Sagimet Biosciences Inc. (SGMT) Earnings Call Transcript
August 13, 2025
Earnings Call Speaker Segments
Hi, good afternoon, everyone. My name is Edward Nash, Senior Biotechnology Analyst here at Canaccord Genuity in the Equity Research Department. Appreciate everyone joining us. I'm pleased to have with us today the management team of Sagimet Biosciences. Joining us from the company are David Happel, the Chief Executive Officer; Eduardo Bruno Martins, the Chief Medical Officer; Robert D'Urso, the Senior Vice President of New Products. And also out in the audience, we have Thierry Chauche, who is the Chief Financial Officer. So thank you guys for joining us.
Thank you, Ed. Thanks for inviting us.
So maybe just to kind of kick things off for a conversation, could you just give some background to our audience on what it is that Sagimet is focused on and a little bit about your lead product?
Yes, sure. So Sagimet was formed actually, it's actually long -- a while ago, back in 2007 by a group of medicinal chemists who came together and were really trying to solve a particular target. And that target was fatty acid synthase or FASN. FASN is this rather ubiquitous enzyme that works on multiple pathways within the body as a regulator and primarily focuses on de novo lipogenesis or fat accumulation. So this group of chemists came together, found the target and then realized that by inhibiting FASN when it becomes overactive, that it could potentially benefit a number of patients and number of different diseases, including the ones that we're currently focused on in MASH, acne and in certain solid tumors where FASN is absolutely necessary for progression of disease.
That's very helpful. So while you do have more than one FASN inhibitor, Denifanstat is clearly very, very important to the company. So could you talk a little bit? You're now going to be moving into combination trials with your drug and resmetirom. And just wanted to kind of understand the rationale behind why you've decided to take that path and are there any other mechanisms that seemed appealing beyond just resmetirom? Or maybe you could just talk us through what that rationale was.
Yes, sure. And I'll now turn it over to our expert hepatologist here, Eduardo here in a minute. But yes, we actually conducted some preclinical studies with resmetirom, which we published about 1.5 years ago, which showed that FASN inhibition is actually probably a bit better at reducing fat inflammation and fibrosis, which are the 3 drivers of the disease, a little bit more effectively. But when you combine the 2 molecules, they have this rather exaggerated effect in reducing fibrosis. So at that time, we knew that the combination of the 2 molecules could be more than just synergistic in reducing fibrosis, which, as you know, is really the driver of prognosis in the disease. So we wanted to get started then at that time, but we were kind of focused on getting the F2/F3 population nailed down and preparing for a Phase III. And now that we do have that moment, we are initiating a Phase I study in combination with resmetirom. It's important to remember that THR-beta actually induces or elevates FASN. So there is probably a point in time that a patient is on a THR molecule for an extended period of time that having a FASN inhibitor would be quite beneficial to them to help them reach treatment goal. With regard to other mechanisms, we've looked at combinations with GLP agents. We have both preclinical and clinical data with semaglutide that shows much the same thing preclinically as our data did with resmetirom that deni is a more effective reducer of fat inflammation and fibrosis. But when you combine the 2, again, you have this rather exaggerated effect in reducing fibrosis. And that certainly played out in our Phase IIb study, which we released a year ago, January that showed that for patients who were on background GLP therapy even at diabetes doses that the impact on reducing fibrosis and improving MASH resolution was quite pronounced. In fact, the placebo-adjusted differential in both of those endpoints was about 42%, and we hit statistical significance on the reduction in fibrosis. So we know that this molecule -- and remember that denifanstat and FASN inhibitors are fat inhibitors by nature. And the only -- we have the only late-stage fat inhibitor in development at this point. And so combining it with a fat burner, which is basically everything else, whether it's a THR molecule, whether it's an FGF or a GLP, all work by either oxidizing fat or mobilizing fat that combining one of those agents with a fat inhibitor makes a great deal of sense. Our molecule not only has great efficacy data, particularly in late-stage patients in F3s, and it looks very promising in F4s as well as the liver becomes less fatty and anti-fibrotic activity becomes paramount, but the AE profile, the side effect profile of denifanstat is quite attractive. There's no GI. There's no DILI signal. There's no muscle wasting. There's no bone loss. So again, it makes it a very attractive companion product.
Do you have anything?
No. The only thing to add is, of course, one of our objective is a fixed-dose combination. So for that, it's the profile, as Dave said, the synergism between molecules, the metabolic pathways being different and the ability to make one pill. And resmetirom for that is an ideal companion, if you will, whereas a GLP, because you have to titrate up and then titrate down and then up and down and up and down, it becomes very, very difficult to make a single fixed dose single tablet.
I see. Okay. And then normally, we know what normally in the Phase I, we'll be looking at with a single agent. Maybe could you talk a little bit about what it is you're looking to further help inform you from this Phase I trial?
Sure. The main objective is drug-drug interaction. And we do not expect based on the different metabolic pathways for -- the different pathways through which each drug is metabolized, they are different. Therefore, we do not expect a negative interaction between the molecules themselves. So this is the key objective. The second one is we'll probably be able to fine-tune a bit which dose. We expect, of course, the doses for resmetirom to be either those approved or those in clinical trials. And for our drug, what we have in clinical trials as we speak, perhaps with some tweak on the way down.
Understood. And then you're looking to target the F4 population with the program, which is clearly the group of patients smaller in number, but obviously the most in need in the MASH -- overall MASH landscape. Can you talk about what the attributes are of the drug, and you've alluded this already a little bit as to why F4 first. We're seeing everyone F2, F3, right, because it's the bigger market and you're running an outcome study on the side to eventually get an F4, but you're kind of going after that first.
Sure. We are ready for F2, F3. We had an end of Phase II discussion with FDA. We have CRO in place, all the sites identified and all that funding as Dave has alluded many times, is the important part. We do not want to be in a position to start a study without the funding to complete at least through accelerated approvals. It's not sensible from a business perspective, but even more important, not right for the patients. We want them to also benefit from that. Now to the F4s, as you said, is the population most in need. And it's a population where a combination makes even more sense. We believe deni monotherapy would be highly efficacious in that population based on the findings so far and the mechanism of action. But adding resmetirom to the mix will probably be synergistic as we've seen in preclinical and our expectation in earlier stages as well. So if we can prevent a significant number of patients from progressing, fewer people at risk of liver transplantation or worse outcomes, you can't do any better than that for your patients.
So we hear a lot from the KOLs, who we're talking about targeting F2 and F3 versus F4s. And the thought is, given the relatively limited amount of data we have in F4 patients and trials is that they really are very different in how they respond to treatment. So it's not a foregone conclusion though, would you say that if you're positive in the more difficult patients, you're going to be most likely successful in II, III, is that fair or...
I think I mean...
By the way, sorry, yes...
No that's okay. That's totally fine. Of course, not having the data in that population. It's always -- that's why we run trials.
Of course, yes.
I think, however, the mechanism of action because of the potent anti-fibrotic effect of denifanstat in addition to the other things it does, makes it a very well-suited molecule for a population where fibrosis is the main component, if you will, of what the [indiscernible] in that liver. And in addition, again, with the combination, there is still fat in patients with compensated cirrhosis. So being able to really get rid of that fat is very important as well. So we are tackling from both ends. But the anti-fibrotic effect of deni is what makes us believe that it is a molecule that makes sense in that population.
And maybe just adding the data from EASL that we presented, we went back and looked at digital diagnosis of these patients and found that 13 of them were digitally diagnosed as F4s. And in 11 of the 13 of those patients, we saw 1 in 2-stage improvement with denifanstat. So I think on top of the 2-stage improvement that we've seen with deni and F3s, certainly strongly suggests that the molecule should work very well in that population, as Eduardo said, even on as a monotherapy. But then when you combine it with a defatting agent like a THR-beta molecule, it certainly strongly suggests that we should see a very positive outcome.
Makes sense. So the -- and I think you guys are a contributor to this that the trial design landscape from the MASH space has changed dramatically as we've learned more and more what works, what doesn't work and what's important and what we should be doing to try to hit the final end goal of what will therapy really look like as the end game be combination therapy. But between now and by the time you're potentially to market, we'll obviously see probably several more approvals, right? We'll probably see -- clearly see the GLP-1. We'll see likely a pan-PPAR potentially and then the FGF21s. How do you overall see the denifanstat combo kind of fitting into the treatment paradigm if we go out to launch?
Well, I think it's an interesting question, and it really depends on what type of labeling each of those molecules get, right? Will the FGFs largely be relegated to F4s given some of the AE concerns, bone loss and cardio and so forth. And -- but I think when you look at deni specifically and deni in combination with a molecule such as resmetirom, I think it's going to do exceptionally well in that population. I think deni on its own is probably one of the few molecules that can span and show a true treatment response in F2s and F3s as well as F4s. And certainly, the AE profile certainly supports its use broadly across all of those populations. So I think by the time it reaches market, I think most drugs are probably going to be used in combination to be able to help patients get to goal. And I think ideally, most physicians in the scientific community would agree that using a combination of a fat inhibitor plus a fat burner probably makes the most sense rather than combining 2 fat burners that can potentially complicate some AEs.
Yes. That makes sense. So I'm going to switch gears a little bit because we're talking about MASH, but now we're going to talk about acne. And even though it sounds a little -- it's like two great tastes taste great together, right? Peanut butter and chocolate. You would normally think to hear about this. But the data that your partner in China had on the Phase III data with denifanstat in acne was really quite impressive. And I know you have your own TVB-3567 that you're looking to get into the clinic with for acne as well. Could you maybe just talk a little bit about that Phase III data and how that can translate into your excitement with your program, 3567?
Yes. I'll turn the comment -- the question over to Rob here in a second, but I think it's important to go back a step and realize why this mechanism of action can work so effectively in acne. I mean it really targets de novo lipogenesis, which is largely responsible for fat accumulation and sebum production in patients. And then by consequence, the inflammation that also corresponds with the fat accumulation in moderate to severe acne. So by targeting that, it's not an accident that this molecule and this enzyme is responsible for how the pathology of this condition and this disease. So by inhibiting FASN in these patients, it's a very natural conclusion to come to that it will work effectively. Now with regard to how the data and its -- and how it compares sort of favorably within land scape, I'll let Rob take that.
Yes. I think to just build on what Dave is saying that because the mechanism of action of the molecule is addressing sebum, we know that sebum is present and elevated in every single acne patient regardless of their nationality. So looking at the Chinese data and the positive outcomes that we see there, we see a direct correlation to how this product, how the mechanism would behave in North America and so I think from our excitement standpoint, because the efficacy is so positive from the Phase III in China, we can see a very direct correlation to how the product and how the mechanism would behave in North America.
So how would you see a FASN inhibitor being incorporated given this current treatment paradigm for acne that's out there. And clearly, there are some approved drugs, I think Accutane off top of my head that have their own safety issues, which are not trivial. How would another oral option like this fit in?
Yes. So when you think about acne, acne is you have mild, moderate, severe and cystic disease. So the product you're talking about isotretinoin or Accutane is really targeted for the cystic most severe condition of the patients. The oral FASN and our target indication is moderate to severe. And so when you think about North America, you got about 50 million patients suffering or people suffering from acne. About 5 million of those people are visiting dermatologists to seek treatment. And within that 5 million, 70% of them have moderate to severe, the indication that we're exploring. And so dermatologists standard of care is they use topical products to address the local lesions and flares and then a combination of oral products. So the oral products, they typically are reaching for oral antibiotics, oral spironolactone, which is used off-label in female patients and oral contraceptives, obviously, for female patients as well. And so the opportunity in the market today and the challenges that we see with the oral products is that they all have somewhat efficacy, but there are also some challenges, safety profile or being used off-label. And so specifically, when you think about, for example, oral antibiotics, the concern that the FDA and dermatology community have with those is that there's oral antibiotic resistance or the potential for that. And so a product like ours with a novel mechanism of action that addresses one of the core pathogenesis or pathologies of acne offers a significant opportunity for dermatologists to have a new therapeutic option for their moderate to severe patients.
So it's roughly about 3.5 million patients. Is that right?
Yes. I mean -- ballpark, I think that's the current number of patients that are in offices with that -- with the moderate to severe patient. I think what you will see, if you take a step back in dermatology and look at atopic dermatitis or psoriasis. So both of those conditions 10 years ago were treated with a combination of generic topical steroids and generic oral products, very much like the acne market is today. And when we look at what's happened in those 2 atopic and psoriasis with the advent of large molecules, biologics, more sophisticated products coming, the patient populations grew being treated in the dermatology offices and the value per patient also increased because doctors transitioned from generic products to more branded products. And so I think what's really exciting for us from a commercial standpoint is looking at that acne opportunity of growing the patients being treated and also increasing the value of each patient.
One important to remember, there are 50 million patients in the U.S. that have moderate to severe acne and only 10% of them are getting treatment right now. And as you pointed out, 70% of those are only going into a dermatologist's office now. If they have a real medication that can help them, then that number is going to grow very, very significantly.
And what endpoints do we look for in a Phase II? And what would a Phase III registrational study look like?
Yes. So the nice thing about our partners' Phase III data is that their endpoints that they used in their Phase III and Phase II are largely mirror to what the FDA would expect a Phase III program to be. So primary endpoint typically is IGA success. So this is a scale investigator global assessment from 0 to 4, 0 being clear, 4 being severe. So the endpoint is you start at 3 to 4, you have to have a 2-point clearance and you have to end up at 0 or 1. And so that's considered IGA success and is the primary endpoint, along with the reduction of inflammatory lesions. And so when we look at the Ascletis, our partner in China's study, that's their primary endpoints and both of the primary endpoints and secondary endpoints in their Phase III program were all statistically significant. So when we think about an FDA study, we see a lot of confidence looking at that denifanstat Phase III data.
Yes. No, I definitely think that there was definitely a lot of -- people saw that data and realized it's very easy to draw a line there for success. So when should we be looking at getting Phase I data on the combo? Sorry, I'm jumping around. I'm going back to MASH.
We'll start the initiation of the Phase I combo study here in the next couple of months and our anticipation is that the results are going to be clean. We don't expect any hiccups. As Eduardo mentioned, they're 2 separate pathways. They behave very well. We do not expect any surprises there. And therefore, that would allow us to start the Phase II sometime next year, first half. So I think, a reasonable goal.
Fantastic. Well, I really, really appreciate you guys being here and look forward to the continued progression on the combo side and definitely the acne. I think the acne is definitely a -- I shouldn't say, I don't like using the free call option here because it really has a lot of weight and merit of its own. So I think that could definitely end up being maybe the tail that wags the dog at the end of the day, right?
So it's a great molecule with a lot of activity across a number of different diseases, and that's always a nice way to start a conversation.
Yes. Great. Thank you.
Thanks for the invitation.
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