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8I

89bio, Inc. (ETNB)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 2024 was defined by clinical execution and a one-time expense: 89bio continued enrolling three Phase 3 programs (ENLIGHTEN-Fibrosis, ENLIGHTEN-Cirrhosis, ENTRUST), while R&D spiked due to an $81.0M milestone payment tied to the commercial supply collaboration with BiBo, widening net loss to $149.1M and EPS to $(1.39) from $(0.45) YoY .
  • Liquidity remains solid: cash, cash equivalents and marketable securities were $423.8M at 9/30/24; the company amended its credit facility to $150M (drew $35M; $35M available through 6/30/25; two additional tranches up to $80M subject to conditions). Management reiterated cash runway “into 2026” and disclosed post-quarter an upsized ~$125.0M equity offering to further bolster capital .
  • Clinical milestones are intact: ENTRUST (SHTG) topline remains expected in 2025; ENLIGHTEN-Fibrosis primary histology is targeted for end of 2026; ENLIGHTEN-Cirrhosis histology “sometime in 2028.” New ENLIVEN Phase 2b analyses were featured at AASLD (Nov 15–19, 2024) .
  • Near-term stock catalysts: continued ENLIGHTEN enrollment updates, AASLD follow-through, and clarity on ENTRUST enrollment/close set up 2025 data; financing and facility flexibility reduce funding overhang near-term but burn remains elevated with three Phase 3 trials ongoing .

What Went Well and What Went Wrong

What Went Well

  • Phase 3 execution continued across ENLIGHTEN-Fibrosis (F2–F3 MASH), ENLIGHTEN-Cirrhosis (F4 MASH), and ENTRUST (SHTG); management: “We continue to execute on our three pivotal Phase 3 trials for pegozafermin in MASH and SHTG.” .
  • Strengthened balance sheet and flexibility: $423.8M cash at Q3-end; amended K2 HealthVentures facility to $150M with $35M drawn and incremental availability; runway into 2026 per management .
  • Scientific momentum and platform differentiation: additional ENLIVEN (Phase 2b) analyses at AASLD; management emphasized potential advantages vs. incretins and differentiation within FGF21 class (tolerability, Q2W dosing, liquid formulation) .

What Went Wrong

  • Operating burn elevated: R&D surged to $141.4M (+350% YoY) driven by an $81.0M BiBo milestone and higher clinical/manufacturing costs; net loss widened to $149.1M (from $34.7M YoY) .
  • Enrollment/data visibility limited in MASH; management said it’s “early to comment” on enrollment; ENLIGHTEN-Fibrosis primary histology expected end of 2026, and ENLIGHTEN-Cirrhosis histology in 2028, extending the MASH readout timeline .
  • Funding needs beyond runway to MASH histology: management noted cash gets the company into 2026 and past ENTRUST readout, but not to ENLIGHTEN-Fibrosis histology; subsequent equity raise helps but underscores continued capital intensity .

Financial Results

Quarterly P&L (sequential)

Metric ($USD Thousands)Q1 2024Q2 2024Q3 2024
Research & Development$47,428 $44,865 $141,441
General & Administrative$9,849 $8,571 $10,497
Total Operating Expenses$57,277 $53,436 $151,938
Net Loss$51,681 $47,971 $149,073
Net Loss per Share (EPS)$(0.54) $(0.48) $(1.39)
Weighted Avg Shares (basic/diluted)95,846,740 99,831,111 107,075,197

Year-over-Year (Q3 2024 vs Q3 2023)

Metric ($USD Thousands)Q3 2023Q3 2024
Research & Development$31,417 $141,441
General & Administrative$7,928 $10,497
Total Operating Expenses$39,345 $151,938
Net Loss$34,725 $149,073
Net Loss per Share (EPS)$(0.45) $(1.39)

Balance Sheet Snapshot

Metric ($USD Thousands)Dec 31, 2023Mar 31, 2024Jun 30, 2024Sep 30, 2024
Cash, Cash Equivalents & Marketable Securities$578,870 $562,288 $531,384 $423,774
Total Assets$596,269 $577,322 $582,138 $458,297
Total Stockholders’ Equity$536,306 $510,539 $514,917 $378,102

KPIs and Capital Resources

  • Cash runway (management): “into 2026… past SHTG Phase 3 readout; not to MASH readout” .
  • Amended credit facility (K2 HealthVentures): Up to $150M; $35M drawn at close; $35M additional available through 6/30/25; two further tranches totaling up to $80M subject to time-based clinical milestone or lender approval .
  • Post-quarter capital raise: ~$125.0M gross via upsized equity offering (priced at $8.50/share; pre-funded warrants included) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
ENTRUST (SHTG) topline timing2025“Topline results… expected in 2025” (Q1/Q2) “Topline data… expected in 2025” (Q3) Maintained
ENLIGHTEN-Fibrosis primary histology52-week histologyCo-primary endpoints at week 52 intended to support accelerated/conditional approval (timing not specified) “Primary endpoint… expected end of ’26 (±1–2 quarters)” New timing disclosed
ENLIGHTEN-Cirrhosis histology24-month histologyTrial initiated; subset at 24 months to assess fibrosis regression (no date) “Histology component will read out sometime in 2028” New timing disclosed
Cash runwayN/ANot explicitly disclosed in prior quarters“Into 2026; past SHTG readout” New
Credit facility capacity/availabilityN/ANot previously amendedAmended to $150M; $35M drawn; $35M available through 6/30/25; up to $80M conditional tranches New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3)Trend
Phase 3 MASH executionInitiated ENLIGHTEN-Fibrosis; planned ENLIGHTEN-Cirrhosis (Q1) ; ENLIGHTEN-Cirrhosis initiated (Q2) Enrollment ongoing in both ENLIGHTEN trials; timelines framed (F2–F3 histology end ’26; F4 histology 2028) Steady execution; timelines clarified
ENTRUST (SHTG)Ongoing; topline 2025 (Q1/Q2) Still 2025; not 1H and not December; endpoint/trial positioning reiterated Maintained timeline; added color
Manufacturing readinessCommercial supply agreement (BiBo) in place; focus on commercial readiness (Q1) $81M milestone to BiBo; commercial-scale production emphasized Advancing; incurred milestone
Regulatory positioningEMA PRIME status for MASH (Q1) AASLD presentations add scientific momentum Strengthening evidence base
Competitive landscape (GLP‑1 vs FGF21)NA in Q1/Q2 pressersManagement positions FGF21 as addressing fibrosis directly; potential role alongside GLP‑1; differentiation vs efruxifermin (tolerability, Q2W, liquid) Clearer differentiation narrative
Capital & runwayLarge cash balance (Q1/Q2) Runway into 2026; amended facility; subsequent equity raise Improved flexibility

Management Commentary

  • “We continue to execute on our three pivotal Phase 3 trials for pegozafermin in MASH and SHTG,” highlighting strategic leadership additions and financial strengthening .
  • On positioning vs incretins: “FGF21… works in multiple different ways… direct metabolic and fibrotic effects in the liver… pegozafermin… has potential in advanced fibrosis and cirrhotics” .
  • On differentiation vs efruxifermin: “We have seen a better tolerability profile… we are studying once every 2 weeks… [and] are a liquid formulation in a prefilled syringe” .
  • On cash: “We ended the third quarter with $424 million. That gets us into 2026… past our SHTG Phase III readout, but does not get us to the readout from the NASH study” .

Q&A Highlights

  • FGF21 role vs GLP‑1/incretins: Management underscored FGF21’s direct anti‑fibrotic effects and potential necessity in advanced MASH beyond GLP‑1 benefits .
  • F4 (cirrhosis) rationale: Encouraging signals in F4 subsets and mechanistic rationale support efficacy in compensated cirrhosis; study powered for 24‑month histology with outcomes follow‑through .
  • ENTRUST timing and endpoints: Primary endpoint is triglyceride reduction at 26 weeks; not 1H and not December 2025, with added focus on metabolic markers (MRI‑PDFF, A1c) and tolerability .
  • Cash/runway and facility: Runway into 2026; facility provides up to $150M with $65M potential 2025 draws (time/milestone‑based) .
  • Business development: Open to OUS partner and exploring strategies to maximize pegozafermin’s reach; U.S. commercialization could be internal or partnered .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2024 EPS and revenue was not available at time of analysis due to a data access limit. As a result, we cannot assess beats/misses versus consensus for this quarter. We attempted retrieval but could not obtain values and therefore do not present estimate figures here.

Key Takeaways for Investors

  • The quarter’s headline is a one‑time R&D spike from an $81.0M BiBo milestone, masking underlying steady OpEx progression; expect normalization excluding such milestones, but Phase 3 burn remains high .
  • Liquidity optionality improved: $423.8M cash at Q3‑end, a $150M amended facility with near‑term availability, and a subsequent ~$125M equity raise enhance runway and strategic flexibility into key 2025 readouts .
  • 2025 ENTRUST topline is the next binary catalyst; management commentary suggests timing in 2H (not 1H, not December) and emphasizes broader metabolic differentiation beyond triglycerides that could aid payer positioning .
  • MASH timelines are long but potentially rewarding: ENLIGHTEN-Fibrosis histology end of 2026 and ENLIGHTEN-Cirrhosis histology in 2028 anchor the path to accelerated and full approvals, respectively .
  • Differentiation narrative firming: tolerability, Q2W dosing option, and liquid formulation support potential persistence/compliance and combination strategies (e.g., GLP‑1) in real‑world use .
  • Scientific momentum continues (AASLD ENLIVEN analyses) as 89bio advances commercial manufacturing readiness, a critical de‑risking step for eventual launch .
  • Key risks: dependence on pegozafermin’s success, long MASH timelines, and sustained cash burn even with facility and offering; these are acknowledged in forward‑looking risk disclosures .

Appendices

Additional Press Releases Around Q3

  • AASLD (Oct 15, 2024): Four ENLIVEN analyses presented, including high‑risk FAST score biomarker responses and cirrhosis progression findings .
  • Equity offering (Nov 12–13, 2024): ~$125.0M gross proceeds at $8.50/share (plus pre‑funded warrants) .

Prior Quarter Financial Summaries (for trend reference)

  • Q2 2024: R&D $44.9M; G&A $8.6M; Net loss $47.971M; Cash $531.4M .
  • Q1 2024: R&D $47.4M; G&A $9.8M; Net loss $51.681M; Cash $562.3M .