Earnings Call Transcript - ALT Q2 2023

Operator, Operator

Good day, ladies and gentlemen, and welcome to the Altimmune, Inc. Second Quarter 2023 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 call, Rich Eisenstadt, Chief Financial Officer of Altimmune. Rich, you may begin.

Rich Eisenstadt, CFO

Thank you, and good morning, everyone. Thank you for participating in Altimmune's second quarter 2023 financial results and business update 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 hold a question-and-answer session. A press release with our second quarter 2023 financial results was issued this morning and could be found on the Investor Relations section of the company's website. Before we begin, I'd 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. For a discussion of some of the risks and factors that could affect the company's future results and operations, 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 disclosure in our press release issued this morning, and now available on our website. These statements made on this call speak only as of today's date, Thursday, August 10, 2023, 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, our Chief Executive Officer.

Vipin Garg, CEO

Thank you, Rich, and good morning, everyone. We appreciate you joining us today for a discussion of our second quarter 2023 financial results and business update. We are excited about the progress of our lead product candidate, pemvidutide, a GLP-1/glucagon dual receptor agonist, in development for both obesity and NASH. We recently announced the initiation of our Phase 2b IMPACT biopsy driven trial to evaluate the efficacy and safety of pemvidutide in NASH. Given the compelling 12-week and 24-week data from our Phase 1b trials in subjects with NAFLD, we expect to achieve significant rates of NASH resolution and fibrosis improvement at data readout from the IMPACT trial, which is anticipated in Q1 2025. The data from our NAFLD trial demonstrated a greater than 75% relative reduction in liver fat at 24 weeks, with over 50% of subjects achieving the high bar of normalization of liver fat in the 1.8-milligram dose group. Subjects also had a mean weight loss of up to 7.2% at 24 weeks in the 1.8-milligram dose group with weight loss continuing at the end of treatment. We also achieved significant reduction in serum ALT and MRI-based corrected T1 imaging, both important markers of NASH improvement. We believe that a robust reduction in NASH activity combined with fibrosis improvement and meaningful weight loss will be essential for a competitive product in the NASH marketplace. With regards to obesity, we look forward to reporting top-line 48-week data from our Phase 2 MOMENTUM trial in the fourth quarter of this year. The MOMENTUM interim results of 160 subjects reported earlier this year showed weight loss of 10.7% at the 2.4 milligram dose and 9.4% at the 1.8 milligram dose compared to a 1% weight loss in subjects receiving placebo after only 24 weeks of treatment. These robust reductions in body weight, together with the effects of pemvidutide on serum lipids and blood pressure, without cardiovascular safety signals suggest that if approved, pemvidutide can be an important treatment option for patients with obesity, especially those with NAFLD or dyslipidemia. It's important to point out that these two comorbidities are prevalent in 60% to 75% of the obesity population. Finally, we have another data readout from our Phase 2 clinical trial of HepTcell in chronic hepatitis B in the first quarter of 2024. Recall that this trial is designed to show evidence of antiviral effects against hepatitis B virus and establish the role of HepTcell in combination therapy for the treatment of this unmet need. We're excited about the progress of pemvidutide and HepTcell and the upcoming results of these ongoing trials. With that, I'll now turn the call over to our Chief Medical Officer, Dr. Scott Harris, to discuss our clinical plans.

Scott Harris, Chief Medical Officer

Thank you, Vipin, and good morning, everyone. First, let me tell you about the initiation of our IMPACT Phase 2b NASH trial. This biopsy driven trial is being conducted at approximately 60 sites in the United States with Dr. Stephen Harrison, Medical Director, Pinnacle Research, an adjunct Professor of Medicine, Oxford University, serving as the principal investigator. We are planning for approximately 190 subjects, both with and without diabetes, to be enrolled. Subjects will be randomized to pemvidutide 1.2 milligrams, pemvidutide 1.8 milligrams or placebo in a 1:2:2 ratio that will be stratified for fibrosis stage in the presence or absence of diabetes. Therefore, approximately 38 subjects are expected to receive pemvidutide 1.2 milligrams, 76 subjects pemvidutide 1.8 milligrams, and 76 subjects placebo. To be eligible for study participation, subjects will be required to have a BMI of at least 27 kilograms per meter squared, a liver fat content by MRI-PDFF of at least 8% and an NAFLD activity score of at least 4 on a pretreatment liver biopsy. We also expect to have either F2 or F3 fibrosis with at least 50% of subjects required to have F3 fibrosis. The primary endpoints of the IMPACT trial will be the dual endpoints of achieving either NASH resolution with no worsening of fibrosis or fibrosis improvement with no worsening of NASH, with the primary treatment comparison being the 1.8 milligram dose versus placebo. Secondary endpoints will include achievement of both NASH resolution and fibrosis improvement, liver fat reduction by MRI-PDFF, corrected T1 or CT1 response rate, serum lipids and non-invasive biomarkers of disease activity. Importantly, weight loss will also be assessed as a key endpoint. All endpoints will be evaluated at week 24 of treatment, and subjects will continue to be dosed and followed for an additional 24 weeks to a total of 48 weeks for safety and additional biomarker responses. We plan to employ a consensus read between two pathologists with a third who will adjudicate if consensus is not reached. A plan has also been developed to correlate non-invasive tests with NASH resolution and fibrosis improvement, the biopsy endpoints, and to commence discussions with FDA regarding the use of these biomarkers as primary endpoints in Phase 3. We anticipate reporting top line results at 24 weeks in the first quarter of 2025. Now let me talk about the Phase 2 MOMENTUM trial of pemvidutide in obesity. The trial was designed to enroll approximately 320 subjects without diabetes but with obesity or overweight with at least one obesity associated comorbidity. Dr. Louis Aronne from Weill Cornell Medical School, a leading authority in obesity and obesity clinical trials, is serving as the principal investigator. Subjects were randomized 1:1:1:1 to pemvidutide 1.2 milligrams, pemvidutide 1.8 milligrams, pemvidutide 2.4 milligrams or placebo administered weekly for 48 weeks in conjunction with diet and exercise. Pre-specified interim analysis was performed when 160 subjects completed 24 weeks of treatment. Weight loss of 10.7% at the 2.4 milligram dose and 9.4% at the 1.8 milligram dose was achieved compared to a weight loss of 1% in subjects receiving placebo. Approximately 50% of subjects achieved at least 10% weight loss and approximately 20% of subjects achieved at least 15% weight loss by week 24 at the 2.4 milligram and 1.8 milligram doses. Significant improvements or positive trends in cardiometabolic risk factors were observed. Importantly, these effects were achieved without arrhythmias, clinically meaningful heart rate increases or other safety signals. We look forward to the top line 48-week results from the MOMENTUM trial in the fourth quarter of this year. We expect to see continued weight loss beyond the double-digit levels noted in our 24-week interim analysis. Other top line readout parameters will include subject disposition, adverse events, vital signs, serum lipids, and glucose control. Also, as we have previously announced, we have completed enrollment in our Phase 2 multicenter clinical trial of HepTcell in patients with chronic hepatitis B. Chronic hepatitis B continues to represent a serious unmet need in the United States and worldwide and represents a significant commercial opportunity. HepTcell is an immunotherapeutic designed to activate T-cells to fight the hepatitis B virus infection. The HepTcell trial was designed to enroll approximately 80 subjects with an active chronic hepatitis B and low hepatitis B surface antigen. The primary endpoint of the trial is a 1-log reduction or clearance of the hepatitis B surface antigen. We expect to announce the results of this trial in the first quarter of 2024 once all subjects complete the six-month treatment period. It’s generally believed that an effective therapy for chronic hepatitis B infection will require both directly acting antivirals and immunotherapy. And we believe that HepTcell is highly differentiated and may provide for a functional cure of chronic hepatitis B infection when combined with novel directly acting antivirals.

Rich Eisenstadt, CFO

Thank you, Scott, and good morning again. For today's call, I'll be providing a brief update on Altimmune's second quarter 2023 financial and operating results. More comprehensive information will be available on our Form 10-Q to be filed with the SEC later today. Altimmune ended the second quarter of 2023 with approximately $160 million of cash, cash equivalents, and short-term investments compared to $184.9 million at the end of 2022. Research and development expenses were $13.3 million in the second quarter of 2023 compared to $16 million in the same period in 2022. Approximately $7.4 million of this total for the second quarter of 2023 were direct expenses for the conduct of our clinical programs, including $5.6 million in direct costs related to development activities for pemvidutide and $1.8 million of direct costs related to development activities for HepTcell. General and administrative expenses were $4.8 million for the three months ended June 30, 2023 compared to $4.4 million in the same period in 2022. The change was primarily attributable to increased stock compensation and other labor-related expenses. Approximately $3 million of our quarterly operating expenses were non-cash expenses, primarily related to stock compensation. Interest income was $1.8 million in the second quarter of 2023, compared to $300,000 in the same period of 2022. Net loss for the three months ended June 30, 2023 was $16.1 million or $0.32 net loss per share compared to a net loss of $20.1 million or $0.42 net loss per share for the second quarter of 2022. We estimate that our existing cash funds us through the 24-week biopsy results from our IMPACT Phase 2b NASH trial expected in the first quarter of 2025. Our financing also funds completion of the 48-week MOMENTUM trial and the HepTcell trial. I will now turn it back over to Vipin for his closing remarks.

Vipin Garg, CEO

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?

Operator, Operator

Thank you. Our first question comes from the line of Seamus Fernandez from Guggenheim.

Unidentified Analyst, Analyst

Hi there. This is Ilana, on for Seamus from Guggenheim. Thanks for taking our question. We were just curious as far as your expectations for weight loss at 48 weeks. Are you still targeting mid to upper teens? And secondly, any thoughts on what Merck presented with respect to their GLP glucagon at EASL recently? Thank you.

Vipin Garg, CEO

Sure, Ilana. Good morning. Scott, do you want to take that?

Scott Harris, Chief Medical Officer

Yes, thank you for the question. Yes, we still are expecting weight loss in the mid to upper teens. We think that in view of the SELECT readouts which showed that to be associated with a significant reduction in cardiovascular risk, that's a very significant point to achieve. But with regards to SELECT, I would point out that was achieved with GLP-1 monotherapy alone. And with the glucagon effects, we believe that with the reduction in serum lipids and also hepatic fat, we can achieve even better results than those achieved by semaglutide in that trial. With regards to Merck, we believe that the findings validate our continued hypothesis and results that glucagon is extremely important for reducing liver fat. So we were happy to see confirmation of that information. But several things I would point out about that trial was, number one, that had to go through a significant titration period. We're not doing that. We have no titration at the two doses that we're employing in our upcoming NASH trial. And the second is that compound has also been associated with significant heart rate increases, which as I mentioned in my opening remarks, those have not been seen in our program.

Unidentified Analyst, Analyst

Great. Thank you.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

Yasmeen Rahimi, Analyst

Good morning, team, and thank you so much for all the great updates. I think this morning, as you know, the SELECT data this week has really emphasized how the demand for new novel therapies for obesity continues to increase. I think we saw also this morning another acquisition by Nobel. So this raises the question, sort of, if you could just kind of give us an update on how the M&A interest is evolving. I think we have seen in the last month two acquisitions of therapies of where they bring broader novelty and that it's not just about weight loss. So I would love to get an update on how M&A interest is growing and what do you expect the impact on SELECT will be in your discussions with potential partners around obesity? And then secondly, there are two additional key readouts upcoming in the first half of 2024, a biopsy data from tirzepatide from as well as the GLP/glucagon compounds from BI and Zealand. So I would love to hear your thoughts on how you're thinking about how those results could provide color or detail or translation or anything around that? I think a lot of our clients may not be realizing that those two readouts are really key. So would love to hear if you could tackle M&A, tackle what you expect to see in these two biopsy readouts with two incretins in the first half of 2024? And I'll jump back into the queue. Thank you.

Vipin Garg, CEO

Thank you for the questions. Let me address the M&A question first, and then I'll hand it over to Scott Harris to discuss the data expected in the first half of next year. As we've mentioned, we anticipate that the obesity market will segment. There will be various mechanisms that both physicians and patients will want and benefit from. We're beginning to observe that the introduction of the first generation of obesity drugs is not the end of the road; additional mechanisms will be necessary. By integrating glucagon with GLP-1, we believe we can offer significant differentiation beyond GLP-1 alone, particularly as we're seeing notable improvements in serum lipids and leading reductions in liver fat. The initial wave of diabetes treatments aimed at obesity is tailored for patients who have both obesity and diabetes, but many patients without diabetes also suffer from other conditions like dyslipidemia and high liver fat levels. We believe we are well-positioned to address those patients. We've been very encouraged by the interest shown, as evident from two recent acquisitions in novel obesity mechanisms and compounds. Glucagon is set to play an important role, and we are receiving positive signals from large pharmaceutical companies regarding their internal programs and the glucagon data emerging. We are optimistic about our ongoing discussions, and the data from MOMENTUM, as well as the upcoming data and the initiation of IMPACT, will further enhance those discussions. We are eager about the chances of securing a partner before we commence Phase 3 development in obesity sometime next year.

Scott Harris, Chief Medical Officer

Sure, Yasmin. I'll address your second question regarding tirzepatide and the Boehringer Ingelheim Zealand results expected in the first half of next year. It's crucial to emphasize that tirzepatide does not have glucagon activity, and the glucagon activity in the Boehringer Ingelheim Zealand compound is quite minimal. The compound is predominantly GLP-1 focused, with an 8:1 ratio. Consequently, they are not observing significant effects on serum lipids, which also holds true for tirzepatide. This directly relates to the absence of glucagon. In contrast, we do have glucagon, and we're seeing substantial reductions in both serum lipids and liver fat. In their non-invasive study, tirzepatide at the maximum 15 milligram dose only achieved a 39% reduction in liver fat content over the course of an entire year. We believe this reflects the role of glucagon. Zealand has not yet released any non-invasive data regarding liver fat, but we anticipate similar results. We maintain that glucagon is critical for the rapid reduction of liver fat, which is essential for achieving not only NASH resolution but also improvements in fibrosis as seen on biopsies. We expect that the results from our IMPACT trial will significantly outperform those from either of the two compounds in the first half of next year.

Yasmeen Rahimi, Analyst

Thank you so much team. I'm really excited on the continued progress. I'll jump back into the queue.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Roger Song from Jefferies.

Roger Song, Analyst

Great. Congrats for the progress as well. And thank you for taking the question. Maybe a couple of questions, mostly related issue to obesity. First of all, can you comment on your readiness for the Phase 3 for the obesity trial in terms of the dosing and then maybe some of the consideration after you're seeing the Phase 2 24-week data? At the minute, you're still waiting for the 48-week, but just curious the preparation for the Phase 3 in conjunction with the partnership discussion. So that's number one. Number two, very interesting, everything you mentioned, this comorbidity with obesity of pretty high percentage. Just curious given the very differentiated glucagon addition to the mechanism, how likely you think you can do some creative design for the trial, maybe enrich those comorbidity patients to demonstrate even bigger treatment effect or the benefit for those patients with comorbidities? Thank you.

Vipin Garg, CEO

Absolutely. Scott, do you want to take the comorbidity question first?

Scott Harris, Chief Medical Officer

Yeah, Roger. Thanks for the question. So obviously, we're deeply in preparations for Phase 3. And we have not been public about what those specific plans will be, but we have talked about the fact that based on the prior programs, we think the safety database will be about 5,000 subjects with about three-quarters of those receiving active drug and about one-quarter receiving placebo. It appears that it's the size of the safety database that matters. The agency would want to study in non-diabetics and diabetics. Beyond that, there have been some options about looking at for example, osteoarthritis, looking at the comorbidity and the like and we're in active discussions right now. And we've been getting feedback from partners about that as well, as what their preferences would be. So as soon as we have additional information about that, we'll share that with investors. Vipin, did you?

Vipin Garg, CEO

We are aiming to be ready for Phase 3 in the second half of next year. We need to wait for the 48-week data before we can meet with the FDA, which we plan to do. We are preparing for that. Our objective is to secure a partner before we commence Phase 3, and the timing allows us to find a partner and finalize the Phase 3 program after our end of Phase 2 meeting with the FDA. Regarding patient recruitment for comorbidities, as Scott pointed out, it will be a large Phase 3 campaign, so we do not need to specifically search for these patients; they are readily available. The prevalence of the two comorbidities we are focusing on is even higher than that of diabetes, making it easier for us to access these patients within the obesity subpopulation.

Scott Harris, Chief Medical Officer

Yeah, Roger, what I wanted to add, and I was waiting for Vipin to finish his comments, was that the best place to look at those enriched populations is in an outcomes trial, because actually that's the endpoint, right? And you want to make sure that it's adequately powered. So as I mentioned in the opening remarks, the SELECT trial is extremely important for showing that obesity improves the outcomes of patients at risk. And as I also mentioned in the opening remarks, we think that with comparable weight loss, we will do better than that because of glucagon's effects on serum lipids and hepatic fat content. So that trial will be enriched with those patients. We think that's probably the best place to analyze these results because of the number of subjects powering the trial and what the outcome actually is.

Roger Song, Analyst

That's great. Thanks for all the comments. I really appreciate it. That's it from us.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Corinne Jenkins from Goldman Sachs.

Unidentified Analyst, Analyst

Good morning. This is Craig on for Corinne. So I wanted to build on a point that you just highlighted, specifically that about finding a partner to develop pemvidutide. And I guess what I'm wondering is, can you describe what your ideal partner would look like? And specifically, are you looking for someone to contribute to the development of NASH and obesity or just individual indications?

Vipin Garg, CEO

Absolutely. Good morning, and thank you for the question. The best way I can describe it is that we're engaging with a wide range of companies, including all the ones you would expect and more. In terms of the indications, we don’t believe a partner would want to separate them since it’s the same molecule and drug for both NASH and obesity. Ideally, our partner would be interested in both indications. The good news is that both are metabolic diseases, so we're finding interest in both and even other indications for incretin-based compounds. Overall, we have flexibility in structuring the deal in various ways, but I think both these indications, or possibly all of them, would be part of that partnership. The key for us is to capture the full value of the asset. We are very encouraged by our conversations and will continue moving forward.

Unidentified Analyst, Analyst

Got it. Thank you very much.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Mayank Mamtani from B. Riley Securities.

Mayank Mamtani, Analyst

Good morning, team. Thanks for taking our questions. A few from us. So staying on this theme of glucagon-based therapeutics being complementary to a number of programs out there, I was curious if there's any work underway regarding combinability with semaglutide. I assume your NASH Phase 2b is assuming some sort of background rate of either diabetes or obesity level doses. Not sure if you can comment on what those rates are. Sorry, I haven't been able to dig out your clinical trial design yet on ct.gov. I'm not sure if that's posted there. And then I have a couple of follow-ups.

Scott Harris, Chief Medical Officer

Yeah. Mayank, we believe that pemvidutide would be safe on top of existing GLP-1 therapy. It's something that we've certainly looked at as potentially studying at some point in the future, but our current feeling is that there would be no problem if a physician wanted to combine those therapies using them concomitantly.

Vipin Garg, CEO

And, more importantly, we should see additional benefit of putting pemvidutide over and above any of the baseline diabetes treatments again because of the glucagon component and having a direct effect on hepatic fat.

Mayank Mamtani, Analyst

Like, boosting GLP-1 activity should only be helpful, like, does.

Scott Harris, Chief Medical Officer

And then on MOMENTUM quickly, the baseline characteristics there for the full patient cohort, relative to the interim analysis population cohort that you recorded on in March, any insight you have there on differences? And I was also curious about, there were certain sites that may have contributed to a higher discontinuation rate. So was there like a ratio that you can share, what the full population versus the interim analysis population looks like in those sites? Yeah, Mayank. We announced, when we completed enrollment in MOMENTUM, and I believe that was in the September of 2022, we announced that we had done a comparison of the full population versus the interim analysis population. And that the, we had made public statements that the demographics were comparable in terms of age, BMI, body weight, gender ratio, and the like. So there's been no additional information. That was really a snapshot we took when the trial completed enrollment. Regarding the discontinuation rates of trials, yes, there have been some sites that had out of place rates of discontinuation that clearly were higher than other sites. For example, Dr. Aronne's sites had no discontinuations at all. And it showed that the careful management of patients really controlled or mitigated the discontinuation rate. So yeah, that is something. And we've taken a look at those sites and whether they would really be sites that we would consider for future trials.

Mayank Mamtani, Analyst

Okay. Got it. And I have to ask a quick SELECT CVOT trial question. Obviously, we have to see the full results there. But since this was a non-Type 2 diabetes patient population and everyone's trying to understand the HbA1c independent mechanisms at work here, I was just curious about the CRP biomarker, as we know, the inflammatory underlying state that can help with outcomes. Is that a marker you're looking at in your NASH study that is starting out or even in the obesity study if you'd report on that?

Scott Harris, Chief Medical Officer

Yeah. We hope to have that information in the future. We don't have information to share at this point.

Mayank Mamtani, Analyst

Okay. And last one for Rich quickly. On the R&D spend coming down quarter-over-quarter, obviously, as you ramp up with this NASH study scaling up, we should have that sort of trend back up. I was just curious if any manufacturing capacity related investments that also kind of feed into that because, obviously, you are probably making sure that you are making investments for Phase 3 ready supply of the drug?

Rich Eisenstadt, CFO

Yeah. All that is true, Mike. The spend did come down as some of the other trials, the NAFLD trials we ran last year and the diabetes, the drug-drug interaction trial rolled off. So Q2 was pretty much just MOMENTUM trial expense, a little bit of investment into the IMPACT trial. Looking at the second half of this year, the IMPACT trial expenditures should increase. And as you point out, we also will have some manufacturing expenses to get the Phase 3 materials ready. All that will probably lead to some increase or rebound back to the old R&D expenditure rates, but that should be just temporary or temporal as MOMENTUM completes and patients are rolling off that trial now. So as we complete that, there's always a big expenditure towards the end of the trial as we do the data analysis and such forth, but that will end up rolling back out in 2025.

Mayank Mamtani, Analyst

Understood. Thanks for taking our questions.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Jon Wolleben from JMP.

Jon Wolleben, Analyst

Hey, good morning, and thanks for the update and taking the questions. Two for me. You mentioned expectations for weight loss after 48 weeks, but I was hoping you could talk about what you think you'll see in terms of tolerability, GI adverse events, especially within the context of the trial design. And then also, Scott, you mentioned heart rate a couple of times. Wondering what you view as that threshold between acceptable and unacceptable heart rate increases for the class? Thanks.

Scott Harris, Chief Medical Officer

Yeah. Thanks, Jonathan. Regarding the first, we're still blinded to the data. We certainly are not seeing anything that would indicate that we would have any worsening of any adverse events. We think there's only this prospect of this continuing to get better, but we'll have the data at 48 weeks. One thing to point out as we go into Phase 3 that there's learnings in Phase 2. We've seen that with all of the companies. We saw 20% adverse event discontinuation rates with the oral GLP-1 program, the Lilly program. We saw it with the tirzepatide, excuse me, we saw it with the retatrutide program and it was also, as we've mentioned in prior calls, seen in other Phase 2 programs. So we think that these companies have clearly addressed this and we think that our dose reduction strategy is something that will really bring this down over the course of time, especially in Phase 3. Regarding the heart rate increases, it's not really known what the actual threshold is. But one of the things I would point out is the concern that in the retatrutide trial, that heart rate increase is also associated with arrhythmias and the two could be linked. In the retatrutide Phase 1 studies, they were seeing heart rate increases that were quite high, as much as 30 beats per minute early on; the data that they're reporting out is really at the end of the trial. So there's a lot more to learn as that data comes out, but I would flip to the positive and say that we're not seeing that with our data. We're not seeing any heart rate increases. We're not seeing any imbalances of arrhythmia. And we really think that that distinguishes us from retatrutide and other compounds in the field.

Jon Wolleben, Analyst

That's helpful, Scott. Thanks again for taking the questions.

Operator, Operator

Thank you. One moment for our next question. Our next question comes from the line of Patrick Trucchio from H. C. Wainwright.

Louis Susser, Analyst

Hi, good morning. Louis here on for Patrick. Thanks for taking our questions. One question regarding the NASH program and, are 24 weeks enough to see benefits on NASH resolution and fibrosis improvements? And, do you think you can already have some clinical data that could predict that? And then I have another question on the HepTcell program.

Scott Harris, Chief Medical Officer

Right. Thanks for the question, Louis. So we do have preclinical data in animal models of NASH showing fibrosis improvement, and that's been accompanied also by gene expression study showing reduction in those drivers of stellate cell activity in fibrosis. Regarding the 24-week endpoint, several companies have shown the ability to achieve NASH resolution and fibrosis improvement at 24 weeks. And we believe that with our class-leading liver fat reduction effects and with the link between liver fat reduction and the factors that you just mentioned, we think we have a very high likelihood of achieving success in those endpoints at 24 weeks.

Vipin Garg, CEO

Yeah, it's important to point out that it's not just the magnitude of the effect, it's also how fast you get there. So it's also not only class-leading in terms of overall reduction in liver fat but the speed of it, a very fast reduction in liver fat, we believe gives plenty of time for the liver to heal in 24 weeks.

Louis Susser, Analyst

Thank you. That's helpful. Can you discuss the antiviral mechanisms that you believe will be most complementary to the HepTcell and what do you need to see in the HepTcell data to have more confidence to move the program forward to a larger trial?

Vipin Garg, CEO

Scot Roberts, do you want to take that?

Scot Roberts, Chief Scientific Officer

Absolutely. The mechanism of HepTcell is to stimulate T-cells that can recognize the HBV virus, helping to clear it from infected cells. Recent antivirals, sRNAs, and monoclonal antibodies have been effective in lowering surface antigen levels, but stopping these agents leads to a rebound in surface antigen levels and a state of immune tolerance. Therefore, it is generally believed that combining a direct antiviral to reduce surface antigen levels and relieve immune suppression, along with an immunotherapy to enhance the now activated immune system, could be an effective treatment approach. We believe that HepTcell, which stimulates responses against key parts of the HBV polymerase and core antigen, will serve as an effective immunotherapy that, when paired with a direct acting antiviral, could create an interesting and effective therapy. In the Phase 2 HepTcell study, we expect the efficacy endpoint to achieve a 1-log reduction in surface antigen, which we believe is attainable. Any notable effect from the HepTcell monotherapy would set the stage for a follow-up study with the direct acting antiviral.

Louis Susser, Analyst

Great. Just a quick follow-up on that. Would you have any other types of analysis on the antigen presenting side regarding the potential effect of not just a stronger response but a broader response with the type of CDA T-cells that are required to clear those infected cells?

Scot Roberts, Chief Scientific Officer

Well, especially with respect to breadth, that's really one of the differentiating aspects of HepTcell. It's the epitopes that we've selected to include in the peptides that constitute HepTcell. And so with respect to breadth, because these epitopes are in largely hydrophobic regions and are highly conserved between the different genotypes, we feel that the immune response, which we've demonstrated pre-clinically to be broad against genotypes A through D would extend through all of the known genotypes right now. That's what the bioinformatics would suggest. And we do have the preclinical data showing a very broad response.

Louis Susser, Analyst

Great. Thank you.

Operator, Operator

Thank you. At this time, I would now like to turn the conference back over to Vipin Garg for closing remarks.

Vipin Garg, CEO

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

Operator, Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.