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ALTIMMUNE INC (ALT -4.11%)
Q1 2022 Earnings Call
May 12, 2022, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, ladies and gentlemen, and welcome to the Altimmune Inc. Q1 earnings conference call. [Operator instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Rich Eisenstadt, chief financial officer of Altimmune.

Rich, you may begin.

Rich Eisenstadt -- Chief Financial Officer

Thank you, Kay, and good morning, everyone. Thank you for participating in Altimmune's first quarter 2022 earnings conference call. Members of the Altimmune team joining me on the call today are Vipin Garg, our chief executive officer; Scot Roberts, our chief scientific officer; and Scott Harris, our chief medical officer. Following the prepared remarks, we will hold a question-and-answer session.

A press release with our first quarter 2022 financial results was issued this morning and can be found on the Investor Relations section of the company's website. Before we begin, I would like to remind everyone that remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Altimmune cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, including those related to the ongoing conflict in Ukraine, COVID-19 and the impact on our business operations, clinical trials and results of operations. For a discussion of some of the risks and factors that could affect the company's future results, please see the risk factors and other cautionary statements contained in the company's filings with the SEC.

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I'd also direct you to read the forward-looking statement disclosure in our earnings press release issued this morning and now available on our website. Any statements made on this conference call speak only as of today's date, Thursday, May 12th, 2022, and the company does not undertake any obligation to update any of these forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this conference call is being recorded and will be available for audio replay on Altimmune's website. With that, I will now turn the call over to Dr.

Vipin Garg, chief executive officer of Altimmune.

Vipin Garg -- Chief Executive Officer

Thank you, Rich, and good morning, everyone. We appreciate you joining us today for a discussion of our first quarter 2022 financial results and business update. We continue to advance multiple clinical trials for our lead product candidate, pemvidutide, a GLP-1/glucagon dual receptor agonist and are excited about reporting important data from these trials in the second half of 2022. Last month, we announced the initiation of the 48-week Phase 2 Momentum trial of pemvidutide in subjects with obesity or who were overweight.

That trial is ongoing at multiple sites in the United States with Dr. Lou Aronne, professor of clinical medicine at Weill Cornell Medical College, a leading authority in obesity and obesity clinical trials, serving as the principal investigator. Dosing has commenced and a planned interim analysis to assess changes in body weight after 24 weeks of treatment is expected to read out in the fourth quarter of 2022. Enrollment in the Phase 1b nonalcoholic fatty liver disease or NAFLD trial has been completed, and data readouts for weight loss and liver fat reduction at 12 weeks of treatment are expected in the third quarter of 2022.

In addition, a double-blind, placebo-controlled 12-week extension of the NAFLD trial has been initiated with an expected data readout on weight loss at 24 weeks in the fourth quarter of 2022. We believe that the 24-week weight loss readout from the NAFLD extension trial will provide a valuable read through to the Phase 2 Momentum obesity trial. A 12-week trial to characterize effects of pemvidutide on glucose control in diabetic subjects with overweight and obesity is also ongoing. This trial will further expand on the findings from our Phase 1 trial in which decreased insulin resistance and maintenance of glucose control were observed in an obese and overweight patient population that included subject with pre-diabetes.

Given the increasing competitive obesity space, it is important to highlight the potential differentiating features of pemvidutide. First, we believe we'll be able to achieve weight loss comparable to the results of pediatric surgery, confirming the benefit of adding glucagon agonism to GLP-1 monotherapy. Based on more than 10% weight loss after only 12 weeks, we expect the level of weight loss to be greater and more rapid than other agents in development, increasing patient satisfaction with treatment. In addition, we believe that the absence of dose titration will represent a major advantage in the minds of prescribers simplifying patient management in the first months of therapy.

And finally, we believe that the robust reduction of serum lipids observed in our Phase 1 study could translate into cardiovascular benefit with long-term use, further increasing the value proposition of pemvidutide treatment. I want to emphasize that our focus continues to be on obesity as the lead indication for pemvidutide. While we believe that our ongoing NAFLD trial will deliver the best liver fat reduction data in clinical trials to date and add significant value to pemvidutide, we are not planning to initiate a 52-week biopsy-driven NASH trial at the current time. We believe this decision will create additional flexibility in the development of obesity indication without forfeiting the value of pemvidutide in the NASH indication.

And puts us in a good position to evaluate various strategic options for the continued development of pemvidutide. The findings of our preclinical studies in the Gubra mouse model were published last month. And we are excited about the clinical data that we have generated, which we plan to present at international meetings throughout this year. We are pleased to announce that pemvidutide abstracts have been accepted as oral presentations at the 5th Global NASH Congress, the 82nd Annual Meeting of American Diabetes Association and the 2022 meeting of European Association for the Study of the Liver.

We hope to announce the publication of these study results in peer-reviewed journals in the near future. Turning to HepTcell. Enrollment in our Phase 2 clinical trial in chronic hepatitis B subjects is ongoing with an expected study readout in the first half of 2023. We are excited about the progress of pemvidutide and HepTcell and the results of ongoing trials.

We expect 2022 to be an important year for Altimmune with three major readouts representing potential significant value drivers for the company. With that, I'll now turn the call over to our chief medical officer, Dr. Scott Harris to discuss our data and clinical plans. Please, Scott.

Scott Harris -- Chief Medical Officer

Thank you, Vipin, and good morning, everyone. First, let me talk about the Phase 2 Momentum trial of pemvidutide in obesity. We expect this trial will enroll approximately 320 nondiabetic subjects with either obesity or overweight with at least one obesity-related complication. Subjects will be randomized 1:1:1:1 to receive either 1.2 milligrams, 1.8 milligrams, 2.4 milligrams pemvidutide or placebo administered weekly for 48 weeks.

The primary endpoint of the Momentum trial is the relative percent change in body weighted eight weeks compared to baseline with additional readouts, including metabolic and lipid profiles, cardiovascular measures and glucose homeostasis. Dr. Lou Aronne from Weill Cornell Medical College, a leading authority in obesity and obesity clinical trials is serving as the principal investigator. An interim analysis is planned to assess changes in body weight after 24 weeks of treatment with an expected readout in the fourth quarter of 2022 and a 48-week readout in the middle of 2023.

As Vipin mentioned, we completed enrollment in our Phase 1b NAFLD clinical trial of pemvidutide, and expect a data readout in the third quarter of 2022. This trial is designed to assess the effects of pemvidutide on liver fat and body weight in subjects with obesity or overweight with NAFLD, defined as a 10% or greater liver content, liver fat content as measured by MRI-PDFF. Nondiabetic and diabetic subjects were randomized 1:1:1:1 to pemvidutide 1.2 milligrams, 1.8 milligrams, 2.4 milligrams or placebo over 12 weeks of treatment. The primary endpoint of this trial is the reduction in liver fat by MRI-PDFF.

But a key secondary end point is weight loss at the end of 12 weeks of treatment as we believe that obesity is the key driver of NAFLD and NASH. Based on the results of our Phase 1 clinical trial, we expect to achieve a robust reduction in liver fat content, and again show a significant weight loss in subjects after 12 weeks of treatment. We have also initiated a 12-week extension for subjects who complete the initial 12 weeks of treatment. This will permit subjects to receive treatment for up to 24 weeks.

And allow us to compare the weight loss achieved by pemvidutide to the weight loss achieved by semaglutide and tirzepatide at 24 weeks of treatment. We expect data readout on the 24-week weight loss endpoint in the fourth quarter of 2022. Later this year, we also expect to have the results of two additional Phase 1 studies to evaluate the effects of pemvidutide on glucose control in people with diabetes and its potential for drug-drug interactions. We are rapidly building the pemvidutide clinical development program and expect to have accrued safety data in over 200 subjects receiving one or more doses of pemvidutide in clinical trials by the fourth quarter of 2022.

I want to highlight the robust effects of pemvidutide and serum lipids that was demonstrated in our first-in-human clinical trial which could have important implications for cardiovascular risk. It's well established that NASH and NAFLD patients come most often to the cardiovascular comorbidities associated with obesity, which include myocardial infarction, stroke, and heart failure. Pemvidutide treatment for 12 weeks resulted in robust reductions of total cholesterol, LDL cholesterol, and triglycerides, elevated levels of which are associated with increased risk for cardiovascular disease. We will be presenting these findings in an oral presentation at the American Diabetes Association meeting this coming June.

We are also making continued progress in the enrollment of our Phase 2 clinical trial in patients with an active chronic hepatitis B and expect to read out the results of this trial in the first half of 2023. Recall that the virologic effects of HepTcell are being evaluated in chronically infected patients to enable the combination of HepTcell with novel direct-acting antivirals as part of combination therapy for chronic hepatitis B. I will now hand the call over to Rich Eisenstadt to give us an update on our first quarter financial results. Rich?

Rich Eisenstadt -- Chief Financial Officer

Thank you, Scott, and good morning again, everyone. For today's call, I'll be providing a brief update on Altimmune's first quarter 2022 financial and operating results. More comprehensive information will be available in our Form 10-Q to be filed with the SEC later today. I also will provide some guidance on our expenses for 2022.

Altimmune ended the first quarter of 2022 with approximately $180 million of cash and cash equivalents, compared to $190.3 million at the end of 2021. Turning to the income statement. Revenue was minimal in the first quarter of 2022 compared to $800,000 in the same period in 2021. Our change in revenue for the quarter was primarily due to discontinuation of development activities for our T-COVID and NasoShield programs and will be de minimis going forward.

Research and development expenses were $15.1 million in the first quarter of 2022, compared to $11.9 million in the same period in 2021. The expenses for the quarter ended March 31st, 2022, included $10.8 million indirect costs related to the development activities for pemvidutide and $2.5 million indirect costs related to development activities for HepTcell. As a reminder, we will owe one last development milestone of $3 million payable in common shares of the company within 60 days following dosing of the first patient in the Phase 2 trial of pemvidutide, which occurred in April subsequent to quarter end and will be reflected in the Q2 balance sheet. General and administrative expenses were $4.4 million in the first quarter of 2022, as compared to $3.8 million in the same period in 2021.

The year-over-year change was primarily attributable to increased stock compensation expense. Net loss for the three months ended March 31st, 2022, was $19.4 million or $0.44 net loss per share, compared to $14.9 million or $0.38 net loss per share for the first quarter of 2021. We currently estimate that our research and development expenses for full year 2022, including the $15.1 million reported in Q1 will be approximately $75 million. G&A expenses for the full year 2022 are anticipated to be approximately $19 million.

Approximately $8.5 million of these operating costs are for noncash expenses including stock compensation and depreciation and amortization. With the added financial flexibility afforded to the delay in initiation of a Phase 2 trial of pemvidutide and NASH, our existing cash not only fully funds us NAFLD and 48-week Momentum obesity trial data sets, but we currently estimate that our cash is sufficient to allow us to operate well into 2024. I will now turn it back over to Vipin for his closing remarks. Vipin?

Vipin Garg -- Chief Executive Officer

Thank you, Rich. Operator, that concludes our formal remarks, and we would like to open the line to take questions. Would you please instruct the audience on the Q&A procedure?

Questions & Answers:


Operator

Thank you, sir. [Operator instructions] you would Our first question will come from Seamus Fernandez with Guggenheim.

Seamus Fernandez -- Guggenheim Partners -- Analyst

Thanks, guys and congrats on the quarter. Obviously, good management and execution around the expenses. Can you help us understand a little bit, obviously, it's great to see the NASH study really more incorporated into potential strategic options going forward. But maybe you could just give us a little bit of clarity along those lines.

How far into 2024, do you think that the cash would likely take us? And I just wanted to get a sense of that payment that you mentioned, Rich. I just wanted to get a little bit of clarification on the number that you mentioned there that's going to be paid, I think, in the second quarter here. I just kind of missed the absolute number. I couldn't hear if it was 16 or 60, to be honest.

And then the second question, it was really for Scott Harris, can you just help us understand what exactly you're looking to understand from these other Phase 1 studies in the context of the diabetic patient population. And why the company is conducting those? I think those are some important questions. And then just my final question, Vipin, as you kind of think strategically about the market opportunity here, obviously, you've mentioned the competitive landscape. But in the context of the size of this market opportunity, can you just help us better understand what you think the level of strategic interest is likely to be? And when that becomes sort of a key discussion point for the company based on the data that you're bringing forward.

Thanks.

Vipin Garg -- Chief Executive Officer

Thank you, Seamus. Lots of questions there. We'll try to address them one by one. Let me just sort of set the stage in terms of our rationale behind the NASH -- delay in the NASH study, the 52-week biopsy-proven, biopsy-driven study.

As you know, we've got a number of studies going on that will be generating significant amount of data in terms of liver fat reduction. And we think that's going to be sufficient to sort of drive the value proposition for people to sort of draw the line. And we'll also be getting data from other companies, other players in NASH space during 2022. So if we put all that together, we think we'll have enough information to convince a strategic partner the value proposition that we bring to NASH, which we think will be substantial.

So given that, what we want to do is focus on obesity, generate as much data as we can and maintain financial flexibility. It's really driven by that, that we've decided to essentially postpone at this point, initiation of a Phase 2 NASH study, which, as you know, are very long. So we're not going to see anything out of that study until some time in 2024, even if we start that study right now. So it was given all of those considerations, we felt we would still be able to retain the upside value of the NASH indication in our discussions.

And I'm pretty sure that a strategic partner would want to pursue both obesity and NASH indications just like other large pharma players are doing in this -- in the incretin space. So there's no question that incretins will play a role in NASH treatment ultimately, it's just a matter of timing. So that's the rationale that we are using. With that, let me just turn it over to Rich to talk about the -- your questions about the funding and financing and how long will that last.

Rich?

Rich Eisenstadt -- Chief Financial Officer

Yes. Sure. Thanks, Vipin thanks for the question, Seamus. We didn't provide specific guidance on to how deep into 2024 we'll get it.

We believe it will be sufficient. We should have give or take approximately a year's cash when we have the data or completion of the Momentum trial. So I hope that helps, of course, a lot of changes as time goes on, depending on what the data looks like and additional studies that you may or may not need to do. But it is sufficient to gather all the data, get to the FDA and have discussions and then we believe engage in these potential strategic discussions.

Regarding the payout for Spitfire, the amount is $3 million. I'm sorry for the confusion on that. It gets paid within 60 days following the achievement of the milestone and it will be paid in shares, Seamus. There's a preset formula and the formula indicates that it will likely result in the issuance of approximately 850,000 common shares of the company.

Seamus Fernandez -- Guggenheim Partners -- Analyst

Perfect. That's super helpful. And then just the last question on the diabetes patients. And maybe just an update, if you guys are willing just to kind of provide us general color on how the obesity study -- how the Momentum study is recruiting so far and how you're feeling in terms of that tracking to providing an interim look whether it be at the full patient population or part of the patient population in the fourth quarter? Thanks.

Vipin Garg -- Chief Executive Officer

Scott, do you want to take the diabetes first?

Scott Harris -- Chief Medical Officer

Sure. Thank you, Seamus, for the question. I'll take the diabetes part first and then I'll finish with some comments about the Momentum study. So as you know, within the obesity population, 80% of that population does not have diabetes.

And you're well aware that what really controls blood sugar chronically in this population is the weight loss that was shown in the step trials. The change in hemoglobin A1c at 52 weeks is predominantly driven by the weight loss. So over the long run, we think that this drug will have excellent applications in diabetics. Also in our Phase 1 study, we saw no perturbations in glucose control measured by fasting blood sugar or hemoglobin A1c.

And in fact, as you would have expected with the weight loss that was observed, we actually had a reduction of insulin resistance that bodes quite well for the results of what we're going to see in 52 weeks, either in a nondiabetic population or a diabetic population. I think that we felt the obligation at this point to study the effects of pemvidutide acutely on aspects of glucose control that are typically studied in more intense Phase 1 studies such as continuing glucose monitoring and the like. And we really couldn't do that in our current studies without making them too complicated. So we elected to conduct a committed study in diabetics, and that's what we're trying to get out of the study right now.

I'll answer the second question about the Momentum study, and I'm happy to go back and backfill on that answer I just gave you on the obesity. So the Momentum study is going quite well. We're very enthusiastic with enrollment. We think it's going to enroll very, very quickly, like most obesity studies do, and we have 25 extremely enthusiastic investigators.

The best guidance I can give you is we'll give you an update when the enrollment in the study completes and tell you what our plans right now. Right now, we're optimistic that we'll have a very meaningful readout at the end of the year.

Seamus Fernandez -- Guggenheim Partners -- Analyst

Thanks, guys. Appreciate it.

Vipin Garg -- Chief Executive Officer

And to your question about strategic thinking and the process going forward, I mean, look, the whole obesity space is maturing. I think the latest data from dose appetite is helping. It's growing awareness. There will be a lot of interest from multiple players in this space.

That's how we see it. And what we're trying to do is really generate important data that would put us in the best position to do a robust transaction, partnering transaction around this asset. So a lot of the studies, we've said it many times. We are doing these studies because we think they would add value in our strategic partnering discussions.

I think overall, there are multiple players out there that are going to want to play in this space, and we just want to be ready for that.

Seamus Fernandez -- Guggenheim Partners -- Analyst

Excellent. Thanks so much. Appreciate it.

Operator

Thank you. Our next question will come from Yasmeen Rahimi with Piper Sandler.

Yasmeen Rahimi -- Piper Sandler -- Analyst

Good morning, team, and thank you for taking my question. I'm going to go one by one. Maybe a good place to start off would be, can you comment on the Ib NAFLD study, what you're seeing in regards to discontinuation rates? How many data safety monitoring committees have you had? And what your expectations are in terms of GI tolerability? So just anything safety related to the Ib that you have been previewed to during this time could be helpful for us. And then I have a few more.

Scott Harris -- Chief Medical Officer

Well, thanks for the question, Yasmeen. I mean, as you know, we continue to be blind in the study, and I can -- I can't give you data that we don't have. I will tell you that from the safety point of view, we're extremely pleased, as we've said before, with the safety profile and tolerability of the compound. In that study as well as the other studies that we're conducting right now.

There is no official data monitoring committee for the study, you wouldn't expect it with a Phase 1 study. However, we have a safety committee that reviews the data from the study in a blinded fashion on a regular basis. And those meetings have not identified any issues to date, consistent with what I've said before. Regarding the GI tolerability, we think it's only going to improve going forward.

Remember that with Phase 1 studies, the tolerability profile of the compound is less optimistic than it would be in Phase 2 and Phase 3. And the reason is, number one, there's less known about the compound at that time. There's more heightened -- there's more concern about anything that you see. Investigators are heavily attuned to asking patients questions repeatedly.

Subjects are admitted to the unit for much of the time, so they're under constant surveillance and then they come back weekly. That's very different from a Phase 2 environment like the Momentum study when patients will be coming back say every two to four weeks, and not being monitored constantly. And it was well shown in the tirzepatide and semaglutide programs, that when they went from Phase 1 to Phase 2, that they had a tremendous recourse in their adverse events. So we were very happy with the tolerability profile that we had with pemvidutide in our Phase 1 program.

We had no adverse event discontinuation. We think it's only going to get better going forward.

Yasmeen Rahimi -- Piper Sandler -- Analyst

I just want to clarify on the commentary you made. One, do you get notified when a discontinuation occurs in the NAFLD study or the Momentum study, and have you been notified?

Scott Harris -- Chief Medical Officer

Yes. I mean we are notified. I'm not free to speak on this on a specific basis other than to say that we're very happy with what we're seeing right now.

Yasmeen Rahimi -- Piper Sandler -- Analyst

Got it. And then when you made the remarks that safety -- the GI tolerability could be looking more favorable in a Phase 2 study. Are you saying that the Phase 1b NAFLD study, GI profile could be, given the protocol is more similar to the Ib obese data set that we have seen? Or the execution of the Ib more like the Phase 2 Momentum? Could you clarify, please?

Scott Harris -- Chief Medical Officer

Yes. I think that clearly, as you go from Phase 1 to Phase 3, the tolerability profile of the compound improves. So one would expect, based on that, that the tolerability in the Phase 2 might even be better than a Ib. But once you get the patients out of the Phase 1 unit and you know more about the compound and you have more confidence in the investigators with what you've seen, it gets better.

So we expect that the tolerability in the Phase 1b study will be better than it was in the first-in-human study and that it will progressively get better going forward.

Yasmeen Rahimi -- Piper Sandler -- Analyst

And then last question. Any more commentary on like what exactly we should be expecting out of the interim, like what goes into your decision to decide whether you're going to pick 20 patients per arm or 30 patients per arm. Now it's been, what, about one and a half months, two months into the study. Like can you help us narrow down what exactly -- how big the interim analysis will include?

Scott Harris -- Chief Medical Officer

Yes. Happy to answer that for you, Yasmeen. As you know, we're right now in the beginning of May, we still have a long way to go with a very rapid recruitment. We're simply going to have to look at the data at the time that we have to do the cutoff.

And make that decision about whether it's a complete set or if it's an incomplete set, how many patients are in it. Based on our current projections, we think that the amount of subjects included in the interim analysis, if not the complete set, will be meaningful enough to be convincing of the data that's being seen. And that's the best guidance I can give you until we see how enrollment is going.

Yasmeen Rahimi -- Piper Sandler -- Analyst

And when do you make that decision? When is that time period? Is this in July then? Or at what point would you --

Scott Harris -- Chief Medical Officer

Yes. Probably in that frame, the middle of the year.

Yasmeen Rahimi -- Piper Sandler -- Analyst

OK. Great. Thank you.

Scott Harris -- Chief Medical Officer

You're welcome.

Operator

Thank you. Our next question will come from Liisa Bayko with Evercore ISI.

Liisa Bayko -- Evercore ISI -- Analyst

Hi there. How are you?

Scott Harris -- Chief Medical Officer

Good morning, Liisa.

Liisa Bayko -- Evercore ISI -- Analyst

Good morning. I wanted to ask quickly, for the study you're doing that does not include diabetics, the obesity study. Are you just -- are you now at a point where you can include diabetics now? I know you have an earlier study. I was just curious why not to take it to all comers in a way.

Scott Harris -- Chief Medical Officer

Thanks for the question, Liisa. Well, typically, in obesity studies, Liisa, if you look at the Step program, the Surpass program, the Surmount program, in these, Phase 2 obesity studies in Phase 3 diabetics and nondiabetics are not included. And I believe that the agency would want it that way as well. So consequently, you have to choose one or the other.

And we think that the more meaningful readout is going to be in the nondiabetics. Obviously, at some point, we do in obesity, chronic study. But that Phase 2 study right now is in nondiabetics. And we think that taking the lead, given the precedent with Step-1 on and also Surmount-1, which are nondiabetics, it just makes sense that we match that by doing non-diabetics in Momentum.

Vipin Garg -- Chief Executive Officer

Yes. The recent tirzepatide data was all non-diabetics. So that's pretty standard in the obesity space to not co-mingle them in large studies.

Liisa Bayko -- Evercore ISI -- Analyst

Do you see the tirzepatide data is kind of your new benchmark in a way?

Vipin Garg -- Chief Executive Officer

Yes. So we've been obviously looking at the whole landscape in obesity. And I think, first of all, let me say that it's really validating that the dual-agonism approach is becoming more validated now. We -- clearly, we can see benefit over just pure GLP-1 approach.

So sort of the first benchmark was 15% to 20% of that 15% range, we just have crossed the 20% mark. So tirzepatide, as you know, has about 20% to 22% weight loss. And that's great because I think the interest in multi-agonism is going to grow with this. So we now know what GLP-1 and GIP can do.

The question is what can glucagon combined with GLP-1 do, obviously, we have some data at this point. And just to put things in perspective, tirzepatide showed about 22% -- 20% to 22% after 72 weeks. We have shown 10% weight loss after just 12 weeks, one-sixth the time of tirzepatide data. So we feel very comfortable that we will be able to at least meet, perhaps surpass that number as we go toward 48 weeks.

So we are not only -- we expect to be greater than tirzepatide but also much faster in terms of getting there in our 48-week study, we could already be approaching those numbers. So we feel very good about our prospects based on our Phase 1 data. Scott do you want to add something?

Liisa Bayko -- Evercore ISI -- Analyst

OK. And --

Scott Harris -- Chief Medical Officer

Yes, Liisa. I'll add to Vipin comments that we're extremely excited by the prospect of delivering these results without dose titration. We think this is a very, very important commercial advantage, both for patient satisfaction, patients who want to lose weight faster while they're paying for the drug in the first five months of therapy with tirzepatide and dose titrating. And also the ease that it gives physicians for prescribing who really do not want to be involved in managing complex dose titration.

As well, one other thing I would point out is that our lipid profile appears to be superior to that of both tirzepatide and semaglutide. So you get the weight loss, it's certainly very important. And it's very pleasing to people and doctors. But what you really want to do is decrease the comorbidities, and you achieve that by -- in many ways by reducing the lipids.

So the meaningful aspects of weight loss have to be transited into lipids to reduce the cardiovascular risk, and we think we have a superior profile based on the inclusion of glucagon over the monotherapy or the dual therapy that includes GIP, but not glucagon.

Liisa Bayko -- Evercore ISI -- Analyst

OK. You seem to have pretty -- I mean, so far, it looks like you have a pretty rapid weight loss at the beginning. I'm assuming this is not linear, right? So it will start to probably level off. And How do you think about the shape of the curve? And how predictive do you think this early effect is for more of the long-term weight loss?

Scot Roberts -- Chief Scientific Officer

Hey, Liisa. This is Scot Roberts. When we look at the totality of the data out there and this includes the STEP studies and the SURPASS studies. We see a relationship between the initial slope of the weight loss and where the final weight loss ends up.

And so we're encouraged because of that because right now, we have the greatest rate of weight loss, certainly through 12 weeks. Will that slope eventually change over a year? I think that, that's likely. But if you look at the data, there's a relationship there, at least we believe strongly, that the bottom is really set by the initial rate.

Liisa Bayko -- Evercore ISI -- Analyst

Interesting. it probably helps and encourages people to stay on drug and everything, right?

Scot Roberts -- Chief Scientific Officer

That's right. They're saying well that kind of goes to those titration. In fact, that they're getting the full dose right out of the gate. And so it happens rapidly, they feel good about that.

And there seems to be this relationship where the natives are set by the initial slope.

Liisa Bayko -- Evercore ISI -- Analyst

OK. Interesting. And then just finally, can you kind of maybe qualify how much you're spending on the HepTcell program? And like is there any sort of interim before the readout next year where you could kind of make a go, no go, if you want to continue kind of spending on that program just because the majority of the value here from an investor perspective in an obesity program. And HepT has just been such a tough area.

And unclear commercial opportunity, and it's just a difficult space. It's been difficult for people. I'm just wondering kind of if you can make some kind of early read and if it's even worthwhile depending on how much you're spending on it.

Vipin Garg -- Chief Executive Officer

Yes. That's a good question, Liisa, and we track that all the time. So we think toward the end of the year, we'll be able to determine -- I think main driver is going to be the rate of enrollment. It's very difficult trial to enroll, particularly in the COVID setting because these are international studies, and COVID keeps flaring up in parts of the world, so things shut down.

So we hear you -- and we, at this point, as you can do the math, most significant spend or most of the majority of the spend is on pemvidutide here. So we think there is value to finishing that study because without that study, you really cannot make the argument about combining HepTcell with another antiviral. So we need that data. But we'll evaluate that at the end of the year.

And if we need additional flexibility, clearly, that's a lever that we can pull at that point.

Liisa Bayko -- Evercore ISI -- Analyst

OK. Thank you, guys.

Operator

Thank you. Our next question will come from Mayank Mamtani with B. Riley Securities.

Mayank Mamtani -- B. Riley Financial -- Analyst

Good morning, team. Thanks for taking a question. So for conference data presentation this quarter, could you talk to what we should focus on in terms of understanding the differentiating attributes of pemvi? But also maybe specifically at ADA, what might be the data sets that weren't maybe part of Lilly's top line press release, just things that you're looking out for at ADA? And then I have a couple of follow-ups.

Vipin Garg -- Chief Executive Officer

Scot?

Scot Roberts -- Chief Scientific Officer

Yes. So Mayank, thanks for the question. We'd highlight the differentiating features are: number one, the potential to achieve even higher levels of weight loss with pemvidutide than the other compounds that have been studied both so far. As Scott mentioned in his reply earlier the rate of weight loss initially lends us to believe that the final weight loss that we will achieve will be higher.

We're very optimistic about that. Second, we think the absence of dose titration is extremely important because we think that, that's right there where the pem hits the prescription pad. And physicians are going to prefer this much more to regimens that they have to follow over five months with a physician extender or some other kind of help. And in the primary care setting when the primary care doctor has eight minutes in front of the patient, to manage this is really not feasible and it's only going to get worse.

And finally, we think we differentiate strongly on lipids because the effects of GIP and GLP-1 are mediated indirectly through weight loss. And the lipids are mainly a hepatic event. And as you know, we have tremendous reductions in liver fat, but that also represents the mechanism for the serum lipids, and that's why the serum lipids decrease so much. And that's the direct effects of glucagon on the liver and the lipids, which is well described in the literature.

So we think that for lipid reduction, which is what -- which -- what physicians are going to focus on, they're going to see pemvidutide is having superior attributes. So we're seeing effects on lipids that are similar to statins and fibrates in terms of reduction in total cholesterol, LDL cholesterol, and triglycerides. With regards to ADA, obviously, there's going to be other compounds that are being presented at that time. I am expecting to see some data from Lilly and their dual and triple agonist.

We'll have to wait and see if and what they present and that will be of extreme interest as well to us. But we'll be on the podium. We'll be presenting the results of our Phase 1 trial. Sam Klein, who is an extremely well-known name in obesity research from Washington will be presenting that, and we're really looking for a great session.

Mayank Mamtani -- B. Riley Financial -- Analyst

Great. And then now that you have some cost savings from the 52-week NASH study and you talk about this broad cardiometabolic benefit. I was just curious, maybe it's still early days, but we are hearing incretin therapies get into CV outcome trials. So is that sort of part of your planned initial discussions? And is that in any way big then as you think about the Phase 3 trial design 2023, 2024 onwards?

Scott Harris -- Chief Medical Officer

Well, thank you for the question, Mayank. As you know, the CV outcome trials or trials that you do predominantly after approval and maybe even in this space now exclusively after approval. So although our eyes are on it, it's something that's really not on the drawing board right now. At this point in time, we're looking at the surrogate markers, which should be very predictive of the outcomes, and that would be the lipids.

I mean that's your best marker of cardiovascular risk that we have. So at this stage of development and the absence of an outcome straw, which is some time away, we'd be focusing on lipids, and it looks really good.

Vipin Garg -- Chief Executive Officer

Yes. The other thing I would just add, Mayank, is that once we have the Phase 2 data, our focus would then shift to immediately having an end of Phase 2 meeting with the FDA. So that would be another important milestone. That's really going to be our first substantiative discussion with the FDA on the Phase 3 plan for pemvidutide for obesity.

Mayank Mamtani -- B. Riley Financial -- Analyst

Understood. And then just my practical question on Momentum. So now you're at 25 sites. Any chance you're able to comment how these sites compare to other encryption studies? In terms of patient enrollment per month, how it ramps up as things progress from screening to dosing? I mean, do you see any issues of competitive enrollment? Or if running placebo-controlled trials is an issue in the future? And if like not having titration is critical element of enrollment, not just real-world prescription later on.

Scott Harris -- Chief Medical Officer

Thanks, Mayank. There are several parts of that question. Let me make -- let me try to hit on them and if I don't backfill fully, please ask your question again. Regarding the sites that we have in the trial, each of those sites are accomplished sites in obesity.

Each have a track record not only on enrollment and rapid enrollment, but also retention, which is very important because we're focusing on that. There is a tremendous, and I want to emphasize this, tremendous amount of investigator enthusiasm. Investigators want to be in this space and boy, patients really want to be in these studies. There's always a challenge in these studies of keeping people in the studies, particularly the placebos.

So the enthusiasm in the investigator and the enthusiasm that's given to the patient to stay in the trial with lots of attention, help with their lifestyle management of the like is extremely important. And the ability to keep the placebos in the trial are important as well. None of these sites have competitive studies. And we don't think that the titration or the absence of it is any issue.

If anything, it's a plus because patients are looking forward to more rapid weight loss when they come into the program. And that's why they're coming in is the potential for the more rapid weight loss and the greater weight loss.

Mayank Mamtani -- B. Riley Financial -- Analyst

Thanks for taking our questions.

Scott Harris -- Chief Medical Officer

Sure.

Operator

Thank you. Our next question will come from Jon Wolleben with JMP Securities.

Jon Wolleben -- JMP Securities -- Analyst

Hey. Thanks for taking the question and congrats on the progress. I guess I had a high-level question on decision to focus on obesity, which we appreciate. But also understanding the opportunity in NAFLD, I think, means more in your hands than someone else's.

And how do you have these discussions with strategics if you are successful in obesity, won't that part in the put eat into a NAFLD opportunity. Just wondering how someone else would think of how pemvi could be used in NASH if you're out there in obesity as well.

Vipin Garg -- Chief Executive Officer

Yes. No, that's a good question, Jonathan. Let me just say this that we've always said that the path to treating NASH is through obesity. So if you look at other players that are working in GLP-1 space or GLP-1 -- GIP space as well, they're all following both obesity and NASH.

We think the data that we have generated so far on NAFLD speaks for itself and the data that we will generate will be sufficient to connect the dots between obesity and NASH. So just pursuing obesity doesn't exclude you from pursuing NASH. So whoever we partner with, ultimately, we think they would value NASH in addition to the obesity indication. And really, that would be the ideal way for us to proceed with both those indications in parallel.

By the way, we will be ready to execute a Phase 3 -- a Phase 2 NASH study as soon as possible. So we're making all the preparations. We're not sort of putting the pen down. We're just not going to go to undertake major expense and start the study, but we'll be ready to pull the trigger on that, which we think has value.

So we are preparing for all that needs to be done in order to start that study as quickly as possible.

Jon Wolleben -- JMP Securities -- Analyst

Got it. And I guess to that end, Rich, I kind of missed in the prepared remarks, the 2022 guidance. I was hoping you could run through that one more time.

Rich Eisenstadt -- Chief Financial Officer

Sure. The – I just really gave the two operating cost guidance, Jonathan. So R&D expenses for the year are projected to be about $75 million, for the full year, so that's inclusive of the $15 million we spent in Q1. And then G&A is around $19 million in expense.

And of all that expense, about $8.5 million of that is noncash.

Jon Wolleben -- JMP Securities -- Analyst

Very helpful. Thanks again.

Operator

Thank you. Our next question will come from Patrick Trucchio with H.C. Wainwright.

Unknown speaker

Good morning, team. This is Jason on for Patrick. And so I have a couple of questions on the HepTcell program. So the first one is, what do you view as the ideal antivirals combined with HepTcell? And what is the current status of potential collaboration on HepTcell? And then I have two follow-up questions after that.

Vipin Garg -- Chief Executive Officer

Do you want to take that, Scott?

Scott Harris -- Chief Medical Officer

Yes. Patrick. I think that from a combination standpoint, certainly, agents that knockdown surface antigen are the most likely candidates. I think that we look toward the RNAi type of inhibitors.

Those are the natural selection. There are others that are out there, whether the other nucleic acid approaches. The capsids may have some use. But I think we're really focused on significant knockdown of surface antigen, creating a window, a better opportunity than for HepTcell to go in and activate those T cells.

Unknown speaker

OK. Great. So just kind of -- so to kind of look forward to the data readout for the first half, are we so basically anticipating for clearance of surface antigen initial data set?

Vipin Garg -- Chief Executive Officer

Yes. And I think in terms of your question about partnering status, that kind of goes hand in hand. We've got initial discussion with folks pending the data. So it's really a question of who do we combine with and it's for them as well as for us, which is the best combination, and that would only be sort of determined after we have the data.

Unknown speaker

OK. Great. That's really helpful to know. And then kind of last question on HepTcell.

Will we have a new functional cure rate in the initial data? Or will we wait for another six months to fully assess? And what rate of functional cure would you anticipate in this trial?

Vipin Garg -- Chief Executive Officer

Scot?

Scot Roberts -- Chief Scientific Officer

Yes. The trial is really not set up to look at functional cure. This is meant to look at neurological endpoint. We think that, that's the data we need to take the next important step in the program.

So it's really not focused on functional cure. Certainly, we'll be looking for that, would not go beyond that. Again, the study is focused on the virological endpoints validating the approach and setting us up then for a combination study that I think everybody who's in this area understands is really going to be the successful path forward.

Unknown speaker

Great. Thanks so much.

Operator

It appears we have no further questions at this time. I would now like to turn the program back over to our presenters for any additional or closing remarks.

Vipin Garg -- Chief Executive Officer

Yes. Thank you, everyone, for participating today. We appreciate this opportunity to share our results and outlook with you and thank you for your continued interest. Have a nice day.

Operator

[Operator signoff]

Duration: 55 minutes

Call participants:

Rich Eisenstadt -- Chief Financial Officer

Vipin Garg -- Chief Executive Officer

Scott Harris -- Chief Medical Officer

Seamus Fernandez -- Guggenheim Partners -- Analyst

Yasmeen Rahimi -- Piper Sandler -- Analyst

Liisa Bayko -- Evercore ISI -- Analyst

Scot Roberts -- Chief Scientific Officer

Mayank Mamtani -- B. Riley Financial -- Analyst

Jon Wolleben -- JMP Securities -- Analyst

Unknown speaker

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