Greetings, and welcome to the Sagimet Biosciences Key Opinion Leader call. At this time, all participants are in a listen-only mode, and a question and answer session will follow the formal presentation. As a reminder, this conference is being recorded and will be available for the replay on the investors section of the Sagimet website following today's call. Before we begin, I would like to remind our listeners that our comments today will include some forward-looking statements. These statements include statements regarding the presentation of the data from our clinical trials, our clinical development plans, and related and anticipated development milestones, as well as Sagimet's cash and financial resources, financing, and partnering plans, expected cash runway, and related and anticipated development milestones. These statements involve a number of risks and uncertainties, which are outlined in the press release for this event and on slide two of this presentation. Actual events or results may differ materially from those projected in the forward-looking statements, which contain known and unknown risks, uncertainties, and other factors that may cause actual results or performance to differ materially from those projected. I would now like to turn the conference over to your host, Dave Happel. Thank you. You may now begin. Thank you, Tara, and good morning, afternoon, everyone. We are delighted to have you join us today. During today's call, we plan to review the positive 52-week data from our licensed partner, Ascletis' phase III open label extension clinical trial of denifanstat in moderate to severe acne vulgaris that was conducted in China. We will also provide an update on Sagimet's planned U.S. phase III AURORA clinical trial of denifanstat, or Deni for short, for the treatment of moderate to severe acne. For today's presentation, I will provide a brief overview of Sagimet, highlighting our FASN inhibitor development programs and the significant market opportunity. Dr. Harper, an internationally recognized dermatologist and thought leader in acne and rosacea, will then review Deni's mechanism of action and the positive 52-week data from the phase III open label extension clinical trial of Deni in moderate to severe acne vulgaris. Dr. Andreas Grauer, our Chief Medical Officer, will then discuss our planned clinical development programs, focusing on our U.S. phase III AURORA clinical trial of Deni for the treatment of moderate to severe acne, followed by a Q&A session with our panel. We are delighted to have with us today Dr. Julie Harper, a board-certified dermatologist practicing in Birmingham, Alabama. Dr. Harper is the founding director and past president of the American Acne and Rosacea Society, a fellow of the American Academy of Dermatology, and recently served on the AAD's Acne Work Group and was also the former president of the Alabama Dermatological Society. As we get started today, next slide, please. As we get started today, I'll take a moment to give you a quick company snapshot. In April of 2026, we announced a strategic decision to advance Deni into moderate to severe acne, where we see a significant opportunity to make this product with its novel mechanism of action available to patients and families living with acne. Acne impacts about 50 million people in the U.S., with approximately 10 million suffering from moderate to severe acne. We believe that patients are underserved by the currently approved treatments. If approved for the treatment of acne, Deni could be a convenient, once-daily oral medication and the first innovative oral treatment approved for acne in more than 40 years. With Deni, we are now moving into a registrational U.S. phase III study, building upon the recent successful phase III clinical trial conducted by our licensed partner, Ascletis, for Deni in moderate to severe acne in which Deni met all primary and secondary endpoints. We also have a second oral FASN inhibitor, TVB-3567, currently in phase I study. We are about to complete the single and ascending dose and the food effect portion of this phase I and are moving into the PD biomarker phase of the study. We anticipate starting a phase II dose-ranging proof of concept study with 3567 by the end of this year. Earlier today, we announced a $150 million financing, which further strengthens our balance sheet and extends our runway through the middle of 2029. As noted, we are planning to take Deni into a phase III trial in moderate to severe acne, with patient screening expected to begin next month in October. Enrollment of the first patient is expected shortly thereafter. We also plan to continue the development of 3567 with a phase II trial expected to start by the end of this year. In addition and in parallel, we plan to advance a topical formulation FASN inhibitor into IND submission. As we move forward, we have the fundamentals in place to support the execution of our programs. Our IP is strong, with composition of matter protection for Deni to 2032 plus potential PTE extension to 2037. For both denifanstat and 3567, we are exploring pathways to extend protection into the 2040s. Next thing, I'm going to walk you through the acne landscape. Next slide, please. The global acne market is significant, forecasted to reach $20 billion globally by 2034. Currently, within the U.S., as noted, there are approximately 50 million people with acne on an annual basis, of which approximately 10 million or more have moderate to severe acne, the target patient population for Deni. Annually, 5 million- 6 million moderate to severe acne patients are actively seeking professional treatment, generally in the dermatology setting, underscoring this potentially large underserved population, largely due to the fact that currently available treatments have profiles that potentially limit their effectiveness to treat moderate to severe acne. Next slide, please. In mild disease, treatment consists primarily of topical agents alone or in fixed dose combinations. At the end of the spectrum, severe cystic acne is treated with oral isotretinoin, an effective option with significant prescribing limitations under the FDA required iPLEDGE REMS program. For patients with moderate to severe acne, dermatologists will typically add oral treatments to topical agents. These oral treatments are typically tetracycline class antibiotics, which can have undesirable side effects and raise concerns about long-term antibiotic resistance with overuse. Across the treatment spectrum, skincare routines are deployed routinely to address dryness and irritation associated with acne therapies. We anticipate that Deni 50 mg once daily, if approved, will be prescribed to treat patients with moderate to severe acne. As noted, we are also developing a topical FASN inhibitor, which we anticipate could be used to treat more mild to severe forms of acne. I will now invite Dr. Harper to share her thoughts on the therapeutic space, including the potential role of an oral FASN inhibitor such as Deni in the treatment of moderate to severe acne. Dr. Harper? Great. Thank you, Dave, and thank you for the opportunity to be part of this again. This is a very interesting molecule to us in dermatology and in the acne world in particular. I like that last slide where we break acne down into mild, moderate, and severe. That certainly is the case. I will tell you, regardless of the severity of acne, we are always trying, when we have that patient sitting in front of us in a clinical setting like I am in right now, we are always trying to target as many of these four drivers or pathogenic factors in acne as we can. So we have follicular hyperproliferation, so plugging of the follicle. That is one. Cutibacterium acnes, which is a bacteria involved in acne. That is another one of our key drivers. Inflammation is a third, and then the fourth, and probably historically the hardest one to target, is this increased sebum and really a change in composition of sebum. It is historically the hard one for us to target. Until very recently, we had nothing topically that would work for sebum at all. We now have clascoterone or WINLEVI, which can help topically. I will tell you that it is slow, and it has to be used twice a day, and it is topical. Now, we can do some things orally that will address sebum as well. Some of those were on the last slide. So that would include things like spironolactone and oral contraceptives. But those two right there are systemic anti-androgens. So we cannot use those in men at all. The three that I have just talked about, the topical clascoterone, the oral contraceptives, and spironolactone, are all working through the same pathway. They are trying to block sebum by blocking androgen. The fourth option here, or the third oral, would be oral isotretinoin, a drug that is commonly known by the name of Accutane. It has been around for a long time, since 1982, and it really is FDA approved for severe nodulocystic and scarring acne. So we reserve it for the most severe patients with acne. The other group of people who can benefit from oral isotretinoin are people who have just been really resistant to other treatments. So it is not often put in as a first-line treatment. So often it is going to be a rescue treatment in someone who has not responded well to other treatments. The way isotretinoin works is also different. It causes really just cell death of the sebaceous gland. When we look at a drug like denifanstat, and I love that I get to call it Deni today. We've decided that may shorten my presentation by a little bit. When we look at a drug like Deni, it has a whole different mechanism of action here. That important role of sebum in acne, 80% of the sebum, of the lipid in sebum, comes through this de novo lipogenesis pathway. If we can look over on the right, we'll see FASN there. That's fatty acid synthase. That's the enzyme in this pathway that's toward the end before we get the formation of palmitate and stearic acid. Stearic acid in particular being pretty specific to sebum. If we can take Deni and put a big X over that FASN right there, it is a fatty acid synthase inhibitor. It is going to block the end game there. It's going to help block stearic acid and palmitate and therefore block lipid synthesis. There's some things about this that I think are really unique, and I'll try to call those out to you when we actually look at the clinical results with this. Where do we really Well, certainly sebum, but probably also should be anti-inflammatory. Then I would add just as an acne thought leader, that I think it also stands to reason that if you decrease oil enough, oil or sebum is the food source for C. acnes. You will probably indirectly have an impact on C. acnes. We're also learning more and more about the fact that it's changes in sebum that might really promote some of this follicular hyperkeratinization. When we look at lesions in a little bit, we're going to look at inflammatory lesions and then non-inflammatory lesions or comedones. Those comedones are going to come from that follicular hyperkeratinization. We want to see if with a drug like Deni, which is really targeting sebum and inflammation, can we have an impact even on the follicular hyperkeratinization? Kind of watch for that as we go through. Okay, so we already have some data. Of course, in the lab, we have data that denifanstat would have an impact on sebum, reducing sebum. We also have some data from a phase I oncology clinical trial. This was not a study for acne. The dosages used here are higher than you're going to see in the acne studies. Still what we see is when people are on this medication, they have measurements of sebum lipids from the forehead, sebum tapes were placed on the forehead, and then we were able to see both the quantity and the type of lipid that are present. Look at the graph at the bottom there. On the Y-axis, we're looking at that sapienic acid in triglycerides, so one of the fatty acid chains in triglyceride. Then across the X-axis, we're looking at time. We see people at day one, day two, there's not really any change here. By day eight, we're starting to see a decrease in sapienic acid, and by day 15, a big decrease, and in fact, it's more than 90% reduced from baseline. It doesn't bump right back up. This stays low throughout the entire study, and we go out here to day 93. We do have some evidence that this works. Let's talk about working in acne, not just specifically for sebum, but we are trying to treat acne. Let's look at that. There is a lot of information on this slide, and I like to divide slides up. Vertically, we are going to look at the left half first. You will see that vertical line. It is not really at the halfway mark, but hang with me on this. On the left, we are looking at the phase III clinical trials with Deni. These are the ones that were performed by Ascletis. That is Sagimet's licensed partner in China. This study was done in China, 480 patients with moderate to severe acne. Right there, what that means, on an IGA scale, Investigator's Global Assessment, I am going to go ahead and tell you the numbers. I am sure you already know these. A 0 would be clear, no acne, a 1 would be almost clear, a 2 would be mild, a 3 would be moderate, and a 4 would be severe. Even to be severe here, there is a limit on severity. You can only have up to 2 nodules on the face. There are people with way more severe acne than that that would still not qualify for this. We are looking at the 3s and the 4s with a limit on how many nodules a patient could have. This is a very well-designed study. It is double blinded. It is multi-center, placebo-controlled, randomized 1: 1. 480 people come into the study, 240 in the Deni arm, 240 in the placebo arm. The Deni dose here is 50 mg QD. Always in our studies for acne, we are looking at the same primary endpoints, and our endpoint time is going to be 12 weeks. At 12 weeks, we want to know how many of those people who started out as 3s and 4s are now 0s and 1s. Treatment success is not just who got a little bit better, it is who got all the way down to clear or almost clear. That is one of the two primary endpoints. The other primary endpoint is lesion count reduction. We are going to count both inflamed lesions, we are going to count comedones, which are the smaller blackheads and whiteheads. We are going to add that together and look at total lesion count. The two things we are looking at are global assessment, which is like from an arm's length, that is the way that we are assessing that, and then we will look at lesion count as well. To the right of that vertical line, this is the exciting new part. This is the open-label extension. Anytime we have a new drug like this, we need 52 weeks of safety data. Some people will start over and do a 52-week open-label study. Others will do a 50-week open-label extension right on the tail of that. We do not need 480 people now in this, we need 240. It will be basically the first 240, first come, first served, but we want about equal numbers to come in from the Deni arm from phase III trial and from the placebo arm. We are going to filter in about half and half from those two and then extend the study for an additional 40 weeks. You will notice now that there is no control group here, and that is really because these are safety studies. We want everyone exposed to the drug so that we get all of the safety information that we can have. But we also don't mind a little bit of efficacy data here, too, and that is the exciting thing I get to show us today. I think maybe for the first time, we are going to get to see what the efficacy looks like at the end of the 12 weeks as well. This is our baseline demographics. So who is in the study? The columns there, you will see the 50 mg Deni arm, you will see the placebo arm, and then at the end, it is the total. The average age here was close to 23. Not surprisingly, always in acne studies, there is more females than males. Then if you look about halfway down, most of the people in the study in every arm, 85%, 86% of people have moderate acne, an IGA of 3, and 14% or so have severe. The total lesion count across the board here is over 100. It is 102 lesions. Just about 40 of them are going to be inflammatory and about 60 are going to be non-inflammatory. If I was talking to a bunch of dermatologists, I am going to go ahead and say what I would say. I always want us to step away a little bit from numbers and remember that we don't treat numbers, we treat people. How many zits on our face does it take to mess up our day a little bit? The answer is one. These people have over 100 lesions of acne on their face. So this is significant acne. Okay, so what happens at week 12? Have we improved this acne? So let's look first at the last column. I just want to go ahead and get this out of the way. Every number I am going to show you, denifanstat is statistically superior to placebo, okay? Just across the board. But let's start at the top. So what is our treatment success? If everybody started as 3s and 4s, at the end of the study, what percentage of people are zeros or ones? 33%, so one third of people. I have no head-to-head studies here. I don't even know if I am supposed to say this, but I am going to tell you that for oral antibiotics like those tetracycline antibiotics that were mentioned earlier, oftentimes the treatment success in those trials is closer to 17%-22%. So this is a good number. If you look at lesion count, when we look at total lesions together, our lesion count reduction in the Deni arm is 57.4% versus 35.4% with placebo. If you look at inflammatory lesion counts, which is really where this drug should shine, at least early on, 63.5% at week 12 reduction there versus 43.2% with placebo. When it comes to non-inflammatory lesion count, even here, and when we think mechanistically about this drug, if it is going to have an impact on hyperproliferation in the follicle, that would be a later effect. This would be like a secondary effect. Still, we are getting more than 50% reduction at week 12, even in comedones, and that is statistically superior to the placebo. I love this. I want to tell you that this is so clinically relevant. I love 12-week data, but my patients like week two data. My patients like week four data, because if they don't see something before week 12, they give up. I can do all of my best cheerleading, and they still give up. This is a really unique thing about this drug in the sebum space. Those other drugs we talked about that work through the androgen pathway, they are known to be slow. We know from the clinical trials, we tell our patients in clinic, these may take 8- 12 weeks to kick in. That's because in the trials, they take eight weeks to separate from vehicle. Here we see statistical separation, really strong statistical separation, as early as week four. We don't just want that week 12 data. We want to look back at week eight, and we want to look back at week four, and we have strong data at those time points as well. Anytime we are talking about efficacy, we always want to marry that to a discussion of adverse events. Deni was well-tolerated during the 12-week clinical trials. In fact, the incidence of AEs was comparable between the Deni arms and the placebo arm. There were only two categories of treatment-related adverse events that had an incidence rate of more than 5%. They were dry eye in 10.9% of those treated with Deni. Remember that number, by the way, 10.9%, and they were 8% in the placebo group. So definitely a little background noise with this anyway. The other was dry skin, and it was 6.3% in the Deni-treated subjects and 2.9% in the placebo group. Even when we did have some AEs, all of them were rated as mild or moderate. There were no grade 3s or grade 4s. There were no serious AEs thought to be related to Deni, and no deaths were reported. Okay, let's move on now to the open label extension. What you are looking at here is just to show the arms of the people who are going to come into this open label extension. If you look under Deni/D eni, okay, so those are the people who had started and did the 12 weeks on denifanstat, and then they came into the open label column, are those who were on placebo for the first 12 weeks, but then filtered over into denifanstat. Really, they're exposed to the drug for 40 weeks. We want to look at them at week zero to see if there's anything about this group that stands apart from the third column. Okay, so the third column is our entire dataset, all 480 patients who were in the phase III clinical trial. If you look at these other two arms, now we're down to 240 total. Just go down about halfway to IGA moderate, and you can see as you look across the columns, we're about the same. IGA severe, we're about the same. Even on lesion counts, as we go across, we are about the same on those. The long-term studies are really all about safety. So let's look at safety first. Again, Deni was generally well-tolerated, even over time. What we are looking at here is we want to see with a new molecule like this is, well, maybe the longer somebody is on this, maybe we have a cumulative effect, and now we have more adverse events. We are looking for that. But again, in this case, all of the treatment-related AEs were mild or moderate. There were no denifanstat-related grade 3 or grade 4 AEs. Again, two categories of treatment-related AEs that had an incidence rate of 5% or more in the denifanstat-treated patients. This first part, these first numbers, are over the whole 52 weeks. The 12 weeks plus the 40 weeks. There were two again, dry eye in 5.9%, excuse me, and dry skin in 7.1%. But if you look at just the 40-week group there, then the numbers look even lower. Dry skin at 2.5% and dry eye at 2.1%. Now, importantly, even though there are some AEs like this, there were no permanent discontinuations related to AEs. There was one grade 1 hair thinning in the long-term extension study or the open label extension study. It was experienced by one patient being treated with Deni. It did resolve within eight weeks while staying in the study and not changing the dose of Deni. That person, though, did receive topical minoxidil. In the phase III, by the way, back to the 12-week study, there was also one grade 1 hair thinning, but it was in somebody who was on the placebo. As far as serious AEs, there were none that were thought to be related to drug. There were two, but they were unrelated. Both of those resolved, and there were no deaths that were reported. Okay, this is very exciting now. This is the efficacy at week 52. First of all, I want you to look at the legend kind of right at the top of the graph. When we look at week 12 here, we are not going to include the whole original data set. We are just going to include the people who also ended up in the open label extension. So we are looking at 240 people in the first 12 weeks, and that same 240 people in the 52-week long-term study. So this is how many people, again, had success. They were clear or almost clear. At the end of week 12, it was 37% in this group. But if you wait until week 52, it is now 57.8%. Even if you were the unlucky ones who had to do 12 weeks of placebo first, you still basically caught up, and at the end of 52 weeks, 55.6% of people are clear or almost clear. Let us look at total lesion count reduction. So at week 12, 59.1% in total lesions. That is inflammatory, non-inflammatory together. But if you give it a little more time, we can do even better, 73% reduction in the Deni/Deni arm, and even close to 71% if you had been in placebo first. How about inflammatory lesions? Again, this is where I would expect that this drug would really do great, and it really does. It did great fast, actually. In 12 weeks, we were already down 66.7% for inflammatory lesions. But at the end of week 52, we are down closer to 80%, 78% reduction, and that placebo first arm does well too, getting all the way down to 75.8. Now, non-inflammatory lesions. Okay? This is the one I was interested in seeing this. Again, because in my clinical practice, a drug that works on sebum, I am going to think, "Well, I better use a topical retinoid with it so that I can get the impact for the non-inflammatory lesions." Yet with this drug, even by itself, at week 12, we have almost 53% reduction in non-inflammatory lesions, and by the end of week 52, 68.3% reduction. You do well, again. The placebo arm catches up with the double active, the Deni/Deni. In summary with this, in the phase III clinical trials, patients dosed with Deni 50 mg a day over 12 weeks demonstrated statistically significant improvement in the overall IGA success rate, also in inflammatory, non-inflammatory, and total lesion counts. They did this fast. Not only did they do it at week 12, but we had statistical effect that was statistically significant as early as week four. During the long-term open label extension, patients also showed further improvement in IGA success and lesion count reductions compared to baseline. In all of these clinical trials, denifanstat was generally well-tolerated. The denifanstat related AEs were all mild to moderate, and there were no Deni related serious adverse events. That is a quick run-through. I will be on the call for questions. I am going to pass it back over to, I think, Andreas. Well, thank you so much, Julie, and good morning, good afternoon to everybody. Next slide, please. It will be my pleasure today to review our AURORA phase III clinical trial. As you are aware, Sagimet received the IND clearance and the FDA study may proceed letter in July to enable development of denifanstat for moderate to severe acne in the U.S. Our planned phase III clinical trial would enroll approximately 800 patients, as you see here, 12 years and older, into a double-blind, placebo-controlled 12-week trial, which then, similar to what you have seen before, will be followed by a 40-week long-term extension. Patient screening here is expected to begin in October, so pretty imminently, with enrollment of the first patient expected shortly thereafter. Next slide. Now let me turn it over to our or focus on our second FASN inhibitor, TVB-3567, or 3567 for short, which is currently in its first-in-human phase I clinical trial. This phase I clinical trial, as you would expect, is a double-blind, randomized, placebo-controlled trial investigating single ascending doses and multiple ascending doses, food effect, and also will investigate in a small cohort of acne patients, pharmacodynamic parameters of sebum. As you see here on the slide, we will measure sebum quantity with a Sebumeter and sebum quality with a Sebutape, so that we can characterize what this molecule does in more detail. Next slide. Just sort of give you an impression on the timeline, the ongoing phase I trial will determine phase II trial, which we are planning to start towards the end of 2026. We're currently planning to conduct this phase II trial in moderate to severe acne patients, which would be treated for 12 weeks, and we would utilize similar endpoints to what has been done in the Ascletis phase II trial, looking at total inflammatory lesion counts and explore improvements in acne Investigator's Global Assessment scores. With that, I would like to turn it back to Dave to close the presentation. Thank you, Andreas. Thank you, Dr. Harper. To wrap up, there is a significant opportunity for a novel and differentiated therapy addressing the sizable moderate to severe acne population. As Dr. Harper reviewed, Deni, with its novel mechanism of action, has demonstrated significant clinical efficacy quickly and with deepening positive effects for moderate to severe acne patients. The IP estate for our development portfolio is strong, and our development path is clearly laid out. We have the fundamentals for success in place, strong IP, capital from our existing cash balance and recent financing to reach our next milestones, and a cash runway that takes us through the middle of 2029 and beyond, and a disciplined path forward supported by an experienced team who knows how to execute. We look forward to working with the dermatology community and updating all of you as we progress through the next stages of development. With that, I would like to thank Dr. Harper and all of you for joining the call. Tara, we're open now for Q&A. Great. Thank you, Dave. Yes. We'll be conducting a question and answer session with Dave, Andreas, and Dr. Harper. To our analysts joining us live, just a reminder, please use the raise hand feature to indicate you have a question, and we kindly ask that you limit your question to one and one follow-up due to time constraints. Please hold for a brief moment while we pull for questions. Our first question comes from Nat C haroensook at Leerink. Please go ahead, Nat. Hi, this is Nat Charoensook on for Tom Smith. Thank you for the presentation. First is a clarification question. How come the open label portion only included approximately half of the participants in the double-blind portion of the trial? Did you simply limit the enrollment to 240 subjects? I have a follow-up. Yeah, Nat, thanks for the question, and I'll turn it over to Andreas for that. I'll offer a brief thought on it. The 240 patients that rolled over into the open label extension was the number agreed upon with the NMPA, the Chinese regulatory agency, to support the safety tolerability database and the NDA application. Andreas, if you have additional thoughts. Well, I think you kind of answered the question here. That was the reason for that lower number. Again, the focus of the open label extension was safety, and the requirement of the Chinese regulatory authority was to establish that long-term safety in approximately 240 patients. But one of the things that was important is to demonstrate, to make sure that the efficacy data have internal validity, as Dr. Harper was presenting, is to show that the patients that were moved over or were invited into the long-term extension were representative of the original population. That makes sense. For the follow-up, how do you expect the planned AURORA-U.S. population will be compared to the Ascletis' phase III population in terms of disease severity, demographics, or prior treatment history? Yeah. Let me start with what will be the biggest difference. The biggest difference will be that we will be including adolescents into that study based on the suggestion of the FDA. Ascletis had performed that study in adults only, i.e., 18 years and older. That's the biggest difference. Apart from that, we will have the same inclusion criteria, patients with moderate to severe acne based on an Investigator's Global Assessment score of three to four, and 30- 75 inflammatory lesions, and 30- 100 non-inflammatory lesions as a requirement for inclusion. But very similar population, just including the adolescents. Got it. Thank you for taking our questions. Thank you. Yes. Thanks for the questions, Nat. Our next question comes from Ritu Baral at TD Cowen. Please go ahead, Ritu. Hi, everyone. My question is actually for Dr. Harper. Dr. Harper, how do you think of the data for Deni as presented, comparative to either Accutane or CABTREO on relative efficacy, on relative safety? My follow-up is actually pretty straightforward. You noted the decline in dry eye rates and dry skin with the extension data. Do you think that is biological accommodation, or do you think that that is just patients being able to have sort of OTC support, like a heavier cream or eye drops or something like that? Thank you. Okay. I always hope I can remember the second part of the question after I answer the first one or the topical triple fixed dose CABTREO. Well, just as somebody in the clinic, I think they are all pretty distinct drugs, really, when I think about a drug like Deni. My patients do love oral medications, and I really think of this as a drug that will more likely come in and replace the use of an oral antibiotic, for example. Oral isotretinoin is a very, very effective drug, but as you know, I think we are comparing apples and oranges if we try to compare those two. Oral isotretinoin has been around since 1982, and we have had oral antibiotics, and we have had topicals, and we do not treat every single patient with oral isotretinoin. We use all of those other things. I think those two are definitely apples and oranges. The topical CABTREO product has a very good efficacy data when you look at the clinical trials. It can have some issues with tolerability as any topical product can. There are times, and I really like to use topicals when I can, and oftentimes what I would really say is I cannot wait to use CABTREO together with Deni. But if you are asking me to compare those two, there are times that I have patients who come into clinic, this just happened very recently. Someone is so irritated from the topical that we cannot use them at all right now. It is not just looking at numbers and trying to decide which one works better. It is how am I actually going to be able to use these in clinic, and a topical is quite different than an oral. Isotretinoin, I have to just be honest, kind of stands in a lane all by itself. Second question. I just remembered. And- The eyes. Did you have a follow-up to that first? No. It was the roll-off of the side effect rate and whether that was accommodation. I really don't know the answer to that. We'll see if Andreas has more to say about that. I don't know. I think from my standpoint, it's just nice when we see that that's not something that seems to be getting worse as we go through the studies. It did get better. You did hear that correctly. I don't know if that is because people were accommodating by using external products, or if perhaps they just got used to the product and the side effect goes away. I don't know the answer to that. Yeah. And I think your guess is right, Julie. I think that is exactly what it is. If you restart the clock in the open label extension and just count the side effects from week 40, then it is only like 2.5% and 2.1% of patients who have dry eye, dry skin side effects. And that is probably accommodation that they have just. It is a very small number to start with, and they have just learned to deal with it very effectively. All of these are mild, right, Ritu? Or nearly all of them are mild. That is also important to remember. And they usually respond extremely well to trivial measures like eye drops. Thank you. Thanks for the questions, Ritu. Our next question comes from Evan Wang at Guggenheim. Please go ahead, Evan. Great. Thank you. This is Evan Wang on for Seamus Fernandez. Two questions from us, one for Dr. Harper and one for Andreas. For Dr. Harper, know in April we discussed the shifting guidelines around oral antibiotics and potential for Deni to be used ahead of antibiotics. Can you just talk about your conviction in both usage of Deni as a chronic therapy and also around the treatment paradigm shifting to improve without utilization of oral antibiotics now that we have the longer-term efficacy data? And for Andreas, excited to see the phase III kickoff shortly. Can you walk through some of the details on how you are operationally designing the trial for success? If you could touch on patient selection, site training, adherence, and other critical aspects of acne trials. Thank you. For as long as I've practiced, which is now over 25 years, the way we have treated moderate to severe acne is oral antibiotic along with topical agents. Because again, we really are trying to hit as many of those four factors as we can, and we do better when we do combinations of therapy. But there are reasons that we don't want to use those oral antibiotics. There are reasons my patients don't want to, and there are reasons that we are trying to get away from them. We've already started to limit them. We don't want them longer than three or four months. That's what the AAD guidelines even say, try to limit the duration of those. Really, if we can treat acne without them, why not? That would be great. We know in dermatology that we are some of the biggest prescribers of oral antibiotics, and we are keenly aware of that, and we don't really want to be part of the antibiotic resistance. That is a big problem. We have a little bit of a target on oral antibiotics right now, and I think that's very appropriate. When I look at a drug like this that already would come into the topical and hit a whole different piece of the pathogenesis, because oftentimes, even with those other combos, we were missing sebum. If we were doing something like a retinoid, benzoyl peroxide, clindamycin, oral antibiotic, which would be very common, we were missing sebum with that. Now, if I kept those topicals on board but my oral medication became something like Deni, I can do that. There's no reason I wouldn't do that. I'm not worried about resistance because I'm not even working through that mechanism of action. Yes, I like having the long-term data. I do expect that this would be a long-term treatment for most people. I will be interested to see, and this will be way down the pike, I guess, but it would be interesting to see if we have any kind of a remittive effect with this. I don't know that. Those will be things that we learn as we go. But there is no signal from a safety standpoint, and there's certainly nothing like antibiotic resistance that would make me in a hurry to get somebody off of this. I think this looks like a very safe alternative, and taking a once-a-day pill is pretty darn easy for my patients. I can answer the second question, how are we operationalizing our phase III trial. We've selected 55 clinical sites, and we are in the process of starting those sites up, as we had announced. We're expecting to enroll the trial after first patient in approximately six months. That is based on a lot of information that we've collected, both from the CRO that we're going to be working with and some of the CROs that wanted to work with us, from our site feasibility, from feedback, from experienced dermatology thought leaders like Dr. Harper and others. It amounts to a recruitment rate of approximately 2.4 patients per site per month. We're looking forward to getting started and hopefully getting finished very soon with this trial. Great. Thank you. Thanks for the questions, Evan. Our next question comes from Cheng Li at Oppenheimer. Please go ahead, Cheng. Thank you, and hi. Thanks for taking the question. This is Cheng on the call for Jay. I guess there are questions. First, I am just wondering, any particular patient population benefit more from this longer treatment? I am wondering if you further break down the data based on the severity of the patient. I guess a follow-up question is, just wondering, any anecdotal data suggesting what happened to patients once they stopped treatment? Because I think there is half the patient didn't roll over to the OLE. So I am just wondering whether, for those on the treatment arm, their disease actually came back after stopping the treatment. Thank you. Well, for severity, this, as you could see, was studied in moderate to severe acne, which is pretty typical. The pathogenesis of acne, again, is the same whether you are mild or severe. Truly, I cannot think of any reason or group of patient that I wouldn't use this in, except for someone who is pregnant. I am not going to use a new drug in a person who is pregnant. But I would feel comfortable using this in somebody with very severe acne, but that is not really where it is studied, and that is not the place that it is made for. So we are going to be using this in clinic in the upside of mild and moderate acne and probably some of the severes that don't need isotretinoin yet, or, and this happens more than you might imagine, or that don't want isotretinoin. There are plenty of people that come in that I kind of want them to do isotretinoin, and I get the stop from them. I think severity, there's no reason to think that there's some severity out there that this drug wouldn't help, because I have a good friend, you may have worked with her at some point, Hilary Baldwin. Dr. Hilary Baldwin likes to say, "No sebum, no acne." I don't think there's any acne out there that. Yeah. Oh, sorry. Go ahead. I want you to take the part about the open label. Okay. Yes. The question, what happens if you discontinue the drug? First of all, let's back up and review what the drug does, right? Acne patients have an approximately 20% increase in sebum production over the normal population. What we're doing with this drug is not eliminating sebum. We're reducing sebum production to normal levels. That is what the FASN inhibition in this particular setting does. It's not like in oncology, where we're trying to eliminate FASN. Here, we're just trying to normalize FASN. If you stop the treatment, then the FASN production is expected to go up again. We have anecdotal data from patients, where we see that they have stopped it, and their FASN is expected to increase within about four to six weeks, and so is their acne, then eventually going to come back. What we're not seeing is a rebound, so it's not getting worse than it was before. But it's not a disease modifying drug. As soon as you discontinue the drug, the effect will slowly go away. Okay. Got it. Thank you so much. Thanks for the questions, Cheng. Our next question comes from Yanni Souroutzidis at Cantor. Please go ahead, Yanni. Hi, team. Congrats on the data here. Pretty outstanding. Just two quick ones. I guess one, obvious that the placebo treated patients effectively caught up with those that started on treatment by the 52-week mark. I guess that implies that the full effect kicked in somewhere within that 40-week period. Could you just give us a sense of where that might have occurred and just secondarily, also, just the overall compliance rate in the OLE? I might pass that to you, Andreas. Yeah. No problem. The timeline. Yeah, no worries. What we see is in the patients that are continuously treated with denifanstat, we see that they're sort of approaching this maximum treatment effect somewhere around the 24-week mark. The placebo group catches up with a 12-week delay, so they're approaching it about at 36 weeks. At that point, they are on average, as you've seen, at about an 80% reduction in inflammatory lesions. It becomes difficult to improve this even further in a large number. That is, I think, the time when you're starting to see peak efficacy, and from then you will maintain it if you stay on drug. Was there a second question, Yanni? Sorry. Just briefly on overall compliance, I did have a follow-up for Dr. Harper. Oh, yeah, the compliance. In the open-label extension trial, approximately 75% completed the trial, and the compliance rate, the number of patients that had poor compliance as defined as less than 80% compliance was around 1%. So of those who completed the trial, very good compliance. The reasons for not completing the trial. The one thing that we do know that it wasn't, was adverse events. Not a single patient discontinued the trial for adverse events. We've been looking to some of the verbatims of the data from our Chinese partners, and the majority of reasons is sort of other, i.e., this is too much time, I moved to a different city, I can't come to the clinic on a regular basis. You see that quite often in long-term trials, especially once that double-blind phase is over and they're in the long-term extension. No, that's still quite high. Maybe just a quick follow-up for Dr. Harper. Just kind of curious with the profile that we see today, how would you position this to your patients? Is it something that is more in that add-on category that gets clear skin in a pretty rapid manner, or is it something that really kind of alters the paradigm where you'd be encouraging folks to view this as kind of a chronic treatment as they go through their adolescence? I'm not certain what you mean by the question, but the way that I would envision using this is when people come in with, again, that higher end of mild acne, moderate acne, maybe even some of the severes who are new, they haven't had any treatments at all. I think this would be something you would prescribe from day one, alongside your topical agents. The topical agents being topical retinoid, topical benzoyl peroxide, things that are going to more specifically hit C. acnes, and more specifically hit that follicular hyperkeratinization. Then, in the past, when we've done orals and topicals, we were always kind of in a hurry to get that oral off. We wanted to stop it. By the way, that's the doctor who wants to stop it. Very seldom is the patient really keen to stop it. Once they see improvement, they want to stay on it. I think it would probably not be a difficult thing to look at somebody and say, "You're going to stay on both of these when you get better as your maintenance routine." Because if you're in the adolescence age group where you're prone to acne, you're going to stay in that for a while. I think this would be something that we would use early, upfront, in combination with other treatments, and keep it on board long term. Understood. Thank you so much. Thank you for the questions, Yanni. Our next question comes from Debanjana Chatterjee at Jones Trading. Please go ahead, Debanjana. Hi. Thanks for taking my questions. Congrats on the data and greetings from the AAD. The poster from Ascletis mentioned skin desquamation in a very small proportion of patients. Dr. Harper, can you please help us understand the clinical significance of these events in terms of the severity, body area affected, and if this primarily occurred in patients who already had some skin dryness before? I have a quick follow-up on phase III execution. You know what? I am going to pass that to Andreas. I do not know a lot about the desquamation with this. I have got to tell you, that would surprise me with an oral agent, even an agent that is reducing sebum. Sure. Yeah. We actually think part of it is the sort of Mandarin to English translation. This has before been described as skin exfoliation. I mean, it is just dry skin in these patients with some of the skin, like tiny bits sloughing off. So it is a form of dry skin, basically. I think so. Also, those were mild, right? So it was not a severe event in any way, shape, or form. Great. I have a quick follow-up on the phase III execution. Sure. Given that the average age in the trial would probably be lower, and now it's being conducted in the U.S., do you expect any difference in compliance rates compared to what you have seen in the China trial? That's a great question, Debanjana. Obviously, we've been wondering that as well. We've looked at the data, and we've looked at the data from the WINLEVI trials, who, as you may remember, WINLEVI included 50% of the patient population is younger than 18 years old. They reported, and everybody can see that in the very extensive FDA review of their data, they reported the number of patients that had low compliance, i.e., less than 80% in their trial, and it was 1%, which includes the 50% adolescent. In the clinical trial setting, we're not expecting this to be a significant issue. We'll do a few additional things to hopefully enable, give patients feedback on their compliance and adherence. We will put smart caps on the bottles that will measure every time the bottle is opened, and we can give real-time feedback to the sites and even the parents if they sign up for that, to make sure that everybody is fully aware of how compliance is going. Again, we're not expecting this to be a big problem based on the previous big acne studies, but we're trying to do our very best to stay ahead of it in any event. Appreciate the color. Thanks. Thanks for the questions, Debanjana. Our next question comes from Catherine Okoukoni at Citizens. Please go ahead, Catherine. Hi, this is Catherine on for Jon. I just have a quick question for Dr. Harper regarding the use of contraceptives. I know that oral contraceptives, I know that a large portion of the population is expected to be female in this trial. This was female, this trial, and expected to be in the next phase III trial. How much of a confounding variable is this? I know that it's kind of very specific to one group of patients. No, that's something that you're right to even think about that, but I don't know exactly how it reads. Usually, you can stay on the oral contraceptive if you're already on one, but it can't have been changed in the last, is it three to six months in this case? Three months. It's going to be the same in the placebo arm as well. We do know, heck, those do have an impact on acne. Four of them are FDA approved to treat acne. We just want to be sure that if you're on it, you haven't changed it recently, and that it's been in place for three months. Just a quick follow-up to that. What if within a 52-week trial, a longer trial, are you allowed to change contraceptives? I mean, it seems like something that might just happen naturally. Yeah. I do not know the specifics on that, but I would think that that would exclude you from the study. But I do not know the specifics on that. Yeah. I mean, we will have that conversation with the patients before, right? Of what they can do and what they cannot do if they sign up for this trial. Adding any active acne medication will not be possible. Changing oral contraceptives during that trial will also not be possible. We will have a transparent conversation with patients about that. Thank you so much. Thanks for the questions, Catherine. Our next question comes from Brandon Folkes at H.C. Wainwright. Please go ahead, Brandon. Hi. Thanks. Second question, and congrats on the data. Maybe for Dr. Harper. You mentioned earlier that this would be a long-term therapy. I do want to just drill down on that, right? In practice today, if you are putting a patient on Deni, would you recommend this as an indefinite therapy to the patient, just given the FASN inhibition and very clean side effect profile? Does that differ in adolescents and adults? Mm-hmm. Well, based on all of the data I have right now, I do not know why I wouldn't. I mean, again, from the safety standpoint, mechanistically, I think I would. Just bringing in the practicality from what we just talked about, young people and their compliance. Just because I recommend it like that does not mean that it is going to work like that. What could happen in clinic is that I intend for it to be long-term, and it is rather sporadic. They end up doing it for three or four weeks. They get better. They get lazy. There is no reason when they come back into clinic that we wouldn't potentially restart it. There could be some off and on. That is not the way that I would intend it. If this works while the drug is on board, then again, I think this could be a long-term treatment. Even when I talk about being potentially remittive, and I am glad that Andreas came behind me. There is no data right now to suggest that this would have a remittive effect at all. I want to be careful here. Sebum, oftentimes as we age out of acne, people remain oily. Some people even have more oily skin than people without acne, and yet the acne goes away. I still wonder, this is just me pontificating now, if the change in sebum is going to do something to the keratinocyte and the follicle and maybe change acne more long-term. I have no evidence to support that, but it is something that I think about with this drug. Great. Thank you very much. Thank you for the questions, Brandon. Our final question comes from Wayne Wu at Clear Street. Please go ahead, Wayne. Hi, everyone. This is Wayne for Kaveri Pohlman from Clear Street. Thanks for the discussion today. Dr. Harper, just to follow up on your earlier comments about where Deni could fit in your practice. Could you put a rough number on the proportion of your moderate to severe patients you would consider it as a first-line oral therapy, assuming it were approved tomorrow? What would tip your decision toward Deni versus other option for a particular patient? I have a follow-up. Thank you. I am not going to say 100% because it is never 100%, but probably 90%. I mean, again, I really have tried to shift away from oral antibiotics. I am not using them nearly as much as I was even five years ago. I would really like something like this. I also like the mechanism of action of this. I do not have anything else that will do this, especially in the guys, because not all of my guys need oral isotretinoin. I think it would be a high number. I forgot what the second part of your question was. Oh, it's just what would tip your decision toward Deni versus another option? Yeah. Again, understanding the mechanism of action would be a big one. I don't have anything else. I'm not a huge fan of clascoterone. BID application of something pretty creamy is not easy. Again, people aren't compliant, and I don't expect you get the same result QD that you do BID. This is kind of, for my guys, this is almost it. This is the option that I have. There will be some people who either they don't want to take a pill or their parents don't want to take a pill. So there would be people that would end up just being on a topical. But I think it's the mechanism of action, it's the safety, it's the efficacy. Again, I really step back and try to think why wouldn't I use this? It's hard for me to come up with a reason. Thank you. That's super helpful. Our second question is for both management and Dr. Harper. So what percentage of moderate to severe patients in the U.S. are currently seeking treatment, and what are the main barriers to uptake of existing treatment, and how could Deni address those barriers? Well, I can answer the first question. That one's pretty easy. There are about 5 million- 6 million patients currently in the U.S. that are being seen in the dermatology community alone. The dermatology community alone sees about 85% of the moderate to severe patients. So you can do the math on what the remaining universe sees in their offices. That population is on either oral antibiotics or topicals or combinations of the two, which I think you've heard pretty clearly from Dr. Harper. I'll turn it over for the remaining part of the questions. To this. I think it is safety and tolerability for some of these. Slow onset of efficacy. Cost can be an issue for some people. We have to have access issues for any of the medications that we are talking about. I cannot think of anything else, but it would be all of those. Safety, tolerability, onset of action, because it cannot be too slow. People give up. And cost. Very helpful. Thank you. Yeah. Great. Thank you for the questions, Wayne. This concludes the question and answer session for today. I will turn it back to Dave for some quick closing remarks. Thank you, Tara. Thank you, Dr. Harper. Thank you, Andreas. And I want to thank everyone who joined on the call for your continued support and confidence in our programs. We look forward to updating you very, very soon on the start of our phase III program when we dose our first patient. Have a great day.