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Operator: Good day ladies and gentlemen, and welcome to the Altimmune Inc. full year and fourth quarter 2022 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. To ask a question during this session, you will need to press star-one-one on your telephone. 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.

Richard Eisenstadt: Thank you Gigi, and good morning everyone. Thank you for participating in Altimmune’s full year and fourth quarter 2022 financial results and business update conference call. Members of 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 full year and fourth quarter 2022 financial results was issued this morning and can be found on the Investor Relations section of the company’s website. Before we begin, I would 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 statements disclaimer in our press release issued this morning and now available on our website. Any statements made on this conference call speak only as of today’s date, Tuesday, February 28, 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, Chief Executive Officer of Altimmune.

Vipin Garg: Thank you Rich, and good morning everyone. We appreciate you joining us today for a discussion of our year-end and fourth quarter 2022 financial results and business update. We are excited about the 2022 achievements with pemvidutide, our GLP-1/glucagon dual receptor agonist. Pemvidutide is in development for the treatment of obesity and NASH, two important clinical indications. Altimmune achieved key milestones in the development of pemvidutide last year, including completion of our 24-week Phase IIb NAFLD trial with compelling positive data, and the initiation of our 48-week Phase II MOMENTUM obesity trial. The 24-week data from the NAFLD trial produced a greater than 75% relative liver fat reduction at 24 weeks with over 50% of subjects achieving normalization of liver fat and significant reductions in serum ALT levels and co-related T1 relaxation times in the 1.8 milligram dose group.

Serum ALT levels and cT1 imaging are both established markers of liver inflammation. Subjects receiving pemvidutide also had a mean weight loss of 7.2%, a placebo-adjusted weight loss of 6% in subjects without diabetes at this dose. This is important because excess body weight is believed to be a major driver of NASH and its comorbidities and weight loss represents an important therapeutic goal in the treatment of these patients. We believe the robust reduction in liver fat content and markers of liver inflammation, together with meaningful weight loss will be important determinants of success in NASH, and because the great majority of people with NASH also have overweight or obesity, we believe pemvidutide is uniquely positioned to address these populations effectively.

Given these results, we plan to continue development of pemvidutide for NASH and expect to initiate a Phase IIb NASH trial in mid-2023. Scott Harris will provide more details on these trials shortly. Turning to our Phase II MOMENTUM obesity trial, we are looking forward to announcing the top line 24-week interim results of approximately 160 subjects in the second half of March. We believe that the level of weight loss consistent with the class-leading obesity drugs may be achieved at the end of 48 weeks of treatment and that potential will be reflected in the interim data readout. We also believe the tolerability profile of pemvidutide together with the absence of dose titration could translate into improved adherence to therapy and ease of administration, and that a reduction in serum and hepatic lipids and blood pressure may afford benefits to patients at risk of cardiovascular events.

In contrast to several other agents in development, reductions in blood pressure are being achieved with pemvidutide with minimal increase in heart rate. We believe these attributes could differentiate pemvidutide from other drugs in the obesity space and make an important contribution in the treatment of obesity. Finally, enrolment in the Phase II clinical trial of HepTcell in chronic hepatitis B is over 90% complete, and we expect to have a data readout in the first half of 2024. Recall that this trial is designed to show evidence of anti-viral effects against hepatitis B virus and establish its potential role in combination therapy for the treatment of this important disease. 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 data and clinical plans. Scott?

Scott Harris: Thank you Vipin, and good morning everyone. First, let me briefly review the results of our Phase IIb NAFLD trial. As Vipin noted, a 75% liver–relative liver fat reduction was achieved in the 1.8 milligram dose at 24 weeks of therapy with over 50% of subjects achieving normalization of liver fat. These effects on liver fat content were accompanied by significant reductions in corrected T1 and serum alanine aminotransferase, both markers of hepatic inflammation. cT1 is a measure of fibro-inflammatory activity in the liver, and elevated cT1 scores have been correlated with hepatic and cardiovascular events in clinical trials. Specifically an 80 millisecond reduction has been shown to correlate with a two-point improvement in NAFLD activity score on liver biopsies and up to 100% of subjects assessed by cT1 experienced an 80 millisecond or greater change in cT1.

We believe these findings could be predictive of success on biopsy end points when late stage trials are completed, as well as the likelihood of reduced hepatic and cardiovascular events when outcome trials are conducted. Next, let me tell you about the initiation of a Phase IIb NASH trial later this year. This Phase IIb biopsy-driven NASH trial will be conducted at approximately 60 sites in the U.S. with Dr. Stephen Harrison, Medical Director of Pinnacle Research and Adjunct Professor of Medicine, Oxford University, who led our 12-week NAFLD trial and 12-week extension trial, serving as the principal investigator. The key end points of this trial will be NASH resolution and fibrosis improvement after 24 weeks of treatment. We also plan to perform correlations with non-invasive tests of NASH resolution and fibrosis improvement and have discussions with the FDA about the use of these biomarkers as primary end points in Phase III.

We expect the study to commence mid-2023 and produce top line results in the first half of 2025. Now let me talk about the Phase II 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 cormorbidity. Subjects were randomized one-to-one to one-to-one, to 1.2 milligram. 1.8 milligrams, 2.4 milligrams of pemvidutide or placebo, administered weekly for 48 weeks in conjunction with diet and exercise. Based on characteristics of the fully enrolled study population, including median body weight and body mass index of approximately 101 kilograms and 36 kilograms per meter squared respectively, and median liver fat content of approximately 5% as measured in approximately 100 subjects participating in a body composition sub-study.

The study population is approximately 75% female and approximately 20% of the subjects are of Hispanic ethnicity. As we pointed out previously, the demographics of the subjects in the interim analysis may differ from those in the fully enrolled study population. In addition, unlike the Phase IIb NAFLD trial, the Phase IIb MOMENTUM trial employs end points and lifestyle modifications that are standard for a multi-center obesity trials. The primary end point of the MOMENTUM trial is the relative percent change in body weight at 48 weeks compared to baseline, with additional readouts including serum lipid profiles, cardiovascular measures, and glucose homeostasis. Dr. Lou Arrone from Weill Cornell Medical School, a leading authority in obesity and obesity clinical trials, is serving as the principal investigator.

We expect to have the results of an interim analysis of the MOMENTUM trial in the second half of March. That analysis will be comprised of approximately 160 subjects that received 24 weeks of therapy. The readout parameters are expected to include weight loss, serum lipids, adverse events, vital signs, glucose control, and study discontinuations. We have also completed enrollment in our Phase I multi-center safety trial evaluating glucose control in subjects with Type II diabetes over 12 weeks of treatment. Approximately 48 subjects were planned with a readout expected in March 2023. The purpose of this trial is to establish the safety of pemvidutide in preparation for an end of Phase II meeting with the FDA which is expected early next year.

Across the trials I have described, we are rapidly building the safety profile of pemvidutide with unblinded safety data accrued in over 200 subjects receiving pemvidutide in clinical trials at year-end 2022, and approximately 500 subjects by year-end 2023. We are also making excellent progress in our enrollment of our Phase II multi-center clinical trial of HepTcell. The trial was designed to enroll approximately 80 subjects with over 90% now enrolled. We expect to read out the results of this trial in the first half of 2024 once all subjects complete the six-month treatment period. Recall that HepTcell is an immunotherapeutic against hepatitis B virus and that the virologic effects of HepTcell are being evaluated in chronically infected patients with partial control over infection to enable the combination of HepTcell with novel direct acting antivirals as part of chronic therapy for chronic hepatitis B.

It is believed that effective treatment of chronic hepatitis B will include combination therapy of a direct acting antiviral and an immunotherapeutic agent. I will now hand the call over to Rich Eisenstadt to give an update on our third quarter financial results. Rich?

Richard Eisenstadt: Thank you Scott, and good morning again. For today’s call, I will be providing a brief update on Altimmune’s full year and fourth quarter 2022 financial and operating results. More comprehensive information will be available in our Form 10-K to be filed with the SEC later today. Altimmune ended the fourth quarter of 2022 with approximately $184.9 million of cash, cash equivalents, and short term investments compared to $190.3 million at the end of 2021. Turning to the income statement, revenue was negligible in the fourth quarter of 2022 compared to $3.3 million in the same period of 2021. The negligible negative revenue reported in 2022 was due to adjustments to cost reimbursement under the now completed BARDA contract.

Fourth quarter 2021 revenue was primarily prior period rate adjustments received in that quarter for earlier government-funded research projects. Revenue for the full year 2022 was negligible compared to $4.4 million in 2021. The revenue in 2021 was attributable to the BARDA contract and T-COVID programs, which were concluded in 2021. Research and development expenses were $19.2 million in the fourth quarter of 2022 compared to $20.2 million in the same period in 2021. Approximately $15.3 million of this total for the fourth quarter of 2022 were direct expenses for the conduct of our clinical programs, including $13.4 million in direct costs related to development activities for pemvidutide and $1.9 million in direct costs related to development activities for HepTcell.

R&D expense in the fourth quarter of 2021 included $12.4 million in direct expenses associated with the development of pemvidutide and $2.4 million in direct expenses related to HepTcell development activities, as well as approximately $2.6 million of expense to close out the AdCOVID campaign. Research and development expenses were $70.5 million in full year 2022 compared to $74.5 million in prior year. The decrease in R&D expense was primarily the result of a $35.1 million decrease in AdCOVID and T-COVID related development costs, which programs were discontinued in 2021. This included the expensing of payments made to Lonza for the construction of a manufacturing suite. In full year 2022, we incurred $46.8 million in direct costs associated with the NAFLD and MOMENTUM trials for pemvidutide and $7.5 million in direct costs associated with the HepTcell campaign.

General and administrative expenses were consistent period-over-period at $3.8 million in each of the fourth quarters of 2022 and 2021. For the full year 2022, general and administrative expenses were $17.1 million versus $15.4 million for full year 2021. The $1.7 million increase was primarily due to increased stock compensation expense as well as additional labor-related costs in 2022. Net loss for the three months ended December 31, 2022 was $21.7 million or $0.43 net loss per share compared to net loss of $23.9 million or $0.57 net loss per share for the fourth quarter of 2021. The reduction in net loss is primarily attributable to the $1 million lower research and development expenses, $3.3 million in non-recurring expense in 2021 for the recognition of the Lonza impairment loss, and the $1.3 million increase in interest income offset by the reduction in contract revenue.

Net loss for the year ended December 31, 2022 was $84.7 million or $1.81 net loss per share compared to $97.1 million or $2.35 net loss per share for the year ended December 31, 2021. The decrease in net loss was primarily attributable to the lower research and development expenses in 2022, $11.4 million in non-recurring expense in 2021 for the recognition of the Lonza impairment loss, and the $2.7 million increase in interest income offset by the reduction in contract revenue. We currently estimate that our research and development expenses for full year 2023 will be approximately $90 million. G&A expenses for the full year of 2023 are anticipated to be approximately $18 million. Approximately $10.1 million of these operating cost are for non-cash expenses, including stock compensation and depreciation and amortization.

We estimate that our existing cash funds us into the second half of 2024, which includes completion of the 48-week MOMENTUM trial and completion of enrollment of the Phase IIb biopsy NASH trial. Our current cash projection also anticipates investment in 2023 in Phase III obesity clinical drug supply, as well as funding in 2024 for the initiation of a Phase III obesity campaign. I will now turn the call back over to Vipin for his closing remarks. Vipin?

Vipin Garg: Thank you Rich. 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?

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Operator: Our first question comes from the line of Seamus Fernandez from Guggenheim Securities.

Seamus Fernandez : Great, thanks so much for the questions. Two questions for the team here. First and foremost, if you could lay out what you would hope to see in the MOMENTUM study just from a weight loss perspective that would be–you know, from your perspective, clinically relevant and likely successful as an obesity agent at 24 weeks, perhaps even generating strategic interest or potential partnership opportunities. Would love to just hear how the team is thinking about those levels and thresholds, and perhaps comparable products that make sense in that regard. Then second, as it relates to the NASH study, can you just help us better understand how the recruitment in biopsy-driven studies at least has been progressing, or perhaps just a general sense of when your 24-week data could potentially be available? I know it’s a little bit of a crystal ball looking into the future in that regard, but just interested to better understand that. Thanks.

Vipin Garg: Yes, thanks for the question, Seamus, good morning. Let me take the first question and maybe Scott Harris can take the second one, and anybody else can chime in as well. As far as what we are looking or expecting to see at the 24-week interim readout, as we have always said that this is not about just one thing, not just about one number, it’s not just a weight loss number. You have to look at the overall target product profile to figure out where does your product fit in the long run in the obesity landscape. If you think about, at 48 weeks or at the end of treatment, approximately a year, what we are looking to achieve is about 15% to 20% weight loss. We think that’s where one needs to be in order to be competitive from a weight loss perspective.

But you also need to bring a number of other attributes, which we think our product has, so I think it’s really a combination of all those things – lack of dose titration, better tolerability, serum lipid reduction and serum lipids and so on, so all of that has to be factored into determining the overall competitive profile of the product. If you back off of that and look at 24 weeks, we would expect to be on the way to achieving that 15% to 20% weight loss, so 24 weeks, halfway there, 8% to 10% is what we’ve been talking about. We think we’ll have a competitive profile if they’re having that kind of weight loss, with all of these other attributes together with that weight loss. Scott?

Scott Harris: Hi, good morning Seamus. Regarding your second question, we think that we’re putting together a very strong plan for recruitment. We think we’ve identified a number of very good sites. As you know, Stephen Harrison is serving as the principal investigator of the trial once again. He is a great organizer and there is a very established network under his direction, so we feel very good about the recruitment plan and doing it in the United States. Regarding that, we think that we could have a readout on that 24-week end point in the first half of 2025.

Seamus Fernandez: Great, thanks. Very helpful. Then just as a final follow-up question and I’ll jump back in the queue, as we think about the prospects for 8% to 10% weight loss, I assume, just to clarify, is that placebo subtracted weight loss that you’re hoping to see, and maybe just as a little bit of incremental context, can you remind us at 24 weeks, what Wegovy and tirzepatide achieved? Thanks.

Scott Harris: Okay Seamus. Yes, as we’ve said before, that 8% to 10% is placebo adjusted. As Vipin mentioned, at the end of the year we’d like to be in that 15% to 20% range, and where we would be at the end of 24 weeks is how you look at the curve. We should point out that at the same time point, the 24 weeks, semaglutide, which has been a very successful drug – I think there were over 60,000 scripts written last week alone, was at 8% placebo adjusted weight loss. Tirzepatide was at 12%, so the 8% to 10% is certainly within that range and is actually in excess of semaglutide, and we think that based on our Phase I data, we can have very, very good weight loss, but we’ve constructed our target product profile to include not just a weight loss percentage number but the full spectrum of what’s going to differentiate drugs and get doctors to use them.

The benefits of the drug are going to be well beyond the simple weight loss number. It’s going to include all the other attributes that Vipin talked about.

Vipin Garg: Yes, and I would also point out that when we are comparing 15% to 20%, we’re looking at 68 to 72 weeks for semaglutide and for tirzepatide versus what we are looking at here is a 48-week study, so there’s still a lot of runway left there to achieve additional weight loss beyond 48 weeks.

Seamus Fernandez: Thank you.

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

Yasmeen Rahimi: Good morning team, and thank you so much for all the updates and detail. A few questions for you. I just wanted to drill down on the design of the NASH study. What is the duration of the study, and I just wanted to also clarify, is the study powered for both end points, NASH evolution as well as a one-point improvement of fibrosis? Then broadly speaking, what is the size of the study going to be, so if you could just drill down there. Then sorry, one last question about the diabetes study, a lot of clients are wondering, and given that that study is also reading out at March around the same time as we’re expecting interim MOMENTUM, how do you plan on sharing that data? Thank you again for taking my long list of questions.

Vipin Garg: Yes, let me take the second question and then Scott, maybe you can take the first one. As far as the diabetes study is concerned, both the studies are neck in neck. We’re prioritizing the MOMENTUM study to make sure that data is out as quickly as possible in the second half of March, but we’re also expecting the diabetes data around the same time. It’s hard to say exactly what the timing will play out, but I would say it’s going to be very close to each other.

Scott Harris: Yes, and Yas, thanks for the question about the NASH study. That study is still in its final stages of design. We’re going to share those additional details as soon as we can. At this point in time, we do believe that we’re going to be reading out at 24 weeks. We consider both end points important. The actual power calculation will need to be worked out, but the hope would be that we could power for both; but again, that’s going to depend on the sample size, and that hasn’t been finalized at this point either, but we do hope to get you those details as soon as possible.

Yasmeen Rahimi: Thank you Scott. Just a clarification question. Given that you hope to have the data, I guess in the first half of 2025, can we assume that the study will be a one-year duration or–rather than six months, or a little premature to make these long assumptions on our end?

Scott Harris: Well, the primary end point of the study will be read out at 24 weeks, or six months, and we’re making a decision about whether to continue to follow a patient for other parameters, such as safety or the non-invasive markers, for a longer period of time, and that decision is being made right now. But assuming we get the trial commenced midyear this year and the time period that we anticipate will be necessary to accrue the requisite number of patients, and then the 24-weeks of treatment follow-up, we think that a first half 2025 data readout is very realistic.

Yasmeen Rahimi: Great, thank you so much, and really the best of luck as we’re headed in the next few weeks. Thank you again.

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

Roger Song: Great, thank you team for taking our questions. A quick one from us. One, given the pleiotropic effects from pemvidutide, can you guys just lay out what are the key targeted populations you want to address, particularly for example for the obesity plus/minus, NAFLD versus NASH, maybe some other comorbidities pemvidutide that are better or worse positioned to address? If you can give us some details in terms of the numbers, that would be very helpful. I will have a follow-up question after that. Thank you.

Scott Harris: Hey Roger, and good morning. There is a great deal of overlap between the obesity population and the NASH population. It’s estimated that 50% of obese patients have NAFLD and virtually all NASH patients, at least in the United States, have obesity, and it’s known that they share similar comorbidities. NASH patients at their terminal stages of liver disease die of liver disease, but they predominantly die of the cardiovascular complications, and therefore it’s important when you treat the NASH patient to treat not only the process going on in the liver but also the obesity as well, to have a meaningful impact. We also think that doctors, when they prescribe to patients, will pick drugs for the treatment of NASH that also offer weight loss, not only because they believe it’s so but because patients also want it.

I’d point out that in the NASH space, we believe that we’re the only drug that has effective interventions on both NASH inflammatory and fibrotic activity at the end of the trial, but also weight loss. When you’re looking at the obesity population, clearly right now in its early stages of the marketplace and development, people are looking at one thing – they’re looking at the percentage weight loss. That would be nice if insurance companies were looking at that as well. We note that the primary dose of tirzepatide that’s being prescribed right now is not the 15 milligram dose but the 5 milligram dose – it gives you an idea of the kind of weight loss that prescribers and patients might want right now, and despite the fact that tirzepatide had a higher percentage weight loss than semaglutide in clinical trials, that semaglutide is being prescribed quite nicely.

Our projection for the percentage weight loss is actually greater than semaglutide at 24 weeks, but we think in terms of the target product profile, what will it include, it will include meaningful weight loss, meaning as Vipin pointed out, in that 15% to 20% range, although at the end of 48 weeks, although we think that based on our Phase I study results, we can achieve more than that. We believe a successful target product profile would include that as a base case. We think it’s important that it also be replete with the treatment of the comorbidities that are ultimately going to drive prescriptions and insurance approvals, such as reduction in serum lipids, reduction in hepatic fat, meaningful reductions in blood pressure which we’re achieving, unlike some other compounds in development, with only minimal increases in heart rate.

Scot Roberts: You know, Roger, in that context, it’s helpful to also understand that the IAH states that 60% to 70% of obese people are dyslipidemic, and the ability of glucagon to drastically change the metabolism of lipids and lower serum lipids and liver fat, as Scott just indicated, certainly creates a special target population in that respect.

Roger Song: Excellent, thank you. I appreciate all the comments, very good. A very quick one in terms of the NASH. I know it’s early stage, you are still finalizing the design, but just in terms of given the multitude, the effect from pemvidutide, what could be the ideal population you will do, like an earlier stage in terms of the NASH stage, or some other consideration you will have for the patient population? Thank you.

Scott Harris: Thanks for the question, Roger. It had been said early on in NASH development that metabolic drugs treat at the early stages of NASH, whereas you need anti-fibrotic drugs to treat the later stages. That paradigm has been turned on its end because we now have two metabolically active drugs, resmiterom and efruxifermin, which have completed Phase III and Phase II respectively, having very meaningful effects on fibrosis. What that shows is that if you affect the liver and have effective liver fat reduction, you’re going to have effective reduction in inflammatory and fibrotic activity which is going to drive activity not only from fat reduction all the way through fibrosis improvement. We actually see the product population for this study being all stages of NASH, up until advanced fibrosis.

That’s been a tough population to treat, and we’d point out that the greater the reduction in the liver fat, the greater the effects that I just mentioned have been in clinical trials. Very happy about the resmiterom results, the reduction of liver fat at 24 weeks was about 49% to 50%, and with efruxifermin it was about 65% to 70%. We’re at 70% to 75%, and based on that, we’re very, very optimistic about biopsy results in the future. But with resmiterom, which we believe will go onto approval, only 25% of people had a response in either NASH resolution or fibrosis improvement. We think that’s great – it lays the regulatory precedent, but we also believe there’s a large amount of room for improvement that we think we can fill.

Roger Song: Excellent, thank you. That’s it from us.

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

Corinne Jenkins: Thanks and good morning. Maybe first from me, just based on what we saw in the NAFLD study, how do you think the dose titration and the 2.4 mg/kg arm could impact safety compliance and then maybe downstream about efficacy in the upcoming MOMENTUM readout?

Scott Harris: Well, thank you for the question, Corrine. We put that short titration in place based on some observation we made in our first-in-human study. With the 2.4 milligram dose, we saw more GI intolerability events, and they were occurring early on, in the first one to two weeks, so we thought that a four-week titration would mitigate adverse events. We saw something to that effect in our NAFLD trial. Whether we continue to use that titration going forward in the future, we’ll have to see based on the data that we accrue. We think that the end of 24 weeks with a four-week titration would probably at that point in time have a minimal effect on the overall weight loss, and certainly by 48 weeks there’d be sufficient time to minimize the impact of the effect of the titration.

We’re not committed, by the way, to use the titration going forward. We’ll look at the data, we may drop it. We’d point out that we’re the only drug in development for either obesity or NASH that’s incretin-based that can actually dose without dose titration. We have the optionality if we want, and this is not something that we’re doing right now but something that we’re quite aware of, if we ever got back research for example, market research which we’re conducting continuously, that patients preferred the tolerability over the titration, we could offer titration as an adjunct either in a late stage trial or as a separate user trial, and actually offer that to patients and doctors as a prescribing option. That’s something that the other drugs in development, like tirzepatide and semaglutide, can’t do because they’re already at four to five months of titration and the question is, how much longer do they need to go.

We think that the titration, based on what we’ve seen before, is helping, but is it needed? We don’t know. Will it affect the efficacy at 24 weeks? We don’t believe it will, and certainly not at 48.

Corinne Jenkins: Helpful, and then just a point of clarification for me, with the weight loss–sorry, with the diabetes study that’s coming soon, will you share weight loss data from that trial or is it going to be primarily focused on the diabetes-related end points?

Scott Harris: Right, no, we will share that data. We’ll also share the information on the diabetes end points.

Corinne Jenkins: Thanks.

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

Mayank Mamtani: Good morning team, thanks for taking our questions, and congrats on the progress. On the Phase IIb NASH study design, I know you’re not commenting on the total number of subjects yet, but just curious if your interim 24-week readout will be like the Phase IIb MOMENTUM readout, where you’ll include sort of a smaller cohort of patients for that 24-week biopsy, or would you have the full population? Just trying to see how much excitement there is out there for enrolling for your NASH study, like we saw with the obesity study.

Scott Harris: Thanks for the question, Mayank. You know, that readout that would occur in the first half of 2025 would not be an interim analysis, that would be a full readout because it’s a readout on the primary end point at the established time point for reading it out. Now, we may elect to continue following patients, but the efficacy of the study with regards to the primary end point would already be established. When we read out in the first half of 2025, it will be in the entire study population, and that’s in contrast to the readout that we’re going to have in the latter part of March, where we’re actually doing a cut of the patients, approximately 160 or approximately 100–about 50% of the patients and only at about half of therapy, so the readout in the first half of 2025 in that NASH trial will be a complete readout.

Mayank Mamtani: Got it, thank you for that clarification. Then on MOMENTUM, it seems like the focus here is on totality of data, rather than any one specific metric, better weight loss. Are you willing to comment on what your expectation might be on maybe the discontinuation rate for pemv versus placebo, and also I think a similar comment, if you could have on the hyperglycemia study that you’re running in parallel to MOMENTUM. I know the follow-up there is shorter there, 12 weeks. I have one final question after that.

Scott Harris: Yes, well, we’ll have information on the discontinuation rates. I don’t anticipate that we’d be talking about other people’s data on that readout, but we should have that information for you in both trials.

Mayank Mamtani: And your expectation for that rate to be in what range?

Scott Harris: Yes, so historically in obesity trials, up until the recent couple of years, the discontinuation rates were quite high. We’ve seen them come down recently in that 20% to 30% range. The other thing to comment on is the fact that discontinuations in any trial like this are not a continuous process. They’re probably going to be front end loaded, so that has to be taken into consideration when you look at the discontinuations that are reported at the 24-week readout. We’ll have that information and we’ll share it with you, and we’re happy with what we’re seeing so far.

Mayank Mamtani: Great. Finally, sort of a big picture question, as you prepare for that end of Phase II FDA meeting, I know it’s a bit early to talk about that, but just curious if you are thinking of a late stage program in terms of scale that kind of mirrors what we have seen with program, which includes an active competitor arm, and/or studying pemv with certain combination regimens. Are you able to share any initial thoughts on that?

Scott Harris: Well, we haven’t had that discussion with FDA yet. Obviously, we would have an end of Phase II meeting with FDA to discuss the Phase III program. Everyone is aware of the Phase III programs that were conducted with semaglutide, and that is being conducted now with tirzepatide and obesity. It’s not just been a question of the number of trials but the number of subjects that you need to have in your safety database in order to file for approval, and typically companies have fulfilled those requirements of the safety database by doing pivotal trials. In both of those programs, there have been four pivotal trials. None of those trials of those pivotals that were filed for approval have included an active comparator.

There was a trial that was done in obesity for tirzepatide where they compared it to an outdated dose of semaglutide, Ozempic for the treatment of obesity, so I think at this point in time, the questions are there. We have a concept that would look somewhat like the other programs, but we need to have that discussion with the agency.

Mayank Mamtani: Great, thanks for taking our questions.

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

Jon Wolleben: Hey, good morning, and thanks for taking the question. You touched on this a little bit, about the serum lipid data that you’re going to release as well, and I was just wondering if you could give us a little more context on what you consider to be a meaningful reduction when we’re looking across the class for both 24 and 48 weeks, and how important do you think that attribute is moving forward for pemv’s ultimate utilization.

Scott Harris: Thanks Jon. Ultimately the lipid reduction we want to get is going to be at 48 weeks. There’s probably going to be progressive improvement over the course of time, so with the other programs, like tirzepatide and semaglutide, the reduction in total LDL cholesterol has been minimal. My recollection is for LDL in the range of about 3%, maybe as high as 5%. Though these drugs don’t really move cholesterol, they do have very potent effects on triglycerides. We’ve seen with the glucagon mechanism that you can move LDL cholesterol – we saw that in our first trial, so we would hope to achieve something above that 5% range, hypothetically maybe in that 10% range would be very nice to see, but again the number would have to be achieved at 48 weeks, and our first-in-human trial we were able to see a 20%, approximately 20% reduction in LDL and total cholesterol, and that’s directly attributable to the glucagon.

Our hope is that we would be meaningfully above the other drugs when we look at the trial at 48 weeks.

Jon Wolleben: That’s helpful. Just one on the NASH study, I know you’re in the finalization steps with the design, but how are you thinking about dosing? The 1.8 milligram dose seems to be the most effective so far. Is it worth moving forward to 2.4, or is the 1.8 probably the sweet spot? Just wondering how you’re thinking about that. Thanks.

Scott Harris: Well, that’s a question that’s on our mind, and the decision is going to be data driven. Obviously we’ll make decisions about the NASH trial based on what we see in MOMENTUM, whether we carry the 2.4 milligram dose forward. You know, although we haven’t seen any convincing data that 2.4 is better than 1.8, we do know at least from the obesity point of view with semaglutide, that when they got to super obesity, which you would define as 110 or 115 kilograms, that serum concentrations dropped and with that, there was reduction in the percentage weight loss that patients achieved. Now, that wasn’t seen with tirzepatide. Then the question is, will we as a compound behave more like semaglutide or tirzepatide, and at this point we’ve modeled out the data but we’re not absolutely certain, so we’ve used the 2.4 milligram dose essentially as an insurance policy in case we also see that effect.

That strategy might be more relevant to obesity than NASH. We are modeling the data. There are systems and modeling efforts that you use, among them things like population PK, so we’ll use that information that we’re developing in-house with MOMENTUM data to make a decision about the doses going forward. That in many ways will drive the sample size, which was one of the earlier questions. If we have multiple arms in the study, including 2.4, that would require more patients to achieve adequate power. If we’re not going to do 2.4, the study would be smaller and we could get it done more quickly, and that’s what’s being considered right now, which is why we’re not making an announcement about the design or the numbers. We want to see the results of the MOMENTUM trial, finish our modeling, and then we’ll come up with a conclusion, and as soon as we have that, we’ll share that conclusion and the design of the trial with the street.

Jon Wolleben: Very helpful color, thanks Scott.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Patrick Trucchio from HC Wainwright.

Joe Pantginis: Hi, this is Joe on for Patrick. Thank you for taking the question. Switching gears a little bit to the HepTcell Phase II, just wondering from the initial readout following the six months on treatment, in terms of both clearance and hep-B surface antigen and seroconversion, how important is it that patients also achieve seroconversion at six months?

Vipin Garg: Dr. Roberts, do you want to take that?

Scot Roberts: Sure. I think that obviously that’s a nice to have. I think really what we’re looking for is the ability to reduce the surface antigen, and this is still a relatively short trial even at six months of treatment, and so seroconversion is certainly being followed, is certainly of interest. But I think that significant reductions in the surface antigen, we set the bar at a one log reduction is really what we’re looking for. Again, the purpose of this trial is to establish that HepTcell has, as a monotherapy, activity against chronic hepatitis B. It’s viewed that the effective treatment of the disease will require combination therapy, and so we’re using this patient population that already is partially controlled, like they might present having received some of the new direct acting antivirals, and then the immunotherapeutic, like HepTcell being able to drive that clearance of the surface antigen with the presumption of seroconversion.

That’s how we’re looking at that trial.

Joe Pantginis: Thanks so much.

Operator: Thank you. As a reminder, to ask a question, please press star-one-one on your telephone and wait for your name to be announced. At this time, I’m showing no further questions. I would now like to turn the conference back to Vipin Garg for closing remarks.

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

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.