Aclaris Therapeutics, Inc. ($ACRS)

Good day, and thank you for standing by. Welcome to the Aclaris Clinical Program Update Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Will Roberts, Corporate Communications. Please go ahead.

Thank you, Liz. Good morning, everyone, and welcome to the Aclaris Therapeutics conference call to discuss this morning's clinical program update, including the positive full top line results from our ATI-052 Phase Ia single and multiple ascending dose clinical trial and our plans to move ATI-2138 into a Phase IIb program in Lichen Planus. The press release on the clinical update was issued earlier this morning and can be found in the Press Releases subpage of the Investor Relations section of our corporate website at aclaristx.com. Please note that we provided slides as part of this discussion -- they're now available in the webcast window and as a downloadable PDF document on our website. We'll reference the slide numbers throughout. A Q&A session will follow the prepared remarks. Before we begin, I'd like to remind you that today's webcast contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. For more information on such risks and uncertainties, please refer to our filings with the SEC, which are available from the SEC or on our corporate website. Any forward-looking statement represents our views as of today, April 28, 2026. Joining me on the call today are our CEO, Neal Walker; Hugh Davis, our President and COO; Jesse Hall, our Chief Medical Officer; and Roland Kolbeck, our Chief Scientific Officer. Kevin Balthaser, our Chief Financial Officer, will also be available for questions following the prepared comments. And with that, I'll turn the call over to Neal. Neal?

Thanks, Will. Good morning, everyone, and thanks for joining us on our call. We are delighted to share a couple of key clinical milestones that we recently achieved. First, the full SAD/MAD results for our lead bispecific antibody, ATI-052, confirm and build upon the remarkable PK, PD and tolerability interim results announced back in January, providing strong clinical validation of the mechanism of this bispecific across a wide spectrum of single and multiple ascending doses. ATI-052 effectively binds TSLP upstream and immune cells downstream in the Th2 cascade via IL-4R, the share receptor for both IL-4 and IL-13. As a reminder, the biology is additive and as such, has the potential to provide strong efficacy in a variety of indications with infrequent dosing, which lowers the injection burden for patients. There are numerous feedback loops and interdependencies in this pathway and data generated to date strongly suggests a synergistic effect of inhibiting TSLP as an initiator of the cascade and IL-4 and IL-13 as the effector cytokines downstream. Second, we have completed a robust indication down selection process for our most advanced oral inhibitor compound, ATI-2138 and have selected Lichen Planus or LP as the next clinical indication for Phase IIb development. As you'll hear from Roland, ATI-2138 is the first and only oral small molecule that inhibits both key JAK related cytokines and TCR signaling. As such, 2138 has the potential to be an ideal mechanistic fit for LP. Turning to Slides 3 and 4. Th2-driven indications represent large and growing market opportunities due to the tremendous unmet need for better treatment options. We believe significant efficacy gaps still remain in many of these indications, including asthma and atopic dermatitis. The opportunity we have with ATI-052, our bispecific that targets both IL-4 and TSLP is to redefine the standard of care. ATI-052 inhibits 3 inflammatory cytokines, IL-4, IL-13 and TSLP to more broadly suppress the Th2 inflammatory pathway that drives many respiratory dermatologic and GI diseases, particularly those with heterogeneous subtypes. By inhibiting both upstream and downstream components of the Th2 cascade, ATI-052 has the potential to raise the efficacy ceiling beyond what either target achieves alone, while also addressing the biologic heterogeneity seen across respiratory and dermatologic diseases. This positions us to redefine the standard of care in Th2 disease and pursue first-line therapy status. Further enhancing its profile, ATI-052 has the potential for once every 3 months dosing, offering meaningful convenience for patients and providers alike. I will now pass the call over to Hugh to provide an overview of the full ATI-052 trial results and the planned next steps. Then Jesse will discuss our next clinical steps for this bispecific, and Roland will be on to provide more color on our ATI-2138 Lichen Planus program. I'll be back at the end to conclude the call. Hugh?

Thanks, Neil, and good morning to everyone. I'll provide a quick overview of the compound itself before proceeding to the final results of the trial. As Neil mentioned, ATI-052 inhibits TSLP upstream and immune cells downstream in the Th2 cascade by simultaneously binding both TSLP and IL-4 receptor effectively and with high affinity. Antagonism of the shared receptor IL4R block signaling of both IL-4 and IL-13 activity. We believe that 052 has the potential to raise the efficacy ceiling in a variety of immuno-inflammatory diseases. As a reminder of the construct itself, Slide 5 shows a diagrammatic representation of ATI-052. It has the same anti-TSLP ligand binding regions as our anti-TSLP monoclonal antibody, bosakitug, allowing it to retain the potential class-leading attributes and potency advantages over tezepelumab and comparator clinical stage assets. You'll also see that it has 2 single-chain variable fragments that have high affinity to the IL-4 receptor. This antibody contains a YTE mutation to bind FcRn more tightly designed to extend the half-life and an AQQ mutation designed to reduce off-target binding and potential toxicity. As you will see in the results, we believe these mutations contribute to the strong behavior of the molecule. The next set of slides describe the key attributes of ATI-052, most of which were covered in detail on the January interim results call. First, on Slide 6, both ATI-052 and bosakitug show a very low dissociation rate from TSLP. The inverse of dissociation rate is residence time. As you can see on the right panel, both bosakitug and the bispecific have over 400 hours of residence time on TSLP, which is considerably longer than comparator antibodies and about 25 to 30x higher than tezepelumab. We recently characterized the crystal structure of bosakitug bound to TSLP, which is the same anti-TSLP Fab binding region as in ATI-052. As shown on Slide 7, bosakitug has a much more extensive TSLP binding interface than tezepelumab, including all 6 light chain and heavy chain complementarity determining regions or CDRs, whereas tezepelumab only has 3 heavy chain CDRs in contact with TSLP. In addition, bosakitug and ATI-052 bispecific anti-TSLP Fab interfaces with the entire TSLP molecule, spanning from the N-terminal tyrosine at 29 to the C-terminal proline at 154. It virtually envelops the TSLP molecule, while teze only engages the C-terminal portion. This explains the long residence time on TSLP by both bosakitug and ATI-052. This is important because TSLP is a very potent alarmin that drives a number of inflammatory diseases when produced at high chronic levels. And as such, it's necessary to have a very potent therapeutic that can bind and neutralize its pathological effects. On Slides 8 and 9, you'll see that ATI-052 can also effectively bind 2 molecules of TSLP and 2 molecules of IL-4R simultaneously with high affinity, meaning that all 4 binding sites are acting independently. Importantly, binding to target first does not affect its ability to bind to the other. And all 4 binding sites act independently and maintain the same high affinity to their target at the same time. Functionally, the bispecific inhibits the activity of all 3 targets, TSLP, IL-4 and IL-13, leading to a significant potency advantage over the combination of dupilumab and tezepelumab, which we show on Slide 10. This isn't surprising. Pfizer's data with their trispecific antibody tilrekimig show this synergistic potential when addressing the same 3 important biologically distinct targets. Moving to the results of the Phase Ia SAD and MAD trial itself. As you see on Slide 11, this was a randomized, blinded, placebo-controlled Phase I trial first in human designed to evaluate the safety, tolerability, PK and PD of subcutaneously administered ATI-052 in healthy adults receiving both single ascending doses and multiple ascending doses. In the SAD portion, all 4 cohorts of 8 healthy volunteers were randomized 3:1 to receive a single dose of ATI-052 of 30, 120, 360 or 720 milligrams or placebo. In the MAD portion, 2 cohorts of 8 healthy volunteers each were randomized 3:1 to receive 5 doses of either 240 or 480 milligrams of ATI-052 or placebo administered every 7 days. As a reminder, the baseline characteristics were generally balanced across cohorts and were typical of a healthy population. Let's start with the pharmacokinetic results. On Slide 12, the concentration time profile of the 4 SAD cohorts and the 240 and 400-milligram MAD cohorts are shown. This continues to be a very well-behaved molecule pharmacokinetic. Dose proportional increases in PK for both Cmax and AUC were observed across all SAD and MAD dose levels. Focusing now on the 2 MAD cohorts, we see at least 12 weeks duration above the target-mediated drug disposition or TMDD for both cohorts. We note that we did not measure PK at week 14. The accumulation ratio calculated using the AUC after the fifth dose divided by that of the first dose, measures how much a drug accumulates in the body after repeated dosing compared to a single dose. This analysis provides an estimated half-life of approximately 45 days. Considering this dose proportional PK profile, along with the remarkable PD effect I'll describe momentarily, these results help confirm our expectation that ATI-052 can be dosed as infrequently as every 3 months. Let's move now to the compelling pharmacodynamic results. The CCL17 inhibition assay is widely considered the gold standard in our industry to quantify the inhibitory activity of certain antibodies and serves as an early surrogate for clinical effect. The stronger and more sustained the inhibition, the better the molecule. Both TSLP and IL-4 stimulate the release of CCL17, also known as TARC. But given that this trial was conducted in healthy volunteers and there's no disease, as such, endogenous levels of TSLP and IL-4 and consequently, CCL17 are very low and variable. To overcome this limitation, as we show on Slide 13, we developed a rigorous whole blood assay to assess the inhibitory activity of ATI-052. We stimulated whole blood samples from participants in the trial with optimal quantities of TSLP and IL-4, which was up to 500-fold above endogenous levels seen in healthy volunteers in order to induce maximal CCL17 release and then directly measure the inhibition of CCL17 by the act of ATI-052 onboard in the blood at the various time points. Using the supra biological levels of TSLP and IL-4 for maximum stimulation even exceeded those that would be seen in disease provides a very high hurdle to demonstrate the inhibitory activity of ATI-052. On Slide 14, you see the full PD results. Overall, we observed a sustained dose proportional PD profile across all SAD and MAD cohorts. Looking at the top panel, when we assess inhibition of TSLP stimulated CCL17 in the 480-milligram MAD cohort shown in dark blue, we observed 100% inhibition through the 20-week final sampling time point, 4 months beyond the last dose. We observed a similar result with the 240-milligram MAD cohort shown in green, with nearly 100% inhibition out to the same 20-week time point. On the bottom panel, describing inhibition of IL-4 stimulated CCL17, the 480-milligram cohort of ATI-052 showed 100% inhibition of CCL17 for at least 3 months, 2 months beyond the last dose. It is expected based on the concentration of ATI-052 at week 14 that near complete inhibition would be achieved through the week 14 time point as well. It's worth noting that these results represent data from isolated systems. They don't take into account the expected synergy from the mechanism in vivo. We have summarized the results of these potential best-in-class PD results on Slide 15. Overall, these PD results support the potential to raise the efficacy ceiling with ATI-052 with an extended dosing schedule. Slide 16 serves as a reminder of the strong tolerability and safety profile of ATI-052 in this trial. These results confirm the strong profile we described at the interim look in January. No safety signals were observed and more importantly, no conjunctivitis was seen. Regarding immunogenicity, in general, the impact of ADA is observed as either rapid clearance observed in a PK analysis or rapid loss of activity in a PD analysis. No impact of ADA on PK or PD has been observed in this trial. These trial results not only corroborate, but also dramatically improve on the compelling interim results we presented in January and clinically validate the potential best-in-class binding and potency attributes. They also provide important clinical evidence supporting ATI-052 as a molecule with a particularly strong safety and tolerability profile and a robust PK and PD package, all of which support the potential for synergistically driven efficacy with an extended dosing schedule of up to every 3 months. I'll now turn the call over to Jesse to provide an update to our ongoing clinical program for ATI-052. Jesse?

Thanks, Hugh, and good morning, everyone. First, I want to echo Hugh's sentiments regarding the strength and importance of these results. They reinforce that this molecule has best-in-class potential and potential therapeutic utility in a wide variety of indications. In parallel, we've been focused on execution. We have initiated 2 randomized, double-blind, placebo-controlled Phase Ib proof-of-concept trials. These trials are designed to build the foundation that we need to move into our Phase IIb programs with confidence. At this stage, while we will be looking for initial efficacy signals, the objective is more about translational clarity. Specifically, we're looking to define PK, target engagement and biomarker response in disease populations and to use those data to inform next steps. Turning to Slide 17. In January, we initiated a Phase Ib study in approximately 12 patients with AD with EASI scores of greater than 21, evaluating 480 milligrams of ATI-052 using a regimen consistent with our Phase Ia MAD cohorts, 5 weekly doses over 4 weeks, identical to what we did in healthy volunteers. The trial will assess clinical endpoints at week 8, including EASI, IGA and PP-NRS, followed by an additional 12 weeks of follow-up. So we'll have 16 weeks of evaluation following the last dose. Importantly, we're also collecting PK and PD data, including lesional and non-lesional tape strips, which provide a direct bridge to established data sets, including dupilumab and should help contextualize biological activity. Next, on Slide 18. In February, we initiated a second proof-of-concept study in asthma, a 3:1 placebo-controlled single-dose trial in approximately 16 patients on Gen Step 2 through 4 therapy. We expect top line readout at day 29 with approximately 6 weeks of follow-up. Endpoints include safety, PK and PD biomarkers with a focus on FeNO, eosinophils and FEV1 to assess biological effect and consistency with mechanism. Both studies are actively enrolling with top line data expected in the second half of 2026. In parallel, and shown on Slide 19, we are advancing Phase IIb planning in both asthma and AD with the goal of initiating the asthma study in the fourth quarter of this year. We believe that ATI-052 has the potential to be differentiated and competitive across multiple important indications. With this, we'll now transition the call to ATI-2138. So I'll turn the call over to Roland.

Thanks, Jesse, and good morning, everyone. I'm excited to be with you today to provide an update on ATI-2138 regarding our plan to move into Lichen Planus or LP. As shown on Slide 21, Lichen Planus is an ideal fit for this molecule for a variety of reasons, including mechanistic overlap, market size, available white space, potential for cost-effective development and the availability of regulatory pathways that may expedite development. I'll touch on most of these factors this morning. Let's start with the disease itself on Slide 22. It's an unaddressed chronic inflammatory CD8 cytotoxic T cell-driven interface dermatitis. There are multiple subtypes, the 3 most common of which are erosive mucosal, cutaneous and lichen planopilaris, which is a rare form of LP affecting the scalp and causing permanent scarring hair loss. Patients with LP experience stores, difficulty eating, severe itch, scales, plaques, permanent hair loss and fatigue. Quality of life is also affected in most patients due to disease and symptom-related anxiety and depression. In fact, studies have shown that LP affects quality of life in up to 78% of affected individuals. As you see on Slide 23, LP is a significant white space market opportunity. There are currently no FDA-approved therapies for LP. So disease management has historically focused on immunosuppression and topical symptom control. Estimates of market size suggest that at least 0.1% and up to 1% of the population is affected in the U.S. Despite no targeted therapeutic intervention, up to 40% of patients with LP currently seek treatment. This percentage would likely increase with new innovative targeted and effective oral therapies. The steroid failure rate in LP is also very high, as much as 60% in the moderate to severe population. We believe that new targeted therapeutics have the potential to dramatically increase diagnosis and treatment rates by providing rapid pain and itch relief and addressing multisite disease involvement in addition to minimizing flares and directly improving symptoms and potentially quality of life. In addition, oral agents are far more practical for the treatment of widespread or multi-subtype lesions than topically administered corticosteroids or calcineurin inhibitors. As a reminder, ATI-2138 is a highly potent investigational oral compound which interrupts T cell receptor or TCR signaling by inhibiting interleukin-2 inducible kinase or ITK and Janus kinase 3 or JAK3 signaling of common gamma chain cytokines in lymphocytes. Slide 24 further describes its mechanism involving dual inhibition of TCR-mediated and cytokine-mediated activation of CD8 cytotoxic T cells. ATI-2138 dual inhibitory activity results in a bispecific-like effect that could be very powerful in certain diseases like LP. In fact, it is the first and only known JAK-based therapy that also inhibits the TCR. First, on the left side of the slide, it inhibits TCR signaling through potent inhibition of ITK, which inhibits autoantigen-mediated T cell activation, cytotoxic destruction of targets by CD8 T cells and production of inflammatory cytokines, including interferon gamma. Second, on the right, it inhibits cytokine signaling via JAK3 inhibition, thus impacting cytokine-mediated T cell proliferation, activation and survival. All in, on Slide 25, you'll see that this provides the mechanistic rationale for broad and deep efficacy in LP. ATI-2138 is the only known drug in development that precisely targets these 2 signaling axis that are the defining pathological drivers of LP, potentially positioning it as the first mechanistically complete therapeutic candidate designed to address the root inflammation underlying land symptom. This also aligns well with the clinical rationale and efficacy of ATI-2138 in atopic dermatitis, which was on display at the 2026 AAD meeting. It's understandable that the medical community is excited about this potential therapeutic innovation. As you see on Slide 26, we intend to initiate a phase multipart Phase IIb basket study of ATI-2138 in LP starting with the erosive mucosal and cutaneous subtypes in Part A, then layering in lichen planopilaris in Part B as the trial evolves. Our goal is to initiate this trial in the second half of 2023. We'll describe the trial design further as we approach initiation. We are also excited about the mechanism of ATI-2138 in other niche indications beyond Lichen planus, such as the 10% to 15% of asthma patients that are severe or refractory -- with that, I'll turn the call over to Neal for some closing comments. Neal?

Thanks, Hugh Jesse and Roland. Turning to Slide 27. The PK and PD results with 052 provide a convincing surrogate for clinical effect and exceeded our expectations across the board. The results showed complete and sustained inhibition of both TSLP and IL-4R, providing an estimated half-life of approximately 45 days. Beyond that, the safety and tolerability profile is exactly what we want to see, if not better, as we proceed toward Phase IIb. On Slide 28, and as you heard from Roland, ATI-2138 is the only known drug that hits the key modulators of interface dermatitis disorders Lichen planus, both TCR signaling and CD8 cytotoxic suppression and as such, is an ideal mechanistic fit. This is a white space opportunity with an estimated U.S. market potential exceeding $1 billion with an opportunity up to nearly $4 billion. We've had a productive first part of the year across the pipeline, including the new information we provided today, and we are looking forward to the rest of the year. As we show on Slide 29, we expect to achieve numerous important milestones throughout the year. Thanks for your time today. And now let's open up the call to Q&A, though I'll remind you that we may be limited to what we can discuss beyond what we've disclosed. Operator, are there any questions?

[Operator Instructions] Our first question comes from Thomas Smith from Leerink Partners.

This is Nat on for Thomas Smith. Congrats on the data. We have 2 questions. So first, the Phase Ib asthma trial, you to a single 480 mg dose, while the atopic dermatitis trial used 5 weekly 480 mg doses. What drove that difference? And second, what are your expectations on the top line Phase Ib data expected in second half '26 from both asthma and atopic dermatitis indications? Any specific bar that you aim to clear before starting a Phase Ib program?

Yes. So I can start and you feel free to chime in. So on the asthma dose, we're just mimicking the traditional FeNO study to get an idea of dose response in patients in a pretty quick study, both on FeNO and FEV1. It's a typical study that most people do on the asthma side. In AD, it's a little different because usually with atopic dermatitis, you have a load-in dose just because you got to get to the skin site of action. So we're trying to mimic that or at least use that as a surrogate in this study. And it also comps nicely and is a direct comparator to what we did in the healthy volunteer study. So that's kind of the background rationale. Hugh, do you have any other comments?

Yes. I mean the goal with the AD is to really get to an exposure response profile that can be done successfully with 5 loading doses. We will also be able to do a Pop PK analysis because we'll be able to combine the data from our healthy volunteers with that data set and really be able to hone in on any potential covariant. But at the end of the day, we'll be able to look at true activity and efficacy profile in AD in these severe patients relative to established historical data from Dupi, for instance, which has a 4- and 8-week monotherapy publication. So we'll be able to get some really good understanding of actual clinical effect over time and a PK/PD analysis that we'll be able to take forward into the Phase IIb.

Yes. We'd like to see a 10% bump on the efficacy front. I think that would be meaningful. There's various ways to look at efficacy, whether it's speed of onset. So for instance, in AD, we would like to see a rapid onset with this mechanism. That's why we're looking at a week 8 kind of top line day 57 number 4 weeks after the last dose in the AD study, but then we're going to track those patients out another 12 weeks. So you get an idea of what the curve looks like. But rapidity of response in something like AD is important. Remember, AD is very different than psoriasis as a treat the flare disease. So in terms of a quick effect, that's important. And then we'd like to see, obviously, depth of response. There's a lot of efficacy being left on the table with current modalities, and we think hitting 2 inflammatory mediators makes sense.

Our next question comes from Biren Amin with Piper Sandler.

Maybe to start on ATI-052. Your plans to move into Phase IIb trials in asthma in the fourth quarter of this year. What's driving the priority for asthma compared to AD?

So I think it's -- I can start and then if Roland or Jesse has any other comments. But I think the key for us is we know 100% that teze works well in T2 low asthma. It's doing quite nicely in that indication. It's been well received. We know that Dupi also does quite well in T2-high asthma. So if you look at our molecule, we're simply combining those 2 modalities. And as you can see, we're doing so not only in a very robust way with 100% inhibition over an extended period of time, but then we have the advantage of a dosing interval on both. So from our perspective, having a 1 plus 1 equals 3 in respiratory is very easy to understand and has a high probability of success. So that's why we're prioritizing that out of the gate. And then, of course, we still like a number of indications in the Th2 family, including atopic dermatitis.

Our next question comes from Jeff Jones with Oppenheimer.

Congrats on the updated data. Could you expand a little on how you're thinking about the Lichen Planus trial design? You mentioned erosive first, the drivers there to expand and how you're thinking about endpoints and bars for the bar for success?

Yes. Thank you, Jeff. So yes, it's pretty exciting. Lichen Planus is, in my mind, very similar to where hidradenitis was many years ago. And it's a disease that is a lot more prevalent than the numbers would suggest. That's why we provided that range of like 0.1% to like 1%. In fact, I've seen some that say it's upwards of 1.5%. And it is a spectrum of disease. That's kind of one of the things I like about this category is the pathophysiology is the same. It's an interface dermatitis, but it attacks the mucosa. So you can get mucosal LP, which would manifest in the mouth, the oesophagus also in the general area. And then the severe extension of that is erosive. And these patients sometimes need tube feeding. That's how painful and distressing it is. And then you have cutaneous LP, which has its own issues with just the burden of itch, et cetera. And then the next layer in the spectrum is like lichen planopilaris, which is a pretty devastating scarring alopecia, which we heard about recently from a competitor. So why I like that is we can develop -- we can design a basket study where we step through these indications. We're going to start with mucosal and cutaneous and we're going to test 2 different doses, 10 milligrams BID and then 20 milligrams BID. As a reminder, we tested 10 milligrams BID in the atopic derm study. And then once we see the effect there, then we'll take that kind of winning dose and move forward into the next layer, which is like in lichen planopilaris, which is a little bit more difficult to treat. We really feel strongly about the mechanistic fit here. There's -- Roland alluded to it, but just to reiterate, there's kind of 2 pieces. One is the JAK-driven inflammation, but there's also an antigenic stimulation, which fits perfectly with inhibiting the T cell receptor. And the easiest way to think about this is 2138 has the efficacy of a cyclosporine by hitting the T cell receptor with the efficacy of a JAK3, which is a highly selective way to inhibit the JAK mu. And so basically, we get a 3:1 here in terms of the indication set, and there are opportunities for -- certainly opportunities for orphan designation within that category.

Our next question comes from Roger Song with Jefferies.

[Indiscernible] Helpful PK/PD data today. I have 2 from us. So this is Nabil on for Roger. One on the translation. So on the biomarker, I was thinking if you could help us better understand the predictive value of PARP suppression in magnitude and durability. And if you feel this is equally informative across asthma and atopic derm? Or do you also look at other biomarkers in those indications? And then a follow-up.

Hugh. Do you want to go first?

Sure. Yes. So the way we think about this is we have 2 sides of the molecule. We want to make sure both sides are equally active and contributing to the potential efficacy downstream. So by doing an assay where we have this target engagement, it really shows the value of the molecule. We had 500, even up to 1,000x higher concentration than what you would expect in disease with TSLP and IL-4 at the concentrations we used. And so if we can inhibit 100% of these targets that are added into this natural milieu of cytokines and cells and chemokines and the like, if we can inhibit it at these concentrations, with the doses that we used, then we're going to be able to show complete impact of both the 240 and the 480-milligram dose, where we're seeing 100% inhibition with TSLP out to 20 weeks. It really shows the potency of the TSLP arm, as mentioned through the structural interface with TSLP and not releasing. On the IL-4R side, same thing. IL-4 is 10x more potent than IL-13 in driving downstream chemokine secretion in PBMCs. So if we can inhibit IL-4 at 2 nanogram per ml, which is 1,000x higher than normal and even greatly higher than AD or asthma subjects, then we're going to be able to have a molecule that's going to be able to take these targets and this pathway down to homeostasis. And so it will translate, but there's not a direct mechanism showing that if you inhibit TSLP generated TARC that you will be clinically effective. But clearly, the molecule is able to shut these pathways down completely for the complete dosing that we did. And so it's going to translate to both asthma and AD. And in fact, I'm not sure why we don't use a loading dose in asthma to have an even greater earlier effect in patients. So at the end of the day, this will translate well not only to AD and severe asthma where -- but other indications as well that follow on behind that.

And then would you be sharing any updated -- any additional biomarker data in the later months?

So for the healthy volunteer study, we don't have that. But Jesse, do you want to speak to the Ib?

Yes. Thanks, Hugh. So what we're going to be doing is we're going to be looking at endogenous levels of all of these biomarkers in both the asthma study as well as the AD study. And we think we're going to be able to have a nice understanding of the exposure response as you mentioned over the time course of the treatment as well as off therapy. So if you recall, from the AD study, for example, we're going to be following subjects for up to 4 months after the last dose. So I think this gives us a really good opportunity to understand the duration of response and the ability to suppress these PD biomarkers for a sustained period of time.

Got it. And then congrats on selecting your lead indication for your ITK molecule. I was wondering if you could share any more updates on the ITK selective program.

It's all on track. ITK selective is due for IND in the second half of this year. We're very excited about that. And with the onboarding of that into the clinic, we'll have 4 clinical stage assets.

Our next question comes from Adam Vogel with Craig-Hallum.

Great to see a clean and support PK/PD profile emerge here. Just a couple of questions from me. Maybe first, beyond the biologic rationale and to as much as you can disclose, have there been any early insights from the ongoing Phase Ib studies that increase your confidence in clinical translation in asthma over, say, atopic derm? And then I have a quick follow-up from that.

Yes. I mean those are ongoing studies. We can't really talk about those, but we're excited about both. I mean the -- we obviously had a lot of this PK/PD data, particularly the 720 and 240 for a little while. We were just waiting for the 480. -- can't get much better than 100% suppression. And these are in isolated systems. And I think the whole promise of bispecifics is a 1 plus 1 equals 3 approach. I mean I think we saw that with the Pfizer disclosure. So us, it's tremendously exciting. There's a reason we're looking at 8 weeks as a primary top line in the AD study. Traditionally, biologics will look much later at week 16 or so. We're looking at week 8 because we truly believe we're going to see a rapid response there based on the totality of the data that we've observed. And then on the asthma front, we're expecting to see robust effects on FeNO and FEV1. And I think for -- there's always a little doubt about TSLP and AD. But remember, like we have a whole slew of indications on the respiratory side vis-a-vis everything that Dupi and tee is in that we can go after and kind of claim first-line therapy. And atopic dermatitis for us is an extra bonus, and there's great biologic rationale for TSLP there. So super excited about the Ibs. And I think enrollment is going well. So that augurs well. It means investigators are excited.

Great. And then maybe in the context of LT being a white space of high unmet need, how should investors think about 2138 versus the next-gen ITK selective development strategies?

Yes. I think it's a great question. I mean the next-gen ITK, we think, is more applicable to the traditional mass market indications like AD as an oral with very clean target product profile, kind of no JAK overhang, if you will, although that hasn't really played out in the market. Docs are pretty comfortable with that. The mechanistic match here, it's important, right? We hit the T cell receptor with ITK, but then we mop things up with the JAK3. And the literature is pretty clear about going after the cytotoxic CD8 lymphocytes and going after an interface dermatitis. This is a much better hammer to hit this disease pretty hard. This is a devastating disease. I mean if you see -- just look at the pictures, I mean, you can imagine these patients like if you wake up and you have mucosal involvement all around your mouth, pain, the effect on eating and this lasts for quite a long time. And then you layer in the cutaneous aspect and of course, the hair loss piece. So it's -- I think this indication is deserving more of a hammer approach rather than a more elegant approach to hitting ITK.

Our next question comes from Michael King with Rodman & Renshaw.

This is Jillian Rice from the line for Michael King. Just a follow-up on the TARP discussion for 052. The ex vivo cohort data show TSLP stimulated TARC fully suppressed out to about week 20, whereas IL-4 stimulated TARC is maintain only to roughly week 12 at 80 milligrams. Based on what you know from the assay design and your prior TSLP and IL-4 IL-13 work, can you share your working hypothesis for why TSLP inhibition appears more durable than IL-4, IL-13 in this setting and whether you think that difference will meaningfully impact clinical efficacy or your ability to dose every 3 months?

Yes, I'll start and then hand it to Hugh. No, we don't. First of all, this is 100% inhibition for 12 weeks over the course of the dosing interval. And actually, as we noted in our prepared comments, we didn't assay at week 14, but our simulations 100% support continued 100% inhibition. So somewhere between week 14 and week 16, it weans off. But remember, these are isolated systems. And I mentioned this previously, we -- I think anybody that is developing bispecifics or combo therapy is expecting not just an additive approach, but a synergistic approach. So I think we easily get to 3 months, if not longer. And these data certainly support that. Hugh?

Yes. I would say on the TSLP, as I mentioned in my comments, the potency of the TSLP binding sites on 052 are just off the charts due to that complete developing and binding to TSLP and not releasing with that low dissociation. So I think that, that effect is just carrying through to the 20 weeks and maybe longer. On IL-4R, we already have drug bound to cells in that whole blood sample. And so at the end of the day, adding more IL-4 to be able to inhibit 100% for 12 weeks, while it's already bound to receptor is pretty amazing, whereas the TSLP components of the bispecific, even if it's bound to receptor can still bind additional TSLP because we have the 4 active binding sites that can be achieved simultaneously on the molecule. So I think it's a bit of high potency and also a bit of the dynamic of the assay itself.

Our next question comes from Seamus Fernandez with Guggenheim Securities.

So just a first one, what are you guys -- we know [indiscernible] had at least a successful data set in asthma. -- but really more of a monthly profile asset there. Interested to just know what you'll be looking for in that data set and then what you're hoping to see from a differentiation perspective. Obviously, the sort of failed effort on their part in AD sort of sets up a different opportunity for 052. And then the second question is just what, if any, challenges were there to selecting Lichen Planus over alopecia? And what new learnings did you guys gain from the start of the year to kind of really move as aggressively as you are into LP and its subtypes. I know, Neil, you've explained quite a bit about the sort of T cell dynamic, but it seems like there was a bit of a push and pull that you needed to kind of work your way through on the decision of alopecia versus LP. And it seems like, obviously, LP rose to the top. But wondering if there are some new learnings outside of just the competitive landscape in alopecia that really drove you to LP.

Sure. Let me take the question about [indiscernible] first. As I think everybody has seen, there wasn't much disclosed there, unfortunately. But I think we've always maintained that to maximize efficacy, it's logically better to hit 413 and TSLP rather than just going after 2 inflammatory mediators and potentially leaving IL-4 unsuppressed. I think the things we don't know about that program are what is the potency of that IL-13, what's the potency of that TSLP and that construct? We don't even really know the dosing interval there either. Certainly, so far in the bispecific space, I think we're kind of class-leading in terms of the dosing interval potential here, which is important. But more importantly is the ability to max out the efficacy by hitting 3 inflammatory mediators, which I think we got a glimpse of that with the Pfizer data. It's hard to understand the totality of their data with the disclosure that was out there, basically alluding to a signal with EASI-75 and IGA, yet mean change from baseline, I guess, didn't hit the mark. So we really just don't know a lot there. But we're happy with our decision to go after 3 inflammatory mediators rather than 2. And just remember, we have the ability with this molecule to go after a breadth of indications across the respiratory landscape, anything that Dupi in and also AD. So AD is just kind of one leg of the stool, if you will. So hopefully, that answers that question. On the LP front, you're right, like we took probably more time than I'd like to go through this, but it's important because these -- all these areas, everything in I&I is pretty competitive, and we're seeing more people jump into the alopecia space. I like going after white space opportunities. We produced phenomenal data in Angela Christiano's lab with our mechanism, which is a tribute to hitting ITK at the T cell receptor level and hitting cytotoxic CD8 lymphocytes -- and also mopping up JAK3, very, very strong mechanism. So then it just boils down to what do we want to lead with. We will certainly cycle back to alopecia at some stage, but I also want to be able to just own a category and own a category that I know very well is a strong mechanistic fit and also has kind of 3 shots on goal within the same indication. So that's what really drove that decision. It wasn't easy. There's probably -- if you just look at what [indiscernible], which is our closest comp is studying, they've got like 20 studies ongoing. So there's a lot to choose from. And if we were a bigger company, I'd put up 5 indications.

And would part of the sort of evolution be this basket study approach that you're taking? Or was that kind of planned all along?

I'm sorry, I missed that last part.

I think you -- was the basket study approach kind of planned all along? Or is that kind of a new kind of evolution to the strategy for LP?

It was on the list. We've seen -- as an example, there's been an IL-17 basket study out there. I think it's smart. It allows us to basically do a little dose ranging within the different categories. So what we would envision is starting a study that includes mucosal, which includes the most severe forms, erosive in that category, along with cutaneous and then look at 2 doses, 10 milligrams BID, 20 BID, so we double the dose. And then we look at how that does. And then we can basically, in an adaptive way, pick a higher dose, move forward with that and then get into like a IIb design that would be -- because there's orphan potential, I think be very seamless into a Phase III. So it's very capital efficient for us and answers a lot of questions in a very quick amount of time.

Our next question comes from Martin Fan with Wedbush Securities.

I wanted to follow up with the last question on the Lichen Planus trial. So I think you mentioned 10 to 20 milligrams BID for Lichen Planus. Any reason not to go higher with the dosing given what you've seen with the atopic dermatitis trial? And then to follow up on that, curious about how -- number one, how large do we think a Phase I and Phase II program might be and whether or not we might have any estimate on timing for conducting those trials, how long this might take to go through?

Yes. So just to clarify, so we're starting the IIb in that in the back part of this year. So second half. And obviously, we need to start it before we guide to a completion. But I would say that back part of 27 is a good marker to keep in mind. We think this is going to enroll pretty quickly. In terms of the dosing, this molecule is so potent. We can dose up to 40 BID according to the MAD, but the 10 milligrams BID showed really strong results in AD across both clinical and pharmacodynamic measures. So we just don't think we need to press dose that much higher. And we are doubling the dose. So 10 to 20, I think, keeps you in that window of not kind of begging for problems on the safety side, but driving incremental efficacy. So -- and that was informed through a pretty extensive analysis of all the PD biomarkers looking at kind of effect on natural killer cells and kind of everything in between. We're doing ILC2 work. And so we've got a lot of data to support all that. To your point, can we go higher? Yes, I don't think we need to given this mechanism in LP. We think that 20 milligrams will give us that dynamic range, double the dose.

Great. And then in terms of estimates of how long it might take to run a Phase III program, I guess, we'll see how long it takes to first do the recruitment for the Phase II. Is that right?

Yes. We think it's going to be pretty quick. I mean there's -- when we went to the AD, it was very evident in talking to a handful of KOLs in this space that there's a lot of pent-up demand, particularly on the mucosal side in addition to the cutaneous. And look, LPP, I've seen patients with LPP for years when I was practicing. And I would say that the prevalence is a lot higher than people imagine. These patients have nothing. I mean there's just nothing that they can turn to. And stopping -- putting out the fires is step #1 and then rehealing the mucosa and also growing hair is kind of step #2.

Our next question comes from Raghuram Selvaraju with H.C. Wainwright.

Congratulations on this exciting data with 052 and the plans on moving forward with 2138. With respect to 052, I was just wondering if you could comment a little bit on where in the overall indication panoply you expect the extended dosing interval to be the most significant competitive advantage? And if you could also comment on how you see the relationship between 052 development and bosakitug development evolving going forward? And I think previously, you have commented on the possibility of effectively regarding bosakitug as kind of feeder club as it were for 052. But I was just wondering kind of when we might expect bosakitug clinical development activities to ultimately wind down or if you do see potential applicability for bosakitug as a stand-alone asset going forward? And then with respect to 2138, I know there's been some questions around this basket trial approach in Phase IIb. How do you see that potentially feeding into a registrational program? Do you anticipate that a registrational program would be sort of pan-LP in focus or that you would anticipate effectively moving forward with 2138 in specific subpopulations within LP for registration in a more sequential manner?

Yes. Yes, all good questions. So maybe on the first one, it's really -- these are evolving markets, right? I think the market, in my opinion, over-indexes on extended dosing intervals like to us, it's always been about trying to max out the efficacy first, particularly in diseases like AD, where you're trying to treat flares. That's why we're trying to look at an early endpoint in the Ib study at 8 weeks. We think a strong result there would augur well. I think it just depends how the landscape evolves. I don't -- as a former practitioner, I think anything more than quarterly, quite frankly, just doesn't make a lot of sense in diseases that wax and wane. And we've seen instances where longer dosing intervals than that in certain diseases might be problematic, right? We saw GSK get a CRL with XtendZA and CRS with NP and the FDA flagged issues of what happens if the treatment effect wanes after up through 6 months, right? So I think the most important thing for all of us is to be thinking about how we max out efficacy and then the dosing interval question is on a case-by-case basis. And it is very indication driven, right? Like psoriasis is a much different market than AD, much different market than asthma. So it remains to be seen. But I think if you develop a drug that at the end of the day, docs and patients want the thing to work, and they want it to be safe. And so that's what we tend to over-index on. Ong, look, we've got to see what the data shows, right? We're excited about it. We feel like the trial is going very well. We've gotten good feedback on it. There is a place just like there might be a place for mechanisms like Nektar or OX40 for TSLP Fab. -- TSLP is exceedingly safe. You can envision background therapy of that, particularly in a disease that skews young. And AD is always, always about polypharmacy and rotating therapies. That being said, the bispecific continues to move along as we've seen, there's a thought that, that might cannibalize things. We're super excited about it. We'll have to make capital allocation decisions, maybe TSLP Pumping you out-license, right, to a bigger player that can maximize that across indications. we'll see. We'll see when we get the data. That data will read out, by the way, after the bispecific IB. So it will be interesting to see how that all comps. On the LP front, it's a very good question. I will -- I'll bounce that question to later. I could see constructs where I go after a Lichen Planus. It's the same exact pathophysiology histologic kind of process. So I can make an argument to get a global label there. A little too early to comment on that. If I get the opportunity to click off a couple of those because they're more orphan as very quickly, I'll take it and get it on the market. So that remains to be seen. But the beauty of the strategy that we've come up with is, again, it's a 3for1, and I have good -- in one construct, I have good short-term visibility on getting on the market.

Quickly. Our next question comes from Alex Thompson with Stifel.

Congrats again on the data. This is Charles on for Alex. Maybe just one on 052. I was curious as to whether suppression of STAT6 signaling was measured? And if so, how long did that last? And if not, is that a biomarker that will be measured in the Phase Ib studies?

Thanks, Charles. Appreciate the comments. So we -- yes, we'll certainly be measuring a spectrum of biomarkers in the Ib. We don't have data for that for the healthy volunteers. As we said before, healthy volunteer data has a lot of limitations in terms of just variability and they're healthy, right? So I think the construct that we put out today is kind of unambiguous. It's super high levels of both stimulation on TSLP and IL-4R. And I'm not sure how we can get much better than 100% inhibition.

I'm showing no further questions in queue at this time. I'd like to turn the call back to Neil Walker for closing remarks.

Thanks, everybody, for joining the call. We're tremendously excited. We feel like we've significantly derisked the 052 program, and we have great visibility on 2138 in terms of closer to -- getting closer to Phase III and thinking about how to get a great molecule like 2138 in the hands of patients. It took a little while to get there on the indication, but really like the white space opportunity. And we're a clinical stage company with 3 active clinical programs with a fourth to onboard at the end of the year. Really appreciate your time. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.