Hello, everyone, welcome to Oppenheimer's 36th Annual Healthcare Life Sciences Conference. I'm Jay Olson, one of the biotech analysts here at Oppenheimer. It's a pleasure to welcome you to our discussion with Sagimet Biosciences. It's an honor to introduce Dave Happel, the CEO of Sagimet, Rob D'Urso, SVP of New Products, Eduardo, Chief Medical Officer, and Thierry, the Chief Financial Officer. Thanks so much, guys, for bringing your team here today and making time for us. Thanks, Jay. Thanks for the invitation. Great to be here. It's our pleasure. We're super excited about Sagimet. You've got a lot of interesting things going on. It's good timing for the discussion. For those who may not be so familiar with the Sagimet study, Dave, would you like to give us a quick overview? Yeah, sure. Thanks, Jay. Sagimet is a clinical-stage biopharmaceutical company, and our approach really begins with understanding how overexpression or overactivity of fatty acid synthase, or FASN, plays such a critical role in the development of a number of underserved conditions. In our primary focus in MASH, acne, and certain solid tumors that are dependent upon FASN for progression of disease. To solve for this overactivity of FASN, we've developed a portfolio of FASN inhibitors led by our lead program, denifanstat, that really target an underlying cause, that is common to all of these disease states, and that common thread is fat accumulation or de novo lipogenesis. By doing so, and by solving it by this manner, we have a really unique and highly differentiated molecule, across the disease states that we're pursuing development. If we talk about just MASH for a minute, we have a really significant body of work, both preclinically and clinically, that show largely the same thing, and that is that denifanstat targets the three primary drivers of MASH, and that's fat, inflammation, and fibrosis, and it does so independently. It makes it rather unique in the fact that everything else that's really trying to tackle the disease is a fat-burning mechanism of some variety, whether it's a fat oxidizer, like a FGF or THR, or a fat mobilizer, like a GLP or the GLP analogs. All of those molecules really work on burning fat and hoping that that fat burning translates into downstream benefit and inflammation and fibrosis. We've seen that it can be successful to varying degrees. Our molecule really does target the inflammatory cells, the fibrotic cells within the liver, as well as fat cells. By doing so, it has translated into a really significant reduction in fibrosis, which, as Eduardo always reminds me, is what drives prognosis. We've completed a phase II study in which we showed excellent reductions in inflammation and fibrosis, and particularly in the more severe patients, where as the liver becomes less fatty, having an anti-fibrotic mechanism becomes critical. Most recently, we shared data at the International Liver Congress last year, and then again at The Liver Meeting in the fall, that patients who were digitally diagnosed as Fours had a significant response. 13 patients in our phase II study were digitally diagnosed as qF4. 11 out of 13 had a one- or two-stage improvement in fibrosis, all of this has led us to the conclusion that this molecule can work very effectively in qF4. Last May, we announced that we were going to be going into cirrhotics into the qF4 population with a combination of denifanstat plus resmetirom. We have now subsequently completed a phase I PK study, DDI, tolerability, safety study, which we announced last fall before the holiday that showed there was no safety signal, very well-tolerated and supports moving into phase II. With that, our plan is to kick off the phase II study in the second half of this year. Turning quickly over to acne just for a second, Our partner in China, Ascletis, has run a couple of studies in moderate to severe acne patients, demonstrating absolutely nearly identical results, where we saw roughly 20% placebo-adjusted differential reductions in lesion count across the board, total lesions, non-inflammatory, inflammatory lesions, and also improvements in IGA. They submitted their datasets to the Chinese regulatory authority, and that submission was accepted. They are anticipating an approval second half of this year, maybe the beginning of next year, which will be an important milestone because this is the first new mechanism of action in the treatment of acne in roughly 40 years, since isotretinoin was approved back in the early 1980s. The scientific community and I think the patient community are really excited with this potential addition to the landscape. With that, we have started our phase I with our next generation FASN inhibitor that walks and talks and functions nearly identically to Denny. We should see the results from that here in the next few months. Our goal and our communicated plan is to start the phase II by the end of next this year, and then we should have results from that study in the second half of next year. We're really excited by where everything is going. We've got a couple of programs that have great data, and really anxious to see the results of all the work that the team has done. Excellent. Thank you so much for providing that overview. That's a perfect background for our discussion. Maybe let's start by diving into MASH. You successfully completed your phase II-B study with Denny in MASH, and that study met both primary endpoints. Can you give us a recap of the findings from that study? Then you did talk about sort of the differentiating features for Denny in MASH from a, from a mechanistic perspective, but maybe from a clinical perspective, and based on your findings in phase II-B, what are some of the key clinical differentiations for Denny in MASH? Sure. Yeah. The big differentiation is that the drug tackles, as Dave said, all three drivers of the disease: fat, inflammation, and fibrosis. Tackles directly, and it's the only drug that does that. On fat, we block production of it inside the hepatocytes. On inflammation, we block activation of inflammatory cells, the Kupffer cells in the liver. Then on fibrosis, we block activation of the stellate cells that deposit fibrosis. You get the downstream benefits of potent defatting, coupled to the direct effect on the other two cells. It's really a double hit on every single one of the three cell types that are the main ones involved in MASH. You asked about the phase II-B. The study was successful. I think that's the most important thing. We hit both primary endpoints statistically significantly. More importantly, we hit the endpoint that FDA requires for approval of a drug. Fibrosis improvement without worsening of MASH, and MASH resolution without worsening of fibrosis. That is a reflection of the anti-fibrotic mechanism. As Dave said, fibrosis drives prognosis. Importantly, in the study, there were significant improvements that we observed in the most advanced patients there. Patients by human labeled as F3 fibrosis is the highest stage, if you will, before F4 cirrhosis. Also, the patients that received Denny were half as likely, in other words, placebo was twice as likely to progress to cirrhosis, progress to F4, which is one of the endpoints for approval, of course, in non-cirrhotic patients. You can translate that to the cirrhotics to a certain extent, and showing that potent, again, that potent anti-fibrotic effects. Another important point was AI digital pathology. AI pathology supports, corroborates, and goes beyond the human. Our data were also statistically significant. What we saw was that in a continuum, and also in a categorical manner, an improvement in fibrosis, in other words, regression of stages, but also fibrosis being reduced, or in some cases, disappearing in parts of the liver that are the liver microscopic parts of the liver that are associated with prognosis. We call them the portal and periportal areas. Again, a reflection of fibrosis being the key driver. Finally, in AI pathology, we identified, 13 patients that actually, by digital pathology, were cirrhotic, or F4, or, excuse me, or they call qF4. Of those patients, 11 became no longer F4 at the end of the study. There was a regression of one or more stages. That taken together, that is the reflection of the mechanism of action in the clinical trial setting. Excellent. That's super helpful. Thank you for explaining that. Maybe just to touch upon the combination of... By the way, really aggressive anti-fibrotic, especially in those patients with more advanced fibrosis. Thinking about the combination of Denny with resmetirom for MASH, and Dave, you touched upon some of the early work that you've done there. Eduardo, can you kind of walk us through kind of the rationale behind that combination and the evidence that you've seen so far- Sure. that really drives your enthusiasm for the combo? Sure. You are correct. We're very excited in going into this population. That is, of all patients with MASH, the ones that need the most potent possible therapy and as fast as possible, they cannot afford a long time waiting for something to happen. Why combination? Again, it goes to this requirement of the patients. You really need to tackle the disease hard. You have the potent anti-fibrotic effect of Denny, and then by adding resmetirom, you are actually, one, magnifying the steatosis reduction effect. Resmetirom, that's one effect is to reduce steatosis. The two mechanisms of action are not overlapping. They complement each other. Denny blocks production of toxic fats. Resmetirom oxidates, quote-unquote, "burns," fats inside the hepatocytes. The metabolic pathways are somewhat different, which also helps in the planning and running this development. Finally, both are small molecules, and you can combine in a tablet. What else can we say about data in addition to the anti-fibrotic mechanism? Our data on preclinical models that we presented at EASL a couple of years ago, showing in these models that the combination was synergistic. It was better than the parts, let alone better than, of course, a placebo or vehicle, as we call in the mice. The other interesting thing is THR-β, resmetirom and any THR-β, they upregulate FASN, so the activity of FASN increases. We are actually, in a sense, also helping resmetirom to do more. It's really, we believe, a sweet spot to Goldilocks combination. That's why we're excited to go into clinical trials, and we believe that we may show what we saw in the preclinical, in the mice, in people as well. Okay. All right, that's great. As Stephen Harrison used to say, this could be the chocolate and peanut butter. Yep. My dear, my dear late friend, we were close. Congrats on the completion of the phase I PK study for the combo in healthy volunteers. Can you just remind us the highlights that you found in that study? Sure. That is basically a PK study, as you said, was an open-label cohort, a trial, about 40 patients. The objectives were mainly to evaluate the combination, the pharmacokinetic profile of this combination, potential drug interactions, of course, and the safety and tolerability. The combination was well-tolerated over the duration of study. We saw no safety signals, no serious adverse events, and there were no clinically significant lab abnormalities, and no treatment discontinuations. Okay, excellent. I know a lot of investors are looking forward to the detailed results of that study coming up, at a medical conference in the not-too-distant future, I suppose. Where would you like investors to focus on that data set? Given the proven single-agent activity for both molecules and the preclinical synergies that you've found and previously demonstrated, what are the areas you'd like investors to focus on? Sure. We, of course, can't preempt the conference. Organizers of both big meetings, they are very sensitive to disclosure of information prior to the conference. There are actually official embargoes. We are excited, and we plan to share the data at EASL. Okay, fair enough. Understood. We will look forward to that. I guess, how are you thinking about the study design for the upcoming phase II MASH study, especially, related to the comparison arms, the combination doses... Sure ... and the trial size? Sure. Although we have not disclosed the specifics of the study, at a high level, we, one, anticipate to have more than one dose of the combination. Basically, you need to narrow down what you're going to use in phase III. FDA also asks that combinations are tested against the parts in addition to placebo. We'll probably need to do that as well. Of course, the final design depends on our discussions and agreements with FDA. We are planning an assessment at 52 weeks, and the study will continue to 96 weeks. I think it's important that even a very potent combination may require a little longer. We can improve what the patients have to fight, the fibrosis, but biology is biology, so we have to be mindful of the, of how things work. We are looking at non-invasive tests as a potential endpoint. Again, as I mentioned, we will discuss with the agency, and the agreement will be the final protocol. Okay, excellent. I'm glad you mentioned the non-invasive test, and especially with the high-end medical need in the, in the qF4 population. Mm-hmm. complications like portal hypertension. Do you expect the regulatory bar to evolve over time? I think the division is very active, if you will, following where things are going and trying to be as close to clinical practice, coupled with of course, the observations over decades and decades of chronic liver disease. Most of the staff are hepatologists and hepatologists with a very solid pre-FDA experience. We are discussing with peers, if you will. They've shown this in the F2, F3s recently with the acceptance of the Letter of Intent for the FibroScan. We look forward to the evolution of the approval pathways, if you will. Now, as I say all the time, we need to have the conversation with the agency. Understood. Then, maybe a big picture question, a lot of investors ask about the impact of GLP-1 based MASH treatments. Investors are looking at FGF21 class on the horizon in MASH, so getting more competitive. Eventually, where do you see the Denny plus resmetirom combination fitting into the treatment landscape? Sure. Frontline. Once approved, we expect, based on the potency of actually Denny alone, we expect, it, the fixed-dose combination tablet to be frontline, therapy. Again, conversations with FDA, results of the clinical trials. We are optimistic, but you have to prove in studies, of course. GLP-1s, we are not worried about them. We actually welcome GLP-1s. The main reason being, you diagnose more patients with MASH. In the end of the day, you are helping undiagnosed patients and preventing progression of their disease and actually being able to regress the disease. Our opinion leaders in our advisory board, they tell us that, they expect about 50% plus of patients coming into clinical trials to be on a GLP. The appropriate thing in clinical studies, in our opinion, is to allow patients with GLP to enroll as long as they are on a stable dose for a sufficient amount of time. The other drugs, I think the data with FGFs are tantalizing, and we have to see the results of the studies. Of course, we are talking injections and do pharmacological doses, which are thousands of times higher than the endogenous FGF21. One thing that I didn't mention is that Denny upregulates FGF21, and FGF21 upregulates adiponectin, so a very important molecule in MASH. It's one more thing that Denny does. That, with the addition of the THR-β, that's why we believe frontline is the way to go. Jay, I would just add, in terms of sort of competitive differentiation, as Eduardo pointed out, certainly Denny on its own, the fibrosis data stands on its own merit. The combination, as the whole market is moving towards combination therapies to help patients achieve optimal outcome, it's also important to do that in a patient-friendly way, both by route of administration. Keep in mind, this FDC will be a single oral tablet once daily versus an injectable, which is generally highly attractive to patients. Plus, the safety and tolerability profile strongly leans towards this oral FDC that we're developing. We haven't seen any GI, any DILI, any bone loss, any muscle wasting associated with any to date. We don't expect to. It's not what the mechanism suggests. Not only from an efficacy perspective, but also from a safety tolerability, makes it highly attractive. Thank you, Dave. I'm glad you mentioned the patient-centric nature of MASH, I wanna make sure we have time to talk about acne. Yes. Couple of last quick questions. Do you envision a future where there could be a precision-based, precision medicine-based approach to MASH supported by biomarkers? Sure. I think that would be very patient and payer-friendly. We, our goal is to pursue that. Every single patient with MASH is unique. That person is unique. We can't say that a complex disease such as MASH is the same across the board. Identifying patients that are more likely to respond to the drug is one of the things that we are pursuing. We're looking at reduction in toxic triglycerides, tripalmitin, for example, and we're also looking at other markers of metabolomics and proteomics that could support the predictive or personalized medicine approach. This is part of the overall strategy in broad sense. Okay, great. That's super helpful. Maybe one last MASH question before we switch gears to acne. You recently announced a licensing agreement with TAPI for resmetirom API. Anything you'd like investors to know about that deal? Yeah, sure. I think the objective was to have a clear path to approval and to commercialization with a combination molecule that involves resmetirom, and that's what we've done. We struck an agreement, a partnership with TAPI subsidiary Teva subsidiary of TAPI to manufacture multiple forms of resmetirom, which we have the option of choosing the most ideal one to combine with Denny as we move forward. Again, the goal was to have a clear path to development and commercialization, and we believe we've achieved that. Okay, great. Thank you for that. Now, shifting gears to acne, your partner, Ascletis, recently had long-term data from the Chinese phase III trial for Denny in moderate to severe acne. Can you just remind us the highlights there? I guess, what are you expecting to see with longer term treatment? I don't think the press release talked about efficacy longer term. Would you expect to see additional safety signals with prolonged treatment with Denny? Yeah. Jay, thanks a lot for taking the time to learn about acne for a little bit. I can just summarize very quickly, which is the data coming out of China is very exciting. First off, our partner, Ascletis, took denifanstat 50 mg into a phase III study, which is very much aligned to what the FDA in the U.S. would expect an acne study for moderate to severe patients to look like. 12 weeks, efficacy and safety endpoints. In the phase III program, the 12-week phase III program, all the clinical endpoints were statistically met. In addition to the efficacy endpoints, there were a very nice safety profile, and it was generally well tolerated. After that 12-week period, we went into a... Our partner went into an open label extension, where patients were rolled into, 50 mg denifanstat for either an additional 40 weeks or a total of 52 weeks. During that, as you said, the safety profile of the product, remained positive and was very well tolerated through that entire course. In addition, the secondary endpoints, which looked at efficacy, showed that, after the 12-week period, a patient continued to stay on medicine, continued to see an improvement of efficacy. Very, very positive results as well. Those results were shown, presented in a press release at a very high level, and they'll be presented in detail at an upcoming medical conference this year, when our partner Ascletis does. Okay, excellent. Thank you for that. We'll look forward to seeing those detailed results at the medical conference. Can you remind us the potential approval timeline for Denny in China and any milestone payments that Sagimet would be eligible for upon approval in China? Thanks a lot, Jay. The NMPA accepted Ascletis NDA in December 2025, although we cannot predict the timing of the NMPA's response, it's not unusual for applications to be approved within 12 months. Under the license agreement with Ascletis, we are eligible to receive development and commercial milestone payments, in aggregate of up to $122 million, as well as tiered royalty. It ranges from high single digits to mid-teens on the future sales of denifanstat in Greater China. We haven't disclosed the individual milestones, but you should assume that the majority is based on revenue achievement, and there is a small milestone that would be due to us upon potential approval. Okay, great. Thank you for that, Thierry. I wanted to make sure we touched upon your next gen program, 3567, currently in phase I development. Can you just talk about the key differences between 3567, Denny? Also, how should we think about the efficacy safety profile for your next gen based on Denny's profile? Yeah. The next-gen molecule, which we call TVB-3567, was developed as part of our medical chemistry program at Sagimet. We developed a library of FASN inhibitors. There's a significant amount of DMPK, toxicology, and CMC work that led us to basically put denifanstat and 3567 as our lead molecules. Structurally, they are different, and they are governed by different patent families. So they do have different IP landscapes and different IP suites. But in form and function, we are looking that they will work similarly as inhibiting FASN in the body. As you mentioned, we are currently in a phase I program with 3567. This phase I program will look at and provide us PK and PD data that will give us a good read as to how those two molecules are working in the body, both from an absorption and a mechanism. The unique part about this phase I also is that we will have a 28-day acne cohort. We'll have our standard single dose, multiple dose, and then an acne cohort. That acne cohort will give us some very interesting biomarker data around sebum, where we'll see the change in sebum and also the composition change in sebum after 28 days. Why we're doing that is it'll give us a nice read as to how those two molecules are performing in acne patients. It's not a go, no-go decision, to move into the phase II, but it will give us additional information and an understanding of how 3567 behaves and works, and how it relates to denifanstat. Okay, great. Thank you so much for that. I know we're a little bit over, but if I could just squeeze in one last question. I know Dave mentioned this at the beginning. It's been a long time since we've seen any significant innovation in the acne field. Can you just share with us any feedback you're getting from KOLs on Denny's data in acne, and where do you see TVB-3567 fitting into the treatment paradigm for acne? First off, the feedback that we've received from our KOLs and the general dermatology population around an oral FASN for moderate severe acne, and the clinical data that we've presented from the Chinese studies has been very positive. I think the easiest way to think about the acne market for people that don't know acne very well, is to think about what the atopic dermatitis and the psoriasis markets in dermatology looked like 10 years ago, before the large molecules and complex molecules came in. Both diseases were managed through generics and branded generics, a combination of topicals and generics. That is what the acne market looks like today. The acne market patients are treated with branded generics, topicals, and orals. The current available treatments lack either efficacy or safety challenges for their patients. Dermatologists are looking for novel mechanisms of action that will provide effective and safe products for their moderate severe acne patients. When you think about the acne population in the U.S., there's 50 million Americans with acne. There's 20% of them are moderate severe, so 10 million, and only 5 million of those people are seeking therapy today. You know, our hypothesis and what dermatologists are providing us is that with a novel mechanism of action, with the safety and efficacy profile that denifanstat has presented, we're gonna have the ability to not only increase the value of the patients that are seeking dermatology, but also expand that patient population that are seeking dermatology treatments. We've seen that in two markets already in dermatology, with psoriasis and atopic derm. We think that that will be replicated here in the acne population as well, and so do the U.S. KOLs. Okay, great. That's super helpful. Then one lightning round question: How should investors think about the valuation of Sagimet and the balance between MASH and acne and your allocation of resources? Well, we're undervalued, clearly. That's an immediate, obvious answer. I think that what investors should be looking forward to is having a molecule that works exceptionally well in two different disease states. We have great data in MASH, we have great data in acne, and everything points towards significant progress in both of those indications with this molecule. We'll start the phase II in MASH by the end of this year. We'll start the phase II in acne by the end of this year, and we should have data in acne, proof of concept data at the, you know, second half of next year. Ascletis should get approval of their in acne by the end of this year, beginning of next. Lots of stuff to look forward to, and we're really excited to get going. All right, we'll wrap things up there. Thank you all so much for joining us today. Really appreciate the time you've shared with us here. Thanks, Jay. Thank you. Thanks, Jay. Our pleasure. Thanks, everybody.