Altimmune, Inc. Q3 FY2022 Earnings Call

Good day, ladies and gentlemen, and welcome to the Altimmune, Inc. Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Rich Eisenstadt, Chief Financial Officer of Altimmune. Rich, please go ahead.

Thank you, Michelle, and good morning, everyone. Thank you for participating in Altimmune's third quarter 2022 financial results conference call. Members of the Altimmune team joining me on the call today are Vipin Garg, our Chief Executive Officer; Scot Roberts, our Chief Scientific Officer; and Scott Harris, our Chief Medical Officer. Following the prepared remarks, we will conduct a question-and-answer session. A press release with our third quarter 2022 financial results was issued this morning and can be found on the Investor Relations section of the company's website. Before we begin, I would like to remind everyone that remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Altimmune cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, including those related to the ongoing conflict in Ukraine, COVID-19, and the impact on our business operations, clinical trials, and results of operations. For a discussion of some of the risks and factors that could affect the company's future results, please see the risk factors and other cautionary statements contained in the company's filings with the SEC. I would also direct you to read the forward-looking statement disclaimer in our press release issued this morning and now available on our website. Any statements made on this conference call speak only as of today's date, Thursday, November 10, 2022, and the company does not undertake any obligation to update any of these forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this conference call is being recorded and will be available for audio replay on Altimmune's website. With that, I will now turn the call over to Dr. Vipin Garg, Chief Executive Officer of Altimmune.

Thank you, Rich, and good morning, everyone. We appreciate you joining us today for a discussion of our third quarter 2022 financial results and business update. We are excited about the progress we're making with pemvidutide, our GLP-1/glucagon dual receptor agonist that we continue to advance for two important clinical indications, obesity and NASH. The recent data from our Phase 1b NAFLD trial highlighted a 68.5% relative liver fat reduction at 12 weeks in the 1.8 milligram dose group, which translated into more than half of those subjects achieving a normal liver fat content of 5% or less. These promising effects on liver fat content were accompanied at week 12 by significant reduction in serum ALT levels and cT1 imaging relaxation times, both recognized biomarkers of fibroinflammatory activity. Subjects receiving pemvidutide also lost a significant amount of body weight, which differentiates pemvidutide from other drugs with comparable effects on liver fat and ALT reduction. This is important because excess body weight is believed to be a principal driver of NASH and its comorbidities. Weight loss represents an important therapeutic goal in the treatment of these patients. In mid-December, we plan to announce the topline data readout on a trial extension that offers 12 weeks of additional treatment to subjects who completed the original 12-week Phase 1b trial in subjects with NAFLD. The key readouts will be similar to the readouts in the original 12-week study. Scott Harris will join us shortly to discuss our expectations for that readout. Obesity remains our primary focus, and we completed randomization and first dosing of all subjects in our 48-week Phase 2 MOMENTUM obesity trial at the end of September. A 24-week interim analysis is planned for Q1 2023, when we expect that approximately 160 subjects will have completed 24 weeks of treatment. We believe the interim readout should demonstrate meaningful weight loss with favorable tolerability in the absence of dose titration, which could differentiate pemvidutide from other obesity products. Enrollment is also complete in our 12-week Phase 1b multicenter safety trial in subjects with Type 2 diabetes. We expect this trial to provide important information regarding the ability of pemvidutide to maintain glucose control in this population as measured by hemoglobin A1c and serum glucose levels. Finally, we are continuing to enroll our Phase 2 multicenter trial of HepTcell in subjects with inactive chronic hepatitis B and expect to have a data readout in the second half of 2023. Recall that this study is designed to show evidence of antiviral effects against HBV and establish its potential role in combination therapy for the treatment of this important disease. We are excited about the progress of pemvidutide and HepTcell and the upcoming results of these ongoing trials. With that, I will now turn the call over to our Chief Medical Officer, Dr. Scott Harris, to discuss our data and clinical plans. Scott?

Thank you, Vipin, and good morning, everyone. First, let me briefly review the results of our Phase 1b NAFLD trial and additional data presented by Dr. Stephen Harrison, as a late breaker abstract at the annual meeting of the American Association for the Study of Liver Diseases in Washington, D.C. on November 7. As Vipin noted, a 68.5% relative liver fat reduction was achieved in the 1.8 milligram dose group at 12 weeks of therapy, which translated into more than half of those subjects achieving a normal liver fat content of 5% or less. These promising effects on liver fat content were accompanied at week 12 by significant reductions in serum alanine aminotransferase, a marker of hepatic inflammation. Reductions of these parameters have predicted a high likelihood of success in biopsy endpoints when late-stage clinical trials are conducted. Dr. Harrison presented new data that greater than 83% of subjects who received pemvidutide and who participated in the corrected T1 or cT1 imaging sub-study achieved an 80 millisecond or more reduction in cT1 relaxation times at week 12 at each pemvidutide dose. cT1 is a measure of fibroinflammatory activity in the liver, and an elevated cT1 score has been correlated with hepatic and cardiovascular events in clinical studies. Specifically, an 80 millisecond reduction has been shown to correlate with a two-point improvement in NAFLD activity score on liver biopsies. We believe these findings add further to the likelihood of success on biopsy endpoints, as well as the likelihood of reduced hepatic and cardiovascular events when outcomes trials are conducted. Next, let me talk about our upcoming readout in our 24-week multicenter trial of subjects with NAFLD in mid-December, an extension to the original 12-week Phase 1b NAFLD trial. 66 or approximately 70% of subjects from the original 12-week Phase 1b NAFLD trial rolled over into this extension trial to receive an additional 12 weeks of pemvidutide or placebo for a total of 24 weeks of therapy. The subjects that rolled over have remained double-blinded with respect to their assigned treatment of either 1.2 milligrams, 1.8 milligrams, 2.4 milligrams of pemvidutide, or placebo. As we initiated the study well after enrollment and the original 12-week NAFLD trial had commenced, we are pleased with the 70% rollover rate into this trial. The principal readout will continue to be the safety and tolerability of pemvidutide, with reduction in liver fat content as the primary efficacy readouts. The readout in December will also include weight loss, measures of liver inflammation including serum ALT, cT1 relaxation time, lipids, hemoglobin A1c, fasting glucose, blood pressure, heart rate, and adverse events, including adverse events leading to treatment discontinuation. We report consolidated and stratified data on the trial readouts for subjects with and without diabetes. Now let me talk about the Phase 2 MOMENTUM trial of pemvidutide in obesity. The trial was designed to enroll approximately 320 non-diabetic subjects with obesity or overweight with at least one comorbidity. Subjects were randomized 1 to 1 to 1 to 1 to 1.2 milligrams (ph), 1.8 milligrams, 2.4 milligrams of pemvidutide or placebo administered weekly for 48 weeks in conjunction with diet and exercise. Baseline characteristics of the fully enrolled study population include median body weight and body mass index, BMI, of approximately 101 kilograms and 36 kilograms per meter squared respectively, and median fat content of approximately 5% as measured in approximately 100 subjects participating in the body composition sub-study. The study population is approximately 75% female and approximately 20% of the subjects are of Hispanic ethnicity. These demographics contrast sharply with the study population in the 12-week Phase 1b NAFLD trial where approximately 80% of subjects were of Hispanic ethnicity, and the median fat content was approximately 22%. In addition, unlike the Phase 1b NAFLD trial, the Phase 2 MOMENTUM study employs endpoints and lifestyle interventions that are standard for multicenter obesity trials. The primary endpoint of the MOMENTUM trial is the relative percent change in body weight at 48 weeks compared to baseline, with additional readouts including metabolic and lipid profiles, cardiovascular measures, and glucose homeostasis. Dr. Lou Aronne from Weill Cornell Medical School, a leading authority in obesity and obesity clinical trials, is serving as the principal investigator. We plan to perform an interim analysis to assess changes in body weight after 24 weeks of treatment on approximately 160 study participants in the first quarter of 2023. It should be noted that as a result of variations in patient characteristics, as the trial enrolled, the demographics of the study population could differ from those in the fully enrolled study population when the interim readout occurs. It is our expectation that a level of weight loss consistent with the class-leading obesity drugs may be achieved at the end of 48 weeks of therapy. We also believe that the tolerability profile of pemvidutide, the absence of dose titration, and reduction in serum and hepatic lipids could translate into greater ease of administration, improved adherence to therapy, and greater potential for cardiovascular benefit. We believe these benefits should differentiate pemvidutide from other drugs in the obesity space. We've also completed enrollment in our Phase 1 multicenter trial evaluating glucose control in subjects with Type 2 diabetes over 12 weeks of treatment. Approximately 48 subjects are planned with a readout expected in the first quarter of 2023. Across the trials that I have described, we are rapidly building the safety profile of pemvidutide with unblinded safety data incurred in over 200 subjects receiving one or more doses of pemvidutide in clinical trials by year-end 2022 and approximately 500 subjects by year-end 2023. We believe that a positive effect on surrogates of cardiovascular outcomes, including blood pressure, serum lipids, and hepatic fat content will be demonstrated at final readouts. We are also making continued progress in the enrollment of our Phase 2 multicenter clinical trial of HepTcell in subjects with inactive chronic hepatitis B and expect to read out the results of this trial in the second half of 2023. Recall the virologic effects of HepTcell are also being evaluated in the chronically infected patient population to enable the combination of HepTcell with novel direct-acting antivirals as part of combination therapy for hepatitis B. I'll now hand the call over to Rich Eisenstadt to give an update on our third quarter financial results. Rich?

Thank you, Scott, and good morning again, everyone. For today's call, I'll be providing a brief update on Altimmune's third quarter 2022 financial results. More comprehensive information will be available in our Form 10-Q to be filed with the SEC later today. Altimmune ended the third quarter of 2022 with approximately $201.9 million of cash, cash equivalents, and short-term investments, compared to $190.3 million at the end of 2021. We drew down approximately $31.8 million in net proceeds off of our ATM during the three months ended September 30, 2022. Turning to the income statement, revenue was minimal in the third quarter of 2022 compared to $200,000 in the same period in 2021. Our change in revenue for the quarter was primarily due to the discontinuation of development activities for T-COVID and NasoShield programs earlier in 2021. Research and development expenses were $20.3 million in the third quarter of 2022, compared to $29.2 million in the same period in 2021. Approximately $15.8 million of this total for the third quarter of 2022 was for direct expenses for the conduct of our clinical programs, including $14 million in direct costs related to development activities for pemvidutide and $1.8 million in direct costs related to development activities for HepTcell. R&D expense in the third quarter of 2021 included approximately $15 million of expense to close out the AdCOVID campaign. General and administrative expenses were $4.5 million in the third quarter of 2022, as compared to $4.2 million for the same period in 2021. The increase year-over-year was primarily attributable to increased stock compensation expense. The net loss for the three months ended September 30, 2022, was $23.5 million or $0.48 net loss per share compared to $33.5 million or $0.81 net loss per share for the third quarter of 2021. Our existing cash not only funds us through all of our ongoing clinical trials, where we currently estimate that our cash is sufficient to allow us to operate into the second half of 2024. I will now turn the call back over to Vipin for his closing remarks. Vipin?

Thank you, Rich. Operator, that concludes our formal remarks, and we would like to open the lines to take questions. Could you please instruct the audience on the Q&A procedure?

Thank you. Our first question comes from Seamus Fernandez with Guggenheim. Your line is open. Please go ahead.

Great. Thanks so much for the question. So, really just wanted to ask, if you guys could help us understand what the characteristics were of the patients of the 70 patients that are going to be in the extension 24 weeks portion of the study. So do you have the 12-week data in that context? And can you provide us a little bit of information with regard to, if there were any differences in the data for those 70 or so patients versus the overall study? And if there were any meaningful differences at any of the dose levels in particular? Just want to get a better understanding of the base characteristics of that patient population as we head into the full 24-week data for the NAFLD patient population? And then the second question, just as we kind of advance forward, we saw no real change and in fact some increases in HbA1c in the first 12-week data set in the NAFLD patient populations. Just trying to get a better sense of how you guys are thinking about the profile of the product if we don't see improvements in HbA1c as patients are treated over time? Thanks so much.

Scott?

Yeah. Hey, Seamus. Thanks for the question. Just to clarify, there was 70% rollover, but actually the number of subjects was 66. I don't have that immediate data for you. I can tell you that from 10,000 feet, I think that the rollover study population is comparable to what entered the initial original 12-week trial. But I don't have specifics for you at this time. And our position has been that there has been no change in the hemoglobin A1c. I think there was a great deal of variation due to small numbers. All in all, when we looked at individual plots, we haven't seen any change in hemoglobin A1c. So it's our position that at 12 weeks, there was no change. We'll have further information on that when we finish our 12-week committed diabetes study in the first quarter of this year. Our position has always been that we would not see a change in hemoglobin A1c at 12 weeks and that we would see changes over time as insulin sensitivity improved concomitant with improved weight loss. And that's why we expect to see a future time point. But because of the opposing effects of glucagon on GLP incretin activity, the base case had always been that with hemoglobin A1c, which is retrospective to 8 weeks to 12 weeks, over that time period when the weight loss hadn't fully occurred that we wouldn't see it.

Great. And then maybe just a quick follow-up question. In terms of your expectation if the baseline characteristics of the 66 patients ends up being comparable. Can you just help us understand what you think is a good result in this patient population from a weight loss perspective, particularly given the quite, I guess, substantially different metabolic characteristics of these patients with over 20% liver fat and Hispanic patient population? Just wondering what you guys think is a particularly good result in that patient population from a weight loss perspective? Thanks.

Well, I think, you hit the nail on the head. This is a distinctly different population from that of the NAFLD population that's continuing the extension from the MOMENTUM trial and the obesity trial. It's a metabolically very ill population with over 4 times the amount of liver fat. And whether or not they're diabetics, they're metabolic, where like diabetics, you don't expect them to lose weight. It’s fairly clear that there is a very important impact of Hispanic ethnicity, as shown in various studies. That population has also been reduced in prevalence by a factor of four. So we look at that NAFLD study and this extension as being what it was suited for, which was to look at a reduction of liver fat. Although we are seeing a reduction in liver weight, it’s not a weight loss study, and it's not our primary readout in weight loss. We suspect that we’ll continue to see improvements in weight loss, but we have not really gauged what that weight loss has to be to predict what we're going to see in MOMENTUM; we think that study stands alone.

Thank you, guys. I'll drop back in queue.

Thank you. One moment for our next question. And our next question comes from the line of Yasmeen Rahimi with Piper Sandler. Your line is open. Please go ahead.

Good morning, team. Thank you for the detailed updates. I have a few questions this morning. To start, regarding the 66 patients from whom we will receive 24-week data, could you clarify how many will be on the drug versus how many will be on placebo? Additionally, for those patients who chose not to continue to the extension, were there specific reasons for that? That's part one and part two of my question. My next question is about the Phase 1b diabetes study that you plan to report on in the first quarter of 2023. Can you explain what insights you hope to gain from this 48-patient study? Do you believe it will provide a definitive answer regarding the glycemic effect of pemvidutide? I'd appreciate your insights on these three questions, and thank you once again for addressing my comments.

Yeah, Scott?

Yeah. Yasmeen, thanks for the questions. So let me take them one-by-one. We have not unblinded the 106 data. So I can't tell you which patients have continued at each dose. We have no information on that. So I can't give you a snapshot of the continuation rates at each dose or how much of the placebo patients continued versus the reasons per group of the discontinuations. Generally, the discontinuation reasons were administrative; not that the patients discontinued, but you have to realize that patients were recruited for a 12-week study. And regardless of their success, many people simply said, I don't have the ability. Remember, they're coming into the clinic weekly for 12 weeks. They come in weekly for an additional 24 weeks; an additional 12 weeks up to 24 weeks would be an undue burden. Some people just didn't have access to the study. So by and large, it was due to non-safety reasons or non-efficacy reasons that people chose not to continue. Regarding the Phase 1 study that we'll read out in the first quarter of the year, the primary objective of the study is safety. The aim is to show that there are no adverse effects of pemvidutide on blood sugar control, and that's been our base case. We need to demonstrate that going forward and accrue more patients to show that the serum glucose in hemoglobin A1c do not change. Now additional studies will likely be conducted in the future, looking at longer durations to treatment to see the hemoglobin A1c drops. But that's beyond the initial 12 weeks that's planned in that Phase 1 study or the objective of the trial.

Yes. And just to remind everybody that the 48-week MOMENTUM study is in a non-diabetic study. So that's why it's important to have that separate study, so we can look at specifically in subjects with diabetes. And that's really the reason for that study.

Great. And then, team, just one quick clarification. I appreciate the baseline demographic details that you gave us for the MOMENTUM, the 100 kilogram, 36 kilograms BMI and the distribution. Is that for the total population or is it for the 100 patients? If you could just clarify that would be helpful, and I'll jump back into the queue.

That's a great question. Yasmeen, I intended to address this in my opening remarks, so let me reiterate. The information pertains to the entire study population. We don't have specific details about the initial 160 patients involved in the interim analysis at this time. Generally, we acknowledge that population demographics may change during the four to five months of enrollment in the study. It's possible, though not necessarily likely, that the demographics we report in the first quarter of next year might differ slightly. We anticipate this slight variation, but we will clarify that the first 160 subjects may not exhibit these precise characteristics when the data is released, as they can vary throughout the trial.

But it's fair to say that we have a very stark difference here between the NAFLD population and the obesity study population. And that's really the point that we've been making that we had a significantly larger Hispanic population. As you can see in the numbers, a huge difference, same thing with the liver fat content. And of course, the conduct of the study itself, this is a more traditional obesity study, which is being conducted at obesity centers. The whole feeling about the study is different from compared to a liver fat reduction study.

Thank you so much, team, for the color. Very helpful.

Thank you. One moment for our next question. And our next question comes from the line of Liisa Bayko with Evercore ISI. Your line is open. Please go ahead.

Hi. Thanks for taking my question. First of all, for the NAFLD update, can you just give us your expectations? Are you expecting the next readout to be kind of like linear in nature in terms of the obesity, sorry, the weight reduction or what's the right expectation to set?

Liisa, that linear expectations for a traditional weight loss study. And we expect the weight loss and MOMENTUM to be linear. This population is very different. There's no prior information about how this study population will react or will lose weight. The combination of the high Hispanics, the very high Hispanics, and probably the highest liver fat content that's been studied to date in trials. We just don't know what the weight loss is. We know it's going to increase. We're not making any projections about the linearity because we think the study is so different from the MOMENTUM trial; it bears no relevance to predicting the results of MOMENTUM.

What impact do you expect the effects of diet and exercise lifestyle changes to be at 24 weeks in the MOMENTUM and obesity study? Are you anticipating a couple of percentage points?

Yeah. So I'm looking across other trials like the STEP trials and the SURMOUNT trials. Typically, the weight loss peaks at about 2% around week 12 and then maintains itself over the course of the trial or out to say, 24 weeks.

Okay. For the 12-week diabetes safety study, should we consider this primarily as a weight loss study, or how should we interpret its relevance to efficacy components?

Well, once again, like the NAFLD trial that we just talked about, the diabetes study is not being conducted as a weight loss trial. It's kind of being conducted as a diabetes safety trial. So we're not really relying on that trial to give us a readout on diabetics. We think that a committed obesity trial in diabetics would provide that answer, but we're not conducting that trial right now.

Okay. I think that's it from me for now. Thank you.

Thank you. And one moment for our next question. Our next question comes from the line of Mayank Mamtani with B. Riley. Your line is open. Please go ahead.

Good morning, team. Thanks for taking our question and congrats on the progress with three ongoing trials. So maybe just a clarifying question for your comments about the MOMENTUM data expectation. So when you say class leaders, just to clarify, you mean glucagon-directed therapies or just incretin broadly because as you know, for the latter, even for six months, the weight loss bar may be getting elevated to even high-teens with some of the emerging data. So I just want to clarify what sort of your landscape of molecules look like when you think about weight loss for MOMENTUM?

Yeah. That's a good question, Mayank. Well, look, if you look at the progression of weight loss, the first wave of incretin had about 15%. Now we are approaching 20%. So really it's that ballpark we're talking about. Ultimately, we believe that there's going to be multiple products approved in this space and weight loss is going to be important, but not the only component of the overall value proposition; multiple drugs will be approved for marketing and then depending upon what is their overall profile, safety, tolerability, ease of administration, lipid profiles are going to be very important. Ultimately, it's all about cardiometabolic health that we are trying to improve here. So that's what we mean is that we're going to have to be there in that ballpark of the leading drugs in terms of weight loss. But then when you look at all of the other characteristics, we think there will be multiple drugs that would find a place. It's a very heterogeneous patient population, and physicians, doctors are going to need multiple options to treat these subjects. Scott, did you want to jump in?

Yeah, Mayank. I think there's been some recent information on a compound that came out from Amgen, where initial data was presented in very impressive weight loss. And you might be referring to that as now being in the mix. We took note of that, and we congratulate them on the excellent results and shows the drugs can really have weight losses that are starting to approach bariatric surgery. We are happy to be in that group of drugs so that we think and achieve that. We don't want to stress with that drug that it's a new mechanism of action and approach that hasn't been sufficiently explored. We know about the GLP-1, GIP antibody combination. We know about the GLP-1 and GIP specifically that they do not have meaningful effects on serum lipids, and they don't have meaningful effects on hepatic lipids. Therefore, they are going to be coming up with less than a full approach to cardiovascular outcomes reductions because of the absence of that effect, relying mainly on weight loss. So we think that that's still a problem with those drugs. Finally, not only don't we know about long-term efficacy, you're seeing a snapshot of results at a limited time point in the 12-week range. But with the new mechanism of action, the long-term safety is not known. Specific with regards to that compound, it's known that GIP prevents bone resorption in humans; there's human data on that; and now we're giving antibodies against GIP that had deleterious effects on bone health, particularly in women, particularly with women with obesity who put more stress on their bones. We congratulate them on the results. We're happy to be in the mix for long-term weight loss, and we're glad to see the bar going up and up. There's a lot more that has to be known about that mechanism of action, particularly on the safety side.

Thank you. That's very helpful. And I think we'll learn more in a month's time from both you and Amgen. And then just a couple of quick clarifying questions on the NAFLD and the diabetes studies. So is it fair to assume that most of the crossover patients in the 68 patients would be primarily weight loss responders, which means you may not have many in placebo? And I'm just curious what that may mean for kinetics of liver fat and liver enzyme. Should we focus on placebo-adjusted numbers for that 24-week readout?

Yeah. Mayank, I wish I could answer the question. But because we're blinded, I just don't have that data, right. In terms of the kinetics, once again, let me emphasize that this study was conducted to look at reductions in liver fat. I want to highlight the fact that the reductions in liver fat were excellent; they were just excellent. It was accompanied by many markers of good outcomes like the reduction of ALT and the reduction of cT1 times in MR scanning, right. So that was the primary readout of the study, and we went out to recruit a population with very, very high liver fat, primarily Hispanics of Mexican origin ethnicity in the Southwest part of the United States, which is what we should do for a NAFLD trial. This is not a weight loss trial. Yes, we can observe weight loss and are happy with the weight loss that we saw in the first trial that was commensurate with semaglutide on a placebo-adjusted basis. We're very happy with that, but we're trying to emphasize because of the great differences in the populations, in the very nature of the study's conduction with there being no branding or no emphasis on weight loss, no communication on weight loss really to patients, even investigators on the study, that the kinetics of weight loss in this population or the kinetics of weight loss in the population, they don't translate to the kinetics that we're going to see in dedicated obesity trials with patients, dedicated obesity patients with one quarter the amount of liver fat and one quarter the amount of Hispanics.

Yeah. I would just add that in terms of liver fat reduction, further improvement in that as you know that we've already gotten such a significant liver fat reduction in ALT improvement that going from 12 weeks to 24 weeks, you might improve some, but we've already reached such a liver fat reduction occurs relatively quickly anyway. So just to be sure, we have already achieved significant liver fat reduction in just the first 12 weeks.

Thank you. And one for Rich quickly, does the cash runway guidance include any considerations of you starting a Phase 2 NASH biopsy study possibly next year? Can you maybe just clarify that? And thanks again for taking our questions.

Yeah. So the expectation is we'll be spending money to get ready for Phase 3 and/or obesity and/or for NASH. We clearly don't have the cash to complete a full Phase 3 campaign for obesity. We haven't necessarily designated which dollars are going, which direction, but we can get started in either or both of those indications.

Yeah. Our goal is to be both Phase 2-ready for NASH and Phase 3-ready for obesity. The timelines will be different, so we are already working on putting together those plans in place. For NASH, we should be ready for Phase 2 by the second quarter of next year. So we can execute that trial if we decide to do so. And for obesity, we won't have to wait for the 48-week data, and we'll be ready for that execution of that Phase 3 in the first half of 2024.

Yeah. Just to be specific, Mayank, we would not start the NASH trial or any NASH trial before we see the interim readout from obesity.

Okay. Thanks for clarifying that.

Thank you. And one moment for our next question. Our next question comes from the line of Jon Wolleben with JMP Securities. Your line is open. Please go ahead.

Hey. Thanks for taking the questions. A couple for me. You previously commented that the blinded weight loss for MOMENTUM was tracking in line with the first Phase 1 study. So I was wondering if you could update us on how that's looking over time? And then secondly, on the diabetes study, Scott, you mentioned the key here is HbA1c and serum glucose. Just wondering if there's any more specific bars on worsening levels that are acceptable? Or is any change a clear negative here? Just hoping for a little more specifics there. Thanks.

Yeah. So regarding your first question, Jonathan, we took a single snapshot of the data at one time point that was comparable to the time points in the NAFLD trial. But I'm talking about the MOMENTUM snapshot and the 101, excuse me, the first in human study that was done in Australia. We have not been following blinded weight loss curves over time. So I can't communicate that data to you. We don't have that data. Regarding the hemoglobin A1c and the glucose in the diabetes study that we'll read out in the first quarter, yes, it's a safety study. Our base position has always been that there will not be any changes. We don't expect any worsening. That continues to be our position, that we'll see maintenance of glucose control in these patients.

Thank you. And one moment for our next question. And our next question comes from the line of Patrick Trucchio with H.C. Wainwright. Your line is open. Please go ahead.

Hi. This is Matthew and I'm filling in for Patrick today. My first question is about the potential for pemvidutide in NASH. Can you discuss how it compares to other treatments in the field and where you see it fitting into the emerging NASH treatment landscape?

Thank you, Matthew. The data we have shows that our results compare favorably to any drug currently available. The best liver fat reduction observed so far has been with efruxifermin, and we believe that our data is at least comparable, if not superior in certain aspects. There is substantial literature supporting that a reduction in liver fat correlates with success in achieving NASH resolution and improving fibrosis in late-phase trials. We previously saw impressive results with the magical data, and a strong response during the MGM program, as well as significant results with the accurate data. We anticipate that with equal or even superior liver fat reduction, likely achieved more rapidly, we will observe similar effects in an upcoming late-phase NASH trial. Key opinion leaders, such as Stephen Harrison, have commented that this is the best data he has seen in this phase of development. This is further supported by the changes in the corrected T1 or cT1 data, which is crucial as it maps fibroinflammatory activity, similar to how ALT indicates inflammatory activity. Non-invasive markers like these have shown to be quite predictive of success in biopsies. Moreover, cardiologists are now using cT1 data to assess inflammatory activity in the liver as a predictor for inflammatory activity in coronary and cerebrovascular plaques. They have even inferred that reductions in cT1 improve cardiovascular outcomes. Therefore, our position in the NASH space is very strong. We not only have comparable levels of liver fat reduction and at least equivalent improvements in fibroinflammatory activity in our current trials but also offer something that other compounds with similar fat reduction levels lack, which is significant weight loss. With efruxifermin, the weight loss at 24 weeks was about 2.6%, while we are seeing approximately double that in about half the time. Patients with NASH often face challenges due to being overweight; the main morbidities associated with NASH are not solely liver-related but also cardiovascular, especially in the early stages of the disease. Thus, weight loss is particularly important for these individuals. Overall, considering our liver fat reduction, the decrease in inflammatory and fibroinflammatory activity, along with meaningful weight loss, I believe we are uniquely positioned within the NASH drug development landscape.

Thank you. I appreciate that. My next question is a follow-up on the safety and tolerability profile of pemvidutide, specifically regarding the discontinuation rates you have observed so far. How do these rates compare to others in the field? Additionally, could you discuss the dropout rate in the MOMENTUM program or what is expected?

In our first human trial for adverse events, the discontinuation rates were zero percent. In the NAFLD trial, the rates were zero percent at 1.2 milligrams, about 4% at 1.8 milligrams, and about 4% at 2.4 milligrams, which is roughly half of what you would observe in other trials. Regarding the MOMENTUM trial, we will not know the dropout rate until it is completed. Typically, obesity trials have had very high dropout rates, but recent improvements in trial conduct have led to dropout rates of around 20%. I cannot guarantee that this will be the dropout rate in the MOMENTUM trial by the end of the 48 weeks, but that is the range observed in previous trials.

Great. Thank you. And then I have one more. Following the AASLD, I'm wondering if a preference is emerging for Altimmune in terms of which antiviral mechanism you would prefer to combine with the HepTcell program?

Hey, Matthew. This is Scot Roberts. You know, I think there's a number of options out there. But in general, I think that the approach is whether they're algo-based or RNA-based that knock down the surface antigen and begin to release the immune suppression that's characteristic of chronic hepatitis B. Those probably make the most sense. You can imagine a scenario where those types of agents are used first. Surface antigen is decreased; the T-cell responses are beginning to wake up and respond, and then we come in with HepTcell and help boost those responses against the antigens that are being expressed in hepatocytes. So I think there's probably a number of ways to look at that. There's some schedule issues that have to be looked at. But conceptually, I think that's probably the most straightforward approach.

Perfect. Thank you. I appreciate it.

Thank you. And I'm showing no further questions at this time. And I'd like to turn the conference back over to Vipin Garg for any further remarks.

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

That concludes today's presentation. Thank you for participating. You may now disconnect.