Skye Bioscience Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2025

There are 13 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by. My name is JL, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sky BioScience First Quarter Fiscal twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

I would now like to turn the conference over to Bernie Hertel, Head of Investor Relations. Please go ahead.

Speaker 1

Hello, and thank you all for participating in today's call. Joining me today is Puneet Dillon, Sky's President and CEO Chris Twitty, CSO and Caitlin Arsenault, Sky's CFO. Before we begin, I'd like to caution that comments made during this conference call will contain forward looking statements under the Safe Harbor provisions of The U. S. Private Securities Litigation Reform Act of 1995, including statements about Sky's expectations regarding its development activities, timelines and milestones.

Speaker 1

Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely, and reported results should not be considered as an indication of future performance. These forward looking statements speak only as of today's date, and the company undertakes no obligation to revise or update any statements made today. I encourage you to review all the company's filings with the Securities and Exchange Commission concerning these and other matters. I'll now turn the call over to Puneet Gellan.

Speaker 2

Good afternoon, and thank you for joining us. I'm here with members of our management team to review Sky's first quarter twenty twenty five performance. I'll briefly recap our key upcoming clinical milestones and highlight our operational road map for the rest of 2025 before turning it over to our CSO and CFO to share more details around our preclinical data and financials. We delivered meaningful scientific clinical and operational progress this quarter. Most notably, we completed enrollment in our Phase IIa CBEYOND trial ahead of schedule.

Speaker 2

We've now moved forward with an amendment to extend the study to fifty two weeks. This positions us to collect longer term data on safety, tolerability and efficacy, both as monotherapy and in combination with GLP-one. Lastly, we generated compelling new preclinical data that further validates the potential of nirmasumab as a weight loss therapy. Nimasumab continues to stand out with a differentiated mechanism that is distinct from both peripherally restricted small molecule CB1 inhibitors and GLP-one agonists. Importantly, our recent preclinical studies demonstrated a truly peripherally restricted antibody like Nimasumab can potentially result in significant weight loss similar to a less restricted small molecule.

Speaker 2

And Nimasumab has the potential to provide additive weight loss to an incretin mimetic like tirzepatide. Later, our CSO, Doctor. Chris Twitty, will discuss this new data in more detail. These findings reinforce our belief that nimazumab has the potential to deliver durable weight loss with fewer safety concerns. We'll present additional data, including mechanistic and combination findings at key scientific and investor events this year, starting with ECO next week and ADA in June.

Speaker 2

Clinically, we are on track. Patients continue to receive treatment. The Data Safety Monitoring Committee has completed three reviews with no safety concerns. Site engagement remains high. Based on this progress, we expect to report top line weight loss data from the twenty six week primary analysis of CVyond in late Q3 or early Q4.

Speaker 2

Before I pass it on, I want to address one topic proactively, the evolving policy environment. While our focus remains on disciplined execution, we're operating in a period of regulatory uncertainty marked by potential shifts in drug pricing policy and a lack of clear direction from federal health care leadership. Ongoing transitions at the FDA and NIH raise important questions about how innovation will be balanced with regulatory oversight in the years ahead. At Sky, we've assessed our exposure and believe it's limited in the near term as we prioritize our clinical development milestones. We're on track and we're tracking developments carefully, and we have preserved flexibility in our supply chain and capital deployment planning.

Speaker 2

Kate will speak more to how we've accounted for these variables in our financial outlook. Overall, we feel that we're in a solid position to move forward with the next stages of nolasiban's development life cycle and that we're uniquely positioned to help address the chronic nature of obesity and the need for sustainable long term solutions. Chris, over to you.

Speaker 3

Thank you, Puneet. I'm pleased to share our thoughts on a few recent preclinical studies with imafemab, a novel antibody based peripherally restricted CB one inhibitor. These studies were designed to not only address the hypothesis that a truly peripherally restricted CB1 inhibitor such as nipatinib can effectively drive weight loss, but to also generate mechanistic data to support Sky's differentiated approach to CB1 inhibition. Recent biomarker analyses from our initial mouse DIO study has further extended the impact of the dose dependent weight loss observed with damasumab treatment. Specifically, now we can report damasumab dependent reduction in fasting insulin levels that complement significant glycemic control as well as productive modulation of key appetite regulating hormones, including GLP one and leptin.

Speaker 3

Additional datasets also highlighted significant reduction of inflammation in adipose tissue as well as liver steatosis. We are also happy to report that this initial study has now been repeated by an independent lab with very reproducible results, not only in terms of the magnitude of weight loss and body composition, that is preservation of lean mass with significant reduction of fat mass, but also with positive changes in glycemic control. This repeat study also looked carefully at food consumption and noted a significant reduction in cumulative caloric intake, slightly less but in line with semaglutide. Collectively, these studies highlight that nimazumab dependent efficacy is driven by multiple peripheral pathways coordinated through different organ systems. Building on our monotherapy studies, we compared nimazumab, monlunabant, a small molecule c d one inhibitor, and the dual GLP-one GIP agonist, tirzepatide, both alone and in combination with namazumab using our DIO model.

Speaker 3

We chose to use higher yet clinically translatable doses of CB1 inhibitors with imatinib having a simple level of exposure as the current Phase two dose and monlunumab being slightly higher than its twenty day daily Phase two dose. Both CB1 inhibitors demonstrated significant weight loss over 23% driven by reduced fat mass with lean mass preservation. We are encouraged that SKYY's highly restricted Nimazumab drove similar efficacy compared to the less peripherally restricted CD1 inhibitor lamlutaban in a DIO model at clinically relevant doses. This study further highlighted that while an active yet suboptimal dose of tirzepatide could yield a similar level of weight loss as nolasinav, the combination with nolasinav produced 31.5% weight loss. These results combined with our mechanistic data strongly support the potential for imasimod to be effective as both a monotherapy and as part of a combination approach to address the growing obesity epidemic.

Speaker 3

These in vivo studies continue to support our belief that our differentiated antibody approach can provide meaningful efficacy without the challenge that current small molecule inhibitors face, which is brain exposure that can cause unwanted neuropsychiatric side effects. To address this potential advantage, we ran a series of in vitro potency experiments designed to leverage a critical mechanistic difference between enasimod and small molecule inhibitors. Unlike small molecule CB1 inhibitors such as monlutavent that bind to the CB1 receptor at the ortho steric site, that is the same site as the endogenous agonist, primarily the endocannabinoids AEA and 2AG, nolasinop binds at the allosteric site and inhibits CB1 in a noncompetitive manner. We modeled a low concentration of CB1 agonist at 50 nanomolar representing potential physiological conditions where both drugs showed similar potency. However, when challenged with an elevated concentration at 2,000 nanomolars mimicking a pathological state such as obesity in which endocannabinoid become upregulated, the imatinib potency remained remarkably stable while monlutebent's activity was significantly compromised.

Speaker 3

This differentiated mechanism has significant clinical implications. In obesity where endocannabinoids can be greatly upregulated, small molecule CB1 inhibitors such as monlutavent may face increasing competition to bind to the receptor. This circumstance may potentially require higher doses of the small molecule inhibitor, which will increase brain exposure and the potential for neuropsychiatric risks. Conversely, nimasumab allosteric binding avoids this competition, maintaining relatively similar potency regardless of endocannabinoid concentration. These data suggest that nemasumab may offer the widest possible therapeutic window among CB one inhibitors, potentially delivering significant metabolic benefits without having to navigate around the hurdle of neuropsychiatric side effects associated with achieving an appropriate peripheral exposure.

Speaker 3

We look forward to continuing our preclinical research efforts focused on further characterizing imatinib differentiated and clinically relevant mechanism of action and having more data to share over the next month. Now I will turn the call over to our Chief Financial Officer, Caitlin Arsenault.

Speaker 4

Thanks, Chris. After the market closed today, we issued a press release and filed Sky's Form 10 Q with the Securities and Exchange Commission outlining our quarterly financial results. We encourage you to reference the filing for details of our financials and the risk factors described in our other filings with the SEC. I will now provide a brief overview of key financial results for the first quarter ended 03/31/2025. Cash and cash equivalents and short term investments totaled $59,200,000 as of 03/31/2025.

Speaker 4

Our cash flow guidance remains intact with the expectation that our current capital will fund operations and key clinical milestones through at least Q1 twenty twenty seven, allowing us to achieve completion of the Phase 2a study for nolasmab and Phase 2b manufacturing activities in anticipation of our future dose ranging study. Research and development expenses for the three months ended 03/31/2025 were $7,200,000 as compared to $1,900,000 for the same period in 2024. The increase was primarily due to contract manufacturing and clinical trial costs associated with our Phase 2a clinical study for nimaxumab, salaries and stock based compensation, consulting and depreciation expense. Our general and administrative expenses for the three months ended 03/31/2025 were $4,600,000 as compared to $4,200,000 for the same period in 2024. The increase was primarily related to investor relations, marketing and communication costs and consulting and advisory fees.

Speaker 4

Our net loss for the three months ended 03/31/2025 totaled $11,100,000 with non cash share based compensation expense of $2,200,000 compared to 5,000,000 for the same period in 2024 with non cash share based compensation expense of 2,500,000.0 In closing, I'd like to briefly address how we view the uncertainty and implications of the proposed tariffs by the current U. S. Administration and any potential impact we anticipate as it relates to our manufacturing activities. Our drug substance is currently being manufactured in Germany with no expected impact from tariffs on raw materials or excipients as they are shipped directly to our European partner from sources outside The U. S.

Speaker 4

Our final drug substance is shipped to The U. S. And is currently unaffected due to its classification under the applicable customs code. Our final drug product is finished in The U. S.

Speaker 4

And we currently foresee no significant impact on the stage of the supply chain, but we are closely monitoring developments. We anticipate that tariff pressures will affect pharmaceutical products that are manufactured and finished outside of The US and sold into The US market, but that US based manufacturing could also face increased costs due to imported raw materials from other regions. We are actively tracking these changes and engaging with multiple global manufacturing partners domestically and abroad to maintain an agile long term strategy. Our goal is to derisk future supply planning as the CBION program advances. This concludes our prepared comments for today.

Speaker 4

Thank you very much for joining us, and we'll now open the call for questions from our covering sell side analysts. Operator, over to you.

Operator

Thank you. The floor is now open for questions. You. Your first question comes from the line of George Farmer of Scotiabank. Your line is open.

Speaker 5

Hi, this is Chloe on for George. Thank you for taking out our questions. A couple from us. So number one, in terms of preclinical data, what can we expect to see at ADA? And I believe you mentioned ECO next week, so a little more detail around that would be helpful.

Speaker 5

Number two, so on monlunabant, so we know that, well, Novo has said that they are planning on presenting their full phase two a data this year. So last September when they had the data, so that had pretty bad negative read through to to your stock. Do you think by now, now that you have, you know, all this this preclinical data out in public domain, think by now investors have kind of begun to grasp the difference between namazumab and these and and mono and advanced? And do you think this time around, the reaction will be more muted, if not positive, on your stock? And and I have a a follow-up after that.

Speaker 2

Hey, Chloe. This is Puneet here. I'm gonna I'm gonna defer the the ADA versus the ECO presentation and what to expect there to Chris because he and his team have been working really hard on that data package. But I appreciate the little bit of a layup on the other question regarding Monlunaban and the full dataset. Yeah, we were carefully paying attention to what guidance Novo has been giving regarding that.

Speaker 2

And on the same note, I think what's been very important to us as a management team and overall in terms of differentiation is being very clear in terms of our mechanism. And we've, as you've seen multiple times, we've really tried to differentiate ourselves from the small molecule space. We've now demonstrated, you know, the mass mass weight loss efficacy in in these preclinical models, and it's it's not only comparable to molnunavent, but it's also shown additive effect to tirzepatide in combination. And that's the last dataset that was just publicly made available where we achieved over 30% weight loss in DIO model. So I think we'd you know, it's just hard to predict.

Speaker 2

At this point, we do think that the street is is better equipped with that background. We've we've been receiving the sorry. We've been, received well from from the information that we've laid out, even received well from, our counterparts, because we've had a chance to have dialogue there as well. That combination potential is also, I think, really evident in terms of, now with preclinical data and everyone wants to see that read through with our our clinical data with, with the semaglutide combo. So I I hope that I hope that your, you know, your prediction's right, and there's gonna be a better, kind of separation from that.

Speaker 2

But that that is why, you know, the the rest of the work that we're doing on the preclinical side continues to be a very, like, data intensive, and and, we're making an effort to to be at these scientific conferences. So I'll turn it over to Chris and he can tell you expectations on that side.

Speaker 3

Thanks, Tanik. Regarding ECO, we've developed and sort of put together a pretty cohesive model, based on published clinical data that looks at the peripheral versus the central activity, of different CD one inhibitors, and it overlays our own phase two dose, really looking at this from the lens of PK and PD activity. And so, we went into some depths and really focused on on really presenting that that model. So you can look forward to that at at ECO and and, you know, not to give away the punch line. There's actually a lot of interesting pieces that come out of out of this work.

Speaker 3

But, ultimately, I think it makes a really convincing case for, the necessity for peripheral, c d one inhibition inhibition and speaks to, the the central, the brain activity that unfortunately is a hurdle that the small molecules are are contending with, it really presents that as driving the neuropsychiatric AE. So a bunch of strong data that helps, really bring that to focus. And so that'll be the that'll be the, the driver there at ECO. In terms of ADA, we'll we'll be showing more in-depth and additional preclinical data. So we have a a bunch of very interesting biomarker data, some of which came out in in a press release and is up on our current deck.

Speaker 3

You can find online. There's more of that. So really looking at mechanistic data that helps, really support this concept of coordinated organ systems driving, peripheral mechanisms that allow weight loss to occur, not just from anorexigenic drivers, but really a few different pathways. We think it's it's quite compelling. In addition to to that in our initial DIO setting, we have a combination data, which will also be highlighted there along with some very, interesting, biomarker data in support of that.

Speaker 3

So that'll be the thrust of ADA, and I think we mentioned this last time. We have now, you know, multiple colonies with multiple collaborators and labs running in parallel. So our cadence of research is just increasing. There's a lot of interesting questions and datasets, on the horizon. We look forward to sharing that beyond ADA.

Speaker 5

Great. Thank you. Super helpful. If I may squeeze in one last question, this is regarding regulatory interaction. So you've talked about what you see in the mask not fitting into the this obesity treatment paradigm, right, across different populations, exposed to refract refractally or non responders doing credence, for instance.

Speaker 5

So have you had these conversations with FDA yet or or plan to? And and just, like, walk us through for your plan there.

Operator

Yeah. That's a great that's

Speaker 2

a great question. So, I can kick it off, and I know, doctor Arora is on the line. I see him on the portal. So I'm going to let him talk about the regulatory interactions. But there's been two kind of key activities, Chloe, that's important for us.

Speaker 2

One is being very clear crystal clear in terms of what's our roadmap for approval. And the approval regulatory development strategy in obesity or anti obesity medications hasn't shifted. So even with the new guidance, we're sticking to that overall strategy in terms of obtaining approval as a monotherapy. But the big budget there is that there's obviously an advancing kind of landscape with the incretin class continuing to demonstrate success. But at the same time, there's this opportunity of patients coming off drug, discontinuation rates, tolerability issues, maintenance opportunities, and there lies a significant opportunity.

Speaker 2

So one activity that we've been really active in is, active in, not active in as a target, but is the discussion with KOLs how that defines the target product profile and how that refined target product profile goes after a very clear market. And we probably have some of that information become available later in q two. But and then the second strategy is the regulatory strategy, which a lot of it gets defined after the data, readout on the '2 a. But, if doctor Arora wants to elaborate, I'm gonna turn it over to him.

Speaker 6

Yeah. Sure. Thank you. Chloe, we in the not so distant future, I'd say, the near future, we are gonna have an opportunity to have these regulatory interactions. As Puneet pointed out, we're going to have data from the phase two a, which will be available, in q four this year.

Speaker 6

And we're going to take that data and take that opportunity to have discussions with the FDA and possibly with other regulatory authorities both in terms of seeking their advice and also proposing a definitive dose ranging phase two b study to do. And that will be an opportunity for us also to discuss population so we can study and how we can define them. So I think that with data and

Speaker 5

Sorry, I can tell you that was cut off. But thanks again for taking my questions. This was really great. Thank you.

Operator

Your next question comes from the line of Jay Olson of Oppenheimer. Your line is open.

Speaker 7

Hey, thanks for providing this update. Can you please remind us about your findings from the DIO model on body composition and how Nimazumab may help preserve lean muscle mass in combination with GLP-one? And then I guess looking ahead longer term, just how are you thinking about the magnitude of the commercial opportunity for nimasumab in combination with GLP-one versus Nimasumab monotherapy? And then I had to follow-up if I could please.

Speaker 2

Hey there, Jay. Acting as operator right now. So I'm going to let Chris take that first question and then maybe that's teed up really well for Tu who's been handling all the commercial assessments. So after Chris, Tu can give you a response in the second part of your question.

Speaker 3

Thanks, Puneet. And thanks for the question, Jay. So we actually just to clarify the combination data was around tirzepatide, so in combination and alone with tirzepatide. So in terms of body composition, we did see when we look at Nimazumab monotherapy similar to what we saw in the previous repeated studies, which, by the way, just note those were done with independent labs, and we see very reproducible data. We see body composition where significant reduction in fat mass with preservation of of lean mass.

Speaker 3

And we see that to a lesser extent with tirzepatide. Tirzepatide alone still significant, but it's trending up towards less fat mass. And in combination with nolasinav, we see the greatest amount of reduction. They're all fairly, you know, notable, and so there's there's not, like, a huge shift, but we do see that, in fact, in combination, it looks, like there's even more fat mass there. So it really sets the stage, for for combination.

Speaker 3

If we look at the weight loss, we we see this nice, additive effect, partially additive effect. And this, again, gets back to some of the mechanism where there is some overlap in the, in the anorexigenic, driver compartment, if you will. So the chloric intake both can impact that pathway, but there's additional pathways that c d one inhibition, with the amazinet touch on, We feel that's where we get this additive nature of of weight loss. And, two, do you wanna take the next piece?

Speaker 2

Yeah. Happy to. But, Jay, would

Speaker 8

you mind just repeating, your question?

Speaker 7

Yes. Just how you're thinking about the relative magnitudes of the commercial opportunity for the combination of Nimazumab plus GLP-one GIP versus the magnitude of the opportunity for Nimazepam monotherapy?

Speaker 8

We've been thanks for that question, Jay. We've been modeling sort of our commercial opportunity. As Puneet said, we've been doing a lot of sort of commercial assessment of the Nimazumab in terms of what the target population really are. And as Puneet highlighted, we think we do have that opportunity both as a monotherapy and in combination. Monotherapy most likely in the area where patients are intolerable or unresponsive or have a contraindication to GLP-1s, which we think is probably a much larger opportunity that some people may have originally thought.

Speaker 8

In terms of the combination opportunity, again I think this is a potentially large opportunity where you have a class of patients who do require some significant weight loss. Again, looking at that 20, 20 five percent plus weight loss likely in that Class III obese population where maybe again they're not tolerable to the higher doses of let's say tirzepatide and can achieve those higher weight losses or they need just additional weight loss on top of the tirzepatide or other GLP-one class. When we look at sort of what those commercial opportunities are between the monotherapy and combo, they're relatively equal I think at least at this point in terms of how we're seeing the market. They both are quite large and they're $1,000,000,000 sized markets. They have one hasn't necessarily differentiated itself at least at this point as we've been going through the analysis.

Speaker 7

Okay, great. Thank you. That's super helpful. And if I could squeeze in one last follow on question. Have you guys done any work on the co formulation of Nimasumab with GLP-one or GLP-one GIP?

Speaker 7

And is a fixed dose combination technically feasible? And can you comment on any potential IP advantages or lifecycle management advantages of doing a fixed dose combination?

Speaker 2

Yes. It's a great question there, Jay. So the opportunity for us in terms of co formulation, obviously, exists, but that hasn't been something that we've explored yet. The first proof of concept is going to be just in terms of the dosing happening at the same time in the current trial. Instead, there has been interest from a fixed dose, perspective.

Speaker 2

We we did definitely see an advantage, being a biologic, being an antibody that there's, really a future where you can be a c b one plus story. So stay tuned. You know, I think first things first is we want to demonstrate, Nimasumab's advantage as a monotherapy and highlight this data and it's been well supported by the preclinical evidence. And we expect that later this year, once we get through the clinical data, we can start highlighting, what does that pipeline look like as a CB1 plus story that includes fixed dose.

Speaker 7

Great. Thank you so much for taking all the questions.

Speaker 2

Thank you.

Operator

Your next question comes from the line of Albert Lowe of Craig Hallum. Your line is open.

Speaker 9

Hi, guys. Thanks for taking my questions. Maybe the first one, I I saw that there's some stage reviews that have not raised any concerns. I was just wondering if there are any other reviews planned, and would any severe or serious neuropsychiatric AEs be raised in these reports? Thanks.

Speaker 2

Doctor Aurora, you wanna take that question?

Speaker 6

Sure. So we are we are actually holding these unblinded reviews on a quarterly basis. So the independent DNC meets every quarter, and they are provided with unblinded data for on on safety in order to review. Now what we what we have told you and as you were mentioning was that they've they've reviewed that data and told us that there were no concerns moving forward with the study. They are provided with a list of all the adverse events that are reported in the study and the serious adverse events.

Speaker 6

We also report, any neuropsychiatric events that may occur in the study as, adverse events of special interest. So those are also channeled into the DMC. So they get to review all of this, and they they are doing it on a quarterly basis, and no concerns have been raised so far. The next review is scheduled for July, and they will be ongoing from there on until the study ends.

Speaker 9

Okay. So it sounds like, the review board has some, I guess, discretion over,

Speaker 8

I guess, what warrants a concern. Is that right?

Speaker 6

Yes. They I mean, they get all of the data that's available for the study, and they they are, we have on that review board two psychiatrists, actually. We and we have people who have experience both with CD one and with obesity studies in general. So, you know, it's it's a very experienced set of people who, understand exactly how these studies run, what this data looks like, and what they're looking for.

Speaker 9

Okay. Thanks. Maybe one follow-up question. I just want to, be sure I still kind of understand, what's the expectations for would be a a strong separation from placebo and monotherapy at at twenty six weeks. Would this still be eight percent?

Speaker 2

Yeah, Albert. Yeah. That's excellent question. So the the, primary endpoint is is, is for is for eight percent. At twenty six weeks, you know, based on what, has been kind of shared, now we when we put that number out, we had the we didn't have the benefit of, sixteen week data from monlunaband, which showed 5.7% placebo adjusted, if I recall.

Speaker 2

So for us, you know, we we we are expecting to see separation between placebo and active. And, obviously, we're targeting over over 5%. The study has, you know, has a design based on 8%.

Speaker 9

Okay. Alright.

Speaker 10

Thank you. And if I can

Speaker 9

just, squeeze in one last one in with this follow-up here, or start with this. Are you still planning to sorry. I can see with this open label extension for the twenty six weeks, it looks like there may be some gaps in the treatment period. I was just wondering, I guess, if you have plans on how to interpret this data to, I guess, account for some variations here and potential weight changes during these gaps?

Speaker 2

Yeah. There there is a there is a rollover period, that that we've had to account for, because, naturally, there's an operational kind of updates that that come along with adding an extension that wasn't previously a part of the protocol. But we don't I mean, the the data will be collected based on weight and other parameters at the start of the the extension as well. So it it's it's you know, we don't know if there's gonna be variability, but if there is variability, it'll be collected in terms of the data, and we could we can discuss that once, once we have all that information.

Speaker 9

I got it. Thank you.

Operator

Your next question comes from the line of Ted Tenthoff of Piper Sandler. Your line is open.

Speaker 10

Great. Thank you very much, and, thanks for the update. I wanted to get a sense. I know you guys extended the, CBION study phase two to fifty two weeks. What is the incremental benefit from going from twenty weeks to fifty two weeks considering you still have the primary, efficacy readout at, twenty six weeks?

Speaker 10

And then how does it impact potential timing for a phase two b start? Would you have to wait for the full fifty two week data set for c beyond? And just wanted to, get a sense for how you're thinking about that. Thank you.

Speaker 2

Hey, Todd. Thanks. That's that's, you know, a pretty, yeah, import pretty important question. Like, as we as we talked about in the last earnings call, what we really wanted to, try to do is maximize what we could from from the current trial. So having one, having the trial up the phase two a up and running, with the primary endpoint, based on twenty six weeks, it did allow us the flexibility to leverage a study that's already there, patients already enrolled, and then generate another data point that allows us to have broader efficacy, safety data, you know, other other information that we're collecting from the from the trial.

Speaker 2

So that that that's been one of the key factors, and and it it's always been important for us to eliminate any white space between any of our development objectives. So at the moment, this extension actually slots in really well, before the phase two b starts and allows us to take the phase two a data, able to have a, you know, productive discussion with the agency about what a phase two b would look like, and at the same time continue, collecting information based on this extension before that phase two b begins. And perhaps inform perhaps even inform the phase two b to some extent. But at the moment, it hasn't created any extra time. In fact, it's it's slotted really well operationally, and we have the we have the drug product to be able to to be able to get get that additional data point.

Speaker 2

The the last thing I I would say is that, you know, the fifty two week data point is is an is another important thing to continue to build confidence on on the broader safety that we wanna see in with this mechanism. So I think those that's been, you know, another important factor and and as well as the tall tolerability information. Doctor Roy, do do you wanna expand on anything I missed?

Speaker 6

Yeah. No. I just yeah. I think you you covered a lot of it. I just want to add a couple of small things.

Speaker 6

It's so in the in the monotherapy arm, this because it's a normal open label arm, we are able to continue to refine our PKPD models as the study goes on beyond twenty six weeks, and that will help us in picking the correct dose range for the phase two b study. So that data will be helpful. And, of course, as as Puneet pointed out, the safety data is invaluable because we are treating longer and being able to show that imazepam is safe and tolerable. There is also a second arm to the study, so we're also extending the combination dose. And the combination dose isn't currently being tested in the proposed phase two b, which will be a dose ranging for the monotherapy.

Speaker 6

So for the combination dose, we're getting this additional fifty two week data, which just, adds to what happens when you dose these drugs together and, you know, what what happens to the curves and the trajectories of weight loss. So we think that data will be, really useful both for safety and for efficacy.

Speaker 10

Gotcha. So you think the phase two b would would have to be a monotherapy study, or could there be combo on?

Speaker 6

Well, at the moment, the phase two b is, is planned and proposed as a monotherapy study because what we need

Speaker 10

to do Makes sense.

Speaker 6

Is to do a proper dose ranging. Right? We need to understand what the optimal dose for Nimazumab is. It doesn't preclude the idea that we could do a study with the combination or do other work, but it is necessary to find that optimal dose in order to go to phase three.

Speaker 10

Yep. Perfect. Thanks. Thanks, guys.

Operator

Your next question comes from the line of Kristen Kuska of Cantor Fitzgerald. Your line is open.

Speaker 11

Hi, everyone. Based on some of these preclinical studies that you've conducted, the ones that are ongoing, I'm wondering if this has changed your the way you're thinking about how the trial is powered. So perhaps are you walking away with greater conviction in the percents that you've provided us with or essentially if any of your parameters or thought processes changed. And outside of just the monotherapy, same thing with the combination. Thank you.

Speaker 2

Yeah. So, Kristen, that's that's a really, great and important question that you've raised. So the data generated so far, preclinically, wasn't something that we've that we had, you know, when when we launched the program. So this demonstrating that we've now I think there's three important kind of important takeaways here. We've demonstrated this robust in inhibition of c b one across multiple assays.

Speaker 2

That information is available in the deck, and that shows, you know, the potency relative to or the the differentiation relative to small molecules. We've continued to benefit from a really strong safety profile. Right? The we had this previous work of, of multiple biodistribution studies done in in NHPs, which didn't show any CNS penetration. We've achieved now monotherapy, like, 16 to 23 and a half percent weight loss in in several, studies and repeat studies as monotherapy and now, shown over 30% in a combo model.

Speaker 2

So across the board, it checks a lot of boxes. How does that translate to human? Of course. It gives you, you know, this aspect of, well, we we feel more confident around the mechanism, and there's this, this this component that comes along with it that we we expect it to translate into the into the clinic. But to be, you know, at the same time transparent, like, that's that these are these are my studies.

Speaker 2

So we have to we have to, put that in in one aspect. And and, the only other, you know, confident thing that we can leverage is that the DIO models across the landscape have been, interestingly, you know, a very good tool a very good pool in the therapeutic areas therapeutic area across different mechanisms. So, the DIO models have translated, to some degree in in a in the clinical setting. So that that's kind of our our our broad take. Chris, do you wanna do you wanna do you wanna, take a take any different approach on answering Kristen?

Speaker 3

No. I I think you touched it, really, all the key points. I might just add a very small detail, and that relates to and this is sort of the translatability and how well in terms of confidence do we do we feel, the DIO models will predict what we see in the clinic. And you touched on some of the key areas. But what what other aspect is, you know, we we are dosing when we look at our our our DIO dosage, it looks relatively high.

Speaker 3

And and it's worth noting that we have a very different behavior in terms of the DKA profile in the mouse than we do in the human. And so, we're very mindful of looking at exposures, not necessarily a Cmax. It's really when you understand, the whole area of the curve analysis and and what the exposure and engagement, looks like in these DIO models and keeping in mind that these are obviously very short, duration relative to what we're we're doing in the clinic. So when you look at that altogether, you really start to appreciate how we're matching exposure. We're looking at doses that are, you know, we feel very translatable.

Speaker 3

And, you know, we've seen some success, with predicting efficacy in the ignorant space and arguably looking at the, c d one space with Novo's dataset, which we feel is actually a pretty significant dataset. This is actually, you know, a very, I think, very strong dataset, and they too, had DIO data that looked pretty strong. We reproduced that in our own lab. So coming back to this idea of translating, we we do feel pretty confident that we're going to have a an active drug in the clinic.

Speaker 1

So I'll just add that piece. That's all. Thanks, Chris.

Speaker 5

Thank you.

Operator

Your next question comes from the line of Andy Hsieh of William Blair. Your line is open.

Speaker 12

So great. Thanks for taking our questions. So maybe from the outside world, can you kinda talk us through some of the discussions that you will be having with the FDA in terms of the protocol? And then they just you know, what are some steps that you need? Do you need to have a meeting with the FDA?

Speaker 12

The the kind of logistical part of of of that. And the second question I have, I I just wanted to make sure. So so, Chris, you mentioned about all the preclinical data that really kind of accentuates the clinical differentiation of the MathMath. So was that also a part of the the the April 15 disclosure? I just wanna see if there's any overlap, or or is there any new data that you, disclosed today?

Speaker 12

Thank you.

Speaker 2

Yeah. Thanks, Sandy. So we haven't disclosed any new data today. What we expect is updates to these datasets that we've shared recently, in upcoming scientific meetings. And we'll keep, you know, some of these info some of that information close to our vest until we until we get there.

Speaker 2

But there'll there'll be an update at at those meetings. And and our work what we're committed to, as what Chris kind of pointed to earlier, we we now have multiple efforts underway, domestic and international, where we are are gonna going to continue to build on the understanding of the mechanism and support our clinical activities and biomarker activities and other stuff. So so because of that workflow, that that is allowing us, a much larger dataset to work with and and continue to support, our clinical activities. I'll turn it over to, doctor Arora, and then, Chris, you can, elaborate on anything after after doctor Arora.

Speaker 6

Yes. So your question was about, regulatory interactions. As you know, with protocol amendments, the FDA doesn't, doesn't ask for and doesn't grant actual meetings. So we have submitted the protocol amendment to the FDA. They have asked us for some minor clarifications at this point, and we have already sent them the responses for that.

Speaker 6

It's our expectation that, we will be able to, we will be able to sort out the minor issues that have been raised, and we will be able to start rolling patients into our extension. It's very unlikely that they will ask for any kind of actual meeting, around the protocol amendment.

Operator

Next question comes from the line of John Willebrand of Citizens JMP. Your line is open.

Speaker 3

Hey, thanks for taking the question. I'm wondering if you

Speaker 11

guys have looked at blinded baseline data and specifically wondering if you have any concerns like we've seen with some of the anchor teams about reduced efficacy in in larger individuals and also in, the Hispanic population, if there's anything in the demographics that, you know, caught your eye when you take a look at that.

Speaker 2

So, Jonathan, we're still blinded to the data, so we don't really have access to anything. But, doctor Roy, do you wanna take a stab at anything that you wanna provide context from your experience?

Speaker 6

Yes. So, you know, we have I think we've managed to get a pretty good representative population recruited for this trial. We do have some Hispanic representation, and we we also have a pretty good weight range to my mind. So once we unwind, we you know, to the extent that sub analysis is actually possible based on these parameters, we will be able to do that. But at the moment, as Puneet pointed out, we are blinded.

Speaker 6

So it's it's hard to know right now, you know, whether or not there's any correlation or whether any of these individual parameters are making a difference.

Speaker 11

And how do you think about managing discontinuations in the combination arm? And are you allowing dose adjustments for patients on some of Lucent?

Speaker 6

And so that's one of the reasons that we've kept the the rollover gap small is that we don't want patients off semaglutide for any extended period. They are limited to being off their drug for only four weeks and this will only will only account for the few initial patients who who will be able to join the rollover extension, when we are able to begin it and have recently finished. After that, everyone who rolls over will roll over directly. So there will be no gap, we won't need to do any dose adjustments for the semaglutide because they're already on effective doses of semaglutide. For the few patients who will have this small gap, we have made some allowance to be able to go back a little bit on those and be able to, if if they require to and to be able to readjust to the semaglutide.

Speaker 6

We know that these people can tolerate the effective dose of semaglutide because they will all have completed twenty six weeks of treatment on it.

Speaker 3

Got it. All right. Thanks guys.

Operator

With no further questions, ladies and gentlemen, this concludes today's conference call. You may now disconnect.

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Key Takeaways

  • Phase IIa Enrollment Milestone: Completed enrollment in the CBEYOND trial ahead of schedule and amended the study to 52 weeks to gather extended safety, tolerability, and efficacy data for monotherapy and combination with GLP-1.
  • Compelling Preclinical Data: Nimasumab showed significant weight loss in animal models comparable to less restricted CB1 inhibitors and added 31.5% weight loss when combined with tirzepatide, supporting its differentiated mechanism with potential safety benefits.
  • Safety Update and Timeline: The Data Safety Monitoring Committee completed three reviews with no safety concerns, site engagement remains high, and topline 26-week weight loss results are expected in late Q3 or early Q4 2025.
  • Strong Financial Position: Holding $59.2 million in cash and investments, the company expects runway through at least Q1 2027 to fund Phase 2a and Phase 2b activities for nimasumab.
  • Regulatory Uncertainty: Potential shifts in drug pricing policy and ongoing FDA/NIH leadership transitions create an uncertain policy environment, though Sky BioScience believes its near-term exposure is limited.
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