Good morning, everyone. Welcome to Piper Sandler Healthcare Conference. My name is Yasmeen Rahimi. I'm a senior biotech analyst here. Excited to have the team from Sagimet . Thank you, team, for being part of our conference. Lots to cover over the next 25 minutes, and would love to start off with, you recently announced you had a successful End-of-Phase II meeting with the agency. You unveiled the design of both of your studies, the biomarker study as well as the biopsy-driven study. Could you maybe talk about, now that the regulatory discussion is behind you, what activities are ongoing, what's left to do to kick off both studies, and what sequence do you foresee them, so just operationally, where are you in terms of?
Yeah, thanks, Yas. And certainly a pleasure to be here. Yeah, we've made great progress, right, over the last couple of months. A lot of positive news flow with the breakthrough designation from the FDA. And then, as you mentioned, a major clearing event to get through the end- of- phase II discussions with the FDA so that we can now proceed into phase III. So there are a couple of ongoing work streams that are taking place. Certainly, Eduardo can cover the work that his team has been doing to prepare to launch the phase III. And then, on the other side of that, we are working to finance the study. Our goal, of course, has always been, as you know, to have the study financed before we start it. And that's really what we've been working on to ensure that that happens successfully.
Okay.
Yeah. Briefly, all vendors are in place. Sites ready to be activated. Patients pre-screened. So it's turn the switch and here's a go.
And are both being started at the sequentially?
They will be started at the same time. But do remember the FASCINATE, which is the safety study. The majority of patients will come from screen failures from FASCINATE. There are a few endocrinology sites that may feed directly to that. But my expectation is the biopsy trial will be the first one finding a patient. Now, which way that patient is going to go will depend on all the eligibility tests.
I think it's very clear for investors the registrational study will be based on the biopsy study. What do you hope to gain from the biomarker analysis, that biomarker study that's going to be critically important?
Excellent question. I think as we saw with the Madrigal label that has no biopsy requirement, our expectation is when it's all said and done, it's successful, we're going to have a similar label. So biomarkers will help the physicians treat the patients. It's very important. And as you know, we are developing tripalmitin as a potential biomarker, very different from everybody else. In summary, the goal is to help the physician to manage the patient without the need to biopsy and all that.
And that would, at the time, you would have hoped that that data would show you could run a biomarker to be eligible population to run the study.
Of course, NDA data-driven and all that.
Yeah. No, that's very helpful. Would love, obviously, a lot has, you know, a lot of investors are using Madrigal's enrollment completion, and as well as ESSENCE, as sort of a time gate and around timing of the data. Based on your math, how do you think, how long do you project enrollment to take?
Sure. Enrollment will take about 18 months. That's our expectation. The way MASH patients, MASH, sorry, being diagnosed, the way they are being diagnosed because of the GLPs, it could be even less. But 18 months is realistic. One year treatment after that, then prepare the package. And FDA review is usually 10 months.
Okay. Perfect. Team, also maybe digging into the registrational biopsy studies, one of the questions in your FASCINATE-1 , you analyze the biopsy studies based on one single reader. At registrational enrollment studies require two readers. Could you maybe think about if there's going to be, and you had a phenomenal effect on both endpoints if there's any.
For the phase III, we're going to have a panel, like I told you, three pathologists. And the system we are using is what FDA recommended. And that was part of our discussions with them. It's super simple. You know, we're not reinventing the wheel. And the three pathologists are world-class as we had in the initial study.
Is there a reason to believe that the effect of one reader versus three readers could be any different? Did you guys reanalyze the sample?
No, we did not, but based on, for instance, the original Intercept studies, when they did a panel afterwards, there was really not much difference. It all boils down to the quality of your pathologist when you have one reader, and of course, Pierre Bedossa is as good as it gets.
Yeah. And we'll also have the AI, the digital read, which we showed some of at AASLD. And that will become an important part of the support for the biopsy reads as well.
Okay. And team, what do you hope? What did you power the study for? And what do you want to show to be competitive in the MASH landscape? Because now we will have Rezdiffra, we'll have semaglutide on the market by the time.
Sure. We haven't discussed power publicly, but what I can tell you from all the conversations we've had is, as you know, those studies are large. So we're going to be overpowered like everybody else, and our data from the II-B indicates that our expectation is to be better than the other drugs there. For example, there's resmetirom and the GLPs and the FGFs. That's what our data suggests, and that's what we believe we're going to beat the competition.
Yeah. So we do expect GLP will have somewhere between 30%-50% on background GLP therapy, which I think is going to be consistent, frankly, with what we see commercially. In fact, commercially, by the time we arrive at approval, we expect in the neighborhood of 70% of the patients to be on background GLPs. And frankly, we welcome that. Our data in the phase II-B study showed a significant enhanced benefit when the two drugs are combined, particularly in fibrosis. And that, as Eduardo indicated, is consistent with what we saw preclinically with sema and also preclinically with what we saw with resmetirom, that deni is more effective at reducing fat inflammation and fibrosis. But when you combine the two, there is an additive benefit in fibrosis, particularly.
Are you capping the number of patients on Rezdiffra on background GLP-1? Are you allowing the study to have real-world use?
Two important questions, very important. GLPs we're stratifying for. That's reality. We're stratifying. Rezdiffra, like everybody else, there needs to be a washout period. It's not a combination trial. And we are doing, again, the same thing as the competitors, if you will. That's what all KOLs advised without a difference. All said that.
What is your stratification protocol for GLP-1?
The stratification GLP is one of them. Fibrosis is another one that is important because we want to have the distribution that makes sense, which is at a minimum 60% F3s. They are on the cusp of cirrhosis. Our data indicate that we really have an impact in that population, and they will represent the majority. We are capping the F2s at 40%. Nobody goes in after 40% hits. They go to FASCINATE for the safety trial.
And then, team, I think one of the investors always asks about the AE profile, right? I think in FASCINATE-1, there was, you know, could you talk about the safety profile of denifanstat? There was also, I think, 18% of patients reported hair loss.
In the II-B.
In the II-B. So there is that thought process, like what risk mitigation is put into place?
Sure, well, first of all, the drug is very well tolerated. We never saw any remote evidence of DILI. We've seen DILI with other drugs. No impact on muscle mass, no impact on bone density, no cardiovascular risk, so the drug is clean. To address your question about hair thinning, yes, we did see a higher incidence in the phase II-B than what we had ever seen before for, and I'll go into our reasons why we believe this happened, so before that, in MASH, we had two cases ` of 102 only, and if we put the acne studies on top of that, we are really in the magnitude of over 400 patients. We are way over with, again, two cases at the 50 milligram dose.
The II-B, we believe the COVID waves, Omicron, and the son of Omicron happening during the study, COVID vaccines, ritonavir, and Paxlovid bumps up the concentration all the way to cancer doses. Patient that overdosed accidentally. And patients on the, we had patients, sorry, on the GLP. And we know GLPs are associated with hair thinning. We had 6% discontinuation. And when you look at the published data for tirzepatide, they had 7% incidence of hair thinning in their trial. And interestingly, and consistent with what our dermatology advisor said, we had two cases on placebo and two cases during screening. Now, for the phase III, and importantly, we know what to do. If that happens, and we do not expect anything remotely similar to that, scalp oils, biotin supplementation, vitamin D supplementation, and if need be, dose reduction.
And we saw in the phase II-B that patients that dose reduced, the hair regrew while on drug. And of the three patients that remained and dose reduced, two had histological response. The other had an MRI-PDFF response. And amongst patients that remained on 50, most had stabilization of the thinning. So we are confident that now we know how to manage for the phase III. And we believe we are not going to see a similar incidence because the external conditions are different.
Team, given the recent ESSENCE data, you know, I think there was a lot of pressure on many companies that were focused on MASH on what this readout was going to be. And I think it was definitely that data set took that burden off of those stocks, and everybody traded up ahead of it. And I think it's also clear that Novo Nordisk is communicating MASH to be, you know, 22 million Americans have it and see it really as a blockbuster. Definitely know more than enough patients. We need multiple optionalities. But the part that people struggle are vague or don't understand it is how is the market going to evolve into who's going to be on a GLP-1 versus a liver-directed therapy, whether it's Rezdiffra versus denifanstat?
Have you done any work on, you know, thinking about, and obviously by the time you come on the market, we'll have figured it out, right? Because we'll see what the dynamic is. But how do you foresee the space evolving from that perspective?
I think you touched on it. I think that what we're going to see is a lot of combination therapy to help patients arrive at the optimal treatment goal. And a GLP certainly isn't. I think just the difficulty in taking a drug with a tolerability profile like that is, I think frankly, is long contended is actually going to increase the size of the F2, F3 population. While you're on a GLP, obviously, you lose bone muscle fat. But when you're off of a GLP, you only gain back fat. So the likelihood in the end is that you're going to have a less healthy liver. But while they're on a GLP, I think they're also going to be on other medications. And what medication is combined, I think is going to be the question, right?
Is it going to be another fat burner like Rezdiffra, or is it going to be a fat inhibitor? And we have the only fat inhibitor. So while I think our data is great as a standalone and will be used as a monotherapy, I think it's going to be everybody's favorite companion drug as well. We don't have any GI issues. So being able to combine it and having the type of antifibrotic effect that we've been able to demonstrate repeatedly is going to play very, very well. I think, particularly, as patients advance, our data in F3s is unparalleled right now. And frankly, we're very confident that it'll work very effectively in F4s because of the lack of progression we've seen into cirrhosis. We're the only ones that have been able to show statistically significant data on lack of progression into cirrhosis.
Patients on deni are half as likely to get there as the placebo group in our last study. All of that leads us to believe that, particularly in the more advanced patients, that this drug is going to be used either as a standalone or in combination with a fat burner.
Okay. Team, I think your tripalmitin measurement to be used as a biomarker or precision biomarker is a very novel one and really not in the MASH field.
Correct.
So question number one is, as you have been in discussion with the regulatory agency, is the success of the biomarker study, right? Like what do you need to show there to then be implemented onto the label and used? And so that's question one. And then question two is, where are we in terms of feasibility to really feel confident that this is a marker that we can use?
Sure. Let me address two first. The phase III is the validation and the critical study for that. At the moment, we're doing analysis with our lipidomics, looking at indices. So combination of markers and all that, with tripalmitin being really the keystone of that. Now, as far as being on the label is concerned, the data from the phase III will support the potency, not potency, sorry, the strength of the data will be important. To be on the label, like many drugs have biomarkers on the label, that is, of course, a prerogative of FDA. I cannot speak for them, but we're going to request that to be there. But I can't make that decision for the agency.
Upon the success of the study, we would meet with the agency to get the.
Oh yes, it will be part of our NDA package if the data, as we expect, confirm the value of tripalmitin or combination of tripalmitin and other markers.
How difficult is this to measure?
Very easy. Of course, it's not something that all labs do right now, but it's a super- easy test. And once our data from phase III confirm all that, any lab will be able to do it again.
It's a saturated triglyceride.
Oh, okay.
I mean, it's a nasty saturated triglyceride.
Yeah, yeah.
It's very easy to measure.
Very easy.
I mean, it's just breaking out the panel on triglycerides. So yeah, and you're right, it is unique. I mean, it is the only, it's a direct reflection of the mechanism. And we reduce it markedly, as we showed at EASL in a very, very short period of time in the first four and 15 weeks. And historically, it's been very correlative to outcome. So assuming that that continues, it represents a very novel approach. And for payers, they're going to, obviously, they're going to love it.
So you could just run like a step, you could just look at a certain cutoff of baseline levels of tripalmitin and based on that say, okay, you would probably see a benefit on denifanstat. So therefore, you should be on denifanstat. Upon the data from the phase III that.
Showing very early on response. Perhaps with multiple drugs around, hey, why don't we add this or that? Typical clinical practice.
Yeah. Okay.
Yeah. I mean, you'll be able to see it very rapidly, right, and that's the key.
Have you done experiments to see that tripalmitin is not changed with other mechanisms?
No other mechanism would change it. It could go down with ACCs, but you can't bump up the dose to a level that would impact that.
It's truly like a.
Yeah, yeah. I mean, the problem is with an ACC, as he pointed out, if you bump up the dose to a therapeutic level, then triglycerides explode, right? In the other direction. So it's problematic.
Team, I think for investors, the phase II-B data was very strong. And so now we also have two studies, right, where we have high translation from phase II-B to phase III, right, between Rezdiffra and the ESSENCE study, the MAESTRO-NASH, and the ESSENCE. I guess the question that comes down to is financing these two studies, right? I know you spoke that you're working on it. Like what creative strategies are you implementing, thinking, how are you thinking about partnerships? I'd love to hear your thoughts on like what are the optionalities to raise sufficient capital to kick off the studies.
Yeah. I mean, that's everybody's favorite question right now. I mean, it's not about the data. You're right. I mean, I think the nice thing in our data set is that we have both mITT and ITT. And so we've removed pretty much all of the mystery about the outcome of phase III. It's just a question of financing it. And everything's on the table. We've been extremely fortunate that our data has drawn a lot of attention from all venues, from pharma to royalty to debt to equity. And it's really at this point, trying to figure out how to combine them in the most.
Creative way. Yeah.
Correct. And with the least amount of dilution. And that's kind of the key.
What is the current cash and the cash runway?
Yeah. We reported our last earnings $170 million in cash. And to get to the phase III outcome, we need a total of about $400 million. So the quick math would suggest that we need a little over $200 million to get to the data readout.
Okay. Perfect. And then I know you guys also have the Acne study and other maybe just in the next minute and a half, like talk about other pipeline opportunities and catalysts that we should be aware of.
Yeah. You know, acne is a very exciting program for us. Our partner in China, Ascletis, released phase II data in May of last year showing highly statistically significant reductions in lesion count, improvements in total score in IgA, and based on the strength of that data with denifanstat at 50 milligrams, the same dose that we're using in MASH, they launched a phase III study that they just announced completion of enrollment. We expect to see a readout from that in the second quarter of 2025, so we're really looking forward to that because we are preparing an IND on our next-gen molecule, which shares a nearly identical PK profile to deni, and we are getting ready to file that and launch the phase one study first-in-human at the beginning of next year, and as you may know, acne studies enroll very, very rapidly.
They're all 12-week programs, phase I, phase II, phase III. We could easily finish that study, the series of studies at about the same time we finished the MASH study, so we have a number of inflections with that and we do expect it to be very, very positive. The phase II data is very, very predictive of phase III outcome and it looks incredibly promising. With GBM, it's event-driven. They have completed enrollment. Our partner, Ascletis, again is running that study in China, and it really is event-driven, so likelihood is we'll see something in the next year but frankly, I hope that it takes a little bit longer.
Okay. Great. Well, thank you so much. We covered a lot during 25 minutes. I want to say thank you for being part of our conference.
Thank you.
Thank you
Thank you, guys.