Skye Bioscience, Inc. Q1 FY2025 Earnings Call

Ladies and gentlemen, thank you for standing by. My name is Jay, and I will be your conference operator today. At this time, I would like to welcome everyone to the Skye Bioscience First Quarter Fiscal 2025 Earnings Call. 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. Joining me today is Punit Dhillon, Skye's President and CEO; Chris Twitty, CSO; 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, and thank you for joining us. I'm here with members of our management team to review Skye's first quarter 2025 performance. I'll briefly recap our key upcoming clinical milestones and highlight our operational roadmap for the rest of 2025 before turning it over to our CSO and CFO to share more details around our preclinical data and financials. We delivered meaningful scientific, clinical and operational progress this quarter. Most notably, we completed enrollment in our Phase 2a CBeyond Trial ahead of schedule. We've now moved forward with an amendment to extend the study to 52 weeks. This positions us to collect longer-term data on safety, tolerability and efficacy, both as monotherapy and in combination with GLP-1. Lastly, we generated compelling new preclinical data that further validates the potential of Nimacimab as a weight loss therapy. Nimacimab continues to stand out with a differentiated mechanism that is distinct from both peripherally restricted small-molecule CB1 inhibitors and GLP-1 agonists. Importantly, our recent preclinical studies demonstrated a truly peripherally restricted antibody like Nimacimab can potentially result in significant weight loss similar to a less restricted small molecule, and Nimacimab has the potential to provide additive weight loss to an incretin mimetic like tirzepatide. Later, our CSO, Dr. Chris Twitty, will discuss this new data in more detail. These findings reinforce our belief that Nimacimab has the potential to deliver durable weight loss with fewer safety concerns. We'll present additional data, including mechanistic and combination findings at key scientific and investor events this year, starting with ECO next week and ADA in June. Clinically, we are on track. Patients continue to receive treatment. The Data Safety Monitoring Committee has completed three reviews with no safety concerns. Engagement remains high. Based on this progress, we expect to report top-line weight loss data from the 26-week primary analysis of CBeyond in late Q3 or early Q4. Before I pass it on, I want to address one topic proactively: the evolving policy environment. While our focus remains on disciplined execution, we're operating in a period of regulatory uncertainty marked by potential shifts in drug pricing policy and a lack of clear direction from federal healthcare leadership. Ongoing transitions at the FDA and NIH raised important questions about how innovation will be balanced with regulatory oversight in the years ahead. At Skye, we've assessed our exposure and believe it's limited in the near term as we prioritize our clinical development milestones. We're on track, and we're tracking developments carefully, and we have preserved flexibility in our supply chain and capital deployment planning. Overall, we feel that we're in a solid position to move forward with the next stages of Nimacimab's development life cycle and that we're uniquely positioned to help address the chronic nature of obesity and the need for sustainable long-term solutions. Chris, over to you.

Thank you, Punit. I'm pleased to share our thoughts on a few recent preclinical studies with Nimacimab, a novel antibody-based peripherally restricted CB1 inhibitor. These studies were designed to not only address the hypothesis that a truly peripherally restricted CB1 inhibitor, such as Nimacimab, can effectively drive weight loss, but to also generate mechanistic data to support Skye's differentiated approach to CB1 inhibition. Recent biomarker analyses from our initial mouse DIO study have further extended the impact of the dose-dependent weight loss observed with Nimacimab treatment. Specifically, we can report Nimacimab-dependent reduction in fasting insulin levels that complement significant glycemic control, as well as productive modulation of key appetite-regulating hormones, including GLP-1 and leptin. Additional data sets also highlighted significant reduction of inflammation in adipose tissue as well as liver steatosis. We are also happy to report that this initial study has now been repeated by an independent lab with very reproducible results, not only in terms of the magnitude of weight loss and body composition that preserved lean mass with significant reduction in fat mass but also with positive changes in glycemic control. This repeat study also looked carefully at food consumption and noted a significant reduction in cumulative caloric intake, slightly less but in line with Semaglutide. Collectively, these studies highlight that Nimacimab-dependent efficacy is driven by multiple peripheral pathways coordinated through different organ systems. Building on our monotherapy studies, we compared Nimacimab, Monlunabant, a small molecule CB1 inhibitor, and the dual GLP-1 GIP agonist tirzepatide, both alone and in combination with Nimacimab using our DIO model. We chose to use higher yet clinically translatable doses of CB1 inhibitors with Nimacimab having a similar level of exposure as the current Phase 2 dose and Monlunabant being slightly higher than its 20-day daily Phase 2 dose. Both CB1 inhibitors demonstrated significant weight loss over 23%, driven by reduced fat mass with lean mass preservation. We are encouraged that Skye's highly restricted Nimacimab drove similar efficacy compared to less peripherally restricted CB1 inhibitor, Monlunabant, in a DIO model at clinically relevant doses. This study further highlighted that while an active yet suboptimal dose of tirzepatide could yield a similar level of weight loss as Nimacimab, the combination with Nimacimab produced 31.5% weight loss. These results, combined with our mechanistic data, strongly support the potential for Nimacimab to be effective as both a monotherapy and as part of a combination approach to address the growing obesity epidemic. These in vivo studies continue to support our belief that our differentiated antibody approach can provide meaningful efficacy without the challenge that current small molecule inhibitors face, which is brain exposure that can cause unwanted neuropsychiatric side effects. To address this potential advantage, we ran a series of in vitro potency experiments designed to leverage a critical mechanistic difference between Nimacimab and small molecule inhibitors. Unlike small molecule CB1 inhibitors such as Monlunabant that bind to the CB1 receptor at the orthosteric site, which is the same site as the endogenous agonist, primarily endocannabinoids AEA and 2AG, Nimacimab binds to the allosteric site to inhibit CB1 in a noncompetitive manner. We modeled a low concentration of CB1 agonist at 10 nanomolar, representing potential physiological conditions where both drugs showed similar potency. However, when challenged with an elevated concentration at 2,000 nanomolars, mimicking a pathological state such as obesity in which endocannabinoids become upregulated, Nimacimab potency remained remarkably stable while Monlunabant's activity was significantly compromised. This differentiated mechanism has significant clinical implications. In obesity, where endocannabinoids can be greatly upregulated, small molecule CB1 inhibitors such as Monlunabant may face increasing competition to bind to the receptor. This circumstance may potentially require higher doses of the small molecule inhibitor, which will increase brain exposure and the potential for neuropsychiatric risks. Conversely, Nimacimab's allosteric binding avoids this competition, maintaining relatively similar potency regardless of endocannabinoid concentration. These data suggest that Nimacimab may offer the widest possible therapeutic window among CB1 inhibitors, potentially delivering significant metabolic benefits without having to navigate around the hurdle of neuropsychiatric side effects associated with achieving an appropriate peripheral exposure. We look forward to continuing our preclinical research efforts focused on further characterizing Nimacimab's differentiated and clinically relevant mechanism of action and having more data to share over the next month. Now I will turn the call over to our Chief Financial Officer, Kaitlyn Arsenault.

Thanks, Chris. After the market closed today, we issued a press release and filed Skye's Form 10-Q with the Securities and Exchange Commission outlining our quarterly financial results. We encourage you to reference the files and the details of our financials and risk factors described in our other filings with the SEC. I will provide a brief overview of key financial results for the first quarter ended March 31, 2025. Cash and cash equivalents and short-term investments totaled $59.2 million as of March 31, 2025. Our cash flow guidance remains intact with the expectation that our current capital will fund operations and key clinical milestones through at least Q1 2027, allowing us to achieve completion of the Phase 2a study for Nimacimab and Phase 2b manufacturing activities in anticipation of our future dose-ranging study. Research and development expenses for the three months ended March 31, 2025, were $7.2 million as compared to $1.9 million for the same period in 2024. The increase was primarily due to contract manufacturing and clinical trial costs associated with our Phase 2a clinical study for Nimacimab, salaries and stock-based compensation, consulting, and depreciation expense. Our general and administrative expenses for the three months ended March 31, 2025, were $4.6 million as compared to $4.2 million for the same period in 2024. The increase was primarily related to Investor Relations, marketing and communication costs, and consulting and advisory fees. Our net loss for the three months ended March 31, 2025, totaled $11.1 million with noncash share-based compensation expense of $2.2 million, compared to $5 million for the same period in 2024 with noncash share-based compensation expense of $2.5 million. In closing, I'd like to briefly address how we view the uncertainty and implications of the proposed tariffs by the current U.S. administration and any potential impact we anticipate as it relates to our manufacturing activities. Our drug substance is currently being manufactured in Germany with no expected impact from tariffs on raw materials or excipients, as they are shipped directly to our European partner from sources outside the U.S. Our final drug substance is shipped to the U.S. and is currently unaffected due to its classification under the applicable customs code. Our final drug product is finished in the U.S., and we currently foresee no significant impact on this stage of the supply chain, but we are closely monitoring developments. We anticipate that tariff pressures will affect pharmaceutical products that are manufactured and finished outside of the U.S. and sold into the U.S. market, but that U.S.-based manufacturing could also face increased costs due to imported raw materials from other regions. We are actively tracking these changes and engaging with multiple global manufacturing partners domestically and abroad to maintain an agile long-term strategy. Our goal is to derisk future supply planning as the CB1 program advances. 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.

Your first question comes from the line of George Farmer of Scotiabank.

This is Chloe on for George. A couple from us. So, number one, in terms of preclinical data, what can we expect to see at ADA? And I believe you mentioned ECO next week. So, a little more detail around that would be helpful. Number 2, on Monlunabant, we know that Novo has said that they are planning on presenting their full Phase 2a data this year. So, last September, when they had the data, it had a pretty bad negative read-through to your stock. Do you think by now, now that you have all this preclinical data out in the public domain, investors have begun to grasp the difference between Nimacimab and Monlunabant? And do you think this time around, the reaction will be more muted, if not positive on your stock? And I have a follow-up after that.

Chloe, this is Punit here. I'm going to defer the ADA versus the ECO presentation and what to expect there to Chris because he and his team have been working really hard on that data package. But I appreciate the bit of a layup on the other question regarding Monlunabant and the full data set. Yes, we have been carefully paying attention to what guidance Novo has been giving regarding that. And on the same note, I think what's been very important to us as a management team is being very clear in terms of our mechanism. As you've seen multiple times, we've really tried to differentiate ourselves from the small molecule space. We've now demonstrated Nimacimab's weight loss efficacy in these preclinical models, and it's not only comparable to Monlunabant, but it's also shown an additive effect to tirzepatide in combination. That's the last data set that was just publicly made available, where we achieved over 30% weight loss in the DIO model. We think it's just hard to predict. At this point, we do think that the Street is better equipped with that background. We've been received well from the information that we've laid out, even received well from our counterparts because we've had a chance to have dialogue there as well. That combination potential is also, I think, really evident in terms of now with preclinical data, and everyone wants to see that read-through with our clinical data with the Semaglutide combo. So, I hope that your prediction is right and there's going to be a better kind of separation from that. But that is why the rest of the work that we're doing on the preclinical side continues to be very data-intensive, and we're making an effort to be at these scientific conferences. So, I'll turn it over to Chris, and he can tell you expectations on that side.

Thanks, Punit. Yes, regarding ECO, we've developed and sort of put together a pretty cohesive model based on published clinical data that looks at the peripheral versus the central activity of different CB1 inhibitors, and it overlays our own Phase 2 dose, really looking at this from the lens of PK and PD activity. We went into some depth and really focused on presenting that model. You can look forward to that at ECO, and not to give away the punchline, there's actually a lot of interesting pieces that come out of this work. Ultimately, I think it makes a really convincing case for the necessity for peripheral CB1 inhibition and speaks to the central, the brain activity that, unfortunately, is a hurdle that the small molecules are contending with. It really presents that as driving the neuropsychiatric adverse events. So, a bunch of strong data that helps really bring that to focus. That will be the driver there at ECO. In terms of ADA, we'll be showing more in-depth and additional preclinical data, along with some very interesting biomarker data, some of which came out in a press release and is up on our current deck, which you can find online. There's more of that. Really looking at mechanistic data that supports this concept of coordinated organ systems driving peripheral mechanisms that allow weight loss to occur, not just from anorexigenic drivers, but really a few different pathways. We think it's quite compelling. In addition to that, in our initial DIO setting, we have combination data, which will also be highlighted there, along with some very interesting biomarker data in support of it. So that will be the thrust of ADA. We have multiple colonies with various collaborators and labs running in parallel. Our cadence of research is just increasing. There's a lot of interesting questions and data sets on the horizon, and we look forward to sharing that beyond ADA.

Great. Super helpful. If I may squeeze in one last question. This is regarding regulatory interactions. You've talked about where you see Nimacimab fitting into this obesity treatment paradigm across different populations exposed to refractory or nonresponders or incretins, for instance. Have you had these conversations with the FDA yet or do you plan to? Just walk us through your plan there.

That's a great question. So, I can take it up. I know Dr. Arora's on the line, and I can see him on the portal, and I'll let him talk about the regulatory interactions. There have been two key activities that are clearly important for us. One is being crystal clear in terms of what's the roadmap for approval. The approval regulatory development strategy in obesity or anti-obesity medications hasn't shifted. Even with the new guidance, we're sticking to that strategy in terms of obtaining approval as a monotherapy. But the big but there is that there's obviously an advancing landscape with the incretin class continuing to demonstrate success. At the same time, there's this opportunity for patients coming off the drug, discontinuation rates, and tolerability issues, maintenance opportunities, and there lies a significant opportunity. So, one activity that we've been really active in, not as a target but as discussion with KOLs that define the target product profile. We will likely have some of that information become available later in Q2. The second strategy is the regulatory strategy, which gets defined after the data readout on the 2a. If Dr. Arora wants to elaborate, I'm going to turn it over to him.

Yes, sure. Thank you. In the not-so-distant future, in the near future, we are going to have an opportunity to have these regulatory interactions. As Punit pointed out, we are going to have data from the Phase 2a, which will be available in Q4 this year. We will take that data and take that opportunity to have discussions with the FDA and possibly with other regulatory authorities, both in terms of seeking their advice and proposing a definitive dose-ranging Phase 2b study to them. That will be an opportunity for us also to discuss populations so we can study and how we can define them.

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

Can you please remind us about your findings from the DIO model on body composition and how Nimacimab may help preserve lean muscle mass in combination with GLP-1? Looking ahead longer term, just how are you thinking about the magnitude of the commercial opportunity for Nimacimab in combination with GLP-1 versus Nimacimab Monotherapy? And then I had a follow-up, if I could, please.

I am acting as the operator right now, so I'm going to let Chris take that first question. Then maybe that's teed up really well for Tu, who's been handling all the commercial assessment. So, after Chris, Tu can give you a response on the second part of your question.

Thanks, and thanks for the question, Jay. To clarify, the combination data was around tirzepatide, so in combination and alone with tirzepatide. In terms of body composition, we did see when we looked at Nimacimab monotherapy, similar to what we saw in previous repeated studies, which, by the way, I'll just note, those were done with independent labs, and we see very reproducible data. We see body composition where a significant reduction in fat mass occurred with preservation of lean mass. To a lesser extent with tirzepatide, tirzepatide alone is significant, but it's trending up towards less fat mass. In combination with Nimacimab, we see the greatest amount of reduction. They're all fairly notable. There's not a huge shift, but we see that there is more fat mass reduction in combination. This really sets the stage for a combination. If we look at weight loss, we see this nice additive effect, a partially additive effect. This gets back to some of the mechanisms where there is some overlap in the anorexogenic driver compartment, if you will. The caloric intake can both impact that pathway. But there are additional pathways that CB1 inhibition with Nimacimab touches on, and we feel that's where we get this additive nature of weight loss. Tu, do you want to take the next piece?

Yes, happy to. But Jay, would you mind just repeating your question?

Yes. Just how you're thinking about the relative magnitude of the commercial opportunity for the combination of Nimacimab plus GLP-1 GIP versus the magnitude of the opportunity for Nimacimab Monotherapy?

Thanks for that question, Jay. We've been modeling our commercial opportunity. As Punit said, we've been doing a lot of commercial assessments of Nimacimab in terms of what the target populations really are. We think we do have the opportunity both as a monotherapy and in combination; Monotherapy is most likely in the area where patients are intolerable or unresponsive or have a contraindication to GLP-1s, which we think is probably a much larger opportunity than some people may have originally thought. In terms of the combination opportunity, again, this is a potentially large opportunity where you have a class of patients who require significant weight loss, looking at that 20% to 25% plus weight loss likely in the Class 3 obese population, where maybe they're not tolerable to higher doses of, let's say, tirzepatide and can achieve those higher weight losses or they just need additional weight loss on top of the tirzepatide or other GLP-1 class. When we look at the commercial opportunities between the monotherapy and combo, they're relatively equal. At least at this point, they both are quite large in the billion-dollar-sized markets, and one hasn't necessarily differentiated itself as we've been going through the analysis.

Okay. Great. That's super helpful. And if I could squeeze in one last follow-up question. Have you done any work on the co-formulation of Nimacimab with GLP-1 or GLP-1 GIP? Is a fixed-dose combination technically feasible? Can you comment on any potential IP advantages or life cycle management advantages of doing a fixed-dose combination?

Yes, that's a great question, Jay. The opportunity for us in terms of co-formulation obviously exists, but that hasn't been something that we've explored yet. The first proof of concept is going to be just in terms of the dosing happening at the same time in the current trial. Instead, there has been interest from a fixed-dose perspective. We see an advantage in being a biologic, being an antibody, that there's really a future where you can be a CB1 plus story. Stay tuned. First things first is we want to demonstrate Nimacimab's advantage as a monotherapy and highlight this data. It's been well supported by the preclinical evidence. We expect that later this year, once we get through the clinical data, we can start highlighting what that pipeline looks like as a CB1+ story that includes a fixed dose.

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

Maybe the first one, I saw that there are some safety reviews that have not raised any concerns. I was just wondering if there are any other reviews planned. Would any severe or serious neuropsychiatric adverse events be raised in these reports?

Dr. Arora, do you want to take that question?

Sure. We are actually holding these unblinded reviews on a quarterly basis. The independent DMC meets every quarter, and they are provided with unblinded data on safety to review. Now, what we have told you, and as you were mentioning, is that they've reviewed that data and told us that there were no concerns moving forward with the study. They are provided with a list of all adverse events reported in the study and serious adverse events. We also report any neuropsychiatric events that may occur in the study as adverse events of special interest. Those are also channeled into the DMC. They get to review all of this, and they are doing it quarterly, and no concerns have been raised so far. The next review is scheduled for July 18, and they will be ongoing from there until the study ends.

So it sounds like the review board has some discretion over what warrants a concern. Is that right?

They get all of the data that's available for the study, and we have on that review board two psychiatrists and people with experience in CB1 and obesity studies in general. It's a very experienced set of people who understand how these studies run, what this data looks like, and what they're looking for.

Maybe one follow-up question. I want to be sure I still understand the expectations for a strong separation from placebo and monotherapy at 26 weeks. Would this still be 8%?

Albert, that's an excellent question. The primary endpoint is for 8%. At 26 weeks, based on what has been shared now, we didn't have the benefit of 16-week data from Monlunabant, which showed 5.7% placebo adjusted if I recall. We are expecting to see separation between placebo and active. We're targeting over 5%. The study has a design based on 8%.

If I could just squeeze in one last one. I can see with this open-label extension for the 26 weeks, there may be some gaps in the treatment period. I was just wondering if you have plans on how to interpret this data to account for some variations here and potential weight changes during these gaps.

Yes, there is a rollover period that we've had to account for because naturally, there are operational updates that come along with adding an extension that wasn't previously part of the protocol. The data will be collected based on weight and other parameters at the start of the extension as well. We don't know if there will be variability, but if there is variability, it will be collected in terms of the data, and we can discuss that once we have all that information.

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

I wanted to get a sense. I know you extended the CBeyond study Phase 2a to 52 weeks. What is the incremental benefit from going from 26 weeks to 52 weeks, considering you still have the primary efficacy readout at 26 weeks? How does this impact potential timing for a Phase 2b start? Would you have to wait for the full 52-week data set for CBeyond? Just wanted to get a sense of how you're thinking about that.

Ted, thanks. That's a pretty important question. As we discussed in the last earnings call, we wanted to maximize what we could from the current trial. Having the Phase 2a up and running with the primary endpoint based on 26 weeks allowed us the flexibility to leverage a study that's already there, patients already enrolled, and generate another data point allowing us to have broader efficacy, safety data, and other information collected from the trial. That's been one of the key factors. It's always been important for us to eliminate white space between our development objectives. This extension slots in well before the Phase 2b starts and allows us to take the Phase 2a data to have a productive discussion with the agency about a Phase 2b would look like. We will continue collecting information based on this extension before the Phase 2b begins, which could even inform the Phase 2b. It hasn't created any extra time. In fact, it slots in well operationally, and we have the drug product to get that additional data point. The 52-week data point is also important to continue to build confidence in the broader safety that we want to see with this mechanism. I think that's been another important factor as well as the tolerability information. Dr. Arora, do you want to expand on anything I missed?

I think you covered a lot of it. I just want to add a couple of small things. In the monotherapy arm, because it's an open-label arm, we can continue to refine our PK/PD models as the study goes on beyond 26 weeks, which will help us pick the correct dose range for the Phase 2b study. That data will be helpful. The safety data is invaluable because we are treating longer and being able to show that Nimacimab is safe and tolerable. There is also a second arm to the study, so we're also extending the combination dose. The combination dose isn't currently being tested in the proposed Phase 2b, which will be a dose-ranging for the monotherapy. So, we're getting this additional 52-week data, which just adds to what happens when you dose these drugs together and what happens to the curves and the trajectories of weight loss. We think that data will be really useful for both safety and efficacy.

So, do you think the Phase 2b would have to be a Monotherapy study? Or could this become?

At the moment, the Phase 2b is planned as a monotherapy study because we need to do a proper dose ranging. We need to understand what the optimal dose for Nimacimab is. It doesn't preclude the idea that we could do a study with the combination or do other work, but it is necessary to find that optimal dose to go to Phase 3.

Your next question comes from the line of Kristen Kluska of Cantor Fitzgerald.

Based on some of these preclinical studies that you've conducted, the ones that are ongoing, I'm wondering if the way you're thinking about how the trial is powered is changing. Are you walking away with greater conviction in the percent that you've provided us with, or has your thought process changed? Outside of just the Monotherapy, the same thing with the combination.

That's really a great and important question you raised. The data generated preclinically was not something we had when we launched the program. We've demonstrated robust inhibition of CB1 across multiple assays, which shows potency relative to the differentiation from small molecules. We've continued to benefit from a really strong safety profile. We had previous work of multiple biodistribution studies done in NHPs that didn't show any CNS penetration. We've achieved Monotherapy weight loss of 16% to 23.5% in several studies and repeat studies, now shown over 30% in a combo model. Across the board, it checks a lot of boxes. How does that translate to human? Of course, it gives you confidence around the mechanism, and there's this component that comes along with it that we expect to translate into the clinic. But to be transparent, these are mouse studies. So, we must keep that in one aspect. The DIO models across the landscape have been a good tool in this therapeutic area across different mechanisms. They have translated to some degree in the clinical setting. That’s our broad take. Chris, do you have a different approach to answering Kristen?

No, you’ve touched on all the key points. I might just add a very small detail, which relates to the translatability and confidence in the DIO models predicting what we’ll see in the clinic. We are dosing in our DIO dosage, which looks relatively high. It’s worth noting that we have a different behavior in PK profile in mice than we do in humans. We’re mindful of looking at exposures, not necessarily CMAX. It’s really when you understand the whole area of the curve analysis and engagement. Keeping in mind that these are short duration relative to what we are doing in the clinic, we feel pretty confident that we will have an active drug. I’ll just add that piece.

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

Can you talk us through discussions with the FDA regarding the protocol amendment? What are the steps you need to take? Do you need to have a meeting with the FDA, the logistics?

Thanks, Andy. We haven't disclosed any new data today. What we expect are updates to these data sets we've shared recently in upcoming scientific meetings. We'll keep some of that information close to our vest until we get there. There will be an update at those meetings. We have numerous efforts underway both domestically and internationally where we will continue to build on understanding of the mechanism and support our clinical activities. I'll turn it over to Dr. Arora.

Regarding the regulatory interactions, the FDA doesn't grant meetings for protocol amendments. We have submitted the protocol amendment to the FDA. They have asked us for minor clarifications, and we have already sent them our responses. We expect that we will be able to sort out these minor issues and will be able to start rolling patients into our extension. It's very unlikely they will ask for any kind of meeting around the protocol amendment.

Your next question comes from the line of Jon Wolleben of Citizens JMP.

I wonder if you have looked at the blinded baseline data, specifically if you have concerns like we've seen with some of the incretins about reduced efficacy in larger individuals and also in the Hispanic population. Were any demographics that caught your eye when you looked at that?

We’re still blinded to the data. Dr. Arora, do you want to provide context from your experience?

We've managed to get a good representative population recruited for this trial. We do have some Hispanic representation and a pretty good weight range. Once we unblind, to the extent sub-analysis is possible based on these parameters, we will be able to do that. But at the moment, as Punit pointed out, we are blinded, so it's hard to know if there’s any correlation or if individual parameters are making a difference.

How do you think about managing discontinuations in the combination arm? Are you allowing dose adjustments for patients on Semaglutide?

That's one of the reasons we kept the rollover gap small; we don’t want patients off Semaglutide for any extended period. They are limited to being off their drug for only 4 weeks. This accounts for the few initial patients who will be able to join the rollover extension when we begin it. After that, everyone who rolls over will do so directly. There will be no gap and we won't need to do any dose adjustments for Semaglutide because they will already be on effective doses. For the few patients who will have this small gap, we've made some allowance to slightly adjust their doses if needed and to readjust to Semaglutide. We know they can tolerate the effective dose of Semaglutide because they will have completed 26 weeks of treatment on it.

With no further questions, ladies and gentlemen, this concludes today's conference call. You may now disconnect.