Q2 2025 Veru Inc Earnings Call
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Speaker Change: Good morning, ladies and gentlemen, and welcome to Veru Inc's Investor Conference call. All participants will be in a listen only mode. Should you need assistance, please signal at conference specialists 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. I would now like to turn the conference call over to Mr. Sam Fisch, Veru Inc.'s Executive Director, Investor, Relations and Corporate Communications. Please go ahead, sir.
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, statements of the company's plans, objectives, expectations or intentions regarding its business, operations, regulatory interactions, finances and development and product portfolio.
Speaker Change: Such forward-looking statements are subject to known and unknown risks and uncertainties, and our actor results may differ significantly from those projected, suggested, or included in any forward-looking statements.
Speaker Change: Risk that may cause actual results or developments in different materially are contained in our 10Q and 10K SEC filings.
Speaker Change: as well as our Pesterleases from time to time. I would now like to turn the conference call over to Dr. Mitchell Steiner, Veru Eng's chairman, CEO and president.
Speaker Change: Good morning. With me in this morning's call, with Dr. Gary Barnett, the Chief Scientific Officer, Michele Greco, Chief Financial Officer, and Chief Administrative Officer.
Speaker Change: Veru is a late clinical stage biopharmaceutical company focused on developing novel medicines for the treatment of cardiometabolic and inflammatory diseases.
Speaker Change: Our Drug Developing Program consists of two clinical stage drug candidates and nobles arm and submissive viewing.
Speaker Change: Noah Sarman, oral selective and receptor modulator, Sarm, is being developed as a novel drug that makes GLT-1 receptor agonist weight reduction more tissues selective by preserving lean mass muscle while causing greater fat loss and older patients who are overweight who have
So this is Buhler
Speaker Change: As an oral micro-trivial disorder, it's being developed as a broad anti-inflammatory agent to reduce vascular plaque inflammation to slow the progression of promoter regression of astro-scorotic cardiovascular disease.
Speaker Change: This morning, we will focus our update only on our BC program.
Speaker Change: As defined by FDA, obesity is a disease of excess body adiposity of fat.
Speaker Change: GLP-1 receptor agonist have been shown to produce significant weight loss in patients who overweight have obesity.
Speaker Change: and, fortunately, the weight loss is tissue non-selective, with the indiscriminate loss of both fat and lean mass. As the total weight loss up to 50% of the total weight loss is attributable to lean mass, we must do a better job of getting rid of fat tissue only. Let's face it.
Speaker Change: No one wants to lose lean muscle mass. Most of this is common sense, but the beneficial consequences of increasing or maintaining muscle mass in an aging population are increased based on metabolism, which is sustainable weight management, better control of your blood glucose.
Speaker Change: Better Joint Health, Better Increased Strength, Increased Balance, Potential Decreasing Falls, Increased Bone Mental Density, Potential Decreasing Non-Germanic Bone Fractures, and Increases in the Possibility of Maintaining Independence in Older Population.
Speaker Change: With that objective, we are developing a noble song with an oral novel of song that has demonstrated in previous clinical studies improvements in body composition.
Speaker Change: with tissue selective increases in lean mass and decreases in fat mass improvements in both muscle strength and physical function. No mass realizing effects in women and neutral prostate effects in men.
Speaker Change: We conducted a phase to be multi-centred double-brine placebo controlled, randomized dose-spinning
Speaker Change: Designed to evaluate the safety and efficacy of an oversaw in three milligrams, an oversaw in six milligrams or placebo, as a treatment to augment fat loss and prevent muscle loss in 168 older patients greater than equal to 60 years of age, receiving some magnified which is regover for chronic weight management.
Speaker Change: After completing the efficacy dose assessment portion of the Phase-2B Quality Clinical Study, the patients continued.
Speaker Change: into a phase two extension maintenance trial, where all patients have stopped three minutes to magpaltine, but continue to take placebo and others on three milligrams or another on six milligrams, and it blinded the fasting for the additional 12 weeks.
Speaker Change: Phase II B Clinical Trial will evaluate whether a noblison can maintain muscle and prevent the fat re-gain that generally occurs after discontinuing the GLP receptor agonist.
Speaker Change: The positive top-line results that face to be quality clinical study demonstrated that knows I'm in the novel drugs, that when combined with the GLP-1 receptor agonist, makes weight reduction more tissue selective for greater fat loss while preserving lean mass
Speaker Change: Phase II B quality studies the first human study to report the effects of a muscle preservation throughout Canada on body composition, physical function, and older patients who are receiving a GLP-1 receptor agonist for weight reduction.
Speaker Change: The Phase II B quality clinical study made its primary end point with a statistically significant and clinically meaningful benefit of a 71% preservation of totally embodied mass in all patients receiving a novosome plus somagotide versus placebo plus somagotide
and that p value equals 0.002.
Speaker Change: Numbers on 3 milligrams plus some agritide was the best dose, with a greater 99% mean well-to-reduction loss of lean mass, that p-values less than 0.001, meaning almost the entire weight loss was fat mass.
Speaker Change: This is not unexpected. This is similar to what we have seen in previous multiple, in our previous multiple ascending dose clinical study. We believe that at a certain point, a target of the answer and the answer becomes oversaturated by drugs.
Speaker Change: As with the secondary clinical endpoints, an oversaw plus a magnified treatment resulted in a dose-dependent greater loss of fat mass compared to placebo plus a magnified with the, in oversaw 6 milligram dose, having a 46 percent greater relative loss of fat mass compared to placebo plus a magnified group of 16 weeks, and that p-value is 0.014.
Speaker Change: Although an oversaw press to magnetize significantly preserved lean mass, the additional loss of fat mass caused by an oversaw treatment was able to replace the lean mass preserved to allow a similar net mean weight loss measured by DEXA, which to magnetize at 16 weeks.
Speaker Change: Median percentage of total body weight loss was 32% for lean mass and estimated fat loss was 68%. In contrast, in the all-in-aversum for the somatotype group, the total weight loss due to the lean mass was only 9.4%, and estimated fat loss was 90.6%.
Speaker Change: Novosalm plus semacritide, improved changes in body composition, resulting in more selective and greater loss of fat, compared to subjects receiving placebo plus semacritide.
Now physical function was measured by the Stereocline test.
Speaker Change: Stereocomptest is an activity of daily living as it measures muscle strength, balance, and agility.
Speaker Change: The client and performance measured by stair crime tests has been shown in older patients to predict a higher risk for mobility disabilities, gate difficulties, falls and bone fractures, hospitalizations and mortality.
Speaker Change: In our study, the loss of a mass matter has 42.6% of patients on placebo plus the suicide group had at least a 10% decline physical function in 16 weeks.
Speaker Change: Again, this is the first human study to demonstrate that older patients receiving GLP-1 receptor agonist for weight loss or at a higher risk for accelerated loss of lean mass which is and with the physical decline.
Speaker Change: The All and Overson for the Somagotai Group had statistically significant and clinically meaningful 54.4% wealth of reduction, and a proportion of subjects that lost at least 10% stericline power compared to the placebo somagotai group, and that p-value is 0.0049.
Speaker Change: 6 milligram plus somatactite group, there's a 46.2% relative reduction, and unfortunate patients are released to 10% decline in certified power from baseline versus placebo plus somatactite group, the p-value is 0.0505, inclusion, and no-verson treatment.
Speaker Change: On average preserves lean mass and muscle, which is translated into a reduction in the proportion of patients who have a clinically significant decline in steracline-physical function, versus patients receiving somagotide alone.
Speaker Change: In summary, in no of some plus some agritide improve changes in body composition which resulted in more selective and greater loss of adiposity of fat mass while preserving lean mass and muscle and preserving physical function on steric line power compared to patients receiving placebo for some agritide alone.
Speaker Change: and Nova Starmer represents a novel drug that in combination with a GLP-1 receptor agonist, containing therapy causes greater and more selective loss of fat mass, which is the goal for higher quality chronic weight management.
Thank you.
Speaker Change: Number one, results of the unblinded safety data for the face to be quality study or expected this quarter.
Speaker Change: Safety Data for the Phase 2 be quality study remains blinded as the Phase 2 extension maintenance kind of study portion is still pinching out.
Speaker Change: He should be noted that the aggregate blinded safety data have not shown any significant differences compared to previous clinical studies in the nose arm and was expected for GLP-1 receptor agonist.
Speaker Change: Further, the independent data monitoring committee met February 10th, 2025, to evaluate the unblinded safety data, and they made the recommendation to continue the studies planned.
Speaker Change: Next catalyst is the phase to be extension maintenance study efficacy and safety results expected this quarter.
Participants continued into the phase two big trial.
Speaker Change: and Phase 2B Extension Trial, where all patients stop treatment with some agritine, but continue taking placebo and levels on three milligrams and levels on six milligrams monotherapy, and it blinded fashion for 12 additional weeks. The Phase 2B Extension Clinical Trial.
Speaker Change: Well, evaluate whether the nose arm can maintain muscle and more importantly prevent fat regain. But generally it occurs after discontinuity, LP-1 receptor agonist.
Speaker Change: The Economic Plan to present the full clinical efficacy and safety data sets for the phase to be quality clinical study and the phase to be extension maintenance study and future scientific conferences and publications.
Speaker Change: The next catalyst is, we expect, regulatory clarity for the GLP-1 receptor agonist and
Speaker Change: following an end-of-phase-2 FDA meeting, which is anticipated in Q3 2025.
Speaker Change: and as a face-to-be-quality clinical study is a positive study.
Speaker Change: We plan to request an end-of-phase two meeting with FDA. During our previous pre-ID FDA meeting,
Speaker Change: FTA provides general comments about a regulatory path forward for a Nova Sarm that's a drug that improves body composition during chronic weight management, including input on phase 3 clinical program design on the basis of this FDA input.
Speaker Change: We plan to propose a phase three clinical program that is similar to a positive, already positive phase two be a quality clinical trial.
Speaker Change: The proposed phase three clinical trial design is a double-double-blind placebo controlled study in older patients, greater than or equal to age of 60.
Speaker Change: who have obesity or overweight, and who are eligible for treatment at GLP1 receptor agonists. The GLP receptor agonists may be either a goalie with a zemacritide and or a zepbound to zepatype.
Speaker Change: Patients will be randomized to oral daily novosarm imagine placebo, all subjects will start and receive the GLP-1 receptor agonist during the study.
Speaker Change: The proposed primary end point will be the effect of a novosalman physical function measured by steric crime tests at 24 weeks.
Speaker Change: After the phase three clinical trial ends at 24 weeks of treatment, the plan is to continue to measure total lean mass, total body weight, stair climb tests, total fat mass, bone mental density, home IRAs, I mentioned it's from resistance.
Speaker Change: and Himmigo, and A1C, up to 68 weeks, to capture the longer-term benefits of the Novosar improvements on body composition with greater loss of adiposity of fat, preservation of both lean, mass, and bone, to chronic weight management.
Speaker Change: Another catalyst is we have a novel, modified lease oral notes on formulation which is on track to be available for the phase three clinical studies and commercialization.
Speaker Change: Veru is currently developing a novel, a patentable, modified release oral formulation for an oversawing. The actual formulation, pharmacokinetic release profiles and method of manufacturing will be subject to future patents.
Speaker Change: If issued, the experee for the new Modified Release, or knows on form of Legion Patent, is expected to be in 2045.
Speaker Change: The new and known song formulation has completed animal trials and is anticipated to be in phase one by available to the clinical trials during the first half of calendar 2025. Again, the expectation is that this novel modified...
Speaker Change: Police, Oral and Overson Formulations are available for Phase 3, Clinical Studies and Food Commercialization.
Speaker Change: Finally, we are focusing our phase three clinical program on the older patient population that could benefit from the weight reduction drug for chronic weight management, because they're at higher risk for muscle weakness and falls because of age-related loss and muscle.
Speaker Change: BCD Prevalence is 41.5% among 47.4 million patients enrolled in the Medicare Part D plans. Up to 34.4%.
Speaker Change: Patience of the age of 60 with obesity in the United States has sarcopenic.
Speaker Change: and a low muscle mass at the same time, and a potential at the greatest risk.
Speaker Change: for developing critically low muscle mass when taking it currently approved GLP-1 receptor agonist.
Now although older patients represent a large market population alone
Speaker Change: Success in this population can be a segue into the combination of an oversaw and a gel-ply-one receptor-active treatment and younger patients who have obesity, as well as diabetic and the frailty populations.
Speaker Change: I will now turn the call over to Michele Greco or COFO CEO to discuss the financial highlights, Michele.
Thank you Dr. Schener.
Speaker Change: Let's review the results for the three months ended March 31st, 2025.
Speaker Change: The increase is due to expenses related to the company the Novosarm Phase 2B Quality Clinical Study for Higher Quality Weight Loss.
Speaker Change: The decrease is primarily due to a decrease in share-based compensation.
Speaker Change: We recognize the gain on sale of entapied assets of $974,000, while there was none in the prior quarter. The gain represents non-refundable consideration received related to promissory notes due to Veru.
Speaker Change: The bottom-line result for continuing operations was a net loss of $7.9 million or $5 per diluted common share, compared to a net loss of $8.7 million or $6 per diluted common share in the prior year's quarter.
Speaker Change: Net loss from discontinued operations, net of taxes, related to the FC2 female condom business, which was sold on December 30, 2024, with $49,000 or 0 cents per deserted common share.
Speaker Change: Compared to a net loss of $1.3 million or $1 cent per diluted commensurate in a prior quarter.
Speaker Change: The net loss from discontinued operations during the current quarter represents changes in an estimate may at the time of the FC2 business sale, while the net loss for the prior year quarter represents the operations of the FC2 business during that period.
Speaker Change: Now turn to the results for the six months ended March 31, 2025.
Speaker Change: Selling General and Administrative Expenses were $10.4 million compared to $12.6 million in the prior period. The decrease is primarily due to decrease in share-based compensation.
Speaker Change: We recognize the gain, unsailed and happy assets of $1.7 million compared to a gain of $918,000 in the prior period, which is based on non-refundable consideration received related to promissory notes due to Veru.
Speaker Change: In conjunction with the sale of the SC2 female condom business, we recorded a gain on an extinguishment of debt of $8.6 million, related to the termination of the SWK residual royalty agreement.
Speaker Change: 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.
Speaker Change: The bottom-line result for continuing operations was a net loss of $9.6 million, or $0.7 per diluted common share, compared to a net loss of $16.4 million, or $13 per diluted common share in the prior period.
Speaker Change: Net Laws from Discontinued Operations, Net of Taxes, related to the FC2 business was $7.2 million dollars, or 5 cents per diluted common share, including the $4.2 million dollars.
Speaker Change: Lawson Sale of the FC2 Business, compared to a net loss of $1.9 million, or two cents per to get a common share in the prior period.
Speaker Change: The increase in the net loss from discontinued operations of $5.3 million is due to loss on the sale of the FC2 female condom business of $4.2 million.
Speaker Change: and the increase in the loss from the change in fair value of derivative liabilities of $3.1 million, partially offset by a decrease in selling general administrative expenses of $2.2
Speaker Change: The purchase price for the sale of the FC-2 business was $18 million in cash, subject to adjustment as set forth in the purchase agreement for the transaction.
Speaker Change: Net proceeds from the sale of the FC2 female condom business were approximately $16.3 million after selling costs and other purchase-price adjustments.
Speaker Change: The law on the sale of the FC2 female condom business is approximately $4.2 million, the difference between the estimated net proceeds of $16.3 million, and the total carrying value of the FC2 business of $20.6 million.
Speaker Change: Now looking at the balance sheet, as of March 31, 2025, our cash equivalent and restricted cash balance was $20 million, compared to $24.9 million, as of September 30, 2024.
Speaker Change: The Restricted Cash Balance is of March 31, 2025 with $354,000 related to the sale of the F.C. 2 Female Kind of Business.
Speaker Change: Our network in capital was $15.8 million on March 31, 2025, compared to $23.4 million on September 30, 2024.
Speaker Change: The company is not profitable and has had negative cash flow from operations.
Speaker Change: We will need additional capital support our drug development candidates.
Speaker Change: Based upon the company's current operating plan, our cash, as of the issuance state of these financial statements, is not sufficient for the company to fund operations for the next 12 months.
Speaker Change: However, we have sufficient capital to take the company into the fourth quarter of this calendar year which is beyond the upcoming near term catalyst which include the unblind safety data for the phase 2b quality clinical trial
Speaker Change: the top-length efficacy and safety data for the Nova Sarm phase 2B Extension Maintenance Study.
Speaker Change: The regulatory clarity from the FDA end of Phase 2 meeting for the Nobison Phase 3 program, and the Phase 1 Bi availability data for the novel modified release oral Nobison formulation.
Speaker Change: During the six months ended March 31, 2025, we used cash of $19.1 million for operating activities, compared with $11.7 million used for operating activities in the prior period.
Speaker Change: We generate a cash from investing activities of $18.4 million for the six months ended in March 31st 2025, while we use $40,000 in investing activities in the prior period.
Speaker Change: The cash generated in the current year relates to proceeds from the sale of the FC2 female condom business of $16.3 million, proceeds of $1.7 million from the sale of the entad equity assets, and proceeds of $393,000 from the sale of on-kinetics equity securities.
Speaker Change: We use cash and financing activities for the six months ended March 31, 2025, a $4.2 million related to the change of control payment, pursuant to the residual royalty agreement, which terminated in conjunction with the sale of the SC2 female condom business.
Speaker Change: In the prior period, we generated $36.8 million from financing activities.
Speaker Change: Now I'd like to turn the call back to Dr. Steiner. Dr. Steiner?
Dr. Steiner: Thank you, Michele. And with that, I'll now open the call to questions. Operator?
Thank you.
Speaker Change: Ladies and gentlemen, at this time we will begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing new keys to ensure the best sound quality. To withdraw your question, please press star and then two.
Speaker Change: Please lemme yourself to one question and one follow-up. If you have further questions you may re-enter the question queue. Once again that is star then one to rejoin the question queue. We will pause momentarily to assemble our roster.
Speaker Change: And your first question today will come from Dennis Ding with Jeffries, please go ahead.
Speaker Change: Good morning. This is Anthea on for Dennis. Thank you for taking our questions.
Speaker Change: Could you talk a little bit more about how you're thinking about your cash balance and runway? Specifically what options are exploring to fund the Phase 3 and is there potential to partner out the program? Thank you.
Speaker Change: Appreciation and Value, understood by investors and others based on the clinical data and other information that's coming out. So, as I mentioned,
Speaker Change: So we're expecting this quarter to have the unblinded safety data for the face to be quality clinical study.
Speaker Change: The top line efficacy and safety data for the Nozzarme Extension study will come out this quarter as well.
Speaker Change: and then we're expecting phase one viability, bridging date, if you will, for the novel, modified, release, oral, and
Speaker Change: Yes, I think the approach should be to go for non-delutive funding.
Speaker Change: and Nondelude Funding would be best for me, either a partnership type act, partnership or more from a large pharmaceutical company of which we are in active discussions.
Speaker Change: and the reason we're in active discussion is because we have, you know, phase 2B data that uniformly have been told by, told by key opinion leaders, we've been told by the scientific advisory board, we've been told by every expert in the field that this is a game-changer.
Speaker Change: to be able to have in a drug that will make a GLP-1 burn only fat that's unheard of. So we are the first company to report on a GLP-1 in combination with a muscle preservation drug that's in the world.
and being an oil drug.
Speaker Change: and being a non-peptide, being a small molecule, has some very interesting potential. And the way I see it, the future of weight loss and chronic weight management, is going to be a journey which you lose fat only and hold on to lean.
and furthermore, it's going to be an oral space.
Speaker Change: It's going to be an oral drug that you take for weight loss, and be an oral drug you take for body composition. And especially the small molecules, you can pair them together as a fixed combination. This could be very, very interesting. This is where the field is going. It's going to be an oral drug that you take for weight loss, and it's going to be an oral drug that you take for weight loss.
Speaker Change: So, as we get more and more information, I think that will solidify clearly that we're ahead of the pack.
Speaker Change: I think the Mystand inhibitors, you know, even if everything is equal, the IV or sub-Q and that's what they're trying to move away from. So our strategies to get the milestones behind us, to keep the discussions with the pharmaceutical companies going.
Speaker Change: and to have more clarity on the Phase 3 program, and that will help us understand better how what's the best way to fund the Phase 3.
Thank you for the question.
Speaker Change: And your next question today will come from Gary Nachman with Raymond James. Please go ahead.
Gary Nachman: All right. Thanks for all the updates and good morning. So, Mitch, for the face to be extension maintenance study, review what outcomes would be considered a success.
Gary Nachman: in turn to the magnitude of benefit on weight loss and muscle mass for an opusone versus placebo after stopping the GLP1. Does it need to be stacked sig or just show a positive trend?
Gary Nachman: and then if you could just say if the data is imminent or if it will be later in the quarter if you could narrow that at all and then have a follow-up.
Okay.
Thank you very much.
Gary Nachman: and I'll see how I can give you some more clarity. So, as you know, the study is powered on the phase 2B quality study, which is the formal first 168 patients, 16 weeks, lean by the mass being the primary endpoint. So, the way to think of the extension studies, almost like a safety study.
Gary Nachman: and what happens when you stop with TLP1. So it will be more descriptive, but it's telling a real story about the working hypothesis that muscle is important.
and so the idea is considered successful as we already know.
Gary Nachman: that we maintain lean mass with an ovus arm, and we burn more fat mass going into it.
Gary Nachman: Reduction, for the total weight loss, 40% was lean, and 60% was fat.
Gary Nachman: We saw 32% lane, 68% fat at 16 weeks, so the placebo group is acting just like we expect from the public, published New England Journal, Madison article, step one.
So the Expectation
is that the placebo arm?
Gary Nachman: We should now, without some agritine, without a nervous arm, we'll act similarly
Gary Nachman: which we expect to see fat regain. Remember, fat sea enemy, we have to pause for a moment when we deal with weight loss and obesity is all about what happens to fat.
Gary Nachman: through the process, meaning that fat comes back and you get fat re-gain, that's bad.
Gary Nachman: So, fat re-gain is what we're trying to blunt, and with fat re-gain comes weight gain, and then the question of muscle, we're going to, I guess, because we're doing a dexter, we're going to have a better clear understanding what happens to muscle. Now, muscle comes back in the Fieberg group.
Gary Nachman: and Fat Regain. Muscle, I'm not worried about. I'm happy Muscle comes back. Muscle doesn't come back. That's fine. The key thing to focus on is what happens to Fat Regain. I've got a noble soul. If you hold on to, if you have an over-sarm, and Muscle is not depleted.
Gary Nachman: Meaning that you're not getting two signals to the brain. One signal to the brain is you stop at the job we wanted to told the eat.
Gary Nachman: and you have a muscle depletion you're told to eat, you get a double eat, so you overeat.
We know that some shots off one of those and the idea is that we will, we will again focus on fat.
Gary Nachman: Blond the Fat Regain, and I think it's successful to be able to show that we've blunted so much that in fact we may actually cause additional fat loss.
Thank you about that for a moment.
Gary Nachman: So if we call it additional fat loss and don't cause regain, then notice on minor therapy it could be a nice off ramp for patients.
Gary Nachman: who are for patients, who want to stop with jail, who want for a sort of reason, now to be very clear.
Gary Nachman: The whole idea is of stay on the GLP1 to get the benefit.
Gary Nachman: and the problem they're having is they stop, they'll get all the fat back and they feel like it's lost it. So again, this is focus on the fat.
Gary Nachman: and if we can show a blunted fat re-gain or further loss of fat in an extension of 12 weeks, that would be considered success.
Gary Nachman: And the second question is, which is the timing, I will tell you the following, the safety data for the phase 2b quality study will come out first this quarter, and then shortly after that we would expect to see the phase 2b.
Gary Nachman: extension maintenance data come out and the safety and the efficacy will come out together.
and also doing it just for older patients.
Speaker Change: and then just quickly any potential concerns with tariffs, so where is the no-bossom source and manufactured, if you can comment on that, thinking ahead, particularly for the modified formulation. Thanks.
I think it's important because it's called action.
Speaker Change: I mean you can dip into an entire literature so that tells you kind of sets up nicely why physical function is important.
Speaker Change: With that said, the primary important vista requirement is 24 weeks. If you do the power calculations and ends up being about, and then back up, I don't know whether you use 3 or 6 yet.
Speaker Change: It feels like three, but we got to get the full data set to see.
Speaker Change: This three does a great job on Maine, but six does a great job.
Speaker Change: You know, on fat, but you know, but three does a good job on fat too, so we're still debating that, but put that aside for a moment. There'll be one dose.
Speaker Change: So one dose will take for it and so be one dose versus some agritide plus some agritide and or to zephytide. We're thinking now we'll probably do both.
Speaker Change: Why? Because there's only two drugs on the market right now, GLP-1s, and a commercial.
Speaker Change: We don't foresee anything significant obviously, there potentially could be something come up but the cost of goods or and oversaw was relatively low.
Speaker Change: So we believe we'll be in good shape regarding tariffs.
Speaker Change: Yeah.
Speaker Change: Okay, great. Thanks, a lot.
Speaker Change: And your next question today will come from William <unk> with B Riley. Please go ahead.
William: Thank you for taking our questions and congratulations on a very nice quarter and very promising results Kevin looking ahead to those.
Speaker Change: Maybe just good morning to tease out a bit more on what you might have seen already on safety understanding its blinded to date.
Speaker Change: You did say that you haven't seen any significant differences compared to what is it. What's your expected are expecting based on the previous studies. So just to sort of help us out instead of set a bar maybe you can provide some color on what your your expectations are for the safety based on these prior studies and how.
Speaker Change: Now we should be interpreting this in terms of.
Speaker Change: Just the general safety, but maybe specifically on these liver tests, yeah. So I think maybe the best way to answer is to just go head on with liver.
Speaker Change: And because people are saying as you know Sars habits in the literature.
Speaker Change: Sorry in general.
Speaker Change: Of which the data comes from the recreational use of Sars at doses 10 to 20 times higher so if we're at three.
Speaker Change: Three milligrams, they're getting dose at 30 milligrams.
Speaker Change: As you know 10, 10 times higher up to 75 milligrams is up to 20 times higher. So it was taken advil and next day take 21 of them and see how you feel so.
Speaker Change: Problem is that it's a controlled don't know who's making its mainland Chinese Indian company, So even and that's in that case are they.
Speaker Change: Real world data looks pretty good.
Speaker Change: And in terms of liver safety. Comparative example, alkylate is anabolic androgens, which are.
Speaker Change: Which you know is which is also been abused in the past I put abuse aside from our clinical studies.
Speaker Change: And Oh, what do we have a database of about 600 patients.
Speaker Change: We saw a rate of of L. T increase of about 1.8% or something like that in the placebo group and about three next week, 0.4% or something like that in the in the in the <unk> group and that's like 500.
Speaker Change: Patients for for for group.
Speaker Change: And what we see is very very characteristic of what you see with testosterone type products not at not the alkylate testosterone that we didn't modify to make it all in there and and and and it's been the problem, but if you take regular testosterone.
Speaker Change: Probably more similar to that where you see a slight increases mild increases in L. T. In a few subjects.
Speaker Change: I'll I'll always goes down.
Speaker Change: Either on drug mostly almost always on drug and less patient subsets that if for some reason and it goes down to normal we've never seen.
Speaker Change: Anything related to function, meaning believing increases alpha Foss cytase increases pro coagulation.
Speaker Change: Issues. So in other words is it it's.
Mile increase yourself limiting comes back down.
Speaker Change: And and represents what's called Adaptational tolerance, which is a common mechanism to deliver handles some agents are the other thing about novus arm is we're not a we don't fit the 222 tool looks at.
Speaker Change: What dose.
Speaker Change: Technically skilled rule of two two and which you know if you're doses over 100 hundred milligrams. It raises concern our doses three milligrams, we don't fit that rule. So from that standpoint, our expectation is that you know what we're seeing is what we've been seeing before and it's acting the same way.
Speaker Change: Mild increases comes back down, mostly usually on drug and and so we're not expecting a yeah.
Speaker Change: It's tolleson adaptation and it's not.
Speaker Change: Drug induced liver injury by highest law, which is what you know people get into trouble with the drug development, we just have not seen that.
Speaker Change: And so so I want to set the bar that that that are in the aggregate. It's not like we saw something in the aggregate and that we're going to separate it out if you haven't seen anything in the aggregate that that would be consistent with drug induced liver injury with by highest raw I mean, Gary Barnett do you want to add to that.
Speaker Change: <unk>.
Speaker Change: Yeah.
Speaker Change: Yeah, I think you summarized it correctly.
Speaker Change: That's exactly what we've seen in previous studies.
Speaker Change: If you go away and expand out of liver, we we don't see any significant.
Speaker Change: Serious adverse events and we're not seeing that in this particular study either so it's.
Speaker Change: Safety in aggregate is consistent with the studies that we've conducted previously.
Speaker Change: You know one interesting thing is the G. L. P ones also affect a L T, but the same same way.
Speaker Change: L elevations had come down with it.
Speaker Change: Time and it shows Adaptational.
Speaker Change: Tolerance approach and then the widely used and and that's true for dessert to zipper tied and for some magnetite. So so so again, we're not seeing anything inconsistent with what we've seen before what you've been saying I think what will be different.
Speaker Change: When we when we provide the full data safety data set you'll see what's happening in each category you know magnetize a loan versus a magnetite plus three plus six.
Speaker Change: Is that helpful.
Speaker Change: Very helpful. I appreciate that.
Speaker Change: Very disc extra detail their image.
Speaker Change: Just one more actually all from us.
Speaker Change: It looks from everything that we.
Speaker Change: You presented so far on the FDA has sort of provided to pass towards our two shots on goal or two passwords regulatory improvement you can sort of go after a functional improvements or potentially go after metabolic improvements it looks like you're sort of at least initially overwhelmingly targeting functional data obviously with you.
Speaker Change: We're a very nice positive stair climb also as your primary endpoint.
Speaker Change:
Speaker Change: Or are in phase three I.
Speaker Change: I was curious, though to how youre seeing sort of the other path. If you feel that that would be open to and oboes arm also.
Speaker Change: Don't think we've seen too much data on that and so.
Speaker Change: How do you see sort of these two alternate paths towards regulatory improvement.
Speaker Change: And will are and where we are or what should we be expecting as far as sort of the metabolic.
Speaker Change: Tests from the phase two b quality coming up here shortly.
Speaker Change: Yeah. So let me just you know.
Speaker Change: So so let me take let me tell you how I'm seeing it from a standpoint of pass so the first thing to say, but let's talk about another song for sectors and Novus arm has consistently shown.
Speaker Change: Lean body mass maintenance or improvement in other patient populations and we've shown the same thing in this patient population.
Speaker Change: We've shown a reduction in fat out of the population to older patients again, we've shown the same thing in this patient population.
Speaker Change: We have not seen the individual data with some of the metabolic parameters with some of the metabolic parameters of look for LDL insulin resistance and HBA, one H B a one C.
Speaker Change: We've seen a previous studies of LVL is maintained or slightly lower triglycerides go down this way the novus arm in other populations and we've also seen insulin and insulin resistance get better it's a home or got better at H B O N C I'm not quite sure on that one [laughter].
Speaker Change: But my guess is it got better and maybe Gary knows.
Speaker Change: In this study we are measuring our we're not measuring home I are in the phase to be but we are measuring H b O N C and L and LVL and so if a metabolic standpoint.
Speaker Change: We were gonna, we're gonna be additive I believe to what you see with the with a G. L. P. One.
Speaker Change: Now, let's take a step back and what we do differently of course as we have.
Speaker Change: In addition to muscle mass being metabolic we also have met him at muscle mass being physical function and that's been the hardest one for the other drugs like Monistat neighborhood is a shelf and so and part of that is because the Andrew receptors are time tested receptor and we know all you have to just look at the real World Literature. You know people are you know.
Speaker Change: They maintain muscle they burn fat they improve their performance and so it is a performance drag there's no question about it but your ftes asking if they'd be if performance drug they're asking you to show function. So by definition, it's not just what did you see on decks as what you see by performance and we've seen that whereas in Myostatin.
Speaker Change: But just in general have had tough time try to M. Oral so it puts us in a good position now the pathway from a regulatory standpoint, you have to think of it a couple of ways.
Speaker Change: The FDA has put out a guidance in January 2021 'twenty five that was very interesting because the big.
Speaker Change: Debate in the field is what is the regulatory pathway.
Speaker Change: And what you've heard from others.
Speaker Change: Is it if he showed a 5% a greater weight reduction incremental weight reduction when you when you combine two drugs together and that gets you over the hurdle.
Based on everything I know several meetings with the F. D. A C F T guidance itself and Furthermore, our workshops with USDA. That's evolving people are now understanding with DFT meant whereas for the first time, you have a drug food for weight loss.
Speaker Change: <unk>, 5% weight loss compared to placebo.
Speaker Change: Standard of care or standard of lifestyle changes, it's 5%, but once you're in and you have an approved drug that's 10% for example weight loss and you put that in combination with our second drug to come back with 15%.
The agency doesn't know what that means what did you do to make the patient better.
Speaker Change: So the agency says you have to have a second test in a second test is what did you do that's clinically meaningful so the F series is clinically meaningful means H b a once she gets better and some resistance gets better LDL gets better for example, those are metabolic things should get better.
Speaker Change: In the case of art drugs.
Speaker Change: The fact that we showed.
Speaker Change: Improvement in lean start to stabilize the technicals are stabilized preserve lean mass we can show a function if you'd show benefit in function. That's that's a benefit because it would be meaningful but if you think about what the G. L. P. One that's doing the G. L. P. One treatment makes H V. Once he better makes insulin.
Speaker Change: Resistance better makes LDL better so the combination has to make better and better.
Speaker Change: Whereas in the situation with in physical function. We just showed in our phase two b and physical function is not better with a G. L. P. One, though G. L. P 142 points to 6% of older patients in fact have a call it 10% or greater decline in stair climb power. So so we can make something worse better.
Speaker Change: That's interesting now pause for a moment and that means that the bar for.
Speaker Change: It is high and low it's low for the first time you have a product that that's by itself. It's high have you given in combination because you're being asked to do more than just weight loss.
Speaker Change: The F D a.
Speaker Change: <unk> also has said in the guidance.
Speaker Change: Theres a body composition pathway for approval.
Speaker Change: And so by the competition basically means fat and muscle and bone and that kind of stuff. They know there's a problem that the G. L. P ones that you change body composition.
Speaker Change: And in fact, the F D a.
Speaker Change: Purposely gone out of the way to define a b C D as excess of Adiposity. So weight reduction drug has to be drug that burns fat that is if that is what you get no points of losing leanne.
Speaker Change: Fact of the F. T now mandate sponsors to do a dex or an MRI to quantify at least in the subpopulation, how much lean is loss and how much how much fat loss because the whole goal was to show fat loss.
Speaker Change: So with that so in that same guidance you say however.
Speaker Change: If if your drug is a body composition drug work in our case, we're preserving lane.
Speaker Change: And that path then that path is beyond the scope of the weight reduction our guidance because you're now body composition drug in combination of G. L. P. One and come seek advice.
Speaker Change: It was out of device.
Speaker Change: So when we had the pre IMD meeting the FDA made it very very clear that in our case, we're fortunate because we do improve lean mass, Texas scan of lean mass by itself.
Speaker Change: Cosmetic okay to holding on to lean mass is wonderful, but what does it mean and again its performance function and so performance in function has to be measured somehow we did the stair climb test and so now we have in our phase two b a.
Speaker Change: A great situation that if we replicate the phase two being a phase three setting.
Speaker Change: That's wonderful then we win so the primary endpoint in this physical function by stair climb test at 24 weeks and we show that we can.
Speaker Change: Stopped physical the clock stop to decline physical activity physical function by stair climb and patients on G. L. P. One.
Speaker Change: That's clinically meaningful on its own so that is a very clear pathway forward.
Speaker Change: With F D a consistent with the guidance, it's inconsistent with what they told US they are in.
Speaker Change: In our meetings with FDA.
Speaker Change: Yeah.
Speaker Change: I appreciate that color I'll hop back into queue, but definitely on the lookout for the human data and congratulations again for a very nice quarter.
Speaker Change: Thank you.
Speaker Change: Again, if you would like to ask a question. Please press Star then one to withdraw your question first Star then two and your next question today will come from <unk> Chen with H C. Wainwright. Please go ahead.
Eduardo: Good morning. This is Eduardo on for you just a quick question again on the phase III trial.
Speaker Change: You mentioned, the I think there's appetite and I'm curious what your thoughts are there. There's some anecdotal evidence such as that but that skews a little bit more towards fat loss instead of being mass I'm curious, how you're planning around that and your trial design potentially.
Speaker Change: Losing more less lean math right are you it might need a little bit more patients in that group to power a different so curious how you're thinking about that it just yet so we haven't yeah. So if you go back and look at the data you'll see the following that to my surprise until I saw the data to sabotage lose about the same amount of muscle lean mass as.
Speaker Change: Maritime and the data comes from the step one study is a magnetite, where I think it's about $6 eight six to eight weeks. It was 6.8 kilograms of lien that's loss and and and so members with the lean not so much with the Fad is so how much how much lean you're trying to preserve.
Speaker Change: It's a function and so 6.8 and if you go back and look at the two as appetite data and you have to look in the supplemental tables.
Speaker Change: I was able to find the number at 72 weeks. When it was 72 weeks is because they have a different titration period. So it gets to seven two weeks. It was about 6.2 kilograms. So the difference between the lean mass loss at approximately a year plus.
Speaker Change: It's similar.
Speaker Change: So so so I think that the functional issues, there's appetite, it's going to happen to be pretty much similar to what we've found that sits in maritime.
Speaker Change: With that said.
Speaker Change: Well, we're going to power the study based on those numbers and and stratify the.
Speaker Change: The subjects based on based on weather and says hepatitis a magnetite. So we don't mix mix apples and oranges if that makes.
Speaker Change: I think the apples again look very much like Orange is the study, but would it be purists will keep them separate Gary Barnett do you want to add to that.
Gary Barnett: No, that's that's where I'd there'll be stratification on onwards.
Speaker Change: And we will make sure they're equal between the treatment groups, so that that difference will wash out.
Gary Barnett: Or will be accounted for in the randomization.
Gary Barnett: And then of course the.
Gary Barnett: Type of a group one that there'll be one will also be one of our covariates in email.
Gary Barnett: I know about the statistical analysis.
Speaker Change: Got it thanks, a lot very helpful.
Gary Barnett: Thank you.
Speaker Change: And your next question today will come from Leland <unk> with Oppenheimer. Please go ahead.
Leland: Hey, good morning, Thanks for taking our question just wondering Mitch you know the industry has been investing a fair bit in the development of potential therapies for them to decide.
Speaker Change: Effective the G O P ones be that'd be the that might've sudden blockers and so forth.
Speaker Change: Wondering if you know the work you've done to look at the differences between.
Speaker Change: No Bowl and perhaps those strategies are there any concerns you might have that those made show them any benefits.
Speaker Change: That may supersede or be differentiated from.
Speaker Change: No Bo as we await the the remaining data from the phase II.
Speaker Change: Great question. So so that's you.
Speaker Change: I'll begin with what I think makes us different and I'll end with I think what makes us different.
Speaker Change: What makes us different is oral and IV or sub Q in the whole space is moving even if all things equal things are moving in the direction of our oral treatments for chronic weight management.
Speaker Change: And and in all of the G. L P. One containing agents.
Speaker Change: Have the degree of lean mass laws nobody's going to disagree that are older patients who are at risk because they have less muscle mass to begin with and and it sounds representing 25% of a small of a small amount of muscles still a big amount and so so the older patients even big pharma will.
Speaker Change: Tell you are the ones that most at risk that we need to keep an eye on.
Speaker Change: With that said I think the Myostatin inhibitors.
Speaker Change: <unk> are going to have to have to overcome.
Speaker Change: A problem in their in their development, which has been showing physical function benefit in physical function benefits by objective measurements of muscle function and I'm not talking about a six minute walk test cause six minute walk test shouldn't should get better.
Speaker Change: If you lose weight cause six minute walk test as cardiovascular and that's why they would use six minute walk test for example, fulfillment they already hypertension drugs in that kind of stuff.
Speaker Change: But muscular dystrophy for example, they use a muscle quality they use a stair climb and those kinds of tests.
Speaker Change: So I'm not I think the I think the challenge is I think they're going to show a greater loss of fat Ah I think they're going to show a preservation of lean.
Speaker Change: Hum, but the but because lean doesn't translate necessarily to function then they're going to have to make better better which means you're going to have to look at LDL and look at H B O N C standard for instance.
Speaker Change: Insulin resistance something metabolic I think that's a challenge because.
Speaker Change: You can only make things better better so much better [laughter], meaning that.
Speaker Change: If your LDL hit 70, you know.
Speaker Change: With a G. L. P. One alone then what's better than better you're already in a better range same thing the atrium once he and same thing with insulin resistance G. L. P wants to do a good job on their own. So what are you going to show. So I think I think it's a question mark So I'm going to end with what I think makes us different again.
Speaker Change: And that is where oral and because we're all that's that doesn't matter what they show because it's small molecules or it can be combined with the future of weight loss medicines, which is an oral agent that's not that's not a peptide that small molecule.
Speaker Change: And then you'll be able to produce a mass produce drug.
Speaker Change: Cheap more cheaply.
Speaker Change: This distributed distributed much better when you're not looking for cold storage and that kind of stuff and and and get to you know get to the massive number of people who could benefit from a weight loss drug that that there's there's now a drug that is taking.
Speaker Change: 99% of Fad away, and leaving and leaving lean alone. So it's a true weight loss you are getting rid of the fat that's the enemy.
Speaker Change: Yeah.
Speaker Change: Great. Thanks very much.
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: I appreciate everyone, who joined US on today's call and I look forward to updating all of you on our progress at our next investors call and and stay tuned for the.
Speaker Change: The numerous catalysts that will be coming out over the short term. Thank you bye now.
Speaker Change: The digital replay of the conference call will be available beginning at approximately 12 P. M. Eastern time today may 8th by dialing one 870, 734 475 to nine in the United States and one for 123170088 internationally.
Speaker Change: You will be prompted to enter the replay access code, which will be 768 to 749. Please record your name and company when joining the conference call has now concluded. Thank you for attending today's discussion.
Speaker Change: [music].