AnaptysBio, Inc. (ANAB) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the BTLA Agonist R&D event. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Faga, Interim CEO of AnaptysBio.

Good afternoon, and welcome to AnaptysBio's R&D event focused on ANB032, our BTLA agonist. Today's presentation contains statements about our current plans that are forward-looking. Joining me from Anaptys are Dr. Paul Lizzul, our Chief Medical Officer; and Dr. Martin Dahl, our SVP of Research. We're going to cover a significant amount of exciting new data and information, followed by Q&A. This will include an overview of checkpoint agonists, including deeper insight into ANB032's mechanism of action targeting BTLA. We'll present translational preclinical data supporting the rationale to pursue development of a BTLA agonist to treat atopic dermatitis. And we will also review our recently initiated Phase IIb study and the insights into why we are excited about the potential benefit ANB032 may bring to patients living with moderate-to-severe disease. We're thrilled to have Dr. Emma Guttman join us as well. Dr. Guttman is a professor of dermatology and immunology and Chair of the Department of Dermatology at the Icahn School of Medicine at Mount Sinai. She'll cover the disease pathology and unmet patient need in atopic dermatitis. Anaptys is striving to transform patient health by treating autoimmune, an inflammatory disease, through the development of antibody that directly modulate immune cells. Our portfolio of 3 immune cell modulators include 2 clinical stage best-in-class checkpoint agonists. ANB032, which we are focused on today, and rosnilimab, our PD-1 agonist with 2 planned Phase II trials initiating this year, the first for rheumatoid arthritis beginning in the next few months with top line data expected by mid-2025 and a second trial in a yet to be disclosed indication that we'll initiate by year-end. Our third immune cell modulator is ANB033, an anti-CD122 antagonist, on track to file an IND in the first half of next year. The history of Anaptys has led us to today's well-capitalized position with cash runway out through year-end 2026, allowing us to design an optimal multiyear execution plan for the development and continued research of our immune cell modulator portfolio. Over the past 18 years, the Anaptys business model has evolved while remaining focused on discovering differentiated antibodies. All of our programs have been discovered internally at Anaptys by our research team. The company originated as a research stage out-licensing engine, discovering antibody candidates directed at high-value immunological targets. In 2016, we began the clinical development of a single cytokine blockers, including imsidolimab, an anti-IL-36 receptor antagonist, a registration-enabling Phase III trial for the treatment of generalized pustular psoriasis, or GPP, with top line data expected in the fourth quarter of this year. However, dating back 12 years ago, Anaptys out-licensed first-generation variants of PD-1 agonist to Celgene. These variants were in their early stepping stones relative to the field advancement and understanding of both checkpoint agonism and the pathology of inflammatory diseases. Both of Anaptys' checkpoint agonists in development today have significantly benefited over a decade of our company's cumulative expertise and leadership in this field. And over the last 12 months, since I joined this company, this is where we have refocused. Our approach to clinical development and translational research has been refined. We have also significantly augmented our organization to further complement the exceptional talent that was already here. We are moving forward with conviction to maximize our return on equity by enabling broad clinical development of our best-in-class checkpoint agonists as well as continue to leverage our research platform to generate differentiated immune cell modulators. Immune cells have extracellular receptors called checkpoints that service both markers and regulators of immune cell activation and proliferation. We are all familiar with the many PD-1 checkpoint antagonists developed for the treatment of cancer. These antibodies block the ability of a checkpoint receptor defined with its natural ligand on an imposing cell. In the context of cancer, this allows the immune cell to operate unchecked and proliferate. Said simply, a checkpoint antagonist releases the brakes immune cells, allowing them to remain activated to targeted tumor. On the flip side, a checkpoint agonist antibody should be nonblocking and buying on a checkpoint receptor near the immune cell service to facilitate the natural intracellular machinery that downregulates or tunes down an activated immune cell. In the context of autoimmune and inflammatory disease, a checkpoint agonist hits the brakes on runaway inflammation to restore new balance. BTLA is 1 of these key checkpoint receptors. BTLA is expressed predominantly on activated immune cells, including T cells, B cells and dendritic cells that drive inflammatory disease. ANB032 is a nondepleting antibody that binds to the BTLA checkpoint receptor and inhibits activated T cell proliferation, reduces inflammatory cytokine secretion and modulates dendritic cell function, including inducing Tregs both in inflamed tissue and in the periphery. In addition, by interacting in the periphery, ANB032 prevents further migration of pathogenic T cells into the inflamed tissue. 032's broad cellular reach holds promise for the treatment of systemic inflammatory diseases where the BTLA pathway is dysregulated, including areas such as dermatology, rheumatology and gastroenterology. In atopic dermatitis, multiple immune cells, including Th1, Th2, Th17, Th22 and dendritic cells, contribute significantly to disease pathogenesis. The standard of care, dupilumab, as do most other development-stage therapeutics, block the signal of Th2 cytokines, addressing only a part of this heterogeneous disease biology of AD. Despite this limitation in unmet patient need, the atopic dermatitis market overall is expected to grow to greater than $16 billion by 2030. This biology driving AD matches well with the mechanism of action of ANB032, providing a strong rationale to develop our BTLA agonist to treat patients with moderate-to-severe atopic dermatitis. In the remainder of today's presentation, you're going to hear a deep dive on the mechanism of action of a BTLA agonist antibody as well as the drivers of inflammation in atopic dermatitis. We will share why ANB032, supported with translational, preclinical and Phase I safety data, has the potential to drive deep responses across a broad patient population in AD as well as share our excitement to execute our recently initiated Phase IIb trial towards delivering top line results expected in the next 18 months. Now, I'll turn it over to Dr. Martin Dahl, our Senior Vice President of Research.

Thank you, Dan. In this section, I'm going to walk through why checkpoint agonism is an exciting approach to target with the treatment of inflammatory diseases and how to achieve maximum agonistic activity, our rationale for focusing on BTLA and how we've optimized ANB032 to target this key node in the immune system, and present comparative data from a GvHD model that reinforces ANB032 in vivo potency and best-in-class potential. When the immune system is challenged, a normal inflammatory response ensues. It progresses through the staged process of initiation, amplification and, ultimately, resolution when the immune system completes its task of addressing the challenge. Checkpoint receptors and their ligands are actively involved in this process. However, in many diseases, the inflammatory response often is sustained through self-reinforcing cycles. This dysregulation prevents resolution, ultimately resulting in inflammatory disease with significant risk factors and comorbidities. Put simply, with dysregulation and chronic activity, the immune system may lack the ability to hit the brakes like it would normally. Therapeutically blocking cytokine signaling can inhibit the inflammatory response, providing some degree of symptom relief. But most inflammatory or autoimmune diseases involve numerous immune cell types and numerous downstream mediators that are difficult to target with cytokine signal blockers, thus making it challenging to fully resolve the inflammatory cycle. By therapeutically targeting and leveraging natural immune regulatory mechanisms to modulate the many immune cells that are driving the inflammatory disease, there's an opportunity to dampen the inflammatory cycle and restore immune methods. Checkpoint agonists have the potential to offer differentiated safety and efficacy. While there are some diseases like psoriasis where a simple cytokine blockade can deliver significant efficacy across most patients, for most autoimmune and inflammatory disorders, there's substantial remaining unmet needs that can't be met by blocking a single cytokine. Checkpoint agonists have the potential to act upstream and more broadly than cytokine antagonists to modulate multiple types of activated immune cells, which are the drivers of dysregulation. JAK inhibitors have shown us that broader mechanisms can drive broader and deeper clinical responses. However, there are safety risks and toxicity associated with these small molecule approaches. By targeting immune cells specifically, agonist antibodies will potentially have at least equivalent or superior efficacy as JAK antagonist but without the potential toxicity. There are T cell modulators that have already demonstrated the safety of this approach, as abatacept, which broadly targets all T cells, hasn't demonstrated significant carcinogen risk over a decade of use. To date, the checkpoint antagonist class, including Anaptys' checkpoint agonists, have been well tolerated in human trials. We believe targeting checkpoint agonism has the potential to drive broader and deeper responses for autoimmune and inflammatory diseases with substantial unmet need. As Dan outlined, checkpoint receptors are regulators of immune cell activation and function. Dysregulation occurs by signaling through intracellular domains called ITIMs, that when phosphorylated, recruit downstream signaling molecules that turn off immune cell activity. In an unbound state, checkpoint receptors are generally held in a steady state of neutral activity, intermittently signaling when phosphorylated by a kinase and turned off by phosphatases like CD45, which are broadly expressed by immune cells. Agonism occurs when a ligand binds to the checkpoint receptor and drives phosphorylation of the ITIM, resulting in downstream signal transduction that hits the brakes on the immune cell. Importantly, the agonistic signal is amplified when an imposing cell creates a close immune synapse with the checkpoint expressing cell, driving clustering of the checkpoint receptors and exclusion of large phosphatases like CD45 to bias the state of these ITIM motifs towards elevated or prolonged phosphorylation. With more than a decade of experience in the checkpoint agonist space, we've dialed in the most important characteristics contributing to maximal agonism and how these characteristics work together to create the optimal antibody. One way to achieve activation of the checkpoint receptor is through direct binding with a checkpoint agonistic antibody. As you can see in the left graph, this excludes CD45 and focuses kinase activity. I'll show you data shortly that simply binding independently achieved a modest level of checkpoint agonism. The key factor to driving optimal checkpoint agonism is the enabling of a tight immune synapse in which the agonist antibody binds to a membrane proximal domain of the checkpoint receptor and simultaneously binds to an Fc receptor on imposing cell. As demonstrated in the graph on the right, the tight synapse is important because it drives enhanced agonistic activity by physically excluding large phosphatase molecules, such as CD45, resulting in robust and sustained downstream signaling. Anaptys' checkpoint agonists like ANB032 are best-in-class because they optimize inhibitory signaling by enabling tight immune synapse formation, leveraging optimal binding properties on the checkpoint receptor and simultaneously optimal binding properties on the Fc receptor. BTLA, or B and T lymphocyte attenuator, is an inhibitory checkpoint receptor that regulates T cells, B cells and dendritic cell function. It's expressed only on immune cells and preferentially on activated immune cells. If you're familiar with PD-1 and its interaction with its ligand, PD-L1, to induce potent inhibition of T cell activity, you'll appreciate that BTLA works in a very similar manner, interacting with its ligand, HVEM. Both PD-1 and BTLA are phosphorylated upon binding their respective ligands and both recruit SHP family phosphatases as part of their agonistic signaling cascade that inhibit activation signal downstream of antigen presentation and co-stimulation. As a reminder, T cells require both antigen presentation to the T cell receptor accomplished through interactions between the MHC and the TCR and the co-stimulation accomplished through CD80 or CD86 binding the CD28. This is really important. When these interactions are inhibited, T cells can't be effectively primed to expand and differentiate into inflammatory T cell. One of the reasons that makes BTLA agonism so powerful is because BTLA can also be expressed on the dendritic cell side, and its ligand, HVEM, can also be expressed on the T cell side. This allows for BTLA agonism on the dendritic cell in addition to that on the T cell. Inhibition of these signals is the basis of checkpoint mechanism. As I said, inhibiting antigen presentation and the co-stimulation leads to less effective priming of T cells, which prevents T cell expansion and cytokine secretion, importantly, can also contribute to the induction of regulatory T cells or Tregs. Because BTLA is such a key node in the immune system, dysregulation of the BTLA pathway has serious consequences, accelerating disease onset or exacerbating existing diseases. There are many published examples that demonstrate how dysregulation of the BTLA pathway accelerates disease onset or exacerbates inflammatory disease. Here's 1 example where dermatitis is being studied in mice. On the left, you can see what happens when BTLA is knocked out. When an immune stimulant is painted under the ears of mice, they developed an exacerbated inflammatory response, measured by an increase in the thickness of ear skin as well as greater infiltration of T cells. And these T cells are secreting more inflammatory cytokines in wild-type mice. This demonstrates that BTLA is a critical node in negative immune regulation. On the right, normal mice with BTLA are treated with the same immune stimulant used in the experiments on the left. After administration of a mouse-specific BTLA agonist, it was reduced disease severity in the ears, reduced T cell infiltration and reduced inflammatory cytokine secretion compared to untreated animals. This provides us with evidence that modulation of BTLA signaling can have a powerful effect on inflammatory responses. On one hand, literature documents that when there's insufficient BTLA agonism alone, there's dysregulation of immune cells, resulting in accelerated inflammatory disease onset or increased severity of disease. On the other hand, BTLA signaling has proven to be a highly potent modality in preclinical models for reducing inflammatory disease, by reducing T cell expansion, migration into tissues and inflammatory cytokine secretion. We developed ANB032, a BTLA agonist antibody that has the potential to modulate all phases of pathogenic inflammatory responses, including initiation, amplification and resolution. ANB032 binds to a membrane proximal episode of BTLA and maintains the potential to engage Fc receptors, which we believe optimizes overall agonistic signaling and has resulted in a best-in-class profile. As Dan highlighted, BTLA is expressed across many immune cells implicated in inflammatory diseases. Here's how the ANB032 works. First, ANB032 has a wild-type IgG4 Fc domain, which enables Fc receptor engagement while avoiding depletion of BTLA expressing cells. Second, on T cells, ANB032 inhibits activated T cell proliferation and reduces inflammatory cytokine secretion from Th1, Th2, Th17 and Th22 cells. Third, it is also a potent modulator of dendritic cell maturation and function, reducing both antigen presentation by MHC and expression of co-stimulatory molecules. These properties contribute to the enhanceability of ANB032 treated dendritic cells to induce more Tregs. These 3 properties together are complementary to driving toward immune resolution. The data on this slide highlight what we believe is 1 of the key characteristics that differentiates ANB032 from in-class competitors. I'll walk you through the framework for why engaging and imposing cell to exclude phosphatases was so important for potentiating agonistic signaling. The data here explains why. This assay measures SHP2 recruitment to phosphorylated BTLA, which is a key mechanism through which BTLA exerts its agonistic activity. In the green curve on the left, simply binding BTLA with ANB032 induces an increase in SHP2 recruitment. This level of agonism is similar to that of the brown curve, induced when BTLA is engaged by a stabilized soluble form of HVEM, its natural binding partner. However, when we introduced into the assay an opposing cell expressing an Fc receptor to which ANB032 can simultaneously bind and generate an immune complex, we see dramatic potentiation in SHP2 recruitment with both a less shift in potency as well as a magnitude shift. I want to highlight the importance of this characteristic for agonistic potency because the Fc receptor binding profile of ANB032 is differentiated relative to Lilly's BTLA agonist, currently in a Phase II study in SLE. In short, ANB032 has superior Fc receptor engagement, and I'll show you on the next slide how that translates to greater biological effect in a disease setting in vivo. Now we get to see how a BTLA agonist and ANB032's best-in-class profile translates in vivo. We've run an experiment comparing ANB032 to Lilly's BTLA agonist in a humanized mirroring model of GvHD, a T cell-dependent disease model where human PBMCs are transplanted into a mouse. The human T cells drive a GvHD phenotype due to T cell expansion, infiltration into tissue, secretion of inflammatory cytokines and ultimately death of the animal. First, let's look at the Kaplan-Meier survival curves on the left. This is a severe model of disease. Death is a key endpoint in this GvHD model. 100% of the animals treated with an isotype control, which is to say placebo, succumbs to disease and died by day 32. Animals were treated with the same dose of antibodies biweekly for only the first 28 days. You'll see that even during the treatment period, some of the animals treated with Lilly's BTLA agonist succumbed to the disease. Notably, all of the ANB032-treated mice survived well beyond the treatment period. Furthermore, at the end of the study, there was a clear differentiation in the survival benefit of ANB032-treated animals versus the Lilly-treated cohort. Looking at the body weight graph, mice treated with ANB032 gained more weight than those treated with Lilly's agonists and sustained this way through the end of the study, showing robust, durable response even after the cessation of biweekly dosing. We measured the disease activity index, which is a composite score of many manifestations of GvHD morbidity. ANB032 dramatically reduced and maintained the lower disease activity score compared to the [indiscernible], and outperformed the Lilly BTLA agonist, in which we see significant disease morbidity manifesting at the end of the study. ANB032 inhibited T cell expansion to a greater degree than Lilly's BTLA agonist. We believe these exciting data demonstrate the potent in vivo capacity of ANB032 to drive deep, durable responses even in a model as severe as GvHD. I just covered a lot of ground. So let me review the key points from this section. First, modulating immune cells through checkpoint agonism represents a promising approach to leverage a natural pathway for immune regulation to safely drive differentiated outcomes for a broad range of patients. Second, BTLA is a key checkpoint molecule that modulates the activity of broad populations of T cells, B cells and dendritic cells. And third, our head-to-head comparison in the GvHD model demonstrates that ANB032 is the best-in-class BTLA agonist with the potential to deliver durable responses and restore immune balance. We expect ANB032 to be broadly applicable to the treatment of a variety of autoimmune and inflammatory diseases, starting with atopic dermatitis. Now it's my great pleasure to introduce Dr. Guttman, who will speak about atopic dermatitis disease pathology and current unmet needs for people with this disease.

Hi, everyone. My name is Emma Guttman, and I'm the Waldman Professor of Dermatology and the System Chair of the Department of Dermatology at the Icahn School of Medicine at Mount Sinai, and I'm also the Immediate Past President of the International Eczema Council. And I'm really happy to talk today about the unmet need in patients with atopic dermatitis and our need for additional targets. So atopic dermatitis is a very common disease, more common than we used to think. It's, in fact, the most common inflammatory skin disease, as we know now, 7% of the adults in the United States by several studies and around 15% of children, and in some countries in Asia, it may be even more. Up to 1/3 of the patients will have moderate-to-severe disease. Of course, still, the majority will have mild-to-moderate disease. And there is a very large unmet need still for long-term disease control. Yes, we do have treatment for atopic dermatitis already, but still, we have a large unmet need for better long-term disease control. However, the therapeutic drought for atopic dermatitis is finally nearing an end due to a lot of research and increased knowledge in this field. So let's review. What is the impact of moderate-to-severe atopic dermatitis? Atopic dermatitis is 1 of these diseases that has a lot of impact on quality of life. First of all, we see it, right, patients have erythematosus that are really not comfortable, and the more patches you have, of course, the more discomfort you will have. So body surface area is really important. When you have more than 10% body surface area involved and many patients will have much more than that, you are really feeling a lot of discomfort. What does discomfort mean? It disrupts education of patients, both children, adolescents and adults. It disrupts them to do their job, right, because they cannot sleep. They itch all the time, including at nighttime. They itch during the day. Some patients, all they can think about is just thinking about their eczema. It gives them to have anxiety, depression, low self-esteem, interferes with their relationships, interferes with their job, gets them to have interference with their personal relationship or interpersonal relationship, marriage problems, financial problems. They cannot exercise. It's really painful for them to exercise because of sweating. And sometimes any water contact can be painful for these patients. So really major interference with the quality of life of patients and parents of children with atopic dermatitis, particularly, again, when extensive body surface areas are involved, more than 10% body surface area or moderate-to-severe atopic dermatitis. Now as I hinted, a greater understanding of the pathogenesis of atopic dermatitis is not really enabling and facilitating to develop better and better treatment and novel targets, finding novel targets. So now we know that atopic dermatitis is a complex disease that involves abnormalities in multiple cells. And those cells are T cells. They are dendritic cells and they are B cells. And when we are talking about the T cells, we have many flavors of these T cells. And unlike psoriasis that is really focused on the Th17 and IL-23 biology, in atopic dermatitis, we have a much more complex picture where the main cell is Th2 cells that produces many molecules and enhance multiple cytokines that are associated with it, such as IL-13, IL-4, IL-31. But there are other T cells that are also important, such as Th1, with the leading cytokine interferon-gamma, Th17, the leading cytokine is IL-17, and Th22, the leading cytokine is IL-22. And to quantitate even more, there is some irrelevance for B cells and [ using of field ] in the disease as well as a regulatory cell called Treg. Now we need to understand that dupilumab really revolutionized the way we are treating atopic dermatitis because before dupilumab, we had immunosuppressant that really targeted everything. They were really nonspecific and induced some side effects because of that. Dupilumab narrowed it down to target only IL-4 and IL-13 because it is an IL-4 receptor antagonist. And IL-4 and IL-13 are involved in the barrier disruption in atopic dermatitis, including the differentiation abnormalities such as filaggrin as well as tight junction, lipids and many others, because the barrier is abnormal in patients with atopic dermatitis. So not only they have abnormalities in immune responses, but the barrier of patients with atopic dermatitis is not normal. Now the results of dupilumab are very good when you look at in the several metrics that we are using for assessing the improvement in the disease without any additional treatment, which is called a monotherapy study. So this was a 16-week study, not allowing topical steroids, and we assessed EASI-50, EASI-75 and EASI-90. What are these metrics? EASI-50 means how well you managed to get 50% of the disease result. It was a secondary endpoint. And EASI-75, how well you get 75% of the disease result. And EASI-90 means almost clear. You are not yet EASI-100, which is full clearance. So you are almost clear, and that was at 32.8%. So what does this tell us? When EASI-75 (sic) [ EASI-50 ] is only half of the patients, 50%, and EASI-90 is around 1/3 of the patients, that the majority of patients are still not clear. So we can still do that even though this treatment really revolutionized the way we are viewing atopic dermatitis treatment, but still, we have a way to improve upon this treatment. So this is also reiterated by assessing quality of life of patients, how they assess their improvement in sleep, control of disease, in itch and pain-free period, and how treatment is either meeting their expectations or exceeding their expectations. So pay attention that less than 25% of the atopic dermatitis patients say that they are completely satisfied with their treatment. So what it means, again, that we can still do better and much better. We, again, are at a good point, but we can be at a much better point. So we still have a while to improve. Now why is that? That stems from the fact that atopic dermatitis, while it is focused on Th2 biology, as I said, Th2 is very central to the disease with the leading cytokines, IL-4 and IL-13, but atopic dermatitis, unlike psoriasis, is a highly heterogeneous disease that involves multiple immune cytokines, depending on multiple factors, such as age of onset of atopic dermatitis, the duration of the disease, the chronicity of the disease, the ethnicity of the patients. Patients that are Asian may have a different phenotype with increased Th17. Whereas African-American, for example, do not have Th1. Children have also increased Th17. And all of this are resulting in really heterogeneous presentation. In fact, we just recently published a paper on patients that have atopic dermatitis much later in life. And this is a phenotype that we see increasingly more often than previously recognized. And they have greater Th1 activation compared to those with the disease starting in childhood. And it's about 15% of the population that start having atopic dermatitis later in adulthood of the population of eczema patients, obviously. And there are many factors that vary between patients, and that relates also to differences in treatment. And these factors are IDE status, different triggers. I already told you, sweating plays a role, but not only, exercise, contact with water and many others. And all of these will have differences in the impact on itch, sleep and quality of life. So the exciting news is that the pipeline for atopic dermatitis is growing. We now have multiple things in the pipeline targeting some of them. The majority may focus on Th2 targets, such as IL-13. They have several going into the disease. There is another IL-4 receptor in the antagonist that targets a different epitope than dupilumab. There is a IL-13-receptor antagonist as well. There is an itch-related cytokine that is being targeted, nemolizumab, IL-31 antagonist. And there is an IL-22-receptor antagonist also coming into play because Th2 cells are also really important in atopic dermatitis. There are some cells targeting activated T cells or dendritic cells that are linked to this activated T cells, so either OX40 or OX40 ligand antagonist that are in relatively advanced stages. And there is a CCR4 antagonist that targets also activated Th2 cells and there is an S1P receptor modulator, Etrasimod that is also in Phase III. And we now have a new [ AN ] molecule that is being targeted that is a different class, BTLA agonist ANB032 that is now moving into Phase IIb. Now another important concept when we are considering treatment of patients with moderate-to-severe atopic dermatitis is the idea that we cannot treat them just with topical. And why is that? Because we and many others showed that these patients will have systemic inflammation. So the inflammation is more than skin deep. That is a concept that in psoriasis was well established. But in atopic dermatitis, this was built just quite recently, but it was built by many publications showing increases in blood of patients of activated T cells, also activated B cells, and there are also dendritic cells in the circulation of these patients and also increases in circulatory cytokines and cardiovascular associated markers. Now importantly, that came exactly at the same time when several population-based studies showed increased cardiovascular risk or disease in atopic dermatitis patients in very high number of patients. So now we can say with confidence that in patients with moderate-to-severe disease -- atopic dermatitis is a systemic disease and needs to be treated with systemic treatment to really be able to control the disease long term so that it doesn't fluctuate and it prevent flares. Now I also have a lab that focuses among others on atopic dermatitis and then studying biomarkers. And to really understand the phenotype of atopic dermatitis and also to understand the effect of the given treatment, we really need to integrate in our understanding a model that will incorporate both lesional skin and nonlesional skin. So that uninvolved skin of atopic dermatitis patients is also important because it will have a partial disease phenotype as well, likely because of the systemic inflammation we have in these patients, and we also need to bring into account the systemic inflammation of these patients and the markers they have in blood. So we really need to account for the involved skin, the uninvolved skin and the circulatory abnormalities that we have in patients with atopic dermatitis when we are considering a trial. And this is really important because this is really the way we are facilitating in the therapeutic development in atopic dermatitis. So it starts from bench studies of pathogenesis in which we are trying to understand the profile of these patients in their skin and in their blood; and in the skin, remember, both lesional but also nonlesional skin that helps us to really narrow down some hypothesis for some disease targets. And then we follow up with clinical trials with targeted agents that also have skin and blood profiling and that gives us to biomarkers of therapeutic response and multiple cycles will get us to new treatments. And of course, along the way, there are successes, but there are also failures, but both are really important to help us frame the pathogenic concept and the therapeutic directions. Now again, the atopic dermatitis disease biology is really heterogeneous. And that's clear, BTLA in targeting agents fits really well this in mechanism of action because the pathogenesis of atopic dermatitis is really linked broadly to multiple cells and multiple T cells. And it depends on the phenotype of atopic dermatitis. Like we said, depending on ethnicity, the age of the patient and many others. So it's been broadly linked to Th2 but also to Th1 and Th17, Th22 and also dendritic cells are important. And BTLA expressing cells, Th1, Th2, Th17, Th22, B cells and dendritic cells are validated drivers of disease in atopic dermatitis across its phenotypes. So it is exciting to now see new targets such as this BTLA agonist antibody that now is coming into clinic in clinical trials. And why is this important? Because it may target additional patient population because it targets T cells, B cells and dendritic cells. And when we are talking about T cells, remember, it goes after Th2, but also Th1 and Th17 and Th22. It has some function also on the dendritic cells and Tregs, potentially allowing additional benefit for our patients because remember, I bring you back to the idea that still the majority of our patients are not fully controlled with current monoclonal antibodies, and we need better disease control, particularly long term or particularly for chronic use. And we see that in practice, and we see also patients that are on a treatment, they are controlled for a while, and then they stop being controlled. So we still need to improve the way we are treating our patients, and we need additional novel mechanisms of actions and this offers potentially for patients and novel mechanisms. So with that, thank you so much for your attention.

Thank you, Dr. Guttman So far today, we've discussed checkpoint agonism, including deeper insight on ANB032 mechanism of action targeting BTLA. Dr. Guttman has provided a great overview of atopic dermatitis biology as well as clarity on what's still driving the unmet need in this disease. In this section, I'm going show you some translational and some preclinical data that are the foundation for our strong belief that targeting BTLA with ANB032 has significant potential in atopic dermatitis. As Dr. Guttman discussed, while blockade of IL-13 signaling has provided options for patients, there's emerging evidence that targeting additional cell types and be as efficacious or more efficacious than currently available treatment options. We now understand that atopic dermatitis is a systemic disease rather than localized only to the tissue, and it's driven by the involvement of broad T cell-driven pathways, including Th1, Th2, Th17, Th22 and dendritic cells. In early-stage studies, we're now seeing supporting evidence of the potential for immune cell modulators to go broader and to drive meaningful outcomes. A layout in the following slides, the BTLA agonism has the potential to be a broader and more potent immune cell modulators that can drive differentiated outcomes for both biologic-naive and experienced patients. BTLA is expressed broadly across the T cell subsets that are drivers of atopic dermatitis. But what's particularly exciting is that BTLA is also expressed on dendritic cells, which are less frequently discussed due to the lack of therapies that directly impact them, and DCs are critical upstream orchestrators of T cell activation. There's a common analogy used in immunology that while T cells are the soldiers, dendritic cells are the generals, and data demonstrate that dendritic cells are significant contributors to atopic dermatitis pathophysiology. BTLA agonism modulates dendritic cell function, which further impacts T-cell inflammation and may be key to delivering resolution of inflammation that could result in durable outcomes. On this slide, you can clearly see in these images from a paper published by Dr. Guttman as far back as 2011 that there's an enrichment of T cells and dendritic cells in the skin of atopic dermatitis patients, supporting the understanding that T cells and DCs are hallmarks of AD skin. In the next few slides, I'll focus on answering 3 key questions related to T cells and dendritic cells: first, what is BTLA pathway dysregulation look like in atopic dermatitis; second, how does BTLA agonism by ANB032 affect T cell function in atopic dermatitis; and third, how does BTLA agonism by ANB032 affect dendritic cell function? We're going to discuss the effect of ANB032 on both T cells and DCs. Using both published, clinical and Anaptys-generated preclinical data, I'll share our rationale on why the ANB032 has the potential to deliver differentiated outcomes in atopic dermatitis. First, we reanalyzed existing data from Dr. Guttman published in the Journal of Allergy and Clinical Immunology in 2018, looking at BTLA and HVEM expression in skin samples from healthy donors and patients with atopic dermatitis. In the graph on the left, BTLA expression is elevated in biopsies taken from lesional skin of atopic dermatitis patients compared to healthy skin. Likewise, you can see in the graph on the right, HVEM expression is reduced compared to healthy skin. So the receptor is up, and the ligand is down. As I presented earlier, this profile of dysregulation in the BTLA pathway, where there is insufficient ligand presence to engage BTLA agonism has been recorded to drive average inflammation in both nearing disease models and in patients with BTLA or HVEM [indiscernible] and may be a significant driver of atopic dermatitis pathology. In addition to looking at BTLA and HVEM expression in lesional AD skin samples, we also look at them in blood samples as AD is known to be a systemic disease. And in the periphery, we see the same BTLA pathway dysregulation. In the left graph [Audio Gap] in healthy donors. On the right, you see the same pattern as we saw in the skin with HVEM expression reduced on the CD4 and CD8 T cells of AD patients compared to healthy donors. These data reinforce that atopic dermatitis is not just driven by local dysregulation of inflammation in the skin, but is a systemic inflammatory disease characterized by BTLA dysregulation. We expect that a BTLA agonist will have therapeutic effects both peripherally and locally in the tissue, addressing skin cell types and key factors driving this disease. And just 1 final slide on the BTLA dysregulation. The data on the left demonstrates BTLA expression in the skin before treatment and the data on the right demonstrates BTLA expression after dupilumab treatment. One the right, important circles, which represent incomplete responders to dupilumab, BTLA remains consistently elevated in the skin, while in black circles, which represents complete responders to dupilumab, BTLA expression is reduced almost back to the levels seen in healthy skin. So back to my first question, what does BTLA pathway dysregulation look like in atopic dermatitis? In atopic dermatitis patients, BTLA [indiscernible] as ligand HVEM is down. supplementing BTLA signaling with the BTLA agonist through this pathway may be a potent way of restoring immune balance. Moving on to the second question, how does BTLA agonism by ANB032 affect T cell function in atopic dermatitis? As depicted in this illustration, BTLA agonism should result in broad, direct, and potent inhibition of the pathologically activated T cells. In coming slides, I'll highlight ANB032's inhibition of T cell proliferation, resulting in a reduction of cytokine secretion in atopic dermatitis patients, PBMCs. Let's start by looking at T cells. As we've previously demonstrated, we see clear gene expression patterns demonstrating the presence of Th1, Th2, Th17 and Th22 phenotypes in skin biopsies of atopic dermatitis patients. Our goal is to address as many of these T cells as possible with 1 therapy. To determine the impact on T cell function, we assessed ANB032's impact on both T cell proliferation and associated cytokine secretion. We stimulated atopic dermatitis patient-derived peripheral blood cells in the presence of ANB032 and assessed proliferation using CFSE. Shown in the graph on the left, ANB032 inhibits T-cell proliferation in a concentration-dependent manner. An example of the inhibition of T-cell proliferation in a single AD patient paddle is shown on the right. Now let's look at the ANB032 impact on cytokine secretion from different T-cell subsets. As you can see in these 4 graphs with PBMCs derived from AD patients, direct BTLA agonism with ANB032 consistently reduces inflammatory cytokine secretions across Th1, Th2, Th17 and Th22. This broad modulation is statistically significant at concentrations that we would expect to achieve in the clinic. Furthermore, patient-level naive, which we're not showing here demonstrates this modulation is consistent across donors. This activity across multiple TH subsets highlights that ANB032 could be applicable to a broader patient population as those responding to a single cytokine antagonist. Before discussing how the ANB032 modulates BTLA expressing dendritic cell, let's first review the biology of dendritic cell maturation. Dendritic cells largely exist in 2 states, immature and mature. Why does this matter? In the figure on the left, immature DCs express low levels of MHC and co-stimulatory molecules. And because of this, it's inefficient at priming T cells. They also express a low level of BTLA -- when dendritic cells encounter stimuli, such as LPS immature by upregulating expression of MHC and co-stimulatory molecules. Because of this, mature DCs become highly efficient at turning naive T cells into inflammatory T cells. The right graph demonstrates that BTLA is highly expressed on mature dendritic cells, that we can target and modulate with ANB032. An ideal therapeutic marker should prevent the maturation of DCs or reduce the maturation state of DCs, thereby preventing the T cell priming or the generation of inflammatory T cells. This is super important and leads us to our last question. How does BTLA agonism fight the ANB032 affect dendritic cell function? As I've described, mature dendritic cells act earlier in the inflammatory cycle to educate and stimulate naive T cells and turn them into pathologically activated T cells. BTLA agonism by ANB032 uniquely modulate these dendritic cells in addition to the direct activity of T cell function that we saw earlier from agonism. This may serve to cut the inflammatory cycle by reducing the capacity of these DCs to stimulate T cells to proliferate and secrete inflammatory cytokines. First, I'll show that BTLA agonism by ANB032 inhibits expression of antigen presentation and co-stimulatory molecules on DCs, which are themselves validated targets for immunology drugs. Then I'll show that when ANB032 modulates dendritic cells, it results in the generation of FOXP3+ Tregs, which could happen even in a highly inflammatory event. In the figure on the upper left, we stimulated the dendritic cells with LPS in the presence of an isotype antibody or ANB032. LPS induced an increase in the number of mature dendritic cells, which ANB032 clearly inhibited as demonstrated in the graph on the upper right. As demonstrated in the graph on the lower left, the ANB032 also inhibited the amount of MHC expression by DCs. Likewise, on the bottom right, ANB032 inhibited co-stimulatory molecule expression by DCs. This is the signature we see from ANB032 driven BTLA agonism of dendritic cells. These 2 mechanisms, direct agonism of T cells and direct agonism of dendritic cells are synergistic in preventing the generation and proliferation of inflammatory T cells. Particularly exciting is the last set of data demonstrating ANB032 modulation of dendritic cells induces FOXP3+ Tregs. Tregs or regulatory T cells play a critical role in balancing autoimmune D system. Tregs expressed the transcription factor, FOXP3 and suppress activation, proliferation and cytokine production of CD4 and CD8 T cells. Dendritic cells were co-cultured with 90 T cells compared to DCs previously treated with isotype. The DCs previously treated with ANB032 generated significantly more FOXP3-expressing Tregs. This is a unique and potentially highly potent mechanism through which ANB032 may contribute to resolution of inflammation and result in durable immune balance in numerous inflammatory diseases. This could be a key driver of differentiated outcomes for ANB032 in atopic dermatitis. ANB032 inhibits T cell and DC-mediated inflammation, which are both validated drivers of AD pathogenesis. Specifically, we've shown the BTLA pathway is dysregulated in both the tissue and the periphery, demonstrating that atopic dermatitis is a systemic disease; second, BTLA is broadly expressed on T cells and dendritic cells; third, as shown in our preclinical data, ANB032 directly inhibits proliferation of and cytokine secretion from AD patient-derived pathogenic Th1, Th2, Th17 and Th22 cells. Also, in our preclinical data, ANB032 directly modulate dendritic cells, which together with the direct effect on T cells provides a synergistic mechanism to further drive the inhibitory effect on T cells. And furthermore, ANB032-treated DCs can induce Tregs. Because of this, we're very excited to move this molecule into Phase II. Now let me hand it over to my colleague, Dr. Paul Lizzul, our Chief Medical Officer.

Thank you, Martin. Now I will walk you through our clinical development rationale for ANB032 in atopic dermatitis, focusing on a few key points, including: first, a framework for clinical differentiation compared to other agents already on the market or in development; second, ANB032's Phase I healthy volunteer trial results; and finally, our development plan, translational medicine strategy and operational execution plan for our recently initiated Phase IIb trial in atopic dermatitis. To understand the evolving treatment landscape, it is important to recognize that despite approvals over the past 5 years of first-generation single cytokine targeting biologics to treat atopic dermatitis, there remains significant headroom to improve upon existing treatment options. Dr. Guttman also talked about that in her presentation earlier. We see a parallel between where atopic dermatitis therapeutic development is today to where psoriasis development was over a decade ago. Similar to what has been realized for psoriasis patients, there is a true unmet need and tremendous opportunity to achieve superior and truly clinically meaningful levels of efficacy beyond the first generation of biologics that have been approved. In 2004, the first anti-TNF therapy was approved in psoriasis, which was truly innovative for the time, but it had relatively modest efficacy. This was then followed by a tremendous advancement in the understanding of disease biology and a series of incremental approvals with biologics targeting the key pathways involved in psoriasis pathogenesis. These novel agents provided deeper efficacy for many patients, even pushing the efficacy bar to achievement of clear to almost clear skin in a large proportion of patients. Okay. So now let's take a look at atopic dermatitis. Similar early progress has been made with the approval of the first-generation IL-13 targeting therapies, followed by incremental approvals in the same pathway as was just covered by Dr. Guttman. Other single cytokine targeting agents with the exception of IL-4 or IL-13 have either largely failed to provide meaningful efficacy or have not provided additional clinical benefit over dupilumab to date. Therapies targeting a broader range of cytokines such as the JAK inhibitors have improved on the efficacy benchmark set by single cytokine targeting agents. However, on mechanism but off-target activity has raised legitimate and rational safety concerns for this class of medications that have black box warnings, limiting JAK inhibitors from dosing to their full efficacy potential. Other immune cell modulators are being evaluated in mid- and late-stage studies in atopic dermatitis and hold some promise of enabling broader immune modulation, but without the off-target toxicities associated with the small molecule JAK inhibitor class. For example, OX40 ligand antagonist that target a co-stimulatory checkpoint pathway, observed efficacy in preliminary proof-of-concept studies, which appear to minimally equal, what is seen with the Th2 or IL-13 targeting standard-of-care agents such as dupilumab, supporting the potential of an immune cell modulator to expand treatment options beyond first-generation biologics. We are excited about ANB032's comprehensive approach to deliver clinically meaningful outcomes that are differentiated, providing broader and deeper responses, but without the safety and tolerability issues seen with the JAK inhibitors. Unlike in psoriasis, where the disease is dominated by 1 or 2 key single cytokine pathways, atopic dermatitis is a systemic disease where a broader immune modulating approach is necessary to drive optimal results given the heterogeneous nature of the disease. Altogether, as a whole, or even in segments, this represents a large patient population and unmet need. We estimate that more than 1.2 million atopic dermatitis patients, who are not adequately controlled on conventional therapies are eligible for advanced biologic treatment options in the U.S., including those who had experience with an IL-13 targeting agent. There remains significant headroom to improve upon and differentiate versus standard of care and other development stage programs. There are 3 ways to consider the opportunity for ANB032 given its mechanism of action: first, to provide a treatment option for a broader population of patients, including the majority of patients who are suboptimal responders to IL-13 single cytokine therapy; second, the potential to achieve a deeper response for all patients, including the 45% to 50% of patients who achieved EASI-75 scores; and third, for any patient to drive the resolution of inflammation that could result in durable outcomes. We recognize that this regulation of diverse cell types contributes to AD pathogenesis, and ultimately, this results in the clinical signs and symptoms observed in patients. This explains the observed suboptimal clinical responses for the majority of patients when solely targeting a single Th2 cytokine pathway such as IL-4 and IL-13. The opportunity for a BTLA agonist such as ANB032 to safely target not only Th2 cells but also Th1, 17, 22 as well as dendritic cells, creates a compelling opportunity and case for a therapy to improve upon therapeutic options for all atopic dermatitis patients. As we have previously disclosed, our Phase I SAD-MAD trial demonstrated safety as well as rapid and sustained target engagement on both T cells and B cells. This was a randomized double-blind, placebo-controlled, healthy-volunteer Phase I trial, where single ascending dose cohorts received subcutaneous or intravenous single doses, while multiple ascending dose cohorts received 4 weekly subcutaneous doses. ANB032 was generally well tolerated with no dose-limiting toxicities and no discontinuations due to adverse events other than 1 patient quarantined for potential COVID infection. No serious adverse events were reported, and most adverse events were considered to be mild or moderate, of short duration, resolved without sequelae and occur sporadically in a dose-independent manner. Importantly, this study confirmed that the pharmacodynamic activity of ANB032 in humans with rapid and sustained target engagement on both T cells and B cells. With these favorable results, coupled with a robust preclinical package, we are excited to have initiated the Phase IIb trial in atopic dermatitis. Based on our understanding of BTLA agonism, we believe that ANB032 can address all segments of the population. Our global Phase IIb study includes an all-comer population of adult patients with moderate-to-severe AD, who are either anti-IL-13 treatment naive or experienced. The dose-ranging study has 3 active arms versus placebo, and approximately 160 patients with over 40 sites participating in North America and Europe. We will be assessing both, every other week and monthly dosing cohorts. Patients will receive study drug through week 12 with the primary endpoint assessment at week 14, measuring the mean change from baseline in EASI and secondary endpoints, including IGA clear or almost clear in EASI-75. Patients will then be followed for an additional 12 weeks after treatment to understand longer-term safety as well as the potential for a prolonged and sustained efficacy. Additionally, from a translational medicine perspective, we will be exploring potential predictive biomarkers to inform not only future atopic dermatitis development and patient selection, but also map at new changes on to potential mechanistic drivers of atopic dermatitis and additional diseases. A major goal of this study is to evaluate biomarkers at baseline that may be predictive of treatment responses. While we are studying an all-comer population, exploration of differences between clinical responders and nonresponders, regardless of prior IL-13 treatment may help to clarify which patients may be the ideal candidates for ANB032. We are excited about applying these learnings to this program as well as future studies for our BTLA agonism. As we have previously guided, we expect to report top line week 14 data by year-end of 2024. We are pulling on a number of levers to drive quality data and timely enrollment in this trial. We have selected more than 40 well-trained dermatology investigators with experience conducting atopic dermatitis trials in both North America and Europe. This will support recruitment of both IL-13 naive and experienced patients. Importantly, we have long-standing relationships with top KOLs in the field and are working with expert CROs who have extensive atopic dermatitis experience. So in summary, there is a real unmet need for an atopic dermatitis treatment option that delivers improved outcomes for patients. Standard of care or other development stage programs do not adequately address AD disease heterogeneity, falling short on the inhibition of all the diverse contributing cell types, including Th1, 2, 17, 22 as well as dendritic cells. We have initiated our global Phase IIb trial with clear and precise endpoints, recruiting across more than 40 high-quality experienced sites in North America and in the EU. We look forward to sharing these top line data with you in the fourth quarter of 2024. I will now turn the call back over to Dan for closing remarks.

Thanks, Paul. We just covered a lot of ground, which supports our conviction in the initial development of ANB032 for the treatment of atopic dermatitis. The understanding of AD pathogenesis has evolved. We know the disease is broadly driven by a range of T cells, including Th1, Th2 and Th17 and Th22 cells as well as dendritic cells. This biology matches well with the mechanism of action of our BTLA agonist, which inhibits activated T cell proliferation, reduces inflammatory cytokine secretion and modulate dendritic cell function, including inducing Tregs. An estimated 1.2 million patients in the U.S. alone have moderate-to-severe AD and are eligible to be treated with biologic therapies. And this commercial market is only in its early days, projected to generate greater than $16 billion in global sales by 2030. We -- we've shown that ANB032 has the potential to drive deeper responses across a broader patient population in atopic dermatitis relative to existing treatment options. ANB032's Phase II development is supported with a robust translational preclinical package, safety data and healthy volunteers as well as compelling PK and PD, and we're excited that Anaptys' global Phase IIb trial is underway with top line results expected by year-end 2024. Anaptys is a leader in the development of checkpoint agonist, a novel MOA, which can deliver differentiated outcomes while restoring immune balance across autoimmune and inflammatory diseases. In addition to ANB032, our PD-1 agonist, rosnilimab, is in development with 2 global Phase II trials initiating later this year. An additional investor event focused on rosnilimab is being planned in the second half of 2023. Thanks, everyone, for listening, and special thanks to Dr. Guttman for sharing her real-world experience. I also want to thank all the patients and families who participate in the clinical trial to advance our science. Lastly, thank you to Anaptys team for all the work they do every day. Paul, Mark and I will now hand the call over to the operator for our first question.

[Operator Instructions]

[Operator Instructions] Our first question comes from Joseph Thome with TD Cowen.

Maybe one for Dr. Guttman. I know you indicated in your prepared remarks that you have some patients that are controlled for a while and then they seemed to stop being controlled, which seems like it could be a prime population for 032. So maybe how long does this control last before patients maybe slip out of being controlled? And is there a way to predict these patients at this point with your commercial DUPIXENT experience?

Joe, this is Dan. So Dr. Guttman is not with us for the live Q&A session. But I'll turn it over to Paul to address what you asked.

Yes, sure. Joe, thanks for the question. And certainly, I'm experiencing these patients as well. And at least based on a few studies out there, it looks like those patients treated on dupi, once they come off of drug, a high proportion of them start to lose their effect over several months of time. So that certainly is one of the potential downsides we've covered regarding single cytokine therapy agents. With the BTLA agonistic approach, we're hoping to see those long-term durable effects. And obviously, we'll begin to start looking at that in our Phase II program.

Our next question comes from Evan Taddeo with Guggenheim Securities.

First of all, how many patients are going to be in the interim readout? And in your view, what is the [ bar ] for 032 in atopic derm? And I'll hop back in the queue.

Yes, it's Paul. Thanks for the question. So we'll have 160 patients in that readout, the full gambit, but we'll read top line at week 14. In terms of efficacy readouts, obviously, we're looking forward to seeing those results. And I think at least from a [ bar ] perspective, seeing efficacy in the range of dupilumab at a minimum, noting that we're hitting those Th2 cytokines. But the hope is potentially there, given the fact that we're hitting more broadly in the Th1, 17, 22 and dendritic cells as well that there is potential for an enhanced efficacy in that setting.

Yes. And I'll only add that the study is also looking at both, as we mentioned, dupi-naive and dupi-experienced patients. And so we're interested to see if there's a differentiation there or potentially none, depending on background therapy or prior therapies on the results.

Our next question comes from Anupam Rama with JPMorgan.

I kind of have more of a broader question. There have been some trials in the atopic derm space that had kind of experienced slower-than-anticipated enrollment. I know it's early days for the Phase IIb study in AD. So what are you seeing in terms of site activation, early enrollment dynamics? And maybe what contingencies do you have in place to kind of keep enrollment time lines in check, whether it's seasonality or otherwise?

Anupam, thanks for the question. It's Paul. Certainly, we addressed some of that in the slide deck there. And as mentioned, we have key relationships with key stakeholders here. We're leveraging very good CROs that have extensive experience in the field and has picked really the top sites across the board in the U.S., North America as well as in Europe to work with us. In terms of how things are going, we're up and running. We're initiated, and things are looking good and are on track. And as mentioned, we're looking forward to reading out by the year-end of '24.

Our next question comes from David Risinger with SVB Securities. Our next question comes from Ellie Merle with UBS.