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SG: From my perspective, just if you want to look at it from a high lob of the company, we're targeting two areas that are about a $100 billion of total available market. We've done a lot of work in getting some really nice patent positions for the company both in the kidney disease area as well as in the inflammatory area related to areas such as Alzheimer's disease, obesity, and metabolic disease. Those are some of the things we'll talk about today.

SG: We've done this through a combination. As I mentioned earlier, this is my third company. We funded this company initially through high net-worth investors that I had taken our companies public with, and we were able to augment that with funding from the NIH. As a result of that, we've been able to use capital expeditiously to bring it to the stage of the products today. From my perspective, it's a great area of unmet medical needs, and it's an area of high investor interest as well; both the kidney, obesity, and metabolic space are really sought-after areas. From that perspective at a high lob, we'll drill down a bit into the program here, but Brad, any questions at this point?

BS: No, I don't think so. I think the connection with the University of Miami is always interesting. I always like to see when academic institutions and corporations can come together and actually do some good for the community. That's a good point to make. Obviously, obesity is a big subject right now. We can't go 10 minutes of watching TV without seeing an ad for it, so I'd be interested to hear more about what kind of treatments specifically you guys are working on.

SG: Sure. From my perspective, we spent a lot of time trying to understand where to enter the markets. Here's just a kind of portfolio view of the areas in which we're doing research. In the top blue areas, the area of the inflammasome or what you'll see me refer to as the IC-100 program or the inflammation program. Our focus has been on this obesity metabolic side, which I'll drill down here in a second. That's just nearing completion of our preclinical, getting ready to go into the clinical stage of development.

SG: Then the bottom program is a really interesting program. We're now ready in this program to do the first patient's first dose in the kidney program in phase two. You'll hear me talk about mostly today, the top program, just based on the amount of time that we have. But the second program that is moving into phase two is really exciting and we expect some readouts of that program mid-year 2025 in our first phase two. From that perspective, I was just very much evolved in obesity and metabolic diseases since my time at Amgen and Roche over the years.

SG: One of the things you're seeing here is a transition that takes place in every market that develops. The GLP-1s, you joked about it, Brad, you can't go on a TV ad or anywhere and not see happy people losing weight. I think that's an important thing to understand. That's just the beginning of the issues that people are dealing with.

SG: One of the things that obesity week was, just finished up last week. One of the key themes of that conference, which has grown by about 5,000 people, was ‘What's transitioning here?’ I heard a really interesting position here was weight loss is only a piece of obesity and its disease-related comorbidities. That's really where the markets are headed. Then, from the investor perspective, the question always is, ‘What's next?’ And ‘Where's everybody headed?’

SG: What you're seeing is, and you're seeing the analyst community pick this up as well, is we're transitioning to combination therapy. That's really an important piece to understand why. The reason is a picture's worth a 1000 words here. You've got 50% of the worldwide population that is over BMI of 30 and that BMI over 30 is driving a lot of comorbidities. It's driving things like kidney disease, atherosclerosis, Alzheimer's, Parkinson's, CV disease, and type 2 diabetes.

SG: When I talk about comorbidities or combination therapy, this is the trend that I'm talking about. If you look at big companies like Roche Novo and Lilly and the companies in this GLP-1 space, they're now transitioning their strategies to add-on or combination therapies to address these comorbidities.

SG: The first phase of this has been around the transition into muscle-sparing investments. You see things like BioAge and some companies that went public, and that's really trying to combine a muscle-sparing product with a GLP-1. The thought process there is that you can reduce weight without impacting a segment of the population that gets muscle loss. You clearly don't want muscle loss to become a problem from a disease perspective.

SG: The next wave in these comorbidities is adding products into the GLP stage of weight loss to treat obesity complications. That's where the market is headed, and it's actually the areas in which we're studied. When you look at this phenomenon, it's been in the medical community for over 40 years. ‘How do I treat type two diabetes metabolic diseases like CV and kidney diseases?’, which are all impacted by being overweight. That's where the markets are headed, looking for new therapies to do that.

SG: Take my word for it. I'm partial here to what we're doing, but if you back off and say, well, what's going on in the sector? Here's what's going on. The most recent deals, whether they're IPOs or whether they're companies, are all about adding something to this endocrine or GLP-1 combination. You're seeing companies such as Lilly and Novo and others like Roche acquiring products or co-developing products. You're seeing companies like BioAge, one of the biggest IPOs of this fall, go out with a muscle-sparing approach that has happened to be partnered with Lilly.

SG: You're seeing this from the investor and from the M&A perspective. The reason is that pharma can develop products now for the next 20 years on the backbone of these combination therapies. One of the areas that investors may not be as familiar with is in the area of inflammasomes. These are products that we're working on, and other companies are working on, that go after the inflammation component related to obesity. What people may not realize, unless you're following the diet issues around inflammation, is that inflammation from cytokines, IL-1β, and IL-18 are causing a lot of these comorbidities driven by obesity.

SG: The research area here is really exploding. It's an area of high research and partnering. Just recently, Sanofi partnered with a group of companies, one is Vintex, for a combination therapy with their product. Roche is announcing an investor date for their combination approach to their inflammasome inhibitor. Then, Novo, about two years ago, the biggest GLP-1-selling company, had a product in the inflammasome space as well. The reason they want to do this is to go after those comorbidities, things like CV disease and metabolic syndromes, those things that I talked about earlier.

SG: This is kind of what was heard at obesity week. This is the trends and directions, and this is what exactly is going on with the industry on the question of what's next. Why is that? If you look here, this is a complicated slide, and I'll highlight what's important here. We have an inflammasome inhibitor called IC-100, which impacts multiple inflammasomes, and a structure called the ASC spec.

SG: Now, why that is important is when you have obesity, you have adipose tissue, and that adipose tissue generates inflammasome reactions within the body. What that means is that it's stimulating inflammation. What happens when you stimulate inflammation in the body is that it’s being driven by diet and some of these comorbidities. But in essence, this cascade of inflammation drives hypothalamic inflammation as well. The response of the human body to that inflammation is to guess what? Satisfy it. You eat more fatty foods. You eat more processed foods.

SG: This weight gain then leads to this inflammasome release. When these inflammasome release, this is where you get systemic problems in the body with obesity, driving type two diabetes, cardiovascular disease, and on. The trend here is to then develop these inflammasome inhibitors to attack this inflammation cascade. By doing that and adding it to a GLP-1 such as Wegovy or other products in the GLP space, you're able to treat the patient holistically. Not only reducing weight but also treating the disease of obesity.

SG: That's just a quick view of what's going on. It's really important to understand this. For the investment community, I always get the question, as you would expect, well, what's next? What are the trends and directions? We're right in the middle of this, and that's why we're so excited. We released earnings this morning, and the results outline the next steps. We're really excited about where we're headed over the next 6 to 12 months.

BS: Yeah, it is very exciting. I saw the earnings release, so we may touch on that briefly. I want to back up and start where you ended and talk more about the obesity add-on. As you mentioned, there are a lot of companies going after this space and a lot of different venues, ways, and methods. What makes your company unique in what they're doing, and are there specific comorbidities that you're targeting, or are there just a broad range at this point, and you'll target them later as you test more?

SG: Great question. We did something unusual. This summer, we spent about three months talking to some of the leading people in the industry on the academic and treatment side. We formed a SAB and really went after this question you were discussing. What do you think the gaps are? What do you need in treatment? What are the priorities here? As you listened to their feedback, it was that we need to inhibit this inflammation that's causing type two diabetes, cardiovascular disease, and kidney disease.

SG: These are things that we are dealing with because we can get the patient to lose weight, but the problem is that when they do that, they're still not necessarily healthy. They still have obesity as a disease. What we're studying in our work in preclinical is the intersection between these metabolic markers in cardiovascular disease, type 2 diabetes, and kidney disease. Those three areas are the areas of our initial focus. But if you go back to our pipeline slide, we're also looking at areas such as Parkinson's. We're working with Michael J. Fox and Parkinson’s disease and doing some really interesting work on areas called inflammation. This is aging Alzheimer's cognitive impairment and CNS diseases associated with obesity. Our focus is pretty broad, but the next six months are really on that metabolic intersection that we just talked about.

BS: Yeah. Excellent. None of us on this side of the camera anyway, are PhDs, and I don't think a lot of us are listening are doctoral candidates, but is there a high-level explanation you can give of how you think this works? What's the science behind the 100 products? How does it actually work to reduce inflammation?

SG: As I always say, I'll try to do the English version versus the PhD version.

SG: The English version is when you have an insult to your body from a virus or bacteria or, in this case, food, which is kind of a concept that's really interesting to think about. When this happens, the body stimulates a structure called an inflammasome. Think of that as a way to stimulate inflammation. If left unblocked, these inflammasomes drive these comorbidity diseases: CV disease, type 2 diabetes, weight gain, and kidney disease.

SG: Our product has been developed over the last 14 years to target that and block that inflammasome activation. By doing that in English, what you're doing is blocking this inflammation in both the acute phase and then the chronic phase. By doing that, you can slow down the progression of the diseases we believe, reduce the inflammation load, and treat this. A good analogy is when you look on TV around drugs like TNF inhibitors, these are things like Enbrel and Humira. These are used in RA. These are just some of the largest-selling drugs in the world that are in inflammation inhibition at work. That's why inflammation inhibition is the next generation in many ways.

BS: Excellent. I've actually read some of this, and I want you to go into it because it is very interesting. I want you to tell investors that you have done preclinical tests on this, which gives you hope that it will work. What are some of the preclinical results that you've seen from that testing?

SG: We worked with the Lois Pope Life Center down at the University of Miami. All of our research was done with the founders of this technology. This is what they've done for 20 years. They're well-published. They're well-respected KOLs in this area. We started out by looking at inflammation in CNS diseases. We got some really good results in MS and early-stage Alzheimer's and things like that.

SG: As we did the research, we started to realize this intersection between inflammation in the CNS system or in your brain and inflammatory response and obesity. It is really fascinating to take that leap and understand it. As we were doing that, other companies were doing the same research, too. It came to the conclusion that this whole inflammation area related to obesity is really where our focus is. A lot of companies have reported their data showing that, in the inflammasome area in particular, this intersection of inflammation driven by inflammasome and obesity is a real thing. Peer-reviewed publications are out there. A lot of talk about it. These are the partnering activities that you've talked about.

SG: The key to that is doing these things called DIO models. These are animal models that are designed to mimic the human body. That's really our next stage of research. We announced it this morning in our earnings and progress. We are initiating our DIO models in both the use of our drug in monotherapy and in combination therapy with GLPs. We think we're going to have a better mousetrap here because we're inhibiting multiple inflammasomes that are involved in these diseases, not just one, which is what the competitors are doing.

SG: By doing that, we inhibit the acute stage of this. The data is pretty robust here. But we're also looking at this progression of the disease over time or, in other words, the ongoing inflammation that takes place in these diseases. We're one of the first ones to look at inhibiting that through inhibiting a broader range of inflammasomes and a structure called the ASC spec. We'll be the only company doing that. We'll be doing it with a biologic. Over the next three to six months, we'll report data around those results and those DIO models, which would be a game changer for the company.

BS: Yeah, definitely. These DIO models are very highly respected. Let's just veer off just a little bit, and do you have your own manufacturing facilities that manufactures the drug for you for these tests? You usually need small samples at this stage. Briefly explain the process to get the amount of therapy needed to do these tests.

SG: Sure. One of the great things is that we do all of our research at the University of Miami Labs. We have all the innovators and everybody working together with our very experienced team, and our KOLs and everybody are all involved in what I'll call the research side of this. Then we're fortunate enough that my team has been doing this for 30 years in the industry.

SG: We do all of our manufacturing work with the industry's key manufacturers. We're working with KBI out of Raleigh-Durham ourselves. We do all of our animal models either with the university or with a group called Charles River, which is an industry leader. Then, we do anything we need to do with filling or distribution with the core infrastructure. We're a pretty nimble company as a result of that. We do not have a big footprint, but we have the skills to work with the industry's backlog to make things get done quickly.

BS: Yeah, definitely, that reduces the capital needs that your company would have to be able to build out something like that. On that, very quickly, you keep mentioning the University of Miami, which I think is great. Is there a deal in place if this gets to where we hope it will and believe it will? Percentage of revenues, flat fee? There's usually some combination of those between the university and the company. Is a deal in place with the University of Miami about that?

SG: Yes. One of the things that I like to do is make sure that the academic community gets rewards from the research over the years. That's all the companies I've formed. That's really where a lot of your research is really done there. In the federal government, pharmaceutical companies take and develop them is what happens nowadays. We also have nice royalty-sharing agreements with the university in multiple ways so that the university can get rewards for the progression. We do sponsored research with them, which keeps their labs funded and the innovation going down to the university.

BS: Excellent. Yeah, I think that's huge. I could talk to you for an hour. Quickly, though, this is the one that's actually furthest along than the testing phase; I'm just going to call them by their numbers; with the 200 and the kidney research you've done, what conditions in the kidney are you targeting? Is it inflammation-related? Then what stage is that in the testing, and how quickly are we getting further results from that?

SG: Yeah. I was at Amgen for years, and one of my passions between Amgen and Roche was kidney disease. There hasn't been any innovation in kidney disease treatment in 25 to 30 years. The problem is, it's a pandemic. If you want to talk about pandemics, 20% of the Medicare budget in the United States is spent on the treatment of kidney disease. Unfortunately, you get kidney disease, you progress, and you end up in a transplant, and that's really it. You go to Fresenius and dialysis centers to keep you functioning, but in the end, you end up in a transplant.

SG: One of the things I loved about the work at the University of Miami was that we've been working with them on this product called VAR-200, which is really going to focus on diabetic kidney disease. If you see the symbiosis between inflammation, obesity, and kidney disease, this is our intersection. What we're looking to do is go into phase two. We're ready to do that. Our first human trials are ready to go. We've got the sites lined up. We're ready to dose the first patients in the first quarter of 2025.

SG: On the progress of that trial, we'll have some readouts by the second quarter of 2025. We're really excited by that program because it does something that has, at least in animals, that we haven't been able to replicate in the human body ever, which is slow the progression, remove the cholesterol and lipids from the cells which are causing the death of a structure called podocytes. If that podocyte dies, this is where you get nephrotic syndrome, and that's where the progression of this disease moves forward and moves forward. You end up on dialysis, and you end up in a transplant. We're really excited to get our first clinical view of this in the patients very early in 2025.

BS: Excellent. I want to leave time for client questions, and this is actually my next question, and a couple of investors have asked it. Investors always want to know, and I told you this already, but can you discuss it? Obviously, there are capital needs in this kind of company, and investors understand that. Testing is expensive. Can you explain your capital plans for the foreseeable future and how you see them developing?

SG: Sure. Having done this for a few years, I've raised over 500 million in capital. I've done about 12 billion worth of M&A and licensing. I'm chairman of a couple of companies on the NASDAQ. One of the things I always do is think about when you bring capital in and when you do it at the appropriate time. In our earnings release this morning, we mentioned that we had raised about $4 million of capital, sufficient to get us through the first quarter.

SG: As part of that, I'm always talking to investment communities about bringing the capital in and the right price to avoid dilution for the investor. We'll be looking to raise capital. Any biotech CEO tells you that it is not telling you the truth, but that's what we do. We want to do it in the right way to get the data and get the results for the investors. From our perspective, we're always looking to bring the right capital in at the right time to get the right value milestones done.

BS: Related to that, another client question is, are you looking at any merger acquisition or partner working with other companies or being acquired by other companies? Is there any thought of that, or is it focusing on going at it alone and getting these commercialized?

SG: Yeah, one of the things in my background, as I mentioned, is that I've done about 12 billion with M&A and licensing. One of the things you always want to do is be in contact with your potential partners. That's been my background for years. I was a former chairman of Ambrx. Ambrx was a 41-cent company; we sold it in March to J&J for $2 billion in the ADC oncology space. Why? We were always in contact with the bigger companies, seeing what they were looking to do and understanding where we should develop to get the data they might need.

SG: You are always looking to do it if you're thoughtful. I'm happy that we're currently in contact with those companies. We clearly see what they want in terms of direction, and it is clearly a strategic option for the company, but I want to do that at the right time. You have to do it when it's the right time for the investor and those who have invested in getting to the right inflection point. Something that clearly is there. As I mentioned, over $5 billion in M&A and inflammasome space over the last 24 months.

BS: Yeah, excellent. You always want to be in contact with that. I have about 20 more questions for you, so I encourage people to look into this company and contact the company. There's a way to do that, as they've mentioned because it is a very interesting company. That is at what I like to call an inflection point because it looks like there will be results in '25. You get in early on these things. I want to thank everybody for listening and, again, for contacting the company with questions. For now, we're out of time, unfortunately. I want to thank everyone, Stephen, for your time. It was really enlightening, and everybody had a good day.

SG: Thanks to everyone. Take care.

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