Ladies and gentlemen, thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Skye Bioscience, Inc. Third Quarter 2025 financial results and business update call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, I would now like to turn the conference over to Bernie Hertel, Head of Investor Relations. Please go ahead.

Hello, and thank you all for participating in today's call. 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 of Skye Bioscience, Inc.'s expectations regarding its development activities, timelines, and milestones. 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 of the company's filings with the Securities and Exchange concerning these and other matters. I'll now turn the call over to Kaitlyn Arsenault, Skye's CFO.

Thanks, Bernie. After the market closed today, we issued a release and filed Skye Bioscience, Inc.'s Form 10-Q with the Securities and Exchange Commission, outlining our quarterly financial results. We encourage you to reference our filings for the details of our financials and the risk factors described therein. I will now provide a brief overview of our key financial results for the third quarter ended September 30, 2025. We ended the third quarter with cash and cash equivalents and short-term investments totaling $35.3 million. We expect our current working capital to fund operations and key clinical milestones into 2027. This includes the completion of the extension of our Phase 2a study for Nimazumab, certain manufacturing, and preparatory clinical activities needed to initiate the next study. In addition, our runway continues to include a modest discovery R&D budget, the dose concentration, and process intensification work required to support our expected TPP and scale and support later-stage studies for Nimazumab. R&D expenses for the three months ended September 30, 2025, were $9.4 million as compared to $4.9 million for the same period in 2024. The increase was primarily due to contract manufacturing, clinical trial costs associated with our obesity study for Nolasimab, discovery R&D expenses, salary and stock-based compensation expense, and consulting, advisory, and professional fees. General and administrative expenses for the three months ended September 30, 2025, were $3.9 million as compared to $4.6 million for the same period in 2024. The decrease was primarily related to decreases in consulting, advisory, and professional fees, recruitment fees, salaries, and stock-based compensation expense. Our net loss for the three months ended September 30, 2025, totaled $12.8 million, including non-cash share-based compensation expense of $1.9 million, compared to $3.9 million for the same period in 2024 with non-cash share-based compensation expense of $1.9 million. Now, I'll turn the call over to our President and CEO, Punit Dhillon.

Thanks, Kaitlyn. Today and during this quarter and the subsequent quarters, we're really focused on what matters most: turning the answers from our CBEYOND study into the logical next steps. We're going to walk you through what we've learned from our Phase 2a CBEYOND study so far, and how that data has really sharpened our focus, maintained our focus on our clinical path, and strengthened our conviction in the Nimazumab opportunity. From the start, we said that the next step for Nimazumab would be to determine an optimal dose for Nimazumab. And to that end, the top-line data from the Phase 2a study provided us with a wealth of information that we continue to mine for further insights. Most importantly, it gave us evidence in the biological activity of Nimazumab and the clarity on the PK to move forward confidently on our combination development pathway while simultaneously planning to further understand Nimazumab's benefit in a monotherapy setting. On today's call, we'll walk you through the progress that we've made over the past ninety days, the data that we've generated, and the path that we're really focused on in terms of charting forward. We're going to cover four key areas today. One is clinical development, specifically what we've learned from the CBEYOND study, how those insights are shaping the potential for future next studies. Number two is CMC and product economics, how we're designing Nimazumab for scalability and long-term market penetration. Number three is R&D and the work we're doing there, the science that continues to validate that peripheral CB1 antibody. And, or sorry, the Nimazumab or peripheral CB1 antibody is differentiated, and it's a durable mechanism. And four, the continued emphasis on just really strong accountability and consistency, how our actions this quarter measure against what we said that we…

Thank you. As a reminder, if you'd like to ask a question, press 1 on your telephone keypad. Our first question comes from the line of Michael D'Afurrier from Evercore ISI. Your line is live.

Hi, guys. Thanks so much for taking my question. Just two for me. Now that you've had some time to further digest the data from the trial, have you gained any additional insight between late weight loss and exposure? Recalling at the time that the data were revealed, only had PK exposure versus weight loss up to sixteen weeks. That's my first question. My second question is regarding the twenty-six-week extension. Simply, are there enough patients? Forty-three patients seem sort of low, and do you have enough patients to draw any statistically significant insights? Thank you.

Hey, Michael. Thanks for dialing in and the questions. So I'll take the first question and kind of hand it over to Chris because he can further elaborate. But as you indicated there, obviously, we showed a really strong validation of the mechanism in the combo efficacy. Monotherapy dosing, I think, has been evident in terms of issue with dose, not the biology. The exposure response really has demonstrated that the observed concentrations at the two hundred milligram dose didn't achieve the efficacy that we would expect because they were patients were underdosed. But Chris, yeah, can further elaborate in terms of what we've seen now based on the twenty-six-week dataset as well as any he wants to point to from the preclinical data.

Thanks, Punit. Yeah. So to that point, we have, in fact, looked at a more complete PK dataset. I would just note that the final PKPD analysis is still underway, likely won't be available probably for another few more weeks to a month. But we do have a more robust build-out, and we looked at a mixed-effects model both controlling for the placebo effect as well as doing a similar type of modeling where we controlled for the semaglutide effect and looked at that in a combo setting, and in both instances, we see that there's really no bias in the residuals, so the models fit well. They align with the observed weight change that we saw in the trial. And importantly, they point to the point you're making. That is, we're seeing a nice slope, a very believable, credible slope that demonstrates this response related to exposure. We feel very comfortable that the PK data is holding. We'll again have the final PKPD model, but we feel very confident that, in fact, there is a dose response. And as we get to better and better exposures, we will see better and better weight loss as both monotherapy and in combination. And the other thing I've just pointed briefly since we've last talked, Michael, the translation of the DIO data has been further validated. We've done some important biodistribution studies looking at where are the compartments and how those fill relative to what's in the serum and using that along with some other approaches to really get a good fit in terms of how the DIO data, which demonstrates very clean dose response as well, how that translates to the clinical doses. So both those pieces are really supporting this concept of higher dosing in the clinic to see better weight loss.

Michael, would you mind just repeating your second question? Or did we answer it?

No. So my second question is regarding the twenty-six-week extension data. It just seems that only forty-three patients are enrolled, it seems kind of on the low side. And I was wondering if that's enough patients to draw any statistically significant insights for when the trial wraps up.

Yeah. So the good news on the extension is that enrollment has been well, obviously, that was good. That we saw a good interest in the study, and then retention has continued to stay really strong. You know, it is a smaller number of patients relative to the core study, the first part. But we do believe that there will be a clear separation, that we would be able to see, especially, if you recall in the twenty-six-week time point, the first twenty-week time point in the combination, we did see a really strong difference. And then the slope wasn't plateauing. It continued at So we hope that we're going to continue to see that separation between semaglutide alone. On the monotherapy, you know, as we've indicated, we believe that there's still room to go higher in terms of dose. So we'll see what the data reveals. But, at this point, it's a little tough to comment on that because we don't have that separation that we expected in the first twenty-six weeks.

Great. Thanks so much.

Your next question comes from the line of Andy Isaiah from William Blair. Your line is live.

Great. Thanks for taking our questions. We have two. One is more on the regulatory side. So we're curious, you know, very provocative data looking at the weight rebound. Do you need to have a monotherapy approval before a potential maintenance approval? Just trying to get a sense of the sequence and requirements, you know, based on your regulatory discussions with the agency. So that's number one. Number two is we looked at comparative kind of randomized withdrawal studies in particular step four. With semaglutide, it seems like in that study, the weight regain was about 50%. Out to one year. In this study, the weight regain was much faster. So I'm curious if there's any sort of patient baseline characteristics that you want to highlight that could explain the more rapid than expected weight regain from the semaglutide arm. Thank you.

I think these are both great questions and interrelated. I can pass it over to Dr. Arora to take those, and then I might come back with some additional commentary on the maintenance setting.

Yeah. Andy, to address your first question, yes. If we were to do maintenance therapy with Nimazumab as a monotherapy, that would require monotherapy approval. Although, you know, if that is the strongest suit for the drug, then the approval could be as maintenance as well. And, you know, we are as part of our plan as we go forward is to continue looking at the monotherapy to find that optimal dose and frequency on how to dose monotherapy for varying indications, including maintenance. That's a question that we will be discussing with the agency, and I think that will be part of our continuing interaction with them as to how to push both monotherapy and combination forward and what differential path each one may need. So I'm sorry. What was your second question?

It's just on the regain piece. Yeah. Dr. Arora, I think Oh, yeah.

So, you know, if you look across if you look at weight rebound data across a bunch of studies, there was a step one withdrawal study. I think it's one of the ones you're had some. And then tirzepatide did some randomized withdrawals. In one year, the total weight regain is about it does tend to be somewhat accelerated in the first half because the weight begins faster initially and then tends to plateau a little. We do see a somewhat faster regain in this study. We don't know why. It's, you know, we don't know particular characteristics that we're seeing in the demographics. The study of, frankly, the same as you see in most other studies. So we don't know why these patients regain their weight this quickly, but they did. And, you know, being a randomized trial, we figure that both the cohorts are effectively similar.

If I could just elaborate on one thing, Andy. So you look. The durability data that we've showed last week with the only eighteen percent regain versus fifty percent semaglutide alone, is I believe, a real cornerstone of our strategy, and it really validates what you saw from an R&D preclinical perspective. It shows that peripheral CB1 inhibition can provide a durable effect after treatment stops, which is a significant issue for the incretin-only therapies. And I noticed, you know, from coming from Obesity Week, there's been a growing emphasis of the incretins or companies that have incretin pipelines focusing on the maintenance market as well. We believe that it's this comment we made at the last earnings call, and we stand by it, is we do believe that we really have an interesting opportunity for Nimazumab to aggressively pursue a maintenance indication, which we, you know, conformally kind of look at once we finalize our dosing strategy. But we see a massive commercial opportunity that's differentiated because it's more likely and doctors will confirm this, that they would treat with a differentiated mechanism rather than maintenance with another incretin after induction of incretin is completed. And, no twos investigated that from a commercial standpoint, from the survey that we've done. And that's been confirmed. Two, do you want to just expand on that?

Yeah. No. I don't I think you kind of covered it. Pretty well. I think it is important to understand that the maintenance approach therapy is something that's being looked at a lot, not just by Skye Bioscience, Inc., but from investigators and clinicians as well as obviously, you know, other companies. And then as Punit said, you know, right now, there's not a lot of options other than another GLP-1 to go on. And so physicians are generally either reluctant or, in fact, I said at least the ones I've spoken to, generally, I should put them on something else other than a GLP-1. Like a phentermine or something like that. That makes more sense because it's a different mechanism of action. Even though it may have some other comorbidity issues as well as maybe not be as effective. So I think, again, in that space, I think there's a real market for a drug like Nimazumab. That we think we can where we think we can win.

Oh, great. Thank you so much. Yep.

Your next question comes from the line of Ananda Ghosh from H.C. Wainwright. Your line is live.

Hi, guys. Thanks for taking my question, and congratulations on the combo data. Looks really impressive. One of the questions I have is, like, what kind of, you know, the magnitude of data do you believe can be clinically and commercially viable when you are thinking about the combo potential? And was also curious to know what was the quality of weight loss in terms of, you know, the lean mass. That will be helpful. Thanks.

Yeah. I think it's a great thanks, Ananda. I'll turn it over to Puneet Arora. He can take both those questions.

Yes. Ananda, thanks for that question. Now you've seen that a lot of the effective weight loss medications that we've cluster is around the 22% range. In fact, if you, you know, if you speak to most basic physicians, they'll tell you that a lot of patients don't even need, frankly, once you start exceeding about 10% weight loss, you can reverse a lot of comorbidities. But insofar as the benchmark today is about 20%, semaglutide or a generic GLP-1 usually gives you about 15% and then you start seeing the other combinations adding up to another 6% like you see with tirzepatide, the differential that we would hope for. We're already seeing in our protocol set here of 14 and 14 something percent weight loss. At twenty-six weeks, which is three and a half percent more than semaglutide alone. So about a 35% increase. And we think that when we do a full 52, actually, a sixty-eight-week treatment, which is where all these are measured, we will have a combination treatment effect that will be in the range or better than what we are seeing with all these other current combinations. We are actually seeing improvement in body composition along with this thirty extra. So we had planned this at Obesity Week as well. What they're showing is that if you just look at the crude numbers, semaglutide alone has about 72% fat loss and 28% lean mass. And when you add Nimazumab to it, this actually becomes 76% fat loss and only 24% lean fat loss. So there is a transition towards fat mass loss. And when we break this down, we see that as you know, there is 30% extra weight loss. Right? But the fat loss goes from 15% for semaglutide to more than 20% when we look at the combination. Whereas the lean mass loss almost doesn't change. It goes from about 5.5 to 6%. And that is what is showing that is the effect that we are seeing in the Lean2FatMask ratios and why the body composition is improving. So all of the additional weight loss that we've seen is almost all fat mass loss. Our secondary endpoint, to be specific, was linked to fat mass ratio. And that ratio should increase with weight loss. And the more the increase, the better your body composition is. And in our trial, semaglutide increased that lean to fat mass by 0.13. And the combination improved it by 0.26, which is twice the improvement. And this number was actually significant. The p-value was 0.01.

Got it. Thanks. That was very helpful.

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

Oh, hey. Thank you for providing this update. We have two questions. Our first question is about your current thinking around the potential for studying a combination of Nimazumab plus semaglutide for induction of weight loss versus maintenance of weight loss. While acknowledging the regulatory considerations, it seems like they both may offer potentially significant commercial opportunities. So how are you weighing the pros and cons of induction versus maintenance? And then I had a second question, if I could.

Yeah. Thanks, Jay. Thanks for joining the call today. That's a key question. We are certainly focused on the induction side, you know, when we're seeing this improvement that we've showed over the course of this early dataset with no observed plateau at twenty-six weeks. It really demonstrates a synergistic activity. And it's been very encouraging. We're looking forward to seeing what the fifty-two-week data reveals, but the current focus for the Phase 2b is on evaluating the right and optimal dose in combination with sema. And I think there's a little bit of other supportive data that we've seen from a preclinical perspective that Chris might be able to point to, in terms of why we feel confident that dosing higher can lead to a better deeper weight loss in sema because of the data that we've seen so far, which tirzepatide and SEMA in combination. Chris, do you want to discuss that?

Sure. Yeah. To that point, we directly ask that question in light of our recent clinical data. It's important to understand as we get better exposure moving from what we've modeled to be something very similar to our CVRN lumasiran dose, which we're calling sort of a suboptimal dose in this DIO preclinical model, and then a more active dose. An active dose represents something that we're looking towards potentially using in future trials. So, comparing the difference between the active and the suboptimal, you can, of course, see that as a monotherapy in terms of weight loss. Importantly, when we look at this in the setting of combination, we see while the additive effect is there, we really see a large improvement beyond the magnitude you might expect with the monotherapy. So it seems to really unlock the combo potential as well and maybe even beyond what we said with monotherapy. It's important, we think, to really get the dose right as we look towards sort of that induction or that combination approach in the clinic.

And I think it's just important to us to emphasize that it's really relevant in terms of being a truly differentiated, alternative or orthogonal approach to what's out there in terms of current combinations. So although the data is early in the twenty-six-week data, it is very, very encouraging. When you do stack it up across these other combinations, it's really interesting to see how deep that response is initially. So like, you know, we're all excited to see what how that reveals in a longer fifty-two-week data point. But it makes a at the moment, it makes a very compelling case for us to evaluate this in a Phase 2b combo. Hey, Jay. Jay, this is two. I just wanted sort of also add in the relevance of this sort of this rebound data and what I think that also means potentially for a market opportunity, not just in the maintenance setting, but also more in the combination setting where you can get that induction of weight loss. And if, you know, in the real world for patients, you know, need to go on a dosing holiday. For whatever reason. Maybe they're actually going on holiday. They just don't want to bring their drug with them. Or maybe they have other things. Maybe there's access issues, things like that. You know, what our data suggests is that that's not going to be a big as big of a problem as it has been when patients do either lose access to their GLP-1 or lose or have to go on vacation or have other reasons, that they're not going to have a significant rebound by like, we're seeing in that, like, the step one data has shown and that you can have this sort of holiday without sort of losing the gains that you've achieved through the treatment. So I think that's really meaningful. I think a lot of because physicians are looking at that and what that means as well, how you can manage patients' weight. Over a much longer period of time than just sort of these sort of compressed times you're seeing in clinical trials. And what that really, really means in the real world for patients.

Okay. Great. Thank you. That's super helpful. And if I could ask a second question. Can you please talk about any KOL feedback you've received following your top-line, CBEYOND Phase 2a data and also any feedback you may have received at Obesity Week?

Yeah. I think Chris is, or sorry. Two, probably versed and two and Dr. Arora, you guys can take those questions.

Yeah. Thanks for the question, Jay. I'll say that the reaction was positive. I think they see the combination data as very intriguing. They think that the responses that they're seeing are different, and they definitely look forward to us looking at much at sort of the dose-ranging study. They obviously see that that's a key and that's going to be really important for us to establish that sort of baseline with that optimal dose. Dose is going to be. In terms of the blunting of the rebound, data that also has kind of resonated with a number of physicians and KOLs that we've spoken to to the point that I actually just brought up earlier in one specific physician actually brought that up and said, this is really cool data. And if this means that a patient can, you know, go on a dosing holiday and not have to worry about gaining their weight back, then this can be really meaningful for their practice. So, yeah, I think ultimately, positive. They and, again, from a monotherapy side, I think they recognize our need to dose higher. And but they don't see that as necessarily a deterrent for the future of the program.

And I think that, you know, some of the leading physicians out there had experience with CB1 before. So that's where they've had interest in for a long time. And the, you know, psychiatric events have been a source of trouble. They're really I think they're really enthusiastic about the idea that you can get these if and get them in a safe and tolerable manner. So there's a rekindled interest now that we are showing with this biological activity, and you can do that with an antibody without crossing the blood-brain barrier and getting these neuropsychiatric effects.

Yeah. That's great that you emphasized that, Dr. Arora. I mean, I think that was the biggest immediate takeaway once the data hit the tape that we saw when we spoke to our clinical advisory board and other investigators that a lot of folks had recognized that this was a big leap forward for the class. This is the first time that any dataset has been shared with no neuropsychiatric adverse events. So that's a really important kind of step for us in being able to give us the comfort to be able to dose higher. And we feel confident that there's going to be biological activity.

Excellent. That's super helpful. Thanks for taking the question.

Thanks, Jay.

Your next question comes from the line of John Wolleben from Citizens. Your line is live.

Hi. This is Catherine on for John. I got kind of a quick question about what you expect from the monotherapy arm. In the twenty-sixth-week update. What do you want to see in order to give you confidence in kind of choosing the password? I know that we talk a lot about the comm arm because for obvious reasons. I was wondering about that.

Hey, Catherine. Thanks for joining the call and stepping in for John. We, yeah. So from the next twenty-six-week data, the differences here is that we've added increased the dose from two hundred milligrams to three hundred milligrams. What we have emphasized, obviously, to our clinical sites is really making sure that there's strong follow-through in terms of the not only from a patient retention standpoint but ensuring that if there's any noise here regarding compliance, we rectify that. So at the end of the day, what we're really looking for is a better understanding for our PK model. At this dose. In terms of efficacy, so really hard to predict at this point in terms of what that's going to be relative to what we've seen so far in the first, you know, based on the twenty-six-week data. We're obviously encouraged by the PKPD modeling that we've done at higher doses that we should be able to reach the five percent or higher bar but we need to see that data, and we want to make sure that we have improvement in terms of our sensitivity around the PKPD understanding.

Okay. So much. Definitely. That's just to clarify, we did use a slightly higher dose in the extent but as Punit said, primarily to help us help us refine our PK models. We will be when we do a Phase 2 study, we will look at meaningfully higher doses and different exposures, and we think that will give us a more positive result.

And I know that in the past, said about a thousand you're going to go up to a thousand milligrams. Have you changed your thinking at all on that on the target for the higher dose?

Yeah. We're still working through that, Catherine. For monotherapy, we expect basically to unlock efficacy at higher doses. So we've, you know, like we said, it's in line with our exposure in response modeling, and it hasn't necessarily ruled out that the two hundred and three hundred are effective doses as well. I think we had some lack of consistency in terms of what we saw in the face in the first twenty-six weeks and in our slides that we shared during the top-line data review. I think we showed some indication of what the optimal dosing would reveal and those patients that had increased exposure response, they tended to do really well. Versus the patients that were suboptimally dosed or had lower exposure response. So I think what we need to see is if that is kind of course-correcting in what we're evaluating, and then we have confidence that dosing higher is definitely going to show a higher likelihood of efficacy signal that we expect to see and we expect that to be over five percent at twenty-six weeks. At these higher doses that we want to evaluate. Thank you.

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

Great. Thank you so much for taking that question. And I wanted to maybe dig into the other side of going higher on dose. And from the combination of earlier studies preclinical data, and then the initial CBEYOND results, obviously, we're going to keep a close eye on potential CNS side effects. Is there anything else that we should be really focused on or that could sneak up on us from a safety standpoint of taking the doses to the substantially higher level? Thanks so much for answering the question.

Hey. Thanks, Ted. Yeah. I think we feel really confident about the safety signal and allowing us the room to go higher in terms of dose, especially from the standpoint of any concern of neuropsychiatric adverse events. So we, you know, in this study, based on our phase one data, based on our tox data, there's a substantial amount of room relative to where we're at in terms of dosing. In terms of other safety concerns, I think we have to see. So we don't have, you know, the data yet with at higher doses over this longer period of time, whether that's a change in terms of GI tolerability. But we feel at this point, based on the data that we've seen in the Phase 2 that there wasn't any concerns to be able to go higher. But, you know, across the class, it seems to be a little bit different. Some small molecules have had only about 30% GI issues, and then the 60% GI issues. And we don't know if that's linked to CB1 yet or if it's, you know, or it's, like, if it's molecule specific. At the moment, though, there still seems to be substantial room for us to be able to evaluate that. And mechanistically, it's not, you know, it's not the same. It doesn't the mechanism is different than what the GLP-1 drugs are doing. So we feel that we shouldn't have any exacerbated GI burden. But, Dr. Arora, you might want to take that further.

Yeah. You know, it's been my sense that even with the data, if you go back to rimonabant, that even though they showed 30% GI effects, there was a certain placebo effect as well that's worth comparing to, which seems to suggest that the GI effects that you see with the CB1 pathway are not that significant. And, of course, with Nimazumab, we are showing even better results at this dose where essentially there's no difference between placebo and what we are seeing with the drug. Some with the GLP-1s, which is where, you know, all the attention comes from, I believe that a lot of the GI effects tend to come because of the central action on the area on places near the hypothalamus like the area postrema, whose job is to see what's going on in your blood and cause you to have nausea or vomiting if they think that there is something that's deleterious and stimulating receptors that is causing that. And it's very possible that the CB1 mechanism doesn't actually do that. And that's why you see GI effects being so much more muted with this mechanism, and especially with the antibody, Nimazumab. We will test this as Punit said, with higher doses, but we're pleased to see that at least with the dose that we've tested, we are seeing really neutral effects.

Yeah. That's great. And in the next study, how long do you think you'd be able to dose? Thanks so much for taking my questions.

Thanks, Ted. So in a yeah.

Oh, go ahead. Go ahead, Punit.

Yeah. Go ahead. So in a Phase 2 study, I mean, we would we wanted those people all the way out to a year of fifty-two weeks, but we haven't we're still looking at what the primary structure of the study should be. What we'd like is to design a study that will move us meaningfully towards doing pivotal studies. So we may still read out data at, say, twenty-six weeks where, you know, you can get a substantial indication of how individual doses are working and get a lot of safety information. But, you know, we do want to design studies in the end where the patients that we recruit get longer-term treatment and can be treated for a year or even longer.

Yeah. That's great. I really appreciate all the answers, guys. Thanks so much.

Thanks, Ted.

There are no further questions for the Q&A session. Thank you for attending Skye Bioscience, Inc.'s Third Quarter 2025 earnings call. You may disconnect. We are now back in private mode. Great job, everybody. Have a great day.