Tech Biopharma analyst here at B of A. Today it's my pleasure to introduce 89bio, Rohan Palekar, the CEO. Thanks for joining us. Thanks for having us, Alex. Perfect. I guess just to start us off, can you give us a 20,000-foot view of the company as well as the MASH space? Sure. So 89bio is a late-stage clinical development company focused in liver and cardiometabolic space. Our lead program is a drug called pegozafermin, which is an FGF21 analog, which we are developing for both MASH as well as severe hypertriglyceridemia. And for those not familiar with FGF21, it's a metabolic hormone which controls energy, lipid, carbohydrate metabolism, as well as shows good properties on insulin resistance. We've demonstrated really good clinical data in both our indications. And based on this, we currently are in three phase 3 studies. So we have a phase 3 study in pre-cirrhotic MASH, which initiated in March of this year. Yesterday we announced we have initiated a phase 3 study in cirrhotic patients with MASH. So this is F4 patients. And we also have a phase 3 study ongoing in severe hypertriglyceridemia. So this is patients with triglycerides above 500 mg per deciliter. That study started in the middle of last year, and we'll have top-line results from that study in 2025. Perfect. So there are a few FGF21s on the market. Can you just provide your thoughts on your differentiation compared to the other FGF21s? Sure. So, Alex, there are other in development. Fundamentally, the different FGF21s have used different technologies to extend the half-life of their products. And the reason for this is FGF21 in its native state has an incredibly short half-life, less than two hours. So our construct is we created a PEGylated, but we have a unique technology called glycoPEGylation. So it's a glycoPEGylated version of FGF21 which extended the half-life, which allows us to dose the molecule once a week or once every two weeks. The other leading FGF21 in development in the cardiometabolic and MASH space is a fusion protein. So it's a different technology which extends the half-life. There are two of these fusion proteins in development, and then there's one which is an acylated FGF21. At its core, the biology is very similar across the molecules, but what you do see is the potency against the receptors is different, resulting in differential efficacy. So when you look at it from an efficacy perspective, we have shown together with one other molecule, efruxifermin, the best efficacy when it looks at fibrosis benefit. And both of us have shown very similar data on reversal of fibrosis. However, the key points of difference we have are really on one is tolerability. We tend to have shown in the clinical data sets a more tolerable molecule, and specifically when it comes to GI adverse events. So our rates of, say, diarrhea and nausea are in the teens, whereas some of the other molecules have like 30% and 40% rates. Or vomiting and 10% and 20% rates. So we tend to have a much better profile from a tolerability perspective. As well as with our molecule, we have not seen any changes either clinically meaningful or statistically significant on bone mineral density. So that's one difference. The second difference is the dosing interval. We're studying our drug once a week and once every 2 weeks. The other leading FGF21 is studying only a once-a-week regimen. And we think this makes a difference in a commercial setting. Tolerability and dosing convenience do matter for persistency and compliance. And then finally is we are a liquid formulation in a prefilled syringe. One of the other leading competitors, it's a lyophilized product. And per se for MASH, it doesn't matter as much, but when you think maybe downstream lifecycle management, if you want to co-formulate it with another liquid, like a GLP-1, there could be differences there. Is co-formulation something that is top of mind for the team? You know, we think about it a fair bit, right? Because we do think in the MASH market, over time, people will use different modalities. As you might be familiar, meaning Novo is actually developing semaglutide with an FGF21. So I think they realize that GLP-1s need something more and a more potent antifibrotic, you know? I'd like to go back to something you mentioned earlier, the bone density loss. Do you attribute this to a class-wide effect, or do you assume that the way that you designed your molecule can prevent against this bone density loss? So again, what we've seen is we have not observed anything in our studies. There are some FGF21s who have observed it, some who have not seen it. So it's difficult to say that it is 100% a class effect, right? So unlike GI events, which everyone sees but at different rates, in this instance it's not. It is kind of interesting that the two Pegylated molecules did not observe it, while some of the Fab or monoclonal antibodies have seen it. So maybe there is something to be said about the structure, which is causing this, but it's a little speculative, to be honest. Of course. Of course, we have to see longer-term data as well. That is true. Can you remind us what you saw in the ENLIVEN trial in terms of the fibrotic benefit? And how that compares to maybe the first-approved market Rezdiffra? Sure. So the ENLIVEN trial, just to ground everyone, that was our phase 2b study in about 220 patients with F2 and F3 fibrosis. We saw very robust data on fibrosis reversal of one stage or greater with no worsening of MASH. So in that study, we had studied weekly doses of 15 mg and 30 mg, and then we had studied a 44 mg given every two weeks. At the two higher doses, the 30 mg once a week and 44 mg once every two weeks, we saw 26% and 27% of patients seeing a one-stage improvement in fibrosis, whereas the placebo saw a 7%. So we had about a 20% delta with this placebo. To put that in comparison with the resmetirom, which saw 10%-12%. So we're seeing a more robust change on fibrosis on the absolute basis. But another way to look at it is because every trial has evaluated the biopsies differently. We used a 3-panel consensus read, which results in a more conservative reading. And so you can do a relative risk in the construct of that study. So you're really looking at how the drug arm does relative to placebo. And our relative risk reduction ratio is about 3.5. And some of the other drugs, like the approved drug, is below 2. So we think we're showing a much more robust signal on fibrosis reduction. Yeah, that's what we've also heard from prescribers. We thought it was really interesting how you included the GLP aspect as well. Can you kind of talk through the additive benefits of pegozafermin with GLP-1s and how that might change the paradigm moving forward? Yes. So in our study, we allowed patients, as long as they were on stable dose of GLP-1s, to participate. They had to be on six months of stable dose. And about 20% of our trial, sorry, 20% of patients in our trial were on GLP-1s. And we evaluated them both at week 24 and at week 48. And we see very nice changes on top of GLP-1s. So across all kinds of liver markers, whether it's ALT, ELF, VCTE, liver stiffness, you know, PRO-C3, which is a marker of collagen deposition, we see nice changes. We also saw very nice changes in metabolic benefits. Ironically, even on top, we saw improvement in hemoglobin A1c on top of the GLP-1s. I think the reason this happens is mechanistically, the two targets are very different. How GLP-1s work versus how FGF21 works. When you think about the liver effects, right? There are no GLP-1 receptors in the liver. The benefit GLP-1s are exerting on the liver is indirect. It's through the periphery. It's impacting obesity. It's impacting insulin sensitivity, which results in less deposition of fat. They're pretty effective in fat reduction. There are FGF receptors directly on the livers. We have a direct antifibrotic benefit, which is where I think you see the big incremental benefit. Got it. That's helpful. Speaking to the cirrhotic population, you also had a small cohort there. What did you see, and how did that encourage your design of the phase 3? So we had 14 patients who, upon reading with the three-panel consensus read, had F4 status at baseline, even though it was an F2, F3 study. However, we kept them in the study. And at the end of the study, in 12 patients, we had repeat biopsies. And when we looked at that number, out of the 11 patients in drug, 45% of them saw a one-stage reversal in fibrosis with no worsening of MASH. That's 5 out of 11. And in fact, if you just look at who had a one-stage improvement, it was like 9 patients had it. Now, I do caution, it's a small N. But why we are excited about it and why actually the KOLs got excited is we looked at all the non-invasive markers. And they all tracked with the fibrosis. So really nice reductions in ALT, improvements in liver stiffness and VCTE on the FAST score. And that was sustained through week 48. So that was our data set. That gave us a level of comfort based on the mechanism of action in the small data set to say we could see a benefit in this F4 population. And arguably, that's the population with the highest unmet need. And most other drugs have not worked. The competing FGF21 also had data in the F4 population, which looked pretty promising. And they clearly saw a pretty potent signal that they see a benefit in that, right? Now, we learned a little bit from their study because it was a short study, not adequately powered, right? And that's why, while they missed the primary endpoint, it was yet a pretty strong data set. So we took all that information. We looked at a lot of the historical studies on how F4, what patients respond. That's the basis on which we designed our phase 3 study. This phase 3 study, it's 750 patients, roughly. Where we are enrolling patients with compensated cirrhosis. There's two components to it. We will, all these patients will be followed all the way through outcomes. But in a subset of the patients, we will look at histology at month 24 to look for reversal of fibrosis. We've got alignment with the FDA that if at month 24 we show reversal of fibrosis, we could apply for accelerated approval for that indication. Then when we complete the outcomes, which will take longer, we would get full approval. In the press release, it was mentioned that there could be modified definitions of the outcomes. Can you kind of give us any color there, a base case, a best case in terms of the timing that we might expect? Yeah, so just to explain the modified outcomes. So the FDA has, in the guidance document, they define outcomes. So most of the outcome events in a cirrhotic patient study is decompensation. So the patient goes from compensated cirrhosis to decompensation. The way the FDA has defined it, it's a very high bar. It's literally at the end stage of decompensation, like when you're about to fall into really kind of a cliff on decompensation. To get there takes a long time. This answers your timing question. So the NASH CRN has shown data to get to those decompensation events from early compensated state, it's about 3% a year. So it's very slow. So it makes it not a tractable study. So what we worked with the FDA to say, look, no one goes from point A to point Z overnight. So we got them to agree, let's do, during that process, what could be a good decompensation state, right? And we're the first company doing it, right? So it's really difficult to predict exactly how quickly it would happen. But it's something we're monitoring. We have an assumption we've made based on some publications, how people progress across, you know, the decompensation events. That's helpful. In terms of the 24-month endpoint, why did you pick 24 months as compared to 36? So we looked at, we wanted to go sufficiently long. But not too long. Because if your fibrosis has reversed, it's going to happen somewhere 12 months-24 months, okay? We felt 12 months is too short. We know a competitor did a 9-month study and that was probably too short. Because the F4 patients, they have progressed over 15 years. Their fibrosis matrix is very dense. To really break it down, it takes a while. And so we were looking for the sweet spot where it's not too long, but we're not too aggressive that we take undue risk on the trial. And in discussions with the regulators, and it was interesting, we proposed it. And they were like, I'm glad you proposed that number. Like that's where their heads were at, you know? Got it. Turning to the ENLIGHTEN-Fibrosis program, a lot of your competitors have been using a composite endpoint. Can you talk a little bit about your decision to use the co-primary endpoints and the powering that you're planning on using? Sure. So we're using a co-primary endpoint. And the two co-primaries are one-stage improvement in fibrosis with no worsening of MASH. And the second co-primary is MASH resolution with no worsening of fibrosis. So with the FDA guidance, you can use either or you can do an and, okay? Why did we select a co-primary? It was fundamentally three reasons. One is we had a high level of confidence we're going to work on both these endpoints. So we were not worried, right? The risk always on co-primary is you're taking a risk. We were not worried. Number two is your powering is stronger. You have more statistical power than doing an and. And the third, which is arguably a very important one, in Europe, EMA requires both. So while the FDA accepts either or, EMA requires both. So we were like, let's, we were not worried about a co-primary. And with the benefit on the additional power we get, we felt that was the way to go. Now, we will have the data all cuts, right? Of course. Yeah. How is enrollment going for the trial? It's early days. What I can share is there's a lot of excitement with the PIs who want to participate in the trial. The site initiations have gone well and screening is going well. It's a little early to say, you know, how enrollment will end up. Is there a target and a number of patients that will be on a GLP? We're not at this point putting a cap or a minimum. What we are going to do is we will stratify for GLP-1. We expect in the U.S., there'll be a fair number of patients in GLP versus internationally, we expect actually it's going to be a pretty small number. That makes sense. I guess to talk about the benefits of using the SHTG program as a safety database, what are the benefits there as compared to some of your competitors that have to run their own additional? Yeah. So the key one is, as I mentioned, we've got this phase 3 study in SHTG. So we were able to get alignment with the FDA that we can use the data from that study to support the safety database. So as you know, like there's an ICH guideline which has certain criteria. You need X number of patients ever treated, X number at six months, X number at one, sorry, at one month, one year, sorry, not one month. One month would be good. At one year. So the beauty is a lot of others, because MASH is one of those few indications where you can actually do one pivotal study and get approval. And so what happens is very often with one pivotal study, you don't have enough of a safety database, right? So we went to the FDA and said, look, we already have this SHTG study. And there's a lot of similarity in the patient population and we're studying similar doses. So based on those two, they said you don't have to do another MASH study. You can use that. So in some ways, like Madrigal did one, you know, I think another Akero is doing one. That's not adding additional value. It's a lot of money. So we are leveraging a lot of, you know, resources against that indication to support the MASH program. Yeah, it's great cost discipline. I guess talk to us a little bit about the opportunity for SHTG and what we should expect in the results in 1Q. So SHTG, as I mentioned, is patients with triglycerides above 500 mg/dL. We think there's a very significant opportunity here, even though there are approved drugs. So for background, the approved drugs, there's fish oils approved, there's fibrates approved. Statins are not approved, but they're used. But none of these drugs are that effective, okay? They're like the fish oils, like the leading one was Vascepa. Their response rate is 30%. Fibrates do better, but they've got a whole host of AEs. So there is a very significant unmet need where patients could be on these drugs, but are not responding. And these patients with high triglycerides are at risk of acute pancreatitis and increased cardiovascular risk. And to put it in context, there are about 4,000,000 patients with SHTG in the U.S. About two-thirds of them are treated. About a little less than a million are refractory to existing standard of care, okay? So they're on drugs. So that's a sweet spot for a molecule like ours to go in. In our phase 2 study, we saw triglyceride reductions over baseline, nearly 60% versus baseline. So very significant reductions. And then importantly, we saw those reductions on top of existing standard of care. So on top of fish oils or fibrates, et cetera. The other beauty is one of the things physicians are looking for is what are the comorbidities you're treating? So patients with severe hypertriglyceridemia, a lot like MASH, have a lot of comorbidities. Most of them have liver fat. In our study, 100% had liver fat, up to like 20% liver fat. Two-thirds are diabetic or pre-diabetes and they have dyslipidemias. None of the existing standard of care or the other drugs in development like the ApoC3s do a lot on that. So the fact that we can reduce triglycerides, impact liver fat, ALT, and address other dyslipidemias, make it a really nice, you know, drug. And in some ways, the clinical study is pretty de-risked because the phase 3 is just a larger phase 2, you know? So we expect to get the data, not first quarter, sometime in 2025. That study is enrolling really well. We haven't given official guidance when in 2025, but we're excited and looking forward to that data set next year. Yeah, as we are. I guess turning back to MASH, it's been a very exciting couple of months. What did you think of Madrigal's label? And And are you expecting their commercial investments into the space to be a positive for next-to-market launches such as yourself? Sure. So first I'll say is I think it was a great day for the entire MASH community, right? People have been in drug development for a long time. At the end of the day, a lot of us are in this business because we want to help patients one day. And so to me, that was a big win. And it was wonderful because it took away one overhang. People were always worried, hey, can you prove it in phase 3? And then after Intercept got its CRL, there was a lot of like angst, can anything ever cross, you know, meet the FDA threshold? So that's a positive. I actually think the label was a very clean label. It was a very simple label. It was not a complex label. So a couple of things, right? One is it did not require biopsies. It was F2-F3, but what was interesting, it basically said cannot be used in the way it talks about F4, it kind of, it's not an F4 label. But it basically was, it's F2-F3, but do not use it in this. It doesn't, you know, restrict. The clinical data was interesting. It was, I thought it was, they only put like the primary endpoints. They didn't put a lot of the other secondary endpoints, like the liver fat, et cetera. We did see some things about drug-drug interaction, which I think is going to be interesting how that plays out. Personally, I don't know that, at least in talking to the KOLs, no one seems overly worried about that. To answer your second question, look, I think we're all rooting for Madrigal to be successful. When you're launching, when you're the first in the category, I've had to do this previously, there's a lot of heavy lifting. Just on building the awareness, getting people to start screening for MASH because there was no incentive to do it till now. And that takes time. Educating the payers, getting all the payers on board. It just takes time to do that. So in some ways, it's nice to be the follower because someone else does the heavy lifting and we could have a drug with a much better profile, a clinical profile on efficacy and safety, which allows us to kind of leverage all the hard work they've had to do, you know? How are you thinking about monitoring as well, both in terms of, let's say, 6 months as well as 12 months? How do you think payers are thinking about either keeping patients on treatment or not? So in our research, we've talked to payers over the years. I think most of them have talked about annually. They've not said six months. In our research, payers have said they want to make sure that the patients are not progressing. And when we, they recognize that it's nearly impossible to ask a patient to go to serial biopsies on a regular basis. So what they're looking for is more kind of guidance coming from the societies on what are the non-invasive markers to look at whether patients are progressing or benefiting from the drug. The general consensus has been is it's probably going to land as a combination of an imaging marker and a blood biomarker. Like the one people are moving, gravitating towards is using VCTE by FibroScan, which measures liver elasticity. And probably a blood marker, it could be a simple blood marker, which is easy and cheap like FIB-4, or a more discriminating marker, but more expensive like ELF. They probably will ask on reauthorization every year. That's what we are hearing. I think, let's see what the real world turns out. But in fairness also, I want to say that was done before they knew what Madrigal's pricing was, right? Because our research was done prior to that. So they do recognize that these MASH patients have a lot of comorbidities which cost the system. So they do want to make sure that these patients don't progress. I mean, that was the one thing we heard from payers. It's like they're on our side to help these patients and prevent progression, you know? I guess as we're looking 5 years-10 years in the future, do you see MASH as a zero-sum game? Do you see combination treatments being the winner? How should we kind of think about this longer-term environment shaking out? So two things I would say. So one is what happens to the size of the market and one is how does it play out? Like we believe that the MASH market is going to continue to grow. We do not believe like the GLP-1 based therapies result in no longer, there's no obese patients in this world and MASH goes away, right? It might temper the growth, but the underlying prevalence of the condition will keep growing. However, the more important thing is the diagnosis rates we think are going to go up significantly. Today, the diagnosis rates are below 10%, somewhere between 7%-8%, let's say. We think that's going to go up to 20%-25%. You've seen that in other conditions, right? After drugs come out. Like HCV was the classic one, was not being diagnosed. So the entire eligible population we think is going to grow exponentially over the next 10, 12 years, right? Even if prevalence kind of levels out. Now within that, we don't think there is a winner takes all. We don't think this is a one-player market. We think at different stages of the disease, there will be different drugs who would offer a benefit. The sweet spot for pegozafermin is more in that advanced population. So in the early disease state, your treatment goal is resolve steatohepatitis. You can do that with a metabolic agent. You can do it, address the underlying, you know, diet, lifestyle, diabetes, overweight. But once you get in the advanced state, the treatment objective is to prevent progression of fibrosis. And once you're cirrhotic, it's all about preventing decompensation. So you need a potent antifibrotic. So that could be monotherapy, Alex, or it could be a combination, right? Someone, we think a large number of patients would either have been or tried a GLP-1 based therapy, but they've yet progressed. And then you do a combination, right? Because as long as the two therapies have complementary mechanisms of action, which are working, it makes a lot of sense. Would it make sense to combine two pure metabolic drugs? I think that's going to be a little more difficult for the payer to say I'm going to put someone on two, you know, mechanistically same. Yeah, we've heard the same from the KOLs. I guess too, how are you thinking about the commercial opportunity, both in the United States as well as the rest of the world? Sorry, the commercial, like. Opportunity, like the potential challenges and payers in Europe versus the United States. Yeah. So I think in Europe, it's going to take a little bit more time educating because there are some parts of Europe where MASH, unfortunately, is still viewed like obesity as a lifestyle issue, you know? It's not viewed as a true disease, which raises the bar a lot on how you think about pricing. Now, I'll draw the distinction between pre-cirrhotic and cirrhotic. We think in the cirrhotic market, it is the same. There, they recognize this is a serious disease. And it would be to a great extent the way how the U.S. is. Also, a lot of those patients, commercialization is much easier because they tend to have other complications which bring them into the healthcare system. So there's not as much education required. But in the pre-cirrhotics, it's going to be a little bit more about the education. That in fact, someone with advanced fibrosis, it's a pretty serious disease. People don't realize, like the liver, you know, it's a pretty important organ. It's not like something which, and if you, it's uncontrolled, over time you're going to have a lot of other bad issues. And so I think that's one dynamic which will come out to play, you know. I guess another benefit of being next to market. That is true. Yeah. One of the last couple of minutes that we have, can you kind of remind us of your cash position and what runway that you have communicated? Sure. Last week, we put out first quarter results. We ended first quarter with $563,000,000. Additionally, we have approximately $50,000,000 in warrants, which are all in the money, with an expiry date at the end of next month. So pro forma we could be about $600, $610. And we have $60,000,000 in a line of credit available to us. So we're in a pretty nice cash position. We've not given an official guidance. I think what we've said is we clearly have money to go past our SHTG data next year. But we are a little short of getting to the readout of the NASH studies. That makes sense. Perfect. Well, thank you with that. Appreciate you coming. Cool. Thanks a lot. Appreciate you having us.