Altimmune - Q3 2023

Transcript

Operator (participant)

Good day, ladies and gentlemen, and welcome to the Altimmune, Inc. Third Quarter 2023 Financial Results Conference Call. At this time, all participants are on 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 (CFO)

Thank you, Livia, and good morning, everyone. Thank you for participating in Altimmune's Third Quarter 2023 Financial Results and Business Update Conference Call. Members of the Altimmune team joining me on the call today are Vipin Garg, our Chief Executive Officer, Scott 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 third quarter 2023 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 will also direct you to read the forward-looking statement disclaimer in our press release issued this morning and now available on our website. Any statements made on this conference call can speak only as of today's date, Tuesday, November 7th, 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?

Vipin Garg (President and CEO)

Thank you, Rich, and good morning, everyone. We appreciate you joining us today for a discussion of our third quarter 2023 financial results and business update. We are excited about the continued advancement of our lead product candidate, pemvidutide, a GLP-1/glucagon dual receptor agonist in development for both, for both obesity and NASH. With the last dosing of the last subject completed this past September in our phase 2 MOMENTUM trial of pemvidutide in subjects with obesity and overweight, we remain on target to announce top-line 48-week results this quarter. Recall, the MOMENTUM interim data showed weight loss of 10.7% at the 2.4 mg dose after only 24 weeks of treatment.

These robust reductions in body weight, together with the effects of pemvidutide on serum lipids and blood pressure, without arrhythmias or without clinically meaningful increases in heart rate or other cardiovascular signals, suggest that if approved, pemvidutide may be an important treatment option for patients with obesity, especially those with NASH or dyslipidemia. It is important to point out that these two conditions are prevalent in approximately 70% of the obesity population. In our NASH program, we recently announced that the FDA has granted Fast Track Designation to pemvidutide for the treatment of NASH. Fast Track Designation is designed to facilitate the development and expedite the review of new drugs intended to treat serious conditions and address unmet medical needs. NASH is a growing public health concern, and there are currently no approved treatments.

The FDA decision was informed in part by the results of Altimmune's phase 1b randomized placebo-controlled trials of pemvidutide in subjects with nonalcoholic fatty liver disease. The relative reductions in liver fat content of up to 76%, combined with significant weight loss, were achieved. The efficacy and safety of pemvidutide in NASH is being evaluated in the IMPACT, our phase 2b randomized placebo-controlled biopsy-driven trial. Given the compelling data from our phase 1b trials, we expect to achieve significant rates of NASH reduction and fibrosis improvement at data readout, which is anticipated in Q1 2025. As also announced, new clinical data on the anti-inflammatory and anti-fibrotic effects of pemvidutide will be presented at a late-breaking abstract at AASLD. We refer to a prior press release posted at our website for the details of that presentation.

Finally, we expect to have the data readout from our phase 2b clinical trial of HepTcell in chronic hepatitis B in the first quarter of 2024. Recall that this trial is designed to show evidence of antiviral effects against hepatitis B virus and establish the role of HepTcell in combination therapy for the treatment of this significant progress of pemvidutide and HepTcell and the upcoming results of these ongoing trials. With that, I'll now turn the call over to our Chief Medical Officer, Dr. Scott Harris, to discuss our clinical plans. Scott?

Scott Harris (Chief Medical Officer)

Thank you, Vipin, and good morning, everyone. I will start off with our phase 2 MOMENTUM trial of pemvidutide in obesity. The MOMENTUM trial enrolled 391 subjects with obesity or overweight, with at least one comorbidity, but without diabetes. Dr. Lou Aronne from Weill Cornell Medicine, a leading authority in obesity and obesity clinical trials, is serving as the principal investigator. Subjects were randomized 1:1:1:1, to 1.2 milligrams, 1.8 milligrams, 2.4 milligrams pemvidutide or placebo, administered weekly for 48 weeks in conjunction with diet and exercise. A pre-specified interim analysis was performed when 160 subjects completed 24 weeks of treatment.

Weight losses of 10.7% at the 2.4 mg dose and 9.4% at the 1.8 mg dose were achieved, compared to a 1.0% weight loss in subjects receiving placebo. Approximately 50% of the subjects achieved at least 10% weight loss, and approximately 20% of subjects achieved at least a 15% weight loss by week 24 at the 2.4 and 1.8 mg doses. Significant improvements or positive trends in cardiometabolic risk factors were observed. Importantly, these effects were achieved without arrhythmias, clinically meaningful heart rate increases, or other safety signals. These results are impactful in view of the data readouts from other compounds in the obesity space.

At 24 weeks, the placebo-adjusted weight loss achieved by semaglutide and tirzepatide were approximately 8% and 12%, respectively, with pemvidutide occupying the middle of this range at approximately 10% weight loss. It should also be pointed out that at the 24-week time point, the magnitude of LDL cholesterol reduction on pemvidutide treatment was severalfold better than that achieved by semaglutide or tirzepatide in a similar population at the conclusion of their trials, but at 68 and 72 weeks, respectively. We believe that it is the action of the glucagon receptor agonism present in pemvidutide, but not in semaglutide or tirzepatide, that leads to the improved effects in lipid, lipids and differentiates pemvidutide. The important reductions in lipid-based cardiovascular risk factors suggest that pemvidutide has the potential to achieve even greater reductions in cardiovascular risk than those observed in the recently completed SELECT cardiovascular outcomes trial.

Of important note, pemvidutide has not been associated with minimal heart rate increases in any of our trials to date. By contrast, other GLP-1 based multi-agonists containing glucagon have been associated with these increases and, in one case, arrhythmias. This may prove to be an important differentiator, as cardiac effects may not be tolerated in a population with higher cardiovascular risk, such as elderly individuals or individuals with pre-existing cardiovascular disease. We see the obesity marketplace as becoming highly segmented based on the different patient needs and profiles, with pemvidutide fulfilling the need for the large segment with elevated lipids or liver fat content, which we estimate to be approximately 70% of the obesity marketplace.

Pemvidutide may also provide the opportunity to initiate or establish therapy without dose titration, which we believe may be a highly attractive option to primary care physicians as the obesity market grows beyond specialty clinical settings. We believe pemvidutide's profile may be an ideal treatment for many patients and physician segments and may ultimately capture a significant portion of the obesity market. We look forward to the top-line 48-week results from the MOMENTUM trial later this quarter. It should be noted that the placebo-adjusted weight loss achieved by semaglutide and tirzepatide at 48 weeks were approximately 12% and 17%, respectively. Based on our analysis of the 24-week interim data, we believe that pemvidutide could achieve weight loss in the mid-teens at the 48-week time point. As discussed previously by Dr.

Aronne, our lead investigator in the MOMENTUM trial, this represents an important benchmark for reversal of most, if not all, of the key morbidities of obesity. Importantly, it should be pointed out that semaglutide and tirzepatide exhibited continued weight loss from week 48 through weeks 68 and 72 respectively, and that the weight loss curves generated in recent trials with glucagon-containing compounds suggest that the weight loss with pemvidutide may continue beyond the 48-week time point. This gives us confidence that that weight loss beyond the mid-teens could be achieved if subjects were to be treated for longer durations. We're optimistic about the pending results and look forward to ongoing discussions with FDA about the design of our phase 3 program, which we hope to commence with a partner in the second half of 2024.

Now let me talk about our IMPACT phase 2b NASH Trial. This biopsy-driven NASH Trial is being 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, serving as the principal investigator. We are planning for approximately 190 subjects, both with and without diabetes, to be enrolled. Subjects will randomize pemvidutide 1.2 milligrams, pemvidutide 1.8 milligrams, or placebo in a 1:2:2 ratio and will be stratified for fibrosis stage in the presence or absence of diabetes. Therefore, approximately 38 subjects are expected to receive pemvidutide 1.2 milligrams, 76 subjects pemvidutide 1.8 milligrams, and 76 subjects placebo.

This trial will enroll subjects with a BMI of at least 27 kilograms per meter squared, a liver fat content of at least 8%, as measured by MRI-PDFF, a NAFLD of at least four on a pretreatment biopsy, and either F2 or F3 fibrosis, with at least 50% of subjects required to have F3 fibrosis. The primary efficacy endpoints of the IMPACT trial will be the dual endpoints of achieving either NASH resolution with no worsening of fibrosis or fibrosis improvement with no worsening of NASH, with the primary treatment comparison being the 1.8 milligram dose versus placebo. Secondary endpoints will include achievement of both NASH resolution and fibrosis improvement, liver fat reduction by MRI-PDFF, corrected T1 response rate, serum lipids, and other non-invasive markers of disease.

Importantly, weight loss will also be assessed as a key endpoint, as we believe this will be an important differentiator with respect to the majority of NASH therapeutics in development. All efficacy endpoints will be evaluated week 24 of treatment, and subjects will continue to be dosed and followed for an additional 24 weeks to a total of 48 weeks for safety and additional biomarker responses. As a reminder, the 24-week data from our NAFLD trials suggested a greater than 75% relative reduction in liver fat at 24 weeks, with over 50% of subjects achieving the high bar of normalization of liver fat at the 1.8 milligram dose. We also achieved significant reduction in serum ALT in MRI-based corrected T1 imaging, both important, important markers of NASH improvement.

As Vipin mentioned, new clinical data on the anti-inflammatory and anti-fibrotic effects of pemvidutide will be presented as a late-breaking abstract at AASLD. We believe that a robust reduction in NASH activity, combined with fibrosis improvement and meaningful weight loss, will be essential for a competitive product in the NASH marketplace. Also, as we have previously announced, we have completed the enrollment in our phase 2 multicenter clinical trial of HepTcell in patients with chronic hepatitis B. Chronic hepatitis B continues to represent a serious unmet need in the United States and worldwide and represents a significant commercial opportunity. HepTcell is an immunotherapeutic designed to activate T cells to fight the hepatitis B virus infection. The HepTcell trial was designed to enroll 80 subjects with an active chronic hepatitis B and low hepatitis B surface antigen.

The primary endpoint of this trial is one-log reduction or clearance of the hepatitis B surface antigen. We expect to announce the results of this trial in the first quarter of 2024, once all subjects complete the six-month treatment period. It is generally believed that an effective therapy for chronic hepatitis B will require both direct-acting antivirals and immunotherapy, and we believe that HepTcell is highly differentiated and may provide a functional cure of chronic hepatitis B infection when combined with novel direct-acting antivirals. I will now hand the call over to Rich Eisenstadt to give an update on our third quarter financial results. Rich?

Richard Eisenstadt (CFO)

Thank you, Scott, and good morning again. For today's call, I'll be providing a brief update on Altimmune's third quarter 2023 financial and operating results. More comprehensive information will be available in our Form 10-Q to be filed with the SEC later today. Altimmune ended the third quarter of 2023 with approximately $140.8 million of cash, cash equivalents, and short-term investments, compared to $184.9 million at the end of 2022. Research and development expenses were $18.4 million in the third quarter of 2023, compared to $20.3 million in the same period in 2022.

Approximately $12 million of this total for the third quarter of 2023 were direct expenses for the conduct of our clinical programs, including $10.4 million in direct costs related to development activities for pemvidutide, and $1.6 million in direct costs related to development activities for HepTcell. We anticipated a brief and small increase in research and development expenses during the ramp-up of our IMPACT trial as we completed the in-life portion of our MOMENTUM trial. Looking ahead, we expect the increase in expenses related to IMPACT trial will be offset in part by reductions in expenses as the MOMENTUM trial winds down. General and administrative expenses were consistent period-over-period at $4.5 million for the three months ended September 30, 2023 and 2022.

Approximately $2.9 million for quarterly operating expenses, non-cash expense, primarily stock compensation. Interest income was $1.9 million in the third quarter of 2023, compared to $1.1 million in the same period in 2022. Net loss for the three months ended September 30, 2023, was $20.7 million, or 39 cents net loss per share, compared to net loss of $23.5 million, or 48 cents net loss per share for the third quarter of 2022. We estimate that our existing cash funds us through the 24-week biopsy results from our IMPACT phase 2b NASH Trial, expected in the first quarter of 2025. Operator, that concludes our formal remarks, and we would like to open the lines to take questions. Could you please instruct the audience on the Q&A procedure?

Operator (participant)

Certainly. Ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question coming from the line of Yasmeen Rahimi from Piper Sandler. Your line is open.

Yasmeen Rahimi (Managing Director and Senior Research Analyst)

Good morning, team, and thank you so much for all the great updates. To the extent you can comment on and for the MOMENTUM data, like I know it's set for this quarter, enrollment finished in September. Any chance this is gonna potentially come around, this month or next month? So to the extent you could provide a little bit color on when in this quarter we should be expecting it. I know in the past. Second question is, in the past you guys have spoken about also at the top line, to provide some modeling analysis to be able to look at the curve of weight loss. I just wanted to make sure that's still occurring as we head into the top-line data.

And then maybe the third question is just some cadence on, given that IMPACT has a weight loss and a really desirable product profile, what is the enthusiasm among sites and patients as they have eligibility to be part of the study? So appreciate if you could tackle those three for me, and I'll jump back into the queue.

Scott Harris (Chief Medical Officer)

Thanks, Yasmeen.

Vipin Garg (President and CEO)

Thank you for the questions. Scott, you, Scott Harris, do you want to take these?

Scott Harris (Chief Medical Officer)

Yes, I can take those. So Yasmeen, the guidance that we can provide at the current time is that we finished enrollment. We finished dosing in September. There's obviously a safety follow-up period after that of approximately four weeks. There's time for data clearing, cleaning. So as we said, we're really headed towards a readout this quarter, and at this time, that's about as much information as I can provide. But I think the arithmetic is there and you can, you know, you can do the calculation back based on the information in the public domain. Regarding the modeling analysis, yes, as I said, weight loss is expected to continue beyond 48 weeks, based on the shape of the curve of other compounds, particularly the glucagon-containing compounds.

We will model that and try to provide what weight loss would look like had patients been followed for the 68-72 weeks of other compounds. I would emphasize there's been a great deal of enthusiasm from not only patients, but also sites, and in particular, Dr. Aronne, who is the principal investigator in the trial. As he echoed during the reading of our 24-week weight loss, he thinks that this is an extremely important drug based on its differentiated profile, the fact that the marketplace will be segmented with different needs for weight loss, serum lipids, lipid fat reduction. He's particularly interested in the absence of the need to dose titrate, because he feels very strongly that the great majority of this marketplace will move to primary care.

In the absence of really the need to achieve, you know, bariatric surgery type weight loss in patients, we think this, and sites feel and patients feel as well, based on the reactions, that, you know, this is gonna be a very successful product.

Vipin Garg (President and CEO)

Scott, there was also a question about the enrollment of the IMPACT trial based on the weight loss properties. Could you elaborate on that as well?

Scott Harris (Chief Medical Officer)

Yeah, sure. So, we're seeing very brisk enrollment in IMPACT. We're very pleased with it, and the comments reading from patients and investigators is that you've got the drug out there in NASH Trials, that's not only treating NASH, which to most patients is invisible. They have a condition in the liver. What they're really coming into the trial for is the weight loss. And we think that their reaction in the IMPACT trial will reflect the uptake of pemvidutide in the marketplace when it finally gets approved.

Yasmeen Rahimi (Managing Director and Senior Research Analyst)

Okay, thank you so much. I'll jump back in the queue.

Operator (participant)

Thank you. Our next question coming from the line of Corinne Jenkins with Goldman Sachs. Your line is open.

Speaker 10

Hi, this is Omari, on for Corinne. So first question is, what do you view as successful outcome for the 48-week MOMENTUM readout with respect to weight loss? And then, what can you contextualize for us how that positions, pemvidutide, given both the safety and efficacy, efficacy considerations?

Scott Harris (Chief Medical Officer)

Oh, thank you, Omari. I'll, I'll answer both of those questions. Yeah. So Omari, you know, we, as we've said, we feel comfortable that we could achieve weight loss in the mid-teens, which, as Dr. Aronne pointed out, is key for moving most, if not all, of the comorbidities of obesity. And, you know, we feel comfortable that we'll be in that range, and that also we'll continue to see weight loss beyond that. So if you recall, the weight loss achieved by tirzepatide and semaglutide at 48 weeks was less than it achieved at 48 weeks at 72 weeks or 68 and 72 weeks. And that we'll continue to see weight loss or would have continued to see weight loss beyond the 48-week time point.

And as I mentioned in my response to Yasmeen, we'll model that for investors and estimate what we think the weight loss would be at extended point-in-time points. We see this drug extremely well positioned in the obesity marketplace, especially fitting the segment of patients who need to get further reduction in their serum lipids, reduction in their liver fat content, both important risk factors for cardiovascular disease, but most importantly, achieving it safely. And I want to emphasize that we have not seen the heart rate increases, at least not seen meaningful heart rate increases, with pemvidutide or arrhythmias that been seen in other compounds, especially the compounds, the dual agonists that contain glucagon.

So we think the safety profile, the good solid weight loss, the effects on serum and hepatic lipids, and especially in primary care, which we believe is gonna dominate the obesity marketplace in the future, the convenience of not having a dose titration, at least at the 1.8 milligram dose.

Operator (participant)

Thank you. One moment for our next question. Our next question coming from the line of Roger Song with Jefferies. Your line is now open.

Roger Song (Senior Equity Research Analyst, Healthcare)

Great. Congrats for the progress and thanks for the update. A few questions from us. So the first one is regarding the, you know, assuming the MOMENTUM phase 2 data meeting your expectation, and how, what is your current thinking around the phase 3 design, particularly around the dosing and the titration, given, you know, we see it a bit higher, discontinued due to AE, in phase 2, which is similar to other phase 2, but, you know, in phase 3, you probably want to lower that rate, for phase 3. Just remind us to what, what is your current thinking, to, for the design portion? And second question is related to the partnership.

I think on the call, you mentioned you will start a phase 3 in second half next year with a partner. Maybe just can you give us some color around the partner discussion at this point, particularly with the MOMENTUM 48-week data, how and when will trigger additional discussion to make this material? Thank you.

Scott Harris (Chief Medical Officer)

Roger, I'll answer the first question, and then.

Vipin Garg (President and CEO)

Roger. Scott, do you want to take the first question? Yeah, go ahead.

Scott Harris (Chief Medical Officer)

Yeah, Roger, I'll answer the first question. I'll turn the microphone over to Vipin for the second question. The ultimate design of the phase 3 trial will be set in discussion with partners and also in discussions with the FDA. You know, we anticipate having an end-of-phase 2 discussion with the FDA in 2024 based on the results of the MOMENTUM trial. We see all of the current doses as being viable going forward. The 1.2- and 1.8-milligram doses are given without dose titration, and currently, the 2.4-milligram dose is given with a very short 4-week titration. That's about one-fifth the duration of tirzepatide dosing and even lower than the prolonged titrations that are being used beyond a half a year in other programs or will be used in phase 3 programs.

So we see those doses moving forward. As you mentioned, there was a higher than we expected adverse event discontinuation rate at the 2.4 milligram dose, but as you pointed out, it was the same, if not less, than the adverse event discontinuations that have been seen in other phase 2 programs, like the semaglutide program and the tirzepatide phase 2 programs, and that they made the necessary adjustments going into phase 3 to get their adverse events down towards where they are right now in the single digits. We have a lot of opportunity to do that. We have, as you said, we could modify dose titration, but a very important difference from the other trials is that we did not allow dose reduction.

As I mentioned before, in the tirzepatide and semaglutide trials, as much as 30% of those patients either never got up to the highest dose or dose reduced once they got there. Consequently, you can see that by putting a dose reduction scheme, or more flexibility in the up titration in our study, our studies, we really think that we can get that adverse event rate down even without having to dose titrate any further than we are right now. Vipin, would you like to answer the second question about the partnership?

Vipin Garg (President and CEO)

Yeah. Thanks, Scott. So Roger, as we've said before, obviously, this 48-week data is very, very important moving our partnership discussions forward. We've, you know, we've already engaged with multiple discussions out there, and our goal is to be phase 3 ready by the second half of next year. That gives us enough time, plenty of time, to also line up a partner to initiate that phase 3 program. That's really what we are executing to. We feel that with the, with the data that we're expecting at 48-week readout, that would give us the best opportunity to, to line up, line up a partner to, to move forward into phase 3.

Roger Song (Senior Equity Research Analyst, Healthcare)

Excellent. Thank you. That's it on my.

Operator (participant)

Thank you. Our next question coming from the line of Mayank Mamtani from B. Riley, your line is open.

William Wood (Biotech Equity Research Analyst)

Hi, this is William Wood on for Mayank today. Congratulations on your quarter. So a couple of questions from us. Thinking about your upcoming phase 2 MOMENTUM top line readout, are there any data sets that you've recently prioritized and decided to include, possibly body composition or lean muscle?

Scott Harris (Chief Medical Officer)

Yeah, William, the readout that we're going to have this quarter will be in many ways similar to the parameters that we read out before 24 weeks. So let me repeat that. It will include body weight loss. It will include waist circumference. It will include serum lipids. It will include a readout on vital signs, which we think are very important in differentiating. It will include glycemic control and also a report on adverse events with incidence data included on the discontinuations. We also expect to have data on reduction in liver fat. We are doing body composition measurements to this trial. At this point, we do not think that we're going to have them for the top line results because they require more analysis than just liver fat analysis. That additional readout on, say, lean body mass, will probably come sometime after the top line results.

William Wood (Biotech Equity Research Analyst)

Got it. And then you mentioned, and you've previously reported that you have a presentation coming up at AASLD, this weekend or early next week. You've mentioned it's just going to be new data on anti-inflammatory and anti-fibrotic properties of pemvi. Do you think you could go into a little bit more color on what we may expect to see and how we should view that data feeding into the FDA's decision granting you FTD and then obviously your IMPACT trial?

Scott Harris (Chief Medical Officer)

Thank you, William. I cannot discuss the data in that poster because it's embargoed by AASLD rules as late-breaking abstracts. But as you can see, the FDA saw all of the data, including the additional data that we'll present. Additional data on not only anti-inflammatory properties of pemvidutide, but even more importantly, the anti-fibrotic properties of pemvidutide. And they are aware of all that when they saw the Fast Track application and granted that designation to Altimmune. You know, we believe that pemvidutide, with its very high reduction in liver fat content and class-leading effects on anti-fibrotic and anti-inflammatory markers, will result in important improvements of fibrosis, and the abstract will highlight the observations that we've made to date on the latter point.

William Wood (Biotech Equity Research Analyst)

Appreciate it. One last quick one. Your IMPACT trial is enrolling F2, F3 patients. I believe you said 50% have to be F3. Given the difficulties we've seen recently in F4, at the current time, do you foresee pemvidutide trying to be run in an F4 population?

Scott Harris (Chief Medical Officer)

It's a great question, William. That's something we're obviously taking a very, very good look at. We haven't made any announcements on that to date. Right now, we're concentrating on the F2, F3 population, but we're certainly taking a very good look at cirrhosis and the possibility of engaging that population in a separate clinical trial.

William Wood (Biotech Equity Research Analyst)

Appreciate it. Thanks very much, for taking our questions, and congratulations again.

Scott Harris (Chief Medical Officer)

Thank you.

Operator (participant)

Thank you. Our next question coming from the line of Jonathan Wolleben with JMP Securities. Your line is open.

Jonathan Wolleben (Managing Director)

Hey, thanks for taking the questions. I guess two for me. One, a follow-up from an earlier question. You know, how do you think about an acceptable tolerability profile then in the upcoming MOMENTUM readout, given the kind of tweaks, Scott, you just discussed you could make going into phase 3? And then can you also discuss the differentiation from pemvidutide to the other GLP-1/glucagon dual agonist, you know, Merck and BI compounds, either, you know, structurally or even from the data we've seen? We've gotten, you know, pretty good data sets from all three at this point. I think that'd be helpful to hear. Thanks.

Scott Harris (Chief Medical Officer)

Yeah. So, you know, we have to point out that any tolerability data that's been generated to date has been in the absence of dose titration. And the fact that we can achieve comparable safety and tolerability is really a compliment to the drug, and we believe that arises from the pharmacokinetics of pemvidutide with a slow entry into the bloodstream. Remember that at the 1.2 and 1.8 milligram doses, the adverse event rates leading to discontinuation were low. And again, the 1.8 was given without dose titration and still achieved a 9.4% weight loss at that point in time, which is as good as semaglutide at the same time point when you look at it on a placebo-adjusted basis.

Obviously, there is a lot of opportunity to tweak the dosing any way we wish in order to get that profile down even better than it is right now. As I mentioned before, Jonathan, we think we can get that without adjusting the dose titration, by simply allowing for dose reduction in future trials. So we're obviously optimistic about that. Regarding the other compounds, starting from the structural viewpoint, as one knows that, in addition to the EuPort domain, which we think is unique and conveys special pharmacokinetics to the drug, we also have a 1:1 ratio of GLP-1 to glucagon agonism, which is the highest concentration of glucagon in the glucagon dual agonists that are available to date.

In contrast, Merck has announced that it's about 2:1 biased towards GLP-1, and the Boehringer compound, survodutide, is about 8:1. We believe that it's the higher glucagon content that conveys the properties that we've seen. But it's also important to note that these compounds have both been associated with heart rate increases, and that we're not seeing these heart rate increases in our program, and we think that's a very important differentiator. We've not seen any liver fat data with the Boehringer compound. Some discussion has taken place around meetings that they're not seeing changes in serum lipids. We think that reflects the low glucagon compound content in that compound. And, you know, the Merck data, they are seeing relatively comparable reductions in liver fat, which speaks to the glucagon activity in both compounds.

Jonathan Wolleben (Managing Director)

Thanks for the call, Scott.

Operator (participant)

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

Luis Santos (Senior Equity Research Associate)

Good morning, everyone. This is Luis, for Patrick. Thank you for taking our questions. I'm gonna change gears here and talk a little bit about the HepTcell and the way that the field has been looking at immunomodulation as an accepted necessity in the HBV cure to achieve HBV cure. So can you talk about how your treatment is progressing towards a functional cure that could achieve this mechanism, this immunomodulation mechanism, where others don't have that?

Scot Roberts (Chief Scientific Officer)

Sure. I appreciate that, the question there. You know, what we've already demonstrated with HepTcell is that the therapeutic, which is, you know, it's a T-cell immunotherapeutic meant to boost the T-cell response over the resistance it has to seeing the HBV antigens. We've demonstrated in our phase 1 studies that it's very safe and that it's able to significantly increase the T-cell response to HBV antigens. And so the next step, we felt it was important since this is going to be used as a combination therapy, most likely with direct-acting antivirals like siRNA or monoclonal antibodies or oligonucleotides against the surface antigen, for example, to show that the compound had activity on its own.

That's what this phase 2 study that's currently ongoing and we'll report out in the first quarter of next year is meant to show. The advantages of HepTcell have to do with the focus of the T-cell response against antigens that are known to be important for a functional response, and that is the polymerase antigen and the core antigen. The epitopes that were selected and represented in HepTcell are highly invariant. They're hydrophobic in nature, and so they're unlikely to mutate in response to the immune pressure that will be generated. So what we have is an immunotherapeutic that is expected to be active against all of the circulating genotypes of HBV.

And with combination with the adjuvant that we are using, IC31, which is preclinically looked very encouraging, and in our phase 1 study, was shown to be important for these T-cell responses. We feel that we're going to be able to generate a very robust response with surface antigen and other measures of HBV replication. That will then set us up for partnering discussions with companies that have these direct-acting antivirals and allow us to do then phase 2 studies and combination therapies.

Luis Santos (Senior Equity Research Associate)

That sounds great. And do you plan to stratify patients based on surface antigen at baseline? We've seen that with the Bepi phase 3 program. Can you discuss more the baseline characteristics of the phase 2 trial? And if you're successful, if you're going to implement that threshold of surface antigen at baseline going forward?

Scot Roberts (Chief Scientific Officer)

Sure. That's a great question, and, you know, that's really one of the unique design elements of the phase 2 study that's currently ongoing and report out here shortly, is that we've selected patients that are referred to as inactive carriers. And so basically, these folks have low surface antigen levels compared to many chronically infected individuals. And we felt that that would represent a population that has received direct-acting antivirals, has had the surface antigen reduced by the mechanisms that I referred to earlier, and then created a better environment for the immunotherapeutic to work and boost the T cell response. So going forward, you know, we don't see selecting patients with low surface antigens.

We think that the combination therapy, the first part of that with the direct-acting antivirals, will accomplish that goal, and then HepTcell will work as it is in this study. So this study is really meant to, you know, look forward towards the combination studies and how the patients would present themselves for treatment with HepTcell.

Luis Santos (Senior Equity Research Associate)

Sounds great. Can you just remind me quickly, is this with or without interferon? And do you plan to have an arm with and without interferon in that combination setting?

Scot Roberts (Chief Scientific Officer)

So the current study does not include interferon in the treatment regimen. Going forward, I think that there's any number of combination approaches that can be envisioned, and that's something that we'll talk more about as we get a little further down the road.

Luis Santos (Senior Equity Research Associate)

Sounds good. Thank you so much.

Operator (participant)

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

Vipin Garg (President and CEO)

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

Operator (participant)

Ladies and gentlemen, that concludes our conference for today. Thank you for your participation. You may now disconnect.