Altimmune, Inc. (ALT) Q2 2026 Earnings Call Transcript

Good morning, ladies and gentlemen. Welcome to the Ultimate Minion Second Quarter 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. As a reminder, this call is being recorded. I'm going to introduce your host for today's conference call, Luis Zinic, Vice President of Investillations. Luis, you may begin.

Thank you, Operator, and good morning, everyone. Thank you for joining us for Altamian's second quarter 2026 financial results and business update call. On today's call, you will hear from Jerry Durso, our Chairman and Chief Executive Officer, Dr. Christoph Arvid-Angels, Chief Medical Officer, Linda Richardson, Chief Commercial Officer, and Greg Weaver, Chief Financial Officer. Following management's prepared remarks will open the line for questions. Our second quarter 2026 earnings release was issued this morning and can be found in the investor relations section of our website. Before we begin, I would like to remind everyone that remarks made about future expectations, plans, and prospects constitute forward-looking statements for the purpose of safe hardware provisions under the Private Securities Litigation Reform Act of 1995. Altamune cautions that these forward-looking statements are subject to risks and uncertainties that could cause 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 our SEC files. I also direct you to read the forward-looking statements disclaimer in our press release issued this morning. Any statements made on this call speak only as of today's date, August 12, 2026, 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 our website with that i'll now turn the call over to jerry good morning everyone thank you for joining us today for our second quarter 2026 financial results and business update call 2026 is proving to be a year of significant progress as ultimune evolves into a late stage company dedicated to serious liver diseases we've been laser focused on execution since the beginning of the year and believe we're well positioned to advance our strategy and deliver on our mission. Pembidutide is our foundation, and our confidence and conviction in its potential continues to strengthen with the growing body of clinical evidence. We're building momentum across our Pembidutide franchise and are excited for the future. Let me take a minute to highlight our recent progress. Starting with MASH, last week we announced the initiation of the Performa Phase 3 trial as we began enrolling patients in the global program. We worked with urgency to get the trial started quickly, just three months after securing the financial resources to fund the study through the 52-week readout. We're very encouraged by the start of the trial. Sites are being activated quickly, and we're seeing great engagement by the medical community about what performa may mean for the MASH treatment landscape. There remains a significant unmet need in MASH. We believe PEMVI, with its balanced one-to-one glucagon and GLP agonism in a single molecule, has the potential to offer a differentiated profile for MASH patients. Moving now to alcohol use disorder, or AUD, we were pleased to report positive top-line data from the Reclaim Phase II trial last month. Pemba Dutai delivered a very strong, statistically significant, and clinically meaningful reduction in heavy drinking days, which was the trial's primary endpoint. The study also met important secondary endpoints, including a two-level reduction at WHO risk drinking levels, and zero heavy drinking days. It's important to note that either of these two measures are currently accepted as FDA registrational endpoints. The totality of the top-line data from Reclaim strengthens our conviction in PEVY's potential in AUD. We're moving quickly to gather the full data from the trial, then prepare the data package to request an end-of-phase-two meeting with the FDA to discuss next steps. These compelling data, which to our knowledge are the most robust presented in AUD, further strengthens the potential of Pembidutide as a differentiated therapy across serious liver diseases. The results from this trial are also meaningful for the AUD patient community, where Pembidutide could represent an important advancement in an area that has lacked innovation for the past two decades, and again, where a significant unmet need remains. There are approximately 12 million adults in the U.S. with moderate to severe AUD. It's well accepted that this AUD population is more likely to develop liver disease. We believe hemidutide is uniquely positioned to benefit these higher risk patients, as its dual mechanism can address the totality of disease by reducing alcohol cravings while also providing a direct effect on the liver. This population could serve as a key commercial opportunity with substantial future sales potential. Pembidutide has the potential to help address the continual liver diseases we're targeting, MASH, AUD, and ALD. We've now delivered strong Phase II data and yet another indication, and we're well on our way towards building our Pembidutide liver franchise. We're committed to executing our strategy with speed and efficiency, and the significant progress we've made this year reflects that commitment. We remain laser-focused on executing on our goal of bringing Pembidutide to patients who may benefit from its promising and differentiated therapeutic profile and creating value for our shareholders. With that, I'll turn the call over to Christophe for a clinical update.

Thank you, Jerry. I am very excited to share that we continue to advance our clinical programs across MASH, AUD, and ALD. Beginning with our program in MASH, Last week, we announced the initiation of the global PERFORMA phase 3 trial of pemvidutide in MASH and begin enrolling patients. Over the last few months, we've moved very rapidly to set up a strong and experienced global infrastructure to initiate the trial. The trial will be conducted across approximately 300 sites, with one-third in the U.S. and two-thirds ex-U.S. We're working closely with our CRO on site activation in multiple countries and ensuring a smooth start to the trial for an efficient enrollment. The initiation of PERFORMA is an important milestone for Altimmune and for the advancement of MASH treatment. We also see a growing interest and excitement for pembegutide in MASH from the scientific community. Our increased presence and engagement with the scientific community at the EASL and solar medical conferences this year is driving awareness and has helped build momentum as we begin enrolling patients. Based on the strong Phase II data we reported last year and the design of the PERFORMA trial, we are looking forward to studying PEMVIDU-TIDE in a registrational setting.

Moving to AUD.

In July, we were very happy to report the strongly positive top-line data from the reclaimed Phase II trial in AUD. The data readout was based on the 90-T analysis, as it would be for a pivotal study. The trial met its primary endpoint, where penviduti 2.4 mg showed a highly statistically significant reduction in the average number of heavy drinking days versus placebo at week 24, with a treatment difference of 1.45 heavy drinking days per week. PemVigitide also met two critical secondary endpoints, both of which are registrational endpoints recognized by the FDA. On the first endpoint, we saw a highly statistically significant response in a two-level reduction in WHO-RDL versus placebo. Roughly two-thirds of PEMV patients achieved a two-level reduction in WHO-RDL versus only one-third on placebo. On the other FDA registrational endpoint of zero heavy drinking days, one that has historically been challenging to achieve, pemvisitide, again, showed a highly statistically significant improvement in percentage of patients with zero heavy drinking days. In this data, more than twice the number of the pemvisitide patients achieved zero heavy drinking days versus placebo patients. The trial also saw a highly statistically significant change in the percentage of days with drinking abstinence, and pest levels, which is an objective blood-based measure of recent alcohol intake over the last two to four weeks. PEMV also showed a meaningful and statistically significant reduction in body weight from baseline with a 9.1% reduction with PEMVD-type versus placebo. The totality of the data, including patients' reported measures such as the decrease in in heavy drinking days, WHO-RDL reduction, and the increase in zero heavy drinking days, as well as the past objective measure of alcohol intake, shows strong and consistent evidence in PEMV2-type's potential to address the excessive alcohol usage in AUD patients. Considering the landscape of clinical studies in AUD, including looking at other available GLP-1 and UD trials, the totality of the RECLAIM data is to our knowledge the most robust to date. While RECLAIM was focused on drinking behavior, we evaluated in an exploratory manner whether patients with elevated FIP4 above the threshold of 1.3 at baseline were seeing any improvements. FIP4 is an established biomarker correlated with risk for developing liver fibrosis. Given PEMV's direct glucagon effect on the liver, the observed data with 50% of PEMV-dutide patients with a FIP4 index above 1.3 at baseline, achieving less than 1.3 after only 24 weeks versus only 17% in placebo is very encouraging, especially at such an early time point. We expect to further evaluate the potential liver benefit in a Phase III study in AUD. In terms of safety and tolerability, FEMS-DECIDE continues to demonstrate a generally consistent safety and tolerability profile. Let me share a few thoughts as we look ahead to a potential Phase III study in AUD, which of course will be subject to our dialogue with U.S. and European regulators. We would plan a Phase III study in the moderate to severe AUD population. It is important to note that approximately 50% of AUD patients also have ALD. Therefore, we would expect to study a portion of ALD patients in the AUD Phase III trial. We would look to broaden the study population to also include patients with a BMI under 25 and could explore a lower dosage option. We look forward to engaging with the FDA at a nano phase 2 meeting and discussing a path forward for AUD. In addition, we also plan to engage with European agencies such as EMA. In ALD, we are pleased to report that we completed patient enrollment in the RESTORE trial and expect top-line data in the second half of 2027. The trial enrolled approximately 120 patients with ALD and a history of chronic and heavy drinking at baseline. To support future regulatory discussion, we have amended the trial protocol to be able to fully demonstrate the liver benefits in the ALD population that pemvigetide may provide at one year. The primary endpoint of the trial, the change from baseline in liver stiffness measurements, or LSM, will now be assessed in a hierarchical manner at week 48 and then at week 24, allowing for both time points to be assessed. The RESTORE trial is now designed to show a liver benefit over a long period of time, and this is consistent with our development strategy of focusing on higher risk patients. Demonstrating a liver benefit over a long period of time could be a key differentiator for PEMV versus other AUD therapies in development because AUD patients are often already presenting some level of liver impairment. In summary, we are very encouraged by the progress we are making as we move closer to delivering on our mission of helping the millions of patients with serious liver disease. And with that, I will turn the call to Linda.

Thanks, Christophe, and good morning, everyone. In recent quarters, I've shared insights from our market research describing how PEMB's target product profile positions us well for future competitiveness in the mesh market. Today, I will focus on how we view the current alcohol use disorder market landscape, how we believe this will evolve in the future, and the potential role of Pembidutide in driving this evolution for patients and healthcare providers. First, the AUD market has considerable untapped potential. Alcohol use disorder is one of the largest under-addressed markets in the U.S. Approximately 27 million adults meet the criteria for AUD. 12 million of whom are considered to have moderate or severe AUD. It's this group that has the highest risk of progressing to subsequent liver damage, and we believe pemidutide potentially would bring the most benefit. Overall, only 10% of AUD patients are diagnosed, and of those, only one in four receives drug therapy. It's well known that excessive drinking has direct negative impacts on the liver, including cirrhosis, liver failure, and even death. In fact, excessive alcohol consumption is one of the leading causes of preventable liver injury worldwide. The low diagnosis and treatment rates for AUD seem to represent a bit of a disconnect given these health consequences. Why is this? Patient concerns about being stigmatized, low awareness of available drug therapies, less-than-ideal treatment options with poor compliance that limit prescribing, and no recent therapeutic innovations all contribute to the low diagnosis and treatment rates. There is a clear opportunity for future therapies with new mechanisms and better efficacy and tolerability to help address this dynamic. In fact, there has not been a new drug approved to address AUD in 20 years. Better solutions often bring renewed interest and growth to therapeutic categories that have been relatively stagnant, as was the case with obesity. We believe strongly that PEMB may bring exactly this type of innovation to the AUD market, particularly for moderate and severe patients. The unmet need in the AUD market demands new treatment solutions. The reclaimed Phase II efficacy and tolerability data show PEMB's balanced one-to-one glucagon GLP-1 activity significantly improved multiple measures of excess drinking and may show positive effects on underlying or subclinical liver impairment in future studies. The potential direct liver benefits that PEMBi may demonstrate in AUD would provide a strong impetus to prescribe in the moderate and severe patient segments beyond the decrease in drinking levels and behavior. Other products in development may not demonstrate this liver benefit, concentrating more on the cravings and behaviors associated with AUD. Additionally, current AASLD treatment guidelines for MASH strongly encourage alcohol screening, as alcohol consumption accelerates the progression of metabolic dysfunction and increases the risk of liver decompensation, negatively impacting patient outcomes. We see a potential dynamic emerging where increased alcohol screening and routine PET testing among liver specialists could substantially increase the diagnosis of AUD even while assessing MASH patients. Recent market research we conducted shows that 44% of hepatologists and 27% of gastroenterologists reported they already used PET testing in their MASH patients. There is considerable overlap among MASH, AUD, and ALD populations, highlighting the increasing role that the hepatology and gastro communities may play in managing these patients who have or are at risk for serious liver diseases. In summary, the AUD market of today will not be the AUD market of the future. We believe PEMB is well positioned to potentially disrupt this category, providing a catalyst that sets new expectations for what drug therapy can accomplish in the moderate or severe AUD patients who are most at risk for liver damage. We look forward to generating additional clinical data to support these beliefs and to share insights from our pre-commercial work along the way. With that, I'll turn it over to Greg for the financial review.

Thank you, Linda, and good morning. Starting with our financial results for the quarter, which were in line with our expectations. R&D expense in Q2 26 was $18.7 million compared to $17.2 million for the same period prior year. The increase in R&D spend was driven by investment into our ALD trial, as well as startup costs for the Phase III trial in MASH, offset by a decrease in expenses related to the completion of the Phase II trial in MASH, which was ongoing in 2025. Q2-2026 R&D spend included $11.6 million of direct costs related to penvedutide development, of which $3.8 million was for MASH, $5.3 million for the Phase II AUD and ALD trials and $2.5 million in CMC-related expenses. Q2-26 R&D also included $1.1 million in non-cash stock compensation. G&A expenses in Q2-26 were $7.6 million compared to $5.7 million for the same period prior year. The increase in G&A was driven by an increase in professional fees and compensation expenses. And the Q2 26 G&A included $1.7 million in non-cash.com. Net loss for the second quarter of 26 was $22.8 million or 12 cents a share compared to a net loss of $22.1 million or 27 cents a share in the second quarter of 2025. Now moving to the balance sheet, since the beginning of the year, we strengthened our financial position having raised approximately $310 million year-to-date, including the $225 million follow-on offering in April. June 30, 2026, total cash was $519 million. This cash position provides us with the operating cash runway through the Performa Phase 3 MASH 52-week data readout, which is expected in 2029. While our cash runway forecast fully funds the company through the MASH Phase III 52-week readout, it does not include a potential Phase III trial in AUD. As we previously noted, our plan and preference is to use non-dilutive means to fund that trial when needed, and on the strength of this data, we believe we'll have the options to fund that trial, which could include royalty, debt, and or strategic partnerships. With feedback from regulatory authorities, we'll determine the scope and level of investment required for a Phase III trial in AUD, and we'll provide the street with an update as appropriate. Thank you very much. That concludes our prepared remarks, and we'll now turn the call back to the operator for the Q&A session.

Thank you, ladies and gentlemen. If you'd like to ask a question at this time, you will need to press star 11 on your touch on telephone and wait for your name to be announced. To withdraw your question, simply press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question coming from the lineup, Thomas Smith with Leering Partners. Yolan is now open.

Hey, guys. Good morning. Congrats on all the progress and thanks for taking our questions. Good morning. On the Phase 3 Performa study, appreciate the comments on the regional targeting for the trial sites. I just wanted to ask about your sense of the competitive landscape for mass trials, since there are a number of competing Phase III programs at various stages of enrollment. And I was hoping you could provide a bit more detail on how you're targeting study sites with respect to competing programs. How much overlap is there with some of these ongoing pivotal programs? And maybe if you could talk about your expectations on patient enrollment relative to some of the other Phase III programs or SEMA or Cervodutide or the FGF21s. And then I have a follow-up, if I could.

Thanks, Thomas. First of all, as we said in the prepared remarks, we're really encouraged by the speed at which we've been able to initiate and the work happening on the ground that Christoph can give you a little color on. We are operating in an environment where there are some other studies going on, which I think we've been able to work through and take advantage of, frankly, some of the experience out there, both on the CRO side and on the site side, as we think about the speed at which we want to enroll. Christophe?

Yes. So we've planned to have a number of sites, as we said, in the range of 290, 300 sites around the world. We are well aware of the competitive nature of such trials. And what we've built on There's a number of factors that are attractive for our study, including the AMASH, the design where we can reduce the screen failures, and also our relationship with the sites, either through our experience in the phase two or through our CRO right now. We also have not expanded the number of patients that we are asking each of those sites to a reasonable number so that they are able to do additional study as well so this is really those different features in our consideration for enrollments are really pleasing I should say the PIs and the investigators to this point so we were able to to get a really good response on this our enrollment is around So for studies in that nature between 18 to 24 months, we are, because of this, different aspects that we heard they are very attractive for the PIs. We are aiming at the lower end of this, and that fits well with what we are hearing right now.

That makes sense. And then a follow-up, if I could, on the RESTORE study in ALD. Could you just elaborate a bit more on the rationale for the protocol amendment and using this hierarchical analysis, looking at the 48-week time point before the 24-week time point? And can you comment a bit more on the powering assumptions and what impact the protocol amendment might have on those assumptions? Thanks so much.

Sure. So, it doesn't impact any – there's no change at all on the protocol for deaths. It's statistical features from the AUD data and what we've seen and the benefits we expect from Pemvidutide on the lever. For future filing and regulatory filing, we are interested in better characterizing this aspect into the ALD study. So what we're going to be doing is reading at 48 weeks. there is no the there's no alpha spending or anything like this with that hierarchy call we were collecting those data anyway what we're just doing is now being able to analyze both both aspects at week 48 and at week 24 in the powered manner using that statistical approach so it's three it's trying to and if you the role of this study in our differentiation on the liver benefits.

And as we indicated in the prepared remarks, Linda went into some detail. You know, we think about the AUD population with the moderate to severe patients. There is, we know, a significant overlap with AUD and ALD in that population. So having a 12-month view around the liver benefit fits consistently with where we see the differentiation of PENV in an area of ION-MED-EV.

Thanks, Thomas.

Thank you. Our next question in queue coming from the line of Michael DeFeo with Evercore ISI. Your line is now open.

Good morning. Thanks so much for taking my questions, guys. A few for me. For AUD, is conducting one global pivotal trial still the base case now that you're incorporating both FDA and EU requirements? And I have a follow-up or two.

Okay. So, even the guidance, the recent guidance, the June guidance from the FDA, we expect that one trial will be sufficient. That guidance talks about the weight of evidence and the quality of the biomarkers. We know that, for example, PES is becoming more important. We have those PRO, the WHO, RDL, and the zero heavy drinking days that are validated. So our approach is to go with one single trial and to be able to use also our additional experience with PemViducide in other populations for our safety database. So altogether, we believe that one people told phase three in AUD and potentially ALD patient as well will be the best approach, and we have some synergies between our different programs.

And of course, we'll have the expected discussions with the regulators, both in the U.S. and in Europe, as we move forward and try to narrow down the assumptions around what phase three is going to look like.

Got it. Very helpful. And two follow-ups, if I may. On the reclaim call, you were still analyzing the timing of the drug-related discontinuations. Now that some time has passed, do you know whether they clustered around either dose escalation step? And separately, back in March, you said you were active on XUS partnering, and you've since generated the positive AUD data. My question is, has the level of strategic interest changed meaningfully since reclaimed?

So, I'll start on that one, and then Christoph can take the second one. I think we've maintained, Michael, as you know, that we're active and open on the front of exploring how best to accelerate and fund the program globally. We continue to maintain the openness and activity on that. We do believe that with this data set in AUD, the potential of PEMB has increased. And so we take that into the discussions appropriately with strategics.

With regard to the discontinuation rates, we are still looking in more details at those data. The discontinuation rate overall was fairly similar between placebo and the active arm. It was more related to GI AEs in the placebo effect. It was to lack of efficacy, so this is pretty consistent with what is expected, but we'll have more of the details of every single aspect of this in the weeks to come. we're still looking into our final uh programming etc to get those data great thanks so much thank you thank you thanks michael our next question coming from the line of roger song with jeffrey fielan is now open hi guys this is peter on for roger um congrats on the progress and thanks for taking our question uh so two from us um do you plan to share any subgroup analyses from the reclaimed aud trial and are there any patient segments where efficacy appears uh particularly compelling and second um could you share any additional detail on how you're thinking about phase three timing trial design um and funding thank you sure so on the on the sub analysis yes we'll we'll be continuing to to dig into our data and look at this uh we'll present these data at future medical conferences, and so we will have additional information around this. On the phase three, I shared a little bit in the prepared remarks some of our thoughts right now. I think, importantly, again, we are gaining more and more information around the benefits and on the lever side, so we want to really establish this in our phase three, given the overlap between our AUD, ALD population. So that's going to be a real factor here that we're going to look into and also broaden the population a little bit on the BMI side, given that our phase two had that limitation. So we're looking at a study that's probably, given the current guidance, having a 24-week primary efficacy endpoint, But we want to look also probably further to get all the way to 52 weeks with regard to additional analysis. So we'll give more details as we are building this and as we're getting feedback from the regulators.

Yeah, and on the question of timing, look, we're not yet guiding on timing. We're really encouraged by the data. we're going to work quickly and thoroughly on compiling the full data set to answer some of the questions even that have come across this morning. We'll look to package that in a submission to the agencies for an end of phase two, and we'll update you accordingly as you would expect around specific timing. But importantly, you know, the AUD data really creates the opportunity for a liver franchise here. I think you heard this morning and you'll continue to hear from us about where we see the differentiation not only in MASH but in AUD and really the dual mechanism and the opportunity to impact drinking and impact the liver kind of helps us focus on a group of higher risk patients where we think the benefit of PEMB can be unique and different from the other drugs that are potentially available or the ones you know of in development now.

Great, thank you.

Thanks, Peter.

Thank you. Our next question, coming from the line of Ellie Murley with Barclay, CLN is now open.

Hey, guys. Thanks for taking the question. I'm curious your thoughts on how you're thinking about the placebo rate in your MASH Phase 3 study, and can you remind us what your design allows in terms of GLP-1 use at baseline and throughout the study? And then just a second question, I guess, what would be good data from the Phase 2 ALD study on liver stiffness next year. Thank you.

Okay, great.

Yes, on the placebo, we've built some aspects with regard to, for example, the AMASH to decrease variability, to decrease the training of pathologists, et cetera. And we're reading at 52 weeks. So we think that for the MASH study, that analysis for the accelerated approval will give us what we are expecting with regard to the antifibrotic effects that we're seeing. The GLP-1 use is accepted in our study, the antidiabetic doses, and so we will include also diabetic patients in that particular study as long as they are on GLP-1 or other therapies that are limited to their anti-diabetic doses. And then I think you had a question on the... Sorry, I'm blinking. ALD expectations on the ALD data. Oh, it would be good on the ALD. Well, we are looking forward to see, and we believe that that exactly by now being able to read both at 48-week and 24-week, that we will be able to clearly characterize the liver benefit effect of pemvidutide through this longer treatment all the way to one-year duration. And this will be very helpful in our discussion with regulators. So a study that would deliver this would be obviously a very positive study for us.

And remember, in that study, we're also capturing all the expected impact of reduced drinking, which I think when we look at the population in that ALD study, we know at baseline, you know, heavy drinking ongoing. So, again, just reinforcing that overlap that exists between AUD and ALD. Thanks, Ellie.

Thank you. Our next question coming from the line of Crepa de Vavaconda with Truist of Purity. See you, Linus Nelson.

Hey, guys. Thank you so much for taking my question, and congratulations on the progress of this quarter. I have a couple of questions. One is on AUD. Can you remind us what percentage of AUD patients are overweight or obese, and how this might play into your Phase III planning? does it make sense to focus on demonstrating dual benefit of weight loss and drinking reduction to appeal to payers and also if i heard it correctly you plan to have a cohort based on bmi less than 25 um and uh going back to the mass study that's my second question um do you have any mri dexa sub studies in pro forma um to support a specific you know lean mass preservation which is something that you've shown in your phase two study claim on the label or is this mainly something that you would use for messaging assuming the drug is approved? Thank you.

So we'll try to pick them off here because you gave us a bunch. I can go back to the questions. First, I was writing quickly but thanks. First on Performa, we have, as we've said before, we are doing work as part of the overall program, which will allow us to better characterize some of the impact on body composition in the MASH population. And again, we think doing that as part of the phase three might give us some opportunity on the labeling side if everything goes in the direction. Maybe, Linda, you can comment on some of the – can comment and see, I think the question around the overweight and obesity, you did hear, Kripa, Christoph, correctly. We do anticipate including patients in a potential phase three on AUD that were below the 25 BMI. That will be part of the construction of the trial and the dialogue. Linda, maybe you want to talk about the concomitancy.

Yeah, I think depending on the source, you see upwards to practically two-thirds of patients having overweight, not necessarily obesity, but a combination of those. So a safe assumption is at least half because we know what the rates are in the general population and we see that drinking can contribute to excess weight. There's also obviously in some of the more severe populations, particularly in ALD, they actually have some lean drinking. They have caloric restriction issues because they're drinking and have other issues, but the benefits that we talked to some preliminary market access payer work, the losing of weight can be helpful to them as a sign, but really the reductions in drinking and the impact on the liver and the potential to address that, here you have something that not only is, in PEMV, something that is not only addressing the cause of the issue but the damage to the liver potentially and that's what we're really interested in exploring on that back end hence the discussion on the ALD you know timelines and where we're looking at a 48 week readout all of these things that differentiate us make us highly relevant to the population that needs the most help and that's really where we're focusing and that idea because there's never been something that really is doing both in the AUD population, that is really resonating with, I would say, patients, prescribers, and payers.

And I think that's why we view the AUD data set we just reported out as so robust and de-risking, because we get clarity across all of the endpoints, including the two approvable endpoints. We have a clear impact at 24 weeks on drinking across those, on weight in a population where, again, the two-thirds of them are overweight or obese, and the signals on the liver, which we'll explore more deeply in phase 3. So we think we're in a good position to understand what PENVY can really bring in uniquely in this high-risk segment.

Great. Thanks for getting all of them.

Thanks a lot.

Thanks, Chris.

Thank you. Our next question coming from the line of Annabelle's Mimi with Stiefel, Yolen is now open.

Thanks for taking my question. So I'm curious about the follow-up from the AUD study. So I think it's pretty well known that with the weight loss drugs, there's rebound when patients stop taking the injections and there's persistence problems. And so when you think about AUD, has there been any follow-up study on these patients to see how they behave after they stop treatment? Is there a rebound in their heavy drinking? And is there any work being done in trying to maintain the persistence of treatment on this drug? And have you noticed anything with any of the other incretins where they remove treatment and then there's Rebound and the alcohol use. And just one question on that, and then if you could just give us some clarity on the powering assumptions for ALD. Thank you.

So let me start on what the competitive context is with Rebound. What has happened more often is that patients cannot tolerate those therapies and are falling off. And that is a major issue, and part of the reason that you saw an injectable come out with Vivitrol to try and get compliance and staying on drug to help give the most benefit. So that still is an unmet need. And again, when you reflect on the tolerability overall that we've seen with PEMV, we believe that that also positions us very well as we study, you know, in various therapeutic areas here. We think that that is an advantage for us. In terms of, I think, following up on our own study results, I think we haven't had a chance even to do that. And I'll defer to Christophe to look at that, because I know we haven't looked at all the data sets yet.

Exactly, Linda. Thanks. The study was not designed to look at a formal assessment of rebound. We have a follow-up period that we're going to get some information. We'll look into that. I think, again, to the point Linda made, having a drug that people can take chronically, take on the long term, I think even the guidance from the FDA relates to the fact that this is a chronic disease. This is not just a temporary disease, and the treatment needs to be evaluated chronically, both as well with the safety and tolerability that we have seen with pemvidutide. So this is something we'll be able to look a little further in our phase three and over longer duration. With regard to power assumptions for ALD, we will power the study north of 90%. The single trial needs to be powered like this. We will have, like we discussed, the typical AUD with already some damage in the liver, whether they know it or not, similar to what we've seen in our phase two, and we'll have also ALD population, and we'll make sure that this is power adequately. We'll have those discussions with the regulators, and we'll be able to design the study so that it supports the indication for these populations.

Great, thank you.

Thank you.

Thank you.

Our next question coming from the line of This is Katrin Occoni with Citizens, Yolanda's, and the phase three programs in AUD especially, considering it's not fully funded while leveraging the ongoing, the ongoing phase three, phase three mass trial. When would you kind of decide to allocate additional funds and what would you need to see to do that?

Hey, maybe Greg, you can jump in. I think, and I'm sorry you cut out a little bit on our end, But I believe the question is around how we're thinking about financing on the AUD side.

Yeah, thanks. Greg here, and I appreciate the question. So, yeah, this strength of this Phase 2 data in AUD presents us with an opportunity for Phase 3. So next steps, as was teased out earlier in the call, will be feedback from FDA on the end of Phase 2 meeting, and that will allow us then to step back and sketch out and design the blueprint for the size and scope of that phase three, costing that out. Clearly anticipate that'll be quite a bit less costly than a MASH phase three would be. And with that design, would then be in a position to finance that in the new year and anticipate that the preference would continue to be for non-diluted funding. Those options could include a combination of strategic money and or debts or royalty, et cetera. So again, highly confident that that's a program that's fundable. And again, just to remind, we reported June 30 cash, $519 million. That's runway through the MASH Phase 3 readout top line in 2029. So again, takeaway message there is a strong balance sheet today. Great opportunities for the second great indication and a second Phase 3 to build out the franchise.

Thank you. My next question in queue coming from the line And Patrick Trucchio with HC Wenright, your line is now open.

Just a few follow-up questions on PERFORMA and MATCH. I was wondering first if there was a read-through or learnings from the Phase II reclaimed trial in AUD around the 2.4-milligram discontinuations and how that might change titration monitoring or dose reduction plan for the 2.4-milligram arm in Performa, and then as well in Performa, I'm wondering if you're going to be allowing background GLP-1 therapy, Respector Arm, or other, you know, directed therapies, and how you could manage patients who want to initiate or resume those therapies during the 52-week biopsy period. And then just lastly, can you detail a bit more about AIM-MASH, exactly how AIM-MASH AI assist will be incorporated into the pathology workflow and just sort of the operational metrics around this.

So to the first point on the titration and the learnings from the AUD trial for the 2.4 milligram, yes, we have learned that in that particular population, the monthly titration is a simple step. That is a couple of steps, and it's favorable with regard to, in particular, nausea and vomiting. So I think the direction is very supportive to move for the 2.4, and we'll have one step for going to the 1.8 milligram and the two steps to go to the 2.4. So very simple, easy titration. And so those are consistent learnings from the AUD trials applying into the PERFORMA phase 3. With regard to GLP-1 and, as mentioned, or resmiteron, as mentioned before, the GLP-1 will be tolerated only at antidiabetic levels. The resmiteron will not be included in the trial in order to not jeopardize our primary endpoint with regard to the 52-weeks readouts on the biopsy. We will collect history of patients that do have failure on GLP-1, resimiterone, et cetera, who have not improved, not tolerated this. So we'll be able to kind of characterize the population and understand which were, I would call, treatment failures for those particular therapies. And with regard to the AMASH-assist, The way it works is basically the slides that are taken from the biopsy are stained, and then they're digitalized. Now, the program on the AMASH Assist will point to the features based on that AI system, propose a score, And the pathologist will be able to look at those and agree or disagree with the scoring or with the evaluation on certain aspects. And given it's a consensus reading, at the end, as per the FDA requirement, the pathologists are responsible for the scoring. But PATH-AI claims that it improves viability and improves consistency between pathologists We've already put in place additional aspects to make sure that we have that consistency between training, harmonization, and using charters and alignment on how to read the So all these features, we hope, will decrease any variability, improve consistency in the reading, and help not only in the enrollment phase to decrease the screen-filled patient but also in the efficacy reading to have less viability around the reading. So put together, this is the first, again, PERFORMA. It's the first Phase III trial with DMH Assist, and there's quite a lot of, actually, excitement around this from the site, as we've heard.

And then just on the reclaim, if I can add a few additional follow-ups, Just in terms of durability of the AUD effect, do you have any sense of whether the treatment effect was early and durable, and will you eventually have this data? And then on the phase three endpoint selection, or would you eventually share that data? And then on the phase three endpoint selection, I think you noted that two-level World Health Organization risks drinking level reductions, zero heavy drinking days, or the FDA-recognized registrational endpoints. Which one, or is there a preferred primary endpoint, and would heavy drinking days be supportive or primary? And then just lastly, on the AUD phase 3 population, you mentioned broadening the phase 3 AUD population to include BMI below 25 and potentially lower dose options. What's the rationale for those changes, and would the phase 3 trial include both AUD-only and AUD-ALD overlap patients?

Thank you. so on the on the durability of the AUD we have some elements in our data that show that there was no plateau of the effect after 24 weeks so clearly we're going to continue to explore this in the phase 3 which will go all the way for 52 weeks and is needed anyway for the safety database so we'll have that information but it is expected for example even on the weight loss and other aspects on the past, on the number of abstinent days, for example, to continue improving these patients and the chronic exposure to penviditide is really important to assess. On the phase three endpoint, we are lucky enough in our reclaimed study to have a validation of both. Obviously, we're powering. We are going to select one and align with the regulators. Keep in mind that very often the regulators will look at both. So we have also the options to power fully for both, more likely into one primary endpoint, one key secondary endpoint, something in that nature in the way to look at it. But the zero heavy drinking days or the WHO-RDL will be the endpoint that we'll be clearly looking at. And the population with regard to lower dosing or extending to BMI below 25, as Linda said, originally there's two-thirds of the population that are overweight and have a UD. There's an overlap between these two aspects. But there's also another third that is not overweight. So we believe we can address that population by doing this. these patients may require less exposure or the current 2.4 could be very efficacious, but in some patients, a lower dose could be sufficient. So we need to evaluate this during our phase three. We believe a couple of doses will be something, an approach that will allow us to better characterize how to to distinguish in this different population and having a broad picture uh with all the details that we need when we discuss with the regulators flat filing perfect thanks so much thank you thanks thank you our next question coming from the line of william woodwick v riley securities your line is now open hi yes thanks for taking our questions so um just looking Looking back over the past year and sort of the changes in some of the ALD inclusion requirements,

it looks like you've increased your liver stiffness that you're allowing into the trial from about 18 and a half up to about 25. I was wondering if you could speak to sort of how you expect that or why or, you know, that change may have been occurring, you know, possibly being able to provide any details on how, you know, the inclusion of severe, less severe population, and if that led into anything to do with the change in hierarchy for your primary endpoint. I know you said that that was, you're going to be evaluating both, but it does seem to be semi-hierarchical. And then follow-up question or secondary question, at least for your AUD trial, I know we're expecting uh i believe berneptotide will be reading out in 2028 so uh which is obviously uh has the gip one so i was just curious how we should be thinking about at least in uh drinking reduction uh the differences that may occur with gip versus a glucagon component added on thanks yep i'll start on the lsm on the liver stiffness criteria inclusion criteria these are not related at all to the change in reading of primary endpoint at week 48 with the hierarchical

procedure. The hierarchical procedure, as I mentioned, is directly focused on strengthening our understanding of PemVidotide's beneficial effect on the liver and supporting further discussions with the regulator. The criteria and the amendment that we've had was actually related to a study that we've made as a hepatic impairment study that allowed us to now expand to those patients and broaden that criteria. So as you can imagine, every time we do developments, we have a number of learnings, and we were able to implement the learnings from the hepatic impairment study that didn't show any risk in the population, and we were able to expand and broaden the criteria. with regard to the AUD and the brain appetite we're looking forward to see this data I think what again brain appetite is a GLP one GIP it doesn't have the liver effect so it's probably similar to what you see with GLP one semaglutide things to that extent may be a little different because of the GIP component, but the direct liver impact we believe is important. We've heard from our KOL that it's really for them what they call a game-changing approach if you're able to treat the patients that have a UD and may not even know they already have liver steatosis, inflammations, or be even having fibrosis. So PEM-Vigetide fits really well in that population, and that's what we want to build on.

Yeah, I think they're also looking at earlier patients, the mild segment.

Thanks for the question. Operator, are there any more?

Yes, we have one more question in queue. Our last questioner will come from the lineup, and it's him with William Blair. Yolanus Nelson.

Oh, great. Thanks for squeezing me in. So, maybe one more on the RESTORER study and about liver stiffness. So, the upper end of that range, 10 to 25, the upper range is suggestive of a cirrhotic beaters for these patients. I'm curious, if the data is supportive in that segment, and how would you use that data, you know, potential re-throughs to other indications and basically generating more data for PEMV in the cirrhotic patient population.

Thank you for the question. So on the liver stiffness, as you know, the range, there is a little bit of variability there. So you're correct. We may include a very small or minor population of patients that are a little more advanced, closer to the cirrhotic stage. We know the drug is safe because we've done the hepatic impairment, as mentioned before. We know that in this population, we're going to be okay. I think we will have the opportunity to include those patients in our phase three and look at the AUD, but in the meantime, it's important, again, one piece that in this population is happening is over a certain period of time, from a regulatory perspective, it will be important to show that even the patients advance of if they're worsening we can address this population so that will be something that the regulator will will be looking at and and we'll be happy to provide that information based on this on those approach or inclusion criteria thank you thank you and that's all the

time we have our Q&A session I will not turn the call back over to mr. Jerry Are there any closing comments?

Thanks, operator, and thanks, everybody, for joining us today. From our standpoint, we feel very positive about the progress we've made, significant progress to date. I think we're clear on the work to do ahead of us and definitely committed to continuing to advance what we believe to be a promising, meaningful, differentiated therapy in PEMB for serious liver conditions. moving forward. It's going to be an exciting time. I'll continue to forward to update you on the progress moving forward, and enjoy the rest of the day, and have a great last year's summer. Take care.

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