Altimmune, Inc. Q3 FY2025 Earnings Call

Good morning, ladies and gentlemen, and welcome to the Altimmune Third Quarter 2025 Financial Results Conference Call. As a reminder, this call is being recorded. I'll now introduce your host for today's conference call, Lee Roth, President of Burns McClellan Investor Relations Adviser to Altimmune. Thank you, and over to you.

Thank you, operator, and good morning, everyone. Thank you for joining us for Altimmune's Third Quarter 2025 Financial Results and Business Update Conference Call. On today's call, you'll hear from Dr. Vipin Garg, our Chief Executive Officer; Dr. Christophe Arbet-Engels, our Chief Medical Officer; Linda Richardson, our Chief Commercial Officer; and Greg Weaver, our Chief Financial Officer. Following management's prepared remarks, we'll open the line for the Q&A session. Our third quarter 2025 financial results and corporate update press release was issued this morning and can be found on the Investor Relations section of the Altimmune website. Before we begin, I would like to remind everyone that remarks made 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 our actual results to differ materially from those indicated. For a review of the risk factors that could affect the company's future results and operations, we refer you to the company's filings with the SEC. I also direct you to read the forward-looking statements disclaimer in our press release issued this morning, which is now available on our website. Any statements made on this call speak only as of today's date, November 6, 2025, 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 call is being recorded and will be available for audio replay on the Altimmune website. With that, it's now my pleasure to turn the call over to Dr. Vipin Garg, President and Chief Executive Officer of Altimmune. Vipin?

Good morning, everyone, and thank you for joining us today for our third quarter financial results and corporate update. This is a very exciting time for Altimmune. We are on the brink of a major inflection point with our clinical programs. Pemvidutide, the foundation of our pipeline is ripe with opportunity to redefine treatment for those with serious liver diseases like MASH, alcohol use disorder, or AUD, and alcohol-associated liver disease or ALD. On today's call, we will emphasize a few key points: the upcoming Q4 milestone of the 48-week IMPACT data readout, the in-person end of Phase II meeting with the FDA in Q4 that was recently granted, the continued strengthening of the company's balance sheet and the recent talent additions to the executive team. The 24-week data from our IMPACT trial shared earlier this year established rapid efficacy of pemvidutide for those with MASH, providing potential best-in-class MASH resolution shortly after initiating treatment and compelling antifibrotic activity and weight loss. The convincing nature of these data has allowed us to move into preparations for Phase III and to receive confirmation of an in-person end of Phase II meeting scheduled with the FDA before year-end to gain agreement on the design for our Phase III program. We also look forward to the 48-week data from the IMPACT trial, which we expect to share before the end of the year. Beyond MASH, we announced that we have successfully completed enrollment in the RECLAIM Phase II trial of pemvidutide in AUD. The rapid enrollment of RECLAIM, which was completed ahead of schedule, is a testament to our team's continued ability to execute and the significant interest from patients and physicians in pemvidutide as a potential new therapy. In addition, we began enrolling the ALD Phase II trial in the third quarter. As our clinical programs progress, we are ensuring we have the necessary financial resources and executive talent in place to support the next phase of our growth. This includes the recent expansion of our leadership team with the appointment of Dr. Christophe Arbet-Engels as Chief Medical Officer; Linda Richardson as Chief Commercial Officer; and Robin Abrahams as Chief Legal Officer. With that, I'll turn the call over to Christophe to speak further to our promising pemvidutide programs.

Thank you, Vipin. I am very pleased to be here today and to be joining the Altimmune team at such an exciting juncture. From my perspective, I recognize the significant potential of pemvidutide for the treatment of patients with MASH, AUD and ALD. Given its 1:1 glucagon GLP-1 ratio, pemvidutide is uniquely designed to maximize the contribution of each mechanism. In effect, pemvidutide is a combination therapy in a single molecule. Early data from the IMPACT trial demonstrated the potential of this dual mechanism of action with rapid and robust MASH resolution achieving statistical significance at just 24 weeks. I want to reinforce how meaningful the observed efficacy is at this early time point, as most other MASH programs achieve this level of response only after treating for 48 weeks or more. The 24-week results demonstrated significant and very encouraging anti-inflammatory activity based on biopsies and a range of non-invasive tests, which are becoming increasingly important in clinical practice and in the ongoing regulatory conversation. The statistical significance achieved across a panel of NIT we are assessing in the IMPACT trial provides strong support for pemvidutide's antifibrotic effects, which we will look to continue to assess in the upcoming 48-week readout. Speaking of the 48-week readout, we look forward to assessing the data and the potential of a longer treatment duration on NIT measurement, as well as further weight loss. Recall, we had early and significant MASH resolution in our 24-week biopsy data and strong evidence of antifibrotic activity supported by the NIT analysis, along with the continuing weight loss and excellent tolerability. The emerging recognition that improvements in certain NITs are likely to translate to clinical improvement has led regulatory agencies to consider allowing the use of NIT data as a measure of efficacy in MASH clinical trials. In clinical practice, MASH patients are often diagnosed and courses of treatment determined based on these non-invasive tests and the possibility of the regulatory agencies more closely aligning with clinical practice bodes particularly well for pemvidutide given the strength of our NIT data. Dr. Mazen Noureddin, lead investigator on the IMPACT trial will deliver a late-breaking oral presentation on the 24-week IMPACT results at the upcoming annual AASLD Liver Meeting. The acceptance of this abstract reinforces the significance of the data from the IMPACT trial and pemvidutide's opportunity in the broader MASH landscape. Our confidence in pemvidutide is underscored by the collective data surrounding the molecule from the 7 trials completed to date. We are now preparing for a scheduled face-to-face end-of-Phase II meeting with the FDA before year-end to review our proposed Phase III MASH program. The Phase III trial will include the flexibility of using NITs and AI reads as an approvable endpoint in our registrational program if the regulatory process moves in that direction. Beyond MASH, we believe that the balanced glucagon and GLP-1 agonism that is the hallmark of pemvidutide makes it a promising therapeutic candidate in both alcohol use disorder and alcohol-associated liver disease. In AUD, we have completed recruitment and randomization in the RECLAIM trial, which we were able to fully enroll ahead of schedule, is a strong indicator of the significant interest and major unmet need in this indication. We look forward to reporting results next year. Our ALD trial, RESTORE, was initiated in the third quarter and enrollment is ongoing. Importantly, patients with ALD currently lack any approved therapies, and we believe pemvidutide's dual mechanism of action may make a difference for these patients. We look forward to the results of these trials and further understanding the potential of pemvidutide in the additional large patient population of unmet need. I am excited to be at Altimmune and to lead these programs forward. And with that, I will turn the call to our Chief Commercial Officer, Linda Richardson, to discuss how we are preparing for Phase III success in MASH.

Thanks, Christophe, and good morning, everyone. It's great to be here at Altimmune at this exciting time, and I echo Christophe's enthusiasm for joining this team and helping to shape the future of this significant therapeutic candidate. A quick background on me: I've been involved in all facets of commercialization for over 30 years at organizations of all sizes. I have experience in MASH, rare hepatic diseases, cardiometabolic diseases, including diabetes and dyslipidemia, and addiction medicine. We have a great opportunity in front of us with pemvidutide in MASH as well as AUD and ALD, and I look forward to helping prepare for potential commercialization in each of these areas of high unmet need. My decision to join Altimmune was driven by the opportunity to bring real therapeutic advances to patients and the providers that care for them. Pemvidutide has this potential. Why do I believe this? With pemvidutide, we have one therapy that provides two important mechanisms of action, delivering improvements on three critical elements of MASH management. The single therapy is clear. The two mechanisms of action, glucagon and GLP-1 agonism in a balanced 1:1 ratio provide both direct liver effects and metabolic improvements, resulting in three important benefits for patients: one, rapid MASH resolution in as soon as 24 weeks; two, anti-inflammatory and antifibrotic effects in the liver as demonstrated in multiple NIT assessments; and three, quality weight loss, including lean muscle-sparing effects. Additionally, pemvidutide has demonstrated a potential best-in-class tolerability profile with low discontinuation rates in the IMPACT trial. This could be another differentiating feature compared with other MASH therapies. My enthusiasm aside, I would like to highlight some feedback from recent market research we did in Europe. Healthcare professionals in a small group of payers were provided with a projected blinded product profile of pemvidutide along with other blinded profiles of current and future potential MASH therapies. First, 70% to 80% of the physicians surveyed indicated a high or very high likelihood to prescribe pemvidutide based on the blinded product profile in both F2 and F3 patients. Here are some representative qualitative comments from hepatologists on pemvidutide's differentiating features: "It's quite impressive. The fibrosis and the weight loss seem to be a class leader, and the side effect profile is good." And another quote: "For overweight and obese patients, it would be my go-to substance, my first-line approach, more powerful than other dual agonists with strong fibrosis data. Lean mass preservation would be a meaningful differentiator, very important in MASH and chronic liver disease." This is very encouraging early feedback. In particular, the significance of demonstrating lean muscle mass preservation is potentially very differentiating. There is growing interest in the prevalence and effects of sarcopenia in patients with MASLD. A 2024 meta-analysis found that sarcopenia was associated not only with progression but also correlated with MASLD-associated mortality. Other publications project that the prevalence of sarcopenia may be as high as one in four patients. Initial payer feedback was also encouraging. Payers provided us with a positive reimbursement outlook across the EU with broad coverage expected given payers' positive perception of the pemvidutide value proposition. We will continue to identify aspects of pemvidutide therapy that may be important to payers, particularly as more therapies enter the MASH field. Patients and prescriber receptivity is critical, but reimbursement and access are equally important elements of a successful product launch. I've had the opportunity to work closely with our clinical team to incorporate specific endpoints that we believe will be important drivers of market uptake and support a successful launch following potential regulatory approval. It's an optimal time to ensure that commercial considerations are designed into the Phase III MASH program to accentuate the differentiators of pemvidutide from current approved therapies and those to come. Alongside MASH, the AUD and ALD programs are very exciting and could expand substantially the addressable market for pemvidutide. The rapid recruitment of our AUD trial that we discussed earlier is evidence of interest in this space and the patient need for new therapeutic options as well. In closing, I'm very excited to be here at Altimmune at such a crucial time. I look forward to continuing to update all of you on our commercial vision, plans and expectations for pemvidutide. I'll now turn it over to Greg to review our financial results for the third quarter.

Thank you, Linda, and hello. Beginning with our balance sheet at September 30, total cash was $211 million, representing an increase of 60% over our cash position at the start of the year. We've made measurable strides as we source capital through a combination of available options, having raised $127 million through the first nine months of the year, building the cash position required to support our key development milestones. Another step we've taken to add to our financial flexibility was to amend our Hercules debt agreement, where we increased the overall facility size to $125 million and funded $20 million on executing that amendment today. The amendment improved several of the key terms extending the interest-only period, for example. You'll see that we're filing a $400 million shelf registration today, along with a new $200 million ATM facility. Consider these filings as part of our ongoing effort to assure the financial tools are in place to meet our needs going forward. Our cash position continued to strengthen through Q3 and into Q4. I'm happy with the trajectory and confident in the ability to build the balance sheet required to meet our development needs and position pemvidutide for success. Now to comment on the Q3 and year-to-date financial results. R&D expenses were $15 million for the three months ended September 30, 2025, compared to $19.8 million in the same period of 2024. The three-month variance in R&D spend was related to the timing of CRO development cost year-over-year. The Q3 2025 spend included $9.2 million of direct costs related to pemvidutide development, including roughly $3.7 million for the IMPACT Phase IIb trial, $3.4 million for AUD and ALD start-up costs and $1.3 million for CMC. G&A expenses were $5.9 million and $5 million for the quarter ended September 30, 2025, and 2024, respectively. This increase was driven by professional fees and non-cash stock-based compensation. To note, the total non-cash stock-based compensation was $3.6 million in Q3 and $11.1 million year-to-date. No surprises there. Net loss for the third quarter of 2025 was $19 million or $0.21 of share compared to $22.8 million or $0.32 per share in the third quarter of last year. So, in summary, we are well positioned in terms of our financial footing. And with that, I'll turn the call back to Vipin for some closing remarks.

Thank you, Greg. As highlighted today, we look forward to sharing the 48-week IMPACT data in Q4 and to discussing our progression into Phase III clinical development at our end of Phase II meeting with the FDA. As always, we thank you for your continued support and look forward to sharing further details of our progress. This concludes our formal remarks, and we would now like to take questions.

We have the first question from Roger Song from Jefferies.

Congrats for all the progress. Maybe a couple of questions. First is on the upcoming 48-week data from the Phase II IMPACT MASH. So how much of the data will inform your conversation with the FDA and then also the Phase III design? And then what's the current thinking about the Phase III in terms of the 24 versus the 48-week time point and then the NIT and AI biopsy-driven AI-based biopsy endpoints?

Yes. Roger, thank you for the question. So as far as the end of Phase II meeting with the FDA is concerned, as you know, the end of Phase II meeting was requested on the basis of the 24-week data. So really, there would not be any 48-week data that would be part of that discussion at this point. Obviously, we will submit 48-week data when that's available. But we believe and apparently, the FDA agrees with us that we have sufficient data at 24-week to request and now FDA has granted a meeting to us on the basis of that data. So, I think we're in good shape. Christophe, did you want to add anything to that?

No, I think that's correct. The 24-week data were strong enough to grant the submissions and grant the meeting, and we are in good shape with those discussions by the end of the year.

And about the 48-week data, I think, Roger, did you want to repeat your question, please?

Yes, sure. What is the current thinking about the Phase III design based on the 48-week data?

So the 48-week data, we expect to continue confirming what we've seen in the 24-week data and the strength of this with the added weight loss and hopefully as well on the needs. We are in discussions. We will be discussing with the FDA this current regulatory environment with the potential change from those biopsy readings to the needs, and we will have more clarity when we meet at the end of Phase II meeting.

Yes. And our goal, Roger, is to design a very flexible trial, Phase III program, so we can take advantage of any of the changes that take place whenever they take place. So, we'll go in with a very comprehensive, flexible design in terms of the Phase III program and should changes take place over the course of the next months and year, we can certainly incorporate them and pivot to those and appropriately change our endpoints when that happens.

We have the next question from the line of Yasmeen Rahimi from Piper Sandler.

And congrats on the RECLAIM enrollment completion. I guess the first question is based on sort of discussions with the key opinion leaders in the space. Do you have any idea in like, I guess, the probability of the different scenarios of potentially using NITs or AI-based histological reading? If you could just maybe help us understand based on the three scenarios, which one they think has a high probability of being able to get a sign-off. That's question one. And then question two is, help us understand, I guess, the advantages of using AI-based biopsy reading versus traditional histology reading and especially when it comes to Phase III studies and if any other sponsors have implemented that? And then the third question is on RECLAIM, maybe help us conceptualize what would be considered a clinically meaningful endpoint in the primary endpoint there. And I'll jump back in the queue.

I will start with the NITs. There are many discussions happening right now. We are aware that some of these discussions will take place at the AASLD meeting at the end of this week, and we will learn more about that. We know the FDA is taking a close look at this. From what we understand, there is growing interest in exploring those NITs. As Vipin mentioned, we are designing our Phase III to have the flexibility to adapt to any changes in the regulatory environment. Regarding AI, there are differences. Histopathologists typically examine a small section of slides and estimate the level of fibrosis based on various criteria, which can result in significant variability. In contrast, AI analyzes the entire area of fibrosis and not only quantifies the stages but also provides a more gradual and comprehensive evaluation of the slides. This allows for quicker assessments with less variability. We know that the EMA has already approved this approach for examining biopsies. Lastly, I may not have fully understood the questions regarding the primary endpoint.

The RECLAIM trial.

That's right.

Yes. The primary endpoint of the RECLAIM trial is the number of heavy drinking days that we are going to be looking at and those change from baseline.

Yes. It's the number of heavy drinking days per week that's...

Per week, correct.

That's the endpoint that we'll be looking at. And Yasmeen, we're really excited about the fact that this trial enrolled almost five months earlier than we were expecting. So, it really shows the critical unmet need out there and the fact that physicians and patients really like the drug. And so, we're really excited about that.

We have the next question from the line of Patrick Trucchio from H.C. Wainwright & Company.

At 24 weeks, you reported statistically significant antifibrotic activity across multiple NITs. And I'm wondering what magnitude of change of 48 weeks would reinforce this confidence in fibrosis improvement as a key Phase III endpoint? And then separately, I think you've referenced expectation of continued weight loss through 48 weeks. What level of incremental loss or lean mass preservation would confirm pemvidutide's quality weight loss advantage and support differentiation?

At 24 weeks, we observed very strong data regarding fibrosis and continued weight loss that did not plateau. As you know, some of the non-invasive tests can show improvements at different times for each patient. Therefore, we believe we will see further improvements for the patients in the study at the 48-week mark following the 24 weeks. We anticipate that liver stiffness might show improvement, and we will have that data soon. We are really excited about these results. What we observed at 24 weeks gives us optimism for what we expect to see at 48 weeks.

Yes. We expect to see further weight loss, similar to what we observed in our MOMENTUM trial. It's important to note that the doses used were not the strongest for weight loss; the 1.2 and 1.8 milligram doses were applied. With the 2.4 milligram dose, we anticipate even greater weight loss. This indicates that there is still significant potential for additional weight loss. Regarding the NITs, they do not all progress at the same rate; some improve sooner while others take longer. Our goal at 48 weeks is to show sustained maintenance of many of these NITs due to the high levels we have already reached, along with further enhancements in some areas.

This is Scott Roberts. To emphasize the weight loss aspect, remember that among the direct-acting MASH agents that target the liver, such as FGF21s and thyroid beta agonists, there is no weight loss associated with those. Therefore, we are already in a favorable position regarding direct-acting agents. Any further weight loss, along with a curve that does not plateau, certainly suggests the potential for even more weight loss, which can be seen as a bonus.

Yes, I think I'll touch on this concept of lean muscle mass sparing. When you look at various agents and the studies, most of this has been observed in weight loss studies. We examined pemvidutide and the MOMENTUM trial, which had a study duration of 48 weeks, showing a lean loss ratio of about 22% compared to other agents in the 39%, 26%, and 37% range. This aligns more closely with what natural weight loss looks like through traditional diet and exercise. While some impact on lean muscle is always expected, this outcome reflects what is typically seen in routine weight loss contexts. As we analyze our weight loss efforts and plan further Phase III studies, we are keen to understand the results from our 52-week Phase III study data, especially if it shows continued weight loss with muscle mass preservation, as this would be very significant in the field. Considering our future product profile, this advantage could be pivotal. Collaborating closely with the team to establish these markers and preparing for a thorough evaluation in a Phase III trial is crucial for ensuring our findings resonate with payers, physicians, and patients. This approach integrates all we know about our product, aiming for the best outcome in Phase III.

We have the next question from the line of Jon Wolleben from Citizens.

I was hoping you could talk a little bit about alcoholic use disorder and alcoholic liver disease as distinct opportunities. It just seems like there's going to be significant overlap in the advantages or disadvantages of running one program versus both.

Yes, that's a great question, Jonathan. So, I mean, that's the reason we decided to expand the program into AUD and ALD because we believe there is significant opportunity in both of those, and we could be sort of the frontrunner in terms of driving value proposition, additional value proposition for pemvidutide. So, it's not just MASH, AUD and ALD. These are very similar product profiles that we are looking for in terms of having this dual mechanism of action working directly in the liver, as well as in case of AUD having reduction of cravings. So, bringing these multiple features together is really important. AUD typically leads to ALD. So, AUD and ALD go hand-in-hand. So, the idea here is that if we can show success in AUD, chances that we will also be successful in ALD. We've actually already shown the endpoint that we used in MASH, one of the NITs is what would be the endpoint for ALD. So, we already have some idea that the drug is working on these endpoints. So, we're very excited about these additional development initiatives that can be developed independent of MASH beyond MASH.

We have the next question from the line of Annabel Samimy from Stifel.

Just going back to the product profile, pricing, and payer discussions, maybe for Linda. I understand the potential differentiation and how exciting that could be for MASH. The landscape is shifting a little with semaglutide potentially having MASH combinations in development alongside FGF21. Perhaps you can discuss your thoughts on MASH pricing in light of these other alternatives that could indirectly contribute to liver health in the long term. It's important to consider this since some physicians are starting to worry about payer pushback and costs. How should we approach this?

Absolutely. That's a great question regarding the payer landscape. Reimbursement largely revolves around the value proposition of the drug for physicians, patients, and payers. It's essential to have a product that delivers on its promises, and this value is supported by data. When we test a product with our specific activity, we showcase one drug with two mechanisms of action, offering numerous benefits and excellent tolerability. We must also consider aspects like quality weight loss and lipid impacts, along with other downstream effects. The overall value proposition helps determine the drug's worth. By utilizing a single drug instead of two, patients avoid multiple side effects and copays, and they don't have to deal with development challenges or tolerability issues that can hinder adherence—issues we currently observe with some GLP-1s. Other combinations are emerging, but we need to assess their tolerability profiles and how they compare when not being used in a 1:1 ratio. In a crowded market, payers will likely be hesitant to cover treatments that take 72 weeks to show results. The key is demonstrating early efficacy, which we showed with significant MASH resolution at 24 weeks and compelling evidence of antifibrotic activity through NITs. Our product pushes the boundaries of what can be achieved with a single molecule while providing multiple benefits. My goal is to emphasize the value of early action and the overall benefits, which can help in determining our pricing strategy. The offering is more comprehensive than simply paying for a generic and another product that might be used together. This unique value proposition will become clearer as we gather more data, especially from our upcoming Phase III program that we don't currently have access to in our 24-week data. My focus will be on positioning for the future and maximizing the potential of this molecule.

Great. That's great context. Just a couple more for me. Just going into AASLD, I know that raising awareness of pemvidutide is very important. So, can you just give us some color around how you're going to be doing that at the upcoming meeting and how you're going to raise awareness among KOLs? And just on one other quick question, RECLAIM, obviously, enrolled very quickly. How is the ALD enrollment going?

At AASLD, we have planned various activities, including numerous engagements with key opinion leaders, one-on-one discussions, and interactions with patient advocacy groups. I want to highlight that we have two late-breaking presentations, one oral and one poster, which will be showcased at this event. Additionally, we will host receptions with our clinical and principal investigators, which has generated significant interest. We are preparing for a strong presence at AASLD, where we will present exciting data from our late-breaking presentations.

I would like to add that having previously worked in the MASH space, I am familiar with many individuals at Intercept as well as those in hepatology and gastroenterology. I am looking forward to rekindling relationships through the meetings we have scheduled and reconnecting with old friends in the patient advocacy group. Although the company may not have had as many contacts prior to Christophe and me joining, we will utilize the connections from the investigators we have collaborated with. I believe that having the podium presentation as a late-breaker will be an excellent way to conclude the meeting for us.

Yes, we'll have a very large presence. So, we are really looking forward to it. It will be very exciting to bring pemvidutide out in the open.

And regarding the ALD enrollment, we are moving forward as planned. We're happy where we are right now with this enrollment. Obviously, the AUD was even more exciting by getting this study enrolled much earlier, which doesn't happen too often, but it's a testament to what the team can do and the interest in this area from patients and physicians. So, we're excited, and we continue to move forward as we anticipated.

We have the next question from the line of Mayank Mamtani from B. Riley Securities.

This is William on for Mayank. Congratulations on a very nice quarter. Looking forward to seeing the upcoming AASLD presentation. Two for us. In terms of your Phase II 24-week biopsy results, I was curious if you could talk to any new or incremental analysis that you may have performed that we may get. And specifically, do you know if there's, by any chance, any F2 or F3 analysis that you did on the study? And in regards to F4 patients, by chance upon sort of reevaluation of the biopsies were any included in the study and how the data from your F3 patients might inform how pemvidutide may perform in the F4 population? And then I have a follow-up.

Yes, we continue to analyze our data. There's a large amount of information we can gather that will help us advance some of the Phase III efforts. I want to remind you that the design included only Phase II and F2 and F3 patients. There were no F4 patients included. We conducted some post-hoc exploratory analysis, but the sample sizes are small because the study was designed with a limited number of patients, so I'm cautious about that. However, we are very encouraged by what we're observing, particularly with the Phase II F2 and F3 patients. We have supportive data to proceed into Phase III in this population and we look forward to designing this and discussing it with the FDA.

Got it. And then in terms of RECLAIM, as it's been said, it's obviously enrolled pretty far ahead of plan. I was curious if there's been any type of baseline analysis that's been compiled. And if so, could you touch on how those baseline characteristics may compare to the original plan? And then also how that informs to your interest in your RESTORE ALD trial, where you're also looking at these liver-specific endpoints such as VCT and ELF? And maybe what's the broader data package that you're looking for to collect that would help qualify as Phase III enabling?

Regarding the RECLAIM data, we have just completed the enrollment and have not yet conducted a baseline analysis of the information. It is evident that Alcohol Use Disorder and Alcoholic Liver Disease represent a spectrum, with AUD patients generally experiencing less severe conditions than those with ALD. There is a significant unmet need in this group, and we are examining developments in both the most severe and less severe populations. We will assess various parameters, including heavy drinking days and liver health indicators. We recognize that these populations often have fatty livers and increased liver stiffness, which will serve as our primary endpoint for ALD. That's our current status, and we have noted considerable enthusiasm in this area.

Well, and I think the timing of this, just with the interest in no alcohol drinks, mocktails, dry January. Every week, there's something coming out on alcohol use. And here, again, we have a product that is designed to help on two fronts. You can look at the glucagon direct-acting liver effects. I'm thinking if somebody is drinking that much that they want to cut back, they've probably done a little damage, just may not know it, but they're thinking about their drinking. And then you look at what you would get with the GLP-1 side, which may be helping with cravings. And again, it is one product bringing together two activities that do more benefit for patients with a tolerability profile. So, this is really the way we're looking at how can this drug best infiltrate indications that make the most sense, whether it's MASH, whether it's AUD, ALD, you look for where are your strengths and play to your strengths.

We have the next question from the line of Michael DiFiore from Evercore ISI.

I have three questions. First, since you mentioned that Europe has approved AI biopsy reads and that you plan to propose the PathAI platform to the FDA later this quarter, what are the next practical steps once you receive clearance? For instance, are your imaging and workflow systems already validated for PathAI, or will there be a ramp-up period before you can implement the AI read in Phase III? I also have two follow-up questions.

Yes. The way that the AI works is they digitize the slides. And so as long as they have good slides, and we've learned how to do that, that was part of our Phase IIb study. We have excellent specimens and how to handle those. As long as they have good specimens to work with, they have their own proprietary digitalization technique. So, it will be a seamless introduction of that technology into the readout.

Okay. And relatedly, how will NIT tracking actually be implemented operationally in Phase III in terms of frequency, imaging cadence, data interpretation? Any color you could offer on that?

We will have different visit schedules throughout the 52 weeks, particularly with imaging taking place at specific quarters and at the 6-month mark, during weeks 24 and 48. Additionally, there will be ongoing examinations related to clinical outcomes for the patients. The non-invasive tests can be conducted more frequently, potentially on a monthly basis, especially in the early stages, allowing us to assess some blood-based needs and gather information quickly. This will provide us with valuable insights into how those non-invasive tests are progressing within the treatment protocol.

Got it. And my final question is regarding Lilly's Retatrutide. I know it's very early and a lot needs to happen between now and then. But any thoughts on pemvidutide's competitive positioning? Should pemvidutide and Retatrutide compete against each other in the MASH space?

Yes. So as you know, Mike, Retatrutide is a triple agonist. And it's really the benefit here is the same as with dual agonists, we believe the 1:1 ratio is more important here because we are balancing both GLP-1 and glucagon activity in the same molecule. So, we are getting full benefit. Glucagon is working directly in the liver, whereas GLP-1 is working indirectly through metabolic effects through weight loss. So really, adding GIP on top of that is not relevant for the MASH space. It may be more relevant for the obesity field. So, we think we are very well positioned versus the Retatrutide in the MASH as well as AUD and ALD space.

We know and we'll have some new data at AASLD around the anti-inflammatory aspects on the liver level, which is also really important, and we're excited to have really that 1:1 ratio is really important for the direct activity on the liver.

We have the next question from the line of Andy Hsieh from William Blair.

This is Kelsey Lucerne on for Andy. We had a question around the preclinical development program for the oral formulation of pemvidutide. Just curious if you could share next steps and timelines for advancing this candidate and any sort of thoughts around positioning relative to the injectable? Will it also be progressing in MASH as an alternative to the injectable form and who you might see as your competitors for this program?

Sure. Happy to take that question. So, recall that our last earnings call, I expressed a lot of excitement and enthusiasm for what was characterized as appropriately as a breakthrough in our oral formulation program. So, we're continuing to push that forward. Obviously, next steps have to do with an IND in the clinical trial, the timing of that will be more clear as time progresses here. But as far as how does it fit into the landscape, I think there's two important features here that should be appreciated. The first is unlike an oral pill, a small molecule, this is still pemvidutide. It's unaltered. Once it enters the bloodstream following the oral administration, it acts just like pemvidutide. So we get the long half-life. We get the excellent tolerability profile that we've seen so far. So, we have the best of both worlds, too. We have the specificity and potency of the peptide that is pemvidutide as opposed to a small molecule. And yet, we have the oral formulation. So we're really excited about that potential. And we think that as it stacks up against the others, which the vast majority, as you know, are small molecules, we have a real advantage there. So we're excited about the program. We've made, as I mentioned last time, real headway. We're continuing to progress that, and we'll share more data as appropriate.

Ladies and gentlemen, this concludes our question-and-answer session. I will now hand over the conference to Dr. Garg for closing comments.

Well, thank you, everyone, again for joining us. The coming weeks will be incredibly exciting. We look forward to sharing updates on the 48-week data and the end of Phase II meeting with the FDA and hope to see some of you at AASLD. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.