Skye Bioscience Q3 2025: Contradictions Emerge on Weight Loss Efficacy, Regulatory Strategy, and Combination Therapy Potential

Guidance:

• Cash runway and working capital expected to fund operations and key clinical milestones into 2027.
• 
  26-week extension study data expected in late Q1/early Q2 2026; will inform potential 52-week treatment plans.
• Finalizing Phase II design (Phase IIb) focused on combination dosing and higher monotherapy doses.
• Continue CMC work: high‑concentration formulation, process intensification, scale-up and device evaluation to reduce COGS.
• Plan to escalate doses in future trials to unlock monotherapy efficacy and optimize combo benefit.

Business Commentary:

* Financial Performance and Cash Position: - Skye Biosciences ended Q3 2025 with cash and cash equivalents and short-term investments totaling $35.3 million. - The company expects its current working capital to fund operations and key clinical milestones into 2027, including the completion of the extension of the Phase IIa study for nimasimab. - The cash position is supported by a modest discovery R&D budget and ongoing R&D expenses focused on supporting the TPP and scale for nimasimab.

• R&D and Clinical Development:
• R&D expenses for the 3 months ended September 30, 2025, were $9.4 million compared to $4.9 million for the same period in 2024.
• This increase was primarily due to contract manufacturing, clinical trial costs associated with the obesity study for nimasimab, and discovery R&D expenses.

• The focus remains on refining the dose and frequency for nimasimab in various indications, including maintenance therapy.

• Clinical Trial Results and Dose Optimization:

• The top line data from the Phase IIa CB1 study revealed synergistic efficacy with nimasimab plus semaglutide, achieving an additional 3% weight loss at 26 weeks with a p-value of 0.0372.
• Analysis of PK/PD modeling suggests that higher nimasimab doses could lead to better monotherapy efficacy and further weight loss when combined with semaglutide.

• The focus is on evaluating higher doses in future clinical studies to optimize efficacy.

• Manufacturing and Product Economics:

• The high concentration formulation strategy for nimasimab remains on track, aimed at reducing injection volume and lowering costs per gram.
• The goal is to align with target product profiles and compete with incretin-based injectables by avoiding the need for titration, which improves patient convenience and prescriber ease.
• Process optimization and delivery device evaluation are ongoing to reduce costs and support commercial durability.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management highlighted 'synergistic efficacy with nimasimab plus semaglutide' with 'approximately 3% weight loss at 26 weeks (p=0.0372)', noted 'no neuropsychiatric signal and no additive GI burden', and reported cash and short‑term investments of $35.3M with runway into 2027 — underpinning confidence in clinical and operational plans.

Q&A:

• Question from Michael DiFiore (Evercore ISI): Have you gained additional insight between weight loss and exposure beyond the earlier 16‑week PK data? And are 43 patients in the 26‑week extension enough to draw statistically significant insights?
  Response: PK/PD analyses (final model pending) show a credible exposure–response slope indicating higher exposure should yield greater weight loss; the extension is smaller but retention is strong and should show clear combo separation, though monotherapy conclusions remain uncertain.

• Question from Andy (William Blair): Regulatory: do you need monotherapy approval before pursuing a maintenance approval? And any patient baseline characteristics explain the faster than expected weight regain in the semaglutide arm?
  Response: Regulators would require monotherapy approval for a formal maintenance label, so the company will pursue monotherapy dose‑finding while engaging agencies; the faster regain in the semaglutide arm is unexplained in demographics and may reflect natural early rebound patterns, but the combo blunted regain markedly.

• Question from Ananda Ghosh (H.C. Wainwright): What magnitude of combo effect do you view as clinically/commercially viable, and what was the quality of weight loss (lean vs fat mass)?
  Response: The combo delivered ~3.5% incremental weight loss at 26 weeks (about a 35% relative improvement) with improved body composition—most incremental loss is fat (fat loss increased to >20% vs ~15% with semaglutide) while lean‑mass loss remained minimal; lean‑to‑fat ratio doubled (0.26 vs 0.13, p=0.01).

• Question from Jay Olson (Oppenheimer): How are you weighing induction versus maintenance development paths for nimasimab plus semaglutide, and what KOL feedback did you receive at Obesity Week?
  Response: Primary focus is induction via a Phase IIb combo to identify the optimal dose; maintenance is an attractive, differentiated opportunity but will follow monotherapy development/regulatory discussions; KOL feedback was positive—intriguing combo efficacy, interest in dose‑ranging, and strong emphasis on durability and lack of neuropsychiatric AEs.

• Question from Catherine (Citizens) on for John Wolleben: What do you expect from the monotherapy arm in the 26‑week update to choose the path forward, and have you changed thinking on higher dose targets (e.g., up to 1,000 mg)?
  Response: The 300mg extension is primarily to refine PK for modeling; Phase II will test meaningfully higher doses (potentially up to ~1,000mg) to unlock monotherapy efficacy (company expects >5% at 26 weeks at higher exposures) and will evaluate longer dosing (aiming for 52 weeks) in future studies.

• Question from Ted (Piper Sandler): As you escalate dose materially, what safety issues should we watch for beyond CNS/neuropsychiatric events?
  Response: Company is confident in the safety margin—no neuropsychiatric signals to date and preclinical/tox data support escalation—but will monitor tolerability (including potential GI effects) at higher doses and longer exposure in upcoming trials.

Contradiction Point 1

Weight Loss Efficacy and Goals

It involves differing expectations for weight loss efficacy and the clinical significance, which are critical for assessing the product's potential and investor expectations.

What data magnitude is clinically and commercially viable for the combination potential? What was the lean mass composition of the weight loss? - Ananda Ghosh (H.C. Wainwright)

20251111-2025 Q3: Combinations exceeding a 20% weight loss are clinically significant. In our study, semaglutide alone showed about 15% weight loss, and the combination increased it by 3.5%. - Puneet Arora(CPO)

What is nimacimab's weight loss efficacy potential at week 26, and which key metrics and biomarkers will you monitor? - Matthew Baron Hershenhorn (Oppenheimer)

2025Q2: We are looking for an 8% placebo-adjusted difference in weight loss, validating the mechanism and ensuring safety and tolerability. 5% to 8% placebo-adjusted weight loss would indicate biological activity. - Punit S. Dhillon(CEO)

Contradiction Point 2

Regulatory Path and Approval Strategy

It involves differing statements about the regulatory path and the necessity of a monotherapy approval before a maintenance therapy approval, which is crucial for understanding the company's strategy and potential regulatory hurdles.

Do you need monotherapy approval prior to maintenance approval? Why was weight regain faster in your study versus semaglutide monotherapy? - Andy (William Blair)

20251111-2025 Q3: We're also having discussion with the FDA regarding, you know, is a monotherapy approval required or is approval in a certain population enough? - Puneet Arora(EVP of R&D)

What are the key findings from the DIO model on Nimacimab's body composition effects, and what is the commercial potential of Nimacimab when combined with GLP-1? - Jay Olson (Oppenheimer)

2025Q1: I think we do need a monotherapy approval before we get to maintenance therapy. But the path for this is being discussed with regulatory agencies, and we're excited about the opportunity. - Puneet Arora(EVP of R&D)

Contradiction Point 3

Combination Therapy Focus and Potential

It involves differing statements about the focus and potential of combination therapy, which is crucial for understanding the company's product strategy and market positioning.

Do you need monotherapy approval before maintenance approval? Why was weight regain faster in your study compared to semaglutide alone? - Andy (William Blair)

20251111-2025 Q3: We believe that the combination therapy will have similar or equal commercial opportunity to monotherapy. - Tu Diep(COO)

What were the DIO model findings on body composition with Nimacimab, and what is the commercial potential of Nimacimab combined with GLP-1? - Jay Olson (Oppenheimer)

2025Q1: We think that there is equal commercial potential for both the monotherapy and combination. - Tu Diep(COO)

Contradiction Point 4

Weight Regain and Patient Characteristics

It involves the explanation for the observed rapid weight regain, which is crucial for understanding the effectiveness and potential issues with the treatment's efficacy.

Do you require monotherapy approval before seeking maintenance approval? Why was weight regain faster in your study compared to semaglutide monotherapy? - Andy (William Blair)

20251111-2025 Q3: Weight regain is faster than expected due to patient characteristics similar to other studies, but we don't know the specific reasons. - Puneet Arora(CMO)

What regulatory considerations apply to monotherapy approval prior to maintenance approval? Do patient baseline characteristics explain the rapid weight regain? - Unknown Analyst (William Blair)

2025Q3: The weight regain is faster than expected due to patient characteristics similar to other studies, but we don't know the specific reasons. - Puneet Arora(CMO)

Contradiction Point 5

Phase IIb Study Focus

It relates to the focus of the Phase IIb study, which is important for understanding the company's strategic direction and potential outcomes of future trials.

How are you evaluating the trade-offs between induction and maintenance? What feedback have KOLs provided on the Phase IIa data? - Jay Olson (Oppenheimer)

20251111-2025 Q3: We are focused on the induction phase with combination therapy. - Punit Dhillon(CEO)

Are you comparing induction vs. maintenance in the study of nimasimab plus semaglutide? Have you received KOL feedback on the CB1 Phase IIa data? - Jay Olson (Oppenheimer)

2025Q3: We will continue with the Phase IIb study as planned, focusing on induction this time. - Puneet Arora(CMO)