Hello, good morning, and welcome to the H.C. Wainwright 26th Annual Global Investment Conference. My name is Ed Arce. I'm one of the senior biotech analysts here at H.C. Wainwright. This morning, I'm very pleased to have with us our next presenting company, Sagimet Biosciences. And representing the company is, to my far right, Eduardo Martins, the Chief Medical Officer, and to my immediate right, Dave Happel, the CEO. Gentlemen, welcome.
Thank you, Ed.
Thank you very much.
Great to have you here. So let's start by just a quick overview of the company for those who may not be familiar-
Sure.
-with Sagimet.
Yeah. All right. Sagimet is a clinical stage biopharmaceutical company. It was founded in 2007, so many years ago, with the intent really of focusing on a particular pathways that involve fatty acid synthase. Fatty acid synthase is a sort of a ubiquitous enzyme that if it gets out of whack or if it gets overexpressed, it tends to throw things out of balance, and our particular focus in those places where it does become out of balance is in MASH, and in acne and in oncology. Those are our immediate pursuits. The bulk of our work has been in MASH.
We've had a number of preclinical and clinical studies, evaluating the molecule, and it shows very consistently the same thing, and that is that it affects the three primary drivers of MASH, rather uniquely. It reduces fat, inflammation, and fibrosis, independently, and I'm sure Eduardo will talk a little bit more about that in detail, but that uniqueness separates it from all of the other molecules that are currently in development or have been approved for MASH. Those molecules are fat burners. We're a fat inhibitor.
And when you burn fat, you're basically trying to reduce fat and then rely on that fat reduction to translate into downstream improvements in inflammation and fibrosis, where, as a fat inhibitor, our molecule, denifenstat, is really equipped to target all three of those independently and separately and very effectively. In our preclinical models and in our clinical data to date, as I indicated, it's shown the exact same thing, that it will very effectively target each of those different pathways. We completed a phase IIb study just at the end of last year. We reported the top line from that study in mid-January, and showed a very pronounced effect particularly in reducing fibrosis.
We presented the full data set at the European Liver Meeting in Italy about eight weeks ago, in which we showed even further effect in the more severe patients living with MASH, those patients with fibrosis Stage III. So with our data, as we've talked about, we've walked into and out of EASL in the same position in the competitive landscape, and that's at the top. The drug is extremely well-tolerated. It's been assessed in well over seven hundred patients at this stage in all of the indications that we're pursuing development, and it's been extremely well-tolerated and generally safe. So we don't see any limitations to any of the treatment populations that we're pursuing development. So...
Great. Fantastic overview. So, with denifenstat, as you mentioned, a rather unique molecule being a fat inhibitor, as opposed to others that either burn or oxidize or mobilize fat, wanted to get your take on how well-positioned it is, in your view, given that profile, not only as a monotherapy, but obviously, as we go forward in the next few years, MASH is going to see a number of combination regimens.
Mm-hmm.
as well. How do you see that?
Sure.
with your compound?
That's a very good point, and you're looking into the future, which is the way to do it. So back to the monotherapy to start with. As Dave said, the differentiated mechanism, the key component is the fact that we do not rely solely on fat reduction to have an effect downstream in the disease. The enzyme is also critical for activation of inflammatory cells and activation of stellate cells that deposit the scar tissue. And this way, we can target all three key drivers, which is one of the reasons why we see the pronounced effect, in particular in F3 patients, so this pronounced effect in more advanced disease where patients have less fat in their livers. So targeting all that is very important. The other drugs target solely the fat excess in the liver. So now, back...
Now to the combination component that you mentioned. In the phase II clinical trial, we had-
... The numbers were small, please take that. 16 patients that did have GLP-1, stable GLP-1, so they had to be at least six months on treatment, no weight loss anymore, and what we saw was a pronounced effect in MASH resolution, but also, and importantly, on fibrosis. Statistically significantly so, and fibrosis drives prognosis in MASH, so that's what you have to impact. Now, take a step back, and let's go into pre-clinical data. We also saw that in mice, we presented those data at EASL, and before that, at AASLD last year, we also ran a pre-clinical experiment, if you will, and presented the data combining resmetirom, Rezdiffra, with our drug.
In both cases, the combination was greater than the individual components, and in particular, in like GLP-1s, we actually brought them to the fibrosis side of the equation as well with the combination. So we're very well-positioned. As a monotherapy, our data are clear, but also looking into the future, and as you said, as the backbone, the ideal drug for combination therapy as well.
Great. All right, so, you've touched on some of the key points of the recent phase IIb data.
Mm-hmm.
I wanted to give you an opportunity to discuss a couple areas that have seen some debate. Firstly, when you look at triglycerides, there's a small increase-
Mm-hmm.
That's an on-target effect.
Mm-hmm
... but actually a positive cardiometabolic effect. If you could, elaborate on that-
Sure
... as well, the two markers of fibrosis, one FAST and one ELF.
Mm-hmm.
FAST was stat sig, ELF was not.
Mm-hmm
... even though there was a reduction. Maybe you could elaborate on that a bit?
Sure. So let's start with the triglycerides. I think you said the important part. What the drug does is shift the triglycerides from saturated into polyunsaturated, and that's where you see the elevation. In other words, from butter to olive oil. And that's been associated, as we all know, polyunsaturated fatty acids, fats, are associated with beneficial... Sorry, are beneficial to the cardiometabolic component of the human.
Mm-hmm.
So that's why it's important, what we have observed. And we have shown these data at EASL, as Dave said, in June, but also in pre-clinical experiments. So this is reality. Now, to FAST and ELF. So both are non-invasive markers of fibrosis. FAST is based on FibroScan, combined with a liver enzyme, AST, and ELF is another soluble marker with three components to it. Non-invasive markers have to be taken in their entirety, whereas the liver biopsy is the gold standard, and that's where we had all of our results. There is more gray area in the non-invasives. FAST is the best of all non-invasives, and it is the closest to the liver biopsy, the gold standard. ELF, you are correct. We saw a reduction. There was no statistical significance. Why was that?
We looked at patients at risk, and those were patients that, at baseline, had an ELF equal or greater to 9.8. By doing that, you reduce the numbers. So by reducing the sample size, focusing on those, it becomes harder-
Mm-hmm
... for the statistics.
Great. Okay, so, another aspect, I think, that's rather unique to your program, is the existence of a biomarker for-
Mm-hmm
... de novo lipogenesis, or DNL inhibition. That, tripalmitin is the name.
Mm-hmm.
And is not only a marker for on-target FASN activity, but is also a reliable marker of early treatment response.
Mm-hmm.
How do you plan to leverage that marker that's unique to denifenstat?
Sure, thank you. Precision medicine is the best way to look at it. We're not planning on developing a companion diagnostic with all the regulatory parts, but it's very important to the patients and to payers to know who is responding or not, just because of the sheer size of the MASH population. Now, what is tripalmitin? Tripalmitin is a triglyceride that has palmitate, a very, let me use a technical term, very bad fatty acid, which is highly saturated. It's a marker of effect of the drug, and as it goes down, we know that patient is responding, and we are developing exactly that, so when we get to the clinic after our phase III and all that, we may have a precision-
Mm-hmm
... medicine program. And you are correct. To the best of our knowledge, we are the only ones doing that, and this is a big differentiator when it comes to reimbursement.
... Great. Okay, and then nextly, I wanted to touch upon a couple on-target AEs-
Mm-hmm.
-in your profile.
Sure.
The mitigation-
Mm.
of those. How do you plan to address dry eye and hair thinning that you've seen?
Sure.
As you've designed your Phase III trial?
Sure. Thank you. Dry eye, we actually saw more on patients taking placebo than patients on drug. But let's say you have dry eyes, it's a very common thing in the population, hence the placebo high levels.
Mm-hmm.
Over-the-counter eye drops, Systane, GenTeal, whichever one you prefer. The hair thinning component, that, I must say, caught us a little by surprise. We had not seen that. We saw only in two patients out of 102 before the phase II study, patients with MASH and all that. Of course, in oncology, we do see where we bump the dose up all the way to 10 times the dose that we use in MASH. Importantly, if you look at our dropout rate, 6% is very much what has been reported with one of the GLP-1s.
Mm.
The differences, we were very transparent about it. Now, how do we plan to address it? Sorry, before I get to that, one important point is the study was conducted over the COVID Omicron wave, and the other wave that came after that.
Mm.
COVID is associated with hair thinning. Paxlovid patients, some patients taking Paxlovid, it bumps up the concentration of the drug. That's what the ritonavir in Paxlovid is supposed to do. There were patients that were taking levothyroxine. Levothyroxine for thyroid, hypothyroidism, is also associated with that GLP. And there were two patients on the placebo arm, and two patients during screening, so before they even started taking something, that had hair thinning as well. We spoke with important big KOLs, dermatologists in this area, and basically, scalp oils, biotin supplementation, we can do that for the phase III. Finally, it's reversible, completely reversible. Of the patients that remained at five milligrams, there were five of them, the hair thinning stabilized. After treatment, everything came back normal, and we saw histological response.
The other thing one can do is to dose reduce to 25 milligrams. We did see, out of the three patients that dose reduced, two had responses at liver biopsy, and one had non-invasive response in MRI-PDFF. The hair thinning reversed completely while on drug. So, we know how to manage, we know how, it happens, so we are prepared for the phase III.
Great. Okay. Turning to the competitive landscape.
Mm-hmm
... in MASH, of course, everyone knows this is a, an attractive area with a lot of programs,
Mm-hmm
... in the last few years. How do you view the magnitude of your fibrosis improvement with that of others, in particular, resmetirom?
Mm-hmm.
And would you expect to see further improvements or strengthening of your effect size over time?
Mm-hmm
... as has been seen with, Akero's drug, efruxifermin?
Sure. Very, very important points. If one looks at the placebo-adjusted rates for all the drugs that are in development, in other words, the delta, we are better than every other one at one year of treatment. So, I'm not gonna go into all the numbers and all that, but we are leading the the field, if you will. Now, the biology of scar reabsorption, the biology of, fibrosis regression, in any chronic liver disease where you have a potent treatment, requires time. It's a large amount of damage, it requires time. Give us another year, and, we're expecting to be better than Akero. Why do we think that?
Looking at our F3 data in particular, on using the human pathologists, using is a bad word, but with the human pathologist reading, as well as artificial intelligence digital pathology, our impact in F3 was phenomenal. And finally, we had twice as many patients on placebo in one year that progressed to F4, to cirrhosis, when compared to denifenstat. Progression to histological cirrhosis is an endpoint for full approval-
Mm-hmm
... probably the most common one that those patients will hit. So we have data that give us a significant amount of optimism, confidence in the phase III accelerated approval component, as well as in the long term.
Great. So, Dave, as you mentioned earlier on in your introductory remarks, at EASL, there were two key aspects to the data you presented there. First was the highly consistent ITT analysis on the data, along with the initial top line that was modified ITT. But perhaps even more important was the differential effects in the subset of patients that are F3, and the stronger response that you saw there. I know you mentioned it, but I wanted to give you an opportunity to sort of contextualize the importance of that going forward, especially as you look competitively into your phase III.
Yeah, no, I think that's a great question. I think as Eduardo pointed out, in the F3 population, those patients that probably need the greatest intervention, we were three times the treatment effect that we've seen with resmetirom in terms of placebo-adjusted differential, acknowledging the fact that none of these trials are head-to-head. But in terms of comparison to tirzepatide, which is the only GLP that's really presented F3 data, we were 50% greater. So in terms of being able to reduce fibrosis in this most important population. And as Eduardo pointed out, lack of progression to cirrhosis, patients on Deni were half as likely to get there.
And again, that we were the only ones to demonstrate a statistically significant lack of progression in those patients amongst all of the medications that are in development. So we believe that sets us up very well from a competitive or a comparative landscape as we move forward. And I think importantly, both in terms of monotherapy and then in terms of combination, I think Eduardo pointed out that the combination data that we've been able to show preclinically with fat burners, including GLPs, as well as resmetirom, which we showed at EASL several weeks ago, all showed the same thing, that Deni was more effective in reducing fat inflammation and fibrosis independently. But when you combine the two molecules, there is an enhanced effect, particularly in fibrosis.
So we think that's very important, given the fact that our drug is going to arrive on the scene, commercially in about three and a half years. Recognizing that there will be a lot of patients that will still be struggling to get to target goal, in terms of their treatment effect. And, combining it with a fat inhibitor, like ours, can push them not only over the top, but can cause significant regression.
Fantastic. So turning to your planned phase III, I believe you've said as of a month ago for your second quarter call, you're still in discussions with the agency on-
Mm-hmm
... defining,
Yes
... the design of that. I believe you're still on target to initiate the Phase III by the end of the year. At this point, what elements of that design can you share? Can you disclose whether or not you would be pursuing the alternative regulatory pathway?
Mm.
As you know, Madrigal and several others are pursuing that.
Mm-hmm. Now, those are good questions. Let me start with the latter. Alternative pathway, for those that may not be familiar, is running a cirrhotic and a non-cirrhotic study at the same time, so you accelerate the full approval. We have indicated that, we have an interest in pursuing cirrhosis. The first big component-
Mm
... is a trial in F2, F3 patients. Madrigal, as you mentioned, set a very good blueprint as to how to do it, so one learns from others that have been successful. Having said all that, FDA is very specific on how they want phase III. They have a very clear guidance. It becomes a matter of agreeing on aspects of the protocol here and there. It's a negotiation, of course. So, there will be no surprises, let's put it this way.