Sagimet Biosciences Inc. (SGMT) Earnings Call Transcript

Thank you very much for joining us here at Guggenheim's Emerging Outlook Conference. This is our Biotech Summit for 2026. We've hosted this event annually for several years now, but really excited to have Sagimet join us here today. I'm Seamus Fernandez, one of the biopharma analysts here at Guggenheim. And I'm really pleased to have Sagimet with us. We have David Happel immediately to my left, Eduardo Martins, the Chief Medical Officer, is to Dave, CEO's left; and then Rob D’Urso, who's SVP of New Products and is also kind of uniquely focused on the acne market. So thanks again for joining us. Maybe just to kick us off, Dave, for those less familiar with Sagimet, maybe just kind of give a high-level view of the company, both from a MASH and acne perspective.

Yes, happy to, and thank you for the invite to come out and speak. So Sagimet Biosciences is a clinical stage biopharmaceutical company, and our approach really begins with understanding how overactivity or overexpression of fatty acid synthase or FASN plays such a critical role in the development of a number of underserved conditions and diseases, specifically our focus in MASH, acne and in certain solid tumors. To solve for this overactivity of FASN, we have developed a portfolio of novel FASN inhibitors led by our lead program, denifanstat, that really target an underlying cause that is common to all of these diseases, and that is fat accumulation or de novo lipogenesis. We're -- this -- our program is the only fat -- essentially the only fat inhibitor in either any of the spaces that we're pursuing development, and it makes it rather unique. If we talk about just MASH for a moment, we have a very strong body of data that shows through preclinical and clinical studies, essentially the same thing that denifanstat inhibits and blocks fat inflammation and fibrosis directly and independently. And again, that makes it rather unique in the space. Everything else in MASH is really a fat burner of some type of mechanism, a fat oxidizer like an FGF or a THR or a fat mobilizer like a GLP. Those programs really rely on burning fat and hoping that, that fat burning translates into reductions in inflammation and fibrosis. And we've seen varying degrees of success and how well that works. But our program specifically targets inflammatory cells within the liver as well as fibrotic cells, and that has really catapulted the program forward and translated into the type of results that some of you may be familiar with. In a Phase II study that we announced in January of '24, we showed that in the F2/F3 population within MASH that we had a really pronounced reduction in fibrosis. And that further played out in the F3 population specifically, where we see really an unmatched reduction in fibrosis. We carried that a bit further, and we looked at population of -- a subpopulation within our Phase II study that were digitally diagnosed as F4 patients or those that have cirrhosis or beginning cirrhosis. And we showed that of the 13 patients in that study that were digitally diagnosed as F4s, 11 of the 13 had a 1 or 2-stage improvement, which is really pretty unparalleled. It gives us a great deal of confidence as we move the program forward. We announced last May that we were initiating a study or our plans to initiate studies specifically focused on F4s and cirrhotics in combination with resmetirom. And we have since completed a Phase I study that we announced just before the holidays last year, showing that there was no safety signal. The drugs are incredibly compatible as we anticipated and really supports moving the program now into Phase II and that's where we're currently at. We will start the Phase II program in MASH later this year and really looking forward to getting that rolling. Shifting over to acne just briefly. I know we're going to talk about that in a bit more detail here shortly. But our partner in China, Ascletis completed a Phase II and a Phase III study in moderate-to-severe acne patients using denifanstat at the same dose as we're using in MASH, 50 milligrams orally once daily and showed incredibly consistent results in both studies, roughly 20% reductions in lesion count, total inflammatory, non-inflammatory lesions and also roughly about a 20% improvement in IgA. Based on the strength of their Phase III data, they submitted an NDA to the NMPA, the Chinese FDA and that NDA was accepted by the NMPA. So they are waiting for approval at this stage, which we anticipate -- or I should say, they anticipate later this year, maybe the beginning of next year at the latest. They just announced data from the extension part of their Phase III study, which showed that from a safety perspective, that denifanstat was incredibly well tolerated through the course of a total of 52 weeks for most of the patients, and that was really well received. In addition, they also indicated and hinted at data that's going to be coming forth in a publication and presentation that patients continue to respond in terms of efficacy, achieving IGA scores of 0 or 1 and/or improvements or 1 or 2 rating points. So it works very effectively in this population. And from our perspective, we're taking our next-gen molecule forward that is a FASN inhibitor. It's a more potent -- slightly more potent version of deni, and we're in Phase I right now, and we're well on track to start the Phase II in the second half of this year as we've communicated publicly. So with that, I'll turn it back over to you.

Yes. So just because I think investors are generally less familiar with the acne portion of the story, and it's definitely growing interest in an area that we have a lot of expertise in. I wanted to just kind of drill into your views, not just around the efficacy data for deni, but the similarities and comparisons to the sister compound that we can start to maybe hopefully draw a little bit of a straight line from deni over to the next compound.

Sure. Rob, do you want to tackle that?

Yes. So thanks for the question. So just taking a step back. So our partner Ascletis in China conducted a Phase III acne program. Acne programs are 12 weeks. The endpoints are typically IGA success, which is our acne scoring score, total lesion count, inflammatory lesion and non-inflammatory lesion. So in this Phase III study that was 12 weeks long, 480 patients. All the primary and secondary endpoints met clinical significant efficacy. And so that was good. It was positive, demonstrated that the 50-milligram denifanstat is an effective treatment for moderate to severe acne. The secondary endpoints were around safety and the product demonstrated it was well tolerated. No significant adverse events came up. So very positive. So safe and effective, well-tolerated product in Phase III. They also previously had completed a Phase II dose ranging with 25, 50 and 75 milligram. When we -- and why that's important is both of the studies had very similar results with the 50 milligrams. So their repeated efficacy endpoints came out very similar. So I think when we look at the Chinese population, the Chinese data, that is a reproducible efficacy endpoint, which is very positive. And our KOLs in the U.S. now are looking at that data as reliable and something that is compelling for them. In addition, they've started or just completed the open-label study that Dave was just mentioning. That is a follow-on study that is a 40-week safety study, open label. So the patients that completed the 12-week rolled into a 40-week extension. And so those patients either were dosed for 40 weeks or 52 weeks with denifanstat and the primary endpoints were safety. And in that safety study, some -- only 2 treatment-emergent adverse events came up over 5%, which were dry skin and dry eyes. Both of them are easily managed with moisturizers and some eye drops. And it's on label or on mechanism. So nothing that's surprising to us. And there were no treatment adverse events that were moderate to severe. One thing to note, I think it's just because of the history of denifanstat, we did have only one patient of the 360 patients that were treated with denifanstat that had some hair thinning and that hair thinning self-resolved. The patient stayed on medicine and it resolved within, I believe, 8 weeks from treatment. So just as a thing to note in that. So that's kind of where the product's efficacy and safety have been with the Chinese population. When we've looked at it with our KOLs, they've really looked at how does the study -- how does this data fit into the market in the U.S. And so I think what we've gotten feedback is that, obviously, there's been no head-to-head studies. But when they're looking at it with their current standard of care products, the efficacy is a compelling efficacy story. And because of the well-tolerated safety profile, they're viewing this as a potential significant therapeutic option for them for moderate to severe acne patients.

Great. And maybe you can kind of put that in context of some of the changes that are occurring in the acne market today. So one of the things in our work that is becoming increasingly clear is the ADA -- or sorry, AAD guidelines changed and are really directionally leaning away from utilization of antibiotics. We've even seen a precipitous fall in antibiotic prescriptions in the wake of that. What kind of an unmet need is now emerging versus comparisons to other product launches that we've seen occur in the space with lots of old mechanisms?

Yes. It's been an exciting time in acne in the last little bit with this antibiotic. And actually, the FDA this week came out with some guideline improvements with iPLEDGE as well. But let me take a step back. So acne in the U.S. has about 50 million people that are affected with acne, roughly 85% of adolescents at some point in all of our lives, we all had acne. So it's a very common condition. About 5 million people are currently seeking therapy for acne in the U.S., largely treated by dermatologists. When you think about an acne patient, you can kind of bundle them into 3 groups: mild, moderate-to-severe and cystic. So the mild patient is that one zit, 2 zits. Those people are largely managing their products -- their condition through CVS, home care, things like that, proactive. And then on the other side, the cystic patient, they're being managed by dermatologists with isotretinoin or Accutane, if that's a brand name that's commonly associated with it. Product is a gold standard. It's been around for about 40 years, but it has a significant challenge with safety. And so it's managed through this program called the iPLEDGE REMS program that requires patients, doctors, pharmacists, distributors all be registered. There's significant birth pregnancy controls in there. And so that's really geared towards cystic acne patients. Our therapeutic area is moderate to severe. And so this is of the 5 million patients seeking therapy, about 70% of them are going to dermatologists with moderate to severe patients. The dermatologists have a choice, and they typically are using a combination of topicals and orals to manage these patients concomitantly. Right now, in the market, it's a mix of branded generics, generics, but it's largely a generic market. As you've mentioned about this oral antibiotic, the main oral products that are used are oral antibiotics, minocycline and doxycycline. Their efficacy is a little bit -- you could debate it if it's great or not. But the challenge is that after you've had a patient on it for a long time, there's a potential that they have antibiotic resistance. And so the CDC and the AAD have been pushing for a long time to reduce their reliance on oral antibiotics for acne therapies. Dermatologists are also using oral spironolactone off-label for female acne. And so I think the opportunity here and our KOLs have told us this is that with oral denifanstat or an oral FASN inhibitor, the doctors will have another oral product with a novel mechanism of action because over the last 42 years, really, there's been very limited novel mechanisms coming to market in acne. And so an oral fasten inhibitor represents a novel mechanism that addresses sebum regulation, which every single acne patient has an elevated level of sebum. And it has a well-tolerated demonstrated safety effect over 52 weeks now.

Yes. So let's talk a little bit about the sister compound. So you're advancing TVB-3567. And again, it is structurally distinct from deni. Why not move deny? Maybe help us understand that, but also as we think about what needs to be proved with this compound, what do you feel needs to be proved with the compound? And then when is our opportunity to really sort of learn that?

Yes. So from a commercial standpoint, it adds a little bit of complexity if you had denifanstat for acne in the U.S. and denifanstat for MASH in a fixed-dose combination. There's pricing challenges, there's just substitution issues. So from a commercial standpoint, it will be a little bit easier to have 2 molecules on the market. And the IP landscape or portfolios of both of the molecules are somewhat optimized for each one, denifanstat for MASH and 3567 for acne. So there's a commercial rationale for it. Clinically and scientifically, basically, Sagimet developed a library, and we own a library of FASN inhibitors. And so in that development pathway, we've done DMPK, CMC, tox work on all these molecules. And these 2 molecules are basically led to the lead molecules of those. And so our choice to take 3567 forward instead of deni is more as a commercial decision. However, scientifically and clinically, that will be proven out to date that they work very well, that PK and PD profiles look very similar. We've initiated a Phase I program, as Dave was saying, with 3567. That is ongoing right now, and that will give us really the confirmation that 3567 and denifanstat behave the same way in human subjects.

Okay. Great. And maybe just remind us what are the kind of points of focus? Obviously, any Phase I study, the focus is going to be on safety. But what can we learn from the Phase I study as it relates to potential kind of clinical activity, clinical endpoints?

Yes. So standard Phase I, you have your single and multiple dose ascending groups. So the goal of our Phase I program, like anyone, will find a therapeutic dose or doses that will get us into a Phase II dose-ranging clinical study. So that is the primary goal of the Phase I study. Eduardo can elaborate that if you have additional questions. I think what's unique about our program is that in addition to the standard SAD/MAD studies, we have a Part D, which is a 28-day MAD cohort that will be in moderate to severe acne patients. And then there, we have the opportunity by using a sebumeter and a sebutape dermatology test to study the composition of sebum before and after 28 days with 3567 and also the quantity of sebum. And why that's important is sebum is the key driver and what we infect in acne patients. So we can show a reduction and a change in the sebum. We feel really confident that the product is going to work. Now obviously, that is not a go/no-go decision for us. We're going to find a therapeutic dose in the Phase I and move into a dose-ranging study of Phase II. This 28-day cohort just gives us additional comfort, additional knowledge, additional understanding of the mechanism and our direct effect on sebum.

Okay. Great. And I know I think the bar is incredibly low on sebum measurement side of things just because it hasn't necessarily been utilized that.

And there's a lot of variation, too. So I think it's a good biomarker, a good directional thing, but it's not a -- if you reduce by 20%, you're going to have efficacy at 20%. It's not as black and white as that. I wish it were, but it's not.

Right. So I mean, the punchline here is that very similar molecule to denifanstat. Denifanstat has demonstrated a very clear clinical benefit in a relevant moderate-to-severe patient population in China. It's been replicated in China 2 times with deni. And the reality is that the market is being left with an entire category that physicians are being encouraged to no longer use.

Yes. I mean, Seamus, I've been in dermatology for 25 years. I've launched multiple acne programs. Having engaged with these dermatologists that are KOLs in acne for that long, having the opportunity to show them this data and specifically this mechanism, it's been amazing to hear the feedback from these doctors of their excitement, their commitment to the program and their understanding of how the mechanism relates directly to acne and how in China, that has already translated to clinical outcomes and how that clinical outcome translates to the U.S. population. I think it's a very easy story from our side of communicating. And now it's just clinical operations and clinical execution to get it to the next step.

Right the bread crumbs are there. So...

And I think it's really neat, right? I mean in the extension study, I know I hinted at continuing efficacy. And you think, well, if you're on a medication for a longer period of time in acne that shouldn't -- most patients continue to respond. But in reality, that's not the case. After about 12, 13 weeks, most patients start to plateau, and that's not what happened here. And they continue to have more and more lesion reduction and an improvement in IgA, and it makes it really exciting. It's going to be very well received once we get to it.

And as a once-daily pill, the compliance is easy instead of twice-daily topical product.