Ladies and gentlemen, thank you for standing by. My name is Jale, and I will be your conference operator today. At this time, I would like to welcome everyone to the Skye Bioscience Year-End 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I would now like to turn the conference over to Bernie Hertel, Head of Investor Relations. Please go ahead.

Hello, and thank you all for participating in today's call. Leading the discussion today are Punit Dhillon, Skye's President and CEO; and Kaitlyn Arsenault, Skye's CFO. Before we begin, I'd like to caution that comments made during this conference call will contain forward-looking statements under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements about Skye's expectations regarding its development activities, timelines, and milestones. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely, and reported results should not be considered as an indication of future performance. These forward-looking statements speak only as of today's date, and the Company undertakes no obligation to revise or update any statements made today. I encourage you to review all the Company's filings with the Securities and Exchange Commission concerning these and other matters. I'll now turn the call over to Punit Dhillon.

Good afternoon, everyone. Thank you for joining us today on Skye's fourth quarter and year-end 2024 earnings call. We appreciate your interest in Skye, and thank you to our shareholders. Joining me is our entire executive team, and they will stay online for the Q&A portion after the prepared remarks. At the start of 2024, we identified critical questions about peripherally restricted CB1 inhibition and implemented a clear vision and a plan for executing an ambitious clinical trial to demonstrate proof-of-concept of our novel CB1 inhibitor, nimacimab, in patients with obesity and overweight. This plan led to a $90 million investment from top life science institutional investors in the early part of 2024, ultimately allowing Skye to execute on its goals for the year. I'm happy to report that not only did our team meet, but we exceeded our expectations. First, we submitted and received clearance of our obesity IND in January 2024. Second, following the completion of our $90 million fundraising, we immediately initiated planning of our clinical operations activities for nimacimab, which culminated in the initiation of CBeyond in August of 2024. And third, our team's ability to execute efficiently resulted in rapid enrollment into the CBeyond clinical trial, and I'm proud to announce that as of February 28, we have completed our enrollment with 136 patients, an over-enrollment from our originally planned 120 patients. And as a result of this accelerated over-enrollment, we now expect final topline data from all patients in late Q3 or early Q4. This is potentially three months earlier than our prior guidance, allowing us to forgo the originally planned interim analysis and instead report the full 26-week data ahead of schedule. Fourth, on the manufacturing front, we transferred the manufacturing process for nimacimab to our manufacturing partner and have initiated GMP manufacturing runs as well as implemented plans for optimization, scale-up, and commercial capabilities for nimacimab. Fifth, the excellent safety profile established in nimacimab's Phase I trial continues as our independent Data Safety Monitoring Board, the DSMB, has held two meetings to review the Phase IIa safety data and recommended that we continue the study as planned. The study remains blinded through to the completion of the 26-week treatment and the 13-week follow-up period, and a third DSMB review is scheduled for April this year. To support Skye's increasing focus on the development of nimacimab, we made the strategic decision in 2024 to discontinue SBI-100 development following the Phase IIa clinical trial. We believe that the reallocation of our resources from SBI-100 to nimacimab was a valuable step to help us to reach the milestones that we've achieved. Separately, 2024 also showcased important progress in the field of CB1 inhibition. Phase IIa clinical results from monlunabant, Novo Nordisk's small molecule CB1 inverse agonist, revealed valuable insights for the class and for us, avenues of differentiation for nimacimab. Ahead of our all-important forthcoming nimacimab clinical trial, our preclinical and modeling work continues to paint a favorable picture on nimacimab's safety advantage as well as support the idea that peripheral CB1 inhibition is sufficient for weight loss. To briefly reorient you on our preclinical findings, the first question relates to efficacy and whether a true peripherally restricted CB1 inhibitor like nimacimab can lead to meaningful weight loss. This is a reasonable question as the first drug approved for weight loss in this class, rimonabant, preferentially entered the brain and was originally believed to mediate its effects via central CB1 inhibition. Since then, we've learned so much more about the sufficiency and importance of peripheral CB1 inhibition versus the role of central CB1 inhibition. If you haven't already, I would encourage you to listen to our webcast from July 2024 and November 2024, where our clinical adviser, Dr. Marcus Goncalves; and our CSO, Dr. Chris Twitty, elegantly explained why we believe that peripheral CB1 inhibition is not only sufficient, but necessary for weight loss based on the mechanism of CB1 inhibition. Supporting this thesis, we announced in 2024 the first demonstration that nimacimab can drive significant weight loss in a diet-induced obesity mirroring model. And to our knowledge, this data is the first to describe that an antibody that does not cross the blood-brain barrier and preferentially targets CB1 receptors in the periphery can cause weight loss in a DIO mirroring model. We look forward to sharing even more data that demonstrates the ability of nimacimab to not only drive weight loss, but also impact multiple metabolic processes associated with obesity and its comorbidity. The second, and we think most important question for this class of drugs, relates to safety. As we know, rimonabant was ultimately taken off the market in Europe because of a significant rate of neuropsychiatric side effects and, importantly, a higher rate of suicidal ideation compared to placebo. The concerns around this mechanism were further exacerbated by the announcement by Novo Nordisk that while significant weight loss was noted at 16 weeks, there were dose-dependent increases in neuropsychiatric side effects with monlunabant. At Skye, we believe nimacimab is uniquely positioned to potentially be the safest of the CB1 class of drugs because of its superior restriction from the brain. As we have reported previously, we saw no neuropsychiatric side effects from our Phase I study that treated over 60 patients with nimacimab for four weeks. And as highlighted earlier, the Phase IIa study has a quarterly independent Data Safety Monitoring Board review of safety data. Our original investment and continued efforts to develop nimacimab is based on the premise that neuropsychiatric concerns still hinder small molecule CB1 inhibitors. Whereas to date, nimacimab's truly peripheral mechanism has demonstrated meaningful weight loss without the safety liabilities seen with even the peripherally restricted small molecule CB1 inhibitors. As mentioned earlier in our press release, we announced that we have implemented a protocol extension for the ongoing CBeyond trial. Specifically, with enrollment now complete, patients in all four treatment arms will have the opportunity to continue receiving therapy for an additional 26 weeks, increasing our treatment period to 52 weeks compared to 26 weeks previously. This means that by Q2 of 2026, Skye will have substantially greater safety and efficacy data, which we believe will significantly bolster our regulatory package and help discern nimacimab's therapeutic profile and differentiation. Where 2024 was about successfully implementing our clinical operations plan and completing enrollment for CBeyond, 2025 is about data. First and foremost, our clinical data from CBeyond, but also data from our R&D efforts, which we hope will continue to demonstrate the impact of nimacimab in the DIO model. Our ongoing preclinical research aims to highlight a further understanding of how nimacimab's differentiated mode of CB1 inhibition acts peripherally to promote coordinated modulation of hormones and inflammatory mediators, lipid metabolism, and glycemic control to ultimately yield significant weight loss and a productive metabolic homeostasis. We anticipate that these efforts will yield additional data in the upcoming quarters, enhancing our understanding of nimacimab's capability. Additionally, we are advancing our research to explore other metabolic indications where inflammation and fibrosis play a significant role in disease progression. By utilizing translational models, we aim to identify new therapeutic applications for nimacimab. Looking ahead, we plan to engage with regulators to align on our Phase IIb dose-escalation study, which we anticipate initiating by the second quarter of 2026. And concurrently, we are strengthening our manufacturing capability and evaluating alternatives to bring down our cost of goods sold. These efforts are crucial for maintaining our development pace and preparing for potential commercial demand. We remain focused on nimacimab's attractive market opportunity and based on our ongoing assessment of both current and future market dynamics in obesity and overweight, combined with the latest developments underscoring the appeal of some of the novel mechanisms in obesity, we continue to view nimacimab as a differentiated alternative to enable weight reduction while addressing the limitations of incretin-based therapy. And with the translational workflow in full swing, we not only aim to identify new therapeutic applications for nimacimab. We are also focused on the development of next-generation GPCR-targeting molecules to address various metabolic disorders, which could potentially lead to innovative treatments in this field. Our overarching message is simple. We believe obesity and overweight conditions are extremely heterogenic, demanding multiple effective therapeutic options, while the GLP-1 receptor agonist space, whether we are speaking of oral or injectable drugs, is becoming crowded and competitive. Recent industry deals do, in fact, acknowledge the merits and value of alternative anti-obesity mechanisms to start evolving the weight loss world beyond incretins. And Skye is uniquely and strongly positioned with another promising alternative mechanism and a highly differentiated product with potential to fulfill the unmet needs of this diverse and massive patient population rather than fighting for the same front-line thoughts of a well-established mechanism. So we encourage discerning investors and other stakeholders to look under the surface and understand these dynamics. We believe nimacimab is uniquely positioned to play a role as a part of an inevitable broadening of the anti-obesity toolbox. With an important Phase II inflection point this year, now is an opportune time to evaluate CB1 targeting. At our June event during ADA, ahead of the topline 26-week data, we will review our plans along with additional preclinical data that demonstrate nimacimab's unique advantages. We look forward to sharing these new insights with you. I want to thank all of the patients, physicians, and clinical coordinators who are participating in the CBeyond trial. Without them, we would not be where we are today. They are a vital reason why companies like Skye are able to potentially bring life-altering drugs to the market. Thank you for your continued support as we advance nimacimab and work to solidify Skye's position as a pioneer in peripherally restricted CB1 inhibition. With that, I'll turn the call over to Kaitlyn, our CFO.

Thanks, Punit. After the market closed today, we issued a press release and filed Skye's Form 10-K with the Securities and Exchange Commission, outlining our annual financial results. We encourage you to reference the filings for details of our financials and the risk factors described therein. I will now provide a brief overview of key financial results for the fourth quarter and year ended December 31, 2024. Research and development expenses for the three months ended December 31, 2024, were $7.8 million as compared to $1.6 million for the same period in 2023. The increase was primarily due to contracted clinical and manufacturing costs associated with our Phase IIa CBeyond study for nimacimab and employee-related benefits. Research and development expenses for the year-ended December 31, 2024, were $18.7 million as compared to $5.8 million for the same period in 2023. The increase was primarily due to contracted clinical and manufacturing costs associated with our Phase IIa CBeyond study for nimacimab. The remainder of the increase resulted from increases in discovery research efforts, consulting fees, employee benefits driven by increases in headcount, and general expenses. General and administrative expenses for the three months ended December 31, 2024, were $4.6 million as compared to $2.5 million for the same period in 2023. The increase was primarily related to non-cash incentive stock-based compensation, payroll, benefits and other employee costs, and professional services, including fees for tax, audit, legal services, financial advisory services, and other general business expenses. General and administrative expenses for the year-ended December 31, 2024, were $17.7 million as compared to $7.9 million for the same period in 2023. The increase was primarily related to non-cash incentive stock-based compensation, professional services, including fees for tax, audit and legal services, financial advisory services, patent prosecution for the nimacimab IT and other general business expenses. The net loss for the year-ended December 31, 2024, totaled $26.6 million with non-cash share-based compensation expense of $8.3 million compared to $37.6 million for the year-ended 2023 with non-cash share-based compensation expense of $1 million. The primary reason for the significant decrease was related to the acquisition of the nimacimab in-process research and development assets which totaled $21.2 million during the year-ended December 31, 2023, all of which was expensed upon acquisition. In addition, during 2024, we recognized a $4.2 million gain from the partial derecognition of our contingent legal liability and a $2 million gain from the settlement of insurance litigation with our former D&O carrier, $3 million in interest income and a gain of $1.4 million from the sale of real estate. On December 31, 2024, Skye had cash and cash equivalents of $68.4 million. Notably, during 2024, we further remediated our litigation matters. And in the fourth quarter, we collected $2 million in insurance settlement proceeds and exonerated the bond related to the restricted cash balance, which allowed us to recover the $9 million restriction on our cash. In addition, during 2024, we eliminated all of our related party balances, including the conversion of our debt. During 2024, our operating cash burn averaged $6.3 million per quarter, increasing to $8.1 million in the fourth quarter. In 2025, we expect to maintain at least this level of expenditure as we progress through the CBeyond study and increase our manufacturing efforts. Our team's strength has always been its ability to quickly adapt not only strategically, but also financially to reduce lease and maximize spend. We believe that our capital will fund our operations through at least the first quarter of 2027. Our cash runway includes the capital necessary to complete the Phase IIa study for nimacimab and reach key clinical milestones, including the receipt of topline data in late Q3 or early Q4 2025, 52-week data in Q2 2026, and the manufacturing work required to supply the Phase IIb study. Our runway currently excludes the Phase IIb and Phase III clinical study costs. But most importantly, we are funded for at least nine months after the expected 52-week data from the nimacimab study, which is expected in Q2 2026. This concludes our prepared comments for today. Thank you very much for joining us, and we'll now open the call for questions from our covering sell-side analysts. Operator, over to you.

Thank you. The floor is now open for questions. Your first question comes from the line of Kristen Kluska of Cantor. Your line is open.

Hi, everyone. Thanks for taking the questions and congrats on completing enrollment ahead of schedule. So I wanted to ask as we think about both the 26 and the 52-week readout now, what do we know or what can we translate from some of the preclinical model work to understand what the weight loss curves could look like at these time points and essentially what an extra 26 weeks could mean for the potential?

Hey, Kristen, it's Punit here. Thanks. That's a great question, and thanks for joining the call. I guess I can just kick it off just to kind of give a little bit of context here on what we're trying to achieve with the extension and then hand it over to Chris. So we obviously are really excited about the extension. I mean the decision to implement the extension study was strategic, and we're recognizing the value of longer efficacy and safety data, which we believe is really important to continue to generate with the clinical trial that we have. So the idea was to have additional data for our regulatory discussions as well as for the next steps for the program. I think it's hard to extrapolate what's exactly happening preclinically from the human studies, but that is also something that we're exploring, where we have additional preclinical data. But I'll turn it over to Chris to just specifically answer the preclinical question.

Yes. Hi, thanks for the question. Yes, it's a fair question. One that we're looking carefully at and so we're approaching this in a few different ways, but if we're focused only on the preclinical side, we really are looking at exposure, understanding we've done a critical analysis of the PK profile, if you will, and understanding how that exposure relates to efficacy in the DIO using weight loss and other important biomarkers associated with efficacy. And looking at sort of how that timeframe obviously compressed sort of DIO model and how that relates to something that is more elongated, such as a clinical trial. And so we're using that sort of guidepost to help us understand the potential timing required for loss in the clinical trial. We're also looking at some of the historic data, notably rimonabant, which, of course, is a small molecule. A little bit different mechanism there, but still one that I think can help guide in terms of pathway. And so when you collectively look at that and we'll be certainly putting some of the data out in the future and talk more about it in 2025. But when you look at those, it's pretty evident that adding the open-label extension will allow us to reach a deeper weight loss. That's our feeling. And to Punit's point, we don't know exactly where that sweet spot will be. But certainly, we expect, based both on the preclinical exposure data that I mentioned as well as historically, I think that's going to be advantageous and really allow us to uncouple deeper weight loss and a better signal overall.

Okay. Thanks. And I know your previous clinical study was really safe and you didn't see any of the neuropsychiatric adverse events. But with the DSMB reviews, would they pick up any of this and report it? Or would it have to be deemed a certain grade for it to translate to telling you about it?

Yes, in terms of the safety analysis that's ongoing here, it is pretty straightforward. It's an independent Data Safety Monitoring Board that meets and reviews the data. And they have a go/no-go on continuing the trial. So that information still is blinded to the management. And at the moment, that's all we can really ascertain from that is that there have been two independent meetings that have occurred. They happen quarterly. There's another one planned in April. And the fact that the trial has continued is a signal that all the safety information that's been reviewed is of no concern.

Okay. Thanks. And I know you launched this study back in August. So thinking about the extension, was the decision made ahead of time, where patients essentially would know that they have the option to continue treatment beyond that 26 weeks? So essentially, what I'm trying to figure out is with the data set in Q2 2026, do you expect it will be a full data set with all of the patients? Or could it be a little smaller in light of that?

Yes. So let me just clarify that. So the whole – the point of removing the interim analysis is because the enrollment has obviously gone faster than expected. And by eliminating that, we're now having the full 26-week data on 100% of the patients. So we gain a complete data set. Obviously, that's supporting our decision-making, our overall regulatory discussions, and all of those other things. But independent of that, I think you've implied this in the first part of your question, it's just about the timing of the extension study and why we may not have considered it earlier on. Just to be transparent, we've always recognized the value of having longer-term efficacy and safety data readout. So the 26 weeks was what we originally had planned. But it was also around the drug supply that we had at the moment. So now we've also addressed that over the course of the year. So we have full drug supply and manufacturing that now supports continuing to have the commitment for extending this trial and have the additional data points that we're looking for from weight loss and also some of the other things that we're measuring in the trial for another 26 weeks.

Great. Thanks, everyone. Look forward to the data this year.

Your next question comes from the line of Ted Tenthoff of Piper Sandler. Your line is open.

Great. Thank you. And my congrats too on the early enrollment and really excited to get the full data set in the back half. I'm wondering if this changes either the powering or anything along those lines in terms of the analysis that you're going to be able to do, i.e., do you lose anything? Or were you losing anything from the prior interim analysis? And does this adjust your plans and timeframes with respect to moving into a Phase IIb? Thanks.

Yes. So just to answer the first part of the question there, Ted, thanks again for joining and – so our protocol said 120 evaluable patients. And to reach that goal we've enrolled 136. So overall, there's no change in statistics, but the – obviously, this translates into more robustness in efficacy and safety analysis as we have more patients. So for us, the regulatory pathway doesn't change here. It's just a larger data set, and it's just enhancing kind of confidence for everything that we're working on as well as all of our future interactions that we would have with the agency regarding our subsequent trial. There was a second part to your question that I need you to repeat again.

Yes. No worries. Timing on the Phase II to – the Phase IIb, pardon me, does this move up potential timing on the Phase IIb?

Yes. It's a great question. So the 52-week extension results will be available in the first half of 2026. I mean you can easily kind of do the math there. The goal here is it does allow us to engage with regulators with a more robust data set. And – but that doesn't really change from what we were planning to do with the 26-week topline data. So I think for us, the timelines have continued to accelerate overall for our subsequent clinical program and in terms of our regulatory interactions. Our Phase IIb and subsequent development efforts would all be based off of the topline data. So now that we'll have that in late – in Q3, early Q4, we plan to immediately engage with regulators, both FDA and EMEA, for the subsequent larger studies.

Your next question comes from the line of Jay Olson of Oppenheimer. Your line is open.

Hey, congrats on the progress, and thank you for providing this update. That's great news that you completed enrollment in CBeyond ahead of schedule. We had a question about the preclinical data for nimacimab that you'll be presenting in the second quarter. Can you just provide a little color around what we should be looking for?

Hey, Jay, thanks for joining the call. And yes, that's a great question. We're excited about a lot of different data now that the DIO model that Chris has been working on is up and running. So I'll turn it over to Chris, and he can expand on that.

Hey, Jay, thanks for the question. Yes, as we said, we’re really excited about the direction that our preclinical data is heading. So we're looking forward to sharing just a more robust data set, including some really nice biomarker work that touches on some of the key mechanisms as well as the differentiation around our CB1 inhibitor. So you're well aware of the safety enhancements that our approach takes, where we have some other data that suggest a deeper mechanistic differentiation as well. So look forward to sharing that as well as starting to touch into the combination approaches that you might imagine are relevant. So again, we're looking forward to building out and having a nice data set in the summer.

Yes. If I could just elaborate, Jay. The interesting thing for us has been that last year, when we were beginning to work on all of that, we didn't have the backdrop of additional data from the small molecule CB1 inhibitor. So obviously, with that data – and you know that we've spent quite a bit of effort walking the street through the PK analysis and a side-by-side comparison. So we've continued to build on that. And even in our JPMorgan conversations, we came back and debriefed and said, okay, where are the gaps that we're having people maybe struggling with in terms of comparisons against this – our approach versus other CB1s in development. And that's the key thing is that our preclinical data package, I think, is continuing to become, hopefully, the most robust and the standard going forward. The key thing we want to continue to point to is a differentiated product profile with this preclinical data, it should be informative to give confidence that there's more likelihood of success here in what's translated in the clinic. The early data that we presented in November last year was the first indication of that, showing that there was a deficiency of peripheral mechanism or peripheral-driven weight loss. And now just enhancing that with the combo expectation ahead of our clinical data, that will help to just bolster the strength of our overall thesis.

Great. We're definitely looking forward to that. And then maybe just one other question from us. There were two major obesity deals last week that sparked a lot of interest among investors, partly because they were both in non-GLP-1 mechanisms and included potential for monotherapy and GLP-1 combos. Can you just talk about any lessons or read across the Skye and the types of deals or partners you might consider for nimacimab?

Yes. I'll start there, and I can let our Chief Operating Officer speak to that as well. For us, it's been really exciting. At JPMorgan, we made the comment that the GLP-1 space is crowded, and you're going to get to see a lot more attention on the non-incretin space taking shape. Obviously, that's been led by the CagriSema data that we saw in fall of 2024 and then amycretin data that followed that and now two back-to-back deals that have happened in the Amlin space. And the comment that we made in terms of all of our discussions that we had in Q1 was that Amlin and CB1 are the other two mechanisms that have gotten the most attention in terms of being validated, and it's just a matter of time for CB1 to have that clearing event. For us, CB1 had that clearing event a couple of times: rimonabant, and it had it again with the monlunabant data. The only issue is that the small molecules continue to have a neuropsychiatric concern. So we knew that back in 2023 when we acquired Bird Rock. It's never been an issue for us. We've always built our thesis on the fact that we are going to have a CB1 that's just as competitive in the non-incretin space that doesn't have the safety concerns. And that's been our thesis, and that's what we're executing against. So for us, this new deal flow and the size of those deals is of note because it's obvious that the pharma and strategics are placing bets, and they're placing big bets. Like in the case of Roche, they've really expanded their footprint now. And I think they're being competitive relative to Novo and Lilly, especially in the non-incretin space. Tu has been digging in a lot more on this because we've been doing a bunch of primary research, so I'll let him talk to that as well.

Yes. Thanks, Punit. Jay, thanks for the question. I'll make this quick. But like Punit said, we've been digging in a lot with our own primary and secondary research. And I think what I will say about these last two most recent deals, which certainly aligns with what we've been hearing from the KOLs, is that they're less and less excited about just more GLP-1 drugs and more and more excited, really asking for more and more alternative mechanisms of action that can, one, still drive clinically meaningful weight loss. They don't necessarily need to be 25% weight loss. But if they are more tolerable, they can be. So again, clinically meaningful and convenience for patients. Then those are drugs that the physicians think have a real place in the market, not just as second-line therapies but also potentially first-line settings as well. So I think lots of pharmas are starting to see that, certainly, based on the deals we're seeing. And that's going to be the secondary or these alternative mechanisms of actions are going to become more and more important in the future.

Thank you. That's super helpful, and I appreciate all the color and congrats again on the progress.

Your next question comes from the line of Andy Hsieh of William Blair. Your line is open.

Well, thanks for taking our questions. Kind of a three-parter, if you don't mind, for the Phase II CBeyond study. So first and foremost, obviously, very encouraging that the rapid enrollment rate that you mentioned. I'm curious if you can share some of the on-the-ground physician feedback or investigator feedback on enthusiasm. That's number one. Number two, I guess, one of the differentiating factors for the study was the use of DEXA scans to really delineate fat loss and also lean body mass loss. And I'm just curious, with the extension out to 52 weeks, do you add another DEXA scan at the end of the study there? Or just kind of how do you think about the number of DEXA scans to get kind of a longitudinal look into the relative composition of weight loss? And lastly, it's kind of a biostatistical question. So I'm curious on the removal of the interim, does that preserve some of the powering as you kind of look at the primary endpoint?

Yes. Andy, thanks – those are great questions. So I'm going to actually turn it over to Dr. Arora, as everyone – if you're following, Dr. Arora joined the company at a real opportune moment. We had just begun the CBeyond study, and thanks to his leadership, he has kind of immediately rolled up the sleeves. He was on the road for three weeks and got a chance to see and get clinical sites up and running. And to his credit, we've also been successful in terms of expanding into academic centers. So I'll let him elaborate on all three of these questions. I think it's in his wheelhouse.

Yes. Thanks, Punit. So Andy, thanks for the questions. As far as the investigator question is concerned, we've had a lot of excitement from investigators. Obesity trials are popular right now. People are very motivated and enthusiastic to come into these trials and try different fees that may help them. So we actually – we are very grateful to all the efforts that investigators have put in and the participants have put in, and that's helped us to enroll at a really nice pace. We were able to activate all the sites. We did hold back the IP to add imminent academic centers, which was good for the study. But overall as you can see. Your next question was with relationship with DEXA scans opposition. And as you know, we're doing longitudinal scanning in this first 26 weeks study, and the final scan of that takes place at the end of that last period of the study. We will continue to improve measurement during the extension. So we will do a DEXA scan in the middle, at 12 or 13 weeks, whatever that time point is, and then one again at the end of treatment. So we'll continue that trajectory of looking at what happens to body composition through the study. Now as far as the interim endpoint is concerned, there were some concerns about powering and how we deal with doing an interim endpoint and how that might affect the power of the final endpoint. Given – as you've already heard, given how close the final analysis is to what would have been the interim analysis. Now that we're not doing the interim analysis, I think those questions just simply go away. And yes, we do preserve all our power to be able to do that final analysis.

That's super helpful. Thank you so much.

Your next question comes from the line of George Farmer of Scotiabank. Your line is open.

Hi, good afternoon. Thanks for taking my questions. Want to talk a little bit about the DSMB analysis, and understanding that you're blinding to their discussions and outcomes. I was wondering if any stopping rules that are in place where maybe CNS effects are apparent and you need to be notified immediately. I'm sure that it's a very sensitive area given the history of this drug class. Also, maybe while we're on that, just thinking about what Novo has reported with monlunabant, what they haven't reported, are we absolutely certain that the neuropsychiatric side effects are, in fact, CNS-mediated? Or might there be some sort of peripheral mechanism of action that's causing this? Thanks.

Hey, George, thanks. I'll let – I'll turn that over to Dr. Arora. He might want to take both those questions. And I don't know, Chris, if you want to talk about any of that from a preclinical standpoint on the second part.

Yes. So George, the DSMB gets all the data. We provide them with everything we provided in an unblinded manner. So they are able to assess everything that's going on in the study. We're obviously blinded. So we don't actually get to that. The study does have stopping criteria, similar to every other study. But the DSMB, by its charter, has the right to tell us based on what they're seeing that we need to modify the study or we need to make changes or stop the study or dosing or anything of that sort. They've done two reviews so far. They have told us that the study is fine to continue as is. So that's what we know. We are coming to another full review in April, and we'll keep you all posted. But at this point, we have no indication that the DSMB thinks that any modification of the study is needed based on what they are seeing. And they do have all data, so they are looking at all of the neuropsychiatric adverse events and the neurological exams, et cetera. Your second question was related to neuropsychiatric effect. I mean, I guess in an absolute sense, I can't tell you what the neuropsychiatric effects are because we believe that as CB1 is being locked in the highest centers of the brain. But – and Chris can elaborate on this if you want to hear more. But we do have some really nice models that show how the neuropsychiatric effects are dependent on the concentration from the brain, not on the concentrations in the periphery. So even after you reach full engagement in the periphery as with monlunabant but you increase doses at that point, what's changing is the concentration in the brain and reaching the IC90 there. And we see the rate of neuropsychiatric effects increasing. So based on those models, we do believe that this is very much a CNS effect and not driven by the periphery.

Okay. That's helpful. And one more, if I may. At the 52-week read, I imagine this is going to be over an open-label portion of the study. Are you going to be able to follow the placebo patients?

Yes. So the way the 52-week is designed, the extension, the monotherapy patients, which is the primary arm of the study, go to open-label nimacimab. So we have crossing over the placebo as well, so that everyone has an opportunity to be on active drug, which will help us to retain some patients as well. And also, giving the placebo patients an opportunity, it will give us another 26-week cohort that will go 26 weeks besides those that will get the 52 weeks of treatment. So we can't – we won't have a placebo arm in that. In the combination arm though, we are – because the combination arm is already getting an active treatment, we are able to just continue them to 52 weeks in a blinded manner. So they will continue to get placebo.

All right. That's good. That'll be very informative. Thanks very much.

Your next question comes from the line of Jonathan Wolleben of Citizens JMP. Your line is open.

Hey, thanks for taking the question. Just wondering, what do you attribute the quicker enrollment to, especially when the monlunabant data came out with lower-than-expected weight loss and neuropsychiatric events? I'd imagine that might dampen some enthusiasm, but obviously, something else is going on. So what are you guys hearing from strength and investigators?

Hey, Jonathan, thanks for joining and appreciate your patience on the call list here. The – yes, the good news here is, obviously – and overall, as Dr. Arora commented in what we've seen across the board, you can evaluate other agents. Obesity studies have had generally an uptick of interest from patients. But to the credit of the Skye operations team, the CROs involved, and the clinicians that we're working with, we're also working with some really fantastic investigators, like I mentioned earlier, investigators that have experience with other agents, even experience with rimonabant. So we're working with a few academic centers. And there's been generally strong, I think, follow-through in terms of patient recruitment, patient interest, keeping patients kind of informed about what's going on. And it's an alternative mechanism too, right? So the challenge you have with most of the larger GLP-1 studies is that a lot of patients did discontinue, and there are issues regarding tolerability. Here, you're offering an alternative mechanism. And keep in mind, we also had an arm that had a combination with GLP-1. So it's a combination of factors, and I think alongside some good recruitment tactics that the team employed to get that done.

Got it. And then maybe two others for me. Your release mentioned some optimization work to move to the monthly dosing. Can you talk a little bit more about that and how important that is to your product profile? And then last one for me. Can you discuss your potential utility in diabetics? I know they're not included in CBeyond. So how do you think about the diabetic opportunity and how you pursue that in subsequent trials? Thanks.

Great. So I'll turn it over to Tu to talk about from the GMP manufacturing and the steps that we've taken there. And then probably Dr. Arora or Chris, you guys can both answer the diabetic question.

Yes. So in terms of your question around monthly dosing, we think it's important, I think – where it becomes important for the patient, we think it will help with a sort of convenience and potentially compliance. Where it helps with Skye is it certainly helps with – from a cost of goods perspective. So – but ultimately, again, I mentioned earlier that we did do a KOL – have been doing KOL primary research. And those KOLs actually made pretty clear that weekly dosing is really quite acceptable for them and for patients as well. So from a TPP perspective, if we landed on a weekly dosing, we don't think that's going to be a major sort of deterrent or hit on the target profile. But if we are able to get some monthly dosing, then that certainly would be beneficial from a cost perspective for the company and probably would provide some additional convenience, but I think it's a major concern.

Yes. Just on the manufacturing process, we haven't really spent much time speaking about that. But as you've seen in the press release today, we've now begun to discuss that and be transparent that our GMP manufacturing process for nimacimab is well underway. And we're really proud of the work that Tu and his entire team has been working on. So that's including process optimization, ensuring batch consistency, and then just preparing for larger-scale production. So we don't feel we have any challenges to meet the demands that we expect for the subsequent regulatory studies. And then ultimately, for commercialization, we're doing it really, I think, elegantly in terms of how to scale up and doing it responsibly from a capital allocation standpoint. There was a question regarding just about the Type 2 diabetes population. So I think maybe Dr. Arora, you're probably more informed on how that mechanism is at play. And I don't know if Chris, you want to talk about it from a preclinical standpoint.

Yes, we're very excited to move forward and be able to test in people with diabetes as well. We know that part of the mechanism of action is insulin sensitivity. And so that plays a big role in the treatment of Type 2 diabetes. Of course, the weight loss itself and the fact that the action is in adipose tissue and is anti-inflammatory. So there's a whole lot of different things which may play really well with diabetics. And anecdotally, we've heard from our partners and KOLs in Europe that when they used rimonabant, they were quite pleased with how it worked with diabetics. So it's just an interesting nugget out there that creates even more interest for us. We will definitely be testing this in diabetics. I think once we have proof of mechanism and we're moving forward, we will plan how to do a study in people with diabetes as well.

I might just add briefly on the preclinical side, we are seeing some really interesting – this is not necessarily a diabetic model, but in some of the DIO work we're doing, some of these fibrotic and new pathways that are very much relevant to patients with diabetes modulating the right way. And so whether or not it's a focused study directly or if we're thinking about potential comorbidities or those that are prediabetic, we think this pathway mechanistically seems to have touched in a very productive fashion on some of those pathways. So that's a very nice detail regarding CB1 inhibition.

Your next question comes from the line of Albert Lowe of Craig-Hallum. Your line is open.

Hi, everyone. Thanks for taking my question. I was wondering with this change of having this open-label extension portion whether there are any other notable changes in design. Because then I was wondering if there will still be this 13 weeks follow-up period after the treatment period is done?

Yes. Thanks. Albert, thanks for staying on the call and following through with this question. Yes, at the moment, we haven't spelled out all of the updates regarding the complete design for now. What we've stated is that we're extending all of the arms from 26 weeks to 52 weeks. So stay tuned for additional kind of data in terms of anything else we might explore in the added 26 weeks. What was the other part of your question?

To complete what you were asking, there will be a 13-week follow-up after the 52-week extension too for those who roll over.

Yes.

Okay. All right. Great. Thanks. And I was wondering, you've been very, I guess, clear about kind of setting the bar for an 8% difference at 26 weeks. And I guess I understand there will be a placebo arm at this 52-week time period. And I think Chris mentioned potential deeper weight loss. But can you share any other expectations for the 52-week time point?

Yes. I mean it's great. That's a billion-dollar question that you're asking. And unfortunately, we don't have any data on that at this point in time. But the goal here is for the 26 weeks to show that 8%. And we will also have now indication from the extension study how patients are doing on a longer time point. So at the 26-week time point, I hope that we are going to be able to see the curves continuing to show deeper weight loss with the mechanism. Now to point to other CB1 inhibition data, namely rimonabant, that was the case. And we expect to be just as competitive here with a peripheral-driven approach that we have. So I think that's still pending. And I don't want to speculate on anything other than what we've already kind of designed in our current program.

All right. Got it. Thank you.

That concludes our Q&A session. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.