Sagimet Biosciences(SGMT) - 2025 Q3 - Quarterly Report

Clinical Trials and Drug Development - Denifanstat met all primary and multiple secondary endpoints in the Phase 2b FASCINATE-2 clinical trial for MASH, showing a 49% improvement in fibrosis by ≥ 1 stage compared to 13% for placebo (p=0.0032) [83] - The Phase 3 trial of denifanstat in acne showed a treatment success rate of 33.2% compared to 14.6% for placebo (p<0.0001) [91] - Denifanstat demonstrated a statistically significant difference in progression to cirrhosis (F4) with 5% in the denifanstat group versus 11% in placebo (p=0.0386) [85] - The Phase 1 clinical trial of the combination of denifanstat and resmetirom is expected to provide topline data in the first half of 2026 [88] Financial Performance - Research and development expenses decreased by $2.9 million, or 23%, for the three months ended September 30, 2025, primarily due to a $5.4 million decrease in clinical development costs for the Phase 3 program of denifanstat in MASH [100] - Total operating expenses for the three months ended September 30, 2025, were $14.3 million, a decrease of 15% from $16.9 million in the same period of 2024 [100] - Other income decreased by $2.2 million, or 32%, for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to lower interest income from reduced cash and marketable securities balances [106] - Research and development expenses increased by $8.1 million, or 33%, for the nine months ended September 30, 2025, driven by a $5.3 million increase in clinical development costs related to denifanstat and TVB-3567 [103] - Total operating expenses rose by $9.9 million, or 27%, for the nine months ended September 30, 2025, compared to the same period in 2024 [103] - Net loss increased by $12.1 million, or 41%, for the nine months ended September 30, 2025, compared to the same period in 2024 [103] - Cash used in operating activities was $33.8 million for the nine months ended September 30, 2025, primarily for clinical development and manufacturing activities [120] - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $125.5 million [111] - Net cash used in investing activities was $9.8 million for the nine months ended September 30, 2025, related to marketable securities purchases [123] Administrative Expenses - General and administrative expenses increased by $0.4 million, or 8%, for the three months ended September 30, 2025, primarily due to increased consulting and professional fees [100] - General and administrative expenses increased by $1.8 million, or 15%, for the nine months ended September 30, 2025, primarily due to higher stock-based compensation and consulting fees [105] Company Classification and Accounting Standards - The company is classified as an emerging growth company and can delay the adoption of new accounting standards until they apply to private companies [128] - The company will remain an emerging growth company until it has total annual gross revenues of $1.235 billion or more or until December 31, 2028 [129] - The company is also a smaller reporting company, with a market value of stock held by non-affiliates less than $700 million and annual revenue below $100 million [130] - The company may continue to rely on exemptions from certain disclosure requirements as a smaller reporting company [130] - The financial statements may not be comparable to those of companies that comply with new accounting pronouncements as of public company effective dates [128] - The company has elected to use the extended transition period for complying with new accounting standards until it is no longer an emerging growth company [128] - The company is not required to provide quantitative and qualitative disclosures about market risk as a smaller reporting company [132] - The company has adopted recently issued accounting pronouncements, details of which can be found in the notes to the financial statements [131] - Actual results could differ significantly from estimates made, indicating potential volatility in financial reporting [126] Future Expectations - The company anticipates substantial increases in research and development expenses as it advances drug candidates through clinical trials and regulatory approvals [96] - The company anticipates continuing to incur significant expenses as it advances drug candidates through clinical trials and expands corporate infrastructure [111] - The company has financed operations primarily through public and private equity and debt financings, raising $190.9 million from its IPO and follow-on offering [108]