Q1 2025 Veru Inc Earnings Call
Speaker Change: Good morning, ladies and gentlemen, and welcome to Baruch Inc.'s Investors Conference Call.
Speaker Change: 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.
Speaker Change: After this morning's discussion there will be an opportunity to ask questions.
Please note that this event is being recorded.
Speaker Change: I would now like to turn the conference over to Mr. Sam Fisch, Baruch Inc.'s Executive Director, Investor Relations and Corporate Communications. Please go ahead.
Speaker Change: The statements made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to,
Speaker Change: Statements of the Company's Plans, Objectives, Expectations, or Intentions regarding its Business, Operations, Regulatory Interactions, Finances, and Development of Product Portfolio.
Speaker Change: 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 statements.
Speaker Change: Risks that may cause actual results or developments 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, Veritrix Chairman, CEO, and President.
Speaker Change: Good morning. With me on this morning's call are Dr. Gary Barnett, Chief Scientific Officer, Michele Greco, Chief Financial Officer and Chief Administrative Officer, Michael Purvis, General Counsel and Executive Vice President of Corporate Strategy, and Sam Fisch, the Executive Director of Investor Relations and Corporate Communications.
Speaker Change: Thank you for joining our Q1 fiscal year 2025 earnings call.
Speaker Change: A drug development program consists of two clinical-stage new chemical entities, Enobosarum
Speaker Change: NovoSARM is an oral selective angioreceptor modulator, SARM, and it's being developed as a new generation of drugs that make GLP-1 receptor agonist weight reduction more tissue-selective by preserving lean mass, which is muscle.
Speaker Change: and Physical Function and Augmenting Fat Loss in Older Patients Who Overweight or Have Obesity.
Subisubulin is an oral microtubule disruptor.
Speaker Change: and it's being developed as a broad anti-inflammatory agent to reduce inflammation to slow the progression or promote the regression of atherosclerotic cardiovascular disease. On December 30, 2024, the company sold its FDA-approved commercial product, the FC2 female condom.
Let's talk about our BC program.
Speaker Change: Obesity, as defined by FDA, is a disease of excess body adiposity or fat. The medical objective is to treat obesity by weight reduction drug or drugs in combination should be to reduce excess body fat to improve the mobility and mortality associated with obesity.
Speaker Change: GLP-1 receptor agonists have been shown to produce significant weight loss in patients who are overweight and have obesity. Unfortunately, the weight loss is tissue non-selective, with loss of both fat and lean mass.
which contains muscle.
Speaker Change: Of the total weight loss, 20-50% of the total weight loss reported by patients was attributable to lean mass loss.
Speaker Change: According to Medicare, 22% of the U.S. population is greater than 60 years of age, and that represents 70 million people.
Speaker Change: Based on the Centers for Disease Control and Prevention data, 41.5% of older adults are obese and could benefit from weight reduction medication.
Speaker Change: Up to 34.4% of patients over the age of 60 with obesity in the United States have what's called sarcopenic obesity. Sarcopenic obese patients are patients who have obesity and low muscle mass at the same time and are potentially at the greatest risk for developing critically low muscle mass when taking the current approved GLP-1 receptor.
Magnus
Speaker Change: We therefore believe there is an urgent unmet need for a new generation of obesity drugs like Inovasarm.
Speaker Change: that can prevent the loss of muscle and allow the preferential loss of fat in older patients who are overweight or have obesity receiving GLP-1 receptor agonist therapies for weight reduction.
Speaker Change: Novosarum is a next generation drug that makes weight reduction by GLP-1 receptor agonist drugs more tissue selective for fat loss. Let's talk about our Phase 2B quality clinical study update.
on January 27, 2025.
Speaker Change: The company announced positive top-line results from the Phase IIb quality clinical study.
which is a multi-center, double-blind, placebo-controlled, randomized, dose-binding clinical trial.
Speaker Change: designed to evaluate the safety and efficacy of anomosome 3mg, anomosome 6mg, or placebo as a treatment to augment fat loss and prevent muscle loss in sarcopenic obesity in overweight patients over the age of 60 receiving semaglutide.
Speaker Change: The study was conducted in 14 clinical sites in the United States.
Speaker Change: The Phase IIb Quality Study is the first human study to report the effects of a muscle preservation drug candidate on body composition in older patients who have obesity or are overweight receiving a GLP-1 receptor agonist.
Speaker Change: In a top-line efficacy analysis, the trial met its pre-specified primary endpoint with a statistically significant
Speaker Change: clinically meaningful benefit in the preservation of total lean body mass in all patients receiving the Novozombilis semaglutide versus placebo
Speaker Change: plus the magnetite alone at 16 weeks. It was a 71% relative reduction in lean mass loss, and that p-value is 0.002.
As for the secondary clinical endpoints, the novosarum semaglutide treatment
Speaker Change: resulted in dose-dependent greater loss of fat mass compared to placebo and somatotide alone.
Speaker Change: with a 6 mg dose, having a 46% greater relative loss of fat mass compared to placebo plus semaglutide group at 16 weeks. And that p-value is 0.014.
Speaker Change: Although Inovasorm semaglutide significantly preserved lean mass, the additional loss of fat mass caused by Inovasorm treatment was able to replace the lean mass preserved to allow a similar net mean weight loss with semaglutide at 16 weeks.
Speaker Change: Accordingly, the tissue composition of the total weight loss shifted to greater and selective loss of fat with the NOVASARM treatment.
Speaker Change: The median percentage of total weight loss in the placebo somatotype group that was due to lean mass was 32% and the estimated fat loss was 68%. In contrast, in the all-anovosom plus somatotype group,
loss versus 99.1% fat loss.
Speaker Change: Therefore, Inovasone plus Imaglutide improved changes in body composition, resulting in more selective and greater loss of adiposity than in subjects receiving placebo plus Imaglutide.
Speaker Change: Physical function. Physical function was measured by the stair climb test. Climbing stairs is an activity of daily living, and the stair climb test measures functional muscle strength, balance, and agility.
Speaker Change: The declines in performance measured by steroid crime tests predicts in older patients higher risk for mortality, mobility disabilities, gait difficulties, hospitalizations, falls, and bone fractures. As a point of reference,
Speaker Change: A respondent's analysis was conducted using a greater than 10% decline in serocline power as the cutoff is 16 weeks.
Speaker Change: That cutoff represents an 8-10 year loss of stair climb power due to aging.
In our study, the laws of lean mass mattered.
as 42.6% of patients on placebo semaglutide.
Speaker Change: had at least a 10% decline in serocline power physical function in 16 weeks. This is the first human study to demonstrate that older patients who are overweight or have obesity receiving somaglutide GLP-1 receptor agonists are at higher risk for accelerated loss of lean mass.
with physical function decline.
Speaker Change: The all-anovosarum semaglutide group had a statistically significant and clinically meaningful 54.4% mean relative reduction in the proportion of subjects that lost at least 10% sterocline power compared to placebo plus semaglutide group.
That p-value is 0.0049
Speaker Change: And you notice on the 3 mg semaglutide group, there was a 62.4% relative reduction in the proportion of patients with at least a 10% decline in sterocline power from baseline versus receivable semaglutide, and that p-value is 0.0066.
Speaker Change: In the Inovasome 6mg plus Imaclothide group, there was a 46.2% relative reduction in proportion of patients with at least a 10% decline in steroid client power.
Speaker Change: from Baseline vs. Placebo plus the Magnetite group, and that p-value is 0.0505.
Speaker Change: Therefore, ANOVA's arm treatment preserved lean mass muscle, which translated into the reduction in proportion to patients that had a clinically significant stair climb physical function decline versus subjects receiving semaglutide alone.
NOVUSARM represents the next generation of drugs.
Speaker Change: that improves GLP-1 receptor agonist therapy to result in tissue-selective quality weight reduction. That is, in ovosron plus semaglutide, improved changes in body composition which result in more selective and greater loss of adiposity, that's fat, than subjects receiving placebo plus semaglutide alone.
We're very excited about the top-line results.
Speaker Change: The FxE data provides a proof of concept that you can retain lean mass, improve physical function, and lose enough fat mass to make up for the lean mass retained to have the same weight loss as a magnetized whale in 16 weeks.
Speaker Change: Our expectation is that when patients are treated longer with the Novozomplitazomab, this selective and greater loss of adiposity should translate to greater quality weight reduction than with somatoglutide alone.
That's for safety.
Speaker Change: Safety data for the Phase IIb quality study remains blinded. As the Phase IIb extension clinical study portion is ongoing.
Speaker Change: The unblinded complete safety set will be available after the Phase 2b Extension Study is completed.
Speaker Change: However, the aggregate blinded safety data have not shown any significant differences compared to previous studies in the NOVASARM and what is already expected with GLP-1 receptor agonists.
Speaker Change: The Independent Data Monitoring Committee met this week, February 10, 2025, to evaluate the unblinded safety data, and they made the recommendation to continue the study as designed. So this week they met and made that recommendation.
Speaker Change: After completing the efficacy dose finding portion of the Phase IIb quality clinical study, the participants continued into the Phase IIb extension trial, where all patients have stopped treatment with semaglutide.
Speaker Change: where they continue taking placebo and Novozom 3mg and Novozom 6mg in a blinded fashion for 12 weeks.
Speaker Change: The Phase IIb Extension Trial will evaluate whether the novus arm alone can maintain muscle and prevents fat regain.
Speaker Change: that generally occurs after discontinuing a GLP-1 receptor agonist. The top-line results of the separate blinded phase 2b extension clinical study are expected in the second quarter of calendar 2025.
Speaker Change: The company plans to present the full clinical efficacy and safety data set for the Phase IIb quality clinical study in future scientific conferences and publications after the Phase IIb extension portion of the study is completed and unblinded.
Speaker Change: as the Phase IIb quality study had positive top-line clinical results.
Speaker Change: We plan to move forward to request an end of Phase 2 meeting with FDA.
Speaker Change: We have previously met with FDA to discuss a regulatory path forward as an improvement in body composition drug, and the FDA has provided general advice on Phase III design.
based on the successful Phase II quality clinical trial.
Speaker Change: We plan to run a similar study as a Phase III study. The duration of treatment will be expected to be 52 weeks, which will allow us to also capture the longer-term benefits of inovasome improvements on body composition for greater loss of adiposity and weight reduction.
Speaker Change: As for the novel Inovasan Modified Release Oral Formulation, as you know, Vero is currently developing a novel, patentable, modified release formulation for Inovasan. We anticipate the actual formulation, form of the kinetic release profile, and method of manufacturing will be subject to future patents.
Speaker Change: The drug product formulation is currently in animal trials and is anticipated to be available for the Phase I bioavailability clinical trial during the first half of calendar 2025.
Speaker Change: The expectation is that the oral Inovazone modified release drug formulation will be utilized for the phase 3 clinical studies and for commercialization.
A new program is the atherosclerosis inflammation program.
Speaker Change: So, given the recent positive top-line results from the Phase IIb quality study, evaluating Inovasarm is a cardiometabolic agent that has the potential to preserve muscle, arteries, fat, and overweight in obese patients receiving GLP-1 receptor agonist therapy for weight reduction.
The Bureau has evolved its drug development strategy for Zibizibula.
Speaker Change: to evaluate subizobulin as a treatment for inflammation associated with atherosclerotic cardiovascular disease. More specifically, atherosclerotic coronary artery disease remains the leading cause of mortality worldwide. Inflammation and high cholesterol
Speaker Change: jointly contribute to atherosclerotic cardiovascular disease. It appears that the pathogenesis and progression of coronary artery disease, however, is largely driven by inflammation in response to the atheromatous plaques containing cholesterol in the arterial wall.
Speaker Change: even with maximal cholesterol reduction therapies, there remains a major and largely untreated residual inflammation risk.
Speaker Change: the realization that the combined use of aggressive lipid lowering and inflammation inhibiting therapies might be needed to further reduce atherosclerotic risk.
Speaker Change: has sparked the search for anti-inflammatory medicines that can lower the risk of atherosclerotic events in patients with coronary artery disease. An old drug, Colchicine, which inhibits tubulin polymerization to disrupt microtubules, resulting in broad anti-inflammatory activity,
Speaker Change: Recent randomized controlled trials assessing the role of low-dose Colvacin to treat inflammation to reduce major adverse cardiovascular events had promising results, demonstrating a reduction in cardiovascular risk.
Speaker Change: Colchicine lowered major adverse cardiovascular events by 31% among those with stable coronary artery disease by 23% of patients following a recent myocardial infarction.
Speaker Change: This magnitude of benefit is greater than what has been observed in contemporary trials of lipid-lowering agents, including those with PCSK9 inhibitors.
Speaker Change: Data from these trials led the FDA just recently, in June of 2024, to approve Colchicine as the first anti-inflammatory drug for reducing cardiovascular events in patients with established atherosclerotic cardiovascular disease.
Speaker Change: However, while colosteine may be the first FDA-approved drug to treat atherosclerotic inflammation, unfortunately, colosteine has significant safety concerns that may limit its expected widespread use. Colosteine has high potential for drug-drug interactions with commonly used cardiovascular drugs, including almost all statins.
Speaker Change: In contrast, Virussibizibulin is a new molecular entity, a small molecule, that targets the coaxin binding site on beta-tubulin.
Speaker Change: Like colchicine, sabizobulin inhibits microtubule polymerization and has demonstrated the ability to reduce the most important inflammatory mediators that play a role in the initiation and progression of atherosclerotic coronary artery disease.
Contrast colchicine to bisbulan has stable pharmacokinetics
Speaker Change: low potential for drug-drug interactions, and thus the bisabuelin may be administered potentially more safely as a secondary therapy in combination with statin therapy for the reduction of inflammation to slow the progression and promote the regression of atherosclerotic cardiovascular disease.
Speaker Change: Overall preclinical data from the in vitro and vivo inflammatory studies show that subizapulin treatment suppressed all the cytokines and chemokines tested, and in phase 2 and phase 3 pulmonary inflammation COVID-19 clinical studies, subizapulin has demonstrated broad anti-inflammatory activity.
Speaker Change: Safety Database consists of 266 dose patients from previous submissive bureau and clinical development programs.
The company's decision.
the current Clinical Safety Subdivision Database of 266 patients.
the high probability of success.
Speaker Change: strong intellectual property position, and is consistent with the company's focus on cardiometabolic diseases. Furthermore, the company believes Subizubulin may be evaluated in a small Phase II dose-finding proof-of-concept study.
Speaker Change: to assess the progression of coronary atherosclerosis in patients using the primary endpoint of coronary plaque volume composition measured by coronary CT angiography imaging.
Speaker Change: The company decides to pursue the Phase II clinical study. The company plans to partner with the Colorado Prevention Center in Aurora, Colorado and the Lundquist Institute in Torrance, California.
Viewer: Viewer has had this pre-IND meeting with the FDA Division of Cardiology and Nephrology Center for Drug Evaluation and Research on December 26, 2024. The indication of the discussion was the use of subizabulin, the slow progression of promoter regression of atherosclerotic disease in patients.
Viewer: early artery disease. The FDA agreed that there remains an unmet medical need based on disease pathophysiology and concurred with the general design of the small phase 2 study using coronary CT angiography imaging as the primary endpoint.
The FDA also requested the company conduct
Viewer: Chronic non-clinical toxicology animal studies report a chronic use of subizobulin for this indication.
Viewer: The chronic non-clinical animal studies are expected to be completed, and a new IND for the proposed indication is expected to be submitted by the first half of calendar 2026. Vera currently has sufficient drug and substance to supply the proposed Phase II clinical study.
on the FC2 female condom sale.
Speaker Change: business to an affiliate of Riva Ridge Capital Management, LP, a New York City-based investment management firm for $18 million, subject to adjustment as set forth in the purchase agreement, which Michele Greco will discuss in a few moments.
Speaker Change: The monetization of the FC2 business allows VIRU to be a pure biopharmaceutical company focusing its additional non-dilutive resources on the execution and development of its promising late-stage clinical pipeline.
Speaker Change: I will now turn the call over to Michele Greco, CFO and CAO, to discuss the financial highlights. Michele?
Michele Greco: Thank you, Dr. Steiner. As Dr. Steiner indicated, on December 30, 2024, Vera sold the FC2 female condom business to Clear Future, Inc. The purchase price was $18 million in cash, subject to adjustment as set forth in the purchase agreement for the transaction.
Michele Greco: owed to SWK Holdings LLC pursuant to a residual royalty agreement for a 2018 financing transaction.
Michele Greco: The loss on the sale of the FC2 female condom business is approximately $4.2 million. The difference between the estimated net proceeds of $16.4 million and the total carrying value of the FC2 business of $20.6 million.
Michele Greco: On December 30, 2024, the carrying value of the FC2 female condom business was comprised primarily of deferred income tax assets of $12.3 million.
Michele Greco: accounts receivable of $4.6 million and inventory of $3.4 million partially offset by accrued expenses and other current liabilities of $1.5 million.
Michele Greco: Liabilities associated with the Residual Royalty Agreement, which totaled $9.9 million at September 30, 2024, were extinguished.
Michele Greco: The sale of the FC2 female condom business represents a change in strategy, allowing the company to focus all of its efforts exclusively on drug development, and also affects how we present our operations and financial results.
Michele Greco: In our financial statements, all direct revenues, costs, and expenses related to the FC2 female condom business are classified within the loss from discontinued operations net of tax in the statements of operations.
Michele Greco: Let's review the results for the three months ended December 31st, 2024.
Michele Greco: The increase is due to $4.3 million in expenses related to the company's Inovasarm Phase 2B quality clinical study for higher quality weight loss.
Michele Greco: Selling general and administrative expenses were 5.2 million dollars compared to 6.7 million dollars in the prior quarter.
Michele Greco: The decrease is primarily due to a decrease in share-based compensation and a decrease in headcount from 23 to 22.
Michele Greco: We recognize a gain on the sale of Entafi assets of $695,000 compared to a gain of $918,000 in the prior quarter, which is based on non-refundable consideration received related to promissory notes due to VIRU.
Michele Greco: In conjunction with the sale of the FC2 female condom business, we recorded a gain on extinguishment of debt of $8.6 million related to the termination of the residual royalty agreement.
Michele Greco: This represents the difference between the change of control payment of $4.2 million and the net carrying amount of the extinguished debt of $12.8 million, which included an embedded derivative for the change of control provision at fair value of $4.7 million.
Michele Greco: The bottom line result for continuing operations was a net loss of $1.8 million, or $0.01 per diluted common share, compared to a net loss of $7.7 million, or $0.08 per diluted common share in the prior year's quarter.
Michele Greco: Net loss from discontinued operations and net of taxes related to the FC2 business was $7.1 million or $0.05 per diluted common share, including the $4.2 million loss on the sale of the FC2 business.
Michele Greco: The increase in the net loss from discontinued operations of $6.5 million is due to the loss on the sale of the FC2 female condom business and the increase in the loss from the change in fair value of derivative liabilities of $3.1 million.
Michele Greco: partially offset by an increase in gross profit of $400,000 and a decrease in selling general and administrative expenses of $500,000.
Now looking at the balance sheet.
Michele Greco: As of December 31st, 2024, our cash equivalents and restricted cash balance was $26.6 million compared to $24.9 million as of September 30th, 2024.
Michele Greco: At December 31st, 2024, there was $354,000 of restricted cash related to the sale of the FC2 female condom business.
Michele Greco: Our net working capital was $22 million on December 31st, 2024, compared to $23.4 million on September 30th, 2024.
Michele Greco: The company is not profitable and has negative cash flow from operations. We will need additional capital to support our drug development candidates.
Michele Greco: Based upon the company's current operating plan, our cash, as of the issuance date of these financial statements, is not sufficient for the company to fund operations for the next 15 months.
Michele Greco: However, we currently have sufficient capital to take the company to the end of the calendar year which is well beyond the data readout for NovoSarm Phase II quality extension study.
Michele Greco: During the three months ended December 31, 2024, we used cash of $11.3 million for operating activities, compared with $6 million used for operating activities in the prior period.
Michele Greco: We generated cash from investing activities of $17.2 million for the three months ended December 31, 2024, while there was none generated in the prior period.
Michele Greco: The cash generated relates to proceeds from the sale of the FC2 female condom business of $16.2 million, proceeds of $700,000 from the sale of the Entadfi assets, and proceeds of $400,000 from the sale of Onkinetic Securities.
Michele Greco: We used cash in financing activities for the three months ended December 31, 2024 of $4.2 million related to the change of control payment to SWK pursuant to the residual royalty agreement, which terminated in conjunction with the sale of the FC2 female condom business.
Michele Greco: 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.
Michele Greco: Net proceeds to the company from this offering were approximately thirty five point two million dollars After deducting underwriting discounts and commissions and costs incurred by the company
Dr. Steiner: Now I'd like to turn the call back to Dr. Steiner. Dr. Steiner?
Dr. Steiner: Thank you, Michele. So we've gone over the company progress, clinical progress, and financial highlights. With that, I'll now open the call to questions. Operator?
Speaker Change: Thank you. 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.
Speaker Change: If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys to ensure the best sound quality.
Speaker Change: 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 questioning queue.
Speaker Change: Once again, that is star and then 1 to rejoin the question queue. We will pause momentarily to assemble our roster.
Speaker Change: Our first question today will come from William Wood of B. Reilly. Please go ahead.
Speaker Change: All right, thanks to everybody. We appreciate you taking our questions and obviously congratulations on the very nice quarter and the results.
Thank you.
Speaker Change: If I could, for the extension trial, I'm just kind of curious what the rollover of patients from the induction to the maintenance portion is, and maybe if you could provide any color on why patients may be discontinuing, if so.
Yeah
Speaker Change: So, I'm going to ask Dr. Gary Barnett, our Chief Scientific Officer, to answer the question of basically asking for the dropout rate, who didn't go on to the extension study, and then he'll answer that for you. And he'll tell you the number one reason why they dropped out.
Gary
Yeah, hello.
Speaker Change: randomized subjects did not reach the extension, et cetera. The most common reason for dropping out of the study or discontinuing the study is GI side effects, which as we all know.
Speaker Change: associated with GLP-1 RAs themselves. So it's relatively expected what we're seeing.
Speaker Change: and I assume the the potential difference between placebo versus treatment isn't disclosed yet and we'll get that information more at the end.
Speaker Change: That is correct. That will be in the final analysis as the study, especially the safety data, right now remains blinded.
Speaker Change: Right and then one quick last one. Um, you you've been saying you're now saying second quarter for the induction I'm sorry for the for the maintenance readout You know, I'm just curious. I believe you you were saying sort of more April Maybe even early May have these been has this been now pushed out a little bit more. Are you just Or or relatively no changes here
Thank you.
Speaker Change: There's relatively no changes. I just, yeah, so we're guiding in second quarter but nothing's changed. I mean 12 weeks of, you know, 12 weeks of 12. We know when the last patient went out in December we reported exactly as we told you we're going to do for the phase one, for the phase two be quality and you know, 12 weeks of 12 weeks can't shorten that and you can't make that longer. So the time span that
Speaker Change: that we need after the 12 weeks when the last patient comes out of the studies, just literally discovering the data and, you know, getting the tables, listing the figures and that kind of stuff.
Speaker Change: Yep, that makes sense. I appreciate you taking our questions. I'll have back in queue.
Thank you.
Speaker Change: Our next question today will come from Gary Nachman of Raymond James. Please go ahead.
Speaker Change: Hey guys, good morning. This is Dennis Resnick on for Gary Nachman. Just a couple of questions from us.
Speaker Change: first talk a little bit more about your thoughts going into the extension trial data in the second quarter
Speaker Change: What are you hoping to show and what is the bar for success, particularly on the weight regain following the GLP-1 discontinuation?
Speaker Change: Can you remind us what your assumptions are for the placebo arm, and then what are your expectations for the Inovasarm arm?
and then I've got another show coming up.
I'd say it a different way.
Speaker Change: It's an exploratory extension where we're trying to show that a novice arm has the ability to hold on to muscle, remember the working hypothesis is that muscle...
Speaker Change: If you hold on to muscle, you should not see the rebound weight gain, which is fat. Because remember, the muscle's not the issue, the muscle's depleted. So it's all about fat. And the regain that patients get, it's all fat. So the way to think of the...
extension for just 12 weeks. It's not the weight.
as much as it's fat, because fat attracts weight.
Speaker Change: So it's purely an adiposity play. So if the novus arm holds muscle, so you have more muscle in that 12-week period of time, so you can burn more fat. And the novus arm itself, as you saw, the 6-milligram group had a 46%.
Speaker Change: for the reduction of fat compared to magnetite alone. So it's a fat burner. So what we want to show, and this is what people are afraid of, is that rebound weight gain is all fat. So we were focusing most of our thinking around can we stop that rebound fat reheating.
Speaker Change: and maybe even show you more fat loss because the novus arm burns fat as it goes forward. So I'm going to have Gary Barnett, our Chief Scientific Officer, add a few comments to that.
Gary Barnett: Yeah, so you know as you know when you take away the Glyph1 appetite returns and we've seen that in the studies with the Glyph1.
Speaker Change: So we do expect weight gain, and we specifically expect fat gain.
Gary Barnett: in the placebo group, and it's going to be interesting to see exactly how Inovasorm can minimize that fat regain.
Gary Barnett: while maintaining the muscles, or the lean mass in this case. So, that's what we expect to see. Obviously, the data will bear out exactly, and we're looking forward to that result here coming in the second quarter.
Gary Barnett: Yeah, so if we can show, if we can blunt the fat, potentially blunt the weight, regain. But if you focus on fat and hold muscles constant, you know, that's what you're gaining weight with, the fat. So I think the focus on fat, fat, fat, because we're using body composition as our end point.
Speaker Change: Okay, great. That was super helpful. And then just another couple quick follow-ups.
Speaker Change: For the Safety Monitoring Committee that I met earlier this week, can you talk specifically about what kind of patient safety data they looked at, how far out it went into?
Speaker Change: And then now that you just had a little bit more time with the 16-week data, are you finding anything notable within the patient sites or the patient background characteristics that is abnormal that should be called out? Thanks so much, guys. Yeah. Yeah, good question. So to answer the second question, and I'll have Gary answer the first question on what kinds of data that the Independent Data Monitoring Committee sees. But in terms of your question, remember, we only got top-line data.
Speaker Change: So, there's not much additional stuff to talk about, I mean the baseline characteristics with group characteristics, we don't have individual data, so the top line data, we're going to get the full data set, the individual data set when the study is unblinded.
Speaker Change: Then at that point we can go through and look and see, it's not so much what's abnormal and what's normal. I mean, big questions for me.
Speaker Change: is going to be, you know, which groups are the best, which groups are the worst, you know, how you think about that as you go forward with your Phase 3 program.
Speaker Change: You know, what additional information you can learn about gender and things of that sort. And so I think we're going to get a lot more information we just don't have. But for top-line data, because it's kind of, think of it as an interim look,
Speaker Change: and then the study continues, you know, we've got a very set set set of data that makes sense, but so there's not much more to say at this point.
Speaker Change: accept that we're extremely excited about the outcome because it answered the questions we wanted to answer.
Speaker Change: Novosarum in five other studies, this is a three milligram dose particularly because that's what bridged us to this study. We never studied above three milligrams in muscle studies. We've done it in multiple ascending dose studies and three milligram was our bridge. It worked every time and guess what? It worked again. So we this is unambiguous. We definitely can improve and stop the loss of lean mass.
Speaker Change: What was also exciting is it also confirmed the ability to burn fat in a patient population on a GLP-1. So that was exciting. And then third, you were able to keep the lean mass, get rid of more fat.
Speaker Change: to a point that the 3 milligrams, 99% of the total weight you lost was fat, and less than 1% was mass, and you still had the same weight loss at 16 weeks.
Speaker Change: And finally, we showed that physical function matters in these patients and that we're able to show there's a problem and that, you know, 42.6 percent.
Speaker Change: greater than 10% decline in stair climb, which is like 8 to 10 years of your aging loss of stair climb.
Speaker Change: So, I mean, to me, that's a home run, and that really helps us think very positively about our program going forward, because it's better to fix a problem than, you know, try to have a better HbA1c or better insulin resistance, we expect to see all of that, but better better meaning that GLP-1 does a great job with that, so you have to make it better than a GLP-1, whereas a GLP-1 does affect function in a negative way, we make it better.
Gary Barnett: In terms of the data for the IDMC, Gary, what does the IDMC see?
Thank you.
Gary: Yeah, they see individual patient data, individual safety data all the way down again to the patient level. They see it broken out within the traditional tables and they also see the dose or the randomization scheme.
Gary: The data that this particular IDNC saw was up to a cutoff of December 20, 2024, which included all subjects had passed through or completed the Day 112 visit and then some additional data in the extension.
Gary: was included in this review. So they review down to the individual patients with the patient demographics and background and medical history and con meds and they get all that information and also including their treatment assignments.
Speaker Change: That's super helpful. Thanks, guys, and congrats on all the progress.
Great, thank you.
Speaker Change: The next question will come from Dennis Sting of Jeffries. Please go ahead.
Anthea: Good morning, this is Anthea on for Dennis. Just a couple questions from us.
on Sonobu Farm.
Speaker Change: Given the oral formulation that you're working on, the new one, is there a potential for it to be combined with oral GLP-1s as a fixed-dose combo? I'm curious if you've looked into that and if you could pursue a partnership on that.
Speaker Change: Coaching, I believe, works through HSCRP reduction, so can you just remind us what percent reduction they get and what to visit Bruin does? And given your current cash position, your confidence that a phase two would be feasible. Thank you.
Speaker Change: Alright, so I have a clarification on your second question. So, what did you say Colstein's mechanism was?
Speaker Change: It's just CRP reduction, C-reactive protein. Oh, I got you. So you're talking about... I got you, got you, got you. That's the sensitive CRP. So CRP is a nonspecific inflammatory protein.
Speaker Change: So, yeah, yeah, so really it's not Non-specific inflammatory protein is a result of broad anti-inflammatory activity. And so yeah, so got it Got it. Got it. Got it. Got it. Okay, so
Speaker Change: So the first question about oral formulation, in the oral formulation, the expectation is, and we know from Inovasarm, that Inovasarm is a very nice oral product, highly bioavailable.
Speaker Change: And so, yes, we're working on new oral formulations and modified release, but we can be easily combined.
with an oral GLP-1.
Speaker Change: Those make the most sense. Particularly if you ask the question, what are we trying to do? So if you think about...
Speaker Change: at GLP-1, it creates a hypochloric state, the hypochloric state allows your body to non-selectively
Lose fat and muscle.
Speaker Change: and, you know, just non-selective, a low-calorie state. And in comes an ovus arm. And just an ovus arm telling muscle to take on, to steal the calories and take it from fat allows you to hold on to muscle.
Speaker Change: in that low-calorie state and burn more fat. So if you want to make the GLP-1 better, you'd better add Inovasarmin. That, to me, is the definition of a new generation obesity product. So the answer is yes.
Speaker Change: And if you look at our competition, our competition is IV or sub-Q.
Speaker Change: The only other one that was oral was no longer pursuing activities. But the other ones, IV sub-Q...
and physical function has been very difficult to show.
Speaker Change: and we've shown over and over physical function. Again, we hit on physical function in this study. So if you want to do a fixed combination and make the GLP-1 more tissue selective and have the functional benefit, I think it would be very attractive. And so yes, it's come up.
Speaker Change: As it relates to bisibulin and colchicine, I'm telling you that all our assays that we've done preclinically, colchicine is used as our positive control.
So everything Colchicine does, Subizubulin does.
Speaker Change: What's different is it's a different kind of molecule, so it's not a substrate for p-glycoprotein or 3A4.
and that plays a bigger role than the drug, drug.
Speaker Change: interactions that can happen. Colchicine, as you know, has a very low therapeutic index, a narrow therapeutic index. And if you have a drug-drug interaction, you can push colchicine levels to toxic levels. And that's one of the reasons why.
Speaker Change: it's not picked up widespread use. Yes, CRP, high-sensitive CRP is a measurement that you would use peripherally in these patients.
Speaker Change: which, you know, sapizibulin should easily do the same thing given that all the cytokines and chemokines that we've measured have, you know, statistically significant reductions both in vivo and in vitro. So we measure the actual cytokines that cause
Speaker Change: C-reactive protein to go up. C-reactive protein, again, to the CRP, high sensitive CRP. With that said, because we don't have the drug-drug interactions, and this is the excitement around Cysibizibulin,
Speaker Change: is that, you know, one of the things that people are thinking about is you want to take patients with atherosclerotic disease and suppress the lipid as much as possible. It's all about suppressing LDL.
Speaker Change: that once you suppress LDL, there's still a lot of risk left to a point that heart disease, in particular ischemic MIs, is still the number one killer. So there's still residual risk, and they believe that inflammation is the reason for that.
Speaker Change: that you don't have to convince anybody that we have the same mechanism as colchicine from an inflammatory standpoint, but it becomes a safety play.
Speaker Change: I'm a urologist and this reminds me of the days when abiraterone and ketoconazole were being developed. Ketoconazole is an old drug that's been shown to reduce castrate males and it was given to patients with advanced prostate cancer but it had side effects.
Speaker Change: Aberratho came in and had a better safety profile, and it's not generic, and a pharma company owned it, and had long enough IP, became a blockbuster.
Speaker Change: So, it's okay sometimes to come in and not be innovative and be the first anti-inflammatory agent for...
Speaker Change: for coronary artery disease, but to be one that has the same mechanism of action but a different safety profile and oral.
Speaker Change: and proprietary makes it very, very attractive, meaning it's a high probability of success with the efficacy, and it will play out.
Speaker Change: And especially if you do a small study like we're thinking about, the phase two, where plaque measurements like CT, cornea, and angiography can be, you know, give you the information you need to move forward. So that's what we're excited about.
Speaker Change: As it relates to cash, as Michele said in her comments, we have enough cash to last us to the end of the year, the end of the calendar year, so that's the end of December.
Okay
Sorry, if I could ask a follow-up on that. Sure.
Speaker Change: Is there a numerical HR CRP reduction that's been measured for cystic bulein? No, no, no, no. We've not taken patients with coronary artery disease and treated a patient to see what happens to CRP. What we have done is, you got it, you got it. Yeah, and if...
Speaker Change: If I could also ask, how are you thinking about IL-6 and the 70-90% HS CRP reduction profile in ASCVD?
Yeah, so IL-6, as you know, is not oral, right?
Speaker Change: is injectable, and so our expectation is that IL-6 is one of the many cytokines that's responsible for the inflammation related to coronary artery disease.
Speaker Change: and this reminds us of the same battle we had with COVID, IL-6 versus Subizavulin. Subizavulin did a much better job. We had a reduction of 50 percent and these other agents were more like 5 percent. So I do think that inflammation is not one cytokine.
Speaker Change: And if you have a pan-cytokine approach, which is what Colchicine does and what Subazobulin does, that should be much more effective than a single, knocking out a single cytokine in this particular disease.
Got it. That's really helpful. Thank you so much.
Speaker Change: Again, if you have a question, please press star then 1. Our next question today will come from Leland Gershel of Oppenheimer. Please go ahead.
Leland Gershel: sarcopenic obesity, and seeing the data you have, obviously very encouraging. Just wondering if your thoughts as you take the compound forward into registration, if you'll include a means to study it.
Leland Gershel: may be in a broader population of people who are not as old, given that there is also maybe risk of muscle loss during weight loss. Thank you.
Speaker Change: Good question. So first it's the statistics. It turns out as I mentioned
Leland Gershel: that 22% of the population based on Medicare are over the age of 60.
Leland Gershel: and a third of them have true sarcopenic obesity. So that's a big, big market. Okay? Big market.
and other bees.
Leland Gershel: So that presumably includes the patients who are younger. And so the idea is, from a clinical benefit-risk profile, mostly is to treat patients that have a problem.
Leland Gershel: And the older patients are more likely, because as you know, we didn't screen for sarcopenia, we just took over the age of 60. And still, 42.6% of those patients had a greater than 10% decline in GLP-1. So this is actually showing you, with serocrine tests, that patients were in trouble, and people were talking about it.
Leland Gershel: But if you do a 6 minute walk test and an endurance test...
That's different.
If you do a test that's focusing on...
Leland Gershel: Leg muscles and muscles are important for what they call explosive force, getting out of a chair, getting out of a tub, going upstairs.
That's, you know, that's different.
Leland Gershel: and those are the muscle types called type 2 muscle that goes away with age and so when you treat with an Elvis Arm or testosterone type product you build back the type 2 muscle.
Leland Gershel: and that's why you see function. So there's a difference between taking an endurance runner...
Leland Gershel: and an older patient. I mean, an endurance runner is not going to be able to lift heavy weights like a bodybuilder, but they can certainly run six miles or ten miles or whatever. So we focus primarily on the activities of daily living that matter to patients. But with that said, the FDA has told us
Leland Gershel: that a drug of this nature would have benefit in younger patients as well.
Leland Gershel: So, if that's the case, Gary Barnett, who is on the call, has a strategy to address that in our Phase 3. Gary, do you want to talk about that?
Leland Gershel: Yeah, obviously, if the FDA asks for a more broader age population and if we deem it to...
Thank you.
appropriate.
Speaker Change: What I would do is I would design a study with Powered.
Leland Gershel: with statistical power on efficacy on the older population and include the younger population as observational and maybe have an overall analysis for every randomized subject, but do a subgroup as the primary, meaning older, over 60, the group we just ran.
Leland Gershel: with the additional efficacy and safety data generated in the younger population to support broadening the label if appropriate.
Leland Gershel: Great, thank you. And just a follow-up question. I just wanted to confirm that when Verru does report the extension data from the second part of the quality study coming up in a few months, if you'll also be including the, you know, complement of the safety observations from both parts of this study. Thanks.
Leland Gershel: Yeah, so to make sure I understand the question, so when the study is unblinded and we're reporting the Phase IIb extension study, will we be reporting the full safety data set? Is that the question? Yes, that's right. Yep. Yes. The answer is yes.
Okay, great. Thanks for taking the questions.
Speaker Change: 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.
Speaker Change: patients in the Phase IIb study, but also the Extension study, and again, thank you all for being on the call.
Speaker Change: The digital replay of the conference call will be available beginning approximately noon eastern time today, February 13th, by dialing 1-877-344-7529 in the U.S.
Speaker Change: and 1-412-317-0088 internationally. You will be prompted to enter the Replay Access Code, which will be 3764-668.
Please record your name and company when joining.
Speaker Change: The conference is now concluded. Thank you for attending today's discussion.
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