Joining us on this, our second day of Bank of America's 2025 Healthcare Conference here in Las Vegas. My name is Jason Zamanski, I'm one of the mid-cap analysts here at the bank, and I'm so pleased to have joining me on stage, Rohan Palekar. Thank you so much for joining us. Great to be here, Jason. Thanks for having us. Maybe let's start broadly, especially for those newer to the story. What about FGF21 makes it an attractive approach in MASH NASH, particularly when compared to other modalities in the space? Sure. I think, as many of you might know, 89bio is developing pegozafermin, which is an FGF21 analog, which we believe is a highly differentiated FGF21 with the potential for a best-in-category profile. I say this because mechanistically, what FGF21 does is very unique relative to some of the other drugs in development for MASH. I think it's important to think about the disease state MASH. Look, it's a liver disease state, but at its core, it's a metabolic dysregulation, which manifests itself in what happens in the liver. Over time, as the steatosis, the fat builds in the liver, you have inflammation, and then you end up with fibrosis and then the late-stage cirrhosis. When you think about a mechanism, you want to hit it in multiple ways. You want to address the metabolic dysregulation, you want to defect the liver, but at the same time, you also want to have a direct effect on the liver on fibrosis. FGF21 is unique. What it does is, in the liver, it has direct effects in rapidly taking fat out of the liver. It prevents the generation of new fat in the liver, but it also has a direct anti-fibrotic effect on the liver. In addition to the liver, it has broad metabolic benefits, which are mediated systemically through the white adipose tissue. It improves glycemic control, it changes lipid and lipolysis balance, it changes things like triglycerides, it reduces LDL. This is where it's unique. When you think about some of the other classes, like GLP-1s, they are all acting in the periphery. There's no GLP-1 receptors in the liver. They're working metabolically, systemically, and downstream benefit on the liver. That's why we see a benefit in as quickly as 24 weeks on fibrosis, whereas some of these drugs might take a year and a half. You have some other drugs which are working purely on the liver, but they might not be addressing the broad metabolic dysregulation these patients have. I think that's the unique properties which FGF21 has. Our profile is a very differentiated FGF21. Perfect. I think we'll definitely get there. Before we sort of delve into the details, I mean, if you think about MASH NASH, it's been a very challenging indication with a lot of setbacks and until recently, no approvals. At a high level, what do you think has shifted? I guess more specifically, why should investors be confident we're finally hitting our stride after years of setbacks? Yeah, so I think there's a couple of things which, so you're right, there have been drugs which were previously in development, which never got through. Finally, we had resmetirom from Madrigal, see positive data in phase III, and now has been incredibly successful commercially. I think in some ways, we learned from the mistakes of our fathers, right? I think we have become much smarter in how we design the trials, identifying the right patients to respond. I think that's one theme. I think the second one is the second generation of products like pegozafermin are just more potent molecules. I think the first generation of products which went into MASH, they were not that potent. They were not that effective. And some of them actually went into late-stage development with failed phase II studies. I think everyone was looking at, wow, MASH is this huge market and let's take a chance on it, right? That's where you're seeing is this new generation of molecules like pegozafermin are really effective molecules, and we know how to do these trials much better. That's why we have a high level of confidence in our phase III programs should be successful. Absolutely. Speaking of new developments, I think the topic on everyone's mind right now is last night, GSK secured the rights to Boston Pharmaceuticals' efimosfermin for $800 million upfront, a deal maybe worth $2 billion in total. What are your overall thoughts on the deal? I'd start at the high level. I'd say two things. I think it's validating in two aspects. One is, I think it's a strong validation that there is interest in big pharma for entering the MASH field and acquiring good assets, right? There's always been this question, is there really an interest in big pharma to play in the MASH space? Because honestly, there's been no deals done in NASH for the last five years, right? Over the last few months, we know we've been in active discussions and engagements with multiple players, and we've always believed that because this market is one of the last few big markets left where big pharma is not playing, right? I think that's the first I'd say. The second I would say is, I think it's a very strong validation that FGF21 is a mechanism of action, which has a high level of interest. This goes back to FGF21 is truly differentiated and can compete really effectively both in the pre-cirrhotic and the cirrhotic population. From an 89bio perspective, look, we think this is really good news because arguably this is the drug with the least amount of data in the FGF21s. It's a relatively small study we can talk about, and a player felt it was big enough to yet pay the big money for a data set of 30+ patients, right? In some ways to us, this is pretty encouraging that you're now starting to see players step in. The last comment I would make is, look, GSK is not what I'm going to call the classic mass player. I think there are other logical players who are already in the MASH space or big in cardiometabolic space who might be arguably the more logical players for partnerships moving forward. Got it. We'll definitely get into the details a little bit more, but just another high-level question. Is this saying to you that if you want to play in MASH and maybe obesity as well, do you need an FGF21 in your armamentarium? I do believe to be a successful player, why FGF21 becomes critical to have in your armamentarium is the biggest unmet need and arguably the biggest opportunity in the MASH space is in the F4 cirrhotic market, okay? That is the highest unmet need. It is the market with the highest pricing power. In the F4 population, the mechanism with the highest likelihood of showing a positive benefit is the FGF21 class. We know that a lot of the strategics, they are really focused on the F4 space. It makes a lot of logical sense that if you want to be a major player in the MASH market, you need an asset which is going to be effective in that space. If you think about the GLP-1s, right, it is very unlikely that the GLP-1s are going to play in the cirrhotic marketplace. In fact, semaglutide did a large study and did not work. In fact, placebo did better than Sema in that F4 space. I would submit that to be a successful mass player, you want to have the entire spectrum of the disorder covered. If you had to only play in one space, the biggest one is in the F4 space. Makes sense. Let's pivot to pegozafermin. What are some of the characteristics, molecular, clinical, administrative, that you think are differentiating? I ask this specifically with, there was a very interesting paper that came out in Hepatologist flagging pegozafermin. Yeah. So pegozafermin is, as I mentioned, it's an FGF21 analog, which we have engineered to extend the half-life while maintaining the potency of the molecule against the key receptors. Based on doing this, we can dose it once a week or once every two weeks while essentially replicating what native FGF21 does. In our phase II study, we showed really significant benefits on fibrosis. It was a 20% placebo-adjusted delta. What's important to look at is, and referencing the hepatology paper which you talked about, when you look at cross-trial comparisons, it's important to look at how did your drug perform relative to placebo in the construct of that study. This is important because every study in MASH has taken slightly different approaches, different approaches in how they read the biopsies, different pathologists, different durations. Some studies are 24 weeks, some are one year, some are 18 months. We showed a relative risk benefit of 3.5. The competing FGF21's relative risk at 24 weeks is about a 2.1. The paper you're referencing, this was a publication which came out in Hepatology where they looked at 29 studies in MASH, 9,300 patients, and they looked at how these trials compare on the two histology endpoints, fibrosis improvement versus MASH resolution. Pegozafermin stood out as the most potent molecule on histology based on this criteria when they looked at it, right? Some of the other FGF21s were included, like efruxifermin, which does well also, but not as good as pegozafermin. We think from an efficacy perspective, we have amongst the most potent FGF21s and arguably across the entire category, the most potent on a histology benefit. But then there are I think two other points of differentiation, Jason, which become important. We have shown a very nice tolerability profile when you compare with the other FGF21 agents. This is important from a commercial perspective because MASH is an indication where you are going to chronically treat patients and it is an asymptomatic condition. We know that patient compliance and persistency is driven by tolerability. We have shown a nice tolerability profile relative to, say, efruxifermin with much lower rates of GI adverse events. On bone biomarkers and bone mineral density, we are not seeing any clinically meaningful or statistically significant change. That is an important one versus some of our competitors in the space who have shown statistically significant changes on BMD by DEXA scans. I think tolerability becomes really important. Finally, on the dosing, right? We are dosing once a week, once every two weeks. You have efruxifermin, which is once a week dosing. We think that's important. Importantly, we are a liquid product in a pre-filled syringe. Some of our other competitors are a lyophilized product, which have to be reconstituted before it gets injected. Why does this become important? We have all the reason to believe that we can be combined and co-formulated with a GLP-1. If you fast forward from a life cycle perspective, a lot of patients by the time we come to market aren't going to be on GLP-1s, whether for their obesity, but more likely for their diabetes. If you have an opportunity to co-formulate, so versus giving two injections, a GLP-1 and then an FGF21, if it's a single injection, it would make a lot of sense. It is unclear whether a lyophilized product, which has to be reconstituted, can be co-formulated. We know we can be co-formulated. I think those are a couple of the differences which are really important when you think about the technology we have used to extend the half-life. Makes sense. You brought up a number of differentiating characteristics, but based on your market research, do you have a sense of what prescribers are looking for and what patients are looking for? I ask this under the guise of, as you alluded to earlier, you have a near-term rival and both products may be on the market around the same time. Yeah. I'll break it up into two. When we talk to physicians, and I'll break it up a little bit between F2, F3, and F4, it's very similar, but the key most important one, no surprise, is fibrosis benefit. What is the benefit you are seeing on fibrosis? They use it within ranges, right? They do not tease out is 18% better than 20%, right? They will clearly say you want to be over a threshold. The threshold they would say is a 15% placebo-adjusted delta in F2, F3. In F4 disease, they would say even a 10% is clinically meaningful. Anything above 15% is highly meaningful. Their focus is on fibrosis benefit. We hear this from physicians. We hear this from peers. They would like to see that you are addressing the underlying disease state of steatohepatitis. Most of them would say this FDA kind of MASH resolution, no one understands it really. They want to see that you are actually impacting steatohepatitis, right? Because you want to do that. That is the key criteria. They do bring up that the drug needs to be well tolerated because from a physician perspective, they want to ensure that the patients stay on drug. This has got heightened because they see the non-compliance with GLP-1s. They actually observe it in their clinic. We do know from a lot of the databases about 2/3 of patients at the end of year one have dropped off. They actually experience it. They want to make sure that the drug is well tolerated and patients can stay on it is very important. Interestingly, once upon a time, if you had done the same research five years ago, they would have said oral is significantly preferred to injectable. Today, that has gone much lower in the importance criteria. I think it is a function of people have got very comfortable in the cardiometabolic space using GLP-1s, right? That is less important. I am not saying it is not. The dosing convenience from a physician perspective, yeah, two weeks is better than one week. One month might be better than two weeks, but they do not get that hung up on this. As long as it is at least once a week or better, physicians are, we have no challenges helping our patients use that, okay? Now, when I flip it to patients, it is a slightly different dynamic. From a patient perspective, dosing convenience is pretty important. Once every two weeks, they literally in our research, 2/3 of patients said they would rather have a once every two weeks than a once a week, other things being equal, which if I were to say I was a patient, 26 less injections probably makes sense, right? They do care about from a patient perspective, what is the AE profile? And then what patients tell us, which again, no surprise is, is this going to be paid for, right? That's a really important determination. What's my co-pay going to be? And which is very reasonable, right? I think that's kind of the patient dynamic. Now, the patients would prima facie say an oral product is better, but as long as it's a once a week or greater from an injection perspective, there's no concerns. Does your answer change specifically on the prescriber side when you think about right now, I'd say the majority of MASH patients, especially if they're cirrhotic, are being treated by hepatologists. Longer term, thinking about moving especially into the F2, F3 population, you're probably targeting more endocrinologists with the possibility of moving into a GP's office. Is pegozafermin something that could be administered in those offices? What does it take to get there? Sure. Thank you for that question, Jason. I should have clarified. Most of our market research, which I referenced, was done with GIs and HEPs and a small subset of endocrinologists. We've not done work in primary care, okay? Here's, I think, how I would characterize it. We think the advanced fibrosis patient and the cirrhotic patient, which is pegozafermin's sweet spot, they will predominantly be treated by gastros, HEPs, and endocrinology over time. Endocrinologists are very comfortable with this mindset, right? They use GLP-1s extensively. They today are not screening for MASH, even though the ADA guidelines ask them to screen for MASH. They're not doing it extensively. I do believe once semaglutide gets approved, and I think it will get approved, as we know they had their phase III positive data, they've said they're going to file, or maybe they've said they've already filed. I think once semaglutide is on the market, no one's actually going to help people like us by really educating this broader audience. By the time we come to market, I think the endos are going to be very comfortable with it. I think primary care, it's tough to say how that's going to evolve, right? Primary care might not have some of the tools. I think a lot of the diagnosis of MASH is going to happen with FibroScan, which is this ultrasound machine. Endos already have, many of them have it. Primary care is not that extensive. I do not know how extensively they are going to be screening. I think there are going to be some primary care who are going to do it. Over time, it might shift. Like today, GLP-1s are prescribed, I think over, I heard a stat, it is like over half is being prescribed by primary care. Ultimately, what factor, two or three factors, would you gauge as being or assess as being the most important in determining market split within the FGF21 class? Sure. So I'll start by saying if FGF21, which I believe will live up to its promise in phase III studies, this is going to be one of those categories which would be multi-billion dollars, right? Just the F4 space could be well north of $5 billion, right? You're going to have potentially multiple players who could be highly successful. To answer your question, how does this play out and how it splits? I think it's going to be first a benefit-risk ratio, which the physician's going to see. What is the relative efficacy I'm getting relative to the tolerability, okay? The research we've done, including some conjoint work we've done, is they are not willing to trade off tolerability for benefit on efficacy. It's got to be well tolerated. What's that balance, okay? Interestingly, we learned in F4 patients, there was the mindset saying it's all about efficacy. Interestingly, in the research, it's come back actually in F4, they are just as concerned about tolerability. The reason is these patients are frail. They do not want to take a chance with these patients, especially on bone mineral density because they're already at a risk of sarcopenia. The other thing which came out is in a cirrhotic patient population, they want to ensure that the patient stays on drug. They actually are concerned that if the GI AEs are excessive, patients are going to drop off drug, which then doesn't help the patient, right? It comes down to fundamentally what's the benefit-risk profile of the drug is going to be a big driver. They are going to look at it from a patient perspective. Is it convenient for the patient? The third, which in some ways we control, but not as much, is it going to get paid for? In today's U.S., physicians are very sensitized to, I want to make sure that I'm giving my patients something which they can actually get access to. It becomes really important as we set up our commercial infrastructure, we're generating all the data to get payers to actually cover and reimburse this because to a great extent, that drives a lot of it, to be honest. Makes sense. Maybe briefly, if we could talk about last weekend's EASL conference. I think most will agree that I think one of the biggest takeaways from the meeting is, at least in the field of MASH, exposure matters. It's the length of time. The more exposure to the drug, the better. When you think about your ongoing phase III, on one hand, there's really no option available, especially for cirrhotic patients, which would kind of justify maybe an accelerated quick look at the data. On the other hand, I think we're just scratching the surface even at two years. Where's the sweet spot for you in looking at a clinical study and why? Yeah. So when you think about, and clearly on EASL, I think the talk was all about the cirrhosis data and what FGF21 could do. In fairness, there was limited data provided or limited incremental data on resmetirom, but it is an open-label study. In the cirrhotic population, there is always a belief you got to give sufficient time on treatment to actually expect to see a benefit here. Think about it. These patients have probably taken 15 years- 20 years to get there. It is a very dense fibrotic- matrix. Even with an efficacious drug like pegozafermin, by the time you break it and allow the liver time to re-heal, it is going to take time. This is why we had, well before the Symmetry data came out, planned a 24-month study, sorry, not 24 weeks, 24-month study, right? We had the discussions with the FDA in 2023 about that. We do think actually treating beyond 24 months could actually continue to see additional benefit, okay? We've picked 24 months as the primary endpoint for the interim analysis for histology because we think that gives us enough time to reverse fibrosis from F4 to an earlier stage. We have got alignment with both the FDA and EMA that if we show a reversal of fibrosis from F4 to F3 earlier, we could file for accelerated approval in the U.S. and conditional approval in Europe, okay? We have this in writing from the FDA. They've reviewed our protocols. They've signed off on our protocols. We are really bullish about getting that data, generating the data, and that would support accelerated approval. We will continue those patients for outcomes because at the end of the day, what we also want to show is that over- time treating with pegozafermin prevents progression of this disease to a decompensation event, okay? We will generate the data. Today, there is no one who has generated three and five-year data in the cirrhotic population. Makes sense. Shifting gears briefly, Novo Nordisk is conducting a combination study of its FGF21, zalfermin with semaglutide. It makes sense, I think, in a number of different avenues, especially as you think about, again, moving towards an endocrinologist's office. What additional benefits do you think we need to see to make the combination make sense from both a safety tolerability side and an efficacy side? I think the study Novo is doing, which hopefully one day they are going to present the data. We know the study is completed in December, so we should expect it soon. I think if you take a step back, it makes sense from a mechanistic perspective. One drug, which is a very potent anti-metabolic or metabolic pathway, obesity pathway, coupled with another drug which has metabolic benefits and glycemic control, but has direct and rapid antifibrotic properties, which is FGF21, right? We would like to believe that with a potent and a good FGF21, you should see nice synergistic benefits. We have shown that in our data. We had about 20% or 22% of our study in phase II- B on patients who were on GLP-1. On top of GLP-1, we saw really nice benefits on liver markers, fibrosis markers, as well as metabolic markers, including like hemoglobin A1c, et cetera, right? Now, I think with the Novo molecule, we do not know much about their FGF21. We do not know a lot about zalfermin. There is only phase I data which was presented two years ago at EASL. It is a poster. It shows the kind of activity you would expect with FGF21, but it also had very significant safety and tolerability issues. I think it is going to be important when this dataset comes out to understand because GLP-1s already have GI side effects. Now, if you add another one which has significant GI side effects, does it compound the issue? The second is if the efficacy profile is not as great as pegozafermin, like would it make more logical sense to combine Sema with the most potent and the best FGF21? In some ways, we think this dataset is actually good for us, right? Because it would validate if the data bears out what we expect it to do. It would validate that this combination makes a lot of sense. You would kind of say, let's combine the best two mechanisms you have. Makes sense. In the brief time we have left, let's switch gears somewhat. In addition to MASH, you're also pursuing severe hypertriglyceridemia. Can you discuss some of the rationale behind this strategy, particularly as the addressable population is far smaller than MASH? Yeah. SHTG is patients with triglycerides above 500 mg/dL. These patients have multiple other co-morbidities. Most of them have a metabolic dysfunction, dysregulation. Over 2/3 of them have glycemic control issues. Between 75% and, in our study, 100% of them had mast celled. I bet you if you actually biopsied them, most of them had MASH. There are drugs approved for SHTG. They are sub-optimal, whether it is the fibrates or the fish oils, and then statins are used. About half of the patients on those drugs are unable to get their glycemic, sorry, unable to bring their trigs below what is required, right? What is unique in our phase II study, we showed we not only dropped trigs, so our response rates in eight weeks was between 57%-63% of patients. That was their drop, sorry. The drop in triglycerides was between 57% and 63%, so very significant. Then importantly, we improved liver fat, ALT, as well as showed other benefits on lipids like ApoB and LDL, right? We think we have a really good profile for this patient population. We see ourselves as a second-line therapy. We're not trying to be the first line. These are patients who are refractory or have failed on a fish oil or fibrate. We showed really good data on top of those drugs in our phase II. That group is still a pretty big group. It's somewhere between 800,000-900,000 patients who have tried an existing drug and are refractory to it. It's a very large audience we have. We think we have a very differentiated profile here. Great. We are out of time. Rohan, thank you so much for joining us. Thanks for having us here.