Good morning, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Goldsmith, a biotech analyst here, and it's my pleasure to introduce Andrew Cheng, CEO from Akero Therapeutics. Before we get started, I just need to read a quick disclaimer for important disclosures. Please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, Andrew, maybe I'll just turn it over to you to make a couple of intro comments for people that might not be familiar with the story, and then we can hop into Q&A. Sure. Akero is a phase III clinical company, and we're in the middle of our three phase III programs that will start. We've started, and we'll talk about that during our chat. Maybe I'll stop there and turn it back over to you. Yeah. Sounds good. I thought maybe just to sort of start off the conversation, maybe talk a little bit about MASH, maybe a quick background there in terms of the market and sort of how things have evolved over the past few years and where the opportunities really are. Yeah. MASH is, I used to say up until last year that it was the most prevalent disease for which there was no approved drug, but Rezdiffra is the first, who got resmetirom approved in March of 2024. Last month, we're in September, Novo had semaglutide approved for both for F2/F3 MASH. Now there are two drugs approved for this disease, and that's only in the U.S. I don't believe there's an approval anywhere else in the world for those two drugs. Maybe just talk a little bit about the mechanisms of action of those two approved drugs and how you're different from them. Yeah. So, Rezdiffra is a thyroid hormone beta receptor agonist. It works exclusively within the liver, increasing liver oxidation and basically reducing liver fat. Semaglutide, obviously, so many indications, obviously, for weight loss and for type 2 diabetes and for sleep apnea. I'm sure there may be some other things that I've not captured, but there's so many indications, and there's data on it since it's an old drug. GLP-1s in MASH work by weight loss, and therefore they reduce liver fat and that mechanisms. Both Rezdiffra and semaglutide would, once they remove liver fat from the liver, it allows what they call nat-MASH resolution to occur. As a result, the liver, unlike other organs, does regenerate, and therefore, it can heal itself and thereby resolve fibrosis via that healing. A more indirect mechanism that takes a little bit longer. What is your approach? Yeah. We also are very effective at reducing liver fat, so we have that component. Perhaps more importantly for this patient, we're a direct-acting antifibrotic. FGF21s work not only within the liver, but also work external to the liver to improve insulin sensitivity, regulating whole body metabolism, and directly inhibit hepatic stellate cells that transform into myofibroblasts that lay new collagen down. We inhibit that process, and we've demonstrated in clinical studies that we're very effective in inhibiting new collagen synthesis. Yeah. Maybe that's a good point to sort of transition to some of your prior data. Maybe we start with the SYMMETRY study. You announced, you know, 96-week data earlier this year that was, you know, very promising and groundbreaking. Maybe walk us through some of that and what made it such a groundbreaking readout. Mike, it's a really good question. I think for many, many, many years, it's been taught in school to both medical students and GI fellows that cirrhosis is irreversible. In January of 2027, our SYMMETRY study, which took patients who were F4 cirrhotic patients who had compensated cirrhosis as on biopsy, they were Child Pugh A, that those patients, when treated with efruxifermin, our FGF21 analog, for two years, we demonstrated a statistically significant improvement in fibrosis, moving from F4 to F3 of 39% in the treated on 50 milligrams compared to 15% on placebo. Roughly a 24% effect size, which was statistically significant whether you look at that analysis, which is what we call the completer analysis, or you look at the ITT analysis, we demonstrated a roughly 18% effect size. That would be 29% versus 11%. Those data were, frankly, remarkable for us to see that difference, and obviously for the patients as well in the trial and for the larger community. Yeah. Can you talk maybe a little bit about some of the feedback you've gotten on that dataset and how it's impacting? Yeah. Our investigators, of course, since they were there as their patients, were extremely pleased. We had some investigators who've been doing this a long time, and they've never been able to say to a patient who's cirrhotic, "You're no longer cirrhotic," as something that they've waited most of their career to say. Fortunately, for most of these F4 patients, the five-year mortality is 50%. For once a patient had that diagnosis of cirrhosis, the physician would sort of give them the unfortunate news and say that the things that we have to do, you know, we're going to do what we can, which is nothing. There are no approved therapies, and eventually they would try to get them on a liver transplant list because that's really the only option for these patients. As you're well aware, there are an insufficient number of organs, and not everyone, due to comorbidities, is a candidate for transplant. It's a pretty difficult diagnosis to share with your patients, especially when you have no treatment options and the future is not not rosy. Yeah. Makes sense. Maybe we can talk a little bit about just fibrosis improvement in terms of what's considered clinically meaningful. Maybe we just start with F4 patients because, sure, that's where what we're talking about. Yeah. I think, frankly, any improvement is clinically meaningful in these patients because the consequences are so dire. Certainly, having a 24% effect size, it's very clear that's something that the physicians would be very happy to be able to share that benefit with their F4 patients. Yeah. Very groundbreaking data. Maybe a similar question. How do you think about what's clinically meaningful in maybe less severe F2, F3 patients? Yeah. Again, the real F2 patients are a little different. They have a little more room. The critical issue for patients who have advanced fibrosis, which is not yet cirrhotic, is that the F3 patients, they're concerned about becoming cirrhotic and having cirrhosis. For F3 patients, I think any amount of improvement is important. Maybe it's a better way to answer your question, Mike, to look at the two approved drugs. If you look at Rezdiffra, I believe its FDA label has about an 11.5% improvement over placebo, so the effect size. I believe that semaglutide, which is just approved, has about a 14.5% effect size based on the ESSERS study that they presented last year. That was recently published in The New England. Yeah. Maybe just, can you touch on sort of your F2/F3 results and kind of how those compare? When you look at our data, we had roughly the two-year data in Harmony, which was published last month in The Lancet. We demonstrated in the completer population a 52% effect size, 75% one-stage improvement of fibrosis on the 50 milligram arm over two years. That's compared to a low 20% in the placebo arm. A 52% effect size in the completer analysis and in the ITT analysis, roughly a 30% effect size. Considerably greater than what's been approved to date. Yeah. You're definitely seeing some very strong effects there on the fibrosis side. Maybe we can talk a little bit about what you're seeing on the safety side. Yeah. We would say that our safety profile has been pretty consistent, in both the cirrhotic and pre-cirrhotic populations. The most common adverse events are, you know, diarrhea and some degree of nausea. Those are the things that we see most commonly. We would say that over the two-year period, the patients in the study are able to tolerate, for instance, in SYMMETRY, we had a number of discontinuations on the 50 milligram arm early in the study through the first nine months. Yet over the final 60 weeks of the study, we only had one patient in the 50 milligram arm discontinue for diarrhea. On the other hand, what we have seen in over two years in both studies, we've seen some decrement in bone mineral density, in general, roughly about a 5% effect size, over placebo. These are patients who are mostly postmenopausal women, but it's something that, and unfortunately, they were also untreated during the study. I think that's something as we look in phase III, we're encouraging our, A, patients to take vitamin D and calcium, as well as, if there's signs of BMD loss, regardless, it's blinded, of course, to seek endocrine referral because their bone mineral density is a slow process, but, and all, but there it is treatable. Yeah. In the phase III, you'll be able to sort of manage this, you think? We're encouraging our hepatologists to refer to their endocrine friends. Makes sense. Maybe we can shift gears now just to your phase III SYNCHRONY program. You have multiple studies going on there. There are three different studies. Maybe to start, just sort of the big picture, walk us through those studies and the purpose of each. The first study is what we call SYNCHRONY Real-World. What that is, is a population that is biopsy-confirmed MASH, but they're followed non-invasively. In a way, this is what the real world is. Patients come in and they're not, and you can see this with Rezdiffra and likely with semaglutide already. They don't rely on biopsy in the clinic today for non-clinical trial patients. They use non-invasive measures, whether it's an ultrasound or they look at some laboratory markers to track their progress. We're doing that in this population. The purpose of that study is really to provide data to physicians and the FDA as to how this drug would be used if you weren't using biopsy. It's a very clinically supportive and helpful study to guide, "Oh, this is what you can expect if you look at this through these non-invasive measures." On the other hand, the FDA doesn't accept non-invasive measures for registration today. The second histologic study, or the second study in F2/F3 patients, is what we call SYNCHRONY Histology. That's very similar to what we've seen with the Harmony trial. That is, it's a biopsy-confirmed F2/F3 patient population with MASH, and they're treated for 52 weeks, and they have a paired biopsy at the end of that time to see what the percentage of patients who have one-stage improvement of fibrosis is and/or MASH resolution. Those are the two FDA-accepted endpoints. The final study is more similar to the SYMMETRY style, which is in F4, so compensated cirrhotic patients, and we're following them with biopsy for 96 weeks, just like we touched on in SYMMETRY. They will also be followed for clinical outcomes. A subset of patients will get the biopsy, and then all patients will be followed for clinical outcomes. That component of the trial is event-driven. We don't know the actual duration of the trial. It's really driven by reaching the pre-specified number of clinical events on both placebo and active. You're going to read out sort of the first study, which is real-world, again, non-invasive in the first half of next year. What should investors focus on there, and any sort of read-through to some of your other studies? Yeah. I think at that study, it's primarily a study of safety and tolerability. I think we'll recall that the phase IIb studies were in pre-cirrhotic patients, were roughly 125 patients, a three-arm study to both 28 and 50 milligrams on the efruxifermin arms and then placebo. The SYMMETRY study was three arms again, but 180 people, so roughly 60 per arm. This study is only one dose of active, which is 50 milligrams, but it's randomized two to one. There'll be 400 patients on 50 milligrams for a year. This will be the largest dataset that we have on 50 milligrams for that duration. I think overall, it'll be helpful to see what the safety profile is, and hopefully, it'll be very similar to what we already know. I recall that there are non-invasive measures that are being used, and we measure them in both pre-cirrhotic and cirrhotic. I think what investors should focus on is how similar this dataset is to what's already known. That's going to be the most important thing to say that we have a good understanding of what this drug does, in a much larger group of patients over the one-year period. If it's primarily for safety, are there any sort of data points we can look at that might read through to efficacy or just further increase our confidence there? Sure. I think we've talked about last fall at the American Society of Liver Diseases, we had a poster presentation that talked about correlating non-invasive measures, specifically the change in the ELF score, Enhanced Liver Fibrosis Score, which is a composite of three measures, as well as FibroScan, which is an ultrasound-based measure, and how that correlates with one-stage improvement of fibrosis. I think in this way, there's a little bit of subtraction in the sense that you won't have fibrosis to correlate, but you have two of the three measures. I think there's some degree of efficacy that could be inferred from those. As a reminder, these markers are imperfect, and we showed that last fall, even though the trial through the eyes of pathologists showed 75% one-stage improvement of fibrosis over two years, the correlation with patients who had both a 30% improvement in FibroScan and had a 0.5 decrease in ELF score was only 42%. These non-invasive measures still leave quite a bit of fibrosis on the table. Maybe we can shift just to histology. Again, your F2/F3 study, plan to share data, I think first half in 2027, so it's sort of a year later. Maybe talk about your decision to use a composite primary endpoint there. Yeah. As I mentioned earlier, in that study for registration, the FDA allows either one-stage improvement of fibrosis or MASH resolution as the registration endpoints. You can satisfy either/or. The European Union requires an "and," you need to be statistically significant on both measures. For statistical issues, we chose the "and" mostly to satisfy the European Union, but the FDA understands that there's also the individual components that will be measured and shared publicly. I think we don't see a bigger difference. I think the ability to satisfy one or both regulatory agencies was how we chose the "and. Yeah, that's one difference between your sort of phase II study. Any other differences in phase III versus SYMMETRY? I would say SYMMETRY, there's one big difference. SYMMETRY is almost entirely U.S., 95%+ U.S. sites. As is common in phase III studies, this is being conducted throughout the world, so it's a rest of the world study. Most importantly, the drug product. In the phase II study, it was a frozen solution, an earlier formulation that required that patients come into the doctor's office once a week for two years, 96 visits, to have a nurse or office staff inject them, 1 milliliter subcu. The phase III program is using the commercial formulation. That is, it's a dual chamber injector, so it's given to the patient so they can inject themselves at home. It doesn't require multiple office visits. It's obviously much more patient-friendly, and we're looking forward to seeing that in clinical use. In terms of the different geographies, you know, U.S. versus European patients, have you noticed any differences in any of your other studies between how those patients respond? We don't have any other data. All the phase II studies were done primarily in the U.S., so both phase II studies. It's really, recall that the phase III studies are being done in the U.S., Europe, Latin America, Asia, as well as the Middle East. It really is a global study for both phase II programs. We don't have any data in phase II to sort of compare and contrast. Would there be any reason to think you might see different responses on fibrosis for some reason? There's no reason to think that would be true. We've not seen that in other programs, whether it's the Intersect program that read out or the semaglutide program or the Rezdiffra program. To my knowledge, they've not shown differences geographically. Yeah. Makes sense. Maybe we can just shift gears to outcomes now. That's your, again, F4 study. You have a biopsy cohort. Maybe just, you started enrolling the study, I think, last September, and maybe talk a little bit about how enrollments were tracking there. As you can imagine, you asked earlier how physicians and investigators felt about our data, given the fact that there's nothing approved for these patients. Unfortunately, there's a five-year 50% mortality for the patients. Once we had two-year data showing a statistically significant difference, it obviously is very beneficial for enrollment. We've had a spike in enrollment, and we're pleased with how things are going. Given sort of the strength of the SYMMETRY data, are you considering making any adjustments to the design of the outcome study, and what's the latest thinking? Yeah. Once we had the two-year data, we were able to sort of look at what kind of patients were successful in one-stage improvement of fibrosis over that time. We are putting together an amendment in the protocol to, how should we say, enhance the entry criteria for those people who are more successful. For competitive reasons, we're not getting a lot of clarity of what it is exactly that we're changing. It's another measure of how helpful it is to have the data versus going straight into phase III with no phase IIb data. Yeah, it's more of selecting the right patients that are going to do the best on the primary endpoint? Exactly. Is there any opportunity to maybe shorten the "and" here just because the data was so robust and kind of off the charts? It's something we're looking at as well. Again, we haven't, the amendment isn't final, and we're not getting a lot of clarity on that. Okay. In terms of timing of the results, I know you have to kind of process. Yeah. We are very close to giving guidance, but we haven't done so yet. We want to get a little further along in enrollment before we say something publicly as to when we would expect results, similar to what we've done in the first of the two phase III studies, SYNCHRONY Real-World and SYNCHRONY Histology. Do you have a meeting set up with the FDA yet, or is that? We don't have anything calendared with the FDA. I recall that we had an end-of-phase two meeting already. They've already reviewed our protocols in the past, and we're very comfortable with where we're proceeding with our development plan. In terms of if the F4 study and the biopsy results and the potential for an accelerated approval, what's your current thinking there? In Europe, we're very comfortable that they've told us that we have an accelerated approval pathway with histology, in cirrhotic patients. The FDA guidance isn't consistent with that. However, the FDA approved our protocol, with the two-year biopsy. We view it as, we're going to submit these data to the Europeans. Once we have the results, we'll probably share that with the agency, and we'll cross that bridge once we get there. Okay. What's the probability of an accelerated path? I think it's very difficult to assess what the regulatory agency would do in the future, especially in light of some of the changes that occurred with this change in administration. One really can't predict accurately. Yeah. No, it makes sense. There are also other agents, FGF21, in development. Maybe talk a little bit about, you know, how your program compares to them. What are the differentiations there? To my knowledge, there's only really now one other FGF21. Actually, excuse me, there are two. One from a company called 89Bio that's also in phase III. They have a program for cirrhotics as well. They're looking at biopsy at two years. There's a company that used to be known as Boston Pharma that was acquired by GlaxoSmithKline in May of this year. They, I believe, are moving forward into phase III. It's not clear whether they're moving forward to both F2/F3 and F4 or only F2/F3. I think we haven't heard much since the acquisition. We'll see what happens. Novo was the third one that they sort of discontinued their program, but just, you know, any sort of reads, really, you think at all to the target? I think when we think about other compounds, the Novo Nordisk compound was Zilfarman was discontinued, and they announced in August on their quarterly earnings call. What I would say is that I recall that BMS had an FGF21 called pegbelfermin that was also discontinued. Merck, as well as Roche and Pfizer, many years ago, had two FGF21s, all of which were discontinued. I think what it really highlights is that the data can't easily be interpreted as leading through to other compounds. Until you have the results, you can't be certain that your FGF21 will be successful. Makes sense. Maybe we can talk more about just the market opportunity. You've had Rezdiffra on the market, as you mentioned, and what's your take from their launch so far? I've always been a champion, and I salute Bill Seibold and the Madrigal team. They've really surprised us and, I believe, investors at how well they've done in the field. Each quarter, their earnings expectations have surpassed what Wall Street has thought. Hats off to them. They've really launched the drug really, really well. It shows to me that in a market that didn't exist prior to Rezdiffra being launched, and they're having non-pharma-type budgets, they can be extremely successful with a focus too on sales force. I think there are definitely read-throughs for us as we think about our market opportunity, especially now that Novo is pursuing MASH for F2, F3. I think the market will grow because Novo is an extremely successful company, and metabolics is something that's core to what they do. They will also grow the market as well. This is one situation where the market is really in its infancy, with only two products available that are only indicated for F2, F3. We see this market as still having a lot of untapped potential. Where do you see your opportunities? Do you still have opportunity in F2, F3, or is it? I think when we talked about this earlier, Rezdiffra has an effect size of about 11.5%. Novo Nordisk, based on the clinical trial results, is a little bit better, at about 14.5%. Unfortunately, although those are good numbers, it still leaves the majority of patients who might be treated with either of those drugs based on the clinical trial results not having a one-stage improvement of fibrosis. Like any other field, which is just getting started with incremental innovation, there are better results potentially for patients. We absolutely feel, as I mentioned earlier, on an ITT basis, our drug has roughly a 30% effect size, so considerably bigger than either of the two agents that are currently approved. We look forward to demonstrating that in phase III. Of course, nothing is approved for F4. We feel that that's something that's very robust and a high medical need for us and patients. Do you think these other mechanisms could be successful in F4, or is it going to be challenging? Let's stick to the data. Semaglutide, in the summer of 2023, presented their own data where they looked at treating F4 patients with a GLP-1. Over that time, unfortunately, their data was pretty similar to everything else in the field today, which is that their data was placebo-like. In fact, numerically, the placebo response exceeded the semaglutide response. We think that makes sense because when one thinks about the mechanism of GLP-1s, it's weight loss-driven, and it's about removing liver fat. Recall, in cirrhotic patients, there isn't that much liver fat to remove. Most of the hepatocytes have been replaced by fibrosis, and weight loss isn't effective as they've demonstrated in removing fibrosis over that timeframe. That may be something that was also seen by other agents. When one thinks about other GLP-1 agents, which improve on weight loss and lead to greater weight loss than, let's say, semaglutide, they're likely, unfortunately, to face the same challenges. Just because you're better at reducing weight loss, if weight loss itself doesn't work, they're unlikely to be effective in treating cirrhotics. Yeah. Makes sense. Maybe in the last few minutes here, we could ask a couple sort of macro questions to get your perspective. With China's rise in biotech innovation, how are you thinking about your competitive position here, and will this influence your R&D or BD strategy going forward? We agree that the innovation coming out of China over the last two to three years has been remarkable when one thinks about some of the clinical trial results and some of the partnering that's taken place. For us, it really highlights, while they're aware of some FGF21s coming out of China, we're unaware of any that have phase IIb data. I think as we talked about the Novo compound in particular, it's very, very important, whether it's and just not Novo, not picking on Novo, it's just Novo, BMS, Roche, Pfizer, and Merck have had other FGF21s that were unsuccessful in the clinic. I think until we see clinical data, I think early stage data with other FGF21s is an open book. It's the story that has yet to be told. I think there's just the importance overall of having results that are very definitive. Makes sense. Maybe we can move to the next sort of macro question. You know, how are you currently leveraging artificial intelligence or thinking about AI's future disruption potential in the industry? We're already using artificial intelligence, as one of the presentations we made last year at the American Association for the Study of Liver Disease, AASLD. We had worked, partnered with a company called HistoIndex, which used AI-guided pathology analysis. We used that to correlate with the human pathologists that looked at our biopsy samples. For the 50 milligram dose, we saw a high degree of correlation. They saw that roughly they had measured about an 80%, low 80% one-stage improvement of fibrosis compared to the pathologist's 75% for the 50 milligram dose. They were more specific in which regions of the liver showed that was parasitic, sinusoidal, or otherwise. We're already using AI. I think right now the challenge for AI is that the FDA is not accepting AI-guided pathology reads for histology samples. It's already a factor for us because we do see the future where that becomes known. The challenge is that biopsy isn't used clinically, but could it be used in clinical trials? It could. Okay. Great. Looks like we're just about out of time. Why don't we wrap it up there? Thanks so much, Andrew. Really appreciate your time today. Happy to be here. Thanks for inviting me.