89bio, Inc. (NASDAQ:ETNB) is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases. The company's lead product candidate, pegozafermin, is a specifically engineered glycoPEGylated analog of fibroblast growth factor 21 (FGF21) that is currently being developed for the treatment of metabolic dysfunction-associated steatohepatitis (MASH) and severe hypertriglyceridemia (SHTG).

Business Overview

89bio was founded in 2018 and is headquartered in San Francisco, California. The company's primary focus is on the development of pegozafermin, which is currently in advanced clinical trials for the treatment of MASH and SHTG. MASH is a severe form of metabolic dysfunction-associated steatotic liver disease, previously known as nonalcoholic fatty liver disease, and is characterized by inflammation and fibrosis in the liver that can progress to cirrhosis, liver failure, hepatocellular carcinoma and death. SHTG is a condition identified by severely elevated levels of triglycerides (≥500 mg/dL), which is associated with an increased risk of MASH, cardiovascular events and acute pancreatitis.

In 2020 and 2022, 89bio presented positive topline results from its Phase 1b/2a trial of pegozafermin in MASH patients, which have informed the advancement of the company's subsequent clinical strategy in MASH. In the company's Phase 2b ENLIVEN trial of pegozafermin in MASH patients, the 44 mg every-two-week and the 30 mg weekly dose groups both met, with high statistical significance, both of the primary histology endpoints per the U.S. Food and Drug Administration (FDA) guidance definitions on endpoints for accelerated approval in non-cirrhotic MASH patients. In September 2023, the FDA granted Breakthrough Therapy Designation to pegozafermin in patients with MASH, and in March 2024, the European Medicines Agency (EMA) granted Priority Medicines (PRIME) designation to pegozafermin in patients with MASH, based on clinical data from the Phase 2b ENLIVEN trial.

In November 2023, 89bio announced positive topline data from the blinded extension phase of its Phase 2b ENLIVEN trial at 48 weeks. Both the 44 mg every-two-week and 30 mg weekly dose groups demonstrated statistically significant improvements across Non-Invasive Tests (NITs) representing key markers of liver health. The benefits observed at week 48 were consistent with the histology and NITs results observed at week 24, indicating sustained benefits over time.

In the fourth quarter of 2023, 89bio held successful end-of-Phase 2 meetings with the FDA, supporting the advancement of pegozafermin into a Phase 3 program and future biologics license application (BLA) filing. The company also received scientific advice from the EMA, which generally aligned with the feedback from the FDA. The Phase 3 ENLIGHTEN program will include two Phase 3 trials evaluating patients with MASH: (i) ENLIGHTEN-Fibrosis, which is enrolling patients with fibrosis stage F2-F3 and (ii) ENLIGHTEN-Cirrhosis, which is expected to enroll patients with compensated cirrhosis (F4).

During the first quarter of 2024, 89bio announced the initiation of the ENLIGHTEN-Fibrosis Phase 3 clinical trial. The company expects to initiate the ENLIGHTEN-Cirrhosis clinical trial in the second quarter of 2024.

89bio is also developing pegozafermin for the treatment of SHTG. In June 2022, the company announced positive topline results from the ENTRIGUE Phase 2 trial of pegozafermin in SHTG patients. The trial met its primary endpoint demonstrating statistically significant and clinically meaningful reductions in triglycerides from baseline and key secondary endpoints. 89bio received feedback from the FDA supporting the advancement of pegozafermin and initiated its Phase 3 ENTRUST trial, the first of two recommended Phase 3 trials, in the second quarter of 2023. The company expects to report topline results from its Phase 3 ENTRUST trial in 2025.

Financials

For the full year 2023, 89bio reported an annual net loss of $142.2 million, with no revenue generated. The company's annual operating cash flow was negative $129.2 million, and its annual free cash flow was negative $129.2 million.

In the first quarter of 2024, 89bio reported a net loss of $51.7 million. The company's research and development expenses increased by $25.1 million compared to the same period in 2023, primarily due to an increase in contract manufacturing costs for scale-up activities and the initiation of the ENLIGHTEN-Fibrosis Phase 3 clinical trial. General and administrative expenses increased by $3.6 million, primarily attributable to a $2.0 million increase in professional fees and a $1.6 million increase in personnel-related expenses.

As of March 31, 2024, 89bio had cash, cash equivalents and marketable securities of $562.3 million, which the company believes will be sufficient to fund its operations for a period of at least one year from the date of the filing of this report.

Liquidity

89bio has incurred significant net losses and negative cash flows from operations since its inception. The company has historically financed its operations primarily through the sale of equity securities, including warrants, and from borrowings under term loan facilities.

In January 2023, 89bio entered into a Loan and Security Agreement with lenders, providing for up to $100.0 million in aggregate principal in term loans. As of March 31, 2024, the company had $25.0 million outstanding under this term loan facility.

To fund its future operations, 89bio will require additional capital, which it may seek to raise through public or private equity or debt offerings, product collaborations, or other sources. The company's ability to obtain such additional funding on acceptable terms, or at all, is uncertain.

Risks and Challenges

89bio faces several risks and challenges in the development and commercialization of pegozafermin and any future product candidates. These include the inherent risks of clinical drug development, such as the uncertainty of clinical trial outcomes, the potential for adverse events, and the risk of failing to obtain regulatory approvals. The company also faces competition from other companies developing therapies for MASH and SHTG, as well as the potential for biosimilar competition if pegozafermin is approved.

Additionally, 89bio is dependent on third-party manufacturers and suppliers for the production of pegozafermin, and any disruptions or issues with these third parties could impact the company's ability to advance its clinical programs and, ultimately, commercialize the product.

Outlook

Despite the challenges, 89bio's lead product candidate, pegozafermin, has demonstrated promising results in clinical trials for the treatment of MASH and SHTG. The company's recent regulatory designations, including Breakthrough Therapy Designation from the FDA and PRIME designation from the EMA, underscore the potential of pegozafermin to address significant unmet medical needs in these serious liver and cardio-metabolic conditions.

Conclusion

As 89bio advances pegozafermin through its Phase 3 ENLIGHTEN and ENTRUST trials, the company's ability to successfully navigate the regulatory landscape and secure the necessary funding will be critical to its long-term success. With a strong cash position and a clear clinical development strategy, 89bio appears well-positioned to continue its progress in bringing innovative therapies to patients in need.