Altimmune - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 delivered a cleaner P&L with lower R&D and G&A, net loss narrowed to $22.1M and diluted EPS of $(0.27), while cash, cash equivalents and short-term investments strengthened to $183.1M as of June 30, 2025.
• Clinical momentum: IMPACT Phase 2b 24-week readout showed statistically significant MASH resolution (up to 59.1%), robust weight loss (up to 6.2%), significant cT1 reductions, and potentially best-in-class tolerability; End-of-Phase 2 FDA meeting and full 48-week data are targeted for Q4 2025.
• Versus consensus: EPS beat (actual $(0.27) vs $(0.312)), while revenue missed given de minimis operating revenue (actual $5K vs $560K) — both consensus values from S&P Global.
• Near-term catalysts: full 48-week IMPACT data and End-of-Phase 2 FDA meeting (Q4 2025); continued execution in newly initiated Phase 2 trials in AUD (RECLAIM) and ALD (RESTORE).

Estimates marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

• Strong efficacy and tolerability in IMPACT: “Pemvidutide demonstrated rapid and robust MASH effects, meaningful weight loss and impressive safety and tolerability… We are preparing for an End-of-Phase 2 Meeting with the FDA” — CEO Vipin Garg.
• Potentially class-leading cT1 improvements: Mean cT1 decreases of 145.0 ms and 147.9 ms at 24 weeks in 1.2 mg and 1.8 mg arms vs 27.5 ms in placebo (p<0.001), indicating anti-inflammatory and anti-fibrotic activity — CMO Scott Harris.
• Strengthened balance sheet and optionality: Total cash of $183.1M on 6/30/25 and access to $100M Hercules facility (with $15M drawn), supporting Phase 3 readiness — CFO Greg Weaver and company filings.

What Went Wrong

• Fibrosis improvement did not reach statistical significance at 24 weeks (ITT analysis); management expects significance with longer duration and larger Phase 3 trials.
• Revenue remained minimal ($5K), underscoring non-commercial stage; consensus revenue was higher, leading to a miss vs estimates.
• Regulatory uncertainty persists around acceptance of NIT/AI endpoints in U.S.; management will seek alignment at End-of-Phase 2, noting shifting FDA views and EMA acceptance of AI-assisted pathology.

Transcript

Speaker 1

Good morning, ladies and gentlemen, and welcome to Altimmune's second quarter 2025 financial results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message as your hand is raised. As a reminder, this call is being recorded. I'll now introduce your host for today's conference call, Lee Roth, President of Burns McClellan, Investor Relations Advisor to Altimmune. Lee, you may begin.

Speaker 5

Thanks, Livia. Good morning, everyone. Once again, thank you for joining us for Altimmune's second quarter 2025 financial results and business update conference call. On today's call, you'll hear from Dr. Vipin K. Garg, our Chief Executive Officer, Dr. Scott M. Harris, our Chief Medical Officer, Greg Weaver, our Chief Financial Officer, Dr. Scot Roberts, our Chief Scientific Officer, and Ray Jordt, our Chief Business Officer, who will join us for the Q&A session. Our second quarter 2025 financial results and corporate update press release was issued earlier this morning, and it can be found on the Investor Relations section of the Altimmune website. Before we begin, I'd like to remind everyone that remarks made about future expectations, plans, and prospects constitute forward-looking statements for purposes of the 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, and these could cause our actual results to differ materially from those indicated. For a full review of the risk factors that could affect the company's future results and operations, we refer you to the company's filings with the SEC. I also direct you to read the forward-looking statement disclaimer in our press release issued this morning, which is available on our website. Any statements made on this call speak only as of today's date, August 12, 2025, and the company does not undertake any obligation to update any forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this call is being recorded and will be available for audio replay on the Altimmune website. With that, it's my pleasure to turn the call over to Dr. Vipin K.

Garg, President and Chief Executive Officer of Altimmune. Vipin?

Speaker 2

Thank you, Lee. Good morning, everyone, and thank you for joining us today for our second quarter financial results and corporate update. As many of you know, we presented the 24-week top-line data from the IMPACT trial at the end of June. As we shared, pemvidutide achieved statistical significance in the primary endpoint of MASH resolution and across multiple objective measures of efficacy at 24 weeks of treatment. These included all non-invasive markers of inflammation and fibrosis, liver fat reduction, and weight loss, along with best-in-class safety and tolerability without the need for dose titration. These data will serve as the foundation of the package that we take to the FDA for our end of phase 2 meeting in the fourth quarter and will inform the design of our phase 3 program.

In addition to the advancement of our MASH program, our phase 2 trials in AUD and ALD, Reclaim and Restore, are now underway. Alcohol use disorder and alcohol-associated liver diseases are two indications with significant unmet needs and few to no treatment options for which we believe pemvidutide may be particularly well suited. As we announced yesterday, our board has appointed Jerome Durso as Chairman of the Board, succeeding Dr. Mitch Sayer, who has served in this role for the past seven years and will remain with us as a non-executive director. This change reflects our planned advancement to phase 3 development of pemvidutide in MASH. Jerome has a wealth of commercial and corporate development experience, including the building of a successful liver franchise as CEO of Intercept prior to its acquisition. We are excited to continue moving forward under Jerome's leadership and look forward to Mitch's ongoing contribution.

With the $183.1 million in cash and cash equivalent, we have considerably strengthened our balance sheet as we work to continue to advance the development of pemvidutide and look forward to reaching additional milestones, including the full 48-week IMPACT data as the year progresses. With that, I'll now turn the call over to Dr. Scott M. Harris, our Chief Medical Officer, to provide a clinical development update. Scott.

Speaker 3

Thank you, Vipin. Those of you on the call with us are likely familiar with the IMPACT top-line data that we reported about six weeks ago. I'd like to expand upon a few of the key highlights of this positive and important data set. First, we achieved MASH resolution up to 59.1% of subjects, a highly statistically significant result after 24 weeks of treatment. On the other measure of fibrosis improvement, we did not reach statistical significance, but clear evidence of antifibrotic activity was observed that was supported by additional objective measures of fibrosis improvement. As Vipin noted, multiple measures of efficacy that were assessed at the 24-week time point achieved statistical significance. We demonstrated impressive results in all of the non-invasive tests of liver fibrosis, including enhanced liver fibrosis and vibration-controlled transient elastography.

In addition, the path-based analysis of the biopsies showed a statistically significant improvement in liver fibrosis in a supplemental analysis. We recently completed our analysis of another important non-invasive test of fibroinflammation, corrected T1 imaging or cT1, where a class-leading effect for pemvidutide was observed at the 24-week time point. cT1 is a reproducible MRI-based liver imaging method that has been correlated with changes in liver inflammation and fibrosis in clinical studies. Decreases in cT1 relaxation time of 80 milliseconds or greater have been correlated with improvements in liver inflammation and fibrosis in clinical studies. At 24 weeks, mean decreases from baseline in cT1 relaxation time were 145.0 and 147.9 milliseconds in the 1.2 and 1.8 milligram pemvidutide treatment arms, respectively, compared with a decrease of 27.5 milliseconds in placebo, representing a p-value of less than 0.001 for both doses.

These new data add additional depth to the data demonstrating the strong anti-inflammatory and antifibrotic activity of pemvidutide treatment. In addition to these impressive effects on the liver, pemvidutide was associated with a greater than 6% decrease in body weight at 24 weeks of treatment, with a weight loss trajectory indicating that further weight loss was likely. Decreases in body weight are important in MASH patients as they succumb to the complications of obesity at greater rates than the complications of liver disease until cirrhosis actually develops. In the aggregate, the IMPACT top-line data compare very favorably to other MASH therapies and include those that have read out at much later time points. Now, moving to safety, pemvidutide demonstrated potentially class-leading results in that important area.

Through 24 weeks, pemvidutide was remarkably well tolerated with only a single adverse event-related discontinuation across the two pemvidutide treatment arms versus two adverse event-related discontinuations in the placebo group. It is worth noting that this excellent tolerability was achieved in the absence of dose titration, which is unique for GLP-1-based agents. The ability to start patients on a dose that is most effective and tolerable will be highly attractive to prescribers and will be another key differentiator for our therapy. We're continuing to analyze the 24-week data and look forward to providing updates as the results become available. The team is preparing for our fourth quarter end of phase 2 meeting with FDA that will further guide our phase 3 plans. We will also be reporting the full 48-week data in the fourth quarter.

This data will include the non-invasive tests that were reported at the 24-week readout, weight loss, and safety. In addition to our MASH program, we've made progress in the development of pemvidutide in two additional indications, AUD and ALD, with the initiation of phase 2 trials in these indications in May and July. AUD and ALD are serious and highly prevalent conditions where current treatment approaches are inadequate and innovation has been limited. Reclaim, our AUD trial, is a 24-week trial evaluating weekly 2.4 milligram pemvidutide versus placebo. The primary endpoint is the change in the number of heavy drinking days, with key secondary endpoints including other measures of alcohol intake and weight loss, including the World Health Organization risk drinking level, which has recently been accepted by FDA as an additional basis of approval in this indication. Restore, the phase 2 trial in ALD, started enrolling in July.

It is a 48-week trial evaluating the 2.4 milligram weekly dose of pemvidutide versus placebo with a primary endpoint of change in liver stiffness measurement at 24 weeks. Liver stiffness is a non-invasive measure of liver inflammation and fibrosis that characterizes the prognosis and severity of ALD. Key secondary endpoints include an assessment of liver stiffness at 48 weeks, as well as changes in ELF score, alcohol consumption, and body weight at both 24 and 48 weeks. With that, I'll turn it now over to Greg Weaver, who will review our second quarter financial results. Greg?

Speaker 6

Thanks, Scott. Beginning with the balance sheet, we finished the second quarter with total cash of $183.1 million. That's an increase of approximately 40% over our cash position at the start of this year. We've raised $88 million in gross equity capital this year, while adding the flexibility of a $100 million Hercules debt facility, which we announced in the second quarter and drew down $15 million from that facility at signing. These strategic financial moves are part of our ongoing efforts to ensure that our balance sheet is able to support the continuing clinical development of pemvidutide. We are committed to staying focused on driving value as we work to position pemvidutide to benefit MASH patients. Now to briefly comment on the Q2 financial results.

First, R&D expenses, which were $17.2 million for the three months ended June 30 as compared to $21 million in the same period of 2024. This amount includes $11.2 million of direct costs related to pemvidutide development. Breaking that down further, including approximately $5.5 million for the IMPACT phase 2b trial, $2.6 million for AUD and ALD startup phase 2 costs, and $1 million for our pemvidutide oral formulation preclinical development. G&A expenses were consistent period over period at $5.7 million and $5.6 million for the quarters ended June 30, 2025, and 2024. Really nothing noteworthy to call out in our G&A. Net loss for the second quarter of 2025 was $22.1 million or $0.27 a share, compared to a net loss of $24.6 million or $0.35 a share in the second quarter of the prior year. With that, I'll turn the call back to Vipin for closing remarks.

Speaker 2

Thank you, Greg. The second half of 2025 will be an exciting period for Altimmune, as we report the 48-week IMPACT data and prepare for our end of phase 2 meeting while continuing to enroll the phase 2 trials in AUD and ALD. This concludes our formal remarks, and we would now like to open the line to take questions. Operator?

Speaker 1

Thank you. Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Annabelle Samimi with Stifel. Your line is now open.

Speaker 8

Hi, this is Jake on for Annabelle. Thanks for taking our question. I have two. The first one related to the MASH development plan. You've had some time to digest the data, and you know we did see fibrosis improvement not reach that statistical significance. To what extent could you still leverage the other improvements in NIST and the AI-assisted pathology analysis at week 24? How does the FDA view these new measures? Could you potentially get it into the label by including those endpoints in the phase 3?

Speaker 3

Hi, Jayed. This is Scott, and thank you for the question. There's more and more emphasis being placed on non-invasive tests, and the overall feeling among experts in the area is that we will be moving to a non-invasive test or NIT-based improvement at some point in the future. I think the FDA is warm to that. We actually haven't seen that happen at this point. I want to remind you that we achieved highly statistically significant effects on ELF and VCTE, sometimes called FibroScan, which are considered the best non-invasive tests for assessing fibrosis. Also, the PATH AI, I should remind you that PATH AI analyses have been accepted in Europe as the basis of approval, and that FDA is now reviewing that proposal, and we should have some news on that in the near future.

We think that based on these highly recognized and validated measures of fibrosis improvement, we not only have excellent evidence that fibrosis improvement is occurring, we're actually meeting what could be FDA and EMA expectations for approval in both of these areas. As we've said before, there is a great deal of evidence that we have very potent antifibrotic effects. We're very confident about our ability to be able to hit these effects in phase 3.

Speaker 2

I just want to add that just to remind everybody that this readout was at 24 weeks, at 48 weeks or beyond, which is where really the phase 3 program will be designed for. We believe that we will hit the statistical significance in the fibrosis endpoint with longer trial and larger trial that would reduce the placebo noise. That's really the reason we didn't hit the endpoint in this 24-week study. We feel very good about going into a phase 3 program in spite of whether the NITs are allowed or not. Even without that, we should hit the fibrosis endpoint in a longer phase 3 trial.

Speaker 8

Thank you. I had one more question, and it's related to the AUD/ALD trial. I could be wrong about this, but I do recall you guys mentioning that you would test different doses, like 1.2, 1.8, 2.4 with titration. It looks like you're only testing the 2.4 milligram in these trials. Is there a particular reason for that?

Speaker 3

Yeah, Jayed. I mean, we think that for a phase 2 trial, it's appropriate to only test one dose. We're testing the most efficacious dose, and then we'll have that conversation with the FDA and other regulatory agencies going forward. There's always the opportunity to expand that and to analyze different doses in a phase 3 program. We think that we're going in with what will be our most efficacious dose, and then we can reexamine other doses as the program unfolds.

Speaker 8

Great. Thank you.

Speaker 1

Thank you. Now, next question coming from the line of Ellie Moore with UBS. Your line is now open.

Speaker 7

Hey, this is Jasmine on for Ellie. Thank you for taking our question. On your end of phase 2 meeting, can you talk about what you're hoping to discuss with the FDA and align with them on? Are you planning to discuss the possibility of an NIT-based phase 3 design with them? Will we get an update after this meeting? Thank you.

Speaker 3

Hey, Jasmine. Thanks for the question. I think that we really can't provide a lot of details about the meeting and our proposals until we actually have the meeting. There will be a lot of topics to discuss. You know the opinions of the FDA on this are shifting right now, and we're keeping our ears very close to the ground on this. We expect to be able to have a very rich conversation with the FDA along multiple lines of approaching this and have an update for you after the end of the phase 2 meeting.

Speaker 7

Okay. Awesome. Thank you.

Speaker 1

Thank you. Now, next question coming from the line of Yasmine Rahimi with Piper Sandler. Your line is now open.

Speaker 8

Hi, this is Dominic on for Yasmine Rahimi. Congrats on a great quarter, and thank you for taking our question. We just had a few questions. The first one, was there any measures on alcohol or alcoholic consumption in the IMPACT study that could de-risk Reclaim and Restore? What is the timing for those readouts? What do you need to see to advance in the phase 3?

Speaker 3

Right. We are continuing to analyze the data sets from the IMPACT trial, and we'll have an update on any alcohol measures as we continue to provide data. As you know, we're continuing to analyze the results of the trial, and we'll provide that information as we further analyze the data. We think we have a great deal of evidence for the effects of pemvidutide on AUD and ALD. As you're aware, we have a very impressive animal study showing about an 80% drop in alcohol consumption in animals who were given free choice. There is a huge literature on the effects of GLP-1 agents in alcohol consumption, both observational trials and at least one randomized trial. As you know, with ALD, the pathophysiologic basis of that is fat-induced liver inflammation, very similar to MASH.

We feel very confident of our ability to hit the endpoints in both the AUD and ALD trial. In terms of the phase 3 development program in those indications, we'll meet with the FDA after the phase 2 results and get agreement on what that program looks like.

Speaker 8

Thank you.

Speaker 1

Thank you. Now, next question coming from the line of Rajasong with Jefferies. Your line is now open.

Speaker 8

Great. Congrats for the progress and thank you for taking our question. Maybe just also on the end of phase meeting, how much more work you need to do before you can request the meeting? My understanding is you have not requested the meeting. How much data from this 48-week readout is needed to finalize the phase 3 design proposal? I have a follow-up question. Thank you.

Speaker 3

Yeah, Roger. We feel very good about having that meeting by the end of the year, and you know we'll have the results of that meeting and share it with the street. Other companies have met with 24 weeks of data, and I want to remind you that we have a lot of information on 48 weeks of data and dosing from our obesity momentum study. Consequently, we feel confident that we'll have the data to go in, and we'll have that meeting. We should have it sometime in the fourth quarter, and we'll inform the street on what the results of that meeting were.

Speaker 8

Got it. Thank you. Thank you. With the new Chairman appointment, how will the corporate strategy evolve regarding the partnership for phase 3 and the commercialization? It seems you're more focused on the commercialization now. Thank you.

Speaker 2

Yes. As you can imagine, that's part of the natural evolution. The Board is continuously evaluating the skill set at the Board level. Given that we're now moving into phase 3, the Board felt that the addition or bringing Jerome Durso as Chairman would be an added advantage for the management team to move forward. His experience in the domain area in building a liver disease company and ultimately being part of that M&A transaction would be important as we move forward.

Speaker 8

Got it. Thank you.

Speaker 1

Thank you. Our next question coming from the line of Catherine Ococone with Citizens. Your line is now open.

Speaker 0

Hi, this is Catherine on for John. I have a quick question about the T1 responses and how the results from IMPACT compare to other programs. I know that you said kind of best in class, but if you could kind of give us some kind of ranges from the other competitor programs. Thanks.

Speaker 3

Catherine, as you're aware, the results that we have were in the range of a reduction of about 145 to 140 milliseconds. That was seen in this trial, but it was also seen in a prior trial or phase 1b trial in patients with fatty liver. Based on the public data, we're seeing readouts of approximately 50 to 60 for Resmiderom and up to about 107 for Tirzepatide. You can see that these results that we're getting, 147 versus a range of 50 to 107, are clearly superior to other compounds, at least those that are reported in the public domain. Given the association of CT1 with reduction of both MASH activity and fibrosis, this is one other measure among many measures showing the potent anti-inflammatory and antifibrotic activity of the compounds.

Speaker 1

Great. Thank you. Thank you. Our next question coming from the line of Patrick Tugio with H.C. Wainwright. Your line is now open.

Speaker 4

Hi, good morning, and congrats on all the progress. I just have a couple of follow-up questions on expectations around the phase 3 program and then as well just maybe looking further ahead to potential commercialization and the product profile that's emerging. I guess the first part of the question is just around kind of updated thoughts on dosing strategy, 1.2 mg, 1.8 mg, and then the higher dose and how you're thinking about the dose selection for the phase 3. As well, for the primary endpoints, how are you thinking about primary endpoint, co-primary endpoint? Would MASH resolution as primary with fibrosis improvement, or would there be a co-primary design? How would you power for both? As it relates to the commercial potential, just based on, I mean, there's a lot of data, and I think there's a lot of points of differentiation here.

If the phase 3 were to reproduce the IMPACT efficacy and tolerability, how do you see the positioning in MASH if there's an eventual approval?

Speaker 3

Patrick, I'll take the first part of the question for the commercial potential. I'll turn that over to Vipin. As you are aware, we studied the 1.2 and the 1.8 milligram doses in IMPACT. Even at the 1.8 milligram dose, which is not our most potent dose for weight loss, we still achieved 6.2% weight loss at only 24 weeks. The trajectory of the weight loss indicated there was a lot more weight loss to be had. We think it's going to be very attractive to put the 2.4 milligram dose into phase 3. It would not only give more weight loss to the extent that it could propel us even more, provide even more efficacy. We find that very attractive.

Regarding the other two doses, that's currently being looked at very critically, and we'll discuss that with the agency and have an update for the street after we have our end of phase 2 meeting. As you are aware, there are two endpoints in MASH: MASH resolution and fibrosis improvement. In the IMPACT study, we had a dual endpoint, meaning that we either had to hit MASH resolution or fibrosis improvement for the trial to be successful, and consequently, IMPACT was a successful trial. We could go into phase 3 with a similar strategy of dual endpoints. There is also the possibility of co-endpoints when you have to hit both, etc. In the background, you have endpoints based on non-invasive tests, which we feel are very exciting.

By the way, EMA has approved the use of a PATH AI methodology for actually reading out MASH resolution and fibrosis improvement using computerized algorithms assisted by the pathologist, but driven predominantly by the computer, which we think is going to reduce greatly the noise that we're seeing in the trial and probably help us control the placebo response and really express the antifibrotic potential of the compound. We think there are a lot of things at play here in terms of the discussion with the FDA. It's going to be a very exciting and important end of phase 2 meeting. As soon as we have further information, we'll update the street. With that, I'm going to turn the commercial discussion over to Vipin.

Speaker 2

Yeah, I just want to emphasize one other thing with regards to the FDA discussions. One thing I want to remind everybody is that we have a very large safety database that we have already accumulated on pemvidutide. Part of our discussion would be how do we leverage that? Do we think there is an opportunity to reduce the number of exposures in terms of the safety database? We will certainly be having that dialogue with the FDA, as Scott said, among many other things that we will be discussing with the FDA. Looking forward to that. Patrick, in terms of commercial potential of pemvidutide, as we have said all along, and as you pointed out, there are multiple points of differentiation. First and foremost, we are combining two mechanisms: direct action in the liver, a direct-acting agent in the liver with a metabolic agent with weight loss.

Really think of it, we are treating MASH with obesity. When you look at the MASH landscape, everybody is talking about the benefit of adding weight loss on top of liver-directed effect. We are bringing that in single molecule. We are combining these two mechanisms. We are treating MASH, but on top of that, people are losing weight. 60% to 80% of patients with MASH are obese or overweight, so they would benefit from losing weight. That is number one, which we believe is a very big advantage or differentiating factor for pemvidutide. In our work, in our market research, it is clear that physicians are looking for a drug where people will not only improve their liver health but will also lose weight. Secondly, safety and tolerability is going to be very, very important. As you can see from our data, we are seeing class-leading tolerability profile.

We think that can be leveraged. Patients like that, doctors like that, lack of dose titration is going to be a major plus when we commercialize pemvidutide. It is really the benefit of combining the two mechanisms and on top of that, having a very clean safety and tolerability profile that we think is going to speak well in terms of the commercial success of the product.

Speaker 8

Great, thanks so much.

Speaker 1

Thank you. Our next question coming from the line of Mayank Mamtani with B. Riley Securities. Your line is now open.

Speaker 4

Hi, thanks for taking our questions. This is William Moen for Mayank today. Two from us. Maybe I'll start with the first. Now that we know that Lilly has gotten positive FDA buy-in on pursuing a high-risk MASH trial for their RETA and tirzepatide, they're using NITs for patient screening and then foregoing biopsies completely for primary FSC endpoint. It looks like even in the trial, looking more of an outcomes type trial. How do you see this as an opportunity for pemvidutide to execute on a capital-efficient phase 3 trial? Is your understanding that this still only biopsies are a way to secure subpart H accelerated approval? I have a follow-up.

Speaker 3

Thank you, William. I think it's really exciting. I think it creates a real opportunity for us in non-invasive tests. You know we're taking a very careful look at that. We think that there's real opportunity for us here, and we'll certainly have that discussion with the FDA.

Speaker 2

As we have said, we will look at every potential opportunity to come up with an innovative trial design and incorporate all of these things that are now becoming clear that the FDA is reviewing. We'll certainly have all of those discussions. We can't get into the specifics right now, but we'll definitely talk about it once we've had the end of phase 2 meeting.

Speaker 3

Let me add to that, William, that there are a lot of exciting things happening here, the development of NITs, the movement toward AI-based reading in Europe. We think there's a good chance that the FDA will pick that up. You saw that we had very positive results from the AI-based analyses that really reduced the noise from the manual pathologist readout. There are other developments here that are going to increase our probabilities of success in phase 3. We're very interested in those and share your excitement and plan to have that discussion with the FDA this fourth quarter.

Speaker 4

Got it. I was just sort of thinking of cross-town peer. Merck has their affinopegdetide readout coming out shortly, and they're looking at biopsy results at 48 weeks. Slightly different glucagon ratio here, but what could their data mean in terms of your 48-week data potentially in phase 3, or obviously just your NIT data coming up the end of the year? What may you be specifically looking for to bring you additional confidence in phase 3 going forward? What will guide you, help guide you in the development of that phase 3?

Speaker 3

Right. As you noted, William, the reading out at 48 weeks, and another glucagon compound is read out at 48 weeks. These have lesser ratios of glucagon. As Vipin mentioned, we read out at only 24 weeks. We think that our readouts at 48 weeks, had we done the biopsy at week 48, would have been as good, if not better, than the other compounds. That is certainly supported by the very potent non-invasive test results we're seeing at week 24. I want to remind you that there hasn't been an incretin, let alone a glucagon-containing incretin, that is read out at week 24. At week 24, our MASH resolution was comparable to or superior to other compounds at week 24 and better than compounds reading out at later time points in 48 to 72 weeks.

We think that pemvidutide readout will be further confirmation of the efficacy of the compound. As you know, we don't have a biopsy at week 48, but we have the non-invasive tests. We expect to be able to use the non-invasive tests to model and to predict what we would have seen at week 48 had we done the 48-week biopsy. We think that data will be very supportive of our mechanism and our efficacy.

Speaker 4

Got it. Thanks for that color. I'll hop back in the queue.

Speaker 1

Thank you. Our next question coming from the line of Karen Johnson with Goldman Sachs. Your line is now open.

Speaker 7

Good morning. Maybe just one from us. How should we think about the cadence of research and development spend from here as these AUD and ALD studies kind of get up and further running and enrollment increases? Thanks.

Speaker 6

Thanks. Appreciate the call. This is Greg. In terms of the R&D spend investment in AUD and ALD, these are phase 2 trials. They're baked into our budget for this year, so they're incorporated in our cash runway. These are relatively modest in size, and we're on it. Don't anticipate anything unusual in our burn rate going forward in the near term as related to AUD and ALD.

Speaker 7

Okay. Thanks.

Speaker 1

Thank you. Our next question coming from the line of Andy Shih with William Blair. Your line is now open.

Speaker 8

Thanks for taking our question. Just a quick one. I'm very interested in the oral program that you are advancing. I'm curious, maybe from a technological perspective, we think about it as a gastric absorption enhancer. I'm also just curious if you can tell us a little bit more about how you would position this formulation in the grand scheme of things. Thank you.

Speaker 6

Yeah, thanks for the question. We've been at this for a little while here, and I'm excited to share that we've had a big breakthrough in the activity. From the very beginning, we focused on two elements to really differentiate an oral formulation of the peptide from others that are out there, Robustis, for example. The first is to get away from the food restriction. You mentioned gastric absorption. That's exactly what we're trying to get away from. We've done that from the beginning and focused on that because when it's absorbed in the gut or in the stomach, then it's really about very tight food restrictions that you're aware of for the Robustis indication. That's one of the things we wanted to do. The secondary feature was to make sure that it really made sense from a cost of goods standpoint.

As you know, the oral absorption is always inefficient compared to subcutaneous injection. To make it work, we had a fairly high threshold for what we would be interested in. I think that things are looking very, very good in that respect. I think this breakthrough that we had was mechanism-based. It went just the way we expect, and we're looking forward to translating that into a preclinical development and nomination there. As far as the impact to the commercial situation, I'll let Vipin speak to that.

Speaker 2

Yeah, I mean, our strategy with the oral program is very similar to what you would expect. What's being done with other products is really a life cycle management question. As this field grows, there would be attractiveness to the oral program. As Scott mentioned, oral delivery is never going to be as efficient as subcutaneous injections. We believe that both of these formulations would be important in terms of developing commercially the value proposition around pemvidutide.

Speaker 8

Wonderful. Thank you.

Speaker 1

Thank you. There are no further questions in the queue at this time. I will now turn the call back over to Dr. Vipin K. Garg for any closing remarks.

Speaker 2

Thank you all for joining our call today. As always, we appreciate your continued support and look forward to keeping you updated in the months ahead. Have a wonderful rest of the day.

Speaker 1

This concludes today's conference call. Thank you for your participation, and you may now disconnect.