Guggenheim 3rd Annual Healthcare Innovation Conference - SAGIMET BIOSCIENCES INC

Innovation Conference, this is 2026, so I'm really pleased to have Sagemet Biosciences with us. So Dave Appel, CEO, and Andreas Grauer, the Chief Medical Officer. You know, this ist a company that we've really enjoyed watching the evolution of the story towards acne in particular. but you know Dave maybe just to kind of kick us off you know talking about that strategic pivot you know towards the end of April the ongoing phase three right now just provide us your your thoughts initially before we jump into Q&A. Yeah thanks Seamus and thank you for the invitation to come out. So yes we made a shift and focused on our dermatology programs back in April, and it was really driven by, I think, a few things, three factors. One, obviously, the market in acne is significant. 50 million patients in the United States have acne. 20% of them have moderate to severe acne. So roughly, you'll see numbers around 10 to 15 million. But less than half of them right now are currently being treated with agents like oral antibiotics, which everyone understands we've got to move away from, and topicals. And so the market size is rather significant. Well, then, of course, you have to have data that can be meaningful to that patient population. And our partner in China, Scletus, has run a couple of clinical studies, a phase two and a phase three, that show virtually identical results with roughly 20% improvements in IGA success and 20% reductions in inflammatory and non-inflammatory lesions, so the data is clearly there. We took that data to the FDA last year, and they responded very favorably. They recognize that the pathology of acne is absolutely agnostic to demographic or ethnic background, so that was an important consideration. Two, they aligned on conducting a single phase three study, as long as it was adequately powered and ours is, which I'm sure Andres will talk about. And then I think three, and perhaps most importantly, they encouraged us to, once we launched a phase three to include 12 to 17-year-olds. They had cross-referenced our end of phase two discussions with the hepatology division and MASH. They recognize that the molecule is extremely well characterized at this point, has a really nice safety tolerability profile and all of those those three things really aligned and very nicely to make the decision to shift our focus on dermatology and and and the market resonated and and received that very favorably we raised 175 million dollars in april to carry us through 28 and then just recently as you know we raised another 115 million through a reverse inquiry that came in that has this well capitalized through the the data readout with denny next year at this time it funds our second oral fast inhibitor which is set to kick off here by the end of this year and we'll have data from that phase two program at about the same time next year as we have the phase three data and it allows us to take our topical fast inhibitor through development and into humans so it's been a great time exciting time and and it's well received. So obviously Andres you have a lot to a lot going on and a lot to do but maybe just in terms of how fast inhibition is differentiated from other mechanisms and in acne maybe you can just kick off kick off there and remind us you know what What is it that patients and physicians are kind of struggling with today? Well, complex question. Let me unpack that a little, right, and start with the mechanism. So what Fasen inhibition, what Denny does, is something very specific. It inhibits fatty acid synthase. It's an enzyme inhibitor, which rather than some of the other drugs like antiandrogens that work on all kinds of bodily functions, this has a very specific action. So it's precise. It affects this enzyme where this enzyme is important, which includes the sebocyte, the cell that produces sebum, which is why it is so useful and specific in acne. It also works on liver cells where it reduces liver fat production. But the effect on the sebo site is what is important here for acne. When you compare that to other mechanisms of action, like the antibiotics, obviously, they're addressing the infection part as one of the pathogenetic drivers in acne. antiandrogens again they also attack sebum but only is one of many many actions that antiandrogen have across the body which is where you would rather have something more specific right and accutane a complex mechanism of action again in a retinoid acid activator, a very complex mechanism of action, does all kinds of things in the body. Many of them we do not like all that much. And so if you look at all these various mechanisms, the specificity of fastening inhibition is definitely an asset. When you take that and compare it to the pathogenesis of acne, it is sebum production. It's the key pathogenetic driver, which is the key target of Denny-Fanstad. Then there is inflammation, which is secondary to the bacterial overgrowth, you know, the acne bacteria. Inflammation is also specifically inhibited by fascin inhibition. It's a second important mechanism of fascin inhibition, so when you look at the four drivers of acne, increased sebum production, bacterial contamination with acne bacteria, inflammation, and hyperkeratosis, it really tackles two of the four. And hyperkeratosis is somewhat also triggered by all the others, by inflammation and infection. And so one could postulate that there may be a carryover effect for that as well. Interesting. In terms of the data itself, what have we seen so far from your partner, Ascletus, from the data that's been generated in China? And I know there's more than just one Trial, but maybe we can focus on the phase three results and then you know, what did we learn incrementally from the open label? Yeah, so the our Chinese partners Designed a phase three trial very well 480 patients one to one randomized and after 12 weeks the primary endpoint showed a convincing and statistically significant reduction in both the global assessment, the IJA score, so patients achieving treatment success defined as a reduction of IJA scored by at least two points reaching clear or almost clear skin, right, reaching zero or one, and that was highly significant, the effect on that. And it also decreased lesion scores. And they looked at all different lesion scores, total inflammatory, non-inflammatory lesion scores, and all of them were reduced significantly at the end of 12 weeks. When you look at the patient population, they had about 40 inflammatory and 60 non- inflammatory lesions to start with, and again showed a significant reduction reduction at 12 weeks. That was, you know, from an effect size, the improvement in IGA success was at around 20, and the reduction in lesion scores was around 20% for both inflammatory and non-inflammatory lesions. So very convincing. And, you now, while there are no head-to-head trials, you know numerically better than everything else that we've seen with the current treatments for moderate tricevular acne. What is important is when you think about the patient population that was studied here, they had 30 to 75 inflammatory and 30 to 100 non-inflammatory lesions to start with. So moderate triceps acne, IgA 3 and 4. So patients that really had these patients really need help, right? They have significant acne that needs to be improved. And so it's very important to see these effects and also the rapidity of these effects. One of the observations that you have when you reduce sebum with antiandrogens is that the effect usually does not become significant before 12 weeks. What we've seen is a treatment effect that is visible after two weeks and becomes significant at four weeks, which is kind of unique for a sebum reducer as an effect. And what was nice to see in the long-term extension was that these effects didn't plateau, they actually increased. We had another 20-point increase in IgA success, and we had lesion count reductions that reached close to 80% for inflammatory lesions and around 70% for non-inflammatory lesions at the end of the observation period at 52 weeks. So very, very strong efficacy. And the primary objective of the long-term extension is safety, and the safety remained as good as it had been in the first 12 weeks. The drug's well-tolerated. Only two adverse events increased or were higher than 5%, two related adverse events, and that was dry skin and dry eye, and they were all mild to moderate. So none of them were SAEs, none of the were even grade 3, overall very good tolerability profile. Great. So, you know, Dave, one of the, I think, points of confusion or challenge is how do you sort of move this product into the treatment paradigm? I don't think it's all that challenging to figure out, but there is on the very sort of extreme side, the curative benefits of Accutane that also comes with some pretty scary workup and follow through that's necessary to get there. And then on the early side, you have the challenges associated with topical therapy, topical retinoids. In the middle, you have this battle that's going on between utilization of antibiotics and the community that really wants to see antibiotic utilization decrease. It just sort of seems to me like this mechanism fits perfectly inside that paradigm. how are the thought leaders reacting to the data and the opportunity to potentially displace antibiotics? Yeah, that's a great question. And obviously, the data will determine that. But right now, based on what we've seen from our partners' data, and the KOL response, and I would say the dermatology community at large is really enthusiastic. I think there's one outcome for this molecule. I think it, as you point out, is going to dramatically reduce, if not entirely replace, antibiotic therapy. The need to, and the effects of antibiotics are well known. You can only treat them for three months at a time, largely because you're trying to reduce antibiotic resistance, but the impact on the gut and the biome is significant with prolonged use. Photosensitivity is an issue that applies also to topical retinoids. DENI is going to be used, and it's going to replace antibiotics. It's going dramatically reduce topical agents, not just because it's more effective, but because it can be used on the trunk and the torso as well. to use a topical agent for patients that have truncal acne, which is greater than half of the patients in this population, you need a caregiver. And to have a caregiver apply a topical on the back one to two times a day is really challenging. Plus, it also carries skin irritation, erythema, and photosensitivity. So I can't, there's one outcome. It's going to replace antibiotics, it's going dramatically reduce topicals, and it's gonna become a step edit for any patient who goes on Accutane. They're going to have to be a Denny failure before they step foot on Accutane. And the likelihood is it gets not only used in IgA3s and 4s, but probably in IgAs2s as well. So I think the safety tolerability of this drug, which can't be underappreciated in this community, really points in one direction, and that is extended use in a population that generally has acne for more than a decade. If they have moderate-sphere acne, they generally have it for more than 10 years, and the likelihood that they are on a medication like this for a significant period of time is actually quite high. Great. The U.S. Phase III is already underway. Can you just talk about the opportunity, you know, how execution on recruitment is likely the timeline for those phase three data, which obviously would be preliminary. But also, you Know, one of the factors was the agency's willingness to allow you to study a younger adolescent patient population. What does that mean in terms of the agency's confidence in the safety profile that was demonstrated from your perspective, but also maybe help us understand the timelines that you've laid out? Yeah. Well, thank you. I mean, we think that it reflects that the agency looks very favorably at the safety of the molecule because it was their suggestion that we study adolescents for acne, which obviously makes a lot of sense because this is the Asian population that really suffers from this problem. So they are obviously very familiar with our data. They've cross-referenced our NASH IND, or MASH IND. And so they believe in the safety of our data set and have encouraged us to include the adolescent patients. Overall, that changes the size of the trial compared to the trial that our Chinese partners have done. So we will study 800 patients rather than the 480 that have been studied in China. 450 of those will be adolescents, 300 on drug. That's what the agency requested. And 150 on placebo, two-to-one randomization. that leaves room for 350 adults to be added to that. So we'll have 800 overall patients that we will be looking at. 530 of those are intended to then continue on to the open-label extension. Again, also there we will make sure that a significant number of adolescent patients will enter the extension trial as well, also to fulfill some of the agency's expectations. From an executional point of view, we've announced that we've dosed our first patient in October, on the 21st of October, which is exciting. We have close to half of our sites activated already, and we're activating new sites every day. So the ramp-up is ongoing, and we're expecting enrollment to take approximately six months and then would have primary endpoint results by the end of next year. And then we'll continue to follow up the patients through the open-label extension period and have a complete safety package and efficacy package for filing. Great. In terms of the, I guess, the enrollment, the management of the patients in this study, the inclusion of adolescent patients, Can you just help us understand what you're doing to optimize compliance? Well, it's always been brought up as a potential issue. We're not the first one to have adolescent patients in a big phase three program. When you look at the data for Cesarov and Levy, they had adolescent patients in their program. And it's very transparently reported in the FDA reviews of those drugs. And significant noncompliance is like you take less than 80% of the drug that you should be taking. That's very, very rare in these trials. And it will be very rare In our trial, we expect. It's like less than in the 1% to 2% range. So within the trial environment, that is really not a concern. But we'll still, obviously, we'll, you know, reducing or increasing compliance to make sure to talk about it positively, you do by informing your patients very well, by not having any surprises, by supporting them throughout the trial, by reimbursing them when they need to travel to the study site. We'll also have one additional feature. We will have smart caps on our pill bottles. So we will get real-time feedback on them opening the pill bottle all the time, like constantly, which we can also feed back to both the sites and the parents if they want to. So we'll have a lot of transparency about this during the trial already. But again, this is more to help everybody to stay on drug. We're not expecting that to be a big issue. Got it. And what about the, as you think about not just the management of the patients during the study, is that also kind of follow through going to continue into the OLE so the quality of the data will remain at that high of a threshold? No, of course. Yeah, the smart caps will become or will be part of the OLE as well. You know, for the OLe, when you start losing patients in an open-labeled extension, mostly for sort of administrative reasons, right? Life gets in the way and participating in the study may not be quite as important. So 20% of loss in an open-label extension, that's what our Chinese partners had, and is not unusual at all. We factored that in even in the study planning for the OLE. But for the 12-week double-blind period, we're expecting a much lower discontinuation rate. Okay, great. You know, in terms of the, not just recruitment, but opportunities for label differentiation, does the OLE kind of come into that part of the discussion? Is that something that can be in the clinical data section? Or are we just looking at the placebo-controlled portion of the study? Well, the key efficacy claims will come from the comparative part of the study, right, where compared to a placebo group. So the key advocacy claims will come from first 12 weeks. The long-term safety is a very important feature of the drug, and that's why the open label extension will certainly be mentioned in the label. That would be our expectation, but more focused on what the true purpose of the open label extension is, which is the long-term safety. The efficacy data will be there. How exactly they're going to be included into the label will be part of conversations with the FDA at the time when we have the data. Got it. And then, Dave, in terms of the additional opportunities for the pipeline assets to differentiate what are kind of the target product profile opportunities that you're most focused on for you know the oral follow-on asset versus you know a topical yeah so with the second oral facet inhibitor we have it's more potent than Denny it's a it's lining up to be about twice as potent and now the question is does that potency increased potency translate into increased efficacy without compromising the safety tolerability profile and if that's the case and that's obviously a clear win but it's also possible that we could end up with roughly the same efficacy but maybe the safety tolerability is perhaps a little bit improved so I think there are a number of different ways that we will have to look at this and it becomes more nuanced when we have the data a year from now and we'll make that decision at that time with the topical it's a little more straightforward we're in formulation development right now. We're testing different vehicles and how well it can help penetrate the skin layers. And the design of that molecule or the intention of that molecule is really to get into more mild patients. And we'll know that when we test it in humans in 2028. But it's a pretty exciting program. Looking forward to seeing how that plays out. Got it. Great. Well, unfortunately, we are up on time, but I think the one area that we didn't talk about that maybe could be an interesting additional exploration for the company at some point might be to look at the oily skin opportunity for a topical. That sort of seems quite intriguing, even from an aesthetic perspective. Yeah, absolutely. So, well, excellent. Dave, Andreas, thank you so much for spending the time with us and really looking forward to a lot of exciting events in 2027, most importantly, the phase three outcome for Dentifax. Thank you. Thank you, Steve. Thanks so much. Thank you.