Q4 2024 Skye Bioscience Inc Earnings Call
Ladies and gentlemen, thank you for standing by my name is Jay Leno would be your conference operator today at this time I would like to welcome everyone to the Sky Bioscience year end 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session well now like to turn the conference.
Over to Bernie Hertel head of Investor Relations. Please go ahead.
Speaker Change: Hello, and thank you all for participating in today's call leading the discussion today, our unique go on Sky as President and CEO and Caitlin Arsenal.
Caitlin Arsenal: <unk> CFO.
Caitlin Arsenal: Before we begin I'd like to caution that comments made during this conference call will contain forward looking statements under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 <unk>.
Caitlin Arsenal: Including statements about sky's expectations regarding its development activities timelines and milestones.
Caitlin Arsenal: Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely and reported results should not be considered as an indication of future performance.
Caitlin Arsenal: These forward looking statements speak only as of today's date and the company undertakes no obligation to revise or update any statements made today I encourage you to review all the Companys filings with the Securities and Exchange Commission concerning these and other matters.
Penny Doing: I'll now turn the call over to Penny doing.
Penny Doing: Good afternoon, everyone. Thank you for joining us today on Sky's fourth quarter and year end 2024 earnings call.
Penny Doing: We appreciate your interest in Sky and thank you to our shareholders.
Penny Doing: Joining me is our entire executive team and they will stay online for the Q&A portion after the prepared remarks.
Penny Doing: At the start of 2024, we identified critical questions about peripherally restricted CB, one inhibition and implemented a clear vision and a plan.
Penny Doing: We're executing an ambitious clinical trial to demonstrate proof of concept of our novel <unk> inhibitor <unk> in patients with obesity and overweight.
Penny Doing: This plan led to a $90 million investment from top life science institutional investors in the early part of 2024, ultimately, allowing sky execute on its goals for the year.
Penny Doing: I'm happy to report that not only did our team meet but we exceeded our expectations.
Penny Doing: First we submitted and received clearance of our obesity.
Penny Doing: In January 2024.
Penny Doing: Second following the completion of our $90 million fund raising we immediately initiated planning of our clinical operations activities for <unk> Mab, which culminated in the initiation of a beyond in August of 2024.
Penny Doing: Third our team's ability to execute efficiently resulted in rapid enrollment into the sea beyond clinical trial and I'm proud to announce that as of February 28, we have completed our enrollment with 136 patients and over enrollment from our originally planned 120 patients and as a result of this <unk>.
Penny Doing: Celebrated over enrollment we now expect final top line data from all patients in late Q3 or early Q4.
Penny Doing: This is potentially three months earlier than our prior guidance, allowing us to forgo the originally planned interim analysis and instead report the full 26 week data ahead of schedule.
Penny Doing: Fourth on the manufacturing front, we transferred the manufacturing process for Nomas mapped to our manufacturing partner and have initiated GMP manufacturing run as well as implemented plans for optimization scale up and commercial capabilities for <unk>.
Penny Doing: Fifth the excellent safety profile established in the mass maps phase one trial continues as our independent data safety monitoring board the DSM B.
Penny Doing: Has held two meetings to review the phase Iia safety data and recommended that we continue the study as planned.
Penny Doing: <unk> remains blinded to the completion of the 26 week treatment and the 13 week follow up period.
Penny Doing: Third the SNB review is scheduled for April this year.
Penny Doing: To support Sky's, increasing focus on the development of the math that we made the strategic decision in 2024 to discontinue Spi 100 development following the phase Iia clinical trial.
Penny Doing: We believe that the reallocation of our resources from Spi 100, and the math map was a valuable step to help us to reach the milestones that we've achieved.
Penny Doing: Separately 2024 also showcased important progress in the field of <unk> inhibition phase.
Penny Doing: <unk> phase Iia clinical results from a little bad Novo Nordisk small molecules TV, one inverse agonist revealed valuable insights for the class and for US avenues of differentiation for <unk>.
Penny Doing: Ahead of our all important forthcoming to mass about clinical trials, our preclinical and modeling work continues to paint a favorable picture of no math map safety advantage as well as support the idea that peripheral CB wanted ambition is sufficient for weight loss.
Penny Doing: To briefly reorient you on our preclinical findings. The first question relates to efficacy and whether a true peripherally restricted CB one inhibitor like the mathematic can lead to meaningful weight loss.
Penny Doing: This is a reasonable question as the first drug approved for weight loss in this class Romano Bad preferentially entered the brain and was originally believed to mediate its effects by a central CB one inhibition.
Penny Doing: Since then we've learned so much more about the sufficiency and importance of peripheral CB, one inhibition versus the role of Central's PD one inhibition.
Penny Doing: If you haven't already I would encourage you to listen to our webcast from July 2024, and November 2024, where our clinical adviser Dr. Mark <unk> and our CSO Dr. Chris Twitty Elegantly explained why we believe that peripheral <unk> inhibition is not only sufficient but nest.
Penny Doing: This theory for weight loss based on the mechanism of <unk> inhibition.
Penny Doing: Supporting this thesis we announced for 2020 for the first demonstration that the math map can drive significant weight loss diet induced obesity murine model and to our knowledge. This data is the first to describe that an antibody that does not cross the blood brain barrier and preferentially targets <unk> receptors.
Penny Doing: In the periphery can cause weight loss in the Dio mirroring model.
Penny Doing: We look forward to sharing even more data that demonstrates the ability of the mass map to not only drive weight loss, but also impact multiple metabolic processes associated with obesity and its comorbidities.
Penny Doing: The second and we think most important question for this class of drugs relates to safety.
Penny Doing: As we know <unk> will ultimately be taken off the market in Europe, because of a significant rate of neuropsychiatric side effects, and importantly, a higher rate of suicidal ideation compared to placebo.
Penny Doing: The concerns around this mechanism were further exacerbated by the announcement by Novo Nordisk that while significant weight loss was noted at 16 weeks there were dose dependent increases in neuropsychiatric side effects with <unk>.
Penny Doing: At Sky, We believe no mathematic is uniquely positioned to potentially be the safest of the CB one class of drugs because of its superior restrictions from the brain as we have reported previously we saw no neuropsychiatrist side effects for our phase one study that treated over 60 patients with the mass map for four weeks and as highlighted.
Penny Doing: Earlier, the Phase Iia study has a quarterly independent data safety monitoring Board review of safety data.
Penny Doing: Our original investment and continued efforts to develop new mass and that is based on the premise that neuropsychiatric concern still hinder small molecule <unk> inhibitors.
Penny Doing: Whereas to date no massive maps truly peripheral mechanism has demonstrated meaningful weight loss without the safety liability seen with even the peripherally restricted small molecule <unk> inhibitors.
Penny Doing: As mentioned earlier in our press release, we announced that we have implemented a protocol extension for the ongoing see beyond trial, specifically with enrollment now complete patients in all four treatment arms will have the opportunity to continue receiving therapy for an additional 26 weeks, increasing our treatment periods.
Speaker Change: <unk> 52 weeks compared to 26 weeks previously.
This means that by Q2 of 2026 Guy will have substantially greater safety and efficacy data, which we believe will significantly bolster our regulatory package and help discern to mass maps therapeutic profile and differentiation.
Speaker Change: Where 2024 was about successfully implementing our clinical operations plan and completing enrollment for see beyond 2025 is about data.
Speaker Change: First and foremost our clinical data from C. Beyond but also data from our R&D efforts, which we hope will continue to demonstrate the impact that the math, Matt in the DIY model. Our ongoing preclinical research aims to highlight a further understanding of how the math that's differentiated mode of PD, one inhibition as peripherally to promote coordinated.
Speaker Change: Modulation of hormone and inflammatory mediators lipid metabolism, and glycemic control to ultimately yield significant weight loss and a productive metabolic homeostasis.
Speaker Change: We anticipate that these efforts will yield additional data in the upcoming quarters enhancing our understanding of the mathematics capability.
Speaker Change: Additionally, we are advancing our research to explore other metabolic indications, where inflammation and fibrosis play a significant role in disease progression.
Speaker Change: By utilizing translational models, we aim to identify new therapeutic applications for new math map.
Speaker Change: Looking ahead, we plan to engage with regulators to align on our phase <unk> dose escalation study, which we anticipate initiating by the second quarter of 2026 and concurrently we are strengthening our manufacturing capability and are evaluating alternatives to bring down our cost of goods sold.
Speaker Change: These efforts are crucial for maintaining our development pace and preparing for potential commercial demand.
Speaker Change: We remain focused on the mass mass attractive market opportunity and based on our ongoing assessment of both current and future market dynamics in obesity and overweight combined with the latest developments underscoring the appeal of some of the novel mechanisms in obesity, we continue to view <unk> as a differentiated alternative.
Speaker Change: To enable weight reduction while addressing the limitations of inclusion based therapy.
Speaker Change: And with the translational workflow in full swing, we not only aim to identify new therapeutic applications for the math map. We're also focused on the development of next generation <unk> are targeting molecules to address various metabolic disorders, which could potentially lead to innovative treatments in this field.
Speaker Change: Our overarching message is simple, we believe obesity and overweight conditions are extremely heterogeneous demanding multiple effective therapeutic options, while the <unk> one receptor agonist space, whether we're speaking of oral or injectable drugs is becoming crowded and competitive <unk>.
Speaker Change: Recent industry deals do in fact acknowledged American value of alternative and UBC mechanisms to start evolving the weight loss world beyond increases in.
Speaker Change: And Sky is uniquely and strongly positioned with another promising alternative mechanism.
Speaker Change: Highly differentiated product with potential to fulfill the unmet needs of this diverse and massive patient population rather than fighting for the same first line thoughts of a well established mechanism.
Speaker Change: So we encourage discerning investors and other stakeholders to look under the surface and understand these dynamics. We believe <unk> is uniquely positioned to play a role as a part of an inevitable broadening of the <unk> toolbox.
Speaker Change: With an important phase II inflection point. This year now is an opportune time to evaluate <unk> one targeting.
Speaker Change: At our June event. During 88 ahead of the topline 26 week data, we will review our plans along with additional pre clinical data that demonstrate <unk> unique advantages.
Speaker Change: Look forward to sharing these new insights with you.
Speaker Change: I want to thank all of the patients physicians and clinical coordinators, who are participating in the <unk> trial.
Speaker Change: Without them, we would not be where we are today.
Speaker Change: There are a vital reason why companies like sky are able to potentially bring life altering drugs to the market.
Speaker Change: Thank you for your continued support as we advance the math on that and work to solidify <unk> position as a pioneer in peripherally restricted <unk> inhibition.
Caitlin Arsenal: With that I'll turn the call over to Caitlin our CFO.
Caitlin Arsenal: Thanks Penny after the market closed today, we issued a press release and filed Form 10-K, with the Securities and Exchange Commission outlining our annual financial results. We encourage you to reference the filing for details of our financials and the risk factors described therein.
Caitlin Arsenal: I will now provide a brief overview of key financial results for the fourth quarter and year ended December 31 2024.
Caitlin Arsenal: Research and development expenses for the three months ended December 31, 2024 were $7 $8 million as compared to $1 6 million for the same period in 2023.
The increase was primarily due to contracted clinical and manufacturing costs associated with our phase <unk> study for <unk> in asthma and employee related benefit Risa.
Caitlin Arsenal: Research and development expenses for the year ended December 31, 2024 were $18 7 million as.
Caitlin Arsenal: Compared to $5 $8 million for the same period in 2023.
Caitlin Arsenal: The increase was primarily due to contracted clinical and manufacturing costs associated with our phase Iia <unk> study further mathematics.
Caitlin Arsenal: The increase resulted from increases in discovery research efforts consulting fees employee benefits driven by increases in head count and general expenses.
Caitlin Arsenal: General and administrative expenses for the three months ended December 31, 2024 were $4 $6 million as compared to $2 $5 million for the same period in 2023.
Caitlin Arsenal: The increase was primarily related to noncash incentive stock based compensation.
Caitlin Arsenal: Payroll benefits and other employee costs professional services, including fees for tax audit legal services financial Advisory services and other general business expenses.
Caitlin Arsenal: General and administrative expenses for the year ended December 31, 2024, or $17 7 million as compared to $7 9 million for the same period in 2023.
Caitlin Arsenal: The increase was primarily related to noncash incentive stock based compensation professional services, including fees for tax audit and legal services financial Advisory services patent prosecution for the new mathematics, and other general business expenses.
Caitlin Arsenal: The net loss for the year ended December 31, 2024 totaled $26 $6 million with noncash share based compensation expense of $8 3 million.
Caitlin Arsenal: <unk> to $37 6 million for the year ended 2023 with noncash share based compensation expense of $1 million.
Caitlin Arsenal: The primary reason for the significant decrease related to the acquisition of <unk> in process research and development asset for $21 $2 million. During the year ended December 31, 2023, all of which was expense upon acquisition and.
Caitlin Arsenal: In addition, during 2024, we recognized a $4 2 million gain from the partial de recognition of our contingent legal liability and a few million dollars gain from the settlement of insurance litigation with our former GNL carrier $3 million of interest income and a gain of $1 4 million from the sale of real estate.
Caitlin Arsenal: On December 31, 2024, sorry had cash and cash equivalents of $68 4 million.
Caitlin Arsenal: Notably during 2024, we further remediated, our litigation matters and in the fourth quarter, we collected 2 million insurance settlement proceeds and exonerated the bond related to the restricted cash balance, which allowed us to recover the $9 million restriction on our cash.
Caitlin Arsenal: In addition, during 2024, we eliminated all of our related party balances, including the conversion of our debt.
Caitlin Arsenal: During 2024, our operating cash burn averaged $6 $3 million per quarter, increasing to $8 1 million in the fourth quarter and 2025, we expect to maintain at least this level of expenditure as we progress through the <unk> study and increased our manufacturing efforts.
Caitlin Arsenal: Our team strength has always been its ability to quickly adapt not only strategically, but also financially to reduce waste and maximize.
Caitlin Arsenal: We believe that our capital will fund our operations through at least the first quarter of 2027.
Caitlin Arsenal: Our cash runway includes the capital necessary to complete the phase Iia study for <unk> and reached key clinical milestones, including the receipt of top line data in late Q3 early Q4 2025.
Caitlin Arsenal: <unk> got it in Q2, 2026, and the manufacturing work required to supply the phase <unk> study.
Caitlin Arsenal: Our runway currently excludes the face TV and phase III clinical study costs, but most importantly, we are funded for at least nine months. After the expected 52 week data from the New Math Lab study, which is expected in Q2 2020.
Speaker Change: This concludes our prepared comments for today. Thank you very much for joining us and we'll now open the call for questions from our covering sell side analysts operator over to you.
Speaker Change: Thank you the floor is now open for questions. If you have dialed in and we'd like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.
Speaker Change: If you'd like to withdraw your question simply press Star. One again you are called upon to ask a question I know listening via a loudspeaker owner device. Please pick up your handset and ensure that your phone is not on mute when asking a question.
Speaker Change: Your first question comes from the line of Christopher Cusco of Cantor. Your line is open.
Speaker Change: Hi, everyone. Thanks for taking the questions and congrats on completing enrollment ahead of schedule. So wanted to ask as we think about both the 26 and 52 week read out now what do we know what can we translate from some of the preclinical model work to understand what the weight loss curves.
Speaker Change: Look like at these time points and essentially what an extra 26 weeks could mean for the potential.
Speaker Change: Hey, Chris it's bidding here thanks.
Speaker Change: Great question and thanks for joining the call I guess I can just kick it off just to kind of give a little bit context here, what we're trying to achieve with the extension and then hand it over to Chris.
Speaker Change: So we obviously.
Speaker Change: We are really excited about the expansion and the decision to implement extension study with strategic and we are recognizing the value of our longer.
Speaker Change: Efficacy and safety data, which we believe is really important for this.
Speaker Change: Continue continue to generate with the clinical trial that we have so.
Speaker Change: The idea was to.
Speaker Change:
We have additional data for our regulatory discussions as well as for the next steps for the program.
Speaker Change: I think it's hard to extrapolate what's exactly happening pre clinically from from the human studies, but.
Speaker Change: That is also something that we're exploring.
Speaker Change: We have additional preclinical data, but I'll turn it over to Chris just specifically answer the preclinical question.
Speaker Change: Yeah.
Chris Twitty: Yeah, Hi, Thanks for the question Yeah. It's a fair question and one that we're looking carefully at and so we're approaching this in a few different ways, but.
Chris Twitty: If we focus only on the preclinical side.
We really are looking at exposure understandings were done a critical analysis.
Chris Twitty: Yeah.
Chris Twitty: The PK profile, if you will and understanding how that exposure relates to efficacy in the CIO using weight loss and other.
Chris Twitty: <unk> biomarkers associated with efficacy.
Chris Twitty: And looking at sort of how that timeframe.
Chris Twitty: Obviously compressed.
Chris Twitty: Vio model, how that relates to something that is more elongated such as a clinical trial and so we're using that.
Chris Twitty: Guideposts to help us understand the potential timing required four four.
Chris Twitty: Los in the clinical trial, we're also looking at some of the historic data notably.
Chris Twitty: <unk>, which of course is a small molecule a little bit different mechanism, there, but still one that I think can help guide in terms of the pathways.
Chris Twitty: So when you collectively look at that and we will be certainly.
Chris Twitty:
Chris Twitty: We're putting some data out in the future talk more about it.
Chris Twitty: In 2025, but when you look at those.
Chris Twitty: Pretty evident that that.
Chris Twitty: Adding the open label extension will allow us to reach a deeper weight loss.
Chris Twitty: Hearing.
Chris Twitty: To produce point, we don't know exactly where that sweet spot will be.
Chris Twitty: Certainly we expect based both on the preclinical exposure data that I mentioned as well as the historically I think that's going to be advantageous and really allow us to to uncouple a deeper way.
Chris Twitty: Weight loss and a better bet.
Chris Twitty: Overall.
Speaker Change: Okay. Thanks, and I know your previous clinical study was really safe and you didn't see any of the neuropsychiatric ease, but with the with the GSM be reviews.
Speaker Change: They pick up any of this and report it or would it have to be deemed a certain grade for it too.
Speaker Change: Translate to keep telling you about it.
Speaker Change: Yes in terms of the safety analysis. That's ongoing here is it is pretty straightforward. It's the independent data safety monitoring board that meets and reviews the data and they give a go no go on continuing the trial so.
Speaker Change: That information is still blinded to the management.
Speaker Change: And.
Speaker Change: At the moment, that's all we can really ask.
Speaker Change: <unk> from from that is that there has been too.
Speaker Change: Independent meetings that have happened they have some quarterly theres. Another one planned in April.
Speaker Change: <unk>.
Speaker Change: The fact that the trial has continued is sick.
Speaker Change: Signal for all.
Speaker Change: All of the safety information that's been reviewed is of no concern.
Speaker Change: Okay. Thanks, and I know you launched this study back in August so.
Speaker Change: <unk> about the extension was the decision made ahead of time where patients essentially.
Speaker Change: They have the option to continue treatment beyond 26 weeks, so essentially what I'm trying to figure out.
Speaker Change: But the data set in <unk> 26, do you expect it'll be full data set with all of the patients or could it be a little bit smaller in light of that.
Yes, So let me just clarify that so the whole point of removing the interim analysis is because the enrollments, obviously gone faster than expected and buy.
Speaker Change: Eliminating that we're now having the full 26 week data on 100% of the patients.
Speaker Change: So we gain a complete dataset.
Speaker Change: Obviously, that's supporting our decision, making our overall.
Speaker Change: Regulatory discussions and all of those other things, but independent of that I think.
Speaker Change: Wanted to see in the first part of your question is it just the timing.
Speaker Change: The extension study.
Speaker Change: While we may not have considered it earlier on just to be transparent we have always recognized the value of having a longer term efficacy and safety data readout. So the 26 weeks was what we originally had planned but it was also it was also around what.
Speaker Change: The drug supply that we had at the moment so now.
Speaker Change: We've also address that over time over the course of the year. So we have full drug supply and manufacturing.
Now supports continuing to have the commitment for extending this.
Speaker Change: Trial, so securing kind of the reliability and the scalability of our manufacturing has been a key part of this.
Speaker Change: This next next decision now that we can say, we can extend our current trial and have the.
Speaker Change: The additional data points that we're looking for from weight loss.
Speaker Change: So some of the other things that we're measuring.
Speaker Change: And the trial for the 26 weeks.
Speaker Change: Great. Thanks, everyone look forward to the data this year.
Speaker Change: Thanks Richard.
Speaker Change: Your next question comes from the line of Ted <unk> of Piper Sandler Your line is open.
Speaker Change: Great. Thank you my congrats too on the early enrollment.
Speaker Change: Really excited to get full.
Speaker Change: Full data.
Speaker Change: In the back half I'm wondering if this changes.
Speaker Change: Either the powering or anything along those lines.
Speaker Change: The analysis that you're going to be able to do.
Speaker Change: You lose anything.
Speaker Change: Or were you losing anything from the prior.
Speaker Change: Interim analysis and.
Speaker Change: Does this suggest your plans and timeframes with respect to moving into phase two be thanks.
Speaker Change: Yes, so just to.
Speaker Change: And so the first part of the question there Ted Thanks.
Speaker Change: Thanks again for joining in.
Speaker Change: Our protocol said mm 120, evaluable patients and to reach that goal.
Speaker Change: We enrolled 136.
Speaker Change: So overall.
Speaker Change: There is no change in statistics, but the obviously the.
Speaker Change: This translates into more robustness in efficacy.
Speaker Change: And safety analysis as we have more patients so for us the regulatory pathway doesn't change here, it's just a larger data set and it's just.
Speaker Change: Just enhancing kind of confidence for everything that we're working on as well.
Speaker Change: All of our future interactions that we have would have with the agency regarding our subsequent subsequent trials.
Speaker Change: There was a second part to your question.
Speaker Change: Alright, I need you to repeat again no timing on the phase two.
Speaker Change: These to be pardon me does it move up a potential timing on the phase II.
Speaker Change: Yes, great Great question. So the 52 week extension results will be available in the first half of 2026.
Easily kind of do the math there the goal here it does allow us to engage with regulators.
Speaker Change: With a more robust dataset and but that doesn't really change from what we were planning to do with the 26 week top line data so.
Speaker Change: I think for us the timelines have continued to accelerate overall for our subsequent clinical program and are in terms of our regulatory interactions.
Speaker Change: Our phase II b.
Speaker Change: And subsequent development efforts.
Speaker Change: What would all be based off the topline data. So now that we will have that.
Speaker Change: In late.
Speaker Change: Late Q3 early Q4, we plan to immediately.
Speaker Change: <unk> with regulators both.
Speaker Change: The FDA and EMEA for the subsequent larger studies.
Speaker Change: Awesome. Thank you so much.
Speaker Change: Your next question comes from the line of Jay Olson of Oppenheimer. Your line is open.
Speaker Change: Okay.
Jay Olson: Oh, Hey, congrats on the progress and thank you for providing this update that's great news that you've completed enrollment in CV on ahead of schedule. We had a question about the preclinical data for NASA ma'am that youll be.
Jay Olson: <unk> in the second quarter can you just provide a little color around what we should be looking for.
Jay Olson: Hey, great. Thanks for joining the call and yes, that's a great question, we're excited about.
Jay Olson: A lot of different data now that the CIO model that Chris has been working on is is up and running so I'll turn it over to Chris and he can expand on that.
Jay Olson: Hey, great. Thanks for the question yes.
Jay Olson: So we're really excited about the direction.
Jay Olson: Our preclinical data is heading so we're.
Jay Olson: We're looking forward to sharing.
Jay Olson: A more robust dataset.
Jay Olson: Including some really nice biomarker work that touches on some of the key mechanisms.
Jay Olson: As well as the differentiation around our CVR inhibitor.
Jay Olson: So you are well aware of the safety enhancements that our approach takes where we have some other data that suggest.
Jay Olson: A deeper mechanistic differentiation as well so look forward to sharing that as well as starting to touch into the combination approaches.
Jay Olson: Approaches that you might imagine a relevant so we're again, we're looking forward to building out and having a nice day.
Jay Olson: Dataset in.
Jay Olson: In the summer.
Jay Olson: Yes, I mean, if I could just elaborate.
Jay Olson: The interesting thing for us has been that.
Jay Olson: Last year, when we were beginning to work on all of that we didn't have the backdrop of additional data from the small molecule.
Let's give you one inhibitor so.
Jay Olson: Obviously with that data and you know that we've spent quite a bit of effort walking.
Jay Olson: The street through the PK analysis, and a side by side comparison. So we've continued to build on that and even R.
Speaker Change: J P. Morgan conversations we came back and be briefed and said, okay, where are the gaps that we are having people.
Speaker Change: Maybe you're struggling with in terms of comparisons against this.
Speaker Change: Our approach versus other.
Speaker Change: Once in development and that's the key thing is that our preclinical data package I think is continuing to become.
Speaker Change: Hopefully.
Speaker Change: The most robust in the standard going forward. The key thing we want to continue to point to us.
Speaker Change: A differentiated product profile with this preclinical data it should it should be.
Speaker Change: Informative to give confidence that there's more likely hood of success here and whats translated into clinic.
Speaker Change: Early data that we presented in November last year was the first indication of that showing that there was sufficiency of peripheral mechanism of peripheral driven weight loss and now.
Speaker Change: Just enhancing that with the combo on expectation.
Speaker Change: Head of our clinical data that will help to just bolster the strength of our of our overall thesis.
Speaker Change: Great.
Speaker Change: Looking forward to that and then maybe just one other question from US there were two major obesity deals last week did sparked a lot of interest among investors, partly because they were both in non GOP, one mechanisms and included potential for mono therapy.
Speaker Change: And GOP one combos.
Speaker Change: Can you just talk about any lessons or read across to sky in the types of.
Speaker Change: Deals or partners, you might consider for and I'm asking that.
Speaker Change: Yes.
Speaker Change: I'll start there and I can let our chief operating officer.
Speaker Change: To that as well.
Speaker Change: Okay.
Speaker Change: For us that's been really exciting at.
Speaker Change: At Jpmorgan, we made the comment that <unk>.
Speaker Change: <unk> space is crowded and youre going to get skipped.
Speaker Change: It's good to see a lot more attention on the non <unk> space, taking shape, obviously thats been led by the Congress and the data that we saw in fall of 2024.
Speaker Change: And then Amin Creedon data that followed that and now two back to back deals that have happened in the online space and.
Speaker Change: The comment that.
Speaker Change: We made in terms of all of our discussions that we had in Q1 was that amlin and CB, one or the other.
Speaker Change: Other two mechanisms that have gotten the most attention in terms of being validated and it's just a matter of time.
Speaker Change: For CB, one to have that clearing event for us <unk> had that clearing event couple of times Romaunt event and it had it again with with them on lunar about data. The only issue is that the small molecules continue to have.
Speaker Change: A neuropsychiatric concerns so we knew that back in 2023, when we acquired Boardwalk has never been an issue for US we've always built our thesis on the fact that we're going to have a CB. One that's just as competitive in the non <unk> space that doesn't have the safety concerns and thats been our thesis and that's what.
Speaker Change: We are executing against so for us this new deal flow and the size of those deals.
Speaker Change: <unk> is it.
Speaker Change: As of note because it's it's obvious that the pharma and strategics.
Speaker Change: Placing bets and theyre, placing big bets like in the case of Roche.
Speaker Change: It really expanded.
Speaker Change: Their footprint now and I think they are being competitive relative to know who are really.
Speaker Change: Especially in the non equipment space.
Speaker Change: <unk> been digging in a lot more on this because we've been doing a bunch of primary research. So I'll, let him talk to that as well.
Jay Olson: Yeah, Thanks, Hey, Jay Thanks for the question I'll make this quick.
Jay Olson: <unk> been taking in a lot with their own primary and secondary research and I think what I will say about these last most recent deals, which certainly aligns with what we've been hearing from the Kols is that.
Jay Olson: They are less and less excited about just more <unk>, one drugs and more and more excited and really asking for more and more alternative mechanisms of action that can one drive still drives the clinically meaningful weight loss, they don't necessarily need to be.
Jay Olson: 25% weight loss.
Jay Olson: But if they are more tolerable and it can be so again clinically meaningful.
And convenient for patients than those are drugs that the physicians they have a real place in the market not just as second line therapy, but also potentially in the first line setting as well. So I think lots of farmers are starting to see that certainly based on the deals we're seeing.
Jay Olson: Net.
Jay Olson: What are the secondary or these alternative mechanisms of actions are going to be become more and more important in the future.
Speaker Change: Thank you that's super helpful and I appreciate all the color and congrats again on the progress.
Jay Olson: Thanks Jay.
Andy Shay: Your next question comes from the line of Andy Shay of William Blair.
Jay Olson: Sure.
Andy Shay: Hello, Thanks for taking our questions.
Andy Shay: Kind of a three parter, if you don't mind for the phase two <unk> study.
Andy Shay: So first and foremost obviously very encouraging that the rapid re enrollment ready that you mentioned I'm curious if you can share similar.
Andy Shay: On the ground physician feedback or investigator feedback on on the enthusiasm.
Andy Shay: That's number one number two I guess one of the differentiating factors for this study was the use of <unk> to really delineate fat loss and also lean body mass loss.
Andy Shay: And I'm just curious.
Andy Shay: With the extension out to 52 weeks do you add another Texas scan at the end of the study there, but just kind of how do you think about.
Andy Shay: Yes, the number of <unk>.
Andy Shay: Texas scans to get kind of a longitudinal look.
Andy Shay: Two the relative competition of weight loss.
Andy Shay: And lastly.
Andy Shay: It's kind of a bio statistical question. So I'm curious on the removal of regeneron.
Andy Shay: Does that preserves the powering as you kind of look at the primary endpoint.
Andy Shay: Yes, Andy Thanks.
Aurora: Questions, So I'm going to actually turn it over to Dr. Aurora.
Speaker Change: As everyone.
Speaker Change: Thank you.
Speaker Change: Following Dr. <unk> joined the company as a real opportunity.
Speaker Change: <unk>, we had just begun the sea beyond studying and thanks to his leadership as kind of immediately rolled up his sleeves. He's on the road for three weeks and got a chance to see it.
Speaker Change: Get critical clinical sites up and running and to his credit. We've also been successful in terms of expanding into academic centers. So I'll let him.
Speaker Change: Elaborate on.
Speaker Change: All three of these questions I think it's and this wheelhouse.
Speaker Change: Sure.
Denise: Thanks Denise.
Denise: So Andy thanks for the questions.
Denise: As far as the.
Denise: Hi.
Denise: Question is concerned we've had.
Denise: Can you add a lot of excitement from investigators.
Denise: Obesity trials are popular right now people are very motivated and enthusiastic.
Denise: This trial.
Denise: Try.
Denise: Please let me help them so.
Denise: So.
Denise: We are very grateful to all of the efforts that'd be mitigated as I put in.
Denise: I'll just put it in and that's helped us to Angola.
Denise: Really nice space.
Denise: <unk> been able to activate it.
Denise: We did hold back.
Denise: And then the academic center.
Denise: Good for us.
Overall.
Denise: As you can see.
Denise: Your next question was split relationship to <unk>.
Denise: And as you know we're doing lung scanning in this first 26 weeks.
Denise: The final scandal that takes place at the end of that.
Denise: The end of the study we will continue.
Denise: Measurement during the extension so we will do indexes Kevin.
Denise: In the middle at 12, or 13 weeks whenever that time point in some than one again at the end of treatment. So we will continue that trajectory of looking at what happens to body composition to the study.
Denise: So as far as the.
Denise: Denim endpoint is concerned.
Denise: There are some concerns about borrowing and how we deal with doing in denim endpoint and how that might affect the power off the final endpoint given that you've already HUD given how close.
Denise: The final analysis as to what would have been the interim analysis now that we're not doing the interim analysis I think those questions just simply go away and yes. We do we resolve all are powered to be able to do that final analysis.
Speaker Change: That's super helpful. Thank you so much.
Speaker Change: Your next question comes from the line of George Farmer of Scotiabank. Your line is open.
Hi, good afternoon, thanks for taking my questions.
Speaker Change: To talk a little bit about the DSM V analysis, and understanding that youre blinding to their to their discussions and outcomes. I was just wondering if there are any stopping rules that are in place where you.
Speaker Change: Where maybe CNS.
Speaker Change: Next.
Speaker Change: Our parent and.
Speaker Change: You need to be notified immediately I'm sure. That's a very sensitive area given the history of this drug class.
So.
Speaker Change: Maybe while we're on that just thinking about what nobody was reported with <unk> band or what they Havent reported.
Speaker Change: Or are we absolutely certain that the New York Neuropsychiatric side effects are in fact, CNS mediated or might there be some sort of peripheral mechanism of action that's.
Speaker Change: That's causing this thanks.
Speaker Change: Hey, George Thanks.
Speaker Change: I'll turn it over to Dr. Aurora, you might want to take both those questions and I don't know Chris.
Speaker Change: If you want to talk about any of that from a preclinical standpoint on the second part.
Chris Twitty: Yeah, So John.
Chris Twitty: The SMB gets all the data.
Chris Twitty: We provide them with everything they provided.
Chris Twitty: Blinded manner, so they're able to to assess everything that's going on in the study and obviously blinded. So we don't actually get that done.
Speaker Change: How do you guys have stopping criteria, which.
Speaker Change: Every other study, but the DSM beach by its charter has the right to tell us based on what they are seeing that we need to modify the study are.
Speaker Change: To make changes or stop the study dosing.
Speaker Change: Anything of that Softbank, who reviewed so far they have told us that the study's findings continue as is.
Speaker Change: That's what people coming to another full review in April and we'll keep you all posted but at this point, we've had no indication that the SMB pink any modification after studying as needed based on what they have seen.
Speaker Change: They do have all the data so they are looking at all of the neuropsychiatry.
Speaker Change: And the neurological exams, etc.
Speaker Change: Your second question was related to you if I kind of take effect.
Speaker Change: Yes.
Speaker Change: In an absolute sense I can't tell you what the.
Speaker Change: Patrick effect, because often we believed it then.
Speaker Change: CB, one is being blocked in the highest centers of the brain, but.
Speaker Change: Chris can elaborate on this if you want to hear more but we do have some really nice models that show how the neuropsychiatric effects.
Speaker Change: Are dependent on the concentration from the brain not on the concentrations in the basin. So even after you reach full engagement in the policy has slipped on lunar bank. When you increase doses at that point, what's changing is the concentration in the brain and reaching the IC 90 bed and you see the rate of neuropsychiatric effects, increasing so based on those modules, we do believe that.
Speaker Change: This is very much a CNS effect of non term and benefit.
Speaker Change: Okay. That's helpful and one more if I may.
At the 52 week.
Speaker Change: I imagine this is going to be over an open label portion of the study are you going to be able to follow the placebo patients.
Speaker Change: Yes.
Speaker Change: The way the 52 week.
Speaker Change: The extension the monotherapy patients, which is the primary arm of the study go into open label no asthma. So we are crossing over the placebo as well.
Speaker Change: <unk> got an opportunity to be an active rob which help us to retain some patients as well.
Speaker Change: I will also give the placebo patients an opportunity it will give us another 26 week cohort that will go in 2006 weeks. Besides those that we'll get the 52 weeks of treatment. So we can be one have a placebo in that in the Bryan Venetian.
Speaker Change: Because the combination arm is already getting an active treatment. We are able to just continue then to 52 weeks in a blinded manner. So they will continue to get this evil.
Speaker Change: Uh Huh alright, that's good.
Speaker Change: That'd be very informative thanks very much.
Speaker Change: Your next question comes from the line of John Wilson of citizens JMP. Your line is open.
John Wilson: Hey, Thanks for taking the question.
John Wilson: Just wondering what do you attribute the quicker enrollment too, especially when the <unk> data came out with lower than expected weight loss and neuropsychiatric events I'd imagine that might dampen some enthusiasm, but obviously someone else is going on so what are you guys hearing from investigators.
Speaker Change: Hey, Jonathan Thanks for joining and I appreciate your patience on the call list here.
John Wilson: Yes.
John Wilson: Good news here is obviously.
Speaker Change: Overall as Dr. Roy commented in what we've seen across the board you can evaluate other other agents obesity studies have had generally an uptick of interest from patients but.
Speaker Change: To the credit of the Sky operations team the Crows involved and the clinicians that were working with were also working with some really.
Speaker Change: Fantastic investigators.
Speaker Change: Mentioned earlier investigators that have experience with other agents experience, even with <unk>. So we're working with a few academic centers.
Speaker Change: And there has been generally strong.
Speaker Change: I think follow through in terms of patient recruitment patient interest keeping pace.
Patients kind of informed with what's going on.
Speaker Change: It's an alternative mechanism too right. So the challenge you have with that.
Speaker Change: Most of the larger <unk>, one studies is that a lot of patients discontinue.
Speaker Change: Discontinue and theres issues regarding Tolerability here.
Speaker Change: Here that youre offering an alternative mechanism.
Speaker Change: And keep in mind, we also had an arm that had the combination with <unk>. So it's a combination of factors I think alongside of some good.
Speaker Change: Good.
Speaker Change: Treatment tactics that the team employed to get that done.
Got it and then maybe two others for me.
Speaker Change: The release mentioned some optimization work to move to a monthly dosing can you talk a little bit more about that and how important that is to your product profile.
Speaker Change: And then last one for me can you discuss.
Speaker Change: Potential utility in diabetics I know they are not included in <unk>.
Speaker Change: <unk>. So how do you think about the diabetic opportunity and how you pursue that in subsequent trials.
Speaker Change: Yes.
Speaker Change: Great.
Speaker Change: Ill turn it over to two to talk about from the GMP manufacturing and with the steps that we've taken there.
Speaker Change: And then.
Speaker Change: Probably Dr.
Speaker Change: Chris you guys can.
Speaker Change: Both funds for the diabetic question.
Speaker Change: Yes.
Speaker Change: Thanks.
Speaker Change: So in terms of your question around monthly dosing, we think it's important I think we're at it.
Speaker Change: It becomes important for the patients we think it will help with the.
Speaker Change: Sort of convenience and potentially compliance where it helps with sky that certainly helps with that.
Speaker Change: From a cogs cost of goods perspective so.
Speaker Change: But ultimately again I mentioned earlier that we did do a K well have been doing kalo primary research.
Speaker Change: And those kols actually.
Speaker Change: Pretty clear that.
Speaker Change: Weekly dosing is really.
Speaker Change: Quite acceptable for them and for patients as well so from a from the TPP perspective.
If we landed on a weekly dosing, we don't think that's going to be a major sort of deteriorates.
Speaker Change: Turns are hit on the target profile.
Speaker Change: But if we are able to get two monthly dosing then it certainly would be beneficial.
Speaker Change: From a cost perspective for the company and probably would provide some some additional convenient you don't make it.
Speaker Change: Good.
Speaker Change: Our major concern.
Speaker Change: Yes, just.
Speaker Change: On the manufacturing process.
Speaker Change: Not really spent much time speaking about down but as you've seen in the press release today, we've now begun to.
Speaker Change: Discuss that and be transparent.
Speaker Change: Our GMP manufacturing process for <unk> is well underway.
Speaker Change: Proud of the work.
Speaker Change: <unk> and his entire team has been working on so that's.
Speaker Change: That's including process optimization.
Speaker Change: Insuring.
Speaker Change: That's about consistency and then just preparing for larger scale production. So we don't feel.
Speaker Change: We have any challenges to meet the demand that we expect for.
Speaker Change: For the subsequent regulatory studies.
Speaker Change: And then ultimately for commercialization, where we're doing it really I think elegantly in terms of how to scale up and doing it responsibly from a capital allocation standpoint.
Speaker Change: There was a question regarding just the both the type two diabetes population so I think.
Roy: Maybe Dr. Roy.
Roy: Probably more informed on how that mechanism is a play and I don't know, Chris you want to talk about it from a preclinical standpoint.
Roy: Yes.
Speaker Change: Two more.
Speaker Change: <unk> will follow and then be able to test in.
Speaker Change: People with diabetes.
Speaker Change: We know that part of the mechanism of action.
Speaker Change: Insulin sensitivity and so that plays a big role in the treatment of <unk>.
Speaker Change: Diabetes of call.
Speaker Change: The weight loss itself and the fact that the action is in adipose tissue and its anti inflammatory. So there's a whole lot of difficulty in which simply is really well with diabetics and anecdotally we've heard from.
Speaker Change: Some of the Kols in Europe that when they use <unk>. They were quite pleased with how it worked with diabetic. So it's just an interesting I'll get there.
Speaker Change: Yes.
Speaker Change: Chris even more interest for us we will definitely be testing. This in diabetics I think once we have proof of mechanism in there moving forward we will plan.
Speaker Change: The study in people with diabetes as well.
Speaker Change: I might just add briefly on the preclinical side, we are seeing some really interesting and this is in.
Speaker Change: And not necessarily a diabetic model but.
Speaker Change: Some of the work we're doing some of the supply of product and pathways that are very much relevant.
Speaker Change: Do patients with diabetes monitoring the right way and so.
Speaker Change: Whether or not it's a focused study directly or predicting about perpetual comorbidities of those pre diabetic.
Speaker Change: This pathway Mechanistically you seem to have touch in a very productive fashion on some of those pathways. So that's that's a very nice detail regarding either PD one inhibition.
Speaker Change: Your next question comes from the line of Albert low of Craig Hallum. Your line is open.
Speaker Change: Okay.
Speaker Change: Hi, everyone.
Speaker Change: Thanks for taking my question I was wondering with this change of having this open label extension portion whether there are any other notable changes in design then I was wondering if there there'll be this 13 weeks of follow up period. After the treatment period is done.
Speaker Change: Yes, Albert Thanks for staying on the colon and following through with a question.
Speaker Change: Okay.
Speaker Change: At the moment, we haven't.
Speaker Change: It's spelled out all of the updates regarding the <unk>.
Speaker Change: Designed for for now what we've stated is that we're extending all of the army.
Speaker Change: Two from 26 weeks to 52 weeks.
Speaker Change: So stay tuned for additional kind of data.
Speaker Change: Anything else, we might explore in those and added 26 weeks.
Speaker Change: The other what was the other part of your question.
Speaker Change: Yes, I think that that was the main part of that.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Complete what youre asking there will be a 13 week follow up.
Speaker Change: The 52 week extension to for those who rollover.
Speaker Change: Yes.
Speaker Change: Okay, alright, great. Thanks.
Speaker Change: Okay.
Speaker Change: And I was wondering you've been very clear about kind of setting the bar for an 8% difference at 26 weeks and I guess I understand there wont be a placebo arm at this 52 week time period end.
Speaker Change: And I think Chris mentioned potential deeper weight loss, but can you share any other expectations for for the 52 week time point.
Speaker Change: Yes, it's great.
Speaker Change: It's a 1 billion dollar question that you're asking.
Speaker Change: Firstly, we don't have any any data on that at this point in time, but the goal here is for the 26 weeks.
Speaker Change: Is to show that 8% and we will also have no.
Speaker Change: <unk> from the extension study.
Speaker Change: How how patients are doing on the longer time point.
Speaker Change: So the 26 week time point I hope that we are going to be able to see the curves.
Speaker Change: Continuing to show.
Speaker Change: Deeper weight loss with the mechanism now to point to other PD, one inhibition data, namely remote event, but that was the that was the case and we expect to be.
Just as competitive here with the peripheral driven approach that we have so.
Speaker Change: I think it's still.
Speaker Change: That's still pending.
Speaker Change: I don't want to speculate on anything other than other than what we've already kind of designed in our current program.
Speaker Change: Alright got it thank you.
Speaker Change: Okay.
Speaker Change: That concludes our Q&A session.
Speaker Change: Ladies and gentlemen. This concludes today's conference call you may now disconnect.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.