Core Viewpoint - Roche has agreed to acquire U.S. biotech firm 89bio for up to $3.5 billion to enhance its development pipeline focused on liver and cardiometabolic disease treatments [1] Company Summary - The acquisition amount is up to $3.5 billion, indicating Roche's commitment to expanding its portfolio in the biotech sector [1] - The target company, 89bio, specializes in treatments for liver and cardiometabolic diseases, aligning with Roche's strategic focus [1] Industry Summary - This acquisition reflects a growing trend in the biotech industry where larger firms are seeking to bolster their pipelines through strategic acquisitions [1] - The focus on liver and cardiometabolic diseases highlights the increasing importance of these areas in the healthcare market [1]

Core Viewpoint - 89bio, Inc. has entered into a merger agreement with Roche, with stockholders set to receive up to $20.50 per share, including a cash payment of $14.50 at closing and a contingent value right (CVR) of up to $6.00 per share, representing a total equity value of approximately $3.5 billion [1][3][6] Company Overview - 89bio is a clinical-stage biopharmaceutical company focused on developing therapies for liver and cardiometabolic diseases, currently in Phase 3 trials for its lead candidate, pegozafermin, targeting metabolic dysfunction-associated steatohepatitis (MASH) and severe hypertriglyceridemia (SHTG) [9] Transaction Details - The merger agreement includes a tender offer for all outstanding shares at $14.50 per share, totaling an aggregate payment of $2.4 billion, with additional contingent payments based on specific milestones [3][4] - The CVR includes potential cash payments of $2.00 per share upon the first commercial sale of pegozafermin, $1.50 per share upon achieving annual net sales of at least $3.0 billion, and $2.50 per share for annual net sales of at least $4.0 billion [5] Strategic Implications - The merger aims to leverage Roche's global development and commercialization capabilities to enhance the potential benefits of pegozafermin for patients and unlock significant shareholder value [2] - Roche plans to integrate pegozafermin into its cardiovascular, renal, and metabolism portfolio, aiming to transform the standard of care for patients with moderate to severe MASH [2]

Core Viewpoint - Roche has entered into a definitive merger agreement to acquire 89bio, Inc., a clinical-stage biopharmaceutical company focused on innovative therapies for liver and cardiometabolic diseases, with the transaction expected to close in Q4 2025 [1][9]. Group 1: Acquisition Details - Roche will commence a tender offer to acquire all outstanding shares of 89bio at a price of US$14.50 per share in cash, plus a non-tradeable contingent value right (CVR) for milestone payments of up to US$6.00 per share, representing a total equity value of approximately US$2.4 billion and a total deal value of up to US$3.5 billion [5][7]. - The acquisition price represents a premium of approximately 52% to 89bio's 60-day volume-weighted average price (VWAP) as of September 17, 2025 [5][7]. - The merger agreement has been unanimously approved by the boards of both Roche and 89bio [5]. Group 2: Strategic Rationale - The acquisition supports Roche's strategy to enhance its portfolio in cardiovascular, renal, and metabolic diseases (CVRM), particularly targeting conditions associated with obesity and metabolic dysfunction [2][3]. - Pegozafermin, 89bio's lead candidate, is positioned to potentially offer best-in-disease efficacy for moderate to severe Metabolic Dysfunction-Associated Steatohepatitis (MASH) patients, addressing critical unmet needs in this area [3][7]. - The distinct mechanism of action of pegozafermin may create synergies with Roche's existing CVRM portfolio, allowing for future combination development [2][3]. Group 3: Market Context - MASH is a serious and increasingly prevalent form of fatty liver disease, affecting an estimated 5-7% of the global adult population, with a significant association with obesity and type 2 diabetes [11]. - The condition can progress to severe complications, including cirrhosis and hepatocellular carcinoma, highlighting the need for effective treatment options [11]. Group 4: Employee Integration - Current employees of 89bio will join Roche's Pharmaceuticals Division as part of the acquisition [4].

Core Insights - The company is making significant progress with its FGF21 analog, pegozafermin, with three ongoing Phase III studies [2] - The SHTG program has completed enrollment, with results expected early next year [2] - Two MASH programs are also in progress, targeting pre-cirrhotic MASH and compensated cirrhosis populations, which are seen as having high unmet medical needs [2] Study Updates - The SHTG program is the first to complete enrollment, with pivotal study results anticipated in early 2024 [2] - The MASH programs include one focused on pre-cirrhotic MASH, which is currently enrolling patients, and another targeting compensated cirrhosis, also in the enrollment phase [2] - The potential impact of FGF21 in MASH, particularly for patients with cirrhosis, is viewed as transformative [2]

Summary of 89Bio (ETNB) Conference Call Company Overview - **Company**: 89Bio - **Focus**: Development of pegosafirman, an FGF21 analog, targeting NASH (Non-Alcoholic Steatohepatitis) and SHTG (Severe Hypertriglyceridemia) [2][3] Key Points and Arguments Ongoing Studies - 89Bio has three ongoing Phase III studies: one for SHTG and two for NASH, including pre-cirrhotic and cirrhotic patients [3][4] - The SHTG program has completed enrollment, with results expected early next year [3] SHTG Program - SHTG is identified as a significant unmet medical need, with many patients also suffering from fatty liver disease and diabetes [6][7] - Pegoasafirman aims to reduce triglycerides and improve liver fat, glycemic control, and lipid profiles, showing a potential advantage over existing treatments [8][9] - Phase II data indicated a triglyceride reduction of 57-63% and improvements in liver fat and transaminases [9] NASH Program - The company has received written agreement from the FDA for an accelerated approval pathway if improvement in fibrosis is demonstrated at the two-year histology endpoint [21][22] - The FDA's stance is based on the scientific argument that reversing fibrosis could predict better patient outcomes [22][23] - The company is working on refining definitions of clinical outcomes to make studies more tractable [26][27] Pricing Strategy - The pricing strategy will depend on the data generated; better outcomes could command higher prices [17][18] - There is speculation that pricing could be similar to existing treatments for NASH, potentially around $50,000 [16] Regulatory Developments - The FDA has shown a willingness to explore new surrogate endpoints for NASH, which could impact the broader field but not the ongoing studies of 89Bio [38][39] - The company is capturing FibroScan data in its studies, which could strengthen its market position [46][47] Market Interest - There is ongoing strategic interest in the NASH space, particularly for FGF21, with recognition of its potential in advanced fibrosis and cirrhosis [57][58] Additional Important Insights - The company is optimistic about the enrollment and progress of its studies, with over 250 sites activated for the Phase III studies [51][52] - The potential impact of competing drugs like semaglutide on enrollment and outcomes is being monitored [49][55] - The company is confident in the safety profile of pegosafirman, particularly regarding bone mineral density [35][37] This summary encapsulates the critical insights from the conference call, highlighting the company's strategic direction, ongoing studies, regulatory interactions, and market positioning.

Market Overview - The MASH (Metabolic Associated Steatotic Hepatitis) space is experiencing significant growth due to recent regulatory approvals of two drugs for treatment, addressing a substantial unmet medical need [2] - The approval of Rezdiffra last year and the recent approval of sema are expected to enhance market expansion and increase diagnosis rates among MASH patients [2] Patient Impact - There are millions of MASH patients, but a large majority remain undiagnosed and untreated, indicating a critical opportunity for market growth and patient care improvement [2]

Summary of 89Bio (ETNB) Conference Call - September 03, 2025 Company Overview - **Company**: 89Bio (ETNB) - **Industry**: Biopharmaceuticals, specifically focusing on NASH (Non-Alcoholic Steatohepatitis) treatment Key Points and Arguments NASH Market Dynamics - The NASH space is experiencing significant growth due to the approval of two drugs: Resdiffera and SEMA, addressing a substantial unmet need in the market [4][5] - There are millions of undiagnosed NASH patients, presenting a large opportunity for market expansion as awareness and diagnosis improve [5][6] - The next generation of products, particularly potent anti-fibrotic agents like pegosofirmin, is expected to further enhance treatment options and market growth [7][8] Current Treatment Landscape - GLP-1 drugs are being utilized but do not directly target liver fibrosis, leading to continued disease progression in many patients [10][11] - Despite the presence of GLP-1s, there remains a significant market for liver-directed therapies, as many patients still have advanced fibrosis [12][13] Clinical Trials and Study Updates - The ENLIGHTEN studies for pegosofirmin are progressing well, with high enthusiasm from clinical sites and a large number of patients being screened [15][16] - The studies are global, involving over 250 sites across 20+ countries, indicating a robust initiative to address the unmet need in cirrhosis [17][18] Differentiation and Competitive Advantage - Physicians recognize the difference between current metabolic drugs and more potent anti-fibrotic agents, with excitement around the potential of FGF21s and pegosofirmin in treating advanced fibrosis [19][20] - Pegosofirmin shows promising data in combination with GLP-1s, indicating potential synergistic effects on liver fibrosis and metabolic markers [21][22][24] Safety and Tolerability - Safety and tolerability are critical factors for long-term patient compliance, especially in chronic conditions like NASH [40][53] - Pegosofirmin has demonstrated lower rates of gastrointestinal events compared to competitors, which is crucial for maintaining patient adherence [42][53] Future Directions and Potential Indications - Beyond NASH, there is potential for pegosofirmin in other fibrotic conditions, including liver cirrhosis from various etiologies, renal fibrosis, and cardiac fibrosis [71][72] - The company is considering partnerships to explore these additional indications while preserving capital for NASH and SHTG (Severe Hypertriglyceridemia) studies [73][75] Commercial Strategy - The potential for co-formulation with GLP-1s is seen as a significant opportunity for differentiation in the market, providing convenience for patients [45][47] - Pricing strategies for combination therapies will depend on the strength of clinical data and market dynamics [50][76] Additional Important Insights - The company is focused on executing its Phase III studies effectively, with a keen eye on the evolving landscape of NASH treatments and patient needs [17][18] - There is a recognition of the importance of long-term weight management and glycemic control in impacting fibrosis outcomes, emphasizing the chronic nature of NASH [29][30] This summary encapsulates the key discussions and insights from the conference call, highlighting the strategic positioning of 89Bio in the evolving NASH treatment landscape.

Group 1 - 89bio, Inc. is advancing Pegozafermin, a long-acting FGF21 analog, through Phase 3 trials [1] - Pegozafermin targets large Total Addressable Markets (TAMs) with unmet needs in Metabolic Associated Steatotic Liver Disease (MASH) with and without cirrhosis, and severe hypertriglyceridemia (SHTG) [1] - The company is pursuing a dual-path approval strategy for Pegozafermin [1]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents 89bio's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents 89bio's unaudited condensed consolidated financial statements, covering balance sheets, operations, equity, cash flows, and notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and cash equivalents | $129,076 | $126,060 | | Marketable securities | $432,088 | $313,895 | | Total current assets | $601,520 | $476,450 | | Total assets | $603,485 | $478,685 | | **Liabilities** | | | | Total current liabilities | $39,611 | $36,129 | | Warrant liability | $— | $516 | | Term loan, noncurrent, net | $36,156 | $35,732 | | Total liabilities | $81,752 | $77,896 | | **Stockholders' Equity** | | | | Total stockholders' equity | $521,733 | $400,789 | | Total liabilities and stockholders' equity | $603,485 | $478,685 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section details the company's financial performance, including revenues, expenses, and net loss over specific periods Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $103,902 | $44,865 | $168,296 | $92,293 | | General and administrative | $11,922 | $8,571 | $23,437 | $18,420 | | Total operating expenses | $115,824 | $53,436 | $191,733 | $110,713 | | Loss from operations | $(115,824) | $(53,436) | $(191,733) | $(110,713) | | Interest expense | $(1,137) | $(874) | $(2,404) | $(1,737) | | Interest income and other, net | $6,210 | $6,473 | $12,248 | $13,029 | | Net loss | $(111,504) | $(47,971) | $(182,779) | $(99,652) | | Comprehensive loss | $(111,767) | $(48,135) | $(183,220) | $(100,525) | | Net loss per share, basic and diluted | $(0.71) | $(0.48) | $(1.20) | $(1.02) | | Weighted-average shares (basic and diluted) | 157,880,203 | 99,831,111 | 152,154,469 | 97,838,926 | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in the company's equity, reflecting stock issuances, net losses, and stock-based compensation - Total stockholders' equity increased from **$400,789 thousand** as of December 31, 2024, to **$521,733 thousand** as of June 30, 2025, primarily driven by **$269,903 thousand** from a public offering and stock-based compensation of **$7,216 thousand** and **$7,315 thousand**, partially offset by net losses of **$(71,275) thousand** and **$(111,504) thousand**[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (In thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(172,162) | $(100,884) | | Net cash used in investing activities | $(114,455) | $(52,049) | | Net cash provided by financing activities | $289,633 | $48,990 | | Net change in cash and cash equivalents | $3,016 | $(103,943) | | Cash and cash equivalents at end of period | $129,076 | $212,218 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Organization and Liquidity](index=8&type=section&id=1.%20Organization%20and%20Liquidity) 89bio, a clinical-stage biopharmaceutical company, has an accumulated deficit of **$1,007.3 million** but sufficient liquidity for at least one year - 89bio, Inc. is a clinical-stage biopharmaceutical company developing pegozafermin for MASH and SHTG[24](index=24&type=chunk) - The company has an accumulated deficit of **$1,007.3 million** as of June 30, 2025, and expects continued operating losses[26](index=26&type=chunk) - Existing cash, cash equivalents, and marketable securities (**$561.2 million** as of June 30, 2025) are projected to fund operations for at least one year[27](index=27&type=chunk) [2. Summary of Significant Accounting Policies](index=8&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines 89bio's accounting principles, including U.S. GAAP conformity, fair value measurements, and new FASB ASUs - Financial statements are prepared in conformity with U.S. GAAP and SEC rules for interim reporting, reflecting normal recurring adjustments[28](index=28&type=chunk)[29](index=29&type=chunk) - The company manages its business as a single reportable segment, with the CEO as the Chief Operating Decision Maker (CODM)[43](index=43&type=chunk) - New FASB ASUs (2023-09 on Income Tax Disclosures and 2024-03 on Expense Disaggregation) are expected to result in expanded disclosures upon adoption in 2025 and 2027/2028, respectively[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) [3. Fair Value Measurements](index=14&type=section&id=3.%20Fair%20Value%20Measurements) This section details fair value measurements for financial assets and liabilities, including cash equivalents, marketable securities, and warrant liability Fair Value of Cash Equivalents and Marketable Securities (In thousands) | Asset Category | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :-------------------------- | :----------------------- | :------------------------- | | Money market funds (Level 1) | $5,535 | $22,645 | | Commercial paper (Level 2) | $101,633 | $51,991 | | U.S. government bonds (Level 2) | $212,381 | $170,270 | | Agency bonds (Level 2) | $56,724 | $63,859 | | Corporate debt securities (Level 2) | $9,103 | $6,166 | | U.S. Treasury securities (Level 2) | $111,149 | $44,509 | | Agency discount securities (Level 2) | $— | $18,942 | | **Total** | **$496,525** | **$378,382** | | Classified as: Cash equivalents | $64,437 | $64,487 | | Classified as: Marketable securities | $432,088 | $313,895 | - The warrant liability, previously **$516 thousand** as of December 31, 2024, was reduced to zero as of June 30, 2025, due to the expiration of Tranche 1 and the remote probability of exercise for Tranches 2 and 3 of the Term Loan Facility[53](index=53&type=chunk)[54](index=54&type=chunk) [4. Balance Sheet Components](index=15&type=section&id=4.%20Balance%20Sheet%20Components) This section breaks down prepaid and other current assets, and accrued expenses, reflecting increased clinical trial activity Prepaid and Other Current Assets (In thousands) | Asset Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Prepaid research and development | $37,802 | $32,550 | | Prepaid taxes | $52 | $368 | | Prepaid other | $2,502 | $3,577 | | **Total** | **$40,356** | **$36,495** | Accrued Expenses (In thousands) | Expense Category | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Accrued research and development expenses | $17,363 | $11,426 | | Accrued employee and related expenses | $5,016 | $6,872 | | Accrued professional and legal fees | $1,749 | $1,680 | | Accrued other expenses | $42 | $42 | | **Total** | **$24,170** | **$20,020** | [5. Commitments and Contingencies](index=17&type=section&id=5.%20Commitments%20and%20Contingencies) This section details commitments under the Teva agreement and BiBo collaboration, plus an Israeli Tax Authority assessment - Under the FGF21 Agreement with Teva, 89bio is obligated to make up to **$65.0 million** in commercial milestone payments and tiered royalties on net sales of pegozafermin[57](index=57&type=chunk) - The BiBo Collaboration Agreement for a commercial manufacturing facility was amended in June 2025, increasing the total contractual obligation to **$175.0 million** (exclusive of VAT), with an additional **$40.0 million** paid in June 2025 and a final **$13.5 million** milestone payment due upon facility completion[61](index=61&type=chunk)[62](index=62&type=chunk) - The Israeli Tax Authority (ITA) issued a formal assessment seeking to recharacterize an intercompany IP transfer as a taxable sale, leading to a recorded liability of **$5.3 million** for unrecognized tax benefit, which 89bio is appealing[64](index=64&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) [6. Term Loan Facility](index=19&type=section&id=6.%20Term%20Loan%20Facility) This section describes the **$150.0 million** Term Loan Facility, its tranches, maturity, interest rate, and warrant reclassification - The Term Loan Facility provides for a maximum aggregate principal amount of **$150.0 million**, secured by substantially all assets excluding intellectual property[69](index=69&type=chunk) - Tranche 1's remaining **$35.0 million** commitment expired undrawn on June 30, 2025; Tranche 2's **$30.0 million** is not expected to be achieved by the December 31, 2025, milestone due to revised ENTRUST data reporting in Q1 2026; Tranche 3 is available at lenders' sole discretion[73](index=73&type=chunk) - The loan matures on October 1, 2028, with interest-only payments until January 1, 2027, and the stated interest rate was **9.25%** as of June 30, 2025[70](index=70&type=chunk) [7. Stockholders' Equity](index=20&type=section&id=7.%20Stockholders'%20Equity) This section details changes in stockholders' equity, including public offerings, ATM program activity, and warrant issuances Common Stock Reserved for Issuance (As of June 30, 2025) | Category | Shares Reserved | | :------------------------------------------ | :-------------- | | Stock options outstanding | 11,698,226 | | RSUs and PSUs outstanding | 2,508,289 | | Shares available for future grants | 1,996,052 | | Shares available for ESPP | 3,246,812 | | Warrants to purchase common stock outstanding | 397,123 | | Pre-funded warrants to purchase common stock outstanding | 11,231,081 | | Conversion feature related to outstanding term loan | 1,112,546 | | **Total available for future issuance** | **32,190,129** | - In January 2025, an underwritten public offering of common stock and pre-funded warrants generated approximately **$269.9 million** in net proceeds[76](index=76&type=chunk)[128](index=128&type=chunk) - Under the 2023 ATM Facility, **$21.0 million** in net proceeds were raised from the sale of **2,160,484 shares** during the six months ended June 30, 2025, with approximately **$82.8 million** remaining available under this facility[78](index=78&type=chunk)[79](index=79&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - As of June 30, 2025, **11,628,204 warrants** were outstanding, including **11,231,081 pre-funded warrants** with a nominal exercise price of **$0.001** per share[82](index=82&type=chunk) [8. Stock-Based Compensation](index=22&type=section&id=8.%20Stock-Based%20Compensation) Stock-based compensation expense increased due to headcount growth, with significant unrecognized expense for options and RSUs/PSUs Stock-Based Compensation Expense (In thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $3,184 | $2,342 | $6,586 | $4,657 | | General and administrative | $4,131 | $2,827 | $7,945 | $5,510 | | **Total** | **$7,315** | **$5,169** | **$14,531** | **$10,167** | - Total unrecognized stock-based compensation expense for unvested stock options was **$47.9 million** as of June 30, 2025, to be recognized over a weighted-average period of **2.9 years**[83](index=83&type=chunk) - Total unrecognized stock-based compensation expense for RSUs and PSUs was **$18.0 million** as of June 30, 2025, to be recognized over a weighted-average period of **1.8 years**, with a reassessment of PSU performance conditions reducing unrecognized expense by **$7.8 million**[84](index=84&type=chunk) [9. Net Loss Per Share](index=23&type=section&id=9.%20Net%20Loss%20Per%20Share) Basic and diluted net loss per share were **$(0.71)** and **$(1.20)**, with increased weighted-average shares due to issuances Weighted-Average Shares Outstanding for Net Loss Per Share | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Common stock | 146,649,122 | 98,495,085 | 142,028,913 | 96,230,372 | | Pre-funded warrants | 11,231,081 | 1,336,026 | 10,125,556 | 1,608,554 | | **Total** | **157,880,203** | **99,831,111** | **152,154,469** | **97,838,926** | - Potentially dilutive common stock equivalents, including stock options, RSUs, PSUs, warrants, and term loan conversion features, were excluded from diluted net loss per share calculations due to their anti-dilutive effect during periods of net loss[86](index=86&type=chunk) [10. Segment Information](index=24&type=section&id=10.%20Segment%20Information) 89bio operates as a single segment, with the CEO reviewing consolidated net loss and key expense categories for performance - 89bio operates as a single reportable segment, with the CEO serving as the Chief Operating Decision Maker (CODM)[87](index=87&type=chunk) Significant Expense Categories (In thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Contract manufacturing | $58,084 | $17,018 | $77,141 | $38,369 | | Clinical development | $35,299 | $18,949 | $69,094 | $36,873 | | Research and development personnel-related | $9,608 | $7,847 | $20,281 | $15,580 | | General and administrative | $11,922 | $8,571 | $23,437 | $18,420 | | Interest expense | $1,137 | $874 | $2,404 | $1,737 | | Interest income and other, net | $(6,210) | $(6,473) | $(12,248) | $(13,029) | | Income tax expense | $753 | $134 | $890 | $231 | | **Net loss** | **$(111,504)** | **$(47,971)** | **$(182,779)** | **$(99,652)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on 89bio's financial condition, operational results, and future funding needs [Overview](index=25&type=section&id=Overview) 89bio is a clinical-stage biopharmaceutical company focused on developing innovative therapies for liver and cardio-metabolic diseases - 89bio is a clinical-stage biopharmaceutical company focused on developing innovative therapies for liver and cardio-metabolic diseases[92](index=92&type=chunk) - Pegozafermin, the lead product candidate, is being developed for metabolic dysfunction-associated steatohepatitis (MASH) and severe hypertriglyceridemia (SHTG)[92](index=92&type=chunk) [Pegozafermin MASH Program](index=25&type=section&id=Pegozafermin%20MASH%20Program) Pegozafermin is in Phase 3 clinical development for MASH, with topline data anticipated in H1 2027 and 2028 - Pegozafermin is in Phase 3 clinical development for MASH, following positive Phase 1b/2a and Phase 2b ENLIVEN trial results[93](index=93&type=chunk) - The FDA granted Breakthrough Therapy Designation and the EMA granted Priority Medicines Designation (PRIME) for pegozafermin in MASH[94](index=94&type=chunk) - The Phase 3 ENLIGHTEN program includes two global trials: ENLIGHTEN-Fibrosis (F2-F3 MASH, topline data anticipated H1 2027) and ENLIGHTEN-Cirrhosis (compensated F4 MASH, topline data anticipated 2028)[94](index=94&type=chunk)[96](index=96&type=chunk) [Pegozafermin SHTG Program](index=25&type=section&id=Pegozafermin%20SHTG%20Program) Pegozafermin is advancing for SHTG treatment, with Phase 3 ENTRUST trial topline data expected in Q1 2026 - Pegozafermin is also advancing for SHTG treatment, based on positive Phase 2 ENTRIGUE trial results[95](index=95&type=chunk) - Enrollment in the Phase 3 ENTRUST trial for SHTG was completed in December 2024 (**369 patients**), with topline data expected in Q1 2026 after study completion at Week 52[95](index=95&type=chunk)[97](index=97&type=chunk) [Manufacturing and Commercial Supply Preparedness](index=27&type=section&id=Manufacturing%20and%20Commercial%20Supply%20Preparedness) A collaboration with BiBo Biopharma Engineering is in place for a Commercial Facility to produce pegozafermin's bulk active ingredient - A collaboration agreement with BiBo Biopharma Engineering Co., Ltd. is in place for the construction of a Commercial Facility in China to produce pegozafermin's bulk active ingredient[98](index=98&type=chunk) - The manufacturing platform is designed to provide sufficient capacity for projected commercial needs and is part of a broader global manufacturing strategy to enhance resilience and flexibility[98](index=98&type=chunk) [Components of Results of Operations](index=27&type=section&id=Components%20of%20Results%20of%20Operations) This section defines key components of operations, including R&D, G&A, interest expense, interest income, and income tax expense - Research and development expenses include costs for preclinical and clinical development, intellectual property, license agreements, contract research organizations, manufacturing, and personnel[99](index=99&type=chunk) - General and administrative expenses primarily consist of personnel costs, professional services (legal, HR, audit), consulting, and allocated facilities costs[103](index=103&type=chunk) - Interest expense includes cash interest, accretion of end of term loan fees, and amortization of deferred debt issuance costs, while interest income is mainly from marketable securities[105](index=105&type=chunk)[106](index=106&type=chunk) [Results of Operations (Three Months Ended June 30, 2025 and 2024)](index=29&type=section&id=Results%20of%20Operations%20(Three%20Months%20Ended%20June%2030%2C%202025%20and%202024)) Net loss significantly increased to **$(111.5) million**, driven by higher R&D expenses, including a **$40.0 million** BiBo payment Summary of Results of Operations (Three Months Ended June 30, In thousands) | Metric | 2025 | 2024 | Change | | :-------------------------- | :----- | :----- | :----- | | Research and development | $103,902 | $44,865 | $59,037 | | General and administrative | $11,922 | $8,571 | $3,351 | | Total operating expenses | $115,824 | $53,436 | $62,388 | | Loss from operations | $(115,824) | $(53,436) | $(62,388) | | Interest expense | $(1,137) | $(874) | $(263) | | Interest income and other, net | $6,210 | $6,473 | $(263) | | Net loss before tax | $(110,751) | $(47,837) | $(62,914) | - Research and development expenses increased by **$59.0 million**, primarily due to a **$40.0 million** non-recurring payment to BiBo for the Commercial Facility and a **$16.4 million** increase in clinical development costs for Phase 3 trials[110](index=110&type=chunk)[111](index=111&type=chunk) - General and administrative expenses increased by **$3.4 million**, mainly due to higher personnel-related expenses, including stock-based compensation, driven by increased headcount[112](index=112&type=chunk) [Results of Operations (Six Months Ended June 30, 2025 and 2024)](index=31&type=section&id=Results%20of%20Operations%20(Six%20Months%20Ended%20June%2030%2C%202025%20and%202024)) Net loss increased to **$(182.8) million**, primarily due to higher R&D expenses, including the **$40.0 million** BiBo payment Summary of Results of Operations (Six Months Ended June 30, In thousands) | Metric | 2025 | 2024 | Change | | :-------------------------- | :----- | :----- | :----- | | Research and development | $168,296 | $92,293 | $76,003 | | General and administrative | $23,437 | $18,420 | $5,017 | | Total operating expenses | $191,733 | $110,713 | $81,020 | | Loss from operations | $(191,733) | $(110,713) | $(81,020) | | Interest expense | $(2,404) | $(1,737) | $(667) | | Interest income and other, net | $12,248 | $13,029 | $(781) | | Net loss before tax | $(181,889) | $(99,421) | $(82,468) | - Research and development expenses increased by **$76.0 million**, primarily from a **$38.8 million** increase in contract manufacturing (including the **$40.0 million** BiBo payment) and a **$32.2 million** increase in clinical development costs for Phase 3 trials[117](index=117&type=chunk)[118](index=118&type=chunk) - General and administrative expenses increased by **$5.0 million**, driven by higher personnel-related costs, including a **$2.4 million** increase in stock-based compensation and a **$1.7 million** increase in payroll and benefits[119](index=119&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) 89bio had **$561.2 million** in liquidity, sufficient for one year, but will require substantial additional capital for operations - As of June 30, 2025, the company had **$561.2 million** in cash, cash equivalents, and marketable securities, and an accumulated deficit of **$1,007.3 million**[123](index=123&type=chunk) - Existing financial resources are expected to fund operations for at least one year from the filing date of the 10-Q[134](index=134&type=chunk) - Key sources of liquidity include **$269.9 million** net proceeds from a January 2025 public offering and **$21.0 million** from the 2023 ATM Facility (with **$82.8 million** remaining)[125](index=125&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk) - The Term Loan Facility's Tranche 1 expired undrawn, and Tranche 2 is not expected to be achieved by its milestone date, limiting future debt funding from these tranches[133](index=133&type=chunk) - Future funding requirements are substantial and depend on clinical trial progress, manufacturing costs, regulatory approvals, and potential in-licensing activities[135](index=135&type=chunk) [Cash Flows](index=37&type=section&id=Cash%20Flows) Net cash used in operating activities increased, while financing activities provided **$289.6 million**, resulting in a **$3.0 million** net cash increase Summary of Cash Flows (Six Months Ended June 30, In thousands) | Cash Flow Activity | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net cash used in operating activities | $(172,162) | $(100,884) | | Net cash used in investing activities | $(114,455) | $(52,049) | | Net cash provided by financing activities | $289,633 | $48,990 | | Net change in cash and cash equivalents | $3,016 | $(103,943) | - Net cash used in operating activities increased by **$71.3 million**, primarily due to a higher net loss and a **$4.2 million** increase in prepaid expenses and other assets[139](index=139&type=chunk) - Net cash provided by financing activities increased by **$240.6 million**, mainly from **$269.9 million** in net proceeds from the public offering and **$21.0 million** from the ATM program[143](index=143&type=chunk) [Contractual Obligations and Commitments](index=38&type=section&id=Contractual%20Obligations%20and%20Commitments) This section details debt obligations, Teva license commitments, BiBo facility payments, and the Israeli Tax Authority assessment - Outstanding principal of **$35.0 million** under the Loan Agreement matures on October 1, 2028, with interest-only payments until January 1, 2027[145](index=145&type=chunk) - Obligations under the Teva license agreement include up to **$65.0 million** in commercial milestones and tiered royalties on net sales of pegozafermin[146](index=146&type=chunk) - The BiBo collaboration for the commercial facility has a total contractual obligation of **$175.0 million** (excluding VAT), with **$161.5 million** paid as of June 30, 2025, and a remaining **$13.5 million** milestone payment due upon facility completion (estimated 2026)[148](index=148&type=chunk)[149](index=149&type=chunk) - The Israeli Tax Authority issued a formal assessment for approximately **$26.0 million** in tax liability and **$3.9 million** in penalties, which the company is appealing, having recorded a **$5.3 million** liability for unrecognized tax benefit[150](index=150&type=chunk)[152](index=152&type=chunk) [Critical Accounting Estimates](index=38&type=section&id=Critical%20Accounting%20Estimates) No significant changes in critical accounting estimates compared to the Annual Report on Form 10-K for December 31, 2024 - There have been no significant changes in critical accounting estimates compared to the Annual Report on Form 10-K for the year ended December 31, 2024[153](index=153&type=chunk) [Recent Accounting Pronouncements](index=39&type=section&id=Recent%20Accounting%20Pronouncements) Refer to Note 2, 'Summary of Significant Accounting Policies,' for information on recent accounting pronouncements - Refer to Note 2, 'Summary of Significant Accounting Policies,' for information on recent accounting pronouncements[154](index=154&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk from the information provided in the Annual Report on Form 10-K for December 31, 2024 - No material changes in market risk from the information provided in the Annual Report on Form 10-K for the year ended December 31, 2024[155](index=155&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance for timely and accurate financial reporting[156](index=156&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[157](index=157&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, though litigation could adversely impact operations - The company is not currently a party to any material legal proceedings[160](index=160&type=chunk) - Litigation, even if not material, can adversely impact the company through costs, diversion of resources, and reputational harm[160](index=160&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks, including dependence on pegozafermin, funding needs, manufacturing reliance, and regulatory complexities - The company is a clinical-stage biopharmaceutical company with a limited operating history, no approved products, and expects significant and increasing operating losses, making its stock a highly speculative investment[162](index=162&type=chunk)[163](index=163&type=chunk)[166](index=166&type=chunk) - Business success is highly dependent on pegozafermin, its only product candidate under clinical development, which has not completed a pivotal trial, and clinical drug development is lengthy, expensive, and uncertain, with no guarantee of regulatory approval or commercialization[162](index=162&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) - The company will require substantial additional capital to finance operations, which may not be available on acceptable terms, potentially delaying or preventing the development and commercialization of pegozafermin[162](index=162&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) - Significant risks include reliance on third-party manufacturers (e.g., BiBo in China, subject to geopolitical risks like the BIOSECURE Act), potential undesirable side effects of pegozafermin, and the complex, evolving regulatory landscape for MASH and SHTG[162](index=162&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - The biopharmaceutical industry is intensely competitive, with many companies developing competing products, some with greater resources, and unstable market and economic conditions, including inflation and geopolitical events, pose serious adverse consequences[195](index=195&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) - Success depends on obtaining and maintaining intellectual property protection, which is uncertain and subject to challenges, and reliance on licenses (e.g., from Teva) and potential limitations on net operating loss carryforwards (e.g., due to Israeli Tax Authority assessment) are also significant risks[165](index=165&type=chunk)[240](index=240&type=chunk)[245](index=245&type=chunk)[249](index=249&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report during the period - None[278](index=278&type=chunk) [Item 3. Default Upon Senior Securities](index=79&type=section&id=Item%203.%20Default%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report during the period - None[279](index=279&type=chunk) [Item 4. Mine Safety Disclosures](index=79&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[280](index=280&type=chunk) [Item 5. Other Information](index=79&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[281](index=281&type=chunk) [Item 6. Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents and key agreements - The exhibits include various corporate documents such as the Second Amended and Restated Certificate of Incorporation, Third Amended and Restated Bylaws, and specimen common stock certificates[285](index=285&type=chunk) - Forms of warrants to purchase common stock for Silicon Valley Bank and K2 HealthVentures LLC, as well as pre-funded warrants, are included[285](index=285&type=chunk) - Key agreements include an Amendment to Executive Employment Offer Letter and an Amendment to Collaboration Agreement with BiBo Biopharma Engineering Co., Ltd[285](index=285&type=chunk) [SIGNATURES](index=81&type=section&id=SIGNATURES) The report is signed by Rohan Palekar, Chief Executive Officer, and Ryan Martins, Chief Financial Officer, on August 8, 2025 - The report is signed by Rohan Palekar, Chief Executive Officer, and Ryan Martins, Chief Financial Officer, on August 8, 2025[289](index=289&type=chunk)

Core Insights - 89bio reported a GAAP earnings per share of $(0.71) for Q2 2025, missing the consensus estimate of $(0.50) and showing a decline from $(0.48) in Q2 2024 [1][2] - The company had no revenue, consistent with its status as a development-stage biotech firm [1][2] - Significant increases in expenses were noted, particularly in research and development, reflecting the advancement of late-stage clinical programs and a one-time payment for manufacturing infrastructure [1][5] Financial Performance - Research and development expenses surged by 131.4% to $103.9 million compared to $44.9 million in Q2 2024 [2][5] - General and administrative expenses rose by 38.4% to $11.9 million from $8.6 million in Q2 2024, driven by higher personnel costs and stock-based compensation [2][6] - The net loss widened to $111.5 million from $48.0 million in Q2 2024, primarily due to increased research and administrative costs [7] Business Focus - 89bio is focused on developing pegozafermin, a drug candidate for metabolic dysfunction-associated steatohepatitis (MASH) and severe hypertriglyceridemia (SHTG) [3][4] - The company is prioritizing late-stage clinical trials for pegozafermin, with key success factors including clinical efficacy, regulatory approvals, and manufacturing readiness [4] Clinical Development - Pegozafermin is currently in three pivotal Phase 3 studies: ENLIGHTEN-Fibrosis and ENLIGHTEN-Cirrhosis for MASH, and ENTRUST for SHTG [8] - The ENTRUST study focuses on the percent change in fasting triglyceride levels, a standard marker for SHTG efficacy [8] - No new efficacy or safety results were reported this quarter, but previous studies and regulatory designations support ongoing Phase 3 work [8] Manufacturing and Future Outlook - Progress has been made on a new production facility for pegozafermin, which is expected to be operational for potential commercial launches [9][10] - A fixed payment of $13.5 million is due in 2026 for this facility, which is crucial for regulatory filings and supply stability [10] - Management has not provided quantitative financial guidance but has outlined timelines for key clinical trials, with topline data for ENTRUST expected in Q1 2026 [11][12]