ALT - NASDAQ

Good day, ladies and gentlemen, and welcome to Altimmune Fourth Quarter and Full Year 2024 Financial Results Conference Call. As a reminder, this call is being recorded. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to introduce your host for today's conference call, Lee Roth, President of Burns McClellan, Investor Relations Advisors to Altimmune. Lee, you may begin.

Thanks Gigi. Good morning everyone and once again thank you all for joining us for Altimmune’s fourth quarter and full year 2024 financial results and business update conference call. On today’s call you will hear from Dr. Vipin Garg, our Chief Executive Officer; Dr. Scott Harris, our Chief Medical Officer; and Greg Weaver, our Chief Financial Officer. Dr. Scot Roberts, our Chief Scientific Officer and Ray Jordt, our Chief Business Officer will join us for the Q&A session. A press release covering our fourth quarter and full year 2024 financial results and corporate update was issued earlier this morning and can be found on the Investor Relations section of the Altimmune website. Before we begin, I'd like to remind everyone that remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Altimmune cautions that these forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those indicated. For a full review of the risk factors that could affect the company's future results and operations, we refer you to our filings with the SEC. I'll also direct you to read the forward-looking statements disclaimer in our press release issued this morning, which is now available on our website. Any statements made on this call speak only as of today's date, February 27th, 2025, and the company does not undertake any obligation to update any of these forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this call is being recorded and will be available for replay on the Altimmune website. With that, it's now my pleasure to turn the call over to Dr. Vipin Garg, Chief Executive Officer of Altimmune. Vipin?

Thank you, Lee. Good morning everyone and thank you for joining us for our fourth quarter and full year corporate update. 2024 was a year of significant progress for Altimmune. The milestones we have achieved over the past 12 months have positioned us for transformative catalysts in 2025 and beyond. Following the third quarter 2024 completion of enrollment in IMPACT, our Phase 2b biopsy-based trial of pemvidutide in NASH, our top line data readout remains on track for the second quarter of this year. The dual primary endpoints of the study will be NASH resolution and fibrosis improvement at 24 weeks. Pending these results, we will request an end-of-Phase 2 meeting with the FDA to align on a registrational Phase 3 program. While the timing of that meeting will be determined by the agency, we expect that it will take place before the end of this year, which would position us to initiate a Phase 3 program in NASH in early 2026. With a positive impact readout, pemvidutide would be the first incretin-based agent to achieve fibrosis improvement at 24 weeks and the first therapeutic candidate in any class to achieve both significant fibrosis improvement and meaningful weight loss in a 24-week treatment period. We believe that this unique combination of pemvidutide's direct action on the liver, together with clinically meaningful weight loss will position pemvidutide to become the treatment of choice in MASH. The ability to reduce fibrosis in only 24 weeks is important, because it signals both the potency of pemvidutide and the promise of even greater response rates over the longer treatment durations used by other incretin-based agents. In addition to our progress in MASH, I am thrilled to share that we submitted INDs for pemvidutide in two additional indications in the fourth quarter of 2024. Both of these INDs have been cleared by the FDA, and this positions us to start Phase 2 efficacy trials in mid-2025. We believe that each of these indications represents an attractive and compelling commercial opportunity for which pemvidutide will be ideally suited. As we announced this morning in our earnings press release, we will be holding a virtual R&D Day on March 13th, at which time we will disclose the additional indications and provide detailed overview of these new opportunities. The R&D event will feature presentations by key opinion leaders, specializing in MASH, obesity and the additional indications. We are extremely excited about this event, and look forward to sharing our plans on the future of pemvidutide. From an organizational perspective, we are excited to -- by the recent addition of Teri Lawver and Jerry Durso to our Board of Directors. Notably, they have decades of experience across the Pharmaceutical Industry, including late-stage clinical development and commercialization of therapeutics in the MASH and metabolic disease space. These areas are highly relevant to Altimmune, and I believe that their expertise and guidance will be invaluable, as we embark on our next phase of pemvidutide development. I'm excited to work with them, and look forward to their respective contributions. Lastly, I wanted to share with you that Scott Harris, who has served alongside me as our Chief Medical Officer for the last six years, recently informed me that he plans to retire a year from now at the end of February 2026. Scott has been a valued and trusted colleague, whose leadership has been instrumental in advancing pemvidutide, to the cusp of an important data readout. If successful, this could position -- this readout could position pemvidutide as the foundational therapy in the treatment of MASH and other metabolic diseases. I am grateful that he will remain with us through the IMPACT data readout and the end of Phase 2 FDA meeting for MASH and that he has given us ample time to find his successor and to ensure a smooth transition. We plan to initiate a search for his successor in the near future. With that, I'll now turn the call over to Scott Harris. Scott?

Thank you, Vipin. As Vipin mentioned, after 25 years in drug development, including the past six years at Altimmune, I've decided to plan for my departure, in early 2026. I want to emphasize that I will remain with the company through all important milestones over the next 12 months, and that I'm not going anywhere anytime soon. I'm excited about the upcoming IMPACT readout and the opportunity to lead the medical team through Phase 3 readiness in MASH as well as the initiation of the Phase 2 trials in two additional indications. You'll be seeing a lot of me throughout the next 12 months. I want to thank Vipin and Altimmune for letting me shepherd pemvidutide from a preclinical molecule to a Phase 3-ready asset in multiple exciting indications. With that, let me turn to our significant progress in MASH. As noted, we are rapidly approaching top line readout of the 24-week efficacy data for the IMPACT trial. Unlike current agents approved or in development for MASH, pemvidutide has the potential to drive both fibrosis reduction and significant weight loss. Essentially, pemvidutide has combined the weight loss effects of the incretins with the liver-directed effects of agents like the FGF21s into a single molecule that we believe will provide a complete solution for the treatment of MASH. Our key metric for the success in the IMPACT trial will be the ability to achieve statistical significance on the fibrosis improvement endpoint at 24 weeks. If successful, pemvidutide will be the first incretin-based agent to achieve fibrosis improvement at 24 weeks and the first therapeutic candidate in any class to achieve fibrosis improvement and meaningful weight loss in the 24-week period. Liver fat reduction is the key driver of fibrosis improvement. But in addition, we also have preclinical data showing that pemvidutide has direct anti-fibrotic effects. Most importantly, we have greater liver fat reduction at 24 weeks than any of the MASH agents currently in development regardless of when the reduction was measured. With respect to study power, the two primary treatment arms IMAPACT, pemvidutide 1.8 milligram and placebo are larger in comparison to the number of subjects in the successful FGF21 trials that also read out successfully at 24 weeks, albeit without meaningful weight loss. Together with our greater liver fat reduction, we believe the study has more than adequate power to achieve statistical significance on the fibrosis improvement endpoint at 24 weeks. Controlling the placebo response rate will also assure a higher likelihood of achieving statistical significance at data readout. We've learned a great deal about how to reduce the placebo effect in biopsy-based match clinical trials. First, we will be employing three readers and using the mode technique of scoring. Second, we will be rereading all the biopsies in a blinded manner prior to the trial readout, eliminating any bias introduced when pathologists know the biopsy is a pre or post-treatment sample as a result of when the biopsy is being read. Both of these approaches are similar to those used in the Phase 2 Pegazofirmin trial, which achieved the placebo response rate for fibrosis improvement of only 7%. Finally, our pathologists have agreed upon a set of rules by which to align the reading of the biopsies, including for example, how to read controversial findings like atypical balloon cells. We believe the advantages of pempedeutide do not end there. We have consistently shown that pempedutide has robust lipid lowering effects. In this context, it is important to note that F2 and F3 patients, cardiovascular events are still the primary cause of mortality. So the reductions in LDL cholesterol and liver fat that we have demonstrated with pemvidutide, combined with the expected effects in MASH and body weight may further reduce the risk of both cardiovascular disease and liver disease. As we've shared previously, the end of Phase II meeting for obesity has implications not only for the Phase III Velocity trials, but for the entire pemvidutide program. During those interactions, FDA identified no safety signals related to pemvidutide in its review of over 500 subjects that have been treated with pemvidutide in our prior studies. To date, close to 700 subjects have been treated with pemvidutide across all of our completed and ongoing trials. Turning our attention to the 2 additional indications, we believe these are areas of significant unmet medical need for which the balanced GLP-1 glucagon dual receptor agonism pemvidutide provides a highly compelling scientific rationale. The recent FDA clearance of our 2 IND applications has us on track to initiate Phase II trials in these indications in the middle of this year. We will be providing detailed and comprehensive information on these indications, including our development plans at our R&D Day on March 13. You will be hearing from 2 of the foremost experts in the treatment of these conditions who have been instrumental in the formation of our strategy and who share our enthusiasm for the development of pemvidutide in these indications. With that, I'll now hand the call over to our Chief Financial Officer, Greg Weaver, to review our financial results for the fourth quarter and full year. Greg?

Thank you, Scott. I'll be providing a brief overview of Altimmune's fourth quarter and full year 2024 financial results with more detailed information to be available in our 10-K, which we'll file later this afternoon. We reported our year-end 2024 total cash and investments of $132 million. This current cash position is expected to fund operations well into the second half of 2026 through our key catalyst of the Phase IIb MASH readout next quarter and also includes funding of the Phase II trials for our additional indications. Moving to the details of the fourth quarter results. R&D expenses were $19.8 million in the fourth quarter of '24 compared to $16.9 million in the same period in 2023. Our R&D expenses in the quarter included $13.6 million in direct costs related to the clinical development activities for pemvidutide, including preparation for the upcoming Phase II trials in the additional indications. Noncash stock compensation included in the R&D expenses was $1.6 million in Q4. G&A expenses were $5.1 million in the fourth quarter of '24 versus $4.3 million in the same period of 2023, with a noncash stock comp included in G&A of $1.8 million in Q4, an increase of roughly $500,000 over the same quarter last year. Net loss for the 3 months ended December 31, '24, was $23.2 million compared to a net loss of $31.6 million in the fourth quarter of 2023. The prior year net loss included a onetime noncash impairment charge of $12.4 million related to a discontinuation of the HepTcell development program. To summarize our full year results, R&D expenses were $82.2 million in 2024 as compared to $65.8 million in 2023. Our R&D expenses included $53 million in direct costs related to development activities for pemvidutide. G&A expenses were $21 million for the full year 2024 compared to $18.1 million in 2023, with the increase due primarily to a $2.7 million increase in stock compensation and labor-related expenses. The total non-cash stock compensation expense for 2024 was approximately $14.4 million as compared to $10.6 million in 2023. Net loss for the year 2024 was $95 million compared to a net loss of $88 million in 2023. The net loss reported for the prior year included the aforementioned non-cash impairment charge of $12 million. I'll close the remarks by highlighting our cash position, which provides runway into the second half -- well into the second half of 2026 based on our OpEx forecast, which includes the cost of launching pemvidutide trials in 2 additional indications, funding through the key MASH clinical milestones of both 2025 and 2026 as we anticipate advancing into the Phase 3 pivotal program next year. I'll now turn the call back to Vipin. Vipin?

Thank you, Greg. We accomplished a great deal in 2024 and have entered 2025 with multiple major inflection points in the near term. As each of these important milestones is achieved, we expect that they will open the door for new and larger opportunities for us, which I strongly believe we are well equipped to capture. I look forward to sharing our next set of updates at the R&D Day on March 13. The combination of Phase 2b readout in MASH and the launch of Phase 2 efficacy trials in 2 additional indications has us poised for an incredible 2025. That concludes our formal remarks, and we would now like to open the lines to take questions. Operator?

[Operator Instructions] Our first question comes from the line of Roger Song from Jefferies.

Hi. This is Fiona for Roger. Congrats on the year and a lot of new developments, exciting for this year. Just a question on the new indications, I was wondering if you're going to announce the details like the preclinical data at the R&D Day and whether if you are going to start the two Phase 2 trials simultaneously midyear?

Yes. So we will provide a very comprehensive picture of the two indications at the R&D Day that's coming up. As we mentioned, we have 2 KOLs that will make presentations about both of these indications, and we will share our plans in terms of when we would start the Phase 2 programs as well. So stay tuned, and we're looking forward to providing all that detail.

Thank you. Yeah, looking forward to the R&D Day and congrats on the year.

Thank you.

One moment for our next question. Our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

Good morning, team. Thank you for the great updates come on, I can't believe you're retiring, you have another 20 years in you, if not more. So -- but I'm happy to know that I get to work with you for another year. So I want to say that. And it's been a pleasure working with you, honestly. I think one of the questions that we would love to understand is post the Phase IIb data as you guys are going to be engaging with the agency, is there anything -- is there an opportunity to think about given the profound defatting of the liver and a lot of data supporting MRI-PDFF as a histological response, should we be thinking about the Phase III design very like the typical studies we have seen based on histology? Or is there going to be some flexibility on some innovative NIT incorporation into the study? And then also if you're thinking about would you be concurrently starting a cirrhosis study in conjunction. Just want to love to understand how you're thinking about on sort of the Phase III development and what sort of strategy you want to implement? And I'll jump back in the queue.

Scott?

Yeah. Thanks, Yasmin, and thanks for the compliment. I hope I make it 20 years. I will look forward to the prospect. So as you know, we're really on the forefront of the knits with our MRI-PDFF, and this is a potential of great interest to the FDA. At this point in time, we don't really know what the FDA is going to do with the knits. We think we're right there at the forefront of this discussion when that happens. But there's been a lot of discussion about these knits, but I don't have any new information about what the FDA will do. Regarding cirrhosis study, we have a great deal of interest in that kind of study. We've talked a lot about it internally. We don't have anything that we can guide you on at this time. But certainly, as we get toward our Phase III program announcement, we will make such a disclosure probably around the time of the end of Phase II meeting. I want to say though that we feel very strongly we're going to have success in the cirrhosis population. We believe that we have -- we'll have best-in-class fibrosis improvement on the F2 and F3 population. And we believe that like the recent efruxifermin readout based on our reduction in liver fat and antifibrotic effects that we have a very high likelihood of success in cirrhosis or F4 as well. We view cirrhosis in its early stage as simply an extension of F3. And that's the longest patients don't have extensive scarring resulting in clinically significant portal hypertension, the complications of cirrhosis such as encephalopathy, ascites, variceal bleeding that this is reversible. And this is the study population that Acro took it in their trial. We simply see that as an extension of F3, and we think our chances of success in cirrhosis are quite high.

Thank you so much. I'll turn it back in the queue.

Thank you. One moment for our next question. Our next question comes from the line of Annabel Samimy from Stifel.

Hi, everyone. Thanks for taking my questions and great progress. I guess, could you -- going into this IMPACT trial, can you talk about what your expectations are to consider this not just a clinical success, but a competitive success? And just to follow-on from that, we've heard a lot about how the obesity market might evolve. But maybe you could talk about how you expect the MASH market to evolve with semaglutide's ESSENCE data and RezDiffra and FGF21. So can you just talk about how you think all those programs as well as pemvidutide will play in with each other? Thank you.

Absolutely. Maybe I'll get started, and Scott, you can take from there. In terms of -- we've always said that MASH and obesity are linked to each other. You need -- people need to lose weight in order to treat their MASH successfully. And we are seeing that even the latest data is showing that many people who are taking RezDiffra, for instance, are also taking GLP-1s. That's really what we have. We have a combination of both a drug that's for obesity as well as for having a direct effect on the liver. So really, it's a complete solution for treating MASH. We view MASH with obesity as really the patient population that we will be treating in the long run. 80% of subjects with MASH have obesity or would benefit from losing weight. So ideal drug would do both. It will have a direct impact on the liver as well as people who lose weight, and that's exactly what pemvidutide uniquely does. So we think it's very well positioned for addressing both of those comorbidities together, treating MASH as well as people losing weight at the same time. Scott?

Yes. Thanks for the question, Annabel. Regarding the competitive success, if we have statistical significance at 24 weeks, we'll be the only incretin that has even attempted a readout at 24 weeks, let alone has success at 24 weeks. And that's because unlike semaglutide, which you mentioned or tirzepatide, we have direct effects in the liver. I want to remind you that semaglutide conducted a Phase 2 trial about the same size as impact about two years ago and even going all the way out to 72 weeks, failed to show significant statistical significance. We expect to show it at just 24 weeks. So it's a much more potent compound. If you listen to the experts out there who are treating MASH, they don't really rely on the antifibrotic effect of semaglutide. They see it as being weaker than RezDiffra, and there's a lot of concern about using it in their advanced patients. We know, for example, that they failed in the cirrhosis study in which the placebo actually did better than the drug. So regarding all of the incretins, we think we have a more potent effect and simply reading out in statistical significance at 24 weeks will separate us. Now regarding the FGF21s, which have had successful readouts at 24 weeks and which has guided us to actually make the decision to study the endpoint at 24 weeks. And as I mentioned before, we believe we can be successful because we actually have better liver fat reduction than the FGF21s. We think our probability of success is even greater is the FGF21s do not have weight loss nor does RezDiffra. So you hear doctors talking about using RezDiffra for advanced MASH with F3 fibrosis. But when the patient needs weight loss, they add semaglutide. That won't be necessary. With pemvidutide, you get both. You get the weight loss and the potent effects in fibrosis. So we think not only in terms of our upcoming readout, but in terms of our competition in the evolving marketplace that we're going to have a very successful drug.

Great. And if I could just ask one more question. Are you going to be releasing any other exploratory or secondary endpoints on this top-line readout?

Yes. We are still planning the readout. Obviously, there's only so much we can do in a top-line readout, but we'll try to provide as much data as we can.

Great. Thank you so much.

Thank you. One moment for our next question. Our next question comes from the line of Liisa Bayko from Evercore.

Hi, there. I'm wondering if you could just talk through the overall strategy of pursuing pivotal studies for pemvidutide in the NASH population as well as bringing on some new indications. How do you prioritize it and fund all of this stuff from here? Just curious about your thinking and prioritizing all of that as well I know the obesity is kind of lingering in the background waiting for partnership. But just love some clarity and thoughts on prioritization there. Thank you.

Yes. Good morning, Liisa. Thank you. Thank you for the question. Everything we are doing with pemvidutide, you'll see when we talk about these indications are really tied to the liver benefits, are tied to the really the mechanism, the dual mechanism of action of pemvidutide. So it will be all highlighted in our indications. The additional indications, the Phase 2 program is very inexpensive, relatively speaking. We think that's additional validation of the mechanism and will provide optionality in terms of adding -- expanding the indications for pemvidutide beyond MASH. Our focus will continue to be on MASH and executing the Phase 3 program on MASH, which, as you know, we're very excited about. We think we have the best-in-class agent for pursuing that. So when we get to the end of 2026, we could be looking at multiple indications that we could pursue in parallel with NASH by having data Phase 2 data in these additional indications at the same time.

Okay. And then for the upcoming Phase 2b data in NASH, can you give us a sense of what you kind of think the bar is to have the competitive profile, both on weight loss and fibrosis reversal?

Scott?

Yes. The readouts of the FGF21s have had different placebo responses, et cetera, different treatment effects. So it's a bit hard to compare it exactly to that as a percentage. We think the key metric is to achieve statistical significance because we know that's something that the incretins could never get, and then we compete against the FGF21s on weight loss.

The other thing I would add to that is that if we get statistical significance at 24 weeks, we know the response is only going to get better with time. So when you go from 24 to 48 to 72 weeks and beyond, we've seen that in other programs that longer treatment, you will see even additional benefit. More patients will respond. The response rate will become higher with time. So achieving statistical significance at 24 week really sets us up well.

And how do you think of survodutide and retatrutide as comps at this juncture?

Yes. Well, as you know, there's really no indication at this point that retatrutide is being developed for MASH. That data is over two years old, and we've not seen motion. We think that survodutide readout was nice. We think that the effects that were observed were a clear indication of the benefit of glucagon and its direct effects. We think it really confirmed our mechanism. I would emphasize though that we’ll do better. We have more glucagons in our molecule, that’s what drove the additional improvement over the other incretins. And we have greater liver defatting effects. There are defatting effects to 24 weeks, there’s about 62% percent, ours is 76%. That’s the major driver of MASH resolution and fibrosis improvement. I think even more importantly, we differentiate on safety and tolerability. On the tolerability front, we’re giving pemvidutide without dose titration. No other incretin can even approach doing that. When that was done in some of the other programs, the rates of GI side effects were enormous. We’re not experiencing that. With survodutide, even at their lowest dose, they’re seeing 20% adverse event discontinuation rates, and that was with 20 weeks of dose titration. Remember, we’re not doing having dose titration. We believe in the tolerability profile of our compound. And in fact they’re now extending their titration up to between 24 and 32 weeks. So we clearly differentiate on tolerability, and I want to also remind everyone that we went to an end of Phase 2 meeting with the FDA, where FDA identified no safety signals in our compound and told us to proceed with four efficacy trials without a committed cardiovascular safety trial. We don't know the details, but that apparently was not the case with survodutide, where they're doing a cardiovascular safety trial. It's not like SELECT where you showed the benefit over placebo for reducing cardiac rates. It's to show that the compound does no harm versus the standard of care. That's a very, very different look at the molecule. And we don't know a conversation they had with the FDA, but we want to emphasize that's not the conversation that we had with FDA. They saw no signals and they confirmed the safety of the compound. And that's an important platform for going forward for all of our trials, not just in obesity, but in NASH in the two indications as well. We've had over 500 subjects in completed trials and close to 700, including the ongoing trials, and we've maintained the safety profile of pemvidutide. And you don't get to play in the space without safety. As you recall, with retatrutide, they saw a signal of arrhythmias, and we know that they have very substantial heart rate increases. We don't have that.

Okay. Great. And then just should we expect any update at your R&D Day on your oral form of pemvidutide? And has there been any progress there? That's my final question. Thanks.

Scot Roberts, do you want to take that?

Yeah. I think that at the R&D Day, we'll be focusing on the new indications. I think that that's where everybody's attention is. And so that will be the focus of that day. As far as progress on the oral formulations, we're excited about what we're seeing here. As I've mentioned before, we have a number of parallel tracks that we're investigating. I think we're closing in on a bioavailability that makes commercial sense. That's always the consideration when you're talking about an oral formulation, which will always be less efficient as far as the amount of drug that you have to administer. So just stay tuned on that, but excited about the progress we're making.

Thank you. One moment for our next question. Our next question comes from the line of Ellie Merle from UBS.

Hi, everyone. This is Jasmine [ph] on for Ellie. Thank you so much for taking our question. So for the additional indications, I just want to get confirmation. So for the two Phase 2s starting this year, would these be cases where we can potentially see proof-of-concept data next year? And then I think previously, you said you were thinking about up to three additional indications. So would that potential third one be something we could also see an IND from this year? And will we learn any more about this or any others at the R&D Day? Thanks.

Yeah. Let me take the second part of the question, and Scott can answer the first part. As far as up to three, that's precisely what we said that we'll look at up to three indications. We've got two on the -- on our plate, which we think is plenty for the time being. We'll continue to evaluate additional indications. But at this point, we're very happy having two active INDs and pursuing two additional indications beyond MASH. So we're in really good shape there. Scott?

Yeah. And thanks, Jas. So yes, both of these studies will be Phase 2, proof-of-concept studies. And for at least one of these indications, we expect to have data in 2026. There's a potential for a second, but we're not committing to that at this time. So we do expect to have data in at least one of these additional indications, some of these proof-of-concept Phase 2 studies, in 2026, and we'll have to see about the second, whether that makes the cut by the end of the year.

Great. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Mayank Mamtani from B. Riley Securities.

Hi. Yes. And thank you for taking our questions. This is William for Mayank. Congratulations on a very nice year and definitely looking forward to some of the data and events that are coming up. So I did just want to dig in just a little bit more on the top line data at IMPACT. I know that we'll be expecting sort of the fibrosis and liver fat reduction, and please correct me if I'm wrong there. But I was also curious if we would be -- if we should be expecting fibrosis improvement and MASH resolution sort of that combined endpoint. And then, on statistical significance, could you speak to what treatment effect you're thinking that you'll need to hit that stat on fibrosis endpoint? And then I have a follow-up.

Well, thanks, William. Yes, the readout will include readouts in both MASH resolution and fibrosis improvement and also the combined endpoint, and we expect to hit all of those endpoints. In terms of the treatment effect, what we would say is that our goal is to hit statistical significance. There's been, differences between studies and the actual treatment effects. But we would say in terms of the study power that we've actually powered the study to actually be -- have a higher power for chance of success relative to the other FGF21 studies that have read out at 24 weeks. We have more subjects per treatment arm, and we're also going into the trials with greater liver fat reduction, which is the primary driver of these endpoints. So we think both in terms of a better treatment effect and having higher numbers of subjects to show it that we're sufficiently powered, if not more powered to achieve the effects that were seen by the FGF21s at 24 weeks.

Okay. Thank you. And then just curious about the two new indications, is it safe to assume or maybe give us some color, if you could, will these -- should we be expecting these indications to be sort of based on or in the obesity subgroup? Or could they be something more akin to even a MASH or cardiovascular or something outside of obesity directly that may actually surprise us a little bit when we -- when you actually unveil these?

The only color I can provide -- well, let me just say that we're going to be talking about all of this in two weeks' time. So, please do stay tuned, and we look forward to seeing you there. But the color I can provide is that obesity cuts across all of these indications. It's a comorbidity that results into other comorbidities. So, people losing weight would -- there will be a benefit in all of these indications. So, that's how we are looking at it. One of the critical component of pemvidutide is the ability to achieve meaningful weight loss while also improving liver health. So that's really how we are looking at the molecule. And everything we're doing going forward is trying to leverage that differentiation of pemvidutide is a combination of these two features. And you'll see that theme develop through these additional indications as well.

Excellent. Thank you. And congratulations again on a very nice year. And Scott, best of luck for you going forward. Congratulations.

Thank you.

Thank You. Our next question comes from the line of Jonathan Wolleben from Citizens JMP.

Hey thanks for taking the questions. Two for me. In the past, we've talked a little bit about potentially seeing reduced weight loss in NASH patients due to metabolic dysfunction for the same drugs than in a non-MASH population. I was wondering your current thinking there if it's evolved since we've seen some more data from other drugs and programs. And then I guess the elephant in the room is real-world adherence. We've seen pretty low discontinuations in Phase III programs from other incretins, but the real-world use not being sustained long-term. How do you think you could buck that trend if there's anything in the data that could suggest you'll have a different profile in the real world?

Patrick, I'll handle the first two, and then I'll turn to Vipin to answer the third. So the 3-reader approach that we're using is identical to the approach used by 89Bio on pegozafermin in their trial. We think they learned a tremendous amount by their predecessors. And this 3-reader approach was advocated by Stephen Harrison. And the way it works is that each reader reads individually. And then if there is agreement of all three, fine, if it's two of the three, you take that. And if none of the 3 agree, then they go to an adjudication, we know that happens very uncommonly. So that's what's called the mode approach. And with that, combined with the strict guidances given to the pathologists for reading the biopsy, they are able to get their placebo response rate down to 7%. Using a somewhat similar approach in the Rezdiffra program, although it's different. But like our study -- and the pegozafermin study, rereading all of the biopsies, scrambling them so the pathologists are totally blinded to the time of the biopsy and the sequence and takes out the bias of a higher severity score early on because pathologists are trying to help the sponsor by getting the patients into the trial and a lower score later on when they believe they're reading post-treatment biopsies, you can see without any effects of placebo simply because the reader bias, you can get placebo responses. And we know that in the semaglutide program, when they didn't do that, they had a 30% placebo response. So combined with that, the 3-mode approach -- 3-reader mode approach and also the guidance given the pathologists, we believe that we're going to get very controllable placebo response rates that will aid us in getting statistical significance. Regarding your second question, yes, we do expect to have an end of Phase 2 meeting with the FDA by year-end, and that would enable us to commence our Phase 3 program in the first quarter of 2026. And I'll turn the mic over to Vipin for the third question.

Thank you. At this time, I would now like to turn the conference back over to Vipin Garg for closing remarks.

Thank you, everyone, for joining our call today. As always, we sincerely appreciate your continued support and interest in Altimmune as we work diligently to advance pemvidutide. Thank you again for your time today.