all enobosarm. So physical function, we were able to measure the lean body mass benefit. So that's your primary endpoint. Remember, the FDA wants to know how a patient fuels functions to survive, function, function, function, we hit function. We measure function. That's going to be the primary endpoint. And then you can measure fats and lean mass and weight. And so then that becomes supportive of your primary endpoint as opposed to turning everything upside down saying, we got to hit a certain amount of weight loss. I think the fact that we were able to make semaglutide a better weight loss drug means that potentially with any GLP-1 containing drug, we could do the same. And so we're not trying to develop enobosarm as a stand-alone drug, it was a drug that can been used in any of these GLP-1s. I don't know, 70 are in development now.

Next question comes from Dennis Ding from Jefferies.

This is Anthea on for Dennis. Just one on the stair climb power. Did you see any improvement from baseline as you saw in the Phase II? And then a question on the Phase III design. I noticed that you're narrowing now down to 60 years old and older. Is there -- is that -- is the all-comer population still on the table? Or are you focusing more on the narrower, older population?

Great questions. Thank you. So to the first question, remember, we did responders analysis. And so you have to prespecify, you don't look for cutoffs, you prespecify your cutoffs. And our thinking was that we were going to maintain lean mass and have a slight loss potentially at lean mass. And the important thing was to see we can stop the decline. And so that was the thinking behind picking the 20%. So I do not have any information that was given to me in top line about what happens with improvement. We picked a detriment because the thought was that if you lost lean mass, you'll see detriment. So if we had a situation, we did a 10% cutoff with decrease. And nobody hit that, then we would have been in trouble. The fact that we had a 10% reduction in power, and 42% -- 43% of the semaglutide group hit that, that tells you that's a problem. So to me, fixing a problem in the client's physical health is critically important in these older patients. And it will be nice to see in future studies, whether or not over the longer periods of time beyond 16 weeks that by maintaining muscle that you may see an improvement in function, not just stopping the decline, which in itself is clinically meaningful. As it relates to your second question, which is it appears that the Phase III design is focusing on older patients. Look, we had a very successful trial and we picked older patients for all kinds of reasons. And the reason we picked it most is because if you want to find a problem with muscle and go after patients, it may have a problem with muscle already and then you add the GLP-1 and you make it worse. Well, that played out. And in our database of the 5 clinical studies in almost 900 to 1,000 patients, they were mostly patients over the age of 60, older men and women. And we hit -- I mean, 3 milligrams did great. I mean that's why we bridged with 3. And guess what, it hit again in different patient populations in the older patients. So we have a drug that's shown not only in this trial, but previous trials, that it's the right drug to change body composition. So the other thinking is that if this is the experiment that worked, then -- and this is a patient population of need, and you can have a very nice clinical benefit versus risk ratio because you're going after something in patients that are already in trouble or getting into trouble. That feels better for a Phase III program. And furthermore, the Phase III program, you're trying not to change the experiment. So if you were successful in your Phase IIb, then let's replicate that because that's a clinically meaningful group, it's subpopulation is large. And they're already more likely to get into trouble in the time span that we're testing them. Now the all-comers is off the table from a standpoint of efficacy because our feeling is with limited resources, let's get this indication to the marketplace. And then in the future, we can always expand.

Got it. That's helpful. And if I could also ask a follow-up. In your prior interactions with the FDA, is 1 Phase III sufficient for approval?

We don't have that clarity at this point.

The next question comes from William Wood with B. Riley Securities.

Congratulations, and I appreciate you taking our questions today. We know that the study remains blinded, but I was curious if there was any extra color you could provide on safety, specifically GI tolerability since the concern with GLP-1s. And then also in terms of liver enzymes that may have been reported thus far, whether they've been in line or if you have any granularity on, if they're in line for both enobosarm and placebo groups?

Yes. So GI tolerability -- first of all, thanks for the question. First of all, it's blinded. So we don't -- as you know, by definition, the GLP-1s have GI toxicity side effects. So our placebo group is not placebo, it's placebo plus GLP-1 and our treated groups all have GLP-1. So we're not going to be able to tease out the GI tolerability fees until we unblind the study. And as it relates to liver enzymes, as I said in my comments, we're just not seeing anything different in the current study in the aggregate blinded data versus what we've seen before. But I have Dr. Gary Barnette, who's our Chief Scientific Officer, to make a comment.