All right. Welcome, everyone, to 2025 Jefferies Global Healthcare Conference. My name is Roger Song, one of the senior analysts covering MedTech Biotech in the US. It's my great pleasure to have the fireside chat with our next presenting company, Altimmune, the CEO Vipin and CMO Scott Harris. Welcome, gentlemen.
Thank you.
Awesome. Yeah. We know a lot of eyes are on the upcoming phase II MASH data. Before that, let's take a step back to say how pemvidutide is uniquely positioned in the future MASH landscape, given you have two sides of the story, incretin and the liver side. Just give us some overview, and then we can dive into some of the data and then upcoming data results.
Thank you. Thank you for inviting us. As you said, we're looking forward to presenting our phase II data, our phase II-B data later this month. Very excited about that. Pemvidutide, as you know, is a dual receptor agonist, GLP-1 glucagon. If you think about treating MASH, the best way to treat MASH is to treat both obesity as well as have a direct effect on the liver. That's exactly what pemvidutide is doing. It's got direct, because of the glucagon, there are plenty of glucagon receptors in the liver. Because of that, it has direct effect in the liver. We've got lots of data on that. One of the best-in-class liver defatting effects pemvidutide has shown. In addition, we have clinically meaningful weight loss. That's the best way to think of it, MASH with obesity.
80%-90% of subjects with MASH are either obese or overweight and would benefit from losing weight. Obesity is the cause of MASH to begin with. We're taking away the reason for MASH disease itself and are treating the serious condition at the same time. We think down the line, that's the best way to treat MASH. It's really more a complete solution for MASH treatment. That's the pemvidutide should be well positioned to do that. It's going to be differentiated from every other compound in development that either only have weight loss or only have effect in the liver. We are combining these two benefits.
Yeah, that's well said. Okay. I think the value proposition is pretty clear, right? You want to address both the liver and the weight loss. It seems pemvi is maybe the only one who can do that because we already know a lot of the [incretin] data and also on the liver side, FGF21. Okay. You are running a phase II, which is a big, well-powered phase II MASH histology data at 24 weeks. My understanding is you designed the trial by learning a lot of the MASH study before in terms of controlled placebo effect, enroll the right patient population, based on the blind data that I believe you're seeing for the demographic.
How much can you tell us about the data you've seen so far in terms of baseline to give you the confidence you are making the right enrollment and then potentially control, see the effect size you want to see?
Scott, do you want to?
Yeah. Thanks, Roger. Thanks for having us. We announced in our last earnings call that we were seeing a study population that was very representative of MASH in terms of mean age, proportion of women, liver fat at baseline, the proportion of F2, F3, the amount of diabetics, the non-invasive tests like the ELF and the FibroScan. At the time of that announcement, we did not have all of the data in-house. As you know, we've been rereading the biopsies and did not want to provide actual numbers because those numbers would change based on the final number of patients included in the analysis. We have not given further guidance. Just in looking at that, we would be fairly clear in saying that this is a very representative MASH trial.
Okay. You mentioned the reread. What are the, maybe just summarize for us, what are the key procedures you are implementing to try to minimize the placebo effect? We know from the previous MASH study, the placebo effect is all over the place, right? We try to minimize that in order to really detect the drug effect.
The placebo effect for, let's say, fibrosis improvement in MASH studies has ranged between 7% and 32%. It's not biologically feasible that a placebo response on a hard endpoint like a biopsy read would be that high. There has to be a process problem. The process is the way the pathologists read the specimens. We know that the studies that have reread their biopsies, and I'll describe what that process is, have seen placebo responses that are low in the range of 7%-13%. We've seen ones that have not reread their biopsies high, as high as 32%, but clearly in the 20s. That placebo response can make it very challenging to hit statistical significance. There are two things that we do to minimize that placebo response. We've learned from trials that have preceded us.
The first is a three-panel read where three readers read independently, and then you move ahead if either three or two of the three agreeing. If not, they get together and they consult and they come up with an agreement, which does not really happen that often. Statistically, it gives you a better chance of hitting the actual true biopsy read. The second thing is that it is recognized that there is a bias in the reading of the biopsies over time, whereas biopsies are upgraded in their severity early in the trial when pathologists believe they are reading the baselines because, after all, it takes about six to eight months for the treatment biopsies to start appearing. There is the inherent bias to want to put the patient in the trial.
If there is indecision, they upgrade, whereas that effect is lost over time or may be driven even in the other direction if pathologists think that they are reading a post-treatment biopsy. What we do is that we take all of the biopsies at the end of the trial, essentially put them into a basket, scramble them, and give them back to the pathologist so they are totally agnostic to the time of the biopsy, reading the baselines on the same basis as the week 24. We believe that those two methods really drive down the placebo response and enhance our chances of hitting STAT-SIG in this trial.
Excellent. Another area of the nuance for the data readout is the statistical methods, right? We have the ITT, Web Completer, maybe some imputation methods. Just tell us what methods you are using for phase II, what data you will present to us when you release the top line data, and which data point we should focus on.
Right. As you've indicated, and we agree with that, the readouts have been really very scattered and very varied in terms of the treatment responses and the magnitude of the effect and even the placebo effect. They've used completer analysis where they ignore the patients who did not complete the trial, which creates problems, does it not? Then they have ITT where they look at all patients, and then an in-between method where they find a way of statistically imputing the missing data. Drugs are read out in all three. We are going to provide all three and make those comparisons for analysts and investors so they can clearly understand the relationship to other readouts in the past.
My understanding is eventually, phase II, FDA is probably okay with any of those data readouts when you host the end of phase II meeting. They will look at the whole thing. What is the requirement for the FDA for phase III? It's the ITT, I believe, right?
I can't tell you what the requirement will be, but the standard for phase three has been the ITT analysis. That is where the FDA is the most conservative, and that is what the FDA will put on the product label.
Got it. Using ITT, one of the key areas we pay attention to is the dropout rate. How should we think about the dropout in terms of maybe some patients not qualifying for the inclusion criteria F1, F4 versus maybe the discontinuation due to AE or any other reason not throughout the whole treatment period? What is your expectation for the dropout?
Yeah. I mean, I think there will be a reread dropout rate. We think it will be controlled. We have a candidate for it on the power calculations. I can't give specifics here. I'm also blinded about the dropouts, the numerical dropouts we're seeing. We're very encouraged by the data. We think it looks good on a blinded basis in terms of not only the number of dropouts, the dropouts due to adverse events. We think that the numbers are going to look good in the final analysis.
Got it. You are seeing the blind of the data in terms of dropout, but you are encouraged by the data, not anything surprising to you as you design the study because you power the study already considering some of the dropout rates.
Right. We think that on the two metrics, the total dropout rate and the dropouts due to adverse events, we think the data will be looked at very favorably.
Okay. Very good. Okay. Exciting timing upcoming, right? I think it's June, right? Basically, you will see the two kills. It's right now. It can be any day from here. What's your expectation in terms of those three, I would say, three endpoints in terms of weight loss, the MASH resolution, and the fibrosis improvement?
Yeah. If we hit statistical significance on all three of those, again, the MASH resolution, the fibrosis improvement, which are your biopsy endpoints, and weight loss, we think this trial will be representative of a compound that's very differentiated from any other compound that's read so far. Remember, the incretins have read out all the way at 48-72 weeks. This would be the first incretin with the potency to read out at FGF at 24 weeks like the FGF21s. It would be in the class of the direct-acting agents. That is because glucagon has direct effects on liver fat reduction, but also on fibrosis as well. We think that it matches up as well, if not better, than the FGF21s because we have better liver fat reduction than the FGF21s. That seems to be the primary driver of MASH resolution and fibrosis improvement.
We differentiate further from the FGF21s for providing weight loss. None of those drugs offer that. Resmetirom doesn't offer any weight loss as well. Consequently, a very differentiated profile where we can treat not only the metabolic phases of MASH as you would, which needs weight loss, F0, F1, F2, even F3. Patients die predominantly of cardiovascular disease, not liver disease, but the potency also to treat fibrosis. If you would, the complete solution for MASH from the less severe stages of fibrosis all the way up to cirrhosis, we think that we would have that in one drug.
Yeah. I just wanted to add that in this patient population, weight loss is very attractive to physicians as well as to patients because MASH is a silent disease. Patients can't really don't really know if a drug is working. If they're losing weight, they really like it. It is very attractive to them. We saw that in our phase II enrollment. It was really very fast because it was attractive to patients to enroll in this trial.
Yeah. Makes sense. In order to expect the data, we did some preview ahead of time. Based on our power analysis, and I think you gave us some guidance as well, we think the weight loss is well-powered. I think based on your phase I [MAFO] data and MASH resolution potentially can also be very good because the liver fat.
The fibrosis, given this is 24 weeks, right? So based on all the historical study, we did some regression analysis. Seems that's maybe among those three, maybe the most difficult endpoint to hit. First of all, do you agree with that? If you agree, let's say if we hit three STAT-SIG, that's a home run, right? Everyone should be very happy. I think you will absolutely move forward without any hesitation. How about if you hit weight loss, STAT-SIG, and maybe MASH or one of the histology here STAT-SIG, but the other one maybe I don't know. Let's talk about some nuance in terms of how much miss there. Just miss the STAT-SIG. How are you going to think about that profile moving forward?
Yeah. As we've stated very clearly, our goal is to hit statistical significance on all three of these endpoints and really look at the drug more holistically. We're going to look at non-invasive tests. We're going to look at biomarkers. Our goal is to really present a very compelling package that's differentiated from other drugs in this class. That can be achieved by hitting the three endpoints, statistical significance, and combining it with additional measurements that we'll be presenting.
Yeah. Okay. I think I'm going to ask the question still. I understand you want to aim for that situation. At least in the U.S., even for MASH phase III, this MASH and the fibrosis is the dual primary endpoint, not the co-primary endpoint. They only need to hit one in order to get the label. Is that right? If that's the case, how are you going to think about if you hit one and then going to move forward? That's another question.
Right. First of all, I'll start by saying I think we're going to hit it.
Okay.
Okay. All right.
We'll start with that. Let me also point out the two most successful drugs in MASH right now, resmetirom and semaglutide, did not hit their endpoint in fibrosis improvement. Semaglutide at 72 weeks, resmetirom at 36 weeks. Resmetirom got approved, semaglutide's on the verge of being approved. We think we solved a very successful drug. We do think we're going to hit the endpoint. We also have the week 48 data. We won't have biopsies then. I think the non-invasive tests will adequately predict what the biopsies would have shown at week 48. That effect will grow over time. We've seen that in the [Acura] data. I think it tripled between week 24 and week 96. We would assume approximately that it would double between week 24 and week 48.
The non-invasive tests have been very reliable, as we've seen in the resmetirom open label data, the efruxifermin data, the non-invasive tests of fibrosis, the FibroScan, which is also known as VCTE, and the ELF, which is a blood test alone and together have very well predicted fibrosis improvement. We would be able to use that in order to predict that response at week 48. Again, I think we're going to hit it. I think there have been drugs that have not hit it and have done extremely well. Everyone would agree that resmetirom has been successful and that semaglutide will probably get approved. We also have the data at week 48 to look at if we need to look at that.
Yeah. I think that's a good point because you have this biopsy at 24 weeks because you think the drug is more potent, right? That's why you think you can hit that at 24. You do have a 48 data readout. Just tell us, I think, Scott, you already mentioned. You will have an additional biomarker and then the non-invasive measure. What's the correlation at the 48 week for those biomarkers correlated with the histology data, just historically?
The week 48 readout will be identical to the week 24 with the exception of not having the biopsies. It will be a catalyst because it will provide 48-week weight loss, 48-week non-invasive tests, including liver fat reduction, but ELF, VCTE for fibrosis markers, and a variety of other measurements. We think the 48-week readout is important. Our analyses have shown that we should be able to predict what that fibrosis improvement would have been at week 48 had we done the biopsies. These non-invasive tests have been very reliable in making those predictions of biopsy responses. We do have that additional information coming. Again, I think we're going to hit the endpoint at week 24.
Got it. You made a statement and said, "Okay. If we have STAT-SIG, that's already very good," which we agree. Some of the investors also ask about the effect size, right? Maybe we can separate by the histology versus the weight loss. What are the effect size you want to see? Understanding the trial is already powered very well for the statistical significance, which means if you hit STAT-SIG, the effect size will not be too low. What are the effects that you want to say to investors, "Okay. This is what we're targeting for"?
Yeah. So it's difficult to quote actual numbers because as you introduce the concept, the numbers are all over the place, right? Are you looking at comparing to placebo of 7% or 32%? Are you looking at a composite endpoint? Are you looking at an ITT? To put a number out there, it could be very confusing because that number will stick, and then people will look back on it because that number is hard. That number is only relevant relative to how you're reading out the data. We're starting by looking at STAT-SIG. We think that's the most meaningful. Then we'll combine the comparisons to the other drugs. I think the comparisons will be very good. Obviously, the treatment effect is not going to be very low or else we wouldn't hit STAT-SIG.
We think that we have to hit in the range of the other drugs given the analyses that they did and the numbers that they used to do those analyses.
Yeah. No, I think that's fair. That's fair. That's why you have this well-powered phase II versus smaller trial. Okay. And then moving on, assuming you have positive results from the phase II and then supporting the next step for phase III, given pembi seems very unique in the future, the MASH, the profile, so what will be the potential phase III design can capture all the differentiation for pemvi in the future MASH?
Yeah. So we've done market research, which has indicated two things. Number one, physicians equate speed with efficacy. They want to use the most efficacious drugs. A 24-week readout along with the FGF21s would equate to speed, which they equate to potency and desirability, and also the effects on fibrosis. They also want to have an early indication of response. They do not want to have to wait 72 weeks to see how the patient is doing. They want to have some data early on to know that patient is responding. Time is critical. We are certainly going to build in those analyses early on so that physicians can have that data in the label. In terms of the whole program, we think that we can expedite it based on a couple of important considerations. Number one, generally, programs have had 1,800 patients going into their NDA.
You can get credit for other exposures. Remember, we have over 500 exposures in obesity alone. We think that's going to reduce the burden of the program. The second is that we're getting into looking at some innovative methods that we're going to discuss with the FDA to get an earlier readout. We could give greater details once we have the end of phase II meeting with the FDA. We're planning that right now. We feel fairly confident about being able to have it in the fourth quarter. We could provide those results once we meet with the FDA and get agreement.
Okay. Good. I know you have the cash to absolutely supporting the readout and then the forward. If you want to continue the development, what is the financing plan, the funding plan for the phase three for the MASH?
Yeah. At the end of first quarter, we reported $150 million in cash. That's sufficient to take us pretty much to the end of 2026. We are well positioned to initiate the phase three program. We are putting a number of other pieces in place. We put a $100 million credit facility with Hercules. We are putting all of the levers that we can pull to provide sufficient cash. We are well positioned going forward.
What is the strategic thinking around the partnership versus going alone, considering MASH is still a large opportunity? Also, you have obesity. You are already phase three ready. We will talk about the ALD in a minute. In terms of the pemvi, like a pipeline in a product type of the situation, how do you think about the partnership decision?
Yeah. Let me just talk about obesity first and then link it back to MASH. I mean, the obesity landscape is changing. As you can see, with just two players, there is almost a price war breaking out. Obesity is going to be a race to the bottom in terms of pricing of products for obesity. As more players come into pure obesity space, that is going to get even further complicated. Oral drugs, oral medications, small molecules, all of that is going to put pricing pressure on obesity. We think the better place to be is to treat a serious disease that results from obesity like MASH. As I pointed out at the beginning, we're really treating MASH with obesity. We bring that added benefit. We're not only treating MASH, but people are also losing weight, which is beneficial.
Everything we're looking at sort of follows that theme of dual mechanism. What is it that we can do that's a comorbidity of obesity, but it's a serious disease? The pricing pressure is not there just for pure obesity space. We've been very clear. We're not planning to proceed with obesity on our own. For MASH, we are well prepared to take that forward on our own. We'll be open to partnership discussions. If it turns out that we have a compelling strategic partnership to be done along the way, we'll certainly look at it. We're not close to the idea, but we are preparing to take it forward on our own all the way to initiation of phase III and completion of phase III.
I believe you already have a lot of the conversation for those strategics. How do they think about one product with different indications and if they want to do one versus all? That's one of the thinking probably the strategics will have.
Yeah. I mean, look, we are hearing the same thing that we're telling you, that people are interested in innovative ways to sort of take these metabolic drugs forward rather than just pure obesity. That's one play. Perhaps a more interesting play is to treat these serious diseases. The strategics are thinking about the same way. What is a creative way to go into the obesity marketplace where you're really taking advantage of the full profile of the drug as opposed to just weight loss? We have had very encouraging discussions. People will be very interested in our data. I want to emphasize, we are preparing to take it forward on our own. If it happens that we have a compelling transaction to be done, we will certainly look at it.
Noted. A couple more minutes. We should talk about the ALD because I have been talking with the investors, and people are interested because that makes a lot of sense because you are very potent on the liver side. If you can address weight loss and the liver, and potentially you can address this kind of alcohol-related liver disease as well. Maybe take a step back first. What are the key mechanisms to lead you to pursue this? And then you can give us some primer, and then we talk about the development plan as well.
Take that.
Sure. As we've announced, we're pursuing two additional indications: alcohol use disorder that we call AUD and alcohol liver disease, which we abbreviate ALD. ALD and MASH are very similar. If you do the biopsy, the biopsies are indistinguishable. When I trained, we used to call this non-alcoholic liver disease. We were accusing people who are overweight of being closet alcoholics, and that's how it got its name. It was later recognized that you didn't have to drink in order to have the same pathophysiology, which are toxic lipids accumulating in the liver, leading to inflammation and then fibrosis. We have a mechanism here to reduce the toxic lipid. We have a lot of lipidomic data showing that not only reduced triglycerides, but a variety of toxic lipids in the bloodstream.
We believe that this drug would be very effective for resolving inflammation in alcohol liver disease. Over and above that, you have the alcohol itself, which is driving the whole process. It has been shown repeatedly in studies that GLP-1s are very potent in reducing the craving for alcohol, both in studies and anecdotes in people who have taken the drug who find that they cannot really drink their favorite cocktails or wine. I think everyone has an anecdote here in the audience. AUD is the predecessor of ALD. These diseases are bound at the hip. Also, in other ways, ALD and MASH are bound at the hip. Obesity is a big risk factor for alcohol liver disease. Alcohol itself has huge implications in alcohol liver disease. If you are obese, the outcomes are more than twice worse in terms of morbidity and liver-related complications.
Vice versa, if you drink, that makes MASH worse as well as alcohol liver disease and AUD. We see obesity and alcohol as being very similar in terms of their medical impact. We believe that we can be the leader in both MASH and ALD. There are no really effective treatments for alcohol use disorder. There are three approved drugs. The overall prevalence of use with these drugs in the U.S. in the last year is about 2%. There is a huge market opportunity. We believe that we can own the fatty liver disease space, which is MASH and ALD, which are the number one and number two causes of liver transplantation in the U.S. In terms of pricing and pharmacoeconomic impact, we believe that we are looking at the two most important liver diseases that currently remain untreated.
Okay. Good. We do not have much time, but you will become a bigger focus moving on. Two quick questions. One is, what is the development plan or status right now when we start to see? I believe you started the phase II or are about to start phase II pretty quickly. When we may be able to see the data? The other one is just quantify for us what is the market opportunity for ALD and AUD.
I will take the first question. Take the second. We announced that we initiated the AUD trial earlier last month. We have posted on clinicaltrials.gov, but we believe that we will finish in August of next year. We are going to have to really just see how the enrollment goes and give guidance to the street about that date. I can tell you that the study has had a very brisk start. Enrollment is going very well already. ALD, we will start probably sometime in the third quarter, but there is potential for moving that up as well. We have not announced the completion date of that. We think there would be good enrollment on that trial as well.
Yeah. I mean, in terms of market size, these are both critical and mathematical needs. The market size is huge for both of these indications. For AUD, there are three drugs, but only 2% of the patients with AUD are currently treated with any kind of treatment. And very few are getting any pharmacotherapy because they really do not work. I think the opportunity is huge. We are at the front end here for both of these indications. The market is relatively not very crowded in this situation. We want to take advantage of that and move as quickly as we can.
Awesome. Great. I think we are on top of the 30 minutes. Thank you for being with us. Thank you, everyone, for listening.
Thank you.
Thank you.