Crystal: Hello, and thank you for standing by. Welcome to the Nectar Therapeutics fourth quarter 2025 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Vivian Wu from Nectar Investor Relations to kick things off. Please go ahead.
Vivian Wu: Thank you, Crystal, and good afternoon, everyone. Thank you for joining us today. Today, you will hear from Howard Robin, our President and Chief Executive Officer, Dr. Jonathan Zalewski, our Chief Research and Development Officer, and Sandra Gardner, our Chief Financial Officer. Dr. Mary Tagliaferri, our Chief Medical Officer, will also be available during the Q&A. On today's call, we expect to make forward-looking statements regarding our business, including statements regarding the therapeutic potential of and future development plans for Respec Aldis-Lukens. the timing and plans for future clinical data presentations, and other statements regarding the future of our business. Because forward-looking statements relate to the future, they are subject to uncertainties and risks that are difficult to predict, and many of which are outside of our control. Our actual results may differ materially from these statements. Important risks and uncertainties are set forth in our latest Form 10-Q available at sec.gov. We undertake no obligation to update any of these four leading statements, whether as a result of new information, future developments, or otherwise. A webcast of this call will be available on the IR page of Nectar's website at Nectar.com. With that said, I would like to hand the call over to our President and CEO, Howard Robin. Howard?
Howard Robin: Thank you, Vivian. Good afternoon, everyone. 2025 was a pivotal year for Nectar, and we continue to build on the success with significant progress in 2026. In 2023, we unveiled our plans to focus on the advancement of our immunology and inflammation pipeline programs, which center around the biology of T regulatory cells. In October of 23, we began the first phase two study of our novel Treg biologic, RESPEG-Aldisleukin, in patients with moderate to severe ectopic dermatitis. In early 2024, we began our second Phase II study in patients with alopecia areata, and just last year, a third Phase II study in type 1 diabetes was initiated with our collaborator, TrialNet, who is fundering and sponsoring this trial. In the second half of 2025, we saw the successful outcome of several years of hard work by our team as we achieved the first positive results from the two Phase IIb studies of RESPEG in ectopic dermatitis and alopecia areata. The results validated that our novel regulatory T-cell mechanism could produce clinically meaningful outcomes in two dermatological and inflammatory disease settings. And just last month, were reported on the long-term monthly and quarterly dosing results from the 36-week maintenance portion of resolved AD in ectopic dermatitis. These data showed a significant durability of efficacy that was highly competitive to what's seen with other biologics and establishes what our novel Treg mechanism is capable of achieving. Monthly or quarterly dosing of RESPEG during the maintenance period showed a deepening of response with increases in EZ-75, EZ-90, and an up to five-fold increase in EZ-100 scores. Both ectopic dermatitis and alopecia areata are inflammatory dermatological diseases that impact a significant number of patients worldwide. In the U.S. alone, there are over 15 million people with moderate to severe ectopic dermatitis, and it is estimated that today only 10 to 15% of patients are receiving biologic treatments for this chronic skin disorder. Driven by the rapid adoption of biologics, the ectopic dermatitis market is expected to grow to approximately $35 billion by the mid-2030s. Although Dupixent and IL-13s are the predominantly used therapeutics today to treat these patients. About 50% of patients fail to respond or lose treatment effect over time with IL-13-based approaches. This leaves a significant opportunity for a novel immune-modulating mechanism like RESPEG to enter the treatment paradigm. And the competitive landscape has recently narrowed for the late-stage novel method MOAs being advanced to BLA filings. We believe this puts Respec in a lead position as a novel MOA which could offer both a differentiated efficacy and safety profile with a better dosing regimen and the potential to offer patients complete clearance of disease over time. In alopecia areata, there remains a need for an efficacious and safe biologic with a better efficacy and dosing profile. Currently approved JAK inhibitors are effective at regrowing hair in some patients, but they carry a number of drawbacks, and more than half of physicians and patients are hesitant to use these agents because of the safety risks and the associated monitoring burden they pose. Importantly, the JAK class has poor durability, and nearly all patients lose their hair after treatment cessation. With the 36-week data from Resolve AA establishing a clinical efficacy profile similar to low-dose JAK inhibitors in alopecia, We're looking forward to seeing the 52-week data from that study in April. For patients who enter the blinded 16-week treatment extension, we will be evaluating the potential of RESPEG to deepen SALT reductions, including ZUSALT 20 responses. RESPEG's differentiated clinical profile and a safety database of over 1,000 patients treated to date, equivalent to 381 patient years of exposure, provides an exceptionally strong basis for advancing RESPEG into Phase III studies. In June, we will be randomizing the first patient in the Phase III studies in ectopic dermatitis. We now have alignment with the FDA on our Phase III dose, the 24-week induction treatment period, and other critical Phase III study design elements. Jay Z will review that in a moment. We expect to have the first data from Phase III in mid-2028 and meet our goal to submit a BLA in 2029. We ended 2025 with $245.8 million in cash and investments and with no debt on our balance sheet. Since year end, we've also raised approximately $476 million in additional net cash through both a public offering and exercising a portion of our ATM. Our very strong balance sheet now allows us to move quickly into phase three. I'll now turn the call over to Jay-Z, who will share more on RESPEG and our other immunology programs. Jay-Z?
Dr. Jonathan Zalewski: Thank you, Howard. To start off, I'd like to comment in more detail on the significant progress we've made with RESPEG that Howard highlighted moments ago. RESPEG is a very unique Treg biologic that capitalizes on a critical immune pathway. As a highly selective agonist of regulatory T cells, It is designed to address the underlying immune balance of multiple inflammatory pathways. This past year, we have shown through our Phase II clinical datasets that RESPEG is truly differentiated as a novel MOA and late-stage biologic candidate with a compelling efficacy profile, and that it can also offer long-term extended dosing frequencies. This phase two data adds to the 36-week off-drug disease control or remittive potential of RESPEC that we demonstrated in the earlier phase one trial. And now RESPEC is a phase three ready program. And we have one of the largest safety databases for agents in mid to late stage development in atopic dermatitis, which is now established in over 1,000 patients spanning about 381 patient years of exposure. In atopic dermatitis, our 16-week induction data reported last June established that RESPEC has a rapid onset of key efficacy metrics, separating early from placebo after one or two doses on EZ-75, EZ-90, and itch relief. And notably, our induction data established RESPEC as the first novel MOA to show strong itch relief in conjunction with skin clearance without the need for topical corticosteroids. We know that it relief is a major driver of improved sleep scores and better quality of life for patients with atopic dermatitis. And this translated into achieving statistical significance on these patient reported outcomes in our study as well. At the high dose of 24 microgram per kilogram given every two weeks in induction, we also saw comparable efficacy data for both EZ75 and EZ90 in the moderate and severe patient populations enrolled in the trial. The study was stratified by the VIGA baseline scores of four and three, and efficacy was comparable among both these populations. And this attribute emerges as a key differentiating aspect from what has been seen with Dupixent treatment. ResPag has also shown promising positive results in treating atopic dermatitis patients with self-reported comorbid asthma. We reported this data for the ACQ5 endpoints for dissolved AD last year at ACAAI. Outside of Dupixent, no other approved agent or agent in development has shown the ability to improve atopic dermatitis and comorbid asthma at the same time. In induction, RESPEC resulted in statistically significant and clinically meaningful improvements in ACQ5 scores at week 16 versus placebo in patients, and a 75% improvement in these scores in patients with uncontrolled asthma at baseline. And approximately one in four atopic dermatitis patients also have comorbid asthma, and RESPEG is the only novel MOA to show improvements in this endpoint. With the 36-week maintenance data reported last month, we demonstrated two additional critical features of RESPEC that differentiated from approved agents and those in development. First, we saw significant maintenance of efficacy, and we also saw deepening of response with continued treatment out to 52 weeks, including improvements in EZ75, EZ90, ICH, and VIGA endpoints. Notably, we saw an up to five-fold increase in EZ100. As Howard mentioned earlier, Underscoring the potential for RESPAG to give patients complete disease clearance with extended treatment over time. And setting a new benchmark in atopic dermatitis. And second, we established that extended monthly and quarterly dosing could be used as a long-term treatment regimen with RESPAG after inducing responses. As I stated earlier, with over 1,000 patients treated to date and about 381 patient years of exposure, RESPEC has a well-established, long-term and favorable safety profile. As seen in our reported data, we have generated a differentiated safety profile with no increased risk of systemic adverse events such as conjunctivitis or infection or malignancy. The RESOLVE-AD data informed our Phase III program, and we will start the first pivotal study in June of this year. following our end of phase two meeting we now have alignment on plans for a phase three program to evaluate a single dose 24 microgram per kilogram twice monthly for a 24-week induction period patients who achieve easy 75 or iga responses will then be re-randomized to monthly and quarterly regimens out to 52 weeks the design of phase 3 will be similar to those studies used for registration of other biologics. Our plan is to utilize, as other Phase III programs have, the primary endpoint of an IGA-related endpoint required for U.S. registration and an additional EASY-75 endpoint to support EU approval. Our Phase III program will evaluate both biologic-naive and treatment-experienced patients. Beyond atopic dermatitis, in December, we also established a proof of concept with the data from Resolve AA for RESPEG in severe to very severe alopecia areata. We were pleased that these data have been accepted as a late-breaking presentation at the upcoming AAD meeting at the end of March. It is the only data set in alopecia areata that was accepted for presentation in the late-breaking sessions. In the RESOLVE-AA study, as we reported in December, RESPEC demonstrated an efficacy response that met our target product profile expectations, which was to achieve efficacy similar to low-dose JAK inhibition at week 36 with every two-week dosing and maintain a more attractive and favorable safety profile. We believe the data positioned RESPEC as a potential first-in-class biologic in alopecia, As Howard stated earlier, the resolved AA study also included a blinded 16 week extension for patients who reached week 36 in the study, but had not yet achieved a SALT20 score. We plan to report the data from this treatment extension in April. To that end, we will initiate a quiet period beginning April 1st until we unblind and report the data from the treatment extension. As a reminder, The only available systemic therapies that are FDA approved for the treatment of alopecia areata are JAK inhibitors, but these contain a number of black box warnings and laboratory monitoring requirements. Nearly all patients also experience hair loss after treatment cessation. With the limited treatment options available in alopecia areata, we believe there's a unique opportunity for a novel immune-modulating T-reg mechanism like RESPEC to offer attractive dosing as compared to a daily pill and a potentially more favorable safety profile. Following our 16 week treatment extension data, we expect to hold our end of phase two meeting with the FDA for alopecia areata in the second quarter of this year. And following that, we plan to share more about our plans for advancing into phase three. Before I move on to our earlier antibody program, I want to mention our ongoing phase two study with ResPag for type 1 diabetes. This study, sponsored and funded by TrialNet, is evaluating ResPag in patients with new onset stage 3 type 1 diabetes. Per protocol, patients will be randomized 2 to 1 versus placebo and receive ResPag every two weeks for six months. The study is broken into three cohorts, beginning with adult subjects, ages 18 to 45, and moving into patients as young as 12, and then eight years of age. We are excited to be working with TrialNet. This consortium of type 1 diabetes specialists in the U.S. also ran the first studies for Tizield, also known as teplizumab, in type 1 diabetes. They have a strong commitment to finding and evaluating new therapies that can help patients with this devastating diagnosis. We believe and expect initial data from the trial that sponsored Phase 2 sometime in 2027. One of the important paradigms of our work is that by creating a first-in-class Treg targeting approach, like RESPEC, we've confirmed what we've always felt as immunologists, that Tregs were essential for so many different diseases and that they could be therapeutically targeted for disease treatment. Based upon low-dose IL-2 and Treg biology, either genetically or assessed clinically, we know that there are so many indications beyond what we're exploring in our current phase two studies that are potential opportunities for respite. These include therapeutic areas such as our skin and autoimmune diseases, such as food allergies or asthma, where we've already seen the signal, and chronic rhinosinusitis. It also includes skin disorders such as dermatomyositis and also potentially immune diseases such as Sjogren's syndrome. As we advance RESPEG in phase three, we look forward to the possibility of generating additional proof of concept data and additional indications which could expand the future label for RESPEG. Moving on to our earlier pipeline programs, NECTAR-0165 and NECTAR-0166, are TNFR2 agonist and bispecific programs. We expect to present preclinical data from this program at a scientific conference in the second half of 2026. This molecule has a very high specificity for signaling through TNFR2 on Tregs to enhance and optimize their ability to regulate the immune system, which we believe could be impactful to multiple sclerosis, ulcerative colitis, vitiligo, and other INI indications. In the first quarter, we announced an academic research collaboration for Nectar 0165 with Dr. Stephen Hauser at UCSF to explore the potential role of TNFR2 agonism and the reduction of neurodegeneration and promotion of neuroprotection and cell repair. The work being funded by UCSF will look at Nectar 0165 in patient-derived B-cell models of multiple sclerosis. We're looking forward to working with Dr. Hauser to inform future development work for this important molecule. Leveraging our learnings from the development of Nectar-0165, we have designed a bispecific molecule called Nectar-0166. This bivalent antibody incorporates a TNFR2 agonist epitope and an antagonist epitope that has been previously validated in the treatment of rheumatology diseases. As a dual agonist antagonist of known pathways, NECTAR-0166 has the potential to modify disease pathogenesis in the number of autoimmune disorders. And we're planning for IND submission for one or both programs in 2027. And with that, I'll now turn it over to Sandy to cover the financials.
Sandra Gardner: Thank you, Jay-Z, and good afternoon, everyone. On today's call, I'll review our quarterly and full-year 2025 financials and share our preliminary financial guidance for 2026. We ended 2025 with $245.8 million in cash and investments and with no debt on our balance sheet. In February, we completed an underwritten public offering for $460 million, resulting in approximately $432 million in net cash proceeds to the company. We also accessed approximately $44 million of net proceeds to date from our existing $110 million ATM facility in 2026. We now have a strong balance sheet to invest in our pipeline and advance our phase three program in ResPay. I will now provide a quick review of our 2025 financials. Our revenue was $21.8 million for the fourth quarter and $55.2 million for the full year 2025. Our R&D expenses were $29.7 million for the fourth quarter and $117.3 million for the full year. Our G&A expenses were $11.2 million for the fourth quarter and $68.7 million for the full year. Our non-cash interest expense for the fourth quarter was $9.8 million and $26.2 million for the full year. And our net loss for the fourth quarter was $36.1 million or $1.78, basic and diluted net loss per share. For the full year of 2025, our net loss was $164.1 million or $9.73 basic and diluted net loss per share. We are providing very preliminary 2026 guidance on today's call. The guidance ranges are wide as we are still completing the planning and budgeting activities for the RESPEG phase three program. We began investing in start activities for this program last year with production of drug supply and placebo. And as Howard stated earlier, we plan to randomize the first patient in June. We expect an updated 2026 budget at that time, and we'll update our financial guidance as necessary. With respect to our 2026 P&L guidance, our non-cash royalty revenue for the full year of 2026 is expected to be between $40 and $45 million. Based on our current forecast, we anticipate that full-year R&D expense could range between $200 and $250 million, including approximately $5 to $10 million of non-cash depreciation and stock-based compensation expense. We expect G&A expense will decline in 2026 over 2025 to a range of $60 to $65 million. This includes approximately $5 million of non-cash depreciation and stock-based compensation expense. Our full year non-cash interest expense is expected to be between $30 and $35 million. Additionally, we do not expect any significant gain or loss on our equity method investment in 2026. Lastly, we expect to end 2026 with approximately $400 to $460 million in cash and investments. And with that, we'll now open the call for questions. Operator?
Crystal: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. In the interest of time, we do ask that you please limit yourself to one question at this time. Please stand by. We compile the Q&A roster. And our first question will come from Yasmine Rahimi from Piper Sandler. Your line is open.
spk14: Good afternoon, team. Thank you so much for all the great updates. Maybe a quick question that's sort of two-part. One is, given congrats on presenting the Resolve AA study at the AAD conference, hope to understand, GZ, what type of new data we could see. Was it just more an opportunity to showcase it And then part two is maybe help us frame what you hope to see in this blinded 16-week treatment extension period. What does the RESPEC need to show to be highly competitive both in regards to mean salt reduction as well as salt 20? Thank you, and I'll jump back in the queue.
Dr. Jonathan Zalewski: Thanks, Yasmeen. So one of the things that we'll be presenting later and that's coming up in the future uh data presentation is remember that the way the study was designed is that it was a 36-week treatment period however patients that had begun to grow hair but had not yet reached a salt 20 they were permitted to advance into a 16-week additional extension which was also a blinded portion of the study where they could receive dosing all the way to week 52. And when we presented the data in December, we had already indicated that there were already three patients that had entered into that period as of the time of that December data cut when we presented the results last year that had already reached a SAL20 after week 36. And those patients were not even considered in the week 36 numerator because their response happened afterwards. When you kind of then ask what is the tone of the presentation that we'll be making once we begin our quiet period in April and after we present the top line results, we'll be sharing the additional effect of treatment with RESPEC and the potential of additional patients to convert to achieving SALT20 responses as well as deepening their SALT reductions over that additional 16-week treatment period. And I think you're kind of potentially starting to see a bit of a paradigm. We saw an atopic dermatitis as we extended the duration of dosing to week 52 in maintenance. Patients treated with RESPEG continued to develop additional efficacy, and we think there's a potential that that could happen as well in alopecia areata, as we've already seen three patients achieve responses that way. So we'll be sharing the totality. of that patient population. All of the patients will have completed week 52 that entered into that extension period, and that will be the nature of the results. In terms of what we'd like to see for what would be competitive, Respec has already demonstrated quite a different profile from a jack inhibitor. When you consider all of the upsides of growing hair, but then balanced by the downsides, as both Howard and I mentioned in our presentation, there are really significant safety issues and risks that make taking a JAK inhibitor chronically very challenging. And particularly, it's a class of drug that's difficult for dermatologists to use owing to the laboratory monitoring and the additional work and risk that the patients have. And then when patients have to stop taking a JAK inhibitor for any reason, pretty much everyone loses all the hair that they might have grown. when they were on the JAK inhibitor. So we'd like to see an efficacy profile that reaches low dose of Lumient. I think we have a very good shot of getting to that level. And then we'd like to deliver all of the other things that Respec has already shown, which is a completely differentiated safety profile, a much more convenient dosing frequency relative to a once a day pill, and really an opportunity to provide a much better biologic that can be used chronically in this chronic indication. Thank you for the question, Yash.
Dr. Mary Tagliaferri: Thank you.
Crystal: Thank you. Our next question comes from Julian Harrison from BTIG. Your line is open.
spk08: Hi, thank you for taking the questions and congrats on the progress. Regarding the phase three program in atopic dermatitis that's expected to initiate next quarter, would you expect the ACQ5 data to make its way into a potential label from those trials? If so, I'm wondering how enabling you would expect that to be from a commercial standpoint relative to dual labeling, both in atopic derm and asthma. And then, sorry if I missed it, I'm curious also what percentage of bioexperience Do you plan to enroll in your atopic dermatitis trial that's upcoming? Is there a defined target there?
spk06: Sure. Mary, would you like to answer that?
Dr. Mary Tagliaferri: Sure. So we are including the ACQ-5 in the Phase III program, and we will look at this at baseline and through induction, and then we'll also look at the ACQ-5 through maintenance. and we are going to power and we will control for multiplicity for the ACQ5, and we will make every effort to include that into the label, and that is certainly part of our plan. With respect to bioexperienced patients, we are anticipating roughly 25% of the patients in our phase three program will be bioexperienced, and then 75% of the patients will be biologic inject inhibitor naïve.
spk08: Very helpful. Thank you.
Crystal: Yep. Thank you. Thank you. Our next question comes from Jay Olson from OPCO. Your line is open.
spk13: Oh, hi, Jean. This is Sean on the call for Jay. Thanks for taking the question and congrats on the progress. I'm just on the ad part. I'm just wondering for the Facebook file and also for future commercial launch, what are the formulation or device for red flag we're thinking right now. And also like wondering if there any protocol guidance or implementation on ISR mitigation strategy for your page three or you think that's necessary? Thank you.
Dr. Jonathan Zalewski: Go ahead, Mary. Well, yeah, I'll cover the question about the formulation and then I'll turn it over to you, Mary. So Restag is a very low volume administered agent. So patients receive, most patients receive one milliliter, two mils max, depending on their body weights. And then our plan is to run phase three in the same way that we ran the phase two, where the drug was presented as a vial. And then at the study site, it's drawn up and administered to the patient by staff at the study centers. But our plan for the commercial launch is to launch ResPag in an autoinjector, coupled with an autoinjector device. And so for that, we'll be switching to what's called weight-banded dosing. So we won't need to use weight-based dosing because patients will be dosed according to their body weight. And then we know that will have a lot of opportunities and also advantages. This will be a very straightforward self-administered product, very similar to all the biologics that are used in single-use pen devices. And then regarding some of the way we'll run the phase three, I'll turn that over to Mary.
Dr. Mary Tagliaferri: Yeah, hi. So first I think it would be a good idea to just review the ISR cases that we've seen across our program. And 99% of the ISRs were mild to moderate in severity, with the vast majority being mild. And only 1% are severe. And we do see a very, very, very low dropout rate due to ISRs. The reason for that is these ISRs are not like what we're experiencing when Pulse was launched. We do not commonly see pain. We do not commonly see toritis. The vast majority patients, 96% of them are just having erythema or redness. And likewise, these patients are not having ISRs every time they receive an injection. In fact, we see really the vast majority of patients are really only having two or fewer during the course of treatment. In terms of how these are managed, patients use cold compresses with ice, and if need be, they can also use a topical corticosteroid. The vast majority of patients don't have pruritus. For the most part, patients are not needing to use a topical corticosteroid. We, you know, did have Dr. Jonathan Silverberg on in our last presentation of the maintenance data. And, you know, he certainly underscored that the trade-off is an easy choice for patients. These patients, you know, are having severe itch. And with ResPeg, having that very rapid itch release and resolution of atopic dermatitis with the trade-off being an erythematous ISR that, you know, overall the risk-benefit highly favors Restag as a treatment for atopic dermatitis.
spk13: Thank you very much.
Crystal: Thank you. Our next question comes from Roger Song from Jefferies. Your line is open.
spk00: Great. Congrats for the progress, and then thanks for taking the question. My question relates to, I think, the last data cut for the atopic area. You have three patients reach 420, and then another seven patients reach 430. Just curious, what are the dosing for those three and the seven patients? And then given if they're deepening the response, since you're getting towards high-dose Illumian, based on your market research and then your advisor, will this efficacy reaching high-dose Illumian will change the potential clinical adoption compared to the low-dose? Thank you.
Dr. Mary Tagliaferri: Yeah, hi, Roger.
Dr. Jonathan Zalewski: Thanks, Roger, for your... Go ahead, Mary.
Dr. Mary Tagliaferri: Yes, indeed, yes.
Dr. Jonathan Zalewski: No, thank you for your question, Roger. So, you know, I just want to reiterate that the study is blinded, right? And so when we share the results coming up very soon in April, we'll unblind and we'll present all of the results for all of the patients that made it through to the extension period. So that'll be, you know, an update for us very, very soon. And then in terms of the TPP, you know, one of the really important elements is that This is a biologic, and it brings a completely different profile. And our objective was always to achieve the TPP of low dose JAK inhibitor, Illumient. And we believe we've already met that with the data that we have. We believe that 52 weeks is the correct duration of extension. So for example, in the phase three that we plan, we know we'd be treating longer than 36 weeks. And we know that there's an opportunity with the additional treatment duration. you know, to potentially elicit even more efficacy of effect. We think there's just this really white slate kind of an opportunity because the first time a biologic moves into an autoimmune indication, it can have a very profound effect on prescribing patterns from physicians. Many doctors are much more comfortable prescribing a safer biologic as opposed to a more difficult to manage and potentially more challenging agent like a JAK inhibitor. So it's something we're very, very excited about. And, you know, it's a data update that we're really looking forward to coming up. And it's a TPP that we think could be a really big opportunity for RASPAC in the future.
Crystal: Got it. Thank you. Thank you. Our next question comes from Mayank Mumtani from B Reilly Securities. Your line is open.
spk01: Yes. Good afternoon, Dean. Thanks for taking our questions and congrats on the progress. So another alopecia question. Sorry if I missed this. What incremental data relative to the December update you would get at the conference? And if you could comment on, you know, any plans for using the off therapy data for, you know, the responders that you had. And I know you had, you know, efficacy responses to the planning as part of a 16-week extension. So I wasn't sure. you know, at what point you'd look at the off-therapy data. And then just a little high-level question for Howard, if I may. You know, the easy 100 responder rate, how important do you think of that as a differentiator? I don't know if many agents get there. I also ask that in context of, you know, the initial framing of a large growing ATD market, you know, could have multiple entrants around the time you get on market in 2029. I understand the near-term launch landscape has certainly narrowed, but just thinking longer term.
Howard Robin: Well, I'll answer the last part of the question first, then turn it over to Jay-Z and Mary. I think EASY 100 hasn't been looked at very closely and it hasn't been reported very much because very few people attain the levels that we've been able to attain. So if you look at the maintenance data where we have achieved 30% or so EASY 100 scores, again, I think that's very important and essentially it leads to effectively complete clearance of the disease in these patients over time. And while it hasn't been talked about much, and people talk about EZ-75 and EZ-90, that's because it's really difficult to achieve EZ-100, and we've done it. So I think that says a lot about the potential for the Treg mechanism in general. I'll turn the rest of the question over to Jay-Z and Mary.
Dr. Jonathan Zalewski: Sure. Thanks, Howard. And Mike, you asked many, many questions in one question, 12 parts. So let me just make sure I catch them all. In terms of the AAD presentation, it's, you know, coming up in just a couple of weeks. So you can see, you know, all of the data that's presented. And it'll be presented in the medical conference, right, by a physician. In terms of the rest of the study, we do have a catalyst later this year, which will be the 24-week off-drug period of evaluation from the alopecia areata study. But that is not going to be data that we touch on either at AAD or in the April data presentation, which just focuses on the end of treatment, the week 52. In the second part of this year, in the later part, in the fourth quarter, we'll present the results of the 24-week off-drug period. So those will be just future catalysts to look forward to for BRASPEG and alopecia areata. Thank you for your question.
spk06: Thank you.
Crystal: Thank you. And our next question comes from Samantha Semenko from Citi. Your line is open.
spk05: Hi, good afternoon. Thanks very much for taking the question. Let me ask one about the type 1 diabetes study. I'm wondering if you could just share a little bit more about that trial. I know there's growing interest in development here. I'm wondering how you see RESPEC potentially differentiating from other approaches in the clinic. And should that 2027 data include C-peptide preservation data? And then if I could squeeze one more in just more broadly, as you think about advancing RESPEG into additional indications, you mentioned quite a few in your prepared remarks, Jaycee. How do you think about prioritizing those for which ones might be the first to potentially advance it to the clinic? Thanks very much.
Dr. Jonathan Zalewski: All right. Thanks, Sam. So, you know, in the type 1 diabetes, it was very interesting because TrialNet, was actually looking for a regulatory T cell targeting approach. And it was very exciting because there was a lot of sort of mutual drive for bringing that forward. And then it was also a very competitive process working with them because they have many things that they can choose from. We were very, very excited that they selected RESPEC to run the study. Now, one of the underlying scientific themes is there is a well-known sort of theory about the role of regulatory T cells in this disease and sort of how thymic antigens end up being bad for driving the autoreactivity against the islet cells and that a loss of Treg control really exacerbates it. So there was a goal in order to elevate Tregs in these patients. in order to slow the progression of the disease and ideally, you know, overcome it altogether. And so the first step in sort of achieving this long mission is this therapeutic intervention study. And this trial is really run very much in the same way that the first teplizumab studies were run. A big difference is that we're giving a six-month treatment as opposed to just a short, you know, burst, just a few weeks, as how teplizumab is dosed. And then the goal is, of course, to really slow down the rate of decline. There will be an opportunity for early data next year. And it's a little early to say the full extent of what that would be, Sam. However, yes, a mixed meal tolerance test, right, with C-peptide is obviously one of the key endpoints in the study, along with HbA1c levels and also insulin usage. And so those are the key activities that are being tracked in the patients. And it's a well-designed study with probably the most highly qualified team of people to do that kind of study in the TrialNet consortium. And then in terms of the other indications, it is still something that we're deciding on, which indications and which ways to go. But I think that we've seen so many examples of data from our own program. that would really make some indications quite attractive. I think it's quite clear that this mechanism in both skin diseases and diseases that have a TH2 drive has quite a lot of potential. And so seeing the results that we saw in patients with comorbid asthma was very exciting. So that makes that a very, very interesting indication. And there are a number of allergic indications as well that are also potential. So this is something that we'll give more updates on in the future in the coming months. Thank you.
Dr. Mary Tagliaferri: Yeah, and we just may want to add to this in terms of the differentiation in type 1 diabetes. You know, Pazil is not an easy drug to give. It's administered as a 14-day course of IV infusion for the step-up dosing schedule. And, you know, patients can commonly have cytokine release syndrome And so then, you know, you do have to give a number of other medications, you know, an antipyretic, an antihistamine, maybe an antiemetic, and then clinicians have to monitor for lymphopenia, rash, and even elevated liver enzymes. So, you know, in contrast, an outpatient dosing regimen with ResTag where there's not routine monitoring and you don't see cytokine release syndrome, I think also affords a highly differentiated and more favorable both safety profile as well as, you know, drugs that's administered outpatient as opposed to as a IV infusion in the infusion center or even hospital.
Crystal: Thank you. Thank you. And our next question will come from Arthur He from HC Wainwright. Your line is open.
spk10: Hey, Howard and team. Congrats on the progress. Can you guys hear me okay?
Howard Robin: Yes, we can.
spk10: Yep. Okay, sounds good. So, two questions. I know you're going to present the extension data from the A study in April, but could you, if it's loud, could you tell us how many patients complete the extension phase? And also, So when the patient finished the extension, do they have choice to continue on the drug or everybody goes to the off-treatment period? That's question one. Question two is, could you give us a quick update on the LIDI trial?
Howard Robin: Thanks.
Dr. Jonathan Zalewski: Jay-Z, why don't you take the first part? So let me start off with the first question. Yeah, okay. Yeah, so really quickly. So as we announced in December, there were 23 patients that were ongoing in the 16-week extension. If you remember, Arthur, we had like a waterfall plot and they were the green dot people, patients, you know, on that chart. So the data update that's coming in April will be when everybody completed the 52-week treatment. So those 23 people as well as anyone that had completed it prior. And then For this trial, all treatment stops for all patients at either week 36 or week 52 for the people that went into the extension. And afterwards, everyone is followed for 24 weeks off drug. And then for the second question, I'll turn it over to you, Howard.
Howard Robin: Yeah, thanks, Arthur. Look, obviously, I can't comment in detail on, you know, this type of litigation. Trial was scheduled for last year. It's in federal court. So because of the government shutdown last year, it was moved to this year because the courts were shut down. This trial is scheduled for September 8th. Jury trial in federal court in San Francisco. And we're fully committed to pursuing this. And we certainly think we were harmed. And let's see how this plays out in court. It's as much of an answer as I can give you at this point, but thanks for the question.
spk10: Awesome. Thanks for taking my question.
Crystal: Thank you. Our next question comes from Andy Shea from William Blair. Your line is open.
spk09: Great. Thanks for taking our question. One, on some of the macro developments in the last couple weeks, Geltderma, they kind of talked about increasing confidence in the atopic dermatitis space. So I guess part one, and I'm curious, is that it alters your market sizing guidance that was provided during J.P. Morgan? And then also kind of data update from Pfizer with its trispecific asset in atopic dermatitis. Not a lot of numerical data, but, you know, kind of curious about your take on that.
Howard Robin: Thanks. Jay-Z, you want to answer that one?
Dr. Jonathan Zalewski: Sure. Yeah. So maybe I'll start off on the Pfizer one, and then, Mary, you can touch on the Galderma update. So briefly covering, you know, Pfizer did present limited data in a press release, covering a couple of molecules, multi-specific molecules, that were inhibiting either IL-4, 13, and TISLIP, or 4, 13, and IL-33. And they showed some very encouraging placebo-adjusted efficacy data. One of the things that, you know, it's a very interesting question because sort of combining known mechanisms, you know, into multi-specific agents, whether buy or try specific is one way of achieving a combination kind of strategy. But it's also a way of kind of bringing in all the known mechanisms into one thing. It has a potential to be helpful, but it is also kind of an incremental approach focusing on known and validated agents. We think there's an opportunity with a mechanism like RESPEG as a T-reg targeting mechanism. to provide the patient a much more holistic and potentially comprehensive kind of efficacy. Because really what a T-RAG is aiming to do is to fix the underlying pathology of the disease. Not take away pathways that are disease drivers per se, but to fix what caused those pathways to be disease driving in the first place. And that's why we think we've been observing, you know, in atopic dermatitis with ongoing dosing, such a growing level of efficacy, a deep maintenance, and the potential for patients to really do better. It's very interesting. I mean, most medicines you take, they tend to do worse for you over time. But in our studies with RESPEG, we see the patients do better over time. So we think there's a lot of opportunity there. We also are very excited that RESPEG is much further ahead, right? So when you think about the programs that are initiating phase three, RESPEG is at a very competitive position and it's a novel MOA, and it has the opportunity to provide very differentiated opportunity for patients. And Mary, I'll turn it over to you for the Galderma question.
Howard Robin: Let me, Mary, before you jump in, let me just add to one thing JC said. Look, it's a great question. I just think it's important to understand the size of this market. The market, as I said earlier, is expected to be, you know, by the mid-30s, $35 billion. And only about 10% of patients who have ectopic dermatitis are taking a biologic. So the potential for market growth is enormous. There's lots of room for various mechanism of actions here. So I don't think that becomes a real hurdle. I do think Jay-Z is absolutely correct that we, as an agonist, as a Treg agonist, are taking a very, very different approach then, you know, IL-13, IL-4 would ever blockade. So let's see how it all plays out, but we're dealing with a market that's very, very large, and I think there's room for a number of different opportunities here. Mary, you want to go ahead?
Dr. Mary Tagliaferri: Yeah, no, I would just say that, you know, when we look at the Arcadia phase 3 data for immunolizumab, remember those trials were in combination with topical corticosteroids, And, you know, patients really don't like to slather themselves with topical corticosteroids. You know, by the time they start a biologic, it's because they've already, you know, for a very long time have been using topicals and they haven't controlled their disease. And when you look at those phase three programs, the EZ75 ranges between 42% and 44% for emolizumab in combination with the topical corticosteroids. I just point everybody to look again at our presentation from February, where we showed those placebo patients who were the placebo patients from the induction and crossed over for both 16 weeks of treatment and 24 weeks of treatment, where the EZ-75 was higher than what we saw with Nemo plus topical corticosteroids. It was 53% at week 16 and 58% at week 24. So, I just think even, you know, we saw a very rapid itch release, and then when, you know, you look head-to-head at EZ-75, ResPeg seems to provide a deeper response than, you know, Lizumab plus a topical corticosteroid. So, you know, from, you know, the perspective that Howard said, of course, this is a huge market, and there's lots of opportunity for multiple agents, I think when we stack up our data compared to Nemo plus the topical corticosteroids, we have very, very compelling data, which would really show that a physician would like to select an agent with a deeper UV75 for the benefit of their patient. So thanks for the question.
Crystal: Thank you. And I am showing no further questions from the phone lines. And I'd like to pass the conference back over to Howard Robin for any closing remarks.
Howard Robin: Well, thank you. And I want to thank everyone today for joining us and for your continued support. We really greatly appreciate it. And I want to thank our employees who continue tirelessly on behalf of patients. And together, we've transformed our scientific hypothesis into real and potentially meaningful therapeutic options for patients. We look forward to initiating our phase three studies in ectopic dermatitis in June and sharing our 52-week alopecia areata data in April. So stay tuned. Thanks, everybody.
Crystal: Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.
