Welcome to the next session of the Citi Biopharma back-to-school event. So my name is Geoff Meacham. I'm the senior biopharma analyst. I have my team with me as well. Our next session is 89bio, and we have Rohan Palekar, CEO, and Ryan Martin, CFO. So guys, welcome. Thank you for coming. Great to be here, Geoff. Good to see you again. Good to see you. Well, let's just kick it off with a bit of a, you know, kind of discussion of the MASH space, all the commercial developments. We've had some regulatory developments with respect to non-invasive diagnoses. Give us kind of the state of the market in your view, and then we can get into pegozafermin. Sure. So I think, Geoff, it's a great time to be in the MASH space. I think this was a long time coming, right, where this is a disease state or an indication with a very significant unmet need. And so it's very encouraging to see we now have two drugs which are approved for the treatment of MASH. I think from the interest of the patients, it's great. And obviously, Resdifra last year was the first one, and now the recent approval of Sema. And I think what it's going to do really is expand this market because it's going to drive a lot more of the diagnosis of MASH patients. There's millions of MASH patients, but most of them are not diagnosed. Most of them are not treated. And what we had always heard from physicians is, what am I going to do? I'm just going to tell them to do diet and lifestyle. And so I think this is a great opportunity to see an expansion in the market. And you see it with the Resdifra numbers. It's very impressive when you look at what Madrigal is generating, which we've always believed that there's a lot of patients available and who are deserving treatment. But there were some people who questioned it, right? Is this a true disease? And I think this is really showing or making the case that there's a lot of patients who can be treated if there's a good therapeutic option. Now, I think over time, there's going to be the next generation of products. So when I look at whether it's resmetirom or whether I look at semaglutide, I put them more in the bucket of metabolic drugs. And the bigger opportunity in the MASH space, we believe, is for the treatment of fibrosis or having more potent antifibrotic agents. Because while it's a metabolic disease, the real complications and the problems you have at MASH is when your fibrosis progresses and when you could become cirrhotic. And so we think the next generation of products like pegozafermin, which are very good potent antifibrotics, could actually take the field to the next level. And so we think we're in a nice spot. The market's going to grow over time, and it positions drugs like ours to be in a prime spot. To your point, the growth that we've seen in the commercial assets has been really in the face of a pretty broad rollout of GLP-1s and utilization, right? So that hasn't been like the barrier to the adoption. Yeah. I mean, so what we see is GLP-1s are being used, but when you think about it, they're not curing MASH at the end of the day. Even when you look at the Sema data on fibrosis, it was a placebo-adjusted benefit of 14%. So there's a lot of people on GLP-1s who progress. Because when you think about how GLP-1s impact MASH, they impact it indirectly. They're not working directly on the liver, right? There's no GLP-1s on the liver. They're impacting it by improving insulin sensitivity, impacting obesity, changing the lipolysis balance, deposition of fat. No question, all of those are important. But what you really want is a liver-directed potent antifibrotic, right? So a lot of these patients progress. We see them screening into our study. So we are seeing a lot of patients on GLP-1s. We allow them in the study as long as they're on a stable dose who still have fibrosis F3. So there's clearly a huge market still despite having GLP-1s on the market. And just on that point on raising the dose of GLP-1s, obviously, they're not going to have an antifibrotic effect. But when you look at maybe F3 patients that are kind of at the border, is that a risk to NASH development of having highest doses of GLP-1s in studies, or is that solved by just clinical trial design? It's essentially you try and solve it by clinical trial design, and then we would, in our case, we stratify for GLP-1 use, right? and I'd also say this is more a little bit of a U.S. dynamic, so our study is a global study where 50%-60% of international sites and patients were actually the utilization is not there, right? Even at the high dose. For obesity, there's really minimal utilization, but we are seeing patients who have been on the higher doses of the Sema who still have fibrosis and have pretty high levels of fibrosis. With that, yeah, let's transition to pegozafermin and the ENLIGHTEN study. So, do you have a, what's the status update with respect to, you're still on track, obviously, with enrollment, but are there any anecdotes of where it's going well, where you may need to do more work, where awareness is higher or lower around the globe? So the studies continue to progress, and there's a lot of effort going into these two studies, right? And I'm talking about the F2F3 fibrosis study and the F4 cirrhosis study. There continues to be very high levels of enthusiasm at the sites, at the clinicians, the PIs, and we are screening a lot of patients, Geoff. So there is a lot of patients. In the F4 study, we were surprised how many patients are screening into that study, clearly showing there's a huge unmet need in the cirrhosis market, okay? From a site perspective, I'm really happy. So both these are global studies. Both these have well over 250 sites who are already screening patients. In fact, in the cirrhosis study, we have actually activated all the sites we were planning to in this phase. It's 20 + countries on both these studies. So it's a big initiative, right? There's thousands of patients, and so now it's all about the execution on both these studies. Do most hepatologists, endocrinologists, treating physicians overall, is there recognition that there is sort of Gen one today and Gen two? Do they sort of delineate it that way? Like these drugs today are probably not going to hit fibrosis, but the ones coming up are for more severe patients, or is that more or less a MASH specialist kind of conversation? So clearly in the MASH specialist, in the KOL community, it's very clear, right? They see a difference in when metabolic drugs could get positioned long-term versus the more potent antifibrotics get positioned. I think in the hepatology community, just because of what is being presented at the liver meetings and with more data with the FGF21s in the last, let's say, two years, there's a lot of energy and excitement about the potential which FGF21s could have. If you ask me in the broader GI and broader community, it's probably not there. The difference is not there. I think it's more just enthusiasm that, in fact, now there's drugs approved for MASH. In the F4 space, right? So we all know GLP-1s tested F4, they did not work, right? Semaglutide did that study, which did not pan out. I think there, if you go, people are very excited about the potential benefit with FGF21 and drugs like pegozafermin can have in F4. And there they see that it's more likely a drug like pegozafermin or FGF21s might be the only class of drugs which one day could come to market for the F4. I think going back to the F4, especially with pegozafermin and other compounds, especially in combination with GLP-1s, is just any more color really on the synergistic effect or how you see pegozafermin playing out in the field when compared to competitors? So, just to clarify, synergistic with. Potential synergistic effects with GLP-1s or how are you guys thinking about that? Yeah. So we've shown really nice data, albeit it was 37 patients post-hoc, where on top of GLP-1s, we see really nice benefits on liver fibrosis markers, other liver markers like liver inflammation, liver steatosis, but also as well as on pretty broad metabolics, right? So we saw improved benefits on VCTE, ALT scores, ProC3. We see benefits, including things like hemoglobin A1c and lipid markers. This was in 37 patients, so it's a small sample. We think over time, and this was all in 24 weeks. It continued for 48 weeks. So we think in longer studies, that is going to translate to even a better benefit to having just a GLP-1 by itself, okay? As I said, these were all patients who were on six-month stable dose, but they still had fibrosis, and that's how they could enroll in the study. And that's the same protocol we are using in our phase 3 studies. Taking a step back, if you think mechanistically, they're working very differently, right? FGF21 is working both peripherally, but also directly on the liver. So in the liver, we are defatting the liver. We are preventing de novo lipogenesis, new fat in the liver. And then we have a direct impact on fibrosis and inflammation in the liver. That is something the GLP-1s are not doing, right? So the GLP-1s are going to reduce the influx of fat into the liver by impacting insulin sensitivity and obesity. And now we are giving it a push beyond that. So we think we feel very optimistic that in our phase 3, we're going to see really nice results on top of the GLP-1s. And then, just for clarification, in the phase three in the ENLIGHTEN trial, are you powering for that? Or what does background therapy look like for the enrollment process? Yeah. So as I said, so we are stratifying for GLP-1 use. And based on our assumptions of how many patients we think will end up being on baseline GLP-1s, we feel we will have adequate power to show a difference. Now, we are obviously monitoring what percentage of patients come in. And again, I think it's going to have to be balanced because in the U.S., we expect more patients on GLP-1 background, and OUS, we expect much lower. But based on our internal assumptions on the percentage of patients we expect in the trial, we think we'll have adequate power to even in that subsample to show the delta. Because I think that from a commercial perspective, that's going to be important. And that's why we've allowed it, right? Because at the end of the day, we recognize, and Geoff, to your point, GLP-1s are going to be used. The interesting thing with GLP-1s is we all know that compliance is not great with these drugs, right? At the end of one year, you hear numbers as low as in the 30%, you hear numbers in the 40% to 50%. And we do know one thing that when you come off GLP-1, your obesity goes back up, which is going to impact your liver again, right? So it is important to factor that in. Does that have any clinical implications, not just a person who's been on GLP-1, but say a person who's been on recurrently, right? So off-on, off-on. Does their MASH look different? I know it's hard to know, but. Yes. So, no one; it's a great question. To the best of our knowledge, we've asked this. No one's done serial biopsies to track that down. But what we do know is that cycling is probably not a good thing for MASH. So while your weight and hemoglobin A1c can be reduced, and we know it comes up pretty quickly, MASH and fibrosis is a much longer drawn-out process, right? So to impact fibrosis, you got to keep your weight down for an extended period and for a long time period. If that comes back up and your glycemic control again is out of control, you will have again your MASH come back. And one data source why it takes a long time to do that is when you look at bariatric surgery data in MASH, which is an extreme case of weight loss, right? 35%, 30%, 35%. At the end of one year, and this was a well-controlled study, you didn't see much benefit in fibrosis. But after five years, you see very nice control on fibrosis. Gotcha. That makes sense. And you mentioned the US utilization of GLP-1s versus OUS. I know you're stratifying it statistically in the trials, but are there other differences between U.S. and OUS geographies in the studies that you think could introduce a little bit more variability? Just standard of care outside of. Yeah, standard of care is the key one, right? What are the other drugs? So even when you think about, if I just take GLP-1, OUS where GLP-1s are being used, Jeff, it tends to be more for diabetes than obesity, so the dosing specifically with Sema is slightly different. Tirzepatide not that different, but tirzepatide's not being used as extensively. We are trying to standardize diet and lifestyle counseling as much as we can, okay? The other drugs for MASH, they're not being used like pioglitazone or like, you know, they're not actually Vitamin E, not being used that extensively. There could be other things which are being used which could change lipids, and we are trying to ensure, you know, we're being very specific to try and ensure that that doesn't bias it. But we're not worried that there's going to be any country biases, especially when you're doing 20 plus countries, which could be problematic. Yeah, that makes sense. And not just on the drug experience side, but on the comorbidity side. Is a patient, for example, with diabetes, obesity, and say chronic kidney disease, a different MASH patient that somebody, because there's a whole host of comorbidities? We're just talking about GLP-1s and obesity and diabetes, but we know that there are tons of other issues, cardio, renal, etc. Yeah. So we obviously have a lot of that, and we try through inclusion-exclusion criteria, right? So we have cutoffs for renal function. There are some of those you do adjust for Asian patients just because they are slightly different. European patients, I don't believe the protocol has that many differences between Europe and U.S. I mean, even things like BMI cutoff, you use a slightly different cutoff for BMI in Asian patients than the U.S. patients. But other than that, we don't anticipate that many differences. And I think we feel comfortable with where we look at it. So when you look at some of the studies which have been done globally, right? Whether you look at the SELECT study from Sema, you look at the Resdifra study, you did not see that much variation between the U.S. patients and the ex-U.S. patients. I think that gives us a level of confidence that, and Sema did their study in many more countries than we are doing it in. Yeah. When you compare pegozafermin across the FGF21 category, is there an opportunity for biomarker differentiation? Obviously, fibrosis is going to be the lead sort of driver here, but are there other narratives that you could maybe tease out of the data that you know already that could lead to commercial differentiation when you're thinking post-market? So the way I look at when you think about from a commercial perspective and the physician has to make a decision between different drugs within the same class, I'd argue there's three key things they look at, right? They're looking at the efficacy of the two molecules. They're looking at the safety and tolerability. And they're looking at it from a patient perspective, the convenience and the dosing for the patient, right? Those are the three broadly speaking parameters. In asymptomatic chronic diseases where the patient has to be kept on the drug for an extended period of time, safety and tolerability actually sometimes becomes more important if efficacy is very similar. Because at the end of the day, they know in MASH, I got to keep the patient on the drug for a long time period, right? As distinct from some indications where it's acute treatment, it's all about efficacy. When I think about our class and why we think we have a best-in-class profile, you look at the efficacy of our drug versus the two other FGF21s, and you look at the key marker of fibrosis change. On an absolute basis, our placebo-adjusted numbers are essentially the same. But on a relative risk basis, we actually stand out and have the best relative risk reduction and fibrosis benefit across all the three molecules. This was the paper which came out when they looked at 29 different trials. Pegozafermin really stands out. Now, when you think about safety tolerability, we continue to have a very differentiated profile on safety tolerability. I'll break the two out. Tolerability is more about GI events. We consistently have observed lower rates of GI events and the more problematic GI events like the nausea, the vomiting, much lower levels than efruxifermin or efruxifermin, okay? And then on safety, we have not observed any statistically or clinically meaningful changes versus placebo on bone mineral density or on bone biomarkers. And this plays really importantly in the F4 patient population who already are at a risk of sarcopenia. And so physicians are going to be very careful on which drugs they will use in that patient population if there's any type of a bone signal, okay? So that's a key point of difference. And then on the dosing paradigm, so we are studying it once a week and once every two weeks. Efruxifermin is only once a week. And this could become a very important differentiation, especially in the F2, F3 population. F4, we are only studying once a week. It might not make that much of a difference. But on the dosing one, there's one additional point which I think could be a very interesting differentiation in the commercial setting. So we are a liquid prefilled syringe. Efruxifermin is a lyophilized product, so it's got to be reconstituted before it gets injected. Now, because we are a liquid product, we believe we have a potential to be co-formulated with a GLP-1. So if you think about the GLP-1s before the orals come out, most all of them are liquid products. And it could be a very interesting lifecycle management, right? If you think about this category, it could be polypharmacy and people are going to use combinations. To have an option of having a co-formulated product with a GLP-1 could be very interesting for physicians is what we hear. So I think there are particular areas where we are differentiated. We think, look, multiple FGF21s could get approved. And this is a class, if we meet our promise, could be huge. And there could be multiple players. But at the end of the day, when I look at efficacy, safety, tolerability, and dosing convenience, we think we could have the best-in-class profile if our phase 3s live up to what we saw in phase 2b. I guess looking forward a little bit, you've brought up the potential for co-formulation with GLP-1s. I guess it might be a little bit far out, but how's the company thinking about how a payer might react to that? A little bit more in depth, how it looks like to be part of a physician's toolbox for, let's say, MASH F4 versus maybe potentially other indications as well? Yeah. So I think from the physician, and let's break it up into two, physician versus payers. I think from a physician perspective, what we hear in our research is they'd like the optionality to have that because they think there would be some patients who would be ideally suited for it and who would prefer the benefit of 52 less injections a year, right, versus injecting myself. But they also want monotherapy because they might want to mix and match with other products. So if we develop it with a particular GLP-1, they might want to do it with another one, right? The other thing from a physician perspective is the benefit of having the monotherapy. I can titrate the doses differently, right? One thing we haven't talked about in a co-formulation. It might give us the opportunity if there's really good synergistic benefit. You might not have to go this high on both the doses. And you could come up with a better profile, right? We do know if I take Sema, for example, at 2.4 mg Sema, tolerability is not great. But maybe in a co-formulation, all we need is 1.5 of Sema. I'm just using that hypothetically, right? I think from a payer perspective, when we've looked at, and we've done some initial work at the pricing of combination therapies, very rarely do you see the combo therapy priced as A+ B. It is priced sometimes just as one molecule, just as much as the basic or marginally higher. I think we're going to just have to see how strong the data is on the combination, on how we think about pricing a combination product. Rohan, I just want to follow up on the differentiation points you made on just on FGF and the landscape. On the safety and tolerability, how much of a role do persistence rates, discontinuation rates play in sort of that's the ultimate driver of good safety and tolerability. And you see that among all the GLP-1s and obesity, right? I mean, there are big differences. 8% is meaningfully better than, say, 15%, right? In the MASH space, just given the severity of disease, is that a reasonable metric? Is it a top priority metric? It's a pretty high priority. And I go back to, and the reason is physicians recognize so where it's an asymptomatic condition, patient compliance and persistency independent of MASH in all therapeutic areas you see is very much driven by tolerability and convenience. Because if I take the classic feel function survival, right, the patient is not feeling and their function is not changing when it's a chronic slow progressive disease. But however, if I'm throwing up, I can feel function it, right? And so I would rather take a drug with a better tolerability profile. And what the clinicians in our market research, and we did an interesting, we did a conjoint study where we tweaked these numbers to your point, we looked at low. You can see a pretty significant share allocation difference on better tolerability because the physician basically is saying, I want to keep the patient on drug for as long as possible because it's a chronic condition. So we think in the real world, this is going to become a pretty important consideration. In a clinical trial setting, the PI can convince people not to discontinue, you stay on drug. In the real world, the patient makes that decision. And if it's not well tolerated, they're going to say, I don't, I want to try something else, doctor. I guess going back to making sure that discontinuation rates remain the same, especially in the context of GLP-1s, are you guys thinking about, to our point earlier, that there being high rates of GLP-1 discontinuation at times? How are you guys thinking about that in the context of the trial? Yeah. So if you look at most of ours, including our discontinuations, they tend to happen very early in treatment. So in our study, the GLP-1s, you have to be on six months of stable dose. That means you've gone through that slow titration period. So a lot of the patients who've dropped out have already dropped out if it's because of tolerability. They might drop out for other reasons. So in our phase 2B, we did not see a lot more. In fact, we did not see any, if you look at the tolerability rates in the combination of GLP-1 plus FGF21, it looks like it's a very acceptable tolerability profile. And we did not see a disproportionate higher discontinuation rates in those patients. Does that make sense? Because they've already gone through that phase of titrating up and now they're on stable dose. I think I know the answer, but I always ask you this about the interim analysis. I mean, is there maybe that saves you six months if you sort of engineer that, but you also add a lot of risk to the, obviously, two ENLIGHTEN studies. Is there any evolution in your thinking on that? Do you still want to go the full final? Is there anything that would maybe you're seeing in the ongoing studies that would make you consider taking an interim look on that and spending some alpha? Yeah. So in some ways, the histology is the interim, right? Because so even when we power the histology portion, we are only allocating a small part of the alpha to it because at the end of the day, you want to retain as much alpha for the outcomes. At this point, Geoff, to us, the histology is the key one. That's what gets us accelerated approval. Look, what could change it? What could only realistically change it is if there is new data which came out which said our powering assumptions were too conservative, right? But to take a peek under it in a phase 3 just for the sake of taking like a, that we would not do, right? We've picked an N today. We continue to look at whether that N is reasonable. If there was new data to say, look, you're being too conservative in your estimations or your assumptions, yeah, we could take a look at it. But we are not considering doing a third look, right? We're doing one look at histology and one outcomes. Yeah, makes sense. Well, let's switch gears to SHTG. So maybe give us a bit of a status update on that. I still think that next year you'll get the readout. Yeah. So we're still, again, that study is fully enrolled. We will see the results in the first quarter of next year, and if it meets what our threshold is, what our target product profile is, we could then initiate a second study, so the strategy is to lead with the MASH indication. We think that's the largest indication and then file SHTG as a supplemental BLA, so as long as we complete the second study in time, by the time MASH gets approved, we should be in good shape. The second study is more a confirmatory study, meaning the agency is not asking for a totally different protocol, so it's literally, it could be a smaller study. It might be only a single dose we pick to move in, right? We think there still remains an opportunity with SHTG for this molecule. And that's in those patients who have high triglycerides, but also have other metabolic comorbidities, specifically liver issues like liver fat, liver transaminases, and glycemic control issues. We don't think the ApoC3s address that, right? And so we think we have a unique proposition there. In fact, the recent data from the APOC3 last week and now in HTG with olazarsen actually saw worsening of glycemic control. Arrowhead has seen it in their study. So there's a unique spot for pegozafermin if we show nice triglyceride reduction, but benefit on some of these comorbidities. I guess, yeah, that's the follow-on question. And that would be if you have unequivocally strong data, could you maybe run a larger study with more biomarkers, more bells and whistles just to kind of help the product profile? Maybe there's a ripple effect in how it's perceived in the MASH community. Yeah. I do think if we would, like, how we plan the second study is really important. So to me, you hit it spot on. The second study is more to generate the data to support what can be in the label from a commercial perspective. Because we have a very high level of confidence we are dropping triglycerides. We've seen it in five studies to date, right? So then it becomes, yeah, triglycerides is the primary endpoint, but what are the key secondary endpoints? And then to your point, we want to make sure we have adequate number of those patients and you augment it with those patient populations to generate adequate amount of data. I guess too, given using that trial then, are there any other potential indications that pegozafermin you believe could be useful in besides SHTG, maybe in other cardiometabolic diseases? Sure. We do believe FGF21 has incredible potential beyond it and honestly could be a pipeline and a product. So I'll break it up. So one is obviously SHTG we're doing, but I'll break it into there's two other buckets, right? So there's one bucket where a lot of our payers are talking to us is if you work so well in cirrhosis, could you work in actually other liver cirrhosis conditions, right? Because at its core, once someone becomes, so there's an injury insult which causes the cirrhosis. Hep C causes it, Hep B causes it, alcohol causes it. But the cirrhotic pathway, as they explained to us, then becomes pretty similar, right? So it could be very interesting where a lot of them are like, okay, if you're working here, should you do something there? Because if your drug could become a true cirrhosis drug independent of the etiology of what caused it, that's huge, right? So that's one. And then honestly, there is a lot of science out there in other areas, some fibrotic, some not. Could it work in renal fibrosis? Could it work in cardiac fibrosis? There's very interesting data in retinal stuff. There's very interesting data in cardiomyopathies, right? So our focus to date has been in MASH. Now that we're in execution of MASH Phase 3, now's the time to start thinking from a lifecycle perspective, what else could be there? But those are two of the more logical ones where we are getting inbounds from a lot of experts like, okay, we've seen your data, would you consider doing this? From a capital perspective, would there be a rationale for maybe saving some time and partnering other indications beyond MASH, SHTG? Or is that too much of an overlap in the call point, I think, commercially? So it's a complex equation, right? Because we made a capital allocation decision on MASH, SHTG we've kind of put in the second tier, right? And we want to make sure we preserve our capital, which the investors have given us to get this across the finish line. Is there ways to partner? So partnerships could be a very good way to do some of these others. It does get tricky with the same molecule if you are exactly in the same indications, right? Now for SHTG, we believe there's a pathway where the agency, in discussions with the agency, that we could come out with a different brand name for SHTG. That's not out of the question. So that makes it much easier than if you carve it out, right? The other ways we can think about partnerships is thinking about doing regional partnerships to raise the capital to then allow us to pursue some of these others. But within the same space, it becomes really difficult to carve out, we are MASH cirrhosis, but you are Hep C cirrhosis, right? That's much trickier, to be honest. But commercial partnership would obviously be data dependent, right? But that's something that could happen, maybe not in the core US, Europe geographies, but. Absolutely. Yeah. We do think, look, we think we can do a good job in the US, OUS. We think there could be really good strategics who could optimize the value of pegozafermin. And so we continue to have those discussions, but we want to make sure we're doing it for the right reasons and with someone who can actually bring value to the program. Okay. Well, thank you very much. Super helpful dialogue. Appreciate the time. Awesome. All right. Thanks.