Q1 2024 Veru Inc Earnings Call

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Operator: Go to Beadaholique.com for all of your beading supply needs! Good morning, ladies and gentlemen, and welcome to the Veru, Inc., Investors Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After this morning's discussion, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr. Michael Purvis, Veru, Inc.'s Executive Vice President, General Counsel, and Corporate Strategy. Please go ahead. The statements made on this conference call may be forward-looking statements. Such statements may include, but are not necessarily limited to, statements of the company's plans, objectives, expectations, or intentions regarding its business, operations, regulatory interactions, finances, and development and product portfolio.

Good morning, ladies and gentlemen, and welcome to the Virtu, Inc. Investors Conference call all participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After this mornings discussion there will be an opportunity to ask questions.

Please note this event is being recorded.

I'd now like to turn the conference over to Mr. Michael purpose.

Through Inc's Executive Vice President General Counsel and corporate strategy. Please go ahead.

The statements made on this conference call may be forward looking statements forward looking statements may include but are not necessarily limited to statements of the company's plans objectives expectations or intentions regarding its business operations regulatory interactions finances, and development and product portfolio.

Michael Purvis: Such forward-looking statements are subject to known and unknown risks and uncertainties, and our actual results may differ significantly from those projected, suggested, or included in any forward-looking statement. Risks that may cause actual results or developments to differ materially are contained in our 10-Q and 10-K SEC filings, as well as in our press releases from time to time. I'd now like to turn the conference call over to Dr. Mitchell Steiner, Vero Inc.'s Chairman, CEO, and President. Good morning. With me on this morning's call are Dr. Gary Barnett, Chief Scientific Officer; Michelle Greco, CFO and Chief Administrative Officer; Michael Purvis, the Executive Vice President, General Counsel in Corporate Strategy; and Sam Fish, Executive Director of Investor Relations and Corporate Communications. Thank you for joining our Q1 fiscal year 2024 earnings call.

Forward looking statements are subject to known and unknown risks and uncertainties and our actual results may differ significantly from those projected suggested or included in any forward looking statements.

Risks that may cause actual results or developments to differ materially are contained in our 10-Q and 10-K SEC filings as well as in our press releases from time to time.

I would now like to turn the conference call over to Dr. Mitchell Steiner.

<unk>, Chairman CEO and president.

Good morning, with me on this morning's call a doctor Gary Barnett as Chief Scientific Officer, Michele Greco CFO and Chief administrative officer, Michael Parrish Executive Vice President General Counsel, and corporate strategy and Sam Fisch Executive director of Investor Relations and corporate communications. Thank you for.

Joining our Q1 fiscal year 2024 earnings call.

Michael Purvis: Veru is a late-clinical stage biopharmaceutical company focused on developing innovative medicines for high-quality weight loss, oncology, and ARDS. The company's drug development program includes two late-stage, novel, orally-administered small molecules, Inovasarm, and Subizibul. Weight Loss Pipeline leads off with Inovasarm, also known as Osterine, MK-2866, GTX-024, S-222, and Veru-024. These are all the identical, same molecule Inovasarm, which is an oral selective antigen receptor modulator.

Here as of late clinical stage biopharmaceutical company focused on developing innovative medicines for high quality weight loss oncology and a R. D. S. The company's drug development program includes two late stage novel orally administered small molecules novus arm and she basically viewers.

Lost pipeline.

And it.

It leads off with and Nobu, sorry, also known as Austria, MK 2866 G. T X 024 S. <unk> 22, and 024 are these are all the identical same molecule nobu, sorry, which is an oral selective androgen receptor modulator nobody farmers being developed as a treatment in combination with weight loss drugs to akamai.

Dr. Mitchell Steiner: Inovasarm is being developed as a treatment in combination with weight loss drugs to augment fat loss and to avoid muscle loss in overweight or obese patients for chronic weight management. In our oncology pipeline, we're developing Inovasarm as a treatment for antireceptive positive, estrogen receptive positive, and human epidermal growth factor 2 negative metastatic breast cancer in the second line setting. In our infectious disease pipeline, which is pending additional external funding or pharma partnership, is Subizibulin, a microtubule disruptor, which is being developed as a phase 3, in a phase 3 clinical trial for the treatment of hospitalized patients with viral-induced ARDS. The company also has an FDA-approved commercial product, the FC2 female condom, an internal condom, for the dual protection against unplanned pregnancy and sexually transmitted infections

Fat loss and to avoid muscle loss in overweight or obese patients for chronic weight management in orange.

How's your pipeline with developing and Novus arm as a treatment for Andrew receptor positive.

Estrogen receptor positive and human epidermal growth factor.

<unk> negative metastatic.

Metastatic breast cancer in the second line setting.

Our infectious disease pipeline, which is pending additional external funding or pharma partnership. It's a visit viewing a microtubule disruptor, which is being developed as a phase III and a phase III clinical trial for the treatment of hospitalized patients with viral induced L. D. S. Company also has an FDA approved commercial product do you have to see to female.

Internal condom, but a dual protection against unplanned pregnancy and sexually transmitted infections. This morning, we'll provide an update on our company's primary focus is the development of the Novus arm and oral sorry in combination with weight loss drugs like glucagon like peptide one receptor agonist, which we refer to slip one was clipped.

Dr. Mitchell Steiner: This morning, we will provide an update on our company's primary focus, the development of Inovasarm and Oralsarm, in combination with weight loss drugs like Glucagon Light Peptide 1 receptor agonists, which we're going to refer to as Glup-1 receptor agonists. These are being used to avoid... Novosarmen combination is used to avoid muscle loss and physical function loss to augment... fat loss and potentially result in We'll also provide financial highlights for our first quarter of fiscal year 2024.

One receptor agonist.

Is it being used to avoid Ah Ah Ah nobody arm in combination is used to avoid a muscle loss in physical function lost the argument fat.

Fat loss and potentially result in higher quality weight loss will also provide financial highlights for first quarter of fiscal year 2024.

Dr. Mitchell Steiner: Now, GLP1 receptor agonists like Ozempic, RICOVI, Stepan, and Monjoro are very effective weight loss drugs. Unfortunately, clinical studies have shown that up to 50% of the total weight loss comes from muscle, which is problematic, as muscle is necessary for metabolism, strength, and physical function. Loss of muscle may also be one of the reasons why patients on GLP1 drugs reach a weight loss plateau, meaning they cannot lose any more weight while taking the GLP1 receptor agonist drug. According to the CDC, 41.5% of older adults have obesity in the United States and could benefit from weight loss medication.

Now flip one receptor agonists like our sympathy with Kobe stepped down in Missouri, or very effective weight loss drugs. Unfortunately clinical studies have shown that up to 50% of the total weight loss kind of some muscle, which is problematic and its muscles necessary metabolism strength and physical function loss of muscle maybe also.

One of the reasons why patients unclear when the drugs reached a weight loss plateau, meaning they cannot lose any more weight, while taking a quick one receptor agonist drug. According to the C. D. C 41, 5% if older adults have obesity in the United States and could benefit from a weight loss medication after.

Dr. Mitchell Steiner: Up to 34.4% of these obese patients over the age of 60 have sarcopenic obesity. This large subpopulation of sarcopenic obese patients is especially at risk when taking GLP1 receptor agonist drugs for weight loss as they already have critically low amounts of muscle due to age-related muscle loss. Further loss of muscle mass when taking the GLP1 receptor agonist medication may lead to muscle weakness, leading to poor balance, decreased skate speed, mobility, disability, loss of independence, falls, bone fractures, and increased mortality. This can lead to a condition similar to age-related frailty.

34, 4% of these obese patients over the age of 60 have start to panic obesity.

A large population of start competing with these patients is especially at risk when chicken eclipsed one receptor agonist drugs for weight loss as they already have critically low amounts of muscle due to age related muscle loss further loss of muscle mass and taken a cliff one receptor agonist medications.

It may lead to muscle weakness, leading to poor balance decreased gait speed mobility disability loss of independence false bone fractures and increased mortality. This can lead to a condition similar to age related frailty because of the magnitude and the speed of muscle loss well on a clip one receptor agonist therapy for weight loss with one.

Dr. Mitchell Steiner: Because of the magnitude and speed of muscle loss on GLP-1 receptor agonist therapy for weight loss, GLP-1 receptor agonist drugs may accelerate the development of frailty in obese, overweight, elderly patients. We believe there is an urgent unmet medical need for a drug, when given in combination with a glyphon receptor agonist, that can prevent loss of muscle while preferentially reducing fat in not only all overweight or obese patients but especially for the large subpopulation of sarcopenic or overweight elderly patients who are at risk of developing muscle atrophy and muscle weakness leading to frailty. We believe that Inovasarm, a novel oral-selective angioreceptor modulator, may be the best drug candidate to address this unmet medical need.

Receptor agonist drugs may accelerate the development of frailty and obese overweight elderly patients.

We believe there is an urgent unmet medical need for a drug when given in combination with <unk> one receptor agonist that can prevent loss of muscle well preferentially reducing fat and.

And not only all overweight or obese patients, but especially for the large subpopulation asarco panic overweight elderly patients who at risk for developing muscle atrophy and muscle weakness leading to frailty, we believe that and Novus arm a novel oral selective Andrew receptor modulator may be the best drug candidates to address this unmet med.

Felipe Novus arm history has been previously studied.

Dr. Mitchell Steiner: Inovasarm has been studied in five clinical studies involving 960 older men and postmenopausal women, as well as older patients who have muscle wasting because of advanced cancer. These studies simulate a starvation state where there is significant unintentional loss or wasting of both muscle and fat mass like what is observed for the GLP-1 receptor agonist treatment. The totality of the clinical data from these five clinical trials demonstrates that Inovus arm treatment leads to dose-dependent increases in muscle mass with improvements in physical function as well as significant dose-dependent reductions in fat mass. The patient data that were generated from these five inovus arm clinical trials in both elderly patients and in patients with a cancer-induced starvation-like state provides strong clinical rationale for inovus arm.

Five clinical studies involving 960 older man in post menopausal women as well as older patients who have muscle wasting because of advanced cancer.

Vance cancer.

Stimulates a starvation state, where there's significant unintentional loss or are wasting of both muscle and fat mass like what is observed for the <unk> one receptor agonist treatment cause totality of the clinical data from these five clinical trials demonstrated another sharp treatment leaves you dose dependent increases in muscle mass within <unk>.

Mr physical function as well as significant dose dependent reductions in fat mass and patient data that would generate at least five and those are on clinical trials in both elderly patients and in patients with a cancer induce starvation like state provide strong clinical rationale for Novus arm. Our hypothesis is that an OS arm in combination.

Dr. Mitchell Steiner: Our hypothesis is that inovus arm in combination with a GLP-1 receptor agonist would potentially augment the fat reduction and total weight loss while avoiding muscle loss. In addition, inovus arm has a large safety database that includes 27 clinical trials involving 1,581 men and women, dosed with Inovasorm with a duration of treatment in some patients for up to three years. In this large safety database, Inovasorm was generally well-tolerated, and there was no increase in gastrointestinal side effects.

With a clip one receptor agonist for potentially augment the fat reduction and total weight loss, while avoiding muscle loss in it.

Dishing Novus arm has a large safety database, which includes 27 clinical trials involving 1500, and 81 men and women.

Those with the Novus arm with a duration of treatment some patients for up to three years and this is large safety database and Novus arm was generally well tolerated and no increase in gastrointestinal side effects. This is important because there's already significant infrequent gastrointestinal side effects with the cliff one receptor agonist streaming alone.

Dr. Mitchell Steiner: This is important, and there are already significant and frequent gastrointestinal side effects with the GLP1 receptor agonist treatment alone. As for our Inovasorm clinical program for high-quality weight loss, this week, I'm happy to report that the FDA has cleared our investigational new drug application for our Phase IIb multi-sensor double-blind placebo-controlled, randomized dose-finding clinical trial designed to evaluate the safety and efficacy of Inovasorm 3mg, 6mg of placebo, as a treatment to augment fat loss and prevent muscle loss in approximately The purpose of the Phase IIb trial is to select the optimal dose of enobosarum in combination with a CLP1 receptor agonist that best preserves muscle and reduces fat after 16 weeks of treatment to advance into a Phase III obesity or overweight clinical trial.

As far I noticed on clinical program for high quality weight loss. This week and I'm happy to report that the FDA has cleared our investigational new drug application for a phase two b multi center double blind placebo controlled randomized dose finding clinical trial designed to evaluate the safety and efficacy.

The Novus arm, three milligrams and six milligrams or placebo.

It's a treatment to augment that loss and because that muscle loss, approximately 90 randomized sarko panic obese or overweight.

Italy patients receiving semi glu tied to it.

Risk for developing muscle atrophy and muscle weakness.

Purpose of the phase II B trial is to select the optimal dose of an OS arm in combination with it with one receptor agonist that best preserves muscle and reduces fat after 16 weeks of treatment to advance into a phase III obesity overweight clinical trial. The primary endpoint of the phase two b clinical trial will be the change in lean.

Dr. Mitchell Steiner: The primary endpoint to the Phase 2B clinical trial will be the change in lean body mass from baseline to 16 weeks. Key secondary endpoints will be the change from baseline to 16 weeks in total fat mass, insulin resistance, total body weight, and physical function as measured by steroid-climbed tests. We plan to initiate the Phase IIb clinical study in April of 2024, and the clinical study will be conducted at approximately 15 clinical sites in the United States. The top-line clinical results from the Phase IIb clinical trial are expected at the end of calendar year 2024.

Body mass from baseline to 16 weeks and key secondary endpoints.

It'll be the change in baseline 16 weeks in total fat mass insulin resistance total body weight and physical function as measured by stair climb test we plan to initiate the phase two b clinical study in April of 'twenty 'twenty four and the clinical study will be conducted in approximately 15 clinical sites in the United States.

Topline clinical results in the phase two b clinical trial, we expected at the end of calendar year 2024, we believe that assessing the effect of <unk>.

Dr. Mitchell Steiner: We believe that assessing the effect of Inovasarm on lean body mass and fat mass in 16 weeks should be adequate to demonstrate significant loss of muscle in the semiglutide plus placebo cohort. Support comes from the Step 1 study reported by Wilding et al. in the New England Journal of Medicine publication.

And lean body mass and fat mass as 16 weeks should be adequate to demonstrate significant loss of muscle in the semi glu tide plus placebo cohort.

Where it comes from this step one study reported by Wilding at all in the New England Journal Medicine publication in a step one study evaluated semi glu tied for weight loss in overweight and obese patients and showed that 49%.

Dr. Mitchell Steiner: In the Step 1 study, it evaluated semiglutide for weight loss in overweight and obese patients and showed that 49 percent of the total weight loss in the 68-week study actually occurred by week 16, and 40 percent of the total weight loss was attributable to muscle loss. After completing the 16-week efficacy dose-finding portion of the Phase IIb clinical trial, it is planned that participants will then continue into an open-label extension trial where all patients will receive 6 milligrams of NovoSARM monotherapy for 12 weeks to determine the ability of NovoSARM to rescue or reverse muscle loss and prevent fat and weight rebound after stopping a GLP-1 receptor agonist. The results of the separate Phase IIb open-label extension study are expected in calendar Q2, 2025.

The total weight loss and a 68 week study actually occurred by week 16, and 40% of the total weight loss was attributable attributable to wait to muscle loss.

After completing the 16 week efficacy dose finding portion of the phase two b clinical trial is planned to participants will then continue into an open label extension trial, where all patients will receive six milligrams and then knows on monotherapy for 12 weeks to determine the ability of the novus arm to rescue which reversed a must.

The loss and prevent fat and weight rebound after stopping at group one receptor agonist the results of this.

The separate phase two be open label extension study are expected in calendar Q2, 2025 summary.

Dr. Mitchell Steiner: In summary, our Phase IIb clinical program is designed to provide clinical data to support the development of NovoSARM for high-quality weight loss in two possible patient populations. In the first population, NovoSARM dose-finding will be evaluated in the large at-risk sub-population of obese overweight patients who are sarcopenic obese overweight elderly patients receiving GLP-1 receptor agonists for weight loss. The Inovasarm-Glip1 Receptor Agonist Combination Therapy has the potential to augment weight loss by preferentially increasing fat loss while preventing muscle loss and improving physical function, potentially leading to higher quality weight loss. Second, Inovasarm monotherapy treatment for at-risk, sarcopenic, obese, overweight, elderly patients who discontinue a Glip1 receptor agonist. In this case, Inovasarm may rescue the patient by increasing muscle mass and improving physical function while preventing the rebound weight and fat gain that typically occurs when the Glip1 receptor agonist is stopped. We believe we have sufficient financial resources on hand, which includes the recent financing of net proceeds of $35.2 million, to complete and provide results for both the Phase 2B clinical trial and the Open Label Extension clinical trial. I will now turn the call over to Michelle Greco, CFO, and CAO, to discuss the financial highlights.

Our phase two B clinical program is designed to provide clinical data to support the development of the Novus arm for high quality weight loss with two possible patient populations. The first population no. Some dose finding will be evaluated in the large at risk population of obese overweight patients who are who are the stark.

Phoenix obese or overweight elderly patients receiving <unk>, one receptor agonist for weight loss.

The Inova sounds glib, one receptor agonist combination therapy has the potential to augment weight loss by preferentially, increasing fat loss, while preventing muscle loss and improving physical function potentially leading to higher quality weight loss.

No. It was a monotherapy treatment for the at risk Shakopee, Nick obese overweight elderly patients who discontinue it with one receptor agonist in this case and Nobody's Army rescue the patient by increasing muscle mass improving physical function, while preventing to rebound weight and fat game. It typically occurs when the glucagon receptor.

Agonist has stopped.

We believe we have sufficient financial resources on hand, which includes the recent financing with net proceeds of $35 two millions of hours to complete and provide results for both the phase two b clinical trial and the open label extension clinical trial.

I will now turn the call over to Michele Greco CFO CEO to discuss the financial highlights Michelle.

Thank you Dr. Steiner.

Michelle Greco: Thank you, Dr. Sainer. Overall, net revenues were $2.1 million, compared to $2.5 million in the prior year's first quarter. The U.S. prescription channel net revenues increased to $634,000 from $163,000 in the prior year's first quarter as a result of increasing sales through our telehealth portal. However, global public sector net revenues decreased to $1.5 million compared to $2.3 million in the prior year's first quarter due to the timing of orders and shipments.

Overall, net revenues were $2 $1 million compared to $2.5 million in the prior year's first quarter.

U S prescription channel net revenues increased to $634000 $163000 in the prior year's first quarter as a result of increasing sales through our telehealth portal glove.

Global public sector, net revenues decreased to $1 $5 million compared to $2 $3 million in the prior year's fourth first quarter due to the timing of orders and shipments.

Michelle Greco: Gross profit was $1.2 million, or 54% of net revenues, compared to $702,000, or 28% of net revenues in the prior year's first quarter. The increase in gross profit and gross margin is driven primarily by the change in the sales mix, with our U.S. FC2 prescription channel representing 30% of net revenues in the current period, compared to 7% in the prior period. Sales in our U.S. prescription channel have a higher profit margin. On December 18, 2023, we completed an underwritten public offering of our common stock, which included the exercise in full of the underwriter's option to purchase additional shares. Net proceeds to the company from this offering were approximately $35.2 million after deducting underwriting discounts and commissions and costs incurred by the company. All the shares sold in the offering were offered by the company.

Gross profit was $1 $2 million or 54% of net revenues compared to $702000 or 28% of net revenues in the prior year's first quarter.

The increase in gross profit and gross margin is driven primarily by the change in the sales mix with a U S. S. T. Two prescription channel representing 30% of net revenues in the current period compared to 7% in the prior period.

Sales in our U S prescription channel had the highest profit margin.

On December 18th 2023, we completed an underwritten public offering of our common stock which included the exercise in full of the underwriters' option to purchase additional shares.

Net proceeds to the company from this offering were approximately $35 $2 million after deducting underwriting discounts and commissions and cost incurred by the company all.

All the shares sold in the offering were offered by the company.

As of December 31st 2023, our cash balance was $46 million compared to $9 $6 million on September 30 of 2023.

Dr. Mitchell Steiner: As of December 31, 2023, our cash balance was $40.6 million, compared to $9.6 million on September 30, 2023. We believe our current cash balance will be adequate to fund the planned operations of the company as we continue to focus on developing an oversight for high quality weight loss. Now I'd like to turn the call back to Dr. Steiner. Thank you, Michelle.

We believe our current cash balance will be adequate to fund the planned operations of the company as we continue to focus on developing and over time for high quality wait long now.

Now I'd like to turn the call back to Dr. Steiner.

Thank you Michele it's only been recently that the significance of clinical need to avoid adverse affect them significant muscle loss caused by clip on receptor agonist has been appreciated all the glucagon receptor agonists work by creating a starvation state that non selectively reduces both muscle and fat tissues to cause weight loss.

Dr. Mitchell Steiner: It has only recently that the significance and clinical need to avoid adverse effects of significant muscle loss caused by GLP1 receptor agonists have been appreciated. All GLP1 receptor agonists work by creating a starvation state that non-selectively reduces both muscle and fat tissues to cause weight loss. Using a muscle-preserving drug in combination with a GLP1 receptor agonist would potentially allow for higher quality weight loss. However, I want to emphasize that Inovasarm is not competing with GLP1 receptor agonist drugs that are already on the market or under development for weight loss. The expectation is that Inovasarm may be potentially combined with any one of the many GLP1 receptor agonist drugs to avoid muscle loss and to augment fat loss. This is truly a new indication.

Using a muscle preserving dragging combination to slip one receptor agonists with potentially allowed for a higher quality weight loss I want to emphasize it's not competing with flip one receptor agonist drugs that are already on the market or under development. The weight loss. The expectation is that a no sorry, maybe potentially combined with anyone.

One of the many slip one receptor agonist drugs to due to avoid muscle loss into augment fat loss. This is truly a new indication.

We believe Novus arm as the best investigational drug candidate to address the muscle loss caused by a good one receptor drugs for weight loss and those armies of first in class.

Has oral once a day dosing has demonstrated tissue selectivity and utilize the well established known mechanism of action the androgen receptor.

Dr. Mitchell Steiner: We believe Novus Arm is the best investigational drug candidate to address the muscle loss caused by Glucoimbicceptor drugs for weight loss. Novus Arm is a first-in-class..., dose, has demonstrated tissue selectivity, and utilizes a well-established known mechanism favorably changing body composition. Activation of the angio-receptor increases muscle mass, improves physical function, and decreases fat mass to potentially achieve higher quality weight loss. The Novus Arm has a favorable safety profile and would not add to the gastrointestinal side effects that are already observed with GLP1 receptor agonist treatment. The global obesity and overweight drug market is projected to be $100 billion by 2030. It should be emphasized that Inovasar may potentially be combined with any one of the GLP-1 receptor agonist weight loss drugs, not only for older or overweight at-risk patients but also all overweight or obese patients who want to avoid muscle loss while taking a GLP-1 receptor agonist for weight loss. The combination of a novus norma, glipomys after agonist, potentially represents a multi-billion dollar global opportunity.

Favorably changed body composition activate the activation of the Angela receptor increases muscle mass, whose physical function and decreased fat mass to potentially achieve a higher quality weight loss.

The favorable safety profile would not add to the gastrointestinal side effects that are already observed with equipped one receptor agonist treatment.

Global obesity and overweight drug market is projected to be $100 billion by 2030 should be emphasized that nobody thought may potentially be confined with any one of the glucagon receptor agonist weight loss drugs not only for older overweight at risk patients, but also all overweight or obese patients who want to avoid muscle loss well taken.

It slipped one receptor agonist for weight loss the.

The combination of an Osama there, Switzerland receptor agonist potentially represents a multibillion dollar global opportunity.

We're very excited about the prospects of an episodic to address this new and important unmet medical need with the F. D. A go ahead, we're looking forward to the initiation of this important and timely phase two b clinical study.

With that I'll now open up the call to questions operator.

Ladies and gentlemen at this time, we will begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if you're using a speaker phone. We ask that you pick up your handset before pressing the keys to ensure the best sound quality to withdraw.

Dr. Mitchell Steiner: We are very excited about the prospects of Enobosar to address this new and important unmet medical need. With the FDA's go-ahead, we are looking forward to the initiation of this important and timely Phase IIb clinical study. With that, I will now open the call to questions. Ladies and gentlemen, at this time, we will begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, we ask that you pick up your handset before pressing the keys to ensure the best sound quality.

Your question. Please press Star then two.

Please limit yourself to one question and one follow up if you have further questions you may reenter the question Q.

Once again that is star one to rejoin the question queue.

Our first question comes from Dennis Dang with Jefferies. Please go ahead.

Hi, Good morning, Thanks for taking my question and congratulations on all the progress.

Just one for me around the obesity program given various Jill P. One.

Different levels of weight loss as well as muscle wasting, what whats clinically meaningful level of muscle preservation and what's clinically.

Operator: To withdraw your question, please press star then 2. Please limit yourself to one question and one follow-up. If you have further questions, you may re-enter the question queue. Once again, that is star 1 to rejoin the question queue.

Meaningful additional weight loss that you guys are looking for in your they used to be and how do you define success from that trial. Thank you.

Thank you good questions. So the first question relates to Hum.

Dennis Ding: Our first question comes from Dennis Ding with Jefferies. Please go ahead. Hi, good morning.

How are we going to view muscle loss and in particularly in the context of a phase two so youre absolutely right. All the good ones have muscle loss associated with them because the mechanism is hyper caloric calories.

Dr. Mitchell Steiner: Thanks for taking our questions and congratulations on all the progress. This one for me is around the OPC program. Given various JLP1s have, you know, different levels of weight loss as well as muscle wasting, what, you know, what's a clinically meaningful level of muscle preservation, and what's a clinically meaningful additional weight loss that you guys are looking for in your Phase 2b trial, and how do you define success in that trial? Thank you. Thank you. That's a good question.

In other words low calorie.

Amounts and that's why the muscle wasting it that way because it just doesn't it's not specifics one tissue type they all do it but the range is about 20 to about 50%.

And in a lot of it depends on the potency of the glucagon receptor agonist more potent and has a more muscle you lose.

Dr. Mitchell Steiner: So, the first question relates to how we're going to view muscle loss, and particularly in the context of our Phase II study. So, you're absolutely right. All the GLIF-1s have muscle loss associated with them because the mechanism is hypocaloric calorie, in other words, low calorie amounts, and that's why the muscle waste and fat waste are not specific to one tissue type. They all do it, but the range is about... 20% to about 50%, and a lot of it depends on the potency of the GLP1 receptor actives. The more potent it is, the more muscle you lose. With that success for us at 16 weeks, it shows that we can basically maintain muscle because we know we're gonna be losing about 40% of muscle with semaglutide.

With that said success for us at 16 weeks is a show that we can make basically maintain muscle because we know we're gonna be losing about 40% of muscle to December <unk> and we picked in our phase <unk> study only one clip one receptor agonist. So that we don't have the confounding concerned each group one receptor agonists may have a different muscle loss.

Amount. So we're using similar glu tide, which is we go V and so is the expectation based on the step one study is about 40% of the muscle loss Oh.

50% of weight loss. It occurs in the first 16 weeks, we'll be at that point.

We will define success as you stop into decline.

And so the delta is going to be the the difference between what we maintain and what what is lost and if we can maintain and stopped declining function and maintain function. That's that's considered a success. The other success. This is important is that fat loss.

Dr. Mitchell Steiner: And we picked in our phase 2B study only one GLP1 receptor agonist so that we don't have the confounding concern that each GLP1 receptor agonist may have a different muscle loss amount. So we're using semaglutide, which is Rig-O-V. And so the expectation based on the step one study is that about 40% of the muscle loss of half of the 50% weight loss that occurs in the first 16 weeks will be at that point. We will define success as stopping the decline.

And total body fat loss correlates with weight loss ultimately week 48, we chose to go to 16 weeks because we are using this the Texas scan think of as sort of a biomarker. We know if we maintain muscle at 16 weeks maintaining muscle at 48 weeks, if you lose fat and prevalence you lose more fat.

16 weeks, you would expect to see a deeper fat loss.

Dr. Mitchell Steiner: And so the delta is going to be the difference between what we maintain and what is lost. And if we can maintain and stop the decline in function and maintain function, that's considered a success. The other success, and this is important, is fat loss. And total body fat loss correlates with weight loss, ultimately at week 48. We chose to go to 16 weeks because we're using the DEXA scan; think of it as sort of a biomarker.

At 48 weeks so the ideas don't spend of 48 weeks now in the phase two.

Get the information you need which could cause there's examples of other drugs and which are.

They showed us the maintenance of muscle and show that reduction of fat at 16 weeks and it was fine.

Find meeting at 48 weeks you saw.

A further decline.

Client and fat in Florida, quite a weight loss with that said.

Dr. Mitchell Steiner: We know if we maintain muscle at 16 weeks, we'll be maintaining muscle at 48 weeks. If you lose fat, and preferentially lose more fat at 16 weeks, you expect to see a deeper fat loss at 48 weeks. So the idea is, don't spend 48 weeks in phase 2, get the information you need, which could be examples of other drugs in which, you know, they showed the maintenance of muscle and showed the reduction of fat at 16 weeks, and it was fine. Now, fine meaning at 48 weeks you saw, you know, a further decline in fat and a further decline in weight loss. With that said... You know, success for us is again focusing on lean body mass being maintained and greater fat loss at the 16-week time point.

You know success for US is again, focusing on lean body mass being maintained.

Greater fat loss.

At the 16 week time point now in terms of total weight loss.

If if we had a situation where we had a weight loss are comparable in both arms that would be great because what you're basically saying is the one army lost all fat.

That'll be the that'll be the same but glu titles, you lose fat and muscle and in the treated arm with the Novus arm you've maintained the muscle loss fat, but do you have the same weight loss, that's a high quality weight loss.

But the expectation is if you leave the muscle alone you can get it deeper weight loss as I mentioned in my comments. The concern is that you can look at any one of these 48 week 70, plus week studies.

Dr. Mitchell Steiner: Now, in terms of total weight loss, you know, if we had a situation where we had a weight loss comparable in both arms... That would be great, because what you're basically saying is in one arm you lost all fat, and that would be the systemic glutide, you lose fat, and you lose muscle. And in the treated arm, with the anomalous arm, you maintain the muscle, you lose fat, but you have the same weight loss. That's a high quality of weight loss. But the expectation is that if you leave the muscle alone, you can get a deeper weight loss. As I mentioned in my comments, the concern is that you can look at any one of these 48-week to 70-plus week studies in the lay press. People will tell you that after about 16 to 20 weeks on a GLP1 receptor agonist, they hit a plateau.

And in the late press that people will tell you that asked about 16 to 20 weeks on our glucagon receptor agonists. They hit a plateau. They just can't lose any more weight, what's happening there is they've lost enough muscle that kicks back in their appetite.

And that's why people, saying do resist an exercise to protein.

All of these studies have that same plateau, how do you get beyond that plateau and the answer is if you can maintain muscle you can have a much deeper way laws.

Compartment in obese patients so much larger than the muscle compartment. It's just you can't get to it because for every pound of muscle to take every pound of fat you take you pay with a pound of muscle of the 60%.

Dr. Mitchell Steiner: They just can't lose any more weight. What's happening there is they've lost enough muscle that it kicks back their appetite. And that's why people are saying to do resistance exercise and take protein. All these studies have that same plateau. How do you get beyond that plateau?

So so success for us would be if if we can show comparable weight loss.

With a different kind of body composition of 16 weeks the expectation that that would ultimately translate into a greater weight loss at 48 weeks, which would be.

Dr. Mitchell Steiner: And the answer is, if you can maintain muscle mass, you can have a much deeper weight loss. The fat compartment in an obese patient is so much larger than the muscle compartment. It's just we can't get to it because for every pound of muscle you take, every pound of fat you take, you pay with a pound of muscle if it's 50%. So success for us would be if we can show comparable weight loss with a different kind of body composition in 16 weeks, with the expectation that that would ultimately translate into a greater weight loss at 48 weeks, which is what phase three would be studying. With that said, the agency has made it clear that what they'll be looking for, if you look at total weight loss as your end point at 48 weeks, is an incremental increase in weight loss.

The phase III would be studying.

With that said the agency has made it made it maybe.

Made it clear that what they would be looking for if you look at total weight losses. Your endpoint at 48 weeks is a incremental increase in weight loss, but the incremental increase in weight loss at about 5%.

The total weight loss by the control arm. So it's not five percentage points five percentage points greater is 5% up so it's just it's a low bar to hit.

But if we can do that same low bar are greater.

And maintain muscle.

And which means most of that weight loss with fat that would be success at 48 weeks.

Dr. Mitchell Steiner: But the incremental increase in weight loss is about 5% of the total weight loss by the control arm. So it's not 5 percentage points greater, it's 5% higher, so it's a low bar to hit. But if we can do that same low bar or greater and maintain muscle, which means most of that weight loss was fat, that would be success at 48 weeks.

So hopefully I answered your question.

Yeah, Yeah, and maybe a quick follow up sure ill remind us that'll be.

The statistical assumptions from the phase two be on whether the study is powered to show stat Sig. Thank you.

Yeah, I'll be happy to have Dr. Gary by net answer that question. So soon.

Gary can you can you talk about the the sample size and power.

Yeah good morning.

Dr. Mitchell Steiner: So hopefully, that answers your question. Yeah, yeah. And maybe a quick follow-up. Can you remind us some of the statistical assumptions from Phase 2B and whether the study has the power to show statistics? Thank you. Yeah, I'll be happy to.

The way we did is we looked at the stuff one study stuff once probably lost.

About six kilos or mass over a six week period.

Dr. Gary Barnett: So I'm going to have Dr. Gary Barnett answer that question. So, Gary, can you talk about the sample size and power? Yes, this is Gary Barnett.

Just to assume a linear loss of muscle that would be 0.102 kilos per week multiply that by <unk> 16.

Dr. Gary Barnett: The way we did it was we looked at the Step 1 study. The Step 1 study lost... about six kilos of lean mass over a 68-week period. That, if you just assume a linear loss of muscle, that would be 0.102 kilos per week. Multiply that by 16 weeks, and you get approximately 1.6 kilos of loss of lean mass in the first 16 weeks in the control arm, meaning the glycol and plus placebo. If we look at our data that we have in obese patients, obese patients with cancer, cancer, as Mitch mentioned, has a tendency to create a hypocaloric state, much like a starvation state. We basically maintain a lean mass in that patient population. So it's a 0.3 kilo loss to a 0.4 kilo increase.

16 weeks, you get approximately 1.6 kilos of lots of lien bias in the first six two.

The control arm.

Blip, one plausible thibault.

We looked at our data that we have.

Patients are obese patients with cancer cancer mismatch in cancer.

Has the tendency to create hyper cohorts they are.

Much like in starvation state, we basically maintain lean back in that patient population. So it's a 0.3 a.

Kilo loss to a 0.4 kilo increase so what we did is we use that alpha a point or two sided 80 hour comparing.

Dr. Gary Barnett: So what we did is we used an alpha 0.05 two-sided, 80% power, comparing a 1.6 kilo expected loss in the control arm versus a minus 3 kilo or minus 0.3 kilo loss in the treated group, and that's approximately 26 subjects per arm we powered at 30. Now, let me also say this, as Mitch mentioned, 49% of the loss of weight occurs in the first So what happens if you take that number and say that 49% of the muscle also is lost, that's over 3 kilos of lean mass that we're expected to lose, but we're being conservative in our sample size calculation using negative 0.3 versus negative 1.6. Right, so the expectation is you're going to have much greater muscle loss than we put into the numbers to be conservative in the arm that's getting the semiglutide without Thank you. That was very helpful.

Oh 1.6, kilo expected loss in the control arm versus the minus three kilo or minus points three kilo loss in the treated group.

Approximately 26.

26 subjects per arm, we repower a burden.

Let me also say this that Mitch mentioned, a 49% of the of the loss of weight occurs in the first 16 weeks of a good one.

Treatment, so what happens with us.

Back.

That number and say that 49% of the muscle also whose laws that REIT over three kilos of lean mass we're expected to lose but we're being conservative in our sample size calculation using 0.3 negative 0.3 versus negative one six.

Right.

So the expectation is you're going to have a much greater.

Muscle loss than we'd planned to then we've put into the numbers to be conservative.

In the in the arm that's getting the same at Blue time without an oversight.

Alright. Thank you that was very helpful. Thank you. Thank you. Thank you for the question.

Dr. Mitchell Steiner: Thank you. Thank you. The next question comes from Leland Gershel with Oppenheimer. Please go ahead. Hey, good morning, Mitch.

The next question comes from Leland <unk> with Oppenheimer. Please go ahead.

Hey, good morning, Mitch Thanks for taking our questions.

Leland Gershel: Thanks for taking our questions. If you could just discuss with us how you're going to define eligibility in terms of what it means to be sarcopenic for entry into the trial, thanks.

You could just review with us how you're going to define the eligibility in terms of.

What it means to be a circa Phoenix for entry into the.

Thanks.

Yeah. So the so what we're doing to make sure we get the biggest patient population as possible as restrict Canadian to age. So so if you look at it we say greater than the age of 60, great. In Asia 60 puts you in that population of 42% of patients that could potentially use a obesity drug because they are visa over.

Dr. Mitchell Steiner: Yeah, so what we're doing to make sure we get the biggest patient population as possible is restricting it to age. So if you look at it, we say greater than the age of 60 puts you in that population of 42% of patients that could potentially use an obesity drug because they're obese or overweight. So that gets you a wide net.

Wait so that gets you a wide net we also know and this comes from our previous experience and frailty and I'm going to pause for a moment I mean, Dr. Gary by Matt and myself and Dr. Domingo Rodriguez and Gary Birdies at all people here, we worked on it we've been working on our space if royalty.

Dr. Mitchell Steiner: We also know, and this comes from our previous experience in frailty, and let me pause for a moment. I mean, Dr. Gary Barnett and myself, Domingo Rodriguez, and Gary Bird, these are all people here. We worked on, we've been working on a space of frailty for at least 15 years with Anobisarm in these patient populations that we have shared the data both in frailty patients, postmenopausal women, and also cancer wasting patients that are older. The reason I bring that up is that we had to deal with all the endpoints that the FDA wants for physical function. We had to understand the amount of muscle that somebody loses from the age of 60 to the age of 80 and what's the critical amount of muscle that gets you to a point where you have problems with functional limitations, mobility, and disability.

You know if you know at least 15 years with Novus arm in these patient populations that we have to find we have shared with you to share the data both in VLT patients post menopausal women and also cancel wasting patients that are older and the reason I bring that up is that we had to deal with all the endpoints the FTE.

Once physical function, but had to understand the the amount of muscle that somebody who loses in the six years of age 80, and and and you know what should a critical amount of muscle that gets you to a point that you you have problems with a functional limitation you end up with functional limitations mobility disability. So we bring all of that history.

Dr. Mitchell Steiner: So we bring all of that history with us as we look at the accelerated development of frailty that occurs in older patients. So the fact that you're 60 means you're already beginning to decline in muscle, and so the idea is rather than trying to come up with a sarcopenic definition for a population, of which there are many, just allow patients over the age of 60, they're going to have reduced muscle mass, follow them along for the 16 weeks, and if you're going to lose, as Dr. Barnett said, you could lose as much as You're accelerating their frailty. You're going to see some problems.

With us as we look at this accelerated development of frailty that occurs in older patients. So the fact that your 60 you're already beginning.

Blaine it muscle and so the idea is rather than trying to come up with asarco peanut population soccer.

Soccer Panic definition for a population, which there are many just just allow patients over the age of 60. They can have reduced muscle mass followed them along for the 16 weeks and and and if you're going to lose it.

It's Dr. Barnett said, you could lose as much <unk>, three and a half kilos in the semi glu tied alone.

You're accelerating free out that youre going to youre going to see problems. So so we wanted to have a wide widened that so the way to think of it as we used greater than 60.

Dr. Mitchell Steiner: So we want to have a wide net. So the way to think of it is we use greater than 60 as the eligibility if they're overweight or obese, that patient population is enriched for the patients that will get into trouble. All right, that's very helpful. And then just to follow up, you know, being that from what we understand, you know, to maintain benefit from weight loss from the GLP-1 therapy, one has to stay on that therapy for, you know, for long term, effectively for life, how do you view, you know, the ultimate use of a NOVASAR, I'm assuming approval over time, would it be used as well, kind of, The entire time that the GLT-1 is used, or would it be used only during the time that the weight loss is actually occurring, but then once the patient achieves their target weight or their plateau weight, they could.., go off since they wouldn't be losing any more. Mass, how should we think about that?

As the as the eligibility.

If the overweight or obese that patient populations enrich for the patients that will get into trouble.

Okay. That's very helpful. And then just a follow up you know being that from what we understand you know maintaining benefit from weight loss from the GOP. One therapy. One has to stay on that therapy for you know for for long term effectively for life. How do you view the ultimate use of the note disarm assuming approval.

<unk>.

Overtime, what would it be used as well.

Of.

The entire time with the guilty one that's used or would it be used only during the time that the weight loss is actually occurring then once the pension the cheese there.

Our good weight or their petro waste they could.

So austin, they wouldn't be losing anymore.

How should we think about that.

Dr. Mitchell Steiner: Yeah, so part of the reason we're doing Phase 2B the way we're doing it is to get some questions answered to address that question. So, for example, the first part, which is the primary study, is in combination with GLP-1. You know, how does the novus arm work? Do we maintain muscle? How much additional fat do we lose? And so that gives you that information.

Yes, so part of the reason we're doing the phase two b the way we're doing it just to get some questions answered to address that question. So for example, the first part which is the primary study is in combination with it slipped one.

How does the Novus arm work and we maintain muscle how much additional fat do we lose them and and and and so that gives you that information and of course physical function.

Dr. Mitchell Steiner: And, of course, physical function and seeing how we can prevent the decline of physical function. The second part, the open label study, it's kind of addressing the question you're asking, that is, if you stop the clip once... The patient that did not take Inovasarm in combination, and they've lost muscle, and the fear is if you stop with Glyp1, you get the rebound weight gain, which is almost all fat, and you've actually made them worse, because now they have less muscle, and they have the same weight, but it's all fat and weaker. And so it would be nice to see what the effect of Inovasarm is in that situation to So here's some examples. One.

And how we can prevent the decline in physical function and.

That second part of the open label study and it is kind of addressing the question you're asking that is if you stop the glib one.

So the patient that did not take a novus arm in combination and they've lost muscle and the fear is stopping with one you get the rebound weight gain which is almost all fat that you've actually made them worse, because now they have less muscle and they have the same weight, but its all fat and the weaker and so it would be nice to see what the effect of the nobu.

Isn't that situation to rescue and prevent the rebound weight gain in fact game and those pieces of information will allow us to think more globally.

High level like you were thinking and that is how would you use it. So here are some examples one.

Dr. Mitchell Steiner: Could a NovoSARM, which by itself has a direct effect on reducing fat and maintaining muscle, in combination with a GLP-1 receptor agonist, be used in combination so you can use less of the GLP-1 receptor agonist? As you know, GLP-1 receptor agonists have GI toxicity, and that's the reason why people have all kinds of gastrointestinal pain, nausea, vomiting, diarrhea, bloating, and that kind And we can decrease some of those with an agent like a NovoSARM that doesn't have any of that. Then you could have a situation where the combination of a GLP-1 with a NovoSARM, you can have less of the GLP-1, potentially. The other way to think of it is the biggest problem that is occurring now is everybody got onto GLP-1s, and they're recognizing they have hit this plateau. The plateau, as I mentioned in my previous comments, is because, particularly in a sarcopenic abuse patient or an elderly patient, where they have very little muscle reserve, it happens because when muscle goes down to a critically low level, it kicks off the appetite mechanism. The appetite mechanism is pretty powerful. It won't let you die.

Couldn't novus arm, which by itself has a direct effect on reducing fat and maintaining muscle in combination with <unk>. One receptor agonist be used in combination. So you can use less of it with one receptor agonist receptor.

Scepter agonists have a Gi toxicity and that's the reason why people have all kinds of a gastrointestinal pain, nausea, vomiting, diarrhea, and bloating and that kind of stuff and we can decrease some of those with an agent like an episodic. It doesn't have any of that and you could have a situation where the combination of a glib one with the Novus arm you can have less.

Is it a good one potentially.

The other the other way to think of it is the biggest problem that that that is occurring now as everybody got onto clip ones and they're recognizing that hit this plateau.

And the plateau as I mentioned in my formal comments is because particularly in asarco Phoenix obese patient an elderly patient with.

They have very little muscle reserve happens because when muscle goes down to critically low level. It kicks off the appetite mechanism appetite mechanism pretty powerful it won't let you die.

Dr. Mitchell Steiner: And so that happens, then you basically have a push-me-pull-you where the clip one is making you lose weight, lose weight while the appetite is asking you to put the weight back on, all because muscle has triggered that. If you maintain muscle... Then the question is, can you have a deeper fat loss? If you have a deeper fat loss, then, again, the combination of R-Drug plus Glyph-1 would be of higher quality but better from the point of view that you mentioned, that is, what is the target weight loss that you want? So if you want a target weight loss that's beyond what your muscle will allow, again, you know, if you do the 50-50 rule, for every pound of fat you lose, you lose That's a lot to pay for.

And so if that happens then you basically have a push me pull you with the Cliff one is making you lose weight.

Lose weight, while the appetite is asking you to put the weight back on all because of muscles triggered that if you maintain muscle.

Then the question is could you have a deeper fat loss have you ever deeper fat loss than than the again, the combination of Archrock plus it with one that'd be higher quality, but better.

At the point of view that you mentioned and that is what is the target weight loss. If you want so if you wanted to target weight loss, that's beyond what your muscles will allow again.

If you do the 50 50 rule for every.

Pounds of Fat and you lose you lose a pound at muscle that's a lot to pay for it because you don't have to make that payment and you can lose a lot more of the fat. Then then you can have a better success in getting to your target weight potentially.

Dr. Mitchell Steiner: If you don't have to make that payment and you can lose a lot more of the fat, then you can have better success in getting to your target weight, potentially. And so, that could be very interesting in getting rid of the plateau. And so, again, I would see a nobis arm in combination with a GLP-1 will allow you to manipulate the GLP-1 to reduce the dose potentially and to potentially get to your target weight without hitting the plateau. Now, what happens if you want to stop?

And so that could be very interesting and getting rid of the plateau and so again I would see novus arm in combination with a group one will allow you to manipulate to cliff wanted to reduce dose potentially and to potentially get to your target weight without hitting a plateau now what happens if we wanted to stop as you know.

Dr. Mitchell Steiner: You know, the chronicity of GLP-1, do you take it for the rest of your life? And some people want to get off of it because of side effects. So, if you could have a drug like nobis, that could be given almost like you're cycling. So, you stop the GLP-1, keep the nobis arm going, then you maintain muscle. And Nobis arm has direct effects on fat, so it decreases the potential for the rebound of fat. And then bring back the GLP-1 if you want to get back to your target weight again and keep avoiding that accelerated rebound and just have a more gentler weight loss. And that's when I say high quality; high quality means weight loss where your muscle and fat body composition is such that the appetite mechanism that gets you into trouble.

You know the Chronicity of a cliff one do you take it for the rest of your life and some people wanted to get off of it because of side effects. So if you could have a drug.

Like an OS arm that could be given almost like you're cycling. So he's stopped equipped one keep the nobu song going then you maintain a muscle and and and and that was sort of has direct effects of fad should decrease the potential for the rebound of fat and and then bring it back to clip. One if you. If you want to know if you wanted to get back.

To your target weight again.

And keep avoiding that accelerated rebound and just have a more gentler.

Weight loss and that's when I say high quality high quality means you know weight loss with your muscle.

And fat body composition is such that.

The appetite mechanism.

And it gets you into trouble.

Dr. Mitchell Steiner: In summary, ICS being used in combination with CLIP-1 chronically, potentially changing the CLIP-1 dose, potentially using the drug to help you decide how you want to stop the CLIP-1 and add it back in. And then furthermore, for those patients that got into trouble, that did not start with a NOVUS arm and took a Gluc1 and want to discontinue the drug, then they have an opportunity to build their muscle back if they lost So there's a lot of information there, but I think the Phase 2B, again, it's not meant to be the Phase 3 study, where you say, okay, I'm going to look at weight loss at 48 weeks, and my 5%..., you know, greater than five percent greater than the weight loss of the control arm. No, this is asking the very critical questions of how, ultimately, do we want to use Inogu's arm. And at a very high level, the two areas are where to clip one, and the second area is to rescue somebody on a. Sorry, thanks for the added information.

Marie I see us being used in combination with a quick one.

I honestly potentially changes with one dose.

Potentially using the drug to help you decide how you want to stop the clip one and add it back in and then Furthermore for those patients that got into trouble. They did not start with the Novus arm and took a quick one in.

One of the discontinue the drug and they have an opportunity to build that muscle back if they lost significant muscle what it potentially stop the.

Of fat rebound, we regain so there's a lot of information there, but I think the phase to be again, it's not meant to be the phase III study, where you say, okay. When we look at weight loss at 48 weeks and in my 5% Yeah.

Greater than 5% greater than the weight loss of the control arm. No. This is asking do very critical questions of how how ultimately we wanted to use novus arm.

And in the very high level. The two areas are where the coupon and the second area is to rescue somebody on a quick one.

Alright, thanks for the other intervention.

Operator: Thank you. Again, if you have a question, please press star, then 1. To withdraw your question, press star, then 2.

Thank you.

Again, if you have a question. Please press Star then one to withdraw your question Press Star then two.

Yi Chen: Our next question comes from Yi Chen with HC Wainwright. Please go ahead. Thank you for taking my questions. Just to clarify, because Enobosome has the ability to preserve muscle mass, in the Phase IIb trial, it is possible that within the first 16 weeks of Enobosome plus GLP-1 drug combo versus GLP-1 drug alone, for the combo arm, we could see patients lose less total weight versus the GLP-1 drug alone arm. Is that right? No, I don't think so.

Our next question comes from E. Chen with H C. Wainwright. Please go ahead.

Thank you for taking my questions just to clarify because the <unk> has the ability to preserve muscle mass that pain.

The phase two B trial it is.

Possible gaps.

The first a 16 week of Osama.

Some pluses G. L. P. One drug combo versus PD L. P. One drug alone.

For the combo arm, we could see patients lose less total weight versus G. L. P. One drug on longhorn is that right.

No no I don't think so I think I think what you're going to see in this situation is what's missing in your characterization of the Novozymes isn't always arm does two things one is it preserves muscle and two it also arguments of fat loss.

Dr. Mitchell Steiner: I think what you're going to see in this situation is what's missing in your characterization of an ovus arm. An ovus arm does two things. One, it preserves muscle, and two, it also augments fat loss. So a GLP1 receptor agonist by itself is muscle and fat. And so if we have a situation where you maintain the muscle, again, we're not trying to make Arnold Schwarzenegger, so we're not trying to pick a dose that you put so much muscle on that that has to counteract the amount of fat that you've lost. Part of it is can you dial down the muscle part so that you maintain muscle, but you make it up by reducing the fat even more than GLP1 by itself. That's the idea.

So that still shows so a slip one receptor agonist myself, it's muscle and fat and and so we have a situation where you maintain the milestones again, we're not trying to make Arnold schwarzenegger's without trying to pick a dose that you put so much muscle on there that has to counteract the amount of fat that you've lost.

Part of it is can you dial down are the muscle part so that you maintain muscle, but you make it up by reducing the fat even more adequate one by itself.

Dr. Mitchell Steiner: If it didn't have direct effects on fat, I would say, okay, I don't know what's going to happen. But it has direct effects on fat. And so it could be possible that a higher dose of Inovazone, I mean, you have the same muscle, a similar muscle maintained, but you have a greater fat loss. So we're going to learn that in Phase 2B at 16 weeks. And so again, the key thing here is can we maintain the muscle, you know, get a deeper fat loss, and the semi-glutide is going to take the muscle and fat equally. And by 16 weeks or so, you're starting to hit the plateau. Would it be meaningful to have an arm receiving a Nobel Prize alone in this tradition? So we've thought about that, because an opus arm alone would be very, very interesting.

That's that's the idea if it didn't have direct effects on fan out and say, okay. I don't know, what's going to happen, but it has direct effects on fat. So it could be possible that at higher doses and overtime. I mean, you have the same muscle with similar muscle maintained them, but you have a greater fat loss. So we're going to learn that in.

In the face to be at 16 weeks and so again the key thing here is can we maintain the muscle.

Do you prefer to get a deeper fat loss and and are in the same igloo tide, it's going to take muscle and fat equally in the 16th.

16th week, so you're starting to hit the plateau.

But would it be meeting for to have an arm with shipping some alone in this trial.

So we thought if we thought about that.

Because because they never saw them alone would be very very interesting, but we have again.

Not in obese patients, but we have in patients that are normal.

Dr. Mitchell Steiner: Not in obese patients, but we have it in patients that are normal, post-menopausal, elderly patients. We know a lot about Novozarm in that setting as monotherapy. And we do have data from a 504 study in a subset of patients that were obese in the lung cancer study that pretty much falls in line. And that is what we saw in that study, where the cancer caused basically a starvation state, but we saw we were able to maintain muscle. Muscle was about 0.3 kilos, where the CLP-1 lost about, I guess in that study, about 3 kilos or something to that effect. And we looked at total weight at 21 weeks. There was much greater weight loss in the anobis arm than in the placebo arm in that patient population. What we saw was that the weight loss was due to fat loss because you maintained your muscle.

Post menopausal elderly patients. So we know a lot about novus arm that setting as monotherapy and we do have data from a five or four study in a subset of patients that were obese and the lung cancer study that that pretty much falls in line.

With what I, just said and that is what we saw in that study where the cancer causes basically a starvation state that we saw we were able to maintain muscle muscle was about a 0.3 kilos, where the where the clip one lost about I guess in that study about three kilos or so.

That story.

And and when you look at total weight at 21 weeks.

There was no much greater weight loss in the in the nobis arm arm than the placebo arm in that patient population, where we saw the weight loss was due to the fat loss cause you've maintained the muscle. So we do have data like that I think for purposes of this this study here.

Dr. Mitchell Steiner: So we do have data like that. I think for the purposes of this study here, we're not trying to make anobis arm by itself a weight loss drug. I think we need to get clarity. And again, no company out there at this point has clinical data for their drug in combination with one of their drugs. It's more important to understand what the magnitude of the hypocaloric influence is and what the dose we need to counter that.

We're not trying to make a novus arm by itself the weight loss drugs, I think we're where we need to get.

Clarity.

And again no no company out there at this point now has clinical data in combination with one of their drugs.

It is to get that information because that's more important understanding what is the what is the magnitude of the hypo caloric influence and and what is the dose we need to counter that and then that will allow us to ask additional questions later.

Dr. Mitchell Steiner: And then that'll allow us to ask additional questions later. You mentioned that in a future phase 3 trial, the end point could be measured at 48 weeks. Is that correct?

Yeah.

Got it.

Did that in a future phase three trial.

Endpoint could be measured.

At 48 week is that correct and I also wonder how many patients could be required for a future phase three trial and weather.

Dr. Mitchell Steiner: And I also wonder how many patients could be required for a future phase 3 trial and whether Veru plans to conduct the trial by itself or potentially with a partner. Yeah, so the answer is we're absolutely seeking a partner, but the way we're designing this study, the way we're thinking about it is, we have a phase three that is potentially an all-comers study, in which case weight loss is your endpoint, and the weight loss endpoint, all you have to show is a 5% incremental increase, which means that would be, again, the standard endpoint of 48 weeks. The FDA wants it to be for at least a year.

Their route plans to conduct a trial by itself or potentially with a partner. Thank you.

Yeah.

So the so the answers.

Absolutely seeking a partner, but the way we're designing this study is the way we're thinking about it is you have a phase III that is potentially an all comers study in which case weight losses, your endpoint and the weight loss endpoint Oh, we have shows 5% incremental increase.

Which means.

That would be again, the standard endpoint at 48 weeks your F. T. He wants you to be at least a year. However.

Dr. Mitchell Steiner: However, embedded in that study are the patients that are in our Phase 2B, greater than 60 years of age, and the reason we picked that patient population is because physical function, potentially lean body mass, could be an interesting end point in itself. So depending on how our discussions go with the FDA, do we focus on a sub-population in which the clinical benefit-risk ratio is different, and the end points are going to be different, potentially? Or do you go after a weight-loss population, in which case you're not worried about muscle, just get the muscle function because that would be something that you can put on your label, and I think that would be important. But you know, get the end point of a 5% better decrease in weight at week 48, and you'll get it.

However, embedded in that study of the patients that are in our phase to be greater than 60 years of age.

And and the reason we picked that patient population is because physical function and.

Potentially lean body mass could be interesting endpoint in itself so depending on how our discussions go with the F. D. A do we do we focus on a subpopulation, which a clinical benefit risk ratio is different and the endpoints are going to be different potentially.

Or do you go after a wave last population.

And in which case, you're not worried about muscle just get the muscle function because that'll be something that you can put in your label and I think that will be important but get you know get get the endpoint of 5% better decreasing wait at week, 48, and <unk> and you get it.

Dr. Mitchell Steiner: Gary, do you want to add anything to that? No, I think the outcome of the study that we're running will dictate that, will dictate where we go and how big that study will be, what the primary endpoint will be, whether the FDA is purely looking at weight loss or whether they're looking at weight loss, as Mitch mentions, as a component of body composition, increasing or maintenance of lean mass and increasing fat reduction would be, in my opinion, a very positive outcome for these patients. And that quality, what I'm going to term as quality weight loss, would be very important for overall health benefits. The fact that we're measuring physical function, we know the FDA likes how a patient feels, functions, and survives.

Gary do you want to add to add to that.

No I think the outcome of the study.

But we're running will dictate that will dictate where we go.

And how big that study will be what the primary endpoint will be.

Whether the FDA, just purely looking at weight loss or whether they're looking at weight loss.

Okay.

With a component of body composition.

Briefing or maintenance or lean back.

And increasing Frac reduction.

It would be.

My opinion, a very positive outcome for these patients.

And I've got quality, well, what I'm gonna affirm its quality weight loss would be very important.

For overall health health benefit.

But the fact that we are measuring physical function, we know the F. G likes of outpatient feels functions or survives and so that's why the stair climb test, which is a key component of the phase two b is important because I think that will also influence how we think about endpoints in phase II.

Dr. Mitchell Steiner: And so that's why the STAIRCLIMB test, which is a key component of Phase IIb, is important because I think that will also influence how we think about endpoints in Phase IIb. Ultimately, we think of NovoSarum as a kind of programmatic molecule, meaning that you're looking at rescue, you're looking at decreasing doses of flipped ones, you're looking at it being used in combination with the whole population, you're using it in combination with an at-risk population. It could potentially be used in combination with a myostatin inhibitor.

Ultimately, we think you know we think an Osama is it kind of a programmatic molecule, meaning that you're looking at rescue you're looking at decreasing doses. It flipped ones you're looking at being used in combination with the whole population. It was used in combination with a with a risk population.

Potentially be used in combination with myostatin inhibitor can potentially be used so I think this can be pretty interesting and and so you know.

Dr. Mitchell Steiner: So I think this can be pretty interesting. We are active in trying to find a partner that has the resources to allow us to explore all these possibilities. Thank you. Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Dr. Mitchell Steiner for any closing remarks. Thank you, operator. I appreciate everybody who joined us on today's call. We're very, very excited about the prospects at Enobisarm. I look forward to updating you on our progress on the next investor call. Thank you. The digital replay of the conference call will be available beginning at approximately noon Eastern time today, February 8th, by dialing 1-877-344-7529 in the U.S. and 1-412-317-0088 internationally. You will be prompted to enter the replay access code, which will be 826-0066. Please record your name and company when joining. The conference call has now concluded. Thank you for attending today's discussion.

We are active in in trying to find a partner that test.

The resources to allow us to explore all these possibilities.

Thank you.

Ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Doctor Mitchell Steiner for any closing remarks.

Thank you operator, I appreciate everybody being who joined US on today's call are and we're very very excited about the prospects of Novus arm I look forward to updating you on our progress into next investor's call. Thank you.

The digital replay of the conference call will be available beginning approximately noon eastern time today February eight by dialing 187734475 to nine in the U S and one for one to three years.

170088 internationally, you'll be prompted to enter the replay access code, which will be eight to 60066. Please record your name and company when joining.

The conference call has now concluded thank you for attending today's discussion.