Apogee Therapeutics, Inc. ($APGE)

Good morning, and welcome to Apogee Therapeutics Conference Call. [Operator Instructions] Please be advised that this call is being recorded at the company's request. I will now turn the call over to Noel Kurdi, Vice President of Investor Relations at Apogee. Noel, you may now begin.

Thank you, operator, and thank you all for joining us today. During this call, we will be making forward-looking statements related to our current expectations and plans for the company as well as our clinical and preclinical programs. These statements represent our views as of this date and should not be relied upon as representing our views as of any subsequent date in the future. Looking at our agenda, CEO, Michael Henderson, will begin the call with an introduction to today's results and the opportunity in atopic dermatitis. Then Chief Medical Officer, Carl Dambkowski, will walk us through the APEX Part B initial results of zumilokibart in patients with moderate to severe atopic dermatitis. Dr. Ruth Ann Vleugels of Brigham and Women's Hospital and Harvard Medical School will then share an update on our current treatment gaps in atopic dermatitis, followed by an overview of our zumilokibart development program by Kristine Nograles, SVP, Head of Clinical Development and Medical Affairs for Dermatology; and Amol Kamboj, SVP, Head of Clinical Development for Respiratory and GI. Lastly, Michael will summarize our vision for building a leading I&I company and the anticipated future milestones for zumilokibart as we advance its development. The subsequent Q&A will be led by Michael, Carl; Apogee's Chief Financial Officer, Jane Pritchett Henderson; Chief Commercial Officer, Jeff Hartness; and Dr. Vleugels. I will now turn the call over to Michael.

Thanks, Noel, and thank you all for your time today. Today is a big day for Apogee. We are thrilled to share positive Part B results that give us a clear path to Phase III later this year with data that we believe will be incredibly exciting for patients and the dermatology community. In addition, today, we announced a concurrent strategic financing collaboration with Blackstone Life Sciences, which when combined with our strong existing balance sheet, will allow us to commercialize zumi in atopic derm, asthma and eosinophilic esophagitis without needing to rely on equity capital markets. Taking a step back, Apogee was founded with a goal to transform standard of care for atopic derm and other type 2 inflammatory conditions. AD is the largest and fastest-growing I&I market, projected to reach over $50 billion, yet treatment options are limited with significant efficacy benefit left on the table and onerous 2- to 4-week dosing required. Today, we will share new data from Part B, the dose-ranging component of our APEX Phase II trial, which continues to support zumi's potentially transformative profile in AD. Zumi demonstrated robust clinical activity across all lesional and itch endpoints at week 16. Importantly, previously disclosed Part A 52-week data showed that zumi's clinical activity continues to improve beyond week 16, with dosing just 2 to 4 days per year in maintenance required. If approved, this could be the first product in any dermatologic indication to offer the option for every 3- or 6-month dosing. With today's data and the bespoke capital facility provided by Blackstone, we believe Apogee has a path to commercialization and profitability. We are thankful to the patients and physicians that have enabled us to share this with you today. With today's positive data from APEX Part B, we have achieved our objective of identifying a dose regimen that we believe maximizes the potential of IL-13 inhibition in atopic derm. In this trial, evaluating low, mid and high doses of zumi versus placebo, we observed similar clinical activity with both the mid and high doses. The low-dose arm achieved relatively lower clinical activity as expected. With this data, we are well positioned to engage regulators with our plan to take forward mid-dose zumi to Phase III, which is an optimized dose that demonstrated robust clinical activity across all lesional and itch endpoints, a well-tolerated safety profile and substantially reduced injection burden versus standard of care. Zumi mid-dose was highly stat sig versus placebo across all endpoints tested. Notably, a meaningful proportion of patients treated with mid-dose zumi achieved EASI-100 or completely clear skin at 16 weeks. Overall, we believe zumi's profile has the potential to set a new standard of care in atopic derm. We have a unique opportunity with zumi to potentially transform the future $50 billion AD market. We previously shared data from APEX Part A showing that 2/3 of patients treated with zumi achieved an EASI-75 response at week 16 and that these responses were maintained with as few as 2 to 4 dosing days per year in maintenance. Today's 16-week data from APEX Part B was remarkably consistent with Part A, providing further evidence that zumi could be the frontline drug of choice in AD. Across all lesional and itch endpoints tested in APEX Part B, zumi demonstrated a highly competitive profile at week 16 on both an absolute and placebo-adjusted basis. Together with data shared earlier this year, showing responses continue to improve after week 16 with maintenance dosing of just 2 to 4 days per year, we believe zumi clearly has potential to improve upon standard of care. I will now hand the call over to Carl, our Chief Medical Officer, to walk us through today's data in more detail.

Thank you, Michael. I'm excited to share the zumilokibart APEX Part B trial results with you all today. In the APEX Part B trial, the modified ITT population consisted of 346 patients that were randomized 1:1:1:1 in the induction stage to receive either a low, mid or high-dose regimen of zumilokibart or placebo. The study was designed to determine the dose of zumilokibart that enables the strongest clinical activity while maintaining a safety profile consistent with the IL-13 class and minimizing injection burden. Our goal was to fully explore the dose response of zumilokibart and ensure we did not leave any efficacy on the table, which we feel we have achieved with the study results being presented today. As Michael has noted, with today's results, the mid-dose from the study is the planned Phase III dose pending regulatory interactions. I'll focus today's discussion on the results at week 16, but the study is designed such that all patients are re-randomized into either the 3- or 6-month dosing arms in the maintenance portion of the study, which we'll plan to release next year. As a reminder, zumilokibart's planned Phase III induction regimen requires just 4 dosing days compared to 9 for dupilumab, representing a more than 50% decrease in the injection days during induction. Part A 52-week results shared earlier this year demonstrated zumilokibart's potential to reduce injection burden during maintenance even further with just 2 to 4 dosing days per year compared to 26 for dupilumab, and up to 13-fold decrease in the injection burden for patients with moderate to severe atopic dermatitis. Baseline characteristics and demographics of participants in this trial were generally well balanced and in line with expectations. The severity of patients enrolled in APEX Part B increased from APEX Part A and is aligned with contemporary trials. Zumilokibart was well tolerated. Results were consistent with expectations for the IL-13 class. Adverse events that occurred in 5% or more of patients in one or more zumilokibart treatment arms included nasopharyngitis, headache, non-infective conjunctivitis, upper respiratory tract infection, dermatitis atopic and urinary tract infection. Conjunctivitis is a known benign adverse event that has been seen with all agents in atopic dermatitis that target either IL-13 or IL-4 receptor alpha. Rates of conjunctivitis across treatment arms were generally in line with standard of care. For the planned Phase III zumilokibart dose, the non-infective conjunctivitis rate was 5.9% and the pooled rate across all conjunctivitis-related preferred terms was 10.6%. There was no effect of ADAs on PK clinical activity or safety. APEX Part B met the primary endpoint of the study, which was EASI-75 response at week 16 with significance achieved for all zumilokibart treatment arms starting at week 2. Zumilokibart mid- and high-dose arms demonstrated comparable activity with 65.9% and 61.6% of patients achieving EASI-75 at week 16, respectively. As expected, zumilokibart low dose showed relatively lower clinical activity with 50.5% achieving EASI-75 at week 16. The mid and high doses of zumilokibart replicated the results previously seen in APEX Part A on both an absolute and placebo-adjusted basis, APEX Part A and Part B mid-dose results were within 1 percentage point. When we look at the more sensitive continuous endpoint of percent change from baseline in EASI score, the trend across treatment arms is consistent with EASI-75 with zumilokibart mid- and high dose showing comparable clinical activity and low dose showing relatively lower clinical activity. Importantly, zumilokibart mid-dose showed a rapid effect on lesions, achieving significance as early as week 1. As with EASI-75, the mid and high doses of zumilokibart replicated the results previously seen in APEX Part A here within 2 percentage points on both an absolute and placebo-adjusted basis. Moving to the more stringent secondary endpoint of IGA 0/1, which will be part of the co-primary endpoint of EASI-75 for the Phase III trials of zumilokibart. Zumilokibart mid-dose demonstrated robust clinical activity with 46% of patients achieving IGA 0/1 at week 16. Zumilokibart high dose generally trended similar over the 16-week period. As expected, zumilokibart low dose showed relatively lower clinical activity. As expected, EASI-90 showed a similar trend as IGA 0/1 with 47.4% of patients treated with zumilokibart mid-dose achieving EASI-90 at week 16. We also saw deep itch relief. Over half of patients, 50.5% to be exact, treated with zumilokibart mid-dose achieved a 4-point or greater reduction from baseline on the itch numeric rating scale at week 16 with zumilokibart high dose generally trending similar over the 16-week period. As expected and consistent with regional endpoints, zumilokibart low dose showed relatively lower clinical activity. The APEX Part B results showcase zumilokibart's competitive profile in atopic dermatitis. The zumilokibart planned Phase III dose demonstrated an absolute EASI-75 at week 16 of 65.9% and a placebo-adjusted delta of 41.9%. These results compare favorably with standard of care and the non-head-to-head trial comparisons are shown on the right for all approved biologics. Zumilokibart mid-dose also demonstrated a competitive profile for the more stringent endpoint of IGA 0/1 with the zumilokibart planned Phase III dose demonstrating an absolute IGA 0/1 at week 16 of 46% and a placebo-adjusted delta of 34.8%. Non-head-to-head comparisons for all approved biologics are again shown on the right. Similar to IGA 0/1, zumilokibart mid-dose also compared favorably on the more stringent endpoint of EASI-90 with the zumilokibart planned Phase III dose demonstrating an absolute EASI-90 at week 16 of 47.4% and a placebo-adjusted delta of 37.8%. Non-head-to-head comparisons for all approved biologics are again shown on the right. Similar to lesional endpoints, zumilokibart mid-dose demonstrated competitive itch improvement at week 16. The itch improvement seen by zumilokibart compares favorably to standard of care in non-head-to-head trial comparisons shown on the right, including nemolizumab in combination with topical corticosteroids. Specifically, the zumilokibart planned Phase III dose demonstrated an itch response of 4 points or greater at in 50.5% of patients and resulted in a placebo-adjusted delta of 36.7%. Prior clinical trials for biologics in atopic dermatitis generally have not reported data for EASI-100 responses, which represent completely clear skin, or composite endpoints, which represent the simultaneous control of lesions and itch for patients with atopic dermatitis. While comparable data is not available for lebrikizumab, nemolizumab or [ tralopinumab ], these 2 endpoints are available from a head-to-head trial of the JAK inhibitor upadacitinib versus dupilumab called [ LEVELUP ]. [ LEVELUP ] was the first and only study to use a composite endpoint of EASI-90 and itch NRS of [ 001 ] as a primary endpoint, which is an endpoint classified as showing very low disease activity or VLDA. In this study, upadacitinib showed EASI-100 and VLDA rates that were 2 to 3x higher than dupilumab. For each of these endpoints, we have added zumilokibart's APEX Part B data as a non-head-to-head comparison to the left of the [ LEVELUP ] data. For EASI-100, the zumilokibart planned Phase III dose demonstrated a 16.5% absolute response and a 13% placebo-adjusted delta. Additionally, 20.6% of patients achieved very low disease activity measured by the composite endpoint of EASI-90 and itch NRS of 0 or 1. These results demonstrate the depth of response being seen after 16 weeks of treatment with zumilokibart. Overall, we couldn't be more thrilled with the study results and the profile of zumilokibart, which provides robust lesion control with reduced injection burden for patients. Before we discuss what is next for zumilokibart, we are pleased to have Dr. Ruth Ann Vleugels of Mass General Brigham Department of Dermatology here on the line with us to discuss treatment gaps in atopic dermatitis. Dr. Vleugels is an expert in inflammatory skin diseases, a Professor of Dermatology at Harvard Medical School and the Director of the Atopic Dermatitis Program at Mass General Brigham Hospital, among her many credentials. Thank you so much for being with us today, Dr. Vleugels.

Thank you so much for that kind introduction, Carl. I really appreciate it. And I'm actually delighted to be here to speak with you all today about treatment gaps in atopic dermatitis because this is an area that I'm extremely passionate about. Atopic dermatitis is actually our most common inflammatory skin disease. It affects infants, it affects the elderly and everyone in between. And I'm sure that you can see by looking at this gentleman in the photo that this is profoundly impactful on our patient's quality of life. When I'm teaching medical students at Harvard Medical School, I often try to explain this by saying, imagine you had a couple of hundred of mosquito bites or poison ivy over your entire body and then imagine that, that goes on for years because this rash and itch is really a severe and systemic problem for our patients that profoundly impacts their quality of life. So let's think about how it does so. So because of this intense itch, patients really lose sleep, adults often miss work, children often miss school. In addition, we have excellent data in children to show that pediatric patients actually have growth restriction. So our kids with atopic dermatitis don't reach their full growth potential because of their atopic dermatitis. Adults have reduced physical activity, and we know that we see increased mood disorders in patients with atopic dermatitis, in particular, depression. In addition, patients have many specialist visits. They often have increased hospitalizations, and we actually even see increased skin infections in patients with atopic dermatitis as well. So you can ideally see that this is really a multifactorial impact on quality of life from this severe skin disease. So we do have advanced treatments for atopic dermatitis that have improved the quality of life for our patients. But before we think about this, prior to 2017, it's important to level set that we primarily use topical therapies and dermatologists often would reach for systemic corticosteroids. Now we know systemic corticosteroids have many side effects that are highly impactful for patients. They cause diabetes, weight gain, high blood pressure, bone damage, et cetera. And so our Academy of Dermatology actually recommends against their use in this disease. So since 2017, we have these therapies, 3 approved biologics as well as 2 oral approved JAK inhibitors. So dupilumab and lebrikizumab are the biologics in the IL-4 and IL-13 family. Both of these medications have improvement in lesions and also itch. Now a key thing when we're thinking about these medications is that they are administered by self-injection and the frequency for these is between every 2 to 4 weeks. So patients have to inject up to 26 times a year, which is a challenge for many of our patients. Nemolizumab is an anti-IL-31 medication. This is a medication that's known to have rapid itch relief. However, it does have limited improvement in rash. And so that is a limitation of this medication. In addition, it is still dosed by self-injection every 4 weeks. Our oral JAK inhibitors, upadacitinib and abrocitinib, do have rapid onset of action and could help both lesions and itch. These are oral medications that are dosed daily. And in addition, all JAK inhibitors carry a boxed warning for blood clots, major cardiac events in cancer. And this box warning is the primary reason why JAK inhibitors have faced practical limitations in their widespread adoption for atopic dermatitis. So when I'm seeing patients in my atopic dermatitis program, it's very clear that our patients are looking for improved treatment options. And really, what they want is impressive efficacy with a clean safety profile. And this is really important because the zumilokibart data not only shows that zumilokibart has numerically improved endpoints than all existing biologics. But in addition, the efficacy is numerically similar to JAK inhibitors at week 16, including on our highest threshold endpoints. And these include very low disease activity as well as EASI-100. And it's important to remind ourselves that EASI-100 is completely clear skin. And so until now, this is really an endpoint that we aren't used to thinking about when we talk about biologic therapies. In addition, we know that after week 16, responses in zumilokibart-treated patients actually improved and actually over 40% of patients achieved completely clear skin on every 3-month dosing by week 52. So again, this is just a really robust endpoint, and this really is what our patients are looking for. And this efficacy is in conjunction with safety data that is comparable to our other IL-4 and 13 medications. And this is extremely important because we know that in the dermatology world, both our patients and my colleagues really are making their decision-making about therapies primarily based on safety. And we know that the IL-4, IL-13 class is a class that they feel extremely comfortable with. So in conjunction with this impressive efficacy data and this clean safety profile, we also need to think about the injection burden because, as I mentioned, this can be a challenge for many of our patients. So in the induction period, zumilokibart needs 4 dosing days. So this is over a 50% reduction from existing biologic therapies. In addition, when we look at the maintenance data, zumilokibart patients would need 2 to 4 injections per year. So that's actually 22 to 24 fewer shots than the current standard of care therapy in atopic dermatitis. So a highly meaningful difference for our patients in terms of that overall injection burden. So from this data, we can really see that zumilokibart could address several unmet needs in atopic dermatitis because although we do have newer therapies that have greatly improved the lives of our patients, there's still substantial unmet need for a highly efficacious therapy that has a safe profile, but also reduced injection burden. So the key takeaways for me is that zumilokibart was not only well tolerated in patients, but in addition, the safety profile is in line with that of the IL-4 and IL-13 class. And again, this is a class that we know my colleagues feel extremely comfortable with because of this clean safety profile. In addition, the data we saw today demonstrates that zumilokibart has efficacy that's numerically similar to JAK inhibitors, which is really a bar that we've been reaching for and that previously we haven't seen from a biologic medication. So this is highly meaningful. In addition, the itch data is numerically similar to nemolizumab, which is the biologic that we consider to have the highest efficacy for itch. So again, this will be extremely meaningful not only to patients but also to my dermatology colleagues. From previously presented data, we also know that zumilokibart shows improved responses over time and that even with dosing as infrequent as every 3 to 6 months, we have high efficacy, which will allow our patients to have excellent outcomes, but also not to have frequent injections, which is something our patients are really asking for in the clinic on a regular basis. Together, this strong efficacy and safety data, coupled with an extremely meaningful reduction in injection burden highlights that zumilokibart is poised to become the biologic of choice for patients with atopic dermatitis. Thank you so much for your interest in our patients with atopic dermatitis.

Thanks, Dr. Vleugels, for highlighting the treatment gaps in atopic dermatitis and the potential for zumilokibart to address these unmet needs. The exciting results from Part B have now enabled us to select the dosing regimen for our Phase III program, which we plan to initiate in the second half of this year, pending regulatory alignment. The [ ADVENTURE ] Phase III program for zumilokibart will include 3 clinical trials, beginning with the [ ADVENTURE ] 1 and 2 monotherapy studies each of which is expected to enroll approximately 400 patients with moderate to severe AD. During the induction phase, patients will be randomized to receive either mid-dose zumi or placebo. Patients will then transition into the maintenance phase where we will continue to evaluate both 3- and 6-month maintenance regimens. The trial design will be very similar to Part B with respect to the patient population and geographic footprint, and the studies will evaluate EASI-75 and IGA 0/1 as co-primary endpoints, both of which were robustly assessed in our Phase II study. The third trial in our Phase III program is the [ ADVENTURE-TCS ] trial, which will evaluate zumilokibart in combination with topical corticosteroids. [ ADVENTURE-TCS ] is also expected to enroll approximately 400 patients who will be randomized to receive either mid-dose zumi or placebo, both in combination with topical corticosteroids. During the maintenance phase, we will evaluate every 3 months maintenance dosing of zumi and TCS. As with the monotherapy studies, [ ADVENTURE-TCS ] will be very similar to Part B in terms of the patient population and geographic footprint. EASI-75 and IGA 0/1 will also serve as the co-primary endpoints in this study. We are very excited to initiate the Phase III program for zumilokibart planned in the second half of this year and incredibly grateful to the patients, investigators and site staff who have participated in our AD trials to date. Their partnership and commitment have been instrumental in advancing our clinical development program in atopic dermatitis. And with that, I'll now turn the call over to Amol, who will discuss our development plans for zumilokibart beyond AD.

Thank you, Kristine, and good morning, everybody. I'm pleased to join today's call to provide a closer look into our plans for zumilokibart beyond atopic dermatitis. We are excited to evaluate its pipeline and a product potential across multiple I&I indications, starting with Phase II programs for asthma and eosinophilic esophagitis, or EoE, both of which we expect to initiate over the coming quarters. We know that patients very often suffer with multiple type 2 inflammatory conditions. For example, an estimated 25% of patients with atopic dermatitis and 40% of patients with EoE have comorbid asthma. As an allergist, I've seen how debilitating these conditions can be and especially so for patients suffering with more than one. The potential for zumi to treat a broad spectrum of type 2 inflammatory disorders could transform standard of care for these patients. We've now twice seen what zumilokibart may offer for patients with atopic dermatitis. We're incredibly excited about zumi's potential in asthma and EoE as well. And beyond these conditions, zumi has potential in other dermatologic, respiratory and GI indications with the potential for a straight to Phase III approach using optimized Phase IIb dosing regimens in each of these therapeutic areas. Following this year's positive Phase Ib asthma readout, where a single dose of zumilokibart drove deep sustained phenosuppression for up to 32 weeks, we plan to initiate the ASPIRE Phase IIb trial enrolling patients with moderate to severe asthma. This randomized placebo-controlled study will include patients with elevated type 2 biomarkers and a history of exacerbation in the prior year and is designed to be registrational. Participants will be randomized to 1 of 3 zumilokibart arms in every 3, 6 or 12-month dosing regimen or placebo. The primary endpoint will be annualized exacerbation rate at week 52. We plan to initiate the ASPIRE trial in the first quarter of next year. ELEVATE is our Phase IIa proof-of-concept study in eosinophilic esophagitis, which we also plan to initiate in the coming quarters. This study will enroll 30 to 50 patients who will receive a zumilokibart induction regimen followed by a maintenance treatment period testing both every 3- and 6-month dosing as we've done in atopic dermatitis. The primary endpoint of the trial is histologic improvement as assessed by eosinophil counts. We will also be assessing endoscopic change and patient symptoms. Our plans to launch the ASPIRE and ELEVATE trials over the coming quarters underscores zumilokibart's potential to redefine the treatment paradigm across type 2 inflammatory disorders. Zumi could become the first long-acting biologic approved for both atopic dermatitis and asthma. Currently, only DUPIXENT dosed every 2 weeks is approved for both indications. It is also the most commonly prescribed biologic in both AD and asthma. We recognize that DUPIXENT being approved in both indications is an important driver of this, given the opportunity to treat patients suffering with both conditions. In EoE, zumi has the potential to be dosed just 2 to 4 times per year. As a reminder, DUPIXENT is the only biologic approved in EoE and is dosed weekly in this indication. That's 52 injections per year. Imagine how transformative 2 to 4 annual injections would be for patients and families living with EoE. On the heels of the exciting atopic dermatitis data that Carl presented earlier, the initiation of these 2 important studies is the next step in exploring zumi's potential to deliver a best-in-class profile across type 2 inflammatory diseases, and we're excited for these next steps. I will now pass the call back over to Michael for closing remarks.

Thank you, Amol. Atopic derm is the largest and fastest-growing I&I market with DUPIXENT's launch outpacing the entire $25 billion plaque psoriasis market. New entrants with limited differentiation are quickly becoming blockbusters in their own right, while DUPIXENT continues to grow rapidly, speaking to the unmet need and significant underpenetration of this market. Zumi's anticipated launch in 2029 could be the next meaningful frontline launch for this population. Taking a step back, when we consider the profile of an atopic derm treatment that will truly be transformative to patients, we look at lesion control, itch relief and dosing. These are the 3 areas that patients and physicians tell us are in most need of innovation where current biologics come up short. Zumi delivered against all 3, and we are confident in its potential to be the next clearly differentiated first-line product to launch in atopic derm. In today's APEX Part B readout, zumi demonstrated robust clinical activity at week 16. And we know from maintenance data shared earlier this year that patients continue to improve after week 16 with 41% of patients achieving EASI-100 at week 52, representing completely clear skin. It's clear that zumi could be a transformative therapy for atopic derm patients with just 2 to 4 dosing days per year in maintenance compared to 26 injections per year for standard of care, which has not demonstrated improved responses after week 16. Today, we also announced a major strategic financing collaboration with Blackstone, a trusted partner to our industry who shares our conviction in zumi's potential to transform standard of care for patients living with type 2 inflammatory conditions. Our partnership with Blackstone provides up to $1.3 billion in additional capital, significantly bolstering the financial resources we can deploy to develop and deliver zumi for as many patients as we can as quickly as possible, including today's announced Phase III development program in atopic derm. The customized structure matches cash flow to Apogee's future funding needs at a competitive cost of capital and without equity dilution to our shareholders. We are pleased to have found the right partner in Blackstone to help realize our expansive vision for zumi. With an exciting 2026 for Apogee well underway, we wanted to wrap up today's call with a look ahead to the coming years, which includes multiple expected value-creating catalysts for zumi through 2028, including additional data in atopic derm and eosinophilic esophagitis next year. In addition to our lead program, we are advancing multiple innovative combination programs, which have the potential to raise the bar over monotherapy. We are looking forward to sharing more details on these programs later this year. I will now hand the call back over to the operator to begin Q&A. Thank you.

[Operator Instructions] We will take our first question from the line of Tyler Van Buren from TD Cowen.

Congratulations on the data, and thanks for the presentation. Considering that the mid-dose induction data improved in Part B compared to Part A on the higher order endpoints, can you and perhaps Dr. Vleugels elaborate on the importance of EASI-90, EASI-100 and IGA 0/1 in the treatment of atopic dermatitis today and the focus on these endpoints among KOLs and patients? And just as a follow-up or a second question, forgive me, but can you also just elaborate on why you felt the need to do the Blackstone deal now?

Thanks, Tyler. I appreciate the question. I'll hand it off to Carl and Dr. Vleugels for the first and then we'll circle back on the second.

Yes. Thanks so much for the question. Obviously, we were really excited to see the improvement, especially on deeper endpoints here. I think part of the key trial design here in doing a Part A and Part B is that we designed the Part B to most clearly represent what we would go forward with in terms of our Phase III program. So it's a bigger study, a more global footprint, and we think that's really important in terms of the replicability of our Part B data to our Phase III program overall. That also -- just the size of the study also gave us more power on these deeper endpoints like EASI-90 IGA 0/1 and EASI-100 as well as itch NRS of 4 among other pieces. And that's why I think we're seeing really the true effect of zumilokibart in the mid-dose Part B data. But really to contextualize that, obviously, Dr. Vleugels is much better in terms of that piece. So I'll turn it over to her to discuss the meaningfulness of these endpoints and what she's seeing with zumilokibart.

Yes. Thank you for this important question. I really appreciate it. So maybe just to level set in clinic, when we're prescribing medications for patients with atopic dermatitis, even the substantial number of decreased injections would be a dramatic shift in atopic derm market, but the enhanced efficacy based on these higher order endpoints that you mentioned is actually what is even more impressive. And so to kind of describe that, essentially, when we look at EASI-90 or IGA 0/1, the fact that these are essentially 10% to 15% numerically higher than the other biologics in the market is highly meaningful to us because these are the endpoints that our patients would really like to dramatically improve their quality of life. And as I mentioned in my brief comments, we've really been looking for years for essentially a biologic that would approach or equal JAK-like efficacy, but have the safety profile of a biologic because dermatologists more than pretty much any other field I worked for, we're driven by safety field. So the fact that we have this JAK-like efficacy from a biologic is highly impactful. And to comment on that, the EASI-100 actually hasn't been reported in any biologic Phase III study. Like this isn't something that we would even expect to track. And the fact that in the 52-week data, we have nearly half of patients meeting EASI-100, that is sort of more than I could have even dumped up when these trials started. And I think in speaking with my colleagues about these higher order endpoints, these are really exciting to my colleagues. And when we think of this ability, these are the types of therapies we actually start talking to patients about in clinic even prior to their approval. like this is coming, keep this in mind. And the reason for that is because patients are really sick of doing their frequent injections, and they're also looking for therapies that can have improved efficacy. So here, we're sort of able to see that on both sides. So this is something my colleagues will really be looking forward to.

Thank you, Dr. Vleugels. And on the second question, Tyler, about why the transaction with Blackstone now, I think it was important to us in our discussions with them, right? We felt that they were a great partner that provided us a bespoke capital structure and an attractive cost of capital that gives us a path to commercialization and even profitability without needing to rely on the equity markets anymore. I think that was something we had heard from investors in the past, right, how will you fund this through launch and even profitability. And we have that now. And I think what was also quite essential was that we maximized coming out of this data set, our strategic optionality and flexibility. And they met us where we were on that. And I encourage folks to read the 8-K where you can see that upon -- there are specific provisions around change of control, et cetera, including within the first 180 days that give us an ability to buy down that royalty to quite an attractive low single-digit rate as well. So it was kind of a no-brainer from us because it gives us a clear path forward while keeping all optionality clearly on the table.

The next question comes from Seamus Fernandez from Guggenheim.

So 2 questions. Can you guys talk a little bit about the strength of the EASI-90 data and the IGA 0/1. That seems quite a bit more consistent with the data in this data set than perhaps what was perceived in Part A. So just hoping you could maybe put a finer point on the importance of those endpoints. And then with regard to the conjunctivitis, maybe just help us understand also from the physician's perspective, the non-infective conjunctivitis frequency versus the overall conjunctivitis and the potential impact of ascertainment bias as people seek to compare across data sets.

Great. Thanks, Seamus. Yes, I'll hand it to Carl and then, of course, welcome Dr. Vleugels input as well on these 2 questions.

Yes. Thanks so much, right? I think that you're really pointing out, I think, something important in this data set to, one, as we mentioned in the presentation, really good replicability of the EASI-75 endpoint and percent change from baseline in EASI. That was really what Part A was designed around with those kind of 2 endpoints based on kind of the size as well as the geographic footprint, and we really replicated those with high fidelity here. But in Part A, saw a very competitive EASI-90 and IGA 0/1, but maybe didn't see that we were getting something more with the additional exposures that the mid-dose has, right? As a reminder, even the mid-dose has 30% to 40% greater exposures compared to lebrikizumab. And really in the first 4 to 6 weeks, it's actually more like 50% to 60% greater exposures compared to lebrikizumab. We really felt like in Part A, we tapped into that in terms of the greater than 40% placebo-adjusted delta on EASI-75 but maybe didn't see what we expected in terms of the deeper endpoints. Here with a bigger study, more global footprint, I think we've tapped into that greater exposure driving these deeper endpoints of EASI-90 and IGA 0/1, both well above 30% on a placebo-adjusted basis, which I think as Dr. Vleugels said, very competitive and numerically higher by approximately 10 percentage points or more compared to the non-head-to-head comparators of dupi and lebri, and we're really excited about that. I think conjunctivitis, we continue to see most importantly, that it's in line with the class, and it doesn't change treatment for the patients that get conjunctivitis. We saw at the mid-dose 10.6%, which is very in line with the class overall, but short-lived cases, again, median duration here, very similar to Part A, which was 30 days, both here and a little -- couple of days less than that in Part A. That compares to our comparison of dupi, which had a mean duration in the study of 172 days and more than 80% of cases resolved within 90 days compared to lebrikizumab, which showed about 41%. So we're obviously not causing longer cases and patients are doing well on this. But really, again, to contextualize this and what conjunctivitis means in the clinic, I'll turn to Dr. Vleugels to talk through that.

Thank you, Carl. I really appreciate it. So perhaps just one comment on your first question. I think what's meaningful to me as an expert is that these higher order endpoints actually are much less susceptible to placebo responses. So in fact, the data that's presented here is actually sort of more impressive even than perhaps we would have expected and the fact that we see these high responses compared to other agents numerically is meaningful to us, and we would expect these to be replicated in the Phase III. And again, just sort of point to that increased efficacy that I mentioned that we think is truly mechanistically driven by what Carl just mentioned, including the higher exposures. So I think those higher order endpoint data is really what's going to help drive clinical decision-making in addition to the reduction of injection burden. So those 2 things coupled together is really what my colleagues will be extremely excited about. In terms of the conjunctivitis, I know it was mentioned that I'm an inflammatory skin disease expert. So I see lots of inflammatory skin diseases other than atopic dermatitis. And it's just I feel really fortunate when I get to speak about a therapy that the main side effect is conjunctivitis because this is essentially something that my colleagues do not worry about. And I can kind of explain that by the fact that you can see that dupilumab and lebrikizumab are prescribed all the time by my colleagues, right? This is -- these are the biologics that we use and we have extreme comfort with because of their safety profile. And when we think about conjunctivitis, first, it's important to level set that atopic dermatitis patients have a higher rate of conjunctivitis at baseline, right? So that is just a common thing we see in these patients. And the time that we're talking about with these IL-4, IL-13 medications is non-infectious conjunctivitis. So when you're counting patients, you can say, you may get a little red eye. And if that's the case, it's not from an infection. If you get that, let me know. And when patients get that, essentially, we almost always just give them eye drops. So literally over-the-counter eye drops, and that is it. And oftentimes, we don't have to do anything because it's very short-lived. And so I've prescribed these medicines several thousand times since 2017 at this point, and I can kind of count on one hand where I've actually had to discontinue one of these therapies due to the conjunctivitis. And so again, this is not a side effect profile that is concerning to the prescribers of biologic therapies for atopic dermatitis. And I think that's just important to level set on. And then when we think about the data presented today, I think the zumilokibart data for the dose that's going to move forward into the Phase III is completely on par with other agents in this class. This is a class effect. And I think there is nothing to suggest that we would have a higher concern with zumilokibart relative to the other IL-4 and IL-13 therapies that my colleagues are extremely comfortable with.

The next question comes from the line of Akash Tewari from Jefferies.

This is Phoebe on for Akash. On the respiratory pipeline, we were just wondering kind of what external validation would you like to see before potentially moving zumi or the combo into COPD?

Yes. Thank you, Phoebe. I appreciate the question. There, I think we're excited about moving zumi in asthma. And then both zumi and our combo, we'll plan to kind of think about COPD likely after asthma for the mono. But then for the combo, that's something that we'll think about, and we'll share kind of plans later this year, potentially around combo plans in respiratory for our IL-13 TSLP, which could be inclusive of COPD.

The next question comes from the line of Alex Thompson from Stifel.

Congrats on the data. I guess a quick clarification and then a question. Could you comment on overall discontinuations beyond those due to adverse events at week 16 across arms? And then maybe in Part A, you showed some NRS changes quite early in the study. I wonder if you could comment on what you're seeing in Part B and if that's sort of a trend that you're seeing pull through at this point.

Yes. Thanks, Alex. I'll hand it to Carl for the 2 questions.

Yes. Thanks for the questions, Alex. I think on the first one, our overall discontinuation rate, we actually had a very low discontinuation rate here. It was about 6% across the whole study. So really low, especially compared to other Phase IIb trials and really lower than most Phase III trials. So really speaks to patients' ability to stay on the drug and treatment as well as the -- what we expect to be really consistent results regardless of analysis method or study moving forward. And great question regarding the early itch changes. Here, this is kind of our top line data. So showing as much as we can here. We're seeing early itch and lesion changes on a weekly basis. This is what we reviewed here. And so we're seeing a lot of those in this data set already with lesion changes as early as a week and itch changes as early as the first 2 weeks. As we move forward and dig in more to this data over the coming weeks and months, we'll present more of that at upcoming medical conferences as well. So really excited for the profile we're seeing here and excited to continue to release more on the zumi profile throughout the year.

Our next question comes from the line of Michael Yee from UBS.

This is [ Kyle Yang ] for Michael Yee. Congrats on the data. So on the higher order endpoints, could you please help us understand, is there any particular reason that you saw better results for EASI-90 IGA 0/1 in your Part B given that you're using the same mid dose as the Part A study? And the second question for Dr. Vleugels. Could you please help us understand how would you use this drug, assuming that the Phase III study replicates the results? And would you prefer to use this in biologics naive patients or experienced patients?

Yes. Thanks, Kyle. I'll hand it to Carl and then, of course, Dr. Vleugels.

Yes. So great question, right? I think that really on the higher order endpoints, I think the key here was size of trial and geographic distribution in terms of the updates to the Part B, I think that were really important for the study and really important for what we expect to do in the Phase III. We designed the Part B to be kind of as close as possible to our Phase III design. And so I think that replicability from Phase IIb our Part B to Phase III is really important, too. The bigger trial size, both on a treatment arm basis, but also on a -- especially on a placebo arm basis, I think, is also an important aspect of that, gave us a lot more power to detect the changes that we expected in EASI-90 IGA 0/1 and then here, as talked about earlier, EASI-100 and even VLDA are very low disease activity. So I think really size of trial and the global footprint, which is expected to be part of the Phase III trial. Then I'll turn it to Dr. Vleugels for the second part of that question regarding how she would use the drug in clinic.

Thanks. This is a great question. So I -- if this drug were available today for both me and my dermatology colleagues who actually prescribe these medications, I would use this in over 95% of new starts. And the reason for that is that differentiated in terms of efficacy and injection burden. And this is really like the first time we can say that in this field. And I think this is really very important because other than a handful of patients where they have a concomitant disease that may need a different mechanistic pathway or, for example, someone who has full body erythroderma or full body disease that might need to be hospitalized. This is really the agent that is differentiated enough that it would take over the vast majority of new start patients. I think we know for existing patients, we do have some percentage of patients that just like to stay on what they're on, and we know this from our psoriasis patients that we followed for a couple of decades, but it's typically about 4/5 or 80% of patients that are willing to change as long as there's a reduced injection burden even. And so what's interesting here is not only do we have a reduced injection burden, but we have what we seem to think would be higher efficacy as well. And so that would take me probably to my last comment on this, which is what's really interesting is what we know in dermatology is that we see dermatologists prefer to cycle between biologics before they move on to JAK inhibitors. And the reason for that is because they are aligned with wanting to use biologics for safety even though these medicines don't have a substantially different efficacy profile. And so what's really unique here is that not only would we see a very high percentage of this for new starts as well as existing patients with efficacy, but patients who've been on a biologics and have so efficacy, this would be, of course, the treatment of choice to change because we also would expect a bump in efficacy. So I think that's another really impactful category because we just haven't had anything that would move the needle in that category previously.

The next question comes from the line of Julian Harrison from BTIG.

Congrats on the progress. First, I'm wondering if you have any thoughts on what is driving zumi's itch benefit relative to other IL-13 and 4 receptor alpha inhibitors as well as [indiscernible]? Is there maybe a prevailing explanation there? And then second, given the strong data you've generated so far with zumi on a monotherapy basis, both in atopic derm and asthma, can you remind us how you're thinking about the combination opportunities going forward in both of those indications? Are they segmented to some extent?

Thanks, Julian. I'll hand it to Carl for the first question, and then I'm happy to take the second.

Yes. So great question. Obviously, we're really excited today with what we're seeing in terms of itch benefit, right, with the itch NRS of 4, which would be the itch data that would eventually end up on the label. So that's a really important aspect of that data, right, with over 50% of patients having that benefit by week 16. So very clear itch benefit with zumilokibart. I really think 2 aspects of zumi are really driving this. One is we know that IL-13 has a direct impact on sensory neurons, too. So that early exposure and those higher exposures, we think are really important for having that sensory neuron benefit during the course of zumilokibart treatment. So I think that's one piece of it. And then the second piece of it is kind of the profound lesion control that we're seeing too as you decrease lesions, you get an itch benefit from that because the lesions are decreasing as well, too. So the more lesion control we get, right, here with almost 2/3 of patients getting to an EASI-75 and approaching half of patients getting to an EASI-90 and IGA 0/1 right, we're having a real huge decrease on lesions, which is also helping the itch too. So direct impact on sensory neurons and lesion control are both important to that itch benefit.

And then for the second question, I think that we've always said that the better the zumi monotherapy does, obviously, the higher the bar for combinations. I think in atopic derm, when we think about our 279 program, we want to see 10 points of better efficacy, not just versus dupi, but also on a cross-trial comparison basis versus zumi. So I think the bar will be high there appropriately so, and we'll allocate capital if it does meet that bar because it could still be the second-line drug of choice in atopic derm prior to JAKs, given JAKs have myriad black box warnings as has kind of been talked about. And then for IL-13 TSLP and asthma, there, I think IL-13, it is a type 2, so right, high eosinophil targeted drug, and that's how we've designed the trial to go after that same population as dupi. But the addition of TSLP could expand the population to all eosinophils. So we think that there, there's potential efficacy benefit, but also just a broader population play that we'll consider as well.

The next question comes from the line of Geoff Meacham from Citigroup.

This is [ Jarwei ] on for Jeff. I guess, first of all, congrats on the EASI-75. I think we can all appreciate that mid-dose and high dose were pretty much on top of each other. But I guess when looking at the higher order endpoints, were there any PK/PD data that might explain why we didn't see similar levels of efficacy at week 16 for those endpoints? I'm just trying to better understand maybe why we didn't see some incremental benefits there? And then maybe for Dr. Vleugels, building on an earlier question about use, given zumi does have a higher efficacy, could you envision a scenario where you would pull patients off the JAK inhibitor and turn them back to zumi? And then as a follow-up, we did notice that there were some UTIs in the dose arm. Do you find that clinically meaningful? And how does that relate to conjunctivitis as the treatment burden?

Thanks. Yes. So I appreciate the question. I think with the high dose, what we're seeing kind of at that single data point, we did see on the EASI-90 IGA, it's just noise. I think when we put out maintenance data next year, right, it will look very similar to the mid-dose. We did recapitulate the exposure response that we know exists with IL-13, and we're just capturing all that with the mid-dose, which is a huge win because we're getting there with 4 dosing days. So I think further data in the future that we release will show that they are just quite similar. And then happy to hand it to Dr. Vleugels for her thoughts as well.

Thank you. So I'm going to try to answer both questions. The first is whether dermatologists would pull patients off a JAK inhibitor. I think that this is highly likely, and this is coming from someone who I am considered a world expert in JAK inhibitor use in inflammatory diseases. And the challenge with JAK inhibitors is not that they don't have efficacy, it's that, by and large, the dermatology profession, both physicians and APPs have some hesitancy, some substantial hesitancy with their use given their box warning. And so the vast majority of prescriptions for JAK inhibitors are for the lower dose when there's 2 doses available. We often have, as I mentioned, our clinicians cycling through many biologics even when they don't have substantial improvements in efficacy rather than putting patients on JAK inhibitors. But once the patient actually gets on a JAK inhibitor, what we often see is use of the lower dose, trying to taper them off as quickly as possible, trying to stop them as quickly as possible. And as I mentioned in my brief remarks, atopic dermatitis is a chronic illness, right? You could see from the patient demographics, the vast majority of patients have had their disease for over 20 years, right? So what we need is a highly efficacious therapy with a clean safety profile. And so the average dermatology provider will 100% take a patient off a medicine that has a box warning if they have a therapy that has similar clinical efficacy. So I think that is a fairly simple and straightforward question. The second is about urinary tract infection. So I think that this is just essentially somewhat random. There's no mechanistic reason to have an increased risk of urinary tract infection on this type of medicine based on this mechanism. One thing I will align on just to kind of put this into clinical context, urinary tract infections are common enough that in major medical centers, we actually have visit pathways where our patients can send in a message and get their UTI treated without a traditional visit because they are so common. And so one of the challenges of doing clinical trials is when there are common things that happen to large pools of patients and there are ends in our study, which are on the smaller side when we're comparing dose ranging, we can have an increased number of something is common like a UTI scene, I have no concerns about this being a mechanistic concern of this class and don't expect to see any concerns in the Phase III.

So much. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.