Perfect. Well, folks, welcome to the Cantor Healthcare Conference. I'm Yanni Souroutzidis, a publishing analyst here with the team, and today I have Sagimet Biosciences. I have Dave Happel, the CEO, and Andreas Grauer, the CMO. Would love to just hand it over to you guys for a few opening remarks, and then dive into the Q&A in terms of what's going on with the company over the last six months, and certainly, going forward over the next 12- 18. Yeah, sure. Thanks, Yanni, for the invitation. Sagimet Biosciences is a clinical stage biopharmaceutical company. Our approach really begins with trying to understand how overactivity of fatty acid synthase, or FASN, plays such a critical role in the development of a number of underserved conditions, such as acne, MASH, and in certain tumors where the overactive FASN plays a role in contributing to disease progression. To solve for this overactivity, we have developed a portfolio of novel FASN inhibitors led by our lead program, denifanstat, or as we call it, DENNY, that really targets the underlying cause of all of these conditions, and that underlying cause is de novo lipogenesis, which is fat accumulation, and that elevated fat accumulation is present in all those conditions that makes it sometimes challenging to treat. We announced, most recently in April, we have great data and industry-leading data in the liver and MASH. Our partner in China, Ascletis, ran a couple of clinical studies, a phase II and a phase III study in acne that showed virtually identical results, statistically significant 20% placebo-adjusted improvements in IGA, which is the Investigator Global Assessment Score for the treatment of acne, and also 20% lesion count reductions, placebo adjusted. We had industry-leading data in the liver and industry-leading data in acne. We chose acne for a couple of reasons. The market is huge. There hasn't been an innovative treatment in acne in over 40 years now. Accutane was really the last molecule to really come to the market. It was approved in 1982. While it can be very effective, it also has pretty significant limitations as well due to its safety tolerability profile. This molecule in this phase, treating moderate to severe acne patients, is really a game changer. It's going to be a game changer. As part of the market, we have 50 million patients in the U.S. that suffer from acne. 20% of those have moderate to severe acne. That's roughly 10- 15 million. Only 5 million of those, roughly half or less, are actually being treated right now because there aren't many options for them. They are on oral antibiotics and topicals, but none are particularly effective. We approached the FDA last year with the Ascletis phase III data, to understand what their receptivity to that data set would be. They were quite enamored. We took it to the dermatology division, and we had a pre-IND meeting with them in December of last year in which a couple of really important things came out. One, they recognized the disease is absolutely agnostic to demographic or ethnic background. Working in China in a Han Chinese patient population is expected to be no different than any other non-Han Chinese population. The FDA aligned on conducting a single phase III study, which was very important. It is within their guidance, and they also indicated that they will be looking at the Ascletis phase III data set as well. I think finally, and perhaps most importantly, they indicated and recommended that we evaluate 12- 17-year-old patients. All of the Ascletis, the acne data studies that were conducted in China were all in 18 year old and above, but the dermatology division had cross-referenced our discussions, the end of phase II discussions that we had with the hepatology division and recognized that the molecule is extremely well characterized. It carries a very favorable safety tolerability profile and therefore, from their perspective, it should go into a younger population. We were going to ask anyway, but it was just nice that the FDA offered that up from the outset. You combine the market size with the clinical data and the opportunity that is there, and also the rapidness in which we can take this program forward directly into phase III. It became quite an easy decision, and certainly one that the scientific community as well as the financial community rallied behind. We raised a significant amount of cash in April of this year to support our three programs in dermatology. The first being denifanstat to start a phase III, which we will do, as I indicated, shortly in October. We will take that through the phase III readout next year, and we will have enough to do commercial preparation and an NDA. We also garnered support from our investors to take, excuse me, our second-generation FASN inhibitor, an oral FASN inhibitor that is a bit more potent than denifanstat. We are about to launch that into a phase II at the end of this year, and we will have phase II dose-ranging data from that program by the end of next year. So we will have phase III data from denifanstat in moderate to severe acne, and we will have phase II data from our second oral FASN inhibitor next year. Then we also have a topical FASN inhibitor that we are, that is in formulation development right now. This molecule as a topical formulation will allow us to branch out into more mild acne patients, and we anticipate that that will be extremely well-received. So we have a lot going on and we are really excited by the path forward and- Understood. Yeah. Yeah. Maybe just double-clicking on what really is the benchmark to beat, because you touched on the fact that there haven't been any extremely novel therapies over the last 40 years or so. But just reinstilling that, we've seen some recent launches, WINLEVI, CABTREO, SEYSARA, and all of those are in many ways just kind of reformulations. Yes. Maybe just expand on that to really press home that most of these are topicals, they aren't anything innovative, and what you're coming in with is an oral once daily that really can be taken quite chronically and hopefully lead to even deepening effects from what we've seen from the initial top line. Yeah, no, it's going to be a game changer for sure. It really is. If you're looking for a surrogate market and how this molecule could change the treatment paradigm, I would encourage you to look at the atopic derm and the psoriasis markets, both of which were really littered with low-cost alternative products, topical corticosteroids, oral steroids, immunosuppressants. Immunosuppressants in many ways in psoriasis and atopic derm functions like Accutane. It's sort of a nuclear bomb. It can be very effective, but also pretty toxic. You can't take it long term. I think we've seen the effect of the new molecules that have come into this space, the IL-4/13s, the DUPIXENTs of the world, the IL-23s in the psoriasis, the JAK inhibitors, the PDE4s. All of them have had really a robust effect in treating those conditions, and I think we're about to see the same thing in acne. As you pointed out, there hasn't been anything novel in many, many years. The treatment regimens that patients have at their disposal are pretty limiting, particularly outside of Accutane. Accutane is generally reserved for the most severe form of acne. That's nodular inflammatory acne. But now I think these patients are frankly going to have an option even before they get to Accutane. I think we'll see more data from the phase III study from Ascletis that is about to be presented later this month at the European Academy of Dermatology and Venereology Congress, in which they will share the totality of the 52-week data. That 52-week extension was really designed for safety first to support the NDA, which it did beautifully. The safety tolerability was rock solid through the entire 52 weeks. In fact, it improved a little bit even over the last 40, once the patients rolled over from the phase III randomized part of the study. I think what's going to be a bit eye-opening is the continuing improvement in the IGA score, as well as the reductions in lesion count, both on a non-inflammatory and probably more importantly on the inflammatory. When we look at the inflammatory lesion counts, that's the one that most derms really focus on, because that can lead to scarring, and that's really what they're trying to prevent. In this situation, I think we're about to see that denifanstat performs exceptionally well and starts to tread awfully close to what Accutane has demonstrated in their clinical trials. Takes a little bit longer to get there, but also in a much kinder and gentler way. We're really excited by the data. Maybe talking a little bit about inflammatory versus non-inflammatory and as that relates back to denifanstat's mechanism here. Obviously in MASH, you guys have shown maybe perhaps advantages there of having anti-inflammatory activity. Also lastly, tying that into the AURORA study where again, I think you're looking at co-primaries of IGA, but also specifically the non-inflammatory and inflammatory counts. Yeah, absolutely. If you think about the mechanism, it all starts with sebum, right? The sebum creates the pressure within the pores and that is the fertile ground for the bacteria to proliferate and then cause inflammation, and then come hyperkeratinization that makes the flow or inhibits the flow. So inhibiting sebum is sort of the universal mechanism that improves all of that. Big difference between, for example, the antibiotics and a sebum inhibitor here is that the antibiotics specifically deal with the infection, and therefore the secondary inflammation, versus if you inhibit sebum, you can inhibit both problems that leads to both the inflammatory and non-inflammatory. Understood. And maybe just on the trial design, because it is slightly different than Ascletis. Yeah. There are a number of differences, right? The first and biggest difference is the population. We will be including adolescents on the request of the FDA. They asked first. We would have asked also, but they first asked to include those, so 450 of our 800 patients will be analyzed. So that is a big difference. With regard to patient selection, like acne-specific criteria is pretty much the same, right? Investigator Global Assessment or equaling moderate to severe acne. And the lesion counts will be the same, at least 30 inflammatory, 30- 75 inflammatory, 30- 100 non-inflammatory lesions. All of this is the same. The endpoint structure, the FDA has sort of a specific idea of how they want the endpoints to look at. They like co-primaries with both an improvement of the global assessment and success there is to have clear or almost clear skin. To get somebody from a 3 or 4 to a 0 or 1, that's quite a dramatic benefit. And in terms of lesion count, they look at the absolute reduction of lesions for both inflammatory and non-inflammatory. While that wasn't exactly the primary endpoint structure of the Ascletis trial, they looked at all of those endpoints, and they were all significant with 4 zeros. So it doesn't really matter that they now are being elevated to the status of a primary endpoint, because we're very confident that we're going to accomplish hitting them. Yeah. Understood. And maybe before we get into the commercial side, you've mentioned a few times, physicians look at the inflammatory lesion count. Usually, I think also maybe looking at absolute IGA and absolute scores versus placebo-adjusted. Historically, if you look at a lot of the acne trials or just IGA as an endpoint itself, it can be a little bit variable. How do you think about the top-line data that we'll get from AURORA versus the greater and kind of longer-term data that will be existing from Ascletis at this point? And eventually, I would imagine, we'd get some OLE data from AURORA as well. Just trying, I guess, to contextualize the top-line 12-week data versus some variability that might be there and what the actual true TPP would be that you'd be marketing to. Yeah. If we take what we've observed in the Ascletis data set as an example, and you will see some of the more specific data at the end of the month at the European Derm meeting. The nice thing is that you have a very convincing effect at 12 weeks, but it continues to get better. Both the reduction or the improvement in IGA or global assessment and the reduction in lesion count actually continues with continued treatment. So we're expecting a significant outcome at 12 weeks, and we assume that the numbers will look very similar to what Ascletis has produced. And we're quite confident that in our open-label extension, the efficacy outcomes will further improve. Again, the improvement over the long-term treatment in the Ascletis trial has really been very, very favorable. At the end of 52 weeks, it was close to Accutane numbers, basically. Yeah. Can you remind us what Accutane numbers have been? It's almost profound. Yeah. Been a long time. It's a very effective drug, right? They're reducing lesion count up to 90%. Yeah. It is a very effective drug that comes with a price. Understood. Maybe starting to shift a little bit more into the commercial dynamics, because I know that's where a lot of investor interest is. Maybe just take a moment to lay the groundwork there in terms of general expectations, be it initial sales force, drug pricing, typical gross net adjustments for the space, and then we can double-click on some of those. To get back to your question, Yanni, about the TPP. I think the TPP is going to look a lot like what the phase III data from Ascletis looks like in terms of IGA lesion count reduction, and I think we can't underscore the importance of the safety tolerability profile. Yeah. If all of those continue to hold as they have, as we expect them to, it's going to be a really attractive product. So it will be about twice as effective or more as any oral antibiotic in that population and frankly, any topical used in that population as well, with the benefit of having a safety tolerability profile that's frankly more attractive than any of those, and certainly more so than isotretinoin. So in terms of how that plays forward, we did do some early payer research in terms of pricing based on the phase II Ascletis data, which fortunately looks a lot like the phase III, and the receptivity was really warm. Recognizing that what I just laid out in terms of the treatment effect and safety tolerability, the payers were more than comfortable with a premium over the current products in that space. Cyclines, SEYSARA is really the most expensive. It is about $1,100-$1,200 a month. CABTREO and WINLEVI are about $1,000 a month. We would expect a gross to net over time of about 40%-50%. I think those molecules, as you pointed out, not being novel, make them subject to a higher gross to net out of the gate in that range. I think it will probably take time for a product like denifanstat to reach that level. It will largely be dependent on the data and the level of competition. Right now there is not anything in development, certainly that we are aware of, that is moving forward in acne that could challenge that pricing paradigm. In regard to commercial infrastructure, we have not guided to that. What I do anticipate is that this market is going to be heavily influenced by direct consumer effort. Social media content creation is very important in the dermatology space. In fact, that may allow us to be pretty flexible on the physical footprint. It may not be the classic in terms of trying to gain share of voice, which is how you measure how you are building out a commercial infrastructure. The fact that it can be achieved through DTC largely means that we can probably modify our footprint on the physical level. We will understand that more as we get through. We are about to do some pretty extensive qual and quant market research after the open label extension data is available. I want the payers, I want clinicians, I want them to see the totality of the data to understand the magnitude that this product can have over time. Once we sort through all of that, we will have a- Yeah a pretty good understanding. Understood. Maybe also on the duration of use. One thing that I was noticing as I was doing my work is that there's obviously a lot of antibiotic stewardship programs in the U.S. A lot of the topicals don't necessarily have the highest adherence, and typically you see folks treated for, call it 3- 6 months, and then they come off. I think here in many ways, the deepening that we seem to be expecting could be advantageous in terms of motivating people to stay on. Oh, for sure. and be part of the commercial strategy. I guess maybe does that idea resonate? Is that how you guys Yes are thinking about maybe changing the paradigm a little bit, so to speak? Oh, absolutely. I think when we originally started to build models, and I know that a lot of the analysts have as well, looked at this as sort of a 6-month treatment during the year. Patterning it after antibiotics. The problem is that antibiotics are treated episodically in acne. It's 3 months on, 3 months off, 3 months on, 3 months off, largely because I think as Andreas Grauer has pointed out, or at least hinted at, that the longer you're on an antibiotic, you start to get a rebound effect. So after about 12- 13 weeks on an antibiotic, you can actually start to get worse. To avoid antibiotic resistance, it's important to take a holiday. In our situation, we know from both our MASH data and our early work in other conditions that in acne and in MASH, we're trying to normalize FASN levels. We're not trying to wipe it out like we do in oncology. Therefore, if you cease taking it in acne, we anticipate that the baseline FASN levels will return within about 4 to 6 weeks. What's interesting is we saw patterns of that in the open label data. It probably won't be shared at the end of this month, but what we did see is that patients were really steady after they rolled over into the open label, and they were at IGA zeros and ones. Clear or almost clear. After an evaluation period, they bumped up to a 2 or a 3. The next evaluation period during the open label extension, they dropped back down to a zero or 1. When you went back and looked at those individual patients, reflective of probably a real-world utilization, patients would drop off. They were clear for 6 months, and they felt, "Maybe I'm done with this." Then they realized 4 weeks later that their acne returned, and then they had to go back on it. It was nice to see the quick turnaround that the molecule can bring them back to a clear or almost clear state. We do know that from denifanstat. Unlike other anti-androgen medications that are designed to block sebum, ours is a direct sebum inhibitor, not an anti-androgen. But those products take a long time to work. Yeah. That's always been the downfall of either oral contraceptives or spironolactone or WINLEVI, which is an anti-androgen, it takes about 3 months for you to see an effect. Patients lose hope at that point. I think they do, to your point, they do drop off. This gives them the opportunity to see a fairly rapid response. In the phase III data with acne and denifanstat, in denifanstat and acne, we've seen lesion count reductions within 2 weeks and separation at 4. I think our dermatology community is really excited by that. Maybe bringing that to the payer and coverage side of things. How do you see that being a lever for reimbursement, potentially? Maybe touching on just general expectations at this point for what a step edit or even a prior auth might look like if there's even an expectation for that. Yeah, no, great questions. I think the way we envision is, first of all, to get first-line therapy designation from the American Academy of Dermatology. They've already hinted, I think that they're moving in that direction if the data remains anywhere close to what it looks like today. One, because they know they have to reduce the amount of antibiotic usage that they're currently utilizing for these patients. I think in terms of step edits, the reality is that almost all patients currently in this country have already been through antibiotic regimens and topical regimens and largely have achieved their step edit. Certainly the 5 million or 6 million patients right now that are currently on medication. That would be the target population immediately. I think it's also important that we start bringing in the other patients as well, once they realize there's a viable treatment option. Yeah. Understood. Maybe starting to think about the launch, it would be too early to obviously give guidance on revenues, but what are some of the metrics that you're hoping to be able to share? Is it covered lives, progress with PBMs? Just walk us through what might be early indicators of success here. Yeah, I think you touched on it. I think payer coverage is going to be absolutely critical, and it becomes really one of the most critical functions to hire early is to be able to have conversations with the major payers and start that process. The typical rates of coverage for most products in the U.S., it is a combination of coverage and where you get placed in tier categories. Tier 1 meaning that you have basically unlimited access, and tier 4, you are more limited. Usually most products out of the gate, because you are not starting on a formulary cycle, in the first year you are roughly 25% coverage and you are usually a tier 3 or 4. By the second year, you may bump up to a tier 2 and 50% coverage, and you gradually get up to about 90% and a strong tier 2, possibly tier 1 by the fourth year. I would expect those metrics to be pretty consistent over time. But it is going to get prescribed probably heavily and quickly out of the gate. Got it. Understood. Maybe one thing we skipped over, but I know you guys have been messaging it pretty proactively. Just on the timelines for AURORA on the enrollment aspect, you guys have laid out, I think, a somewhat aggressive, but I think achievable timeline of six months. Maybe just speaking to why you think that is feasible. I know I saw a number of things that stood out to me in my work, but just curious to hear from yourselves. Yeah. So we are planning and on track to start screening in October. We have a screening window of 45 days, so with any luck, the first patients may be included in October, but if not in October, then in November. We have contracted 55 sites as investigator sites. The vast majority of them are private sites, not academic sites, so the startup is expected to be quick, central IRB. We are expecting an enrollment of approximately 2.5 patients per site per month, which should get us the study enrolled in about six months. Primary endpoint should be three months of treatment. Yeah At that point, we're hoping to be able to clean the data and start communicating some results after. Understood. Okay. I know we're coming up on time. I think the last one for me was just thinking about OLE. Sorry, not OLE, the IP and the patent term extensions here. I think currently, base case, you go out to 2032 with extensions out to 2037. Maybe just walking us through that and how maybe the second gen ties into that a little bit as well. Yeah, sure. The composition of matter on denifanstat is 2032. PTE should be pretty standard, five-year. We've had this drug in. First IND was filed in 2012 with a gap in development, so if they could give us more than five years, I'm sure we'd qualify. We obviously will be going after a pediatric exclusivity, which will grant another six months. So we're looking at basically market exclusivity until November of 2037 just on that patent family. We're also prosecuting a method patent for denifanstat and acne. That patent runs until 2036, and then we could, of course, we would apply the PTE and choose that patent for PTE plus pediatric exclusivity, which would provide us another potentially two to three years on top of what I just communicated for the end of 2037. Sometime in that ballpark, assuming we launch, we get this approved in perhaps late 2028. It's roughly, what, almost nine years of coverage on the base patent and probably more. On TVB-3567, the second oral FASN inhibitor, our composition matter expires in 2035. But the key patent that we're prosecuting is a method patent that would take it until the mid to late 2040s, and that really becomes highly attractive. So it becomes a second FASN inhibitor that we can determine when we develop and bring to market as maybe denifanstat is moving towards expiry. Understood. Well, that's all I have, but maybe any final comments or things you guys would like to broadcast here at the conference, go ahead and go for it. Yeah, no, I think we're just really excited about the path forward. We have a green light from the FDA to move this program forward in a single phase III study. We're getting ready to kick that off. We have a number of inflections that are coming forward with the data that will be presented later this month at the European Academy of Dermatology and Venereology Congress. I would encourage all of you to look for that. It's going to be great. We'll start dosing patients shortly after we screen in October. I would say that we're looking for an approval in China sometime between the end of this year and the beginning of next. That'll be important. It's a major regulatory body approving this novel mechanism of action in this disease for the first time. I think it's going to be great. Understood. Well, thank you so much.