Altimmune, Inc. (ALT) Q2 2026 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen. Welcome to the Altimmune Second Quarter 2026 Financial Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I'm going to introduce your host for today's conference call, Luis Sanay, Vice President of Investor Relations. Luis, you may begin.

Thank you, operator, and good morning, everyone. Thank you for joining us for Altimmune's second quarter 2026 financial results and business update call. On today's call, you will hear from Jerry Durso, our Chairman and Chief Executive Officer; Dr. Christophe Arbet-Engels, Chief Medical Officer; Linda Richardson, Chief Commercial Officer; and Greg Weaver, Chief Financial Officer. Following management's prepared remarks, we'll open the line for questions. Our second quarter 2026 earnings release was issued this morning and can be found in the Investor Relations section of our website. Before we begin, I would like to remind everyone that remarks made about future expectations, plans, and prospects constitute forward-looking statements for the purpose of safe harbor provisions 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 actual results to differ materially from those indicated. For a review of the risk factors that could affect the company's future results and operations, we refer you to our SEC filings. I also direct you to read the forward-looking statements disclaimer in our press release issued this morning. Any statements made on this call speak only as of today's date, August 12, 2026, 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 audio replay on our website. With that, I'll now turn the call over to Jerry.

Good morning, everyone. Thank you for joining us today for our second quarter 2026 financial results and business update call. 2026 is proving to be a year of significant progress as Altimmune evolves into a late-stage company dedicated to serious liver diseases. We've been laser-focused on execution since the beginning of the year and believe we're well-positioned to advance our strategy and deliver on our mission. Pemvidutide is our foundation, and our confidence and conviction in its potential continues to strengthen with the growing body of clinical evidence. We're building momentum across our pemvidutide franchise and are excited for the future. Let me take a minute to highlight our recent progress. Starting with MASH, last week we announced the initiation of the PERFORMA Phase III trial as we began enrolling patients in the global program. We worked with urgency to get the trial started quickly, just 3 months after securing the financial resources to fund the study through the 52-week readout. We're very encouraged by the start of the trial. Sites are being activated quickly, and we're seeing great engagement by the medical community about what PERFORMA may mean for the MASH treatment landscape. There remains a significant unmet need in MASH. We believe pemvi, with its balanced 1:1 glucagon and GLP-1 agonism in a single molecule, has the potential to offer a differentiated profile for MASH patients. Moving now to alcohol use disorder, or AUD. We were pleased to report positive top-line data from the RECLAIM Phase II trial last month. Pemvidutide delivered a very strong, statistically significant, and clinically meaningful reduction in heavy drinking days, which was the trial's primary endpoint. The study also met important secondary endpoints, including a 2-level reduction in WHO risk drinking levels and 0 heavy drinking days. It's important to note that either of these two measures are currently accepted as FDA registrational endpoints. The totality of the top-line data from RECLAIM strengthens our conviction in pemvi's potential in AUD. We are moving quickly to gather the full data from the trial, then prepare the data package to request an end of Phase II meeting with the FDA to discuss next steps. These compelling data, which to our knowledge are the most robust presented in AUD, further strengthens the potential of pemvidutide as a differentiated therapy across serious liver diseases. The results from the trial are also meaningful for the AUD patient community, where pemvidutide could represent an important advancement in an area that has lacked innovation for the past 2 decades. Again, where a significant unmet need remains. There are approximately 12 million adults in the U.S. with moderate to severe AUD. It's well accepted that this AUD population is more likely to develop liver disease. We believe pemvidutide is uniquely positioned to benefit these higher-risk patients as its dual mechanism can address the totality of disease by reducing alcohol cravings while also providing a direct effect on the liver. This population could serve as a key commercial opportunity with substantial future sales potential. Pemvidutide has the potential to help address the continuum of liver diseases we're targeting: MASH, AUD, and ALD. We've now delivered strong Phase II data in yet another indication, and we're well on our way towards building our pemvidutide liver franchise. We're committed to executing our strategy with speed and efficiency, and the significant progress we've made this year reflects that commitment. We remain laser-focused on executing on our goal of bringing pemvidutide to patients who may benefit from its promising and differentiated therapeutic profile and creating value-added for our shareholders. With that, I'll turn the call over to Christophe for a clinical update.

Thank you, Jerry. I am very excited to share that we continue to advance our clinical programs across MASH, AUD, and ALD. Beginning with our program in MASH. Last week, we announced the initiation of the global PERFORMA Phase III trial of pemvidutide in MASH and began enrolling patients. Over the last few months, we moved very rapidly to set up a strong and experienced global infrastructure to initiate the trial. The trial will be conducted across approximately 300 sites with 1/3 in the U.S. and 2/3 ex-U.S. We are working closely with our CRO on site activation in multiple countries and ensuring a smooth start to the trial for an efficient enrollment. The initiation of PERFORMA is an important milestone for Altimmune and for the advancement of MASH treatment. We also see a growing interest and excitement for pemvidutide in MASH from the scientific community. Our increased presence and engagement with the scientific community at the EASL and SOAR medical conferences this year is driving awareness and has helped build momentum as we begin enrolling patients. Based on the strong Phase II data we reported last year and the design of the PERFORMA trial, we are looking forward to studying pemvidutide in a registrational setting. Moving to AUD. In July, we were very happy to report the strongly positive top-line data from the RECLAIM Phase II trial in AUD. The data readout was based on an ITT analysis as it would be for a pivotal study. The trial met its primary endpoints where pemvidutide 2.4 mg showed a highly statistically significant reduction in the average number of heavy drinking days versus placebo at week 24 with a treatment difference of 1.45 heavy drinking days per week. Pemvidutide also met two critical secondary endpoints, both of which are registrational endpoints recognized by the FDA. On the first endpoint, we saw a highly statistically significant response in the 2-level reduction in WHO RDL versus placebo. Roughly 2/3 of pemvi patients achieved a 2-level reduction in WHO RDL. This is only 1/3 on placebo. On the other FDA registrational endpoint of 0 heavy drinking days, one that has historically been challenging to achieve, pemvidutide again showed a highly statistically significant improvement in percentage of patients with 0 heavy drinking days. In these data, more than twice the number of the pemvi patients achieved 0 heavy drinking days versus placebo patients. The trial also saw a highly statistically significant change in the percentage of days with drinking abstinence and PEth levels, which is an objective blood-based measure of recent alcohol intake over the last 2 to 4 weeks. Pemvi also showed a meaningful and statistically significant reduction in body weight from baseline with a 9.1% reduction with pemvidutide versus placebo. The totality of the data, including patients' reported measures, such as the decrease in heavy drinking days, WHO RDL reduction, and the increase in 0 heavy drinking days, as well as the PEth objective measure of alcohol intake, shows strong and consistent evidence in pemvidutide's potential to address the excessive alcohol usage in AUD patients. Considering the landscape of clinical studies in AUD, including looking at other available GLP-1 AUD trials, the totality of the RECLAIM data is to our knowledge the most robust to date. While RECLAIM was focused on drinking behavior, we evaluated in an exploratory manner whether patients with elevated FIB-4 above the threshold of 1.3 at baseline were seeing any improvement. FIB-4 is an established biomarker correlated with risk for developing liver fibrosis. Given pemvi's direct glucagon effect on the liver, the observed data with 50% of pemvidutide patients with a FIB-4 index above 1.3 at baseline, achieving less than 1.3 after only 24 weeks, versus only 17% in placebo, is very encouraging, especially at such an early time point. We expect to further evaluate the potential liver benefit in the Phase III study in AUD. In terms of safety and tolerability, pemvidutide continue to demonstrate a generally consistent safety and tolerability profile. Let me share a few thoughts as we look ahead to a potential Phase III study in AUD, which of course will be subject to our dialogue with U.S. and European regulators. We would plan a Phase III study in the moderate to severe AUD population. It is important to note that approximately 50% of AUD patients also have ALD. Therefore, we would expect to study a portion of ALD patients in the AUD Phase III trial. We would look to broaden the study population to also include patients with a BMI under 25 and could explore a lower dosage option. We look forward to engaging with the FDA at the end of Phase II meeting and discussing a path forward for AUD. In addition, we also plan to engage with European agencies such as EMA. In ALD, we are pleased to report that we completed patient enrollment in the RESTORE trial and expect top-line data in the second half of 2027. The trial enrolled approximately 120 patients with ALD and a history of chronic and heavy drinking at baseline. To support future regulatory discussion, we have amended the trial protocol to be able to fully demonstrate the liver benefits in the ALD population that pemvidutide may provide at 1 year. The primary endpoint of the trial, the change from baseline in liver stiffness measurements, or LSM, will now be assessed in a hierarchical manner at week 48 and then at week 24, allowing for both time points to be assessed. The RESTORE trial is now designed to show a liver benefit over a long period of time, and this is consistent with our development strategy of focusing on higher-risk patients. Demonstrating a liver benefit over a long period of time could be a key differentiator for pemvi versus other AUD therapies in development because AUD patients are often already presenting some level of liver impairment. In summary, we are very encouraged by the progress we are making as we move closer to delivering on our mission of helping the millions of patients with serious liver disease. And with that, I will turn the call to Linda.

Thanks, Christophe, and good morning, everyone. In recent quarters, I've shared insights from our market research describing how pemvi's target product profile positions us well for future competitiveness in the MASH market. Today, I will focus on how we view the current alcohol use disorder market landscape, how we believe this will evolve in the future, and the potential role of pemvidutide in driving this evolution for patients and healthcare providers. First, the AUD market has considerable untapped potential. Alcohol use disorder is one of the largest under-addressed markets in the U.S. Approximately 27 million adults meet the criteria for AUD, 12 million of whom are considered to have moderate or severe AUD. It's this group that has the highest risk of progressing to subsequent liver damage, and we believe pemvidutide potentially would bring the most benefit. Overall, only 10% of AUD patients are diagnosed, and of those, only 1 in 4 receives drug therapy. It's well known that excessive drinking has direct negative impacts on the liver, including cirrhosis, liver failure, and even death. In fact, excessive alcohol consumption is one of the leading causes of preventable liver injury worldwide. The low diagnosis and treatment rates for AUD seem to represent a bit of a disconnect given these health consequences. Why is this? Patient concerns about being stigmatized, low awareness of available drug therapies, less than ideal treatment options with poor compliance that limit prescribing, and no recent therapeutic innovations, all contribute to the low diagnosis and treatment rates. There is a clear opportunity for future therapies with new mechanisms and better efficacy and tolerability to help address this dynamic. In fact, there has not been a new drug approved to address AUD in 20 years. Better solutions often bring renewed interest and growth to therapeutic categories that have been relatively stagnant, as was the case with obesity. We believe strongly that pemvi may bring exactly this type of innovation to the AUD market, particularly for moderate and severe patients. The unmet need in the AUD market demands new treatment solutions. The RECLAIM Phase II efficacy and tolerability data show pemvi's balanced 1:1 glucagon GLP-1 activity significantly improved multiple measures of excess drinking and may show positive effects on underlying or subclinical liver impairment in future studies. The potential direct liver benefits that pemvi may demonstrate in AUD would provide a strong impetus to prescribe in the moderate and severe patient segments, beyond the decrease in drinking levels and behavior. Other products in development may not demonstrate this liver benefit, concentrating more on the cravings and behaviors associated with AUD. Additionally, current AASLD treatment guidelines for MASH strongly encourage alcohol screening, as alcohol consumption accelerates the progression of metabolic dysfunction and increases the risk of liver decompensation, negatively impacting patient outcomes. We see a potential dynamic emerging where increased alcohol screening and routine PEth testing among liver specialists could substantially increase the diagnosis of AUD, even while assessing MASH patients. Recent market research we conducted shows that 44% of hepatologists and 27% of gastroenterologists reported they already used PEth testing in their MASH patients. There is considerable overlap among MASH, AUD, and ALD populations, highlighting the increasing role that the hepatology and gastro communities may play in managing these patients who have or are at risk for serious liver disease. In summary, the AUD market of today will not be the AUD market of the future. We believe pemvi is well-positioned to potentially disrupt this category, providing a catalyst that sets new expectations for what drug therapy can accomplish in the moderate or severe AUD patients who are most at risk for liver damage. We look forward to generating additional clinical data to support these beliefs and to share insights from our pre-commercial work along the way. With that, I'll turn it over to Greg for the financial review.

Thank you, Linda, and good morning. Starting with our financial results for the quarter, which were in line with our expectations. R&D expense in Q2 '26 was $18.7 million, compared to $17.2 million for the same period prior year. The increase in R&D spend was driven by investment into our ALD trial, as well as startup costs for the Phase III trial in MASH, offset by a decrease in expenses related to the completion of the Phase II trial in MASH, which was ongoing in 2025. Q2 '26 R&D spend included $11.6 million of direct costs related to pemvidutide development, of which $3.8 million was for MASH, $5.3 million for the Phase II AUD and ALD trials, and $2.5 million in CMC-related expenses. Q2 '26 R&D also included $1.1 million in non-cash stock compensation. G&A expenses in Q2 '26 were $7.6 million compared to $5.7 million for the same period prior year. The increase in G&A was driven by an increase in professional fees and compensation expenses. And the Q2 '26 G&A included $1.7 million in non-cash stock comp. Net loss for the second quarter of 2026 was $22.8 million, or $0.12 a share, compared to a net loss of $22.1 million, or $0.27 a share in the second quarter of 2025. Now moving to the balance sheet, since the beginning of the year, we strengthened our financial position, having raised approximately $310 million year-to-date, including the $225 million follow-on offering in April. June 30, 2026 total cash was $519 million. This cash position provides us with the operating cash runway through the PERFORMA Phase III MASH 52-week data readout, which is expected in 2029. While our cash runway forecast fully funds the company through the MASH Phase III 52-week readout, it does not include a potential Phase III trial in AUD. As we previously noted, our plan and preference is to use non-dilutive means to fund that trial when needed. And on the strength of this data, we believe we'll have the options to fund that trial, which could include royalty, debt, and or strategic partnerships. With feedback from regulatory authorities, we'll determine the scope and level of investment required for a Phase III trial in AUD, and we'll provide the street with an update as appropriate. Thank you very much. That concludes our prepared remarks, and we'll now turn the call back to the operator for the Q&A session.

[Operator Instructions] Our first question coming from the line of Thomas Smith with Leerink Partners.

On the Phase III PERFORMA study, appreciate the comments on the regional targeting for the trial sites. I just wanted to ask about your sense of the competitive landscape for MASH trials since there are a number of competing Phase III programs at various stages of enrollment, and I was hoping you could provide a bit more detail on how you're targeting study sites with respect to competing programs. How much overlap is there with some of these ongoing pivotal programs, and maybe if you could talk about your expectations on patient enrollment relative to some of the other Phase III programs, or sema, or survodutide or the FGF21s, and then I have a follow-up if I could.

Okay, thanks, Thomas. First of all, as we said in the prepared remarks, we're really encouraged by the speed at which we've been able to initiate and the work happening on the ground that Christophe can give you a little color on. We're operating in an environment where there are some other studies going on, which I think we've been able to work through and take advantage of, frankly, some of the experience out there both on the CRO side and on the site side as we think about the speed at which we want to enroll. Christophe?

Yes. So we've planned to have a number of sites, as we said, in the range of 290, 300 sites around the world. We are well aware of the competitive nature of such trials. And what we've built on is a number of factors that are attractive for our study, including the AIM-MASH, the design where we can reduce the screen failures and also our relationship with the sites either through our experience in the Phase II or through our CRO right now. We also have not expanded the number of patients that we are asking each of those sites to a reasonable number so that they are able to do additional study as well. So this is really those different features in our consideration for enrollments are really pleasing, I should say, the PIs and the investigators to this point. So we were able to get a really good response on this. Our enrollment is around, for studies in that nature, between 18 to 24 months. We are, because of this, different aspects that are, we heard they are very attractive for the PIs. We are aiming at the lower end of this, and that fits well with what we're hearing right now.

Got it. That makes sense. And then a follow-up, if I could, on the RESTORE study in ALD. Could you just elaborate a bit more on the rationale for the protocol amendment and using this hierarchical analysis, looking at the 48-week time point before the 24-week time point? And can you comment a bit more on the powering assumptions and what impact the protocol amendment might have on those assumptions.

Sure. So, it doesn't impact any, there's no change at all on the protocol for this. It's a statistical feature from the AUD data and what we've seen and the benefits we expect from pemvidutide on the liver. For future filing and regulatory filing, we are interested in better characterizing this aspect into the ALD study. So what we're going to be doing is reading at 48 weeks. There is no alpha spending or anything like this with that hierarchical, we were commenting those data anyway. What we're just doing is now being able to analyze both aspects at week 48 and at week 24 in a powered manner using that statistical approach. So it strengthened, if you wish, the role of this study in our differentiation on the liver benefits.

And as we indicated in the prepared remarks, Linda went into some detail. We think about the AUD population with the moderate to severe patients. There is, we know, a significant overlap with AUD and ALD in that population. So having a 12-month view around the liver benefit fits consistently with where we see the differentiation of pemvi in an area of high unmet need.

Our next question in queue, coming from the line of Michael DiFiore with Evercore ISI.

A few for me. For AUD, is conducting one global pivotal trial still the base case now that you're incorporating both FDA and EU requirements? And I have a follow-up or 2.

Yes. So, given the guidance, the recent guidance, the June guidance from the FDA, we expect that 1 trial will be sufficient. That guidance talks about the weight of evidence and the quality of the biomarkers. We know that, for example, PEth is becoming more important. We have those PRO, the WHO RDL and the 0 heavy drinking days that are validated. So our approach is to go with 1 single trial and to be able to use also our additional experience with pemvidutide in other population for safety database. So all together, we believe that 1 pivotal Phase III in AUD and potentially ALD patients as well will be the best approach, and we have some synergies between our different programs.

And of course we'll have the expected discussions with the regulators both in the U.S. and in Europe as we move forward and try to narrow down the assumptions around what Phase III is going to look like.

Got it, very helpful. And 2 follow-ups, if I may. On the RECLAIM call, you were still analyzing the timing of the drug-related discontinuations. Now that some time has passed, do you know whether they clustered around either dose escalation step? And separately, back in March you said you were active on ex-U.S. partnering and you've since generated the positive AUD data. My question is, has the level of strategic interest changed meaningfully since RECLAIM?

So I'll start on that one and then Christophe can take the second one. I think, you know, we've maintained, Michael, as you know, that we're active and open on the front of exploring how best to accelerate and fund the program globally. We maintain the openness and activity on that. We do believe that with this data set in AUD, the potential of pemvi has increased, and so we take that into the discussions appropriately with strategics.

Right. With regard to the discontinuation rates, we are still looking in more detail at those data. The discontinuation rate overall was fairly similar between placebo and the active arm. In the active arm, it was more related to GI AEs. In the placebo effect, it was to lack of efficacy. So this is pretty consistent with what is expected. But we'll have more of the details of every single aspect of this in the weeks to come. We're still looking into our final results programming, et cetera, to get those data.

Our next question coming from the line of Roger Song with Jefferies.

This is [ Peter ] on for Roger. Congrats on the progress. So 2 from us. Do you plan to share any subgroup analyses from the RECLAIM AUD trial? And are there any patient segments where efficacy appears particularly compelling? And second, could you share any additional detail on how you're thinking about Phase III timing, trial design, and funding?

Sure. So, on the sub-analysis, yes. We'll be continuing to dig into our data and look at this. We'll present this data at future medical conferences, and so we will have additional information around this. In Phase III, I shared a little bit in the prepared remarks some of our thoughts right now. I think importantly, again, we are gaining more and more information around the benefits on the liver side, so we want to really establish this in our Phase III, given the overlap between our AUD-ALD population. So that's going to be a real factor here that we're going to look into and also broaden the population a little bit on the BMI side, given that our Phase II had that limitation. So we're looking at a study that's probably given the current guidance having a 24-week and primary efficacy endpoints, but we want to look also probably further to get all the way to 52 weeks with regard to additional analysis. So we'll give more details as we are building this and as we're getting feedback from the regulators.

Yes, and on the question of timing, we're not yet guiding on timing. We're really encouraged by the data. We're going to work quickly and thoroughly on compiling the full data set to answer some of the questions, even that have come across this morning. We'll look to package that in a submission to the agencies for an end of Phase II, and we'll update you accordingly as you would expect around specific timing. But importantly, you know, the AUD data really creates the opportunity for a liver franchise here. I think you heard this morning, and you'll continue to hear from us about where we see the differentiation not only in MASH but in AUD, and really the dual mechanism and the opportunity to impact drinking and impact the liver kind of helps us focus on a group of higher-risk patients where we think the benefit of pemvi can be unique and different from the other drugs that are potentially available or the ones you know of in development now.

Our next question coming from the line of Ellie Merle with Barclays.

I'm curious your thoughts on how you're thinking about the placebo rate in your MASH Phase III study, and can you remind us what your design allows in terms of GLP-1 use at baseline and throughout the study? And then just a second question, I guess, what would be good data from the Phase II ALD study on liver stiffness next year?

Okay, great. Yes, on the placebo, we've built some aspects with regard to, for example, the AIM-MASH to decrease variability, to decrease the training of pathologists, et cetera. So, and we're reading at 52 weeks. So we think that for this, the MASH study, that analysis for the accelerated approval, will give us what we are expecting with regard to the anti-fibrotic effects that we're seeing. The GLP-1 use is accepted in our study, the anti-diabetic doses. And so we will include also diabetic patients in that particular study as long as they are on GLP-1 or other therapies that are limited to their anti-diabetic doses. And then I think you had a question on the...

ALD.

Expectations on the ALD data.

What would be the good on ALD? Well, we are looking forward to see, and we believe that exactly by now being able to read both at 48-week and 24-week, that we will be able to clearly characterize the liver benefit effect of pemvidutide through this longer treatment all the way to 1 year duration. And this will be very helpful in our discussion with regulators. So a study that would deliver this would be obviously a very positive study for us.

And remember in that study, we're also capturing all the expected impact of reducing drinking, which I think when we look at the population in that ALD study, we know at baseline you know heavy drinking ongoing so again just reinforcing that overlap that exists there between AUD and ALD.

Our next question, coming from the line of Kripa Devarakonda with Truist Securities.

Congratulations on the progress this quarter. I have a couple of questions. One is on AUD. Can you remind us what percentage of AUD patients are overweight or obese and how this might play into your Phase III planning? Does it make sense to focus on demonstrating dual benefit of weight loss and drinking reduction to appeal to payers? And also, if I heard it correctly, you plan to have a cohort based on BMI less than 25? And going back to the MASH study, that's my second question, do you have any MRI DEXA sub-studies in PERFORMA to support a specific lean mass preservation, which is something that you've shown in your Phase II study claim on the label, or is this mainly something that you would use for messaging, assuming the drug is approved?

So, we'll try to pick them off here, Kripa, because you gave us a bunch.

I can go back to the questions.

First, I was writing quickly, but thanks. First on PERFORMA, we have, as we've said before, we are doing work as part of the overall program, which will allow us to better characterize some of the impact on body composition in the MASH population. And again, we think doing that as part of the Phase III might give us some opportunity on the labeling side if everything goes in the direction. Maybe, Linda, you can comment on some of the concomitancy. I think the question around the overweight and obesity, you did hear Christophe correctly, we do anticipate including patients in a potential Phase III on AUD that were below the 25 BMI and that will be part of the construction of the trial and the dialogue. Linda, maybe you want to talk about the concomitancy.

Yes, I think depending on the source, you see upwards to, you know, practically 2/3 of patients having overweight, not necessarily obesity, but a combination of those. So, a safe assumption is at least half because we know what the rates are in the general population, and we see that drinking can contribute to excess weight. There's also, obviously, in some of the more severe populations, particularly in ALD, they actually have some lean drinking. They have caloric restriction issues because they're drinking and have other issues. But the benefits, and we talked to some preliminary market access payer work, you know, the losing of weight can be helpful to them as a sign, but really the reductions in drinking and the impact on the liver and the potential to address that, you know, here you have something that not only is a, in pemvi, something that is not only addressing the cause of the issue but the damage to the liver potentially, and that's what we're really interested in exploring on that back end. Hence the discussion on the ALD, timelines and where we're looking at a 48-week readout. All of these things that differentiate us make us highly relevant to the population that needs the most help. And that's really where we're focusing and that idea because there's never been something that really is doing both in the AUD population resonating with, I would say, patients, prescribers, and payers.

And I think that's why we view the AUD data set we just reported out as so robust and de-risking. Because we get clarity across all of the endpoints, including the two approvable endpoints. We have a clear impact at 24 weeks on drinking across those, on weight in a population where, again, the 2/3 of them are overweight or obese, and the signals on the liver which we'll explore more deeply in Phase III. So we think we're in a good position to understand what pemvi can really bring in uniquely in this high-risk segment.

Our next question coming from the line of Annabel Samimy with Stifel.

So I'm curious about the follow-up from the AUD study. So I think it's pretty well known that with the weight loss drugs, there's rebound when patients stop taking the injections and there's persistence problems. And so when you think about AUD, has there been any follow-up study on these patients to see how they behave after they stop treatment? Is there a rebound in their heavy drinking? And is there any work being done in trying to maintain a persistence of treatment on this drug? And have you noticed anything with any of the other incretins where they remove treatment and there's rebound in the alcohol use? And just one question on that. And then if you could just give us some clarity on the powering assumptions for ALD?

So let me start on what the competitive context is with rebound. What has happened more often is that patients cannot tolerate those therapies and are falling off. And that is a major issue and part of the reason that you saw an injectable come out with Vivitrol to try and get compliance and staying on drug to help give the most benefit. So that still is an unmet need. And again, when you reflect on the tolerability overall that we've seen with pemvi, we believe that, that also positions us very well as we study in various therapeutic areas here. We think that, that is an advantage for us in terms of, I think, following up on our own study results. I think we haven't had a chance even to do that. I'll defer to Christophe to look at that because I know we haven't looked at all the data sets yet.

Exactly, Linda, thanks. The study was not designed to look at the formal assessments of rebound. We have a follow-up period that we're going to get somewhat information, we'll look into that. I think again to the point Linda made, having a drug that people can take chronically, take on the long term. I think even the guidance from the FDA relates to the fact that this is a chronic disease. This is not just a temporary disease and the treatment needs to be evaluated chronically, but as well with the safety and tolerability that we have seen with pemvidutide. So, this is something we'll be able to look a little further in our Phase III and over longer duration. With regard to power assumptions for ALD, we will power the study north of 90%. The single trial needs to be powered like this. We will have, like we discussed, the typical AUD with already some damage in the liver, whether they know it or not, similar to what we've seen in our Phase II. And we'll have also ALD population, and we'll make sure that this is powered adequately. We'll have those discussions with the regulators and will be able to design the study so that it supports the indication for these populations.

Our next question coming from the line of Catherine Okoukoni with Citizens.

[indiscernible] starting the Phase III programs and AUD especially considering it's not fully funded while leveraging the ongoing Phase III MASH trial. When would you kind of decide to allocate additional funds and what would you need to see to do that?

Hey, maybe, Greg, you can jump in. I think and I'm sorry you cut out a little bit on our end, but I believe the question is around how we're thinking about financing on the AUD side.

Yes, thanks. Greg here, and I appreciate the question. So, yes, the strength of this Phase II data in AUD presents us with an opportunity for Phase III. So the next steps, as was teased out earlier in the call, will be feedback from FDA and the Phase II meeting, and that will allow us then to step back and sketch out and design the blueprint for the size and scope of that Phase III, costing that out. We clearly anticipate that'll be quite a bit less costly than a MASH Phase III would be. And with that design, we would then be in a position to finance that in the new year and anticipate that the preference would continue to be for non-dilutive funding. Those options could include a combination of strategic monies and/or debts or royalty, etc. So, again, highly confident that that's a program that's fundable. And, again, just to remind, we reported June 30 cash, $519 million. That's runway through the MASH Phase III readout top line in 2029. So, again, takeaway message there is a strong balance sheet today, great opportunities for the second great indication and a second Phase III to build out the franchise.

Now next question in queue coming from the line of Patrick Trucchio with H.C. Wainwright.

Just a few follow-up questions on PERFORMA and MASH. I was wondering first if there was a read-through or learnings from the Phase II RECLAIM trial in AUD around the 2.4 milligram discontinuations and how that might change titration, monitoring or dose reduction plan for the 2.4 milligram arm in PERFORMA. And then as well in PERFORMA, I'm wondering if you're going to be allowing background GLP-1 therapy, resmetirom, or other directed therapies, and how you could manage patients who want to initiate or resume those therapies during the 52-week biopsy period. And then just lastly, can you detail a bit more about AIM-MASH, exactly how AIM-MASH AI Assist will be incorporated into the pathology workflow and just sort of the operational metrics around this?

Sure. Yes. So, to the first point on the titration and the learnings from the AUD trial for the 2.4 milligram, yes, we have learned that in that particular population, the monthly titration is a simple step. That is a couple of steps and it's favorable with regard to, in particular, nausea and vomiting. So I think the direction is very supportive to move for the 2.4, and we'll have 1 step for going to the 1.8 milligram and the 2 steps to go to the 2.4. So very simple, easy titration. So those are consistent learnings from the AUD trials applying into the PERFORMA Phase III. With regard to GLP-1 and, as mentioned, or resmetirom, as mentioned before, the GLP-1 will be tolerated only at anti-diabetic levels. The resmetirom will not be included in the trial in order to not jeopardize our primary endpoint with regard to the 52 weeks readout on the biopsy. We will collect history of patients that do have failure on GLP-1, resmetirom, etc., who have not improved and not tolerated this, so we'll be able to kind of characterize the population and understand which were, I would call, treatment failures for those particular therapies. And with regard to the AIM-MASH Assist, the way it works is basically the slides that are taken from the biopsy are stained and then they're digitalized. Now the program on the AIM-MASH Assist will point to the features based on that AI system, propose a score and the pathologist will be able to look at those and agree or disagree with the scoring or with the evaluation on certain aspects. And given it's a consensus reading at the end as per the FDA requirement, the pathologists are responsible for the scoring, but PathAI claims that it improves viability and improve consistency between pathologists. We've already made, put in place additional aspects to make sure that we have that consistency between training, harmonization, and using charters and alignment on how to read the slides. So all these feature we hope will decrease any variability, improve consistency in the reading, and help not only in the enrollment phase to decrease the screen fail patients, but also in the efficacy reading to have less variability around the reading. So put together, this is the first, again, PERFORMA is the first Phase III trial with the AIM-MASH Assist, and there's quite a lot of, actually, excitement around this from the site, as we've heard.

And then just on the RECLAIM, if I can add a few additional follow-ups, just in terms of durability of the AUD effect, do you have any sense of whether the treatment effect was early and durable, and will you eventually have this data endpoint selection or would you eventually share that data? And then on the Phase III endpoint selection, I think you noted that 2-level World Health Organization risk drinking level reduction, 0 heavy drinking days are the FDA recognized registrational endpoints. Which one or is there a preferred primary endpoint and would heavy drinking days be supportive or primary? And then just lastly, on the AUD Phase III population, you mentioned broadening the Phase III AUD population to include BMI below 25 and potentially lower dose options. What's the rationale for those changes and would the Phase III trial include both AUD only and AUD-ALD overlap patients?

So, on the durability of the AUD, we have some elements in our data that show that there was no plateau of the effect after 24 weeks. So, clearly, we're going to continue to explore this in the Phase III, which will go all the way through 52 weeks and is needed anyway for the safety database. So we'll have that information, but it is expected, for example, even on the weight loss and other aspects, on the PEth, on the number of abstinence days, for example, to continue improving these patients and the chronic exposure to pemvidutide is really important to assess. On the Phase III endpoint, we are lucky enough in our RECLAIM study to have a validation of both. Obviously, we're powering, we are going to select one and align with the regulators. Keep in mind that very often the regulators will look at both. So we have also the options to power fully for both, more likely into 1 primary endpoint, 1 key secondary endpoint, something in that nature in the way to look at it. But the 0 heavy drinking days or the WHO RDL will be the endpoint that we'll be clearly looking at. And the population with regard to lower dosing or extending to BMI below 25, as Linda said, originally there's 2/3 of the population that are overweight and have AUD. There's an overlap between these two aspects. But there's also another 1/3 that is not overweight. So, we believe we can address that population by doing this. These patients may require less exposure or the current 2.4 could be very efficacious, but in some patients, a lower dose could be sufficient. So, we need to evaluate this during our Phase III. We believe a couple of doses will be an approach that will allow us to better characterize how to distinguish in this different population and having a broad picture with all the details that we need when we discuss with the regulators for filing.

Our next question coming from the line of William Wood with B. Riley Securities.

Just looking back over the past year and sort of the changes in some of the ALD inclusion requirements, it looks like you've increased your liver stiffness that you're allowing into the trial from about 18.5 up to about 25. I was wondering if you could speak to sort of how you expect that or why, you know, that change may have been occurring, you know, possibly being able to provide any details on how the inclusion of severe, less severe population, and if that led into anything to do with the change in hierarchy for your primary endpoint. I know you said that you're going to be evaluating both, but it does seem to be semi-hierarchical. And then follow-up question or secondary question. At least for your AUD trial, I know we're expecting, I believe, brenipatide will be reading out in 2028, which is obviously has the GIP1. So I was just curious how we should be thinking about, at least in drinking reduction, the differences that may occur with GIP versus a glucagon component add-on.

I'll start on the LSM, on the liver stiffness criteria, inclusion criteria. These are not related at all to the change in reading of primary endpoints at week 48 with the hierarchical procedure. The hierarchical procedures I mentioned is directly focused on strengthening our understanding of pemvidutide's beneficial effect on the liver and supporting further discussions with the regulator. The criteria and the amendment that we've had was actually related to a study that we've made as a hepatic impairment study that allowed us to now expand to those patients and broaden that criteria. So as you can imagine, every time we do developments, we have a number of learnings, and we were able to implement that, the learnings from the hepatic impairment study that didn't show any risk in the population, and we were able to expand and broaden the criteria. With regard to the AUD and the brenipatide, we're looking forward to see these data. I think what, again, brenipatide is a GLP-1, GIP. It doesn't have the liver effect, so it's probably similar to what you see with GLP-1 semaglutide. Things to that extent may be a little different because of the GIP component, but the direct liver impact, we believe, is important. We've heard from our KOL that it's really for them, whether they call a game-changing approach if you're able to treat the patients that have AUD and may not even know they already have liver steatosis, inflammations, or even having fibrosis. So pemvidutide fits really well in that population and that's what we want to build on.

Yes, I think they're also looking at earlier patients, the mild segment.

Operator, are there any more?

Yes, we have one more question in queue. Our last question will come from the line of Andy Hsieh with William Blair.

Maybe one more on the RESTORE study and about liver stiffness. So the upper end of that range, 10 to 25. The upper range is suggestive of a cirrhotic features for these patients. I'm curious, if the data is supportive in that segment, and how would you use that data, potential read-throughs to other indications, basically generating more data of pemvidutide in the cirrhotic patient population?.

Thank you for the question. So on the liver stiffness, as you know, the range, there is a little bit of variability there. So you're correct. We may include a very small or minor population of patients that are a little more advanced, closer to the cirrhotic stage. We know the drug is safe because we've done the hepatic impairment as mentioned before. We know that in this population, we're going to be okay. I think we will have the opportunity to include those patients in our Phase III and look at the AUD. But in the meantime, it's important, again, one piece that in this population is happening is over a certain period of time from a regulatory perspective, it will be important to show that even if patients advance or if they're, we can address this population. So that will be something that the regulator will be looking at and will be happy to provide that information based on those approach or inclusion criteria.

Thank you. And that's all the time we have for our Q&A session. I will now turn the call back over to Mr. Jerry Durso for any closing comments.

Thanks, operator, and thanks, everybody, for joining us today. From our standpoint, we feel very positive about the progress we've made, significant progress to date. I think we're clear on the work to do ahead of us and definitely committed to continuing to advance what we believe to be a promising, meaningful, differentiated therapy in pemvi for serious liver conditions. Moving forward, it's going to be an exciting time. I'll continue to look forward to updating you on the progress moving forward, and enjoy the rest of the day and have a great rest of your summer. Take care.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.