Aclaris Therapeutics, Inc. (ACRS) Earnings Call Transcript & Summary

Good morning, everyone. Good to see everybody here. My name is Will Roberts. I'm the Head of Comms for Aclaris, and I'm thrilled to be the first person to welcome you to our 2025 R&D Day up here in New York. Thanks to everybody in the room. Really appreciate you showing up. It's early. We know it. The weather is not ideal, but it's good to see everybody here. And to the folks attending on the webcast, thank you guys as well. So the cool thing is that I get to take care of what I think is the most anticipated part of the presentation, the forward-looking statements. So before we get going on the presentation, I want to remind everybody that today's presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These are our judgment as of today, October 14, 2025, and may involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the content of this presentation. If you want more information on our risks and uncertainties, please refer to our filings with the SEC. They're available on our website and they're available through the SEC as well. We have a packed agenda. So we have 5 presentations from management. Dr. Neal Walker is going to take the intro, followed by Roland Kolbeck, our Chief Scientific Officer; then Joe Monahan, our -- actually the Founder of Confluence. Hugh Davis will be next, our President and Chief Operating Officer. And then Jesse Hall, our Chief Medical Officer, will close the day, at least our part of it. That will be followed by a couple of presentations from 2 key opinion leaders, one in Pulmonology, one in Dermatology, Dr. Zuzana Diamant and Dr. Michael Cameron. Assuming time is in our favor, we're going to have a live Q&A at the end, probably 15 minutes or so. Importantly, for the folks listening on the webcast right now, the window in which you are watching the presentation will also allow you to ask a question and we'll get it and as we can filter through those questions and ask the ones that we can get out. So thanks for everybody for being here. Let's get this thing going. I'll turn it over to Neal.

Thank you, Will. So I'm Dr. Neal Walker. I'm the Chairman and CEO of Aclaris Therapeutics. And as Will mentioned, we have a pretty dense slide deck here today. So I'm going to walk through a lot of the things that I view as take-home points that we love to have you walk away with. So '26 is going to be a huge year for us. It's a very catalyst-rich year. We have 4 anticipated readouts across our portfolio in addition to getting a new IND into the queue with our next-gen ITK selective. So right now, we have 3 clinical programs, 3 Phase I and Phase II programs, but we'll have 4 in 2026, which I think makes us pretty unique. The other thing that I think makes us pretty unique is that we are positioned to look at both the oral side of the house and the antibody space. And when we get to the target addressable markets, I'll talk more about that later. And the 2 assets I really want to highlight here today are our bispecific and ITK oral programs. We really view these as potential game changers in multiple indications actually. And why do I say that? So on the bispecific front, when you have the ability to target 2 different aspects of the same inflammatory pathway, the hope is that you can raise that efficacy ceiling. And that's important. Obviously, we aren't there just yet. On the ITK oral side, if you can think of it in the context of having an oral small molecule that goes after the Th2 side of the house, same indications that a Dupi will go after massive markets. But importantly, and we're going to show you this later in a few of the slides, we have the ability to tune these molecules and pick up Th1 and Th17. And so if you think about that from a broad perspective, we are hitting some efficacy ceilings on a broad basis in many of these indications because of the heterogeneity. And you'll hear about that a lot today. So I think that is one, in general, if folks get super interested about a STAT6 oral program, we're going to show you a slide about how narrow that is when it's addressing its targets and show you the broad base that ITK is addressing. And we often hear this, well, it might be the next oral dupi. I want to be the next oral JAK without the safety baggage. I mean that to me is a better bar. So we are -- if you look at all of our complete asset base, we're underpinned by state-of-the-art scientific platform and world-class people. I always like to refer to ourselves. We've got large pharma expertise and capability within a tiny biotech. And I think that's important in these kind of intensely competitive landscapes. And I would say that I think it goes without saying maybe that we have the ability to be resilient over time. We're really good at managing capital, and we have runway now through into the second half of 2028 and can execute across the entire portfolio. So a little bit about our specific assets. So bosakitug, ATI-045 is our TSLP mAb. We did an extensive amount of testing on this asset against both teze and the relevant competitive landscape. And if you really look at our data across numerous assays showing the best-in-class potential, right now, that asset is in a Phase II double-blind placebo-controlled study in patients with moderate to severe AD. We anticipate that readout in the second half of 2026. It's enrolling nicely, and we're excited about that compound. ATI-052 also came along in the Biogen license transaction. And this is a bispecific targeting TSLP and IL-4R. We already initiated SAD MAD work on this. We're through the SAD portion. We're into the MAD portion. We're right on track to complete that at the end of this year, likely top lining that in the very early part of Q1. The next step for that asset will be rolling into 2 Ib studies, one in atopic -- moderate to severe atopic dermatitis, the second in moderate to severe asthma. You'll get all 3 of those data sets in '26. So just through the first 2 assets, we have 4 readouts coming in 2026. The next compound is ATI-2138. We already reported out exceedingly positive data across efficacy and PD biomarkers showing importantly, 2 things in atopic dermatitis. We show that 2138 itself has quite unique pharmacology. And I think that's important. There's all different flavors of JAK inhibitors, and it just depends on what indication you're going after. And then on the ITK side of the house, we painted the path to why you should be believing in ITK as a target rather than relying on others in the space. And of course, we have a vibrant early-stage portfolio, which will be, again, headlined by our next-gen ITK inhibitors that will come into focus in 2026. So obviously, we all know this. These are large, massive markets in I&I across all these indications. We're learning so much about the pathophysiology, how to target these areas better. But I think the one thing that is absolutely true is that we have definitely not maxed out on efficacy and safety. And just to use psoriasis as an analog, a lot of these spaces are at the very early tip of where psoriasis was 10, 15 years ago. Look at indications like AD. But I think the interesting thing for us is that we have the ability to go after both orals and biologics. And that's important because if you think about it in these intensely competitive markets, we have 2 different ways to address Th1, Th2 and Th17 if the market changes in any way over time. And so I think that's important. Some have mentioned that. It's like how are you guys doing that on both sides? Well, we have the expertise. We've got ex-J&J or ex Pfizer guys. We got all the folks in-house to be able to prosecute those targets. So what are some of the opportunities? I think the obvious ones, if you look on the left-hand part of the slide, obviously, would be great to have faster onset. I was practicing as a dermatologist, one of the best things you could get is a patient who's super happy at week 2, not week 16. You like durable, consistent effects, deeper effects, optimizing symptom control. We all peg off these primary endpoints. But at the end of the day, it's how a patient feels. That's the question you ask them when they come in. And so for atopic dermatitis, you're going to say, hey, you itch in a lot, you're able to sleep at night. If it's a respiratory patient, you say, how is your breathing. So I think we have to look at that as surrogates for how well a molecule is going to do out in the wild. And I think the other important point on the oral side, and I already alluded to this, and we're going to show a number of slides on this. When you look at our ITK franchise, you'll see this progression where we've kind of tuned it from 2138, which hits ITK/TXK/JAK3 to an ITK/TXK compound and also an ITK selective. And that's really important. When you're looking at picking up better response rates across the patient population, we all hear about it. Every company talks about, well, maybe I could have done a little bit better, but it's a heterogeneous patient population. We're able to attack this with our oral small molecules. And I think that's a great differentiator. On the other side of the house with antibodies, same thing, faster onset, durable, deep. And when we talk about raising kind of that efficacy ceiling, we talk about being able to hit both aspects of that inflammatory pathway. If you can hit TSLP, if you can hit IL-4R, we know each of those work individually. So you ought to be able to drive a better efficacy response. We also hear a lot about dosing schedules. My personal opinion is we're getting a little bit long in the tooth on some of that narrative when we talk about 6 months and 12-month dosing. It's just -- that's not going to be broadly applicable. When you're seeing a patient and the patient is happy on a drug and the physician is happy with it, they're loath to switch that patient. And I don't care how many pieces of market research people do. There's a practical reality and kind of a ceiling on how much dosing schedule and mucking around that matters. At the end of the day, it's about efficacy and safety. So where are we at today? Like I said, our basis is our world-class platform and our scientific heft. We have 4 potential best-in-class clinical stage assets heading into '26, highlighted again by our bispecific and our oral ITK inhibitor franchise. We have an incredibly rich calendar of data events that will be clicking through all of '26 into '27. So it's a good time to get ahead of that. And of course, we have almost 3 years of capital, and that's not giving effect to any other BD transactions, and we're really good at managing the burn. So this just -- you'll see the slide kind of repeated throughout the day. These are the 2 pillars. We have the oral side of the house. We have the biologics side of the house. And you can see on the left-hand part of the slide, that ITK franchise includes 2138, which is germane to a number of indications. You take out the JAK3, you get rid of the black box there and you look at an ITK-TXK, which is relevant to a whole new set of indications and then an ITK selective, which is even a little bit narrow. And I would encourage people to really pay attention during Joe's section there. And when you're thinking about that relative to a STAT6 target and how narrow that is versus breadth on these kinase inhibitors. On the biologics side, again, we have bosakitug as a lead into the bispecific. We'll likely get some of the bispecific data ahead of the moderate to severe atopic dermatitis readout with the TSLP mAb, and that's just because of lower patient numbers. And then we have -- we've already started on what that next-gen looks like, leveraging that best-in-class TSLP mAb with a number of yet to be disclosed next-gen bispecifics. So we're excited, and I'm at this point, going to hand it off to Roland Kolbeck, who's going to go through our discovery engine. Roland?

Thank you, Neal, and good morning, good afternoon, everybody. My name is Roland Kolbeck. I recently joined Aclaris as CSO. And so what I want to do in the next few minutes is tell you about our world-class discovery engine, which allows us, as Neil was pointing out, to develop really high-quality small and large molecules for [ANI]. So what is it that makes us stand out among the pack? I think it is our ability with small molecules to address parts of the Kinome, which have recently been considered inaccessible, and I'll talk about this in a moment a little bit more. With large molecules, we are really focusing on developing best-in-class multi-specific antibodies that address the unmet clinical need in [ANI] and raise the efficacy ceiling. We have a world-class track record in drug discovery and development, state-of-the-art R&D capabilities and facilities in St. Louis, Missouri and a very experienced team of drug developers for seamless execution all the way from target inception to proof-of-concept studies in the clinic. So let me start with our small molecule capabilities. So kinases are obviously a very successful class of targets. There are about 80 kinase inhibitors approved, which in 2024 drove about 60 billion of sales. And again, that market opportunity is projected to raise almost shy of $90 billion by 2029. Now these 80 kinases only target about 10% of the entire Kinome. So there is ample space to really expand in that space. And this is where our KINect platform is coming in. It allows us to interrogate kinases, which have been considered inaccessible in the past. Now you may ask what is that KINect platform? It is indeed a combination of a proprietary chemical library that contains structures, which are biased towards and binding to interrogating kinases. This library allows us to not only pull out ATP competitive inhibitors, but as you will see in a moment, it allows us to apply different mechanisms of actions, how to target these kinases and opens up a much, much larger space that we can go after. But this, in combination also with our many years of deep experience in biology of kinases, understanding their mechanisms of action, the intracellular signaling pathways and also expertise in computational drug design, this combination with the library really makes the difference and allows us to develop high-quality inhibitors with high specificity and high potency much faster. So I mentioned mechanisms of actions we are focusing on, and that's summarized on that slide here. So we don't mainly do competitive kinase inhibitors. We focus on developing covalent kinase inhibitors. So these are compounds which bind to specific cysteines in the kinase pocket and irreversibly inhibit these kinases. So these compounds normally come with very high potency and specificity. We also have molecular glues. So these are compounds that bind to kinases in their inactive confirmation, keep them in that confirmation and sometimes also set them up for degradation. We can make tissue-specific molecules, which have very little systemic exposure and therefore, a beneficial therapeutic window. And finally, we recently also got into the protein degradation space with PROTACs. So these are compounds that label kinases for the proteasome mediated degradation. And therefore, you don't just inhibit the kinase activity, but you take out the whole scaffold. So you interrupt really the kinase and the binding partners of that particular kinase. Now let me move on to the large molecule to the antibody space. So bispecific, multi-specific antibodies indeed are already a very successful class in oncology. There are about 18 molecules approved for various cancer indications, driving about $12 billion of sales in 2024. We believe that following the path the oncology has shown us and applying it to the autoimmune and inflammation space is a huge opportunity to really address the unmet clinical need in that space. And I talk unmet clinical need, I mean, things like patients only partially respond or they are refractory to any particular treatment. You're talking about indications which have diverse endotypes and phenotypes. So you need to really tailor your molecules to address that unmet clinical need. [ANI] is also a space with an ever-increasing health burden. There global health care spend in 2024 was about $200 billion, and it's anticipated to increase to about to double to almost $400 billion by 2023. So how do we build this multi-specific bispecific monoclonal antibodies? So the way we are thinking about is that we either, for example, combine 2 validated clinical pathways into one molecule, which are non-overlapping. Our bispecific TSLP alpha receptor is one example. We can also take a validated arm and add a novel biology arm to it and therefore, expand the potency and the mechanism of a molecule or simply, we are inhibiting one molecule in any indication is not enough, we can combine it with another one so that these 2 arms synergistically work together and drive efficacy in the indication. Now as we do so, we want to make sure that we really make the best molecules, which are fit for purpose. We select the right format, we humanize or they are fully human antibodies to avoid immunogenicity. We look at developability very early on. We certainly drive for high specificity and potency for the target. And we can also change the Fc effector function of these molecules. You can dial in, for example, half-life extension, again, which we have done with our bispecific ATI-052 or we can dial in and out effector function in these molecules. And this is something we are doing also in collaboration with world-class experts. Now let me just show you 4 examples of what -- how we have applied our strategy. So 2 small molecules, 2 antibodies. You'll hear more about these molecules in detail from my colleagues in a moment. So I just want to highlight a few aspects here. On the left-hand side, ATI-2138, Neal was referring to already our dual ITK/JAK3 small molecule inhibitor. JAK3 is downstream of the common gamma-chain cytokines, inhibit cytokine activity like IL-2, 4, 7, IL-15. So very important cytokines in disease and ITK downstream of the T cell receptor. So you have, again, compatible pathways, which support each other for efficacy. This is a covalent inhibitor, and we are building on that experience to pull out the next-generation ITK inhibitors, which are now we are dialing out the JAK3 crossover. So these molecules are ITK/TXK specific. Again, you'll hear more from Joe in a moment. Just want to highlight here, ITK is a hard kinase to target, and I think it just exemplifies how we can apply our KINect platform to pull out the really potent and selective inhibitors. On the antibody side, we have bosakitug, the TSLP inhibitor. I think with potential to be a best-in-class monoclonal antibody. It's about 70-fold more potent than tezepelumab. It has the potential based on its affinity and its target engagement for infrequent administration also. And then we used that backbone of Bosakitug and added an IL-4 receptor arm to make ATI-052, our bispecific antibody, which is in clinical development. Yet again, a molecule that is more potent than a combination of teze and dupi. It's also an Fc-modified molecule. So it has a half-life extension for infrequent administration, and we dialed out effector function in that molecule. So just to illustrate how we apply our capabilities. We can do all of that and profile our compounds very deeply because we have state-of-the-art R&D capabilities in St. Louis. We have biochemistry, enzymology, we can do bioanalytical chemistry, computational and medicinal chemistry. We also have translational capabilities, which is important, so we can interrogate clinical samples for PD activity or biomarkers, which come from our own clinical studies or from other patient populations. We have a whole plethora of different immunology assays. We can culture human, mouse hematopoietic cells and modify and interrogate them in vitro and also complement this with in vivo pharmacology and PK studies using our vivarium capabilities. So in summary, what I've told you is that we have a great opportunity with small molecules in the kinase space. With antibodies, we designed the best-in-class molecules potentially to raise the efficacy ceiling in [ANI] and address the unmet need, which is huge and very significant in that space. We have unique expertise with small and large molecule development, state-of-the-art R&D capabilities, which allow us to profile our own molecules. But we can also use these capabilities to profile, for example, molecules we in-license, which we have done with the [Biogen antibodies], for example, or compare what we have generated internally with competitor molecules in a really apple-to-apple comparison, which gives us the confidence to take our molecules forward. And this is all possible because we have a great team of scientists, a very experienced group for seamless execution. And so we're expecting new INDs starting in 2026. So thank you for your attention. And with that, I'm going to turn it over to Joe Monahan, who's going to talk about our kinase franchise. Joe?

Thanks, Roland, and good morning, everyone. So I'm going to speak about the oral kinase inhibitors that we've been generating at Aclaris. And specifically, I'm going to be talking about the ITK franchise, which has been mentioned, is leading by the ATI-2138, which is in Phase II and the ITK selective compounds, which we're driving towards IND. So why is ITK something of interest? This is a picture of the T cell. T cells are activated by antigen in the context of MHC presented by antigen-presenting cells, activates a T cell receptor and it initiates a whole series of intracellular signaling, ultimately culminating in the translocation of transcription factors that drive the transcription and translation of a number of different cytokines and these cytokines drive the differentiation, proliferation and activation of T cells. ITK is a central kinase in the signal transduction cascade. It's a member of the Tec kinase family, which has -- consists of 5 different members. And it's located upstream of calcineurin, which is a calcium-dependent phosphatase in the target of drugs such as cyclosporine. ITK has been shown to be upregulated in diseases, and we believe that inhibition of ITK should be effective in a number of I&I diseases. So this digs into a little bit of how ITK works in T Helper cell biology. So CD4 positive T cells can be differentiated into a number of different T Helper cells, and this would drive the immune response against both host protection as well as in the case of an abnormal response in inflammation. And what you can see here is that ITK is critical and the only tech kinase that's expressed in Th2 cells and Th17 cells. So ITK is responsible for the biological activity of both Th2 and Th17, and that is associated with both allergy and asthma as well as systemic autoimmunity. There's a second Tec kinase called TXK and TXK and ITK are co-expressed in Th1 cells. So both these kinases are required for the biological function of Th1 cells. And again, that drives organ-specific autoimmunity. So if one were to be able to generate ITK selective inhibitors, you would expect them to have an impact on Th2 diseases as well as Th17 diseases. And if one were to generate ITK/TXK dual inhibitors, you'd also have an impact on Th1 diseases. So this kind of compares ITK inhibitors, TXK/ITK dual inhibitors against a number of different key cytokines from these T Helper cells, Th2 cells, Th17 cells, innate lymphoid cells of type 2 as well as Th1 cells. And as you can see, ITK inhibitors and ITK/TSK inhibitors have a broad impact across all these different cytokines. In contrast, if you look at the biologics, we're restricted biology there. And even the bispecific, you'll extend that to some degree, but it's still going to be more limited. And that's similar to STAT6 inhibitor, which is an oral compound, but it still is restricted in its biology to targeting IL-4 and IL-13 similar to dupilumab. So when you look at this, ITK and ITK/TSK are oral inhibitors that could have much broader impact than some of the biologics, STAT6 inhibitors and potentially have JAK-like efficacy without the side effect profiles. So if ITK is so interesting, why aren't there a bunch of drugs in development for this target? The problem with ITK, as has been mentioned previously, it's historically difficult to drug. Most drug companies had programs in ITK over the past 20 years, but these were mostly focused on developing reversible ATP competitive inhibitors. And unfortunately, due to some of the properties of ITK, this approach was unsuccessful. Why is it unsuccessful? I think from a chemistry standpoint, it was difficult to generate drug-like properties into these inhibitors because of some of the physical chemical limitations, poor PK properties and in some cases, reactive metabolites. But one issue that was found among all these inhibitors was the large shift in potency when you move from an enzyme into a cell, and that's due to low biochemical efficiency. And so the situation with ITK is that it has a very high affinity for one of its substrates, ATP. And ATP is present in millimolar concentrations in cells. And so when you move from an enzyme into a cell and you now have these reversible ATP competitive inhibitors competing with millimolar concentrations of ATP that bind very tightly to ITK, you get a dramatic right shift in potency and it's to a point where you can't dose high enough to allow clinical development. So the approach that we took to overcome this, again, as has been mentioned, is to develop covalent inhibitors of ITK. ITK is a member of the cystinome, which is a subset of about 300-plus kinases of the human kinome, and it has cysteine residues that decorate the ATP pocket, they're non-catalytic cysteines. And you can take advantage of these cysteines by building a molecule that contains an electrophile that can interact with the [indiscernible], ligate that and form a covalent bond. And so we use structure-based drug design, coupled with our proprietary crystal structure of ITK and the complex of inhibitors to develop these covalent compounds. And what our strategy was is to maximize the reversible affinity of these compounds, so we can drive them into the ATP site and then minimize the reactivity of the electrophile and only have reactions when it's juxtaposed that [sulfhydryl] associated with that cysteine 442. And so I'll go through some of the successes that we had doing this. First-generation inhibitor that we have is ATI-2138, which has been discussed before. It's an oral small molecule covalent inhibitor of both ITK and JAK3. It just so happens that JAK3 has the cysteine residue present in the same spot as ITK. So with the same molecule, you can ligate that cysteine residue in both ITK and JAK3. So in that regard, it's very potent against both molecules, and it's a true dual pharmacology where at a given dose, a given exposure, you're going to hit both targets similarly. This compound has moved into Phase II studies, and I'll talk a little bit about that later. So why is it unique? I think it's high potency for inhibiting both targets. There are other molecules out there now that -- a few other molecules that are covalent in nature and have either a bias for JAK3 or a bias for ITK, but there's nothing out there to our knowledge that has a true dual pharmacology for ITK and JAK3. The fact that you're hitting downstream of the T cell receptor regulating T cell function and you're also hitting these gamma common cytokines that are T cell dependent such as IL-2, IL-4, [7, 9, 15 and 21], you have an upstream effect and you also have a downstream effect, which should be additive or synergistic. Inhibiting both of these pathways should provide a more complete and more potent inhibition of inflammation in the inflammatory response. The other, I think, important thing to note here is that both ITK and JAK3 are restricted in their expression to a subset of hematopoietic cells. So this is in contrast to the other 3 JAK isoforms who are ubiquitously expressed and potentially having this restricted expression could be beneficial from a safety standpoint. We've done a lot of preclinical characterization of ATI-2138. We have a publication in JPET that describes a lot of this stuff. And I'm just going to go over a snippet of the in vivo data that we have in the mouse animal model just to give you a flavor of the breadth of potential that this molecule has. So on the left-hand side here, we're looking at a mouse adoptive T cell transfer model of IBD. And we're comparing ATI-2138 with another compound called ritlecitinib and looking at the histopathology score in the proximal colon and the ilium. Now ritlecitinib is a Pfizer compound that is a covalent inhibitor of JAK3 that has some small impact on Tec kinases such as ITK. This compound has been approved for alopecia and is in late clinical development for vitiligo as well as Crohn's disease and ulcerative colitis. And as you can see in this model, 2138 basically has really good efficacy, both in knocking down the histopathology score in the colon as well as the ilium and is significantly better than what you see with ritlecitinib at the same dose and exposure. In the middle panel, we're looking at vitiligo, mouse T cell transfer model of vitiligo run at John Harris' lab. And basically, 2138 at both doses tested prevented the disease. And on the right-hand side, the classic mouse collagen-induced arthritis model, all 3 doses of ATI-2138 blocked the clinical arthritis in these animals and was significantly better than the TNF biologic Enbrel. So now some of the data in the next couple of slides have been on our website, so I'm just going to go over this quickly. But this slide is just to describe this real dual pharmacology of 2138 in contrast to the Pfizer compound ritlecitinib. On the top panel, you're looking at the ITK component of the cellular activity, where 2138 is about 40 to 50x more potent than ritlecitinib and on the bottom, looking at the JAK3 component where 2138 is about 5x more potent. So this shows 2 things. It shows, number one, that the Pfizer compound is biased towards JAK3 and has minimal activity against ITK. And secondly, that 2138 has real dual pharmacology in these cells. The second compound of interest is the Corvus compound, CPI-818, which is a selective ITK inhibitor. So now we're looking at the ITK portion of 2138 and comparing that to CPI-818. From a biochemistry standpoint, on the left-hand side, looking at the potency against ITK itself, 2138 is 15 to 40x more potent than is CPI-818. And at the right-hand side, we're looking here at cellular functional activity, looking at the activation of differentiated Th2 cells in the cytokine produced of IL-4, IL-5 and IL-13 with 2138 across the top and CPI-818 across the bottom, you can see good inhibition of all 3 of these cytokines with 2138, and it's about 30 to 100x more potent than is CPI-818. So we moved 2138 into clinical studies, and this is a summary of the SAD and MAD studies. The only thing that I want to point out here is, number one, over 2 weeks of dosing, 2138 was safe and well tolerated. We dosed up to 80 milligrams daily. The PK profile was good with this compound. And from a pharmacodynamic standpoint, we're able to demonstrate that we could regulate both JAK3 and ITK. And in doing so, we are able to predict what the best dose to go forward with in the Phase II study was. So we moved this compound into the Phase II trial in atopic dermatitis. It was a 12-week open-label study with a single dose 10 milligrams BID in moderate to severe AD patients. Important readout here was over 12 weeks, we saw a favorable safety profile. We also saw efficacy a number -- across a number of measures, and it was comparable to drugs approved for AD. And importantly, we're able to show that we did have good pharmacodynamic modulation of both ITK and JAK3 and this modulation impacted key pathways involved. This slide summarizes some of the efficacy that was observed in this AD study, which is the EASI score in the center panel of the bar graph all the way to the right, showing that's a favorable itch response relative to other drugs. And then on the right, the body surface area decrease as well as the EASI score decrease was significant, and we believe that this is a retained clinical -- retained consistent clinical response with 2138. We did a significant amount of pharmacodynamic assessment in this study. The part of it was to understand the PK/PD relationship, and that's where we looked at both function of ITK and JAK3 as well as ITK target occupancy. And then in collaboration with Emma Guttman's lab at Mount Sinai, we related PD with efficacy. And in that regard, we looked at punch biopsies in the skin. We looked at tape strip analysis in the skin, and we looked at endogenous biomarkers in plasma using both RNAseq analysis for transcriptome signatures and Olink analysis for proteomic signatures. So first, I'm just going to have one slide to show that we do have good pharmacodynamic response, particularly in this case against ITK. On the left-hand side, we're looking at an ex vivo functional assay out of blood, looking at inhibition of ITK 1 hour post dose as well as a trough. We see 90% inhibition of ITK function 1 hour post dose and somewhere between 40% and 50% at trough. On the right-hand side, we're looking at ITK target occupancy. Almost complete target occupancy is observed 1 hour post dose, so at [indiscernible]. And at trough, we're seeing somewhere between 60% and 70% target occupancy. So this demonstrates that at this 10-milligram BID dose, we're getting near complete and sustained occupancy and inhibition of function of ITK. We'll then move to look at how this inhibition of this target impacted some of the key pathways that are involved in the disease. And this is a section of the data that the Guttman lab generated, and this is looking at tape strip analysis and proteomic data. The transcriptomic data look very similar to this, but I'm just going to show you the proteomic data. So here, we're looking at lesional and nonlesional tape strips over week 4, week 8 and week 12 and looking at gene signatures for immune set of genes, Th1 genes, Th17 genes and Th2 signatures. And looking at, as I said, lesional in the orange and nonlesional in the blue and comparing it to baseline. So if you just look at the immune genes in the upper left, you see that starting at week 4, you see a significant reduction in this immune gene subset. So returned more towards baseline, and that's retained over the 12 weeks of the study. And you see similar results with Th1, Th17 and Th2. So this demonstrates that we're knocking down the target ITK and that knockdown of the target is impacting the key pathways that are involved in atopic dermatitis. Another way to look at the data is shown here. And in this case, we're taking representative genes that represent general inflammation, Th2, Th17 across the top as well as fibrosis across the bottom. And we're correlating the regulation of those genes with a clinical readout. So if you just focus on the top center, for example, this is looking at TSLP as a representative Th2 gene. And for the clinical readout, we're looking at the EASI score. And what you can see is as you decrease the TSLP, which is induced by 2138, you get an improvement in EASI score and there's a good correlation with the correlation coefficient of 0.8. And you see similar results with the other readouts here as well. So now we've taken it a step further saying that knocking down the target, we're impacting the particular pathways, and we see a good correlation of the inhibition of these pathways with the inhibition of the clinical outcome. So this is the summary. I described most of this already. What I would just say is that based on the safety profile that we have from the SAD and MAD study and from this study, coupled with the pharmacodynamic analysis, we believe that while the 10-milligram BID dose was a good anchor dose, we have the potential to increase the dose from a safety standpoint and potentially incrementally increase the pharmacodynamic and clinical responses in subsequent studies. I'm going to switch gears now and talk about our next-generation ITK inhibitors. This is a summary of the ITK inhibitors and the program status. I've already described our first-generation compound 2138. Our next-generation inhibitors come in 2 flavors, as Neal described. One is ITK/TXK inhibitor and one is an ITK selective inhibitor. In these next-generation inhibitors, we wanted 4 parameters to be optimized. One is we wanted to retain good potency against ITK, similar to what we have with 2138. Secondly, we want to engineer out any cross-reactivity with JAK3. Thirdly, we want to extend the half-life to allow for potential once-a-day dosing. And finally, we want to be able to dial in and out cross-reactivity with TXK. So with these molecules, we have a single molecule, ACRS-3 that we're moving forward towards IND that is an ITK selective compound. And we have ACRS-1, which is our lead ITK/TSK dual inhibitor and ACRS-2 is our backup. So how are we doing this? The model on the left shows an overlap of the structure of the ATP domain of ITK and JAK3. And at first glance, you can see that there's a significant amount of overlap here. But there's a couple of key components that allow us to take advantage of some differences to generate both potency against ITK and selectivity against JAK3. One is that phenylalanine 435 in the upper middle there. And that is a gatekeeper residue. It's a phenylalanine 435 in ITK, and it's a smaller methionine residue in JAK3 and allows us to take advantage of the potential interaction either by pi-stacking or hydrophobic interaction of our inhibitor with that Phe435 to increase potency against ITK and increase selectivity against JAK3. Secondly, there's on the right-hand side, JAK3 has a collapsed G-loop. And again, this allows us to engage the G-loop of ITK, improving the potency and decreasing the cross reactivity with JAK3. So taking these 2 engaging the hinge region to form a nice reversible high-affinity interaction that's selective against JAK and then covalently engaging CYS442 with the electrophile allows us to potentially have a really nice next-generation set of compounds. And the results of this is shown here using enzyme-based assays. And what we're looking at here is comparing the first-generation compound, 2138 with the next 3 next-generation compounds and also CPI-818, the ITK selective inhibitor. And what we're measuring here is the efficiency of inactivation of the enzyme by these inhibitors. And that's measured by a term Kinact/Ki. So the Ki component of this term is the reversible interaction and the Kinact is the maximal rate of inactivation. And so if you just focus on 2138, we're looking at 3 enzymes here, ITK, JAK3 and TXK and the higher the bar in this case, the more efficient inactivation of the enzyme. So 2138, which as we described, inhibits all 3 of these enzymes has a high efficiency of inactivation. If you contrast that to CPI-818 all the way to the right, we know that it's a selective ITK inhibitor, and that's borne out in these data as well. But what's also borne out is the low efficiency of inactivation of ITK with this inhibitor. So it is a selective inhibitor, but it doesn't have great efficiency of inactivation. Now if we look at these next-generation compounds, first, looking at the ITK component, all 3 of these molecules are highly efficient in engaging and inactivating ITK, and none of them have any interaction with JAK3 based on these data. And then with TXK, you can see that we can tune in or tune out TXK with ACRS-3 having very little impact on TXK, ACRS-1 having greater impact and ACRS-2 having even more impact. So this allows us to categorize ACRS-1 and 2 as ITK/TXK inhibitors and ACRS-3 as an ITK selective inhibitor. We then looked at this in cellular studies using primary PBMCs, again, comparing the same group of compounds, looking at target occupancy of ITK, looking at ITK function and then looking at in the cellular studies, ITK/JAK3 ratio. And so on the first column of data and the second column of data, we can see that these next-generation ITK inhibitors retain good potency against ITK. They have good potency with target occupancy, significantly better than what you see with CPI-818 and comparable to what you see with ATI-2138. And in contrast with 2138, the ITK/JAK3 ratio is significantly greater and comparable to what you see with CPI-818. So we've been able to, at least from a biology standpoint and a biochemical standpoint, generate inhibitors that have the properties that we're interested in. This is another interesting way to look at the data that I just showed. On the X-axis here, we're looking at target occupancy of ITK on the y-axis, we're looking at functional inhibition, and we're looking at the correlation of those 2. And there are 2 things to point out here. One is that there's a good correlation. So as you occupy the target, you're also inhibiting the target, which is good to see and it would make sense. And then secondly, you see that the Aclaris compounds are clustered in the lower left, whereas ritlecitinib and CPI-818 in the upper right. This again demonstrates that the Aclaris compounds have superior potency against both occupying the ITK and inhibiting its function. We then advanced this to look at -- to determine whether or not our hypothesis that inhibiting ITK alone will have a Th2 effect and inhibiting ITK and TXK should have a Th1 and Th2 effect by taking differentiated Th1 cells and activating them and taking differentiated Th2 cells and activating them and looking at the impact of the same set of compounds. In this case, the Y-axis is the average IC50. So the lower the bar, the more potent the compound, the higher the bar, the less potent compound. And focusing on the Th1 component on the left and looking at the first 3 sets of bars, that's ATI-2138 and [Aclaris] 1 and 2, they have a good potency against inhibiting Th1 function in contrast to [Aclaris] 3 and CPI-818, which have very poor ability to inhibit Th1 function. And so this is consistent with 2138, Aclaris-1 and 2 being ITK/TXK inhibitors and ACRS-3 and CPI-818 being just selective ITK inhibitors. And then if you look at the Th2 biology on the right, you can see that all these compounds are reasonably potent at inhibiting Th2 function with the Aclaris compounds being more potent than the CPI-818 compound. And again, this follows that now all these compounds which inhibit ITK will regulate Th2 cell function. So we've been harping about how our compounds are more potent than some of the competitor compounds. And why is that important? So I think in general, potency is important in drugs. And in this case, when you have good inactivation efficiency that drives high potency and high potency results in lower dosing, less frequent dosing, lower drug burden. And any time you have a lower drug burden, you have an improved potential both selectivity and safety profile. This is particularly important with covalent drugs because covalent drugs contain electrophiles. And these are reactive electrophiles that are indiscriminate in the proteins that they can interact with. So if you have poor potency, you'd have to have a higher level of drug on board in the tissues and in the circulation. You have to have it on board for a longer period of time, and it increases the probability that this reactive electrophile will interact with a nontarget protein, covalently link that nontarget protein, potentially impact its function and potentially drive a safety issue. So I think in particular, with covalent drug potency really is critical. So we've taken it now from the enzyme to the cell. Now I'm going to show you a little bit of the in vivo data that we generated with these next-generation compounds. And what we wanted to demonstrate in these studies was, number one, you can orally dose these compounds and you can have an impact on ITK. And secondly, you can only dose the compound and you can generate -- retain the JAK3 selectivity that we described in the prior studies. So we dosed mice for 3.5 days with various doses of the next-generation compounds. We took the spleens out on day 4, and we looked at ITK occupancy in the spleens shown across the top, and we looked at a JAK3 functional assay that was the NK cell number in the spleens across the bottom. What you can see across the top is we get near maximal ITK occupancy at all doses tested with the 3 next-generation compounds. And in contrast, if you look at the bottom, you're seeing virtually no inhibition of JAK3 function at the 2 lower doses and in 2 of the compounds, no inhibition at the highest dose. And in the third compound, you see a partial inhibition at the highest dose. And we're comparing that to ATI-2138, which we know is a JAK3 inhibitor, which gives a much more dramatic inhibition of NK cells. So this demonstrates that we have good doses and exposures that can maximally block ITK almost completely and have no effect on JAK3 function. So another component of -- that we wanted to engineer into these next-generation compounds was around increasing the half-life. And so what we have here is just an example of some studies that were done looking at the elimination half-life of these molecules in mice and comparing it to ritlecitinib and CPI-818. And you can see we have a significantly longer half-life of these molecules compared to the comparators. And when we model this and project human dosing, it's still early days, but these would project to once-a-day dosing at a reasonable dose level. So in addition to the pharmacology that I described to date, we've been driving these compounds towards development and IND and initiating IND-enabling studies. There's a lot of other boxes that need to be checked. I'm not going to go over any of these, but around DMPK and safety. And all the analysis to date supports continuing to drive these compounds towards IND. And so in summary, I think we've successfully generated a portfolio of covalent ITK inhibitors, starting with the ITK/TSK/JAK3 going to ITK/TSK and then the ITK selective. We believe that these should have differential, but solid inhibition of T cell function and have the potential for both best-in-class and first-in-class categorization. We're hoping, again, we're moving these next-generation compounds as quickly forward as we can and anticipate an IND in '26. So our last slide just summarizes where we are with these programs and how we think they could impact the biology in the I&I space. So we believe that we've established an industry-leading position with this, and we also believe that these molecules have platform potential. You see the range of indications, Neal had shown this earlier that both ITK/TSK inhibitors can impact as well as ITK selective inhibitors. You see the multibillion-dollar markets on the right. And you compare those with the improved inhibitors, and we went through this before, but the breadth of the impact of the mechanism of ITK and TSK is more -- much more broad than the single or dual inhibitors with the antibodies. And we hope that these will have JAK-like efficacy without the associated side effects. So we think ITK is a great target. We think that we have an industry-leading position. We think that we have best-in-class and first-in-class capabilities with our cohort of compounds that we're moving forward. We think that these can impact a number of diseases with a great unmet medical need. And so with that, I'll turn it over to Hugh Davis to talk about the other half of our portfolio, the Biologics.

Thank you, Joe. maybe we need to do some jumping jack because of lot of science, they reenergize our brains. I'm Hugh Davis, President and COO of the company, and I'm going to talk about the Biologics side of the business and specifically focus on TSLP as our effective therapeutic target and the mono and Bispecific specifically as we move forward. So as you've heard, we're in Phase II with bosakitug, the TSLP antibody. And then we're in Phase I with the bispecific, and Jesse will talk about the Phase I data -- well, the Phase I study plan. And then the discovery targets that we have using our TSLP molecule as the basis for a synergistic approach to new targets and new opportunities. So many of you are probably aware of TSLP. And what I'm -- when we think about this, it's an Alarmin just like IL-25, IL-31. But Alarmins are sentinels for the body in that they add border surfaces like the lung, skin, GI tract. They're on the lookout for any insult, parasites, infections, things of this sort. And it's their job to activate the immune system. And specifically, TSLP is at the top of the Th2 cascade. And so it ultimately drives innate and adaptive immunity towards these insults. And so other molecules have been developed against many of these targets already, OX40 and OX40 ligand and dendritic cells, IL-4 and 13 on immune cells and T cells. And then tezepelumab is the only marketed drug that actually inhibits TSLP. And so tezepelumab moved into respiratory diseases. It's approved in severe asthma, but it also had an early program in atopic dermatitis. Phase IIa looked good and encouraging. And then in Phase II, they showed that they didn't have sufficient efficacy to continue on with that indication. And so they terminated their derm effort with that -- with tezepelumab. We thought about how do we create a better molecule. And you already heard Joe and Roland talk about high potency on the small molecule side. But we think high potency on the biologic side is equally important and maybe even more so because we don't have the bioavailability of these large antibodies and bispecifics that weigh 150,000 molecular weight, it's hard to get a lot of it into the deep tissue spaces where TSLP is exerting its pathologic effect. And so only about 15% of an antibody distributes into the skin relative to the serum. And so when we think about the importance of driving better efficacy, it's really about higher potency and being able to deliver that locally. So when we think about our antibody to TSLP, bosakitug, the first thing that we wanted to generate were antibodies that ultimately had very low dissociation rates off of TSLP. And that was a goal. When BioShin created -- or identified this molecule, it was by very low dissociation. But this functional assay with peripheral blood -- PBMCs, peripheral blood mononuclear cells activated with TSLP, inhibiting it with bosakitug or tezepelumab, we saw a 70-fold greater potency of bosakitug compared to teze in this assay. And so trying to better understand this, and some of these data are already on our website. What we showed previously was that it's really a function of bosakitug and also our bispecific that I'll talk about with very low dissociation. In fact, it's the very low linear line at the bottom of this dissociation using a TR-FRET assay. The other molecules in clinical development from GSK, Merck and upstream bio had very quick dissociation relative to bosakitug. And when you think about affinity, tezepelumab and bosakitug have very high affinity, picomolar affinity. It's very high. So how does potency differ? Potency is the concentration needed to drive an effect. And so how do we maintain this effectiveness through the properties of the molecule. Affinity is off rate and on rate, a ratio of on and off. When the molecule is off of the target, the target is able to exert its pathologic effect. And so you don't want it to release. And so very low dissociation translates into very high residence time. And so that's how we have 400 hours of residence time. And so it's completely resident on the TSLP molecule through the dosing interval, whereas these other molecules are on the order of 4 to 22 hours. And so residence time is 20-fold higher in some cases compared to the competitors that we included here. And so when we think about potency, we're looking at functional assays. The effect here is to inhibit CCL17 production from activated PBMCs. And you can see that bosakitug all the way on the left is the most potent of all the clinical development candidates and tezepelumab that we tested. And so now how does this make sense? How do we get there? When we think about the key to potency, it's really about maintaining a concentration in a clinical trial, maintaining a concentration above the threshold that's needed to drive the effect. And so these are PK curves, so it's time concentration over time. What you see is in bosakitug, a very potent molecule with a very low concentration needed in order to drive effect. And so that area above the threshold line under that curve is the effective amount of drug that's able to be used. Whereas tezepelumab, as an example, much more -- much less potent, very high concentration needed to drive an effect, your area above the threshold of potency and inside that area under the curve is much lower than what you're able to achieve with, in this case, bosakitug. So you're able to make up for -- drive this activity in a way that the potency is enabling a much more broader concentration and time profile in order to drive the effectiveness of the drug. And so case in point is looking at the clinical trials in dermatology that were used. So in atopic derm, tezepelumab on the left, 210 to 420 every 2 weeks in their Phase II trial, those were the doses used and that gave rise to the concentrations of 10 to 100 nanomolar. And again, these are in serum. So obviously, the concentrations in skin would be even lower. What we show with the BAF3 proliferation, and these are their data, the BAF3 proliferation, CCL17 inhibition, the IC90 and IC99, the low part of the bar and the high part, overlap almost directly with the doses that were used. And so tezepelumab may not have had an effective concentration in order to be able to drive the effect in a derm in the skin. Whereas because the potency of bosakitug is 70x higher, we're able to have the same concentration, the 300 milligram every 2 weeks gave rise to, again, about 80 nanomolar. But in this case, this is substantially above the IC90 and IC99 in those same BAF3 and CCL17 assays. And so when we ask the question, how can bosakitug be so much more potent, we're looking at the structure of TSLP here. There's 159 amino acids, 28 of them are the signal peptide in blue that gets clipped off. So the N-terminus of an active TSLP molecule that's secreted is the YDFT component in purple. The purple shaded residues are where bosakitug binds to TSLP. And so it binds at the C-Terminus, and that's also where tezepelumab binds. Those are the underlying amino acids. You can see that they both bind at the C-terminus, and that's where TSLP binds to TSLP receptor. That makes sense. But you'll also notice that bosakitug binds to the N-terminal motif YDFT. And so now what we're seeing is a biparatopic approach where the antibody is binding at the N-terminus and the C-terminus of TSLP. And even though each of those have their own affinity, so on rate, off rate, the molecule, the bosakitug never is leaving the TSLP, and that's how you get to 400-plus hours of residence time. And so it's an avidity that's driving the effectiveness and the potency of this molecule. And so we took this into the clinic and Jesse Hall will speak to the data that we saw in Phase IIa that also then translated all of the work that was done preclinically and some of the understanding around the structural binding and activity into the clinic. Ultimately, this same TSLP antibody is the same basis then for the bispecific. We see that this antibody has -- so bosakitug has a very long natural half-life. So it's 23 days. And this is the same as your natural immunoglobulin pool. It also gives you a clue about the immunogenicity profile because if you're going to have a 23-day natural half-life, then that tells you that you don't have a high antidrug antibody incidence. Otherwise, you would have higher clearance and you'd have shorter half-life. And so this molecule is very well tolerated in Phase IIa and the ADA profile on the PK was substantially high. And so then as we move toward the bispecific. Again, it's the same anti-TSLP antibody with a 400-hour residence time on TSLP, the same biparatopic binding nature on TSLP. And then it also has 2 SCFVs that are bound to IL-4R. I'll get to that in a minute. When we think about the multispecifics, and we're talking about bispecifics and trispecifics and every other construct you can think of, really, it's about increasing efficacy. And you heard Neal say it, and you heard Roland say it and you heard Joe say it. All of these diseases, whether it's respiratory or especially atopic derm, there is a huge headroom available to do a better job for patients. When dupilumab has 2/3 of patients that have a 75% response, that means that 1/3 aren't responding adequately at all. And those that are responding still have 25% more to go. And I know when I was at J&J with STELARA and TREMFYA, I led clinical pharmacology, we heard from patients all the time that when they lose that escape from therapy at the end of the dosing interval, that was the worst thing. And so we want to make sure we increase the efficacy for patients and we maintain it through the dosing interval. We also want to make sure we have a reduced therapeutic resistance. And so the way you do this is by better immune response. So you're holding the pathway in check. And so by having 2 targets, as Neal had mentioned, both at the top and the bottom of the cascade going after TSLP at the top of the Th2 cascade and then the immune component on T cells with IL-4 and 13 inhibitor by binding to IL-4 receptor, we're able to have a more deeper and broader response. And certainly, this market is huge already and growing. And so there's a huge opportunity ahead of us as we think about these indications. So the molecule itself, as I mentioned, is the same TSLP antibody with 2 SCFVs that bind IL-4 receptor. While the TSLP itself was designed to inhibit the TSLP completely and not lose residence, that's because Alarmin when they're overproduced, you want to take them back to homeostatic levels. So that makes sense to try to inhibit and neutralize it completely. At the same time, we don't want to completely neutralize the IL-4/13 response because then you're going to have greater or worsening safety profile. And so the way the scFv against IL-4 were created was to have the same affinity as dupilumab. But since this molecule is now also binding to a receptor target, there's going to be target-mediated drug disposition, where the bispecific is going to be cleared from the blood by binding to the receptor. And so in this case, we added a YTE mutation to the Fc to enhance the half-life. And so it's a tug of war, half-life increase, TMDD. And so we're hoping to be able to have a much longer dosing interval than what dupilumab has been able to do. And then the AQQ mutation was added in order to silence the Fc, so we don't have off-target toxicity with Fc gamma receptor binding nonspecifically. And so this molecule has been optimized in every way. New information today is about the molecule itself. We have 4 binding sites, 2 against TSLP, 2 against IL-4 receptor. What we're able to show today is that all 4 binding sites are acting independently. What we -- if we have 2 TSLP molecules bound, the IL-4Rs can still be bound to. You can saturate all 4 sites at the same time, and you can do it by maintaining the same affinity to those targets. And so I'm going to walk you through this [indiscernible], which is surface plasma resonance. What happens is you bind your antibody to a chip, and that's shown in this blue line with 052, and you get an increase in response units, these RUs. Those RUs are a direct relation to the molecular weight of that species. So in this case, the 150,000 molecular weight that's binding. We then add TSLP and you can see a bump up in RUs. And then we add on top of that, different concentrations of the soluble IL-4 receptor and you get increasing RU again. What we're able to show is when the TSLP is bound first, we still can maintain the affinity of the IL-4R interaction to 052. And so the affinity constants of 348 and 215, relatively the same, not affected by that interaction. If we reverse that and we first have soluble IL-4 on the antibody, and that's the figure on the bottom, and then we add different concentrations of TSLP, we now can see whether TSLP is affecting the affinity of the soluble IL-4 receptor interaction. And again, you can see that the affinities here are roughly the same at 41 and 33. In addition, what we're able to show using this SPR technology is that when one is bound, we can actually, again, because it's a direct relationship of molecular weight, we can see that those soluble IL-4 molecules are bound 2:1 even in the presence of 2 bound molecules of TSLP by looking at the response units on the SPR graph. And the reverse then is also true where we're seeing, again, all of these are roughly 2:1, 1.8: 1, 1.8: 1.9. So you're seeing 2:1 ratios of both [sIL4R] bound to 052 and a 2:1 ratio of TSLP bound and both in the presence of the other. Affinities didn't change and complete saturation. And so functionally, and we had shown this particular graph previously, what we showed in a PBMC assay this time, the PBMCs are activated with IL-4 and TSLP. And so now both tezepelumab and dupilumab should be able to inhibit that effect in combination. And so our antibody 052 is shown to have 4x greater potency than the combination of dupi and teze combined. And so the bispecific is showing a synergistic effect that is better than the combination of the 2 antibodies. So as we think about other approaches to inhibiting this Th2 pathway, many drug developers have taken on IL-13 antibodies, for instance, or IL-4, IL-13 approaches with TSLP. And so we looked at this more closely. And as you look at the biology around IL-4 receptor and IL-13 receptor, it's really the heterodimer in the middle here where you have the IL-4, IL-13 combination where dupilumab binds and so does 052. The type 1 receptor and IL-4 is open and so is the decoy receptor at IL-13. So we asked the question, what is the contribution of IL-4 and IL-13 in activating this pathway and therefore, the need for therapies that would inhibit this effect. And what we show here, and so these are new data, IL-4 is substantially better at increasing CCL17 production from activated PBMCs. It's about not only higher activity in terms of the amount of CCL17, but it's also about 10x more potent with an EC80 that's 10x lower than the IL-13 activation of CCL17 in these PBMCs. And so it appears that IL-4 is a much more dominant and consistent driver of this downstream chemokine activation, and we, therefore, assume also immune cell recruitment and activation. And so using this picture, we have 052 on the left are bispecific. It binds obviously to the TSLP molecule, which is in yellow. The others are dupi, lebri and tralo that bind either IL-4 receptor or IL-13. And what we show here is the way in which these molecules are binding. And so obviously, dupilumab is binding at the receptor, inhibiting IL-4 and 13 like ATI-052 and lebri is binding IL-13 inhibiting this complex formation. And then ultimately, tralo binding the soluble IL-13 is inhibiting downstream response by that cytokine. And so when we look at now at PBMCs that are activated by various factors, on the left, we have TSLP. And obviously, Olink, teze, and ATI-052 are able to inhibit this CCL17 response. And again, here, we saw the 70-fold increase in potency of 052 compared to teze. In the second, we're looking at IL-4induced CCL17. And again, now only dupi and 052 are able to inhibit this response and roughly the same IC50. In the next one, we have IL-13 and all of the molecules are able to inhibit that response. But again, you're looking at this case with lebri having a slightly better ability to inhibit that CCL17 response. And then we have 4 and 13 and now only dupilumab and ATI-052 are able to inhibit that. And lastly, we have all 3 activators. And so TSLP4 and 13 are activating CCL17. And here, ATI-052 is about 6x more potent than Dupi in inhibiting this response and the others can't compete at all. And so 052 is exhibiting the broadest activity and the most potency of all of these assets tested. And so in summary, for 052, we have a molecule that has been optimized to completely inhibit TSLP with very high potency against TSLP. We have a similar affinity to IL-4 receptor as dupilumab. But in combination, both teze and dupilumab are not able to be as good at inhibiting a CCL17 response and 052 is 4x more potent than that combination. We have the opportunity for enhanced half-life and the safety profile has been taken into consideration with the AQQ mutation. And ultimately, we have the most potent of the molecules tested to date. And so now we want to think about the future. And so next-generation bispecifics where as you look at the immune cascades across the Th1, 217 biology, there are many opportunities here. So as Neal mentioned, we want to take advantage of our best-in-class anti-TSLP antibody. And so the first order of business is trying to understand what would work best in using in combination as our next-gen bispecifics against these -- one of these various targets in a number of different constructs. And so some of the major concerns as itch is really a major concern. Alarmin combinations, going after just one alarmin, does that make complete sense, it might make sense to also think about combinations with alarmin. But we also really want to make sure that we're driving the efficacy ceiling. And whatever that means, reducing itch to the greatest extent, reducing the body surface area of lesions, et cetera, we want to make sure that we're driving the synergistic effect. And mostly, we're focused on eosinophilic-driven diseases, but also non-eosinophilic are also reasonable to consider. And so the targets that we're going after are not disclosed yet as the combination partners for our 3 bispecifics with our TSLP, but I can tell you that we're moving toward an IND in early '27 when we move these forward. And then lastly, it's really even a much bigger picture that we're looking at. And so there are many other opportunities, both with bi and trispecifics in the multispecific arena to consider. And we've already been putting that in place in terms of plans and actions in order to even have a more sustainable biologic pipeline for the future of Aclaris. Thank you for your time. And I will turn the floor over to Jesse Hall, our Chief Medical Officer.

Thank you, Hugh. Good morning. My name is Jesse Hall. I'm the Chief Medical Officer of Aclaris. The theme of my presentation today is going to be clinical trial execution. You've seen this slide before. I'm going to be spending most of the day focused on 3 of our clinical assets. And I do want to emphasize that we have 3 assets currently in the clinic, 2 in Phase II clinical studies, 1 in a Phase I study and our future ITK inhibitor coming to the clinic in 2026. That will give us a total of 4 assets in the clinic, which is pretty remarkable for a company our size. As you'll see from my presentation today, we have a diversified pipeline with multiple shots on goal in large market I&I indications. Over the next 6 to 12 months, we have a significant number of near-term catalysts. And maybe most importantly, we have a strong cash position that gives us a runway into 2028 that allows us to execute across all of the programs that I'll be presenting today. Many of you have seen this slide previously. I'll touch on most of these programs today throughout my presentation. The programs in orange are those being developed internally by us at Aclaris. Those in gray are being developed by our partner, CTTQ, in respiratory indications in China. 2025 was really a foundational year for us. It's an important time for our business. And we've been focused on clinical trial execution in 2025. Not only have we made great strides across our pipeline, we've also made great organizational strides, meaning we've incorporated the Biosion programs. We've incorporated the Biosion team members, and we've continued to build out our clinical capabilities to support all of the programs that I'm going to overview today. The progress that we have made in our pipeline throughout 2025 have allowed us to derisk a number of our molecules in multiple ways. We've seen clinical validation of inhibiting the ITK pathway through the 2138 atopic dermatitis study. In our Phase II atopic dermatitis study with 045, we're focusing on the right patient. What does that mean? That means we're screening patients to make sure that they are eligible for the study through a unique photographic review process. And I'll be going through that in greater detail in future slides. We've also advanced the 052 program into the clinic, and we've made great progress there. Neal mentioned that we have completed dosing in our single ascending dose portion of that study, and we're currently dosing the multiple ascending dose portion. So we're continuing to learn more about 052 throughout 2025. And finally, we're preparing for new INDs with our next-generation ITK inhibitors, and we plan to file INDs with those molecules in 2026. Portfolio execution has really been the theme of 2025. And we've made great progress, and that leads to a packed agenda for 2026 with us having clinical milestone readouts across the majority of our programs, including 052, bosakitug, 2138 and the ability to bring ITK into the clinic. Now what I'd like to do is dive a little bit deeper on some of our specific programs. Hugh overviewed our progress with 052 and our rationale for developing this bispecific antibody against both TSLP as well as IL-4. And I'm going to spend a little bit of time reviewing this from a clinical perspective. 052, as Hugh mentioned, has the same antibody binding regions as 045, and we believe 045 is best-in-class. In addition to what was done with 045, 052 has a half-life that has been enhanced. So we anticipate extended dosing intervals for 052. We also believe that the combination of inhibiting TSLP as well as the IL-4 pathway provides for significantly greater potency of this molecule. 052 has demonstrated to be more potent than dupilumab or tezepelumab or the combination of those 2. And it's this increased efficacy that we're anticipating and we're looking forward to in our future clinical studies. This is the design of the 052 healthy volunteer study. It's a single ascending dose portion with a large dose range. We have completed dosing for this portion of the trial. Currently, our multiple ascending dose portion is ongoing. We started to learn a lot about 052. We're starting to understand the safety and tolerability. And soon, we'll have a full understanding of the PK profile of this molecule. Neal mentioned that we have disclosed our indications to take forward with 052. So the plan in 2026 is to initiate 2 POC studies, one in moderate to severe asthma and a second in moderate to severe atopic dermatitis. So we will have a number of clinical readouts for 052 in 2026. This is the design of the 052 asthma study. This is a POC study. We're going to enroll patients with moderate-to-severe disease. We believe it's important to focus on this patient population as it's the eventual indication of patients that will be treated with this molecule. This will be a single-dose study. Patients will be randomized to either 052 or to placebo. The primary efficacy endpoint will be at day 28, and we will continue to follow patients for a longer period of time to continue to assess the long-lasting PD effect of what we believe with this molecule can see. In addition to the standard clinical outcomes, FeNO and FEV1, we will also be doing a significant amount of work from a PD perspective. The goal will be to enroll a patient population with Th2-high disease. We do recognize that Th2-low is an important and unmet medical need. However, given the size of this clinical study, we want to focus on Th2-high. Our future clinical plans will enroll patient population with Th2-low disease as tezepelumab has demonstrated a benefit in that patient population. However, this initial study will focus on that patient population with Th2-high disease. That's the summary of the Phase Ib POC study in asthma. In addition, we have plans to start a study in atopic dermatitis. At Aclaris, you know that we have a rich history of studying dermatologic indications. We plan to apply the learnings from our previous atopic dermatitis studies to this patient population. The goal is to enroll a total of 12 patients with moderate-to-severe atopic dermatitis. A total of 5 doses will be administered to a patient population randomized to either 052 or placebo over a 28-day interval. The primary efficacy assessment for this study will be at day 57. We will continue to follow patients. We will utilize our central photography approach that I'll get into more detail in when I start to discuss the 045 program. The primary endpoint of this study will be safety and tolerability. We will be looking at the classic endpoints in atopic dermatitis, including EASI, BSA and IgA. And based on our learnings from the 2138 program that Joe mentioned, we are partnering with Emma Guttman's lab to have additional PD outcomes, including tape strips. The plan would be to initiate this study in the first half of '26 with a readout by the end of 2026. So the plan would be to read out both of these POC studies by the end of 2026. Now let me dive back into the 045 program. As you mentioned, this was a program developed at Biosion. We currently have a Phase II study ongoing in atopic dermatitis. This was the study that built our confidence moving into that patient population of atopic dermatitis. Biosion conducted a small Phase IIa study across 7 sites in the U.S. where patients were treated in an open-label fashion with 300 milligrams of Bosakitug. The primary endpoint was at week 24. And we learned a number of things from this clinical study. We saw that we had sustained clinical response after the last dose, indicating to us that this molecule has the potential for less frequent dosing than every 2 weeks. And that's something that we will continue to explore in future clinical studies with 045. Now to dive into some of the more specific efficacy outcomes, which were very encouraging, if you look at the EASI-75 responses, 94% of patients achieved an EASI-75. If you look at the IGA, 88% of patients achieved a 0 or 1, clear or almost clear. This is quite a remarkable result and raises the bar in this indication. And then if we look at the EASI-90 scores, 65% of patients achieved that and almost 1/4 of patients achieved an EASI-100. This was the background that set us up for our current ongoing 045 study or Bosakitug. In this clinical study, which is currently enrolling, we plan to recruit approximately 90 patients. Those 90 patients will be randomized in a 2:1 fashion between Bosakitug and placebo. The dose that's utilized in this study is similar to the IIa at 300 milligrams. The primary endpoint for this clinical study is at week 24. We know that over time in these dermatologic studies, placebo response rates have continued to creep up. For me, the corollary is in IBD, where you saw placebo response rates over the last 15 years continuously increasing. What the field did to address that is to incorporate central review of endoscopy. What we are doing in this clinical study, not just to verify eligibility, but as well as to follow patients over time is to utilize central photography. I think this will become the future of dermatologic studies and just to overview our process with regards to central photography. We have a vendor that has placed equipment at each one of our clinical sites. When the patient comes in for screening, they undergo a photographic evaluation. That evaluation focuses initially on the primary lesion as well as the total body surface area involved. Once those photographs are obtained, they go to our central photographic vendor. They go through a strict quality review process. Once they have passed that quality review process, they go to our CRO for central review. The reviewer is checking the lesion and make sure the lesion is consistent with atopic dermatitis as well as checking the total body surface area to understand that this is a patient population with moderate-to-severe disease. And then finally, our internal dermatologist reviews the photos for the same criteria, ensuring that the lesion is consistent with atopic dermatitis and that the patient has the appropriate moderate-to-severe disease. We believe that this process will decrease the likelihood of a high placebo response as well as give us the ability to monitor patients over the entire course of the clinical study. So some of the next steps with Bosakitug, we plan to read out this atopic dermatitis study by the end of 2026. We will continue to develop Bosakitug in dermatologic indications, and we are seeking partners in other respiratory indications for Bosakitug. We think Bosakitug has the potential to be best-in-class. Let me shift gears back to our oral molecules. We have a first-generation novel ITK/JAK3 inhibitor for T cell-mediated diseases. Joe has shared some significant information on our Phase II results. I won't spend a lot of time on that study only to say that at the doses we studied, the drug was safe and well tolerated, and we believe we have the potential to increase dose and capture more efficacy in some of our future clinical studies. What we've done is a broad look at other potential indications for 2138. We did signal early on that atopic dermatitis was purely an indication for us to demonstrate biologic mechanism. Our look at potential indications is ongoing. You can imagine with a therapy that impacts T cell-mediated diseases, we have the potential to pursue a number of different indications. We have started to focus on several. Some of those being vitiligo, Prurigo nodularis, lichen planus, alopecia areata and some of the scarring alopecias. In particular, we're quite intrigued about the lichen planus indication, and we've been focused on that over the last several months. If you're not familiar with lichen planus, lichen planus is a disease that is a chronic inflammatory immune-mediated disorder. It affects the skin. There's a cutaneous component. It affects mucus membranes as well as some of the subtypes impact the hair and the nails of these patients. Some of the most common symptoms are intense pruritus, meaning these patients are quite miserable with this disease. We know that oral lichen planus occurs in a crossover fashion in a number of these patients where they are affected by both mucus as well as the cutaneous components. There are very few treatments that are available for this disease. It's typically treated with off-label immunosuppressants or potentially high-dose corticosteroids. The prevalence of this disease is between 0.2% and 1%, and we think that this is a white space opportunity for 2138, meaning there are not many therapies that are currently pursuing this indication. An [ approval ] indication has a great market opportunity, and we think that there's a significant unmet medical need for this patient population. As we continue to progress our plans for lichen planus, we will continue to assess the market components, but if we focus on the mechanistic fit, 2138 is an excellent mechanistic fit for this indication. We know lichen planus is a chronic inflammatory disease. We know that there's aberrant activation of Th1, Th2 and Th17 cells as well as cytotoxic T-cells. CD8 cells. Joe overviewed the impact of 2138 on this pathway. Based on this mechanistic evaluation, we think 2138 is an excellent fit. In addition to those pathways, we know that these patients suffer from intense pruritus. 2138 has the potential based on the atopic dermatitis study to significantly impact the puritic component of the disease. Putting all of this together, we believe lichen planus is an excellent fit for 2138, and we're going to continue to progress our plans for 2138 in this indication. Proposed efficacy endpoints for the indication would be IGA as well as secondary outcome measures of pruritus. Plan is to complete the market analysis, complete our trial design with a plan to initiate a Phase II study in the first half of 2026 in this indication. We still believe that there's an opportunity in alopecia. The market is rapidly evolving here in this area, but we do believe that opportunities remain. Especially in some of the subtypes of alopecia, including scarring alopecias. We will continue to evaluate the opportunities in scarring alopecias, moving into 2026 with our primary focus being on lichen planus. 2025 was a packed year. It's an important year for our business. The work that we have done in 2025 sets the foundation for 2026 across our clinical programs with a number of near-term catalysts reading out for our programs over the next 6 to 12 months. And as has been emphasized previously, we have a cash runway that allows us to execute on all of the clinical programs that I overviewed today. With that, I would like to turn the floor back over to Dr. Neal Walker, our CEO.

Thanks, Jesse. So obviously, we went through a lot today on the science, and we have some more presentations on the KOL side. This is where we're at in the cadence of data events. As we've mentioned a number of times, we've completed the SAD, moving into the MAD, right on track to report that. We're to finish that study at the end of this year, and then we'll be reporting that in early '26. Then the next catalyst that you can anticipate are the 1bs followed by the top line data with Bosakitug in AD. And then we will be initiating 2138 work early this year. The chronic tox work is just about done. In fact, it is the in-life is complete, just waiting on [ Histo ] and assuming all that looks good as expected. We'll be moving into the next phase there, doing -- being able to do longer-term work. And then as I've mentioned a number of times already, really excited about the ITK Next Gen, as you could see being able to target multiple aspects of some of these diseases, which I think everybody talks about whether it's Th2 or having Th1 effects in a variety of respiratory diseases, I think that is a real hidden gem that I think deserves more attention. So really excited about where we're at, where we're going. And now is, I think, a great time to think about Aclaris as we head into a catalyst-rich year. With that, I'm going to turn it back over to Will to introduce our KOLs.

Thank you, Neal. So I'm very happy to introduce Dr. Zuzana Diamant. And I don't need to read her bio. Her bio speaks for itself. But she's a pulmonologist and clinical pharmacologists to affiliate with the Department of Clinical Pharmacy and Pharmacology at the University Medical Center of Groningen. Has worked with a variety of professional societies, as you see and is a world renowned in the space. I'm very glad to turn the mic over to her. Dr. Diamant, I'll be moving your slides for you. So thank you very much for your time and attention today.

Thank you, Will, for a nice introduction. And I'm very happy to speak about the background of the new applications and new developments within the area of chronic respiratory diseases. And especially since new exciting developments within multiple path blocking biologics are underway to optimize clinical outcomes in these type of diseases. So can I have the first slide, please? So this is a little bit about me and that you already have elucidated. I think of importance here is that's a part that I work with several academic institutions across Europe. I also have more than 30 years of experience within the area of clinical development of novel drug interventions and I also hold positions at various scientific societies and have a huge network that I collaborate with. So can I have the next slide that is introducing the topic of today. So it's about chronic respiratory diseases and chronic respiratory diseases here that I will discuss will be asthma, chronic rhinosinusitis with nasal polyps, so CRS with nasal polyps and COPD. And as you can see, these are quite common and very prevalent conditions. And they partly share underlying mechanisms, although there are different -- differences, of course, not only in the anatomy, but also in the pathophysiology and immunology. But it's also important that these conditions can coexist as comorbid diseases based on the mutual underlying mechanisms, and this is called the united airways this concept. Can I have the next slide, please? So in these conditions, typically type 2 inflammation can be quite prevalent. And in asthma, it amounts up to 70% of patients worldwide, in CRS with nasal polyps up to 80% of patients. And in COPD, more recently, up to 20%, 40% of patients have been diagnosed with type 2 inflammation. What is important to know is that the type 2 inflammation is not only prevalent, but it's also quite well defined in terms of underlying pathways and biomarkers. It is also important to state that this is a more severe disease, usually also a bit more disease burden, like the patients have really more symptoms and a poor quality of life. It comes with frequent exudations with mucus plugging of the lower airways and therefore, also with accelerated lung function decline and also small airways disease. Next slide, please. And just to give you a flare, it was already mentioned with one of the -- by one of the previous speakers, what the underlying mechanisms are of asthma and the related airway diseases, which consists of one part of type 2 pathways and type 2 pathways pretty much coincide. First with the upstream alarmins. So these are epithelial cell derived cytokines. Like TSLP of IL-33 and IL-25, which become released upon chronic noxious stimuli, then activate the more downstream pathway at the Th2 and the ILC2, which are respectively, the adaptive and the innate pathways and then these give rise to a release of the so-called type 2 cytokines, which are IL-4, IL-5 and IL-13, which then switch on and activate the effector cells. So mostly the eosinophils. So that's so far for the type 2 pathways. And then there are also components that are beyond type 2 pathways. It can be called non-type 2 or type low pathways. But these pathways usually are about the type 1 or the Th1 and Th17, the neutrophils, but also importantly, the structural changes, not only at the epithelial level and the goblet cell level but also at the airway smooth muscle pathology. And these both mechanisms are important that and drive also the pathophysiology of the chronic respiratory diseases. Next slide, please. So if we look closer at asthma, it is important to realize that not all asthma is the same. And severe asthma that can be especially very heterogeneous and amounts up to 10% of patients globally and can be quite difficult to control. It is currently sub-endotype or sub-phenotype, if you wish, into type 2 and non-type 2 or as I called on the other slide, the Beyond Type 2 end of time. Type 2 asthma is characterized by type 2 inflammation, and it's important to realize that this can exist both by allergic and nonallergic eosinophilic inflammation and also coincide with high-pheno value. So pheno is a fractionated exhaled nitric oxide which arises from the iNOS pathway and is formulated or released by the epithelial cells under mechanism of the IL-13, which is one of the type 2 cytokines. The other type 2 cytokines are IL-5 and IL-4. And as already said, type 2 asthma is associated with more severe disease exudation and lung function decline. Apart from type 2 asthma, there is also non-type 2 asthma. And this non-type 2 asthma is less well defined. And it means, usually, we would say, okay, this is non-type 2 asthma because we do not find these typical type 2 biomarkers being eosinophils and high pheno values. But it can also be associated with neutrophilic inflammation, airway smooth muscle pathology, obesity, that's also one of the treatable traits, but also one of these associated phenotypes, if you wish, with chronic systemic inflammation and by relative corticosteroid resistance. Next slide, please. So of course, in the attempt to treat this severe asthma, there have been several targeted biologics defined and developed in the past decades. And because, again, as I said, type 2 severe asthma is better defined than the non-type 2 asthma. Most of these currently available biologics are targeted against type 2 inflammation. So historically, first, it began like 2 decades ago with anti-IgE and this biologic called omalizumab, is effective against allergy driven asthma. So just for select population that have truly allergy driven disease. Then it was followed in 2000 by the anti-IL-5 approaches for mepolizumab later on followed by benralizumab. And these biologics typically are very effective on a narrow scale on eosinophils and not as much on the other type 2 cytokines. So they do not affect as much the pheno. And they have been shown to protect against exudations but have not a prominent effect on lung function, which is typically driven by the other type 2 cytokines. Then followed by anti-IL-4 receptor alpha approach, dupilumab, which blocks the common pathway of IL-4 and IL-13 and has been shown efficacy in type 2 asthma and type 2 COPD and CRS with nasal polyps. And so again, this protects -- this compound protects against exudations but also improves lung function is corticosteroid sparing and potentially disease modifying as it also can affect the small airways in a benign way. Then the latest development has been the anti-TSLP. So that is very much upstream of the cascade as already shown in the other slide by tezepelumab which has been shown to act both in type 2 and beyond type 2 asthma. And the activity overall outcomes have shown benign effects against exudations also to improve lung function and potentially to be disease modifying the fact that it also affected airway hyper-responsiveness and in some studies, even small airways. Can I have the next slide, please? So altogether, if you see so many very, very effective biologics, what is the current status and what are still the unmet needs? So despite these effective treatment options, still too many patients with chronic respiratory diseases remain sub-optimally controlled. And the reasons for that are various, of course, and it depends per region. But one of the reasons can be the evolving phenoendotype by exogenous factors, loss of efficacy of the treatment combinations, but also the occurrence of comorbidities despite the treatment. So there is still an unmet need for more safe, even safer -- and safe effective treatment options that provide a sustained effectiveness that means an effectiveness over time that also treats the disease in a wide proportion of patients and also can treat the comorbidities with the same underlying mechanisms, and that effect can also be disease-modifying. And so the aim being to stop disease progress and to improve patient quality of life. And of course, with further systemic corticosteroid-sparing effects that would help to overcome a severe side effect of corticosteroid, both for maintenance corticosteroid therapy. Can I have the next slide, please? So to accommodate this unmet need, we have now exciting new developments within the field of biologics. And the exciting developments are that we try to block different components of the underlying pathways. So to combine multiple specific antibodies for us. And here, you can see a list that provides you an overview of the antibodies that can block both the anti-TSLP with other components of the type 2 inflammation, which is more downstream. So the first example is the Aclaris ATI-052, which combines anti-TSLP effectiveness with anti-IL-4 receptor alpha, which then inhibits the joint IL-4 and IL-13 pathway. Similarly also the next compound by Innovent. Then there is a multi-spec antibody that blocks the 3 type 2 cytokines or the upstream on the TSLP IL-4 and IL-13. And of note, the latest one is the [indiscernible], the anti-TSLP and combining the IL-13 activity in the bispec nanobody that has just provided the outcomes of a Phase Ib study in mild-to-moderate asthma, showing an improved efficacy against the biomarker. Pheno combined with the clinical beneficial effects on the small airways. And the efficacy on the pheno was, in fact, enhanced as compared with blocking the TSLP alone. Can I have the next slide? So in fact, even more complete or even better efficacy can be anticipated to combine blockade of the TSLP with IL-4 receptor alpha bispecific antibody for instance, the ATI-052, which has the broad activity in the sense that it blocks the upstream TSLP which allows to include or to treat both patients of the type 2 and the non-type 2 phenotype endotype. And again, because this approach does not fully block the type 2 inflammation because other alarmins like IL-33 and IL-25 can also drive the downstream type 2 inflammation. This molecule also inhibits IL-4 receptor alpha and which then blocks more downstream, the IL-4 and IL-13 cytokines and allow for a more complete inhibition of the type 2 inflammation. And then it does not -- so combining these two approaches within one molecule will then allow for applicability in this broader patient population as already said, so the type 2 and the non-type 2 phenotypes and is anticipated to provide not only fewer exudations, but also to improve lung function, quality of life, but also small airways. In fact, the systemic corticosteroid-sparing because that is also what has been shown with blocking IL-4 receptor alpha. And potentially, it will also provide a sustained effectiveness on disease modification and hopefully, not only on clinical remission but also biochemical remission, which is a more complete remission of the disease. Can I have the next slide? So in summary, again, I hope that I can highlight now the things that I have said in my talk. So asthma especially the severe asthma is highly heterogeneous disease, which has also comorbid conditions, which can change pheno endotypes within patients over time. And this also applies to its associated comorbid conditions like chronic rhinosinusitis with nasal polyps and the COPD. Type 2 inflammation is usually associated with more severe disease, but also non-type 2 or beyond type 2 inflammation has different aspects that are also detrimental for lung function over time and that also needs to be treated, and it's less well defined at this moment. And bispec that combines both the anti-TSLP and anti-IL4 receptor alpha inhibition. So here as exemplified by the ATI-052 is anticipated to be more effective both in asthma and not only type 2 but also non-type 2 -- beyond type 2 asthma and other chronic respiratory diseases given its broad mechanism of action, more complete inhibition of not only the non-type 2 component, but especially also the type 2 inflammation. And therefore, its anticipated to have a more superior clinical efficacy because if you look at head-to-head comparisons that are both indirect and direct, the both mono components, so the anti-TSLP and anti-IL4 receptor alpha have proven already superior clinical efficacy in other studies. So, so far for my presentation, thank you very much.

Thank you very much, Dr. Diamant. Our next presenter, again, I think for anybody in the Greater New York area, he needs no introduction. This is Dr. Michael Cameron with the dermatology department at Mount Sinai. I think probably a bunch of folks here already know him very well. Not only experienced in the medical field, but also throughout the industry, well known across the industry with expertise in eczema, psoriasis, alopecia and a variety of other dermatological disorders. So Dr. Cameron, I'll turn it over to you. Thank you very much.

All right. Well, thanks so much for having me, everyone, and special thanks to Aclaris. So my name, as was mentioned, is Dr. Michael Cameron, I'm a dermatologist based in New York. I'm also the CEO of Equity Medical, which is a national clinical trial organization with 3 locations and 7 principal investigators, we focused on dermatology and allergy and respiratory as well as internal medicine. And so I have the privilege of being a principal investigator for the ongoing clinical trial with Aclaris, ATI-045 AD-201, which, as you all know, is a randomized, double-blinded, placebo-controlled dose finding study for ATI-045. Their anti-TSLP asset in patients with moderate-to-severe atopic dermatitis. I don't have any slides today. So I'm just going to give some overall thoughts. I've enrolled several patients on this trial. Things are going really well. Before I talk about Aclaris' execution on this clinical trial and what I view that they're doing differently and better than other companies. First, I just want to speak to the atopic dermatitis space. And so as we know, and some of this work has been done at my home department of Mount Sinai Health System in New York, where I'm a voluntary faculty. But as we know, atopic dermatitis or eczema is a very heterogeneous disease, has multiple endotypes, really presenting as 1 phenotype. And so I think we should remember that we classified diseases and presentations of pathology, really for our learning purposes and for pattern recognition, right? So showed no different than -- so one patient's cancer is different than another patient's cancer and all cancer is really multiple diseases, even in the specific types of cancer. Eczema really, in my view, at least, is multiple diseases. Everyone has their own inflammatory kind of pattern. And so in East Asia with papular eczema is going to present very differently than a Caucasian with flexural atopic dermatitis in terms of -- if you were to do biomarkers and take stripping and what have you. And I'm not in any way trying to suggest that we're going to really rapidly move to an environment where we're endotyping people commercially because there are payment constrictions with that. But what I am trying to suggest based on that is that we need a ton of different biologics to adequately treat this disease. And we know that based on estimates that really this atopic dermatitis biologics space is growing at anywhere from 7% to 15% CAGR, compounded annualized growth rate per year. And so even though the space is really, really huge and dupilumab is one of the best-selling drugs in the world with over 1 million prescriptions now, the space is just growing and growing and growing. And as more and more incumbents advertising market shape, whether it's EIi Lilly or Regeneron, Sanofi, and inside and more and more companies, these patients are really just coming out of the woodwork. I mean, we are seeing so much moderate-to-severe atopic dermatitis. And what we're finding is over time, patients lose response to one biologic or they never respond. And we just need a lot of different biologics to target really all the different endotypes of this disease. That's point one. Point two is that, similar to our OX40 ligand assets that we're investigating, TSLP is really involved early in the T-cell inflammatory cascade when we look at atopic dermatitis pathogenesis. And so what's going to be interesting to find out is, if you target TSLP and we know that TSLP plays a really important role in initiating that cascade as well as allergen induction, can we affect the disease in terms of the long-term trajectory? And can we induce any kind of remittive effect. And so that's point number 2. We also know, and this has also work done at where I'm a voluntary faculty and outside of health system. We know that the work done by Dr. Brian Kim that TSLP plays a really important role in sensitizing non-histaminergic neurons. And so we all know that antihistamines do not work for atopic dermatitis and really, they just induce somnolence. And there's actually a lot of potentially deleterious effects of long-term use of antihistamines. And so, what we know from Dr. Kim's work is that TSLP actually auto sensitizes your non-histaminergic neurons up and it makes them more sensitive to pruritogens like IL-31, and so it helps potentiate that itch signal to the central nervous system in eczema. And so what I'm finding is that we're seeing really kind of early itch relief, obviously, I'm a blinded investigator, but what I'm hoping that we see with the results is that TSLP actually provides a really meaningful itch relief early and a deep itch relief as well. And so my early experience with this asset has been very positive. I'm excited to see what this trial shows. And I'd like to just finish with what I feel like Aclaris is doing differently in terms of executing on this Phase II. And so we all know that this space has been plagued by high placebo response rates, some sites that did not perform well. We saw recently with Q32 Bio and their atopic dermatitis readout and other trials that, well, dermatology is a hard therapeutic area to conduct clinical trials. There's obviously high levels of interobserver variability based on the fact that someone's EASI score, at one site in New York might look different than another person's EASI score in California. I think we would all say that there's probably some bad actors in the clinical trial space as well. And so what I love that Neal Walker, Dr. Neal Walker and his team are doing at Aclaris is, first of all, they're requiring photographs. And so -- they're doing central read of their photographs. And Neal Walker is the CEO of Aclaris, is a board-certified dermatologist and he's actually involved in this because he wants to make sure that every single patient that goes into this clinical trial is a real moderate-to-severe atopic dermatitis patient. And so I think that this level of attention to ensure that they're meeting the strict enrollment criteria, they do have the actual disease of atopic dermatitis. They do actually have the correct body surface area and moderate-to-severe disease. This is really resonating with me because what I think we're going to find is they're going to have much more high-quality data when this trial reads out. And so I just want to call out Aclaris for being a leader in the field and doing this. And I'm hoping that this type of approach really kind of affects the entire therapeutic area because I think what we'll end up having is better data, better. High-quality clinical trials and ultimately better FDA-approved assets. And so that's really the message I want to send to you all, and I certainly would welcome any questions.

Perfect. Thank you, Dr. Cameron. Really appreciate your time.

Thanks.

So we're going to gather the team up here for some Q&A. So if the Aclaris team could join me up here, that would be terrific. For the folks listening in online, I'll remind you that through the window on which you're watching the webcast, you can also ask questions. We've already got a litany of questions that have come in. So we'll get to the ones that we can. And for the folks in the room, we'll hand you a mic, just raise your hand, and we'll take [ you carry ].

Prakhar Agrawal from Cantor. Maybe for the bispecific, you mentioned that the SAD portion is completed and the MAD is ongoing. So maybe just talk about the initial expectations on the immunogenicity profile and the half-life for this drug based on the data that you're seeing. And will this MAD follow-up next year be enough to derisk the immunogenicity profile for this drug? And a follow-up to that, I realize that it's just healthy volunteer, but will you be measuring any biomarkers related to asthma or atopic dermatitis that can derisk as you move into the disease patients?

Sure. I'll start, and I'll hand it off to Hugh. So at least on the biomarker side, we are looking at that. I mean it's healthy volunteers. So it's somewhat limited, but I think it gives you at least reasonable information directionally. And as it relates to the other two questions, I'll pass that to Hugh.

Yes. So In terms of immunogenicity that you mentioned. So we don't have any readouts from the 1a yet in the healthy volunteers in PK or ADA, but what we do know is it's the same TSLP antibody has 045. And then that 2a trial in healthy volunteers, we saw a very low ADA and so we're expecting that we're going to see a similar profile. I'll be surprised if we don't, but you never know. And so we're going to have to wait on that for the first part of the year. But as Jesse mentioned, the 1a, the SAD has already finished dosing, and we've already initiated MAD dosing. So that will be complete by the end of the year.

Tom Smith, Leerink Partners. Thanks for putting together this really comprehensive event. Two questions, if I could. I guess, first on Bosakitug and the photographic review that you've instituted in the Phase II. Just wondering if you could comment on the experience you've had with this to date. Any sort of visibility into the screen failure rates at the vendor or the company level? And can you just elaborate on how you're able to track patient progress through the balance of the study there? And then on 2138 in lichen planus, I think there's been some Phase II studies, one with an IL-17 inhibitor, one with a topical JAK, can you just talk about some of the results there and how you think ITK/JAK3 could be more effective? And any learnings from the existing clinical experience that you plan to implement in your planned Phase II?

Sure. I'll take -- I'll start there and have the team fill in where necessary. So on the central review, I do -- I always kind of find it remarkable when folks talk about, well, I'm setting these bars of EASI 16 and 10% body service area. And the reality is none of that matters if you can't lay your eyes on the patient and see what you really have. And unfortunately, as Dr. Cameron astutely pointed out, there's a lot of things within atopic dermatitis itself that can be compounding. But then think about just being very simplistic or red scaly rash that can look like a lot of different things. And there are some sites that throw patients in that have fungus or psoriasis. And believe me, I've done this a number of times, you wouldn't believe what I see, that comes into these studies. So I think it's -- I know you guys always try to dissect and cross-trial compare. And if you saw what I saw, you would kind of give that up because it's really difficult to do that when you're seeing some patients who don't even have AD, which is a lot. And then you're seeing patients that don't even have the extent of disease necessary even if I set an EASI 16. And Dr. Cameron also rightfully pointed out that there's a tremendous -- and this is in the literature. This is nothing new. There's a tremendous amount of inter-rater variability. So as you're seeing patients back, remember it's a static assessment. You don't get to go back and say, "Well, let me check the last picture." So you're better off having a provider who saw that patient coming in -- so at least they have a feel for extent when they're looking at the patient as a follow-up. So I feel really good with what we've seen so far. And usually, when you do this, when I've done this in the past and you set the stage that you're going to be watching that you go in thinking logically that the screen failure rate is going to go through the roof, but nobody likes extra work, right? So if they know you're looking at this stuff, they're going to put in patients who make sense. And so we really haven't seen a big uptick. You see -- you usually see that in the beginning of the study as everybody is getting a feel for what you want because there are certain trials that you want a certain type of patient within that broader category of moderate-to-severe. So I think we started out with a little bit of a higher screen failure rate, but then it just modulated out. And we're ahead of schedule on the enrollment side. And I can tell you this, this will not fail because we don't have the right patients in. That is a guarantee. And it is a lot of work, right? I mean I'm sitting here doing that as a day job as well. But it's important because we really want to understand that. Any -- does that answer your question on that? On the LP front, so it's interesting. There have been some investigator-initiated studies that have shown proof of concept. It's one of the things I liked about it there. I got to be honest, I watch with great intrigue, the strategy Roivant employed with their JAK, TYK2. I think it's smart. We are operating in intensely competitive times. Rinvoq just reported out data in alopecia areata. So now we're going to have another player in that space. And so the decisions that we have to make are we like all these indications, but what's the lead, because that helps set price, as we all know. And so when I take a look at that landscape and try to decide -- do I lead with alopecia or do I go into something like a scarring alopecia, which kind of led us to lichen planus because lichen planopilaris is a very particular type of scarring alopecia, where we've seen good efficacy there. And remember, we just presented data with our ITK/JAK3 that showed remarkable effects on fibrosis. So -- it's -- and we also know that LPP, lichen planopilaris is [ orphan ]. So there's a lot of different ways to go here. And we're not saying we're abandoning alopecia areata because we still really like that. But I think it's important what you go with as your lead. And so that's what we'll be continuing to assess going forward, but that's where we're leaning at the moment.

And Neal, I'll just add to the question with regards to the secukinumab study. So I think the secukinumab study was a very innovative study design. It was a basket design. It included three subtypes of lichen planus. I think there's many learnings there, although the study was not successful with the ability to recruit that patient population, the outcome measures that were utilized to measure outcomes in that study. So I think we are modeling a little bit our program around that secukinumab program. And then finally, with regards to some of the work that has been done with the JAK inhibitors. baricitinib has done work there. Topical ruxolitinib has demonstrated effect there. And I think that's very encouraging because we know that we impact the interferon pathway and maybe potentially more intriguing with 2138 is our ability to also impact Th2-driven disease and pruritus. So we think there's a really good opportunity there in that indication.

Maybe I can take one from the web real quick. So this one is about synergies. How does Aclaris think about its portfolio as it relates to potential synergies between the biologics and the small molecule candidates currently in development?

Well, clinical drug development -- clinical drug development, the biggest difference with biologics is the CMC piece. And clearly, we've seen -- if you really think about it, honestly, over the last 15, 20 years, there are huge barriers to entry for small companies to get into biologics, mainly the CMC side of the house. So I think if you have the ability to do all the testing, which we talked about in St. Louis, and understand how each of these drug targets impacts pathophysiology, it just develops a rich data set. It's -- I always use that expression in large pharma capability. A lot of these larger companies, they have that luxury of understanding how all these different data sets play together. So from my perspective, once you get past the CMC portion, it's -- we have -- it's about having the right experts. I mean we've got a lot of gray hair on the stage, my colleagues more than myself, probably, but these folks are 30 -- 35 years in the industry actually did the work, not just say they did the work, and that's important knowing where to go, and that's how we came up even with the ITK approach.

Roger Song, Jefferies. Thank you for putting together this presentation. Also a question related to the 052. So looking at the pharmacology and the in vitro efficacy seems on the IL-13, IL-4 side, maybe slightly lower than dupi, but comparable. But when you add on top of the TSLP much higher than dupi, so with this profile, how do you think of the position in terms of the biology wise, this will be better suited for dupi [indiscernible] versus experience. And then in terms of indication selection because dupi has a bunch of the indication, which one may be better for this profile with the combination?

Yes. We have plenty of opportunities because the efficacy across any of these disease areas is still really not addressed well. One indication that dupi can't do is dupi-resistant or dupi failures. But we're looking at refractory disease. We're looking across other important diseases that have really a dearth of real efficacy. So if you look at dupi in COPD, 35% response rate, and that's an approval. And that really shows the huge unmet medical need there. But really, you saw that first slide with psoriasis and the market opportunity in psoriasis is like 5x higher than anything else. The reason that's higher, and I was part of the team that first puts Stelara out. The market cap on that when we looked at that was $3 million -- I'm sorry, $3 billion total. Well, now it's $30 billion. So you grow the market when you have successful therapies that can address disease. And so I think that's what you're seeing across, AD was never thought of before 10 years ago. It was a wide open space. That's how dupi became so successful. But now that we have different approaches, especially bispecifics and other -- even in the small molecules that are new targets that you're now able to address, you're going to see that grow equally as well. And so we'll look just like Neal said, the first out of the gate is the key. And then filling in behind it is relatively straightforward once you show that initial success. But there's a plethora of opportunities there.

Got it. Very quick follow-up. In terms of the half-life, looking at the current Phase III design is for the -- every once weekly dosing. So is that because you want to test the efficacy part and then to maximize -- max out the potential there? And then what's the eventual maybe induction versus the maintenance dosing regimen for the 052 potential?

Well, that's all to be seen, of course. But any time you do a POC study, the first thing you do with the trial is make sure it's going to be successful. And you don't want to leave any questions on the table. And so if you run that 1a -- I'm sorry, the 1b in either -- in this case, asthma, which is only a single dose that's just looking for signal finding. But in the atopic derm portion with 4 -- I'm sorry, 5 doses over 4 weeks, we're looking to maximize the exposure to look not only for the safety profile in patients, but also we had about a 50% decrease in the EASI-75 in the 045 trial in the POC within the first 4 doses. So we do have an opportunity to show real effectiveness of this. Clearly, every -- the 1-week dosing is only meant to put maximum drug on board for safety and tolerability, ADA and any other issues that may show up. It's not meant to be a view into the PK. I would fully expect that we'll come out with a dosing regimen that will be longer than dupi. And the only reason I expect that is because of the YTE that is going to enhance that. But we can also dose higher. And that's the interesting thing. When you're first out of the gate, you develop the safety profile for all the drugs behind you. But then when you're sitting in second place or third place, it's very easy to pass in a typical race, you're sitting there waiting for your opportunity. And so they've already shown what that safety profile looks like, we could actually push more on that, I believe. So again, enhancing the efficacy.

I saw another one from the web. There's a handful of questions actually about the rationale or the process that Aclaris follows to prioritize one particular indication over another, specifically lichen planus over an alopecia or vitiligo. Can we talk a little bit more about the process that we follow to do so and whether that decision has anything to do with anything we saw in the data? The answer is no but...

No. I mean it's -- I said this earlier, I don't think I've ever -- I think we've ever seen a competitive intensity like we see today with fast follower approaches and within a therapy area within a target, within a little tweak on a target. So I think we have to always be thinking about what your lead is. And it's not to say, again, we still really like alopecia areata. We know it very, very well. And we think 2138 would do great there. But I also just want to be mindful of being maybe the fifth JAK inhibitor in the space. And so as a lead, you start thinking about what are other diseases that have nothing approved like the scarring alopecias. And these are devastating, much more devastating than regular alopecia because you get scarring, which means it's basically irreversible if you don't catch it in time. So I think looking at that, looking at things like lichen planus as good leads obviously have impact on pricing, have impact on success of your launch out of the gate. There are opportunities to get orphan status in a couple of these things, which I really like as well. And then you can think about layering in the other indications, which everybody does. So it is a multifactorial process. It's not just market size. It's a lot about the competitive intensity. I mean, look, RINVOQ put out really strong data in their recent alopecia areata studies. It's stronger than I actually thought. So it just makes you just think about that like and how much credit we're going to get as we make progress.

Charles here from Stifel. I guess a different question for me. In terms of the bispecifics, how are you thinking about what to target in addition to TSLP and how it fits within the overall portfolio?

Yes. I think that goes back to the comment I just made about competitive landscape. So we've spent a lot of time just trying to keep ahead of that. And we have it all mapped out in a spreadsheet when everybody presents their data. And I think the good news with that space is that I don't think there's a defined market leader yet. But in '26, we're going to get 3 or 4 pretty good data sets, like not just a pheno study, but Phase II data sets in patients. And we'll learn a lot, right? And I think we have to be mindful of that and yet set our programs up in a staggered way so that we can be nimble enough to move if somebody puts out world-beating data. And the good news is, I don't think any of these constructs are going to dominate across all therapeutic areas. There's some that will be good in respiratory, like what we've seen with IL-13, decent data in AD, not so decent in respiratory and everything across the board. So you just have to be very thoughtful. There's so many stealth companies on the private side that you just have to be aware of. And I don't know how many of you are aware of some of the really good alarmin data that's come out in AD. We've talked a lot about TSLP in AD as a mAb, some IL-25 data coming out of a China company that showed quite remarkable results, a little bit unexpected results that were presented at EADV with an IL-17 trispecific constructs. And so there's a lot of things to juggle around. And we're looking at predefined constructs based on what we know of the competitive landscape today.

Seamus Fernandez at Guggenheim. So a couple of quick questions, Neal. Not a lot of questions on the ITK and the ITK selective approach. We're going to get some -- potentially some information from the CPI-808 (sic) [ CPI-818 ] molecule in the near term. What are you going to be looking for in that data to really kind of maybe assess proof of principle as it relates to the opportunity in atopic dermatitis for that asset? And then beyond that, when you just kind of think about ITK selectivity, obviously, you've got this ability to dial in, dial out. But what is the real advantage of ITK selectivity, especially from a safety perspective as you look at this?

So I think what we've seen out of CPI-818 is at their highest dose level, the 200 mg BID, they showed a signal in a small number of patients. I think you've seen what we've presented today that, that molecule has quite modest potency, and that does matter. And so I think the fact that with perhaps a molecule that's not optimized that you're showing a signal that should be encouraging. And I know they have additional data coming up, but it's only a longer-dosing interval. I'm pretty sure it's 400 mg QD and takes it out to 8 weeks. So what I'm hoping is that, again, kind of coming out of this meeting, we presented a lot of data on that side. And what I hope is that people start recognizing what we've presented. We have an exceedingly potent molecule. We got new ones coming down the pike in '26. And again, I couldn't be more excited about the ITK next-gen approach and getting rid of just theoretical JAK risk because as we all know, JAK inhibitors are generating billions of dollars and everybody harps on the black box. But we did just see RINVOQ get moved up in the pecking order with ulcerative colitis and now to be used ahead of TNF inhibitor. So I think as time goes on, it's as predicted that at the end of the day you want to get a molecule that drives great efficacy. And I know folks are fond of referencing, well, I can be a better oral dupi. I want to be a better oral JAK as it relates to the overall target product profile. And I think the dialing in and out of TXK is important because as we talked about with the -- we know those are safe targets, at least for what we know today. And by dialing that in and out, you're able to have a more robust effect across the patient population. We talk about this all the time with people referenced respiratory with low EOs, high EOs and like TSLP worked in kind of both do be more so on the high EO side. Well, what if you had a molecule that does really well on the Th2 side, but also pulls in that Th1 and can generate a more robust effect across a broader set of patients. That's what we're [indiscernible] off with. And the fact that, as Joe presented today, we got a QD version, that's a good setup for us.

Great. And then maybe just as a final question. When you look at the AD data for TSLPs that have been generated so far, tezepelumab had data, looked like there may have been a modest signal in that study. How do you look at those data and translate that to your own pursuit with your more selective TSLP?

Yes. No, I think you poached that well, modest signal because there are some who believe that, that was a total failure. And I just -- when I look at the data objectively, I don't think it was. It was just miss on a p-value. It wasn't what they wanted. But it's still on an IgA responder basis at week 16, they also generated a p-value, I think it was like 28%, 29%. So I think it shows that there is possibility there. And the fact that we just showed this data, which we had generated a long time ago and just saved it to present today about the stuff that Hugh presented with the different concentrations, I think that gives you a plausible reason to believe that I get asked this question all the time, well, does potency matter? Well, in some indications, it does. If I only get 15% absorption of the mAb into the skin, if you look at literature that's what it'll say, I want something that's more potent, sticks to the alarmin and doesn't come off. And the other thing that gives me confidence on that side is what we've seen with other alarmins and other people's data sets, which maybe they're private companies, so they don't -- it's not as widely distributed, but it shows that, that's important. And I would also point to at least some of the Sanofi OX40 data, it's in the same pathway, right? So we designed this study to be pretty efficient I would say, again, I've said this a bunch of times, I'm really very excited about the bispecific and ITK programs. But for us to do a smallish study that can read out within a year on TSLP mAb, to see if we're right, this is a pretty efficient study. And if we are, it would be a great addition to the armamentarium because as Dr. Cameron pointed out, you need to be thinking about layering of treatment, having a background effect. That's far more important than worrying about whether I'm dosing Q12 months, Q6 months, like it just -- to me, that's a little bit of going down the wrong path.

A question about ATI-052. Given the 2 studies that are ongoing, do we expect to be able to differentiate the impact of an anti-TSLP versus an anti-IL-4R impact in those studies?

Roland?

Well, yes, I think this is what we are trying to attempt in these studies. We're going to look at, obviously, a lot of PD and biomarkers in these studies in the atopic dermatitis studies. There are data for dupilumab for biomarkers. And so we're going to compare what we get with our bispecific antibody against this -- the data out there with dupilumab. We do this in collaboration with Emma Guttman's lab, she's had a lot of experience in that space. So yes, we are looking forward to getting this data.

Yes. And I just maybe add one piece on there. We get asked, are we going to do biopsies in that study. We don't think we need to. By doing the tape strips and in conversations with Emma Guttman, she didn't think we need to either because they have such a huge amount of historical data on the effect with dupi that it's not great because it's not all in the same study, it's not head-to-head, but still you can make that inference.

Biren Amin, Piper Sandler. Congrats on all the updates. So I have 3 questions on ATI-052. The first question relates to, I think you mentioned that we'll likely see PD data in the SAD/MAD cohort. Are we likely to see IL-4, IL-13 knockdown in the SAD/MAD cohort when you report that out? And would we be able to compare that to the Phase I SAD/MAD cohort data from Sanofi's lunsekimig? Second question, I think you had mentioned around immunogenicity the fact that 052 uses 045 component on the TSLP side. And so your confidence level there in terms of immunogenicity profile. However, I think there is a modification of the YTE mutation, the AQQ mutation. Do you expect those modifications to have any changes on immunogenicity? And then third question, as it relates to the Phase Ib planned atopic derm and asthma studies next year, comparison to placebo, would the company consider comparing to bosakitug, for example, where you already have that component on TSLP side in 052 to discern an effect on additive effects on IL-13?

Yes. Thanks for the questions. So first of all, the healthy volunteer study, the SAD/MAD, there's not a lot to be taken away in PD there. I mean we can do, and we are, we'll take blood samples and do challenge studies and things of this sort to look at effect and remaining effect. But most of the PD that you're hearing about with 052 is going to be in the Ib studies with this single asthma dose and then the 5 AD doses. And there we'll have a very rich PD approach, and we'll be able to also separate out some of the TSLP versus IL-4R component in that effort as well. In terms of ADA, right, there's a YTE and AQQ. Both of those are very well known and historically 30 or 40 years in the making with clinical data. And they don't generate or put a greater risk, I should say, in terms of an ADA profile. If we were to receive ADA that would be different than 045, it would probably be against the linker or the scFv component on the N-termini of the fabs. And we'll know that because we'll have differentiating assays that will be able to tell exactly where those antidrug antibodies are binding when we do those studies. I think I answered them all.

Could you repeat that question on the Phase Ib?

So the Phase Ib, the planned studies in asthma and AD are comparing to placebo. Thoughts on comparison as an active control to bosakitug where you can differentiate the activity of IL-4 and IL-13.

Yes. Do you want me to take that or...?

Sorry, I forgot that question, but I had the answer. So the comparison is fine, and I'm sure we'll do that. As I mentioned in the IIa trial with 045, we had 4 weekly doses, but they're at 300 milligrams and the potency is slightly different than the 052 bispecific. But we will be looking at EASI scores after that because we did have a 50% reduction in EASI-75 in 045. So I'm fully expecting that when we look at 052 after 5 weekly doses, if we didn't see that, we would be highly concerned. But I think with the potency we have, the exposures and the affinity against both targets, I'm sure we'll make that comparison. But head-to-head, it's not going to be all that meaningful. We're just looking for a gestalt on whether we're seeing a similar impact. It's not going to be, oh, it's more or less potent or active than 045.

A couple of questions from the web on business development. So could you, Aclaris, catch us up on how -- an update on business development on partnerships? I think it's a broad question, if I'm reading it correctly, but there was one specific question about ATI-1777 as well. So if you could answer it both ways, please.

Yes. So we're usually pretty open that we have active dialogues going on across the board. So we continue to have discussions on 1777. It always kind of comes in fits and starts. I think people are getting more interested in the topical side based on the success of Opzelura. So I don't have a material update there. Across the portfolio, we continue to engage on a number of fronts and anything from monetizing the kind of last of the JAK inhibitor IP for alopecia royalty streams to specific assets both on a regional and more global basis. So we're optimistic that as we head into the back part of the year that we'll have more to report on that front. Obviously, you can't predict BD, but I think that's why we're so bullish about our cash position just at a basal level, we already get through midyear '28.

Prakhar from Cantor. Maybe a question for Joe. On the ITK selectivity, you talked about the selectivity versus JAK3, but maybe just broader off-target effects and what you saw in the [ kinome 3 ]. And second question, is there -- on the TSLP side, given that you have much better potency and inhibition compared to tezepelumab, what are the safety implications of too much TSLP inhibition?

So with regard to the kinome selectivity, the next-generation compounds, we've looked at that. We looked at about 200 kinases. And there's nothing that we saw that's really of concern to us. So I think we're in pretty good shape there.

Yes. So in regard to TSLP, so we have the IIa data where we dosed with 045, we dosed pretty high, right, 300 milligram every 2 weeks with a 23-day half-life. So there was a fair amount of accumulation as you saw also in the figure. And the safety profile was identical to teze. Nothing popped out. It looked very safe. It looked like you'd be able to go down into younger populations without any incident.

So with the last question, another one from the web, it's a pretty good one to end up on. This one is directed to Joe and Neal. What are you both most enthusiastic about in the pipeline?

Go ahead, Joe. I'll let you go first, and I can close.

So Neal said like his enthusiasm about 10 times already. And I agree with him. I think that the next-generation ITK inhibitors are exciting as is the bispecific. I probably am a little bit more excited about 2138 than maybe Neal is. I think the issue with 2130 obviously is that it has some JAK3 cross reactivity, which helps probably with efficacy, but also brings in the safety issue. But the drug, both preclinically and clinically to date looks really, really good. So I think for me, those 3 assets are the ones that I'd be most excited about.

Yes. I mean I would just echo that. You always have to be, I think, intellectually honest when you're looking across your portfolio so you can make strong capital allocation decisions, particularly in these competitive markets. And I'm not -- I don't feel like I'm a very big hand waver, but I definitely am super excited about the bispecific because of the impact it can make in terms of driving better efficacy, which we believe is always the first thing, the first kind of central tenet you should be thinking about. And then on the oral ITK side, I mean, look, whenever you can get an oral that has this kind of broad-based activity and check the safety box. And I think we went a long way to doing that with an exceedingly potent molecule that hits JAK3, ITK. NTXK with 2138, we just saw nothing. So it's -- from my perspective, I'm really excited about that and why I use the term game changer or potential game changer there. So with that, I appreciate the attendance of everyone who showed up in person and joined on the web. Obviously, we're really excited about what 2026 can bring and stay tuned, and we'll be in touch shortly. Thanks.