Ascendis Pharma A/S (ASND) Earnings Call Transcript & Summary

Okay. I think we'll get started. Welcome, everyone, in the room and online to Ascendis Pharma's oncology program update. Hopefully, I can get this working. Here we go. Here on Slide 2, I'm lucky enough to take Tim's part today. I'd remind you that we may make forward-looking comments during this presentation, including statements regarding our TransCon technology platform and our oncology product candidates. Actual results may differ materially from those expressed or implied and you should not place undue reliance on these statements. For information concerning the factors that could cause actual results to differ materially, please see the Risk Factors section of our most recent annual report on Form 20-F. Turning to Slide 3. We have a great agenda for you this morning. Today, we will focus, in particular, on presenting the monotherapy data used to declare the TransCon IL-2 beta/gamma recommended Phase II dose. These data are an updated data cut compared to our ASCO abstract with 3 months additional enrolling, dosing and follow-up. Showing that TransCon IL-2 beta/gamma was well tolerated as monotherapy, generating robust immune responses along with clinical benefit in a dose-dependent manner in a heavily pretreated patient population. During our presentation, Jan, we'll give an overview of Vision 3x3 and how oncology is a key part of that. Then Kennett Sprogoe will walk through the biology and design of our immuno-oncology product candidates. Stina will go into detail on the data I previously mentioned and walk through our clinical development strategy and program. We're also very fortunate and pleased to have Dr. Davar here today from UPMC to provide an investigator's perspective on both of our immuno-oncology product candidates, including his experience treating a patient with TransCon IL-2 beta/gamma. And finally, Jan will close with some remarks before we take Q&A. With that said, I'll turn it over to Jan.

Thank you, Scott. It is actually a pleasure to be Back in New York. This is my first really exposure to [indiscernible] since COVID. And I feel really pleasure to meet new people, see people coming here and getting breakfast. So it's really, really nice. But I would like to start where I'll always start our Vision 3x3, which is our strategic road map from 2020 to '25, how we want to build a leading global biopharma company. And I would just spend 3, 4 minutes to give you an update how we are focusing to fulfill this vision. TransCon Growth Hormone for pediatric growth hormone deficiency got approved in 2021. Now in the -- being commercialized here in the U.S. under the name SKYTROFA, really building up to be the leading brand in value. We do the commercialization of SKYTROFA in Europe, where we will start to do that in Q3. TransCon PTH is for adult hypoparathyroidism, we are filing our response for -- related to our Type A, meeting with FDA here in June. And in Europe, we are progressing with our filing and expect to get our approval later this year. TransCon CNP for achondroplasia, which is our last product in our rare disease endocrinology pipeline. We really are going through all the regulatory interactions, both in U.S. and in Europe. We're getting more and more convinced about our strategic plan to ensure that product will be out in the market in 2025. We're really getting the interaction that we need, the sign-on, how we're really doing the latest part of the development. And as you know, we are growing the endocrinology rare disease pipeline through our global clinical reach. We basically are having global trials everywhere in the world to ensure that we can be where every patients are. We are pursuing 9 total indication. And one of the important ones that come out is our Phase III trial for adult growth hormone deficiency later this year and new endocrinology products. Yes, we are focused on endocrinology. We will continue to focus on endocrinology. This is where we started, and this is where we will continue to invest in new product opportunities developing this area where we have in-depth knowledge from. Going over to the oncology today. And I will come to a few slides about oncology, why did we move into oncology. I think Davar and everyone else know there's huge unmet medical need. And we believe, as we did in rare disease endocrinology by utilizing the TransCon technology and using the same algorithm that we basically have been extremely successful with in our rare disease endocrinology. We basically can do the same thing in oncology. We're utilizing 2 different platforms: one, the systemic delivery, which Kennett will explain how we use that from IL-2, which basically are the same technology platform we have used in endocrinology. And the localized delivery platform, where we basically are developing a paradigm shift where we basically inside a tumor can deliver for weeks and weeks an unmodified compound. We see the opportunity to work with a lot of different opportunities. Why oncology? Because we believe we can develop this paradigm shift products. But it's not at the same time that we will have the same business model in oncology as we do in rare disease or endocrinology, where we basically are going from developing an idea to move it out to the patients. One question I often get asked for. What is your passion for IL-2? Why are you so passionate about IL-2? And it goes back potential as Scott said, because I'm so experienced, it's a nice way to see it, but I have seen a lot of these product being approved and come to the market. So when I look on IL-2, it remind me a little bit about growth hormone. Growth hormone got approved in the '80s. And since the '80s, people have tried to develop an improved version of growth hormone because it has been realized there was a huge unmet medical need in the daily treatment with growth hormone. But first, when we got our approval with SKYTROFA in 2021, it was the first once-weekly product that came out to the market in the U.S. with an approved outcome. When I look on IL-2, I actually see the same pattern. It's a product nearly from the same age as daily growth hormone. It got approved in '92 as the first hemological compound in oncology or cancer. There has been 2 multiple pathways. When people for 10 years ago started to make it non-alpha, we thought we have solved it. No, we didn't solve it. We built more knowledge about it. And there was why it was a perfect compound for Ascendis to go back because where do we have our strengths. We have our strength by utilizing the TransCon technology, really to develop product in a complete unique manner. But at the same time, we also believe in the 3 fundamental pillars of drug development, scientific understanding. And we really can spend 20 years utilizing the last 20 to 30 years knowledge about IL-2 fail program, building up on the science, understanding as a pillar 1 or #1. The second part was really building up a really, really strong preclinical package. We will not show that today because we have presented that before. And now we start to see the clinical data coming in. So I believe any product opportunity that need to be successful into the market. It needs to be successful, both on the strong scientific fundament, strong preclinical data and have the right clinical data. And we're starting to emerge in the clinical data now. We're starting to have a first in human data in the dose escalation. And the purpose of that is really to prove the safety, finding the recommended Phase II data. That is the purpose of this data. We're going into a patient group that is different for the patient group we will treat later on. It's heavily, heavily pretreated, diverse tumor type, and that is the patient group we will get data from today. Why was my convention that IL-2 was really the product to focus on and use our effort for us? Because when we saw the treatment regime, just go back to aldesleukin, it functioned when you really can get the patient to tolerate it. It meant that you need to be sure you can give the highest dose for longest time, mainly taken to in intensive care unit, give it as many days as possible, try to stabilize the patient because you know if you really provide long enough treatment with high enough dose, you could be successful. So there was basically the target profile we wanted to improve on. How could we basically make this as a safe, well-tolerated treatment and at least see the same benefit with aldesleukin. And this was our success. So think about 2 things: duration of treatment, the potency of the treatment, how you really go out and improve the hemological system. And I'm really happy that Kennett now will take over, move to the next part of the presentation going in and explain how we designed.

And I can also advance the slide.

Thanks, Kennett.

All right. Thanks, Jan. So I'm looking forward to taking you through our thinking from when we started deciding our immuno-oncology pipeline with TransCon TLR 7/8 Agonist and TransCon TLR-2 beta/gamma. So many of you know our technology very well. It combines the benefits of prodrug technology and predictable release technology. And for the purpose of our immuno-oncology pipeline, I would also like to add a sustained release because, for example, if you want to inject tumors, you need to -- if it's not a superficial tumor, you also need that long duration of action in order to broaden out what types of tumors you can treat. When we look at our IL-2 beta/gamma, our non-alpha IL-2 we're using the same technology as Jan mentioned, that we're also using in SKYTROFA and that you know very well from our endocrinology pipeline. If we wanted to make an intratumoral treatment using that technology, we don't believe it would have worked because tumors also clear molecules, soluble compounds flush out quite rapidly. So we needed to come up with a different way of making sure that we could keep the compounds that we wanted to treat the tumor with for a long time within the tumor. So we had to develop our TransCon hydrogel technology, which I'll go into a little more detail later, but it's an insoluble carrier. So when you inject it, it stays exactly within the tumor, releasing the drug locally. And now we have shown that it works for TLR-7/8 Agonist, but it also works with small molecule peptides, antibody fragments and antibodies. We have experienced coupling all of these types of compounds into the hydrogel. And also conceptually, this is the same technology that we're using in our ophthalmology portfolio. So when we go into the details of how we designed TransCon IL-2 beta/gamma, Jan mentioned, we had a lot of data to go off by going all the way back to aldesleukin and then other compounds that didn't work as intended. And what we realized is you can't solve it all with one technology. You need to have both sustained release as one technology and then also a very potent non-alpha IL-2, and I'll show some data on that later. And then for our innate immune stimulator, TLR-7/8 Agonist, this is per definition, a very toxic unspecific compound. So as we can target it, if you give it systemically, you need to target it else -- in a different manner. And this is what we're doing with the technology of -- the hydrogel technology, so we make sure that the activity stays within the tumor with minimal systemic exposure. So this combination to us of having the systemic and the localized platform is really uniquely suited for harvesting all of the benefits of innate and adaptive immunity to provide amplified and durable immune activation. And we hope that this will be able to broaden immuno-oncology out and also raising the tail as Stina will go into details later on. This figure is well known to us all. The only thing I want to mention here is typically when we talk about it, we say we take one parent drug, one carrier and one linker. But in order to build the immuno-oncology pipeline, we're also thinking about where do we apply the soluble carrier and where do we apply the insoluble carrier. So you can see on the left-hand side in the blue lady there that for the insoluble carriers, we are putting that in the tumor and the systemic IL-2 is releasing a native IL-2 with a size that is in the bloodstream, but also small enough to distribute into tumor tissue. If we take a step back and then start thinking about immunity, so first line of defense, if there's an invading pathogen or a tumor starts forming would be your innate immune system as the first defender. So that would be macrophages, dendritic cells, antigen presenting cells would try to take out the pathogen of the tumors. So as we're sitting here and standing talking, our immune system is already clearing malignant cells that are forming, but sometimes immune-evasion happens and tumor starts building out and overwhelmingly the innate immunity. Through a fairly complex process, antigen-presenting cells can then call upon help from the adaptive immunity by engulfing neoantigens from the tumor, presenting them on the surface of the antigen-presenting cell and locally activate immune cells already present in tumors because immune cells survey all our tissues already, but they need a signal as stimulant to start clearing the invading pathogen. So the ADCs can turn your tumor resident or your tissue resident, T cells into cytotoxic T cells that can help the innate immunity. But they can also drain to the draining lymph nodes and start educating and activating and expanding your cytotoxic T cell repertoire and also expanding your NK cells, which then through the bloodstream can come back into the tissue and further help local resident cells. But in order for circulating cells to find their way back into the tumor, they need a homing signal. And that's why the production of chemokines are also extremely important because that gradient is what pulls the cells back into the tissue. And this is where we have designed our 2 candidates, first candidates to work both in monotherapy but also rationally designed to work in combination. So what the TLR-7/8 program is intended to do is to turn the tumor hot by increasing the pro-inflammatory microenvironment, which helps educate T cells, both locally and in the draining lymph nodes and also to recruit in cytotoxic immune cells from circulation. And then IL-2 alone expands and activates your CD8s and natural -- your killer cells and also due to the size can act in the autocrine-paracrine fashion that evolutionarily or locally produced IL-2 is able to. So if we look in normal tissue, you have immune cells present already. They're not really doing much because there's not a threat. They are, however, still producing cytokines locally, you can see IL-2 as an example here being produced. Given that this is an alpha-binding IL-2, this is predominantly mapped up by all of the Tregs there because they have the trimeric receptor conformation that contains the alpha sub unit. So this is very high affinity for IL-2, for native IL-2. So the slowly secreted IL-2 acts as an anti-inflammatory component or cytokine in the homeostatic environment of normal tissue. In contrast, when you have an infection, for example, then there's danger molecules being released that activates TLR receptors. This causes your antigen presenting cells to be activated and start releasing cytokines and chemokines. And as mentioned before, that brings in immunity from a circulation and also starts activating immune cells already present in the tissue. And one of the cytokines being released under these conditions is IL-2, but at much higher levels compared to under normal tissue homeostasis. So then you saturate the Treg receptors. So there's excess IL-2 available to bind to tissue resident T cells and activate them into cytotoxic T cells. And this is how you also get the pro-inflammatory immune response activated in the inflamed tissue. So if we take that knowledge and then apply it to the status of cold versus hot tumors. In cold tumors, you also -- you can also have lots of immune cells present, but they're not doing anything because they're lacking the signal. And in certain instances, even you have the tumor producing anti-inflammatory cytokines, so further putting a lid on your immunity. So our goal and our thinking was if we can turn that tumor type into a much hotter tumor type by pushing on those TLR receptors, we would be able to then leverage not only the local innate immunity, but also the adaptive immune system. So that was conceptually the goal of designing TransCon TLR 7/8 Agonist. So when we then thought about development of the 2 compounds in parallel, how do we decide the optimal innate immune activator, we want sustained high local concentration because these are not specific, so they would activate innate immunity throughout the body, if present. So we wanted a high local concentration. And then we also wanted the most potent TLR agonist to produce cytokines and chemokines. So that's how we ended up selecting TLR7/8 Agonist. And turning to adaptive immunity, Jan already touched on this. You want a long half-life so you have a big AUC potent non-alpha IL-2 molecule, but also you need the Cmax to be low. Because Cmax is what drives your dose limiting toxicity. So this is why we had to use the prodrug technology. And then also you need full bias high potency and a size that is similar to native IL-2. So then turning to how we used our hydrogel technology to design TransCon TLR7/8 Agonist. The hydrogel itself, we preformat using the same type of linkers you know from our endocrine portfolio. We load in our active TLR-7/8 Agonist, and then inject it into the tumor. Then slowly over the course of weeks, resiquimod is being released into the tumor microenvironment and pushing on the TLR receptors mimicking inflammation or infection. Then after a couple of months, the hydrogel bead itself disintegrate into small polymer bound fragments that are then flushed out of the tumor and cleared by the kidney. Also, I mentioned it takes a couple of months for the hydrogel to degrade. So keep that in mind when Stina is also showing data later on because the hydrogel is in fact space occupying when you inject it into the tumor. And given that we administer every 3 weeks, you have accumulation of hydrogel material within the tumor. So if you were to image it or caliber measure it, you're measuring both tumor tissue, but also the hydrogel space occupying material. If we then look on what does this mean on a PK parameter. On the left, we have mice experiment, tumor-bearing mice where we injected the hydrogel into the tumor. And you can see we have a thousandfold higher resiquimod concentration in the tumor compared to in circulation. And this is really what allows us to have a high pro-inflammatory cytokine release within the tumor. We are producing that CXCL-10 gradient that allows NKs and T effector cells to home-in from circulation. And then the antigen presenting cells are activated so they can present antigen both locally in the tissue but also in the draining lymph nodes. And this latter part is also what we believe is driving the abscopal responses that we are seeing because when you have education in the draining lymph nodes, you're also mounting a systemic antitumor response. And with this approach, we believe we can make not only cold tumors hot, but also hot tumors hotter, so driving efficacy across the board. And then when it comes to IL-2 beta/gamma, we had our soluble technology already validated in the endocrine pipeline, but we never believed it would be enough just to make a reversible conjugate of IL-2 because what -- in the end, it would be releasing -- would be fully active non-biased IL-2. So we analyzed all of the information that was available in the public domain, and that was quite a bit after 30 years of experience with IL-2. And we realized there's no one technology that can address all of the drawbacks of the IL-2 molecule. So we started out thinking how do we make the ideal non-alpha IL-2 molecule. And we realized if we made a site-specific mutation in the domain of the protein that binds the alpha receptor subunit, we could specifically attach a small PEG there. If we were to inject this molecule into circulation, we would still need to put people in the hospital and give them long infusions because this would clear very rapidly, it's small, it would be renally cleared quickly. So we also added on top of this molecule, our TransCon technology, the soluble platform using actually the same that we are applying in the endocrine pipeline. And this is what gives us that long half-life exceeding 35 hours. And then importantly, also, the molecule that we're releasing is that not that different from aldesleukin only that it has a bias away from the Tregs. And this is what you're seeing in the table here in the chart. We actually made multiple different variance to explore and interrogate what does it mean when you're increasing the size of the PEG that you're putting on to your IL-2 molecule. Because other companies have tried increasing the size of the PEG, you could have both longer half-life and full bias. So we've replicated and in our hands, what we saw was with a small PEG, we retain the most activity, which is not surprising because the larger the PEG, the most [indiscernible] the less ability to interact also with the beta/gamma receptor confirmation. And also, if you then look at the far side of the table, you're also seeing sizes going up. So using a 5-kilodalton PEG also allows you to have native like size, whereas if you go up in size, it starts having the size of an antibody. And that we know doesn't penetrate well into tumors. So we can selectively expand the reservoir of cytotoxic T cells and natural killer cells over Tregs because of the bias. We have a size that allows us to penetrate into tissue and act in the same autocrine-paracrine fashion endocrinous IL-2 works in. This is because we have the prodrug approach. And then we have a low Cmax that improves tolerability and allows us to dose up and really provide high exposure over the course of the dosing interval. And Stina will show you some comparative data later on showing how we can push the dose compared to other programs. And then my final slide is just showing how we are also thinking about the synergy between the 2 molecules because IL-2 can bring that impressive adaptive immunity response, expanding the cell population, but ALC alone doesn't do it. You also need a signal for your circulating cells to find and home into the tumor. So that will work in certain cancers that have that. But if you have a cold tumor with no homing signal being produced, then there's a high degree of synergy with the TLR-7/8 Agonist, because that would provide that gradient that will then also allow to expand the number of indications that you can apply an IL-2 type molecule. So the 2 have been rationally designed to work both as monotherapy but also in combination. So I think I showed the design and then we're moving over to Stina's presentation, and you'll see something about the pharmacology, how we have sustained inflammation in the tumor with high cyto and chemokine release and convenient dosing for the TLR, allowing you to go also for deep-seated tumors. And then for IL-2, we'll show data and expansion on the relevant cell populations and also with the convenient dosing.

Good morning. Our oncology pipeline is in immunotherapy. And although work in immunotherapy for cancer has been ongoing for more than 3 decades, it hasn't been until the last decade when checkpoint inhibitors came in treatment landscape that we actually see clinical activity of immunotherapy across various different tumor types. On the left-hand side, you can see the response rates of many different solid tumor types. And they really range from the teens to as high as 80%. However, you can see a lot of patients do not respond. And even those patients who do respond on the right-hand side, you can see that many of those patients have acquired resistance that develop. So let's take the poster child for immunotherapy for better illustration. So you're looking at here overall survival for first-line melanoma. Over the recent years, you have seen incremental benefit of various targeted agents and checkpoint inhibitors. And just to make this a little bit more simplistic to look at, here you're looking at anti-CTLA4, anti-PD-1 and even combination of checkpoint inhibitors. And you see highlighted here the unmet need even in melanoma. Checkpoint inhibition is not sufficient even for melanoma. Removing immune brakes, that's what the checkpoint inhibitors do. It's just not sufficient for majority of patients with cancer. So the Ascendis pipeline is trying to look at and develop product candidates with different modes of action. Our first product candidate, as Kennett has mentioned is resiquimod, which is a very potent TLR 7/8 Agonist. It is a small molecule agonist of both TLR7/8, I won't go into too much detail because Dr. Davar is actually an expert in innate immune activators, and he will talk more about them later. Our Phase I/II first-in-human trial is called transcendIT-101. And in fact, Dr. Davar gave an oral presentation of our monotherapy recommended Phase II dose data package at SITC last year in the fall. We declared recommended Phase II dose at 0.5 milligram per lesion to be injected. And I would just like to highlight some key observations that provide clinical validation of our technology. We have seen that the drug is generally safe. We had seen 1 dose-limiting toxicity of a Grade 3 local injection site reaction. We dosed 23 patients treated in dose escalation cohorts as monotherapy or in combination with pembrolizumab. Our PK data showed that the drug behaves as expected, there was very low systemic exposure, sustained release of resiquimod over weeks after a single injection. We had biomarker data you'll see more of them today from Dr. Davar There is target engagement in not just the injected tumor but also in the noninjected tumors along with sustained systemic immune response. We have seen some preliminary clinical activity, antitumor effect, not only in the injected but also in noninjected tumors. And we have somewhat more updated clinical data for you today. This slide just highlights what you saw at SITC of the clinical activity, swim lanes on the left, the blue bars are the patients treated with monotherapy highlighting there were 2 patients with responses, 1 was a confirmed response, 1 was an unconfirmed partial response. On the right-hand side waterfall highlighting here a non-injected lesion that reach ACR. We are continuing to enroll patients with monotherapy, and we are continuing to see in additional patients abscopal effect. So the highlight of today is really to provide you our first clinical data on our second drug product, which is IL-2 beta/gamma. People sometimes forget that aldesleukin or proleukin was approved some 30 years ago, starting renal cell and then for melanoma. But what people, particularly clinicians who have had to give it, it is hard to forget how hard it was to give it. Patients had to be hospitalized oftentimes in the ICU. Aldesleukin is given every 8 hours, have to be monitored. We try to give as many doses as tolerated, but oftentimes patients cannot tolerate half of the doses that were prescribed. But the clinical experience with Aldesleukin actually suggests that the more drug you are able to give to the patients, you would see higher lymphocyte counts, perhaps more sustained lymphocyte exposure and that leads to better efficacy. This is some very old data that you can see on the left-hand side. But the general sense is if you can push more drug in patients to allow for sustained immune activation, you may get better efficacy. The challenge has been toxicity. We have seen vascular leak syndrome, severe cytokine release syndrome requiring vasopressors, oxygen support due to the IL-2 receptor alpha binding to eosinophils and endothelial cells. So as Kennett has described, we're trying to overcome those challenges with both how we are designing, how we're altering IL-2 and also putting it in the TransCon carrier. So maximizing IL-2 therapy has so far been limited by toxicity or insufficient lymphocyte expansion. You can see here, Aldesleukin actually does pretty well for those patients who can tolerate it. So recent clinical programs and there has been 20-plus, I think many of you have been following. They demonstrate generally improved tolerability and somewhat improved PK properties with the aim to have better efficacy. But if you look closely at the scientific data, the actual extent to both magnitude and duration of lymphocyte expansion has not clearly surpassed that of aldesleukin. So on the left-hand side here is some simulation of aldesleukin. You can see over 5 days there is a wide range of drug exposure. And it is Cmax that's giving patients a lot of side effects of the alpha activity. On the right-hand side, as Kennett has described, with the TransCon technology, we're hoping to be able to provide a drug product that will allow IV outpatient once every 3 weeks until a patient has progressive disease. Our Phase I/II first-in-human trial is called IL-Believe. It is a fairly standard Phase I/II trial. We have a dose escalation portion and also dose expansion at the recommended Phase II dose identified from dose escalation. So today, it's really our first clinical data. We have reached a milestone, which is declaring recommended Phase II dose out of monotherapy dose escalation. You can see we have evaluated 5 different dose levels. It's not showing you the sequence, but we went from 20-microgram per kilogram to 40 to 80 to 160. And based on tolerability, I'm going to show you in a bit, we stepped down a little bit to 120, which then ultimately became our recommended Phase II dose. Our combination with pembrolizumab is ongoing, we'll show you data towards end of this year. We won't talk about our dose expansions until much later today on next steps. So focusing on our monotherapy dose escalation, you can see the generally 3+3 design. There are very few patients in each dose level and how many DLTs that we have observed here, you can already see we saw 1 DLT at the 160 microgram per kilogram dose. On the right-hand side is really top line demographics. So remember, Phase I dose escalation patients, they tend to be your very late line, diverse tumor types, very hard to treat patients who have no other standard of care treatment options. Prior lines of systemic therapies out of our 25 patients in monotherapy dose escalation was 4, who have a range from 1 to 15. Many of these patients actually had also participated in other clinical trials and have progressed. About 1/3 of our patients in monotherapy dose escalation had higher checkpoint inhibitor. Of the most common tumor types we saw, head and neck cancer, colorectal, ovarian and pancreas. This table provides you with very top line safety information out of monotherapy dose escalation. You can see across different dose levels, we saw 1 dose-limiting toxicity at 160. We can see that majority of the Grade 3 or higher treatment-related adverse events happen at the 160 dose will tell you what those are in the next slide. You can see a few patients with treatment-related adverse events that led to treatment discontinuation. Again, I'll show you what those are in the next slide, and no patient died due to treatment-emergent adverse events on study treatment. So here describing a little bit more detail about what those numbers mean in patients. So our dose-limiting toxicity of 160 was a patient with Grade 3 cytokine release syndrome. Also at the 160 dose we had patients that had Grade 3 hypoxia, the same patient worsening CRS was the DLT, and we had a couple of patients with significant cytopenias. Also at the 160 dose, we had a Grade 4 lung infection not related to study drug. At the 120 dose, now this is our recommended Phase II dose, out of 8 patients dosed, we did not see any DLT. We had no Grade 3 or higher adverse events related to study drug. We had 2 patients that discontinue because of treatment-emergent adverse events. One was a patient with Grade 1 CRS who also had worsening cancer pain, and we had a second patient with Grade 4 septic shock not related to study drug. You can see at the lower dose levels, the drug was generally very well tolerated. So moving on to pharmacodynamics effect. We're going to start out with absolute lymphocyte count. You can see that on the left-hand side and eosinophil count on the right-hand side. Looking at absolute lymphocyte count across from different dose levels. You can see at the 120 and 160 dose, we are really reaching on treatment, a lymphocyte level that is above normal range, 1 week after dosing. On the right-hand side in the eosinophils, you can see -- and also based on the Y axis here, within the normal range on treatment, there's really no dose effect, across dose levels or on study treatment. Now this is an indication that we have a non-alpha drug. Looking at the specific lymphocyte subtypes. In particular, cytotoxic immune cells, CD8-positive T cells and NK cells. Those are the first 2 graphs that you see. And then the Tregs. Looking initially at the CD8-positive T cells and NK cells, you see again a dose effect and also on treatment effect. And actually, although sample size is small at the 120-microgram per kilogram dose, our recommended Phase III dose, there is a clear on-treatment effect of expansion of CD8-positive T cells. And if you look at NK cells, our on-treatment number goes up to 2,000 cells per microliter on treatment at the 120 dose. On the other hand, Tregs. Again, I would like to point out the Y axis here is in hundreds, whereas the cytotoxic immune cells, the Y axis start in the thousands, right? So if you look at Tregs within the normal range, even though there is a small treatment effect even on treatment, your number of Tregs stay within the normal range. So put this a little bit more in context together in the same graph so you get a better idea of the magnitude of difference of expansion. So in blue, we have your cytotoxic immune cells, your NK cells and your CD8s, and the Tregs are the black bars. You can see the different dose levels, the available samples for flow and the predose and cycle 1, day 8 values. I think even with small sample size across the different dose levels, 1 thing that is clear is that there is a clear on-treatment effect of expansion of cytotoxic immune cells from generally less than 50% pretreatment to more than 50% when you're on treatment. If you look at our recommended Phase II dose, predose, you're looking at about 300 cells pre-dose of your cytotoxic immune cells, on treatment, you're looking at about 3,000 cells per microliter. There is about a tenfold increase in amount of cytotoxic immune cells that you can get on study treatment at our recommended Phase II dose. Now how may dose immune correlates translate to potential clinical benefit for patients? So we have very short follow-up, very early data. This is our first milestone declaring recommended Phase II dose. So you can see here in the swimmers plot the different dose levels. The patients who are as of April 28 data cut efficacy evaluable. So efficacy evaluable are patients who had reached the first tumor assessment at 90 or they have died. So you have seen a few patients here who have died, but not yet had a tumor assessment. But that's how we define our efficacy evaluable population. At our recommended Phase II dose, currently, we only have 3 patients who are efficacy evaluable. We have 3 patients ongoing who have not yet reached the assessment time point, and we have 2 patients, as I described to you earlier, who discontinued due to an adverse events. There are 2 patients, we would like to provide a little bit more detail on to illustrate again, small sample sizes. So we're going to have to look at this in a little bit more detail at patients who might have derived some clinical benefit from study treatment -- monotherapy study treatment. So what's highlighted here patient one is a patient with MSI-high colorectal cancer whose had 5 prior lines of systemic treatment who's progressed on prior anti-PD-1. We'll describe this patient in detail. And patient 2 is actually Dr. Davar's patient. So he's going to talk more in detail about that patient. It's a pancreatic cancer patient, 3 prior lines of treatment, who has been on stable disease for a year on monotherapy, TransCon IL-2 beta/gamma. So the details on patient 1. This was a heavily pretreated patient with metastatic colorectal cancer. This patient had microsatellite instability high MSI high, also a BRAF mutation. Previously, you can see from the time line we put on the right-hand side, along with the 5 prior lines of systemic treatment, many of these are combination chemotherapy agents, targeted treatments. We've highlighted when the patient received nivolumab back in 2020. Patient progressed on each of these treatment lines and also best overall response for each of this with stable disease. And patient came on to our study in February this year and patient at the first tumor assessment at 9 weeks, actually just before our data cut had a tumor assessment that showed a partial response. This patient had target lesions, peritoneal deposits next to the spleen, omental soft tissue nodule, nontarget lesions were all in the omentum and peritoneum that are hard to measure. Patient is tolerating treatment fairly well with Grade 1 and Grade 2 side effects from study drug. Now the second patient, again, Dr. Davar will go into more detail about this patient who's received as of earlier this month, 13 cycles of study treatment. And I think that is something we'd like to highlight, which is the fact that we would like to develop IL-2 therapy that can be given chronically as an outpatient. So this looks like an index card for you kind of take home messages on our recommended Phase II dose for TransCon IL-2 beta/gamma, which was declared earlier this month at 120-microgram per kilogram IV every 3 weeks as an outpatient. We've seen from the safety profile, it is generally well tolerated. At the recommended Phase II dose, no DLT out of 8 patients dosed, no vascular leak syndrome, no grade 3 or 4 cytokine release syndrome. We have a long effective half-life more than 35 hours, we have seen low Cmax. We have seen evidence that our drug expands local and systemic cytotoxic immune effector cells specifically the CD8-positive T cells and NK cells without clear effects on Tregs and eosinophils, really providing evidence that we have a non-alpha drug. We have seen very early clinical benefit observed with monotherapy in heavily pretreated patients. So what are our next steps now that we have the recommended Phase II dose? We are going to Phase II, indication-specific cohorts. Now we've picked some what we call first wave or our first indications are selected for speed to meaningful endpoint readout and the current treatment landscape. You can see here the different dose expansion cohorts we have in protocols right now in 7 different tumor types. And just like a standard dose expansion, about 40 patients per cohort. So these are in melanoma, cutaneous, squam, head and neck, cervical, other HPV-associated tumor types, non-small cell lung cancer in the neoadjuvant setting and platinum-resistant ovarian cancer. We are also planning a randomized Phase II trial in neoadjuvant head and neck to start this year. We expect to have top line or interim analyses from these Phase II dose expansion cohorts in 2024. So aside from current ongoing trials, what do we want to do with our drug that we believe may become backbone treatment in oncology. We believe in the power of combinations for patients to achieve the best benefit. So we are looking around at the different potential combinations. And we believe that TransCon IL-2 beta/gamma by amplifying the immune signal can truly add to benefit of many other treatments or treatment modalities out there. We can see the IO combinations, cytotoxics, antibodies or even use it as adjuvant such as for cancer vaccines or cellular therapies. So these are all avenues we are exploring currently. So I think to sum up, I would like to say, across both our programs, we have now declared recommend the phase II dose, we have shown what we needed to show out of a Phase I dose escalation, which is that our products are safe at the recommended Phase II dose and that we've seen preliminary evidence of clinical activity as a monotherapy. We have a broad clinical development plan that is already in place, and we look to further expand it. We believe that the TransCon platform really gives a potential best-in-class platform to differentiate our product candidates from what is out there today. So with that, I would like to turn the podium over to Dr. Diwakar Davar, who has been an investigator with us for both of our first in human trials. He is our Clinical Director of Melanoma and Skin Cancer Program at the University of Pittsburgh Medical Center, Human Cancer Center. So Dr. Davar.

Thank you, Stina. Thank you all for having me. So Stina briefly mentioned a patient of ours being treated on IL-2 beta/gamma product. So I'll give you guys a brief outlook of this patient we've been treating right now. So this is an older Caucasian male with advanced metastatic pancreatic cancer much like almost everybody else with this disease, this patient has got microsatellite stable disease, non-targetable KRAS G12V mutation, extensive prior systemic therapies with only really disease progression being his best overall response to chemotherapy, chemotherapy and more chemotherapy. And he essentially enrolled in the clinical trial at the 80-microgram per kilogram dose level in June of last year. After about 4 cycles of therapy, the patient had cytokine release syndrome, as you've seen earlier, in Stina's AE table, this was graded as being Grade 2. Tocilizumab was added with cycle 8, and that actually has provided a significant amount of benefit and he's had consistent stable disease since then. The major treatment-related adverse events included Grade 2 CRS clearly related to the drug, infusion reactions and a transient reduction in his total white cell count. Now what you can see here is that on treatment, he's had a very remarkable reduction in his tumor markers, which is, in this case, CA19-9. It's very interestingly -- it's very interesting to see that it goes down on treatment. It goes up when you hold therapy. In this case, this patient had -- which is not uncommon for this disease, grade 3 bacteremia and unrelated to the drug. And in the context of the treatment being held, the tumor marker goes up when the treatment gets restarted, the tumor marker comes down. And so very interesting kinetics in relation to the use of the drug in this patient. Clear ongoing confirmed disease stabilization lasting more than a year, which in the context of heavily pretreated pancreatic cancer is quite remarkable, right? So the median survival for these patients is oftentimes about 2 years. This guy is therefore, 1 year past its expiration date, and he's doing well, doing his thing, mowing his lawn, not quite going to the gym because people from Western Pennsylvania don't do that, unlike you guys sitting in the audience and he is driving continued benefit. So what you can see is the summary of his total tumor changes, you can see that he's got a very large amount of tumor at baseline. So the average some of diameters of all his tumor is 60 millimeters, which is about 6 centimeters of tumor. So this is not exactly low tumor burden. And every 1 of these target lesions keeps being stable. There are no new lesions and it's continued SD. So again, in summary, durable response and durable stable disease in a heavily pretreated, widely metastatic patient with chemotherapy refractory pancreatic cancer. Initially, at the 80, then dose reduced to the 40 microgram per kilogram dose level with lung and liver involvement, all of the target lesions of which are showing disease stabilization at approximately 1 year. So why are we excited about this, right? Why am I excited about this? I'm a translational scientist, I run a lab. Why am I excited about it? So the answer is, you heard from Jan earlier that IL-2 Agonists are essentially the first demonstration of immunotherapy. And that's actually true, right? So for those of you guys who are not old enough to know this because some of you look really young. I'm old enough to, unfortunately, have taken care of patients who while in the early days of oncology. So these are dark ages, right? So in Pittsburgh, for example, where we ran one of the first IL-2 programs, IL-2 is not on formulary in Canada. Patients used to fly down from Manitoba. So if you were in Canada, they have to fly you somewhere else to get treatment. So we were seeing patients who have flown down to get IL-2 therapy, all right? And the issue with the first generation of IL-2 was that it was undoubtedly effective, all right? This is the very first immunotherapy, cells that were isolated, first actually demonstration of recombinant use of cells -- growth of cells ex vivo. IL-2 generated by Steve Rosenberg's group demonstrating that you could expand cells in vivo in humans. And aldesleukin produced durable responses and led to the first approval of immune therapy for the treatment of advanced cancer. Initially, RCC, subsequently melanoma, 1992, 1998 -- 1988 and 1998. And these cells, these drugs essentially work by essentially activating T cells and NK cells. And the aim of the second generation of IL-2 agents, and even if you think about it, the first generation of IL-2 agents were approved before I was in medical school, right, in the 1990s, and then it takes like almost 2 decades to get to the second version. And the reason there is this 2-decade gap is not because people are just sitting down and doing nothing. It's because there were other agents that were developed. So there was a whole slew of immune checkpoint inhibitors that were developed based on our understanding of immune checkpoints. But the key thing to understand about immune checkpoints is that they are transformational drugs, right? There's no taking away from the fact that they are extraordinarily effective agents but they come at a cost. And that cost is the fact that the PD-1, PD-L1 checkpoint and similarly with the CTLA, CD28, B7-H1 mechanism are designed as checkpoints. They're designed to actually restrict immune activation. So when you have loss of tolerance, what immune checkpoints do is that they uncouple the balance between immune response and immune tolerance. So for every effect, there's an equal and opposite reaction. So with the immune checkpoint inhibitors, which are undoubtedly effective. The major heel of immune checkpoint inhibition has been the development of immune-related adverse events. And this was particularly seen with CTLA-4, right, which is the first drug that was actually FDA approved to treat this disease, where we have a response rate of between 12% to 15%, but immune-related adverse event rate of about 30%. Now again, at the time in which you have no other drug available to treat outpatient cancer this seems like a really good idea. But when you start thinking of these drugs in context, now if I -- right now, if one of you guys were a patient. And I said, "I've got an agent that's got a 15% remission rate. Oh, but by the way, it's going to give you a really bad diarrhea 30% of the time". Now that doesn't seem very appealing. And so the idea right now, the new generation of these IL-2 agonists are designed to harness the key immune effector cells that we have, T cells and particularly NK cells, which unfortunately, for reasons that I'm not entirely clear on and do not get enough headlines. Without the requirement for additional co-stim or co-inhibition and therefore, abrogating the need to worry about immune-related adverse events. And so the preclinical data behind this and the early clinical data behind this really suggests that what IL-2 does is that it activates and now this we know in more detail because of the recent data from Rafi Ahmed's group, that essentially the stem-like CD8 T cells that are essentially not fate-locks. So there's -- there was this idea that essentially PD-1 represents a pathway that essentially locks the expression of which locks T cells into expression of checkpoint inhibitors and these checkpoint inhibitors represent a pathway of exhaustion and exhaustion results internally exhausted T cells. And what we now know is that the TCF1 subpopulation of PD-1 expressing T cells are essentially not quite fate-lock, they're stem-like, and they just need the right cues in order to get them to become effector cells. The antigen-specific T cells, they upregulate increasing amongst the high affinity receptor and the combination therapy with single-agent therapy with IL-2 as well as combinations with checkpoint demonstrates tremendous amounts of synergy in multiple preclinical cancer models as well as the viral LCNV model. And even though early data suggested that the synergy was dependent upon CD25 coengagement, it's important to highlight that, that data is not quite necessarily seen with all of the drugs, and it's really the important aspect of the functional efficacy of the drugs is dependent on beta/gamma binding. The whole slew of agents that have been developed, and I will highlight that we're not included, at least I have not included BEMPEG as well as the Sanofi THOR-707 data in this list. And the reason for that is because BEMPEG was a drug that has developed to much fanfare. And if you look at the drug from a structural perspective, really kind of sort of looks like IL-2, meaning like aldesleukin. And if -- when it was studied in the early Phase I, Phase II trials, in a program that was developed together initially at Nektar and then subsequently co-developed with BMS. The Phase I, Phase II results were quite promising in multiple diseases, primarily renal cell carcinoma as well as melanoma. And this Phase III trial was essentially a dead negative, right? So the Phase III trial was NIVO/BEMPEG versus NIVO. The response rate of BEMPEG/NIVO was 28% relative to 36%, and this has already been publicly reported. THOR-707 was essentially a trial that was then subsequently developed by Sanofi to speculate the IL-2 mutant, the Phase II results of the Q3 combination with checkpoint has been reported. The program has -- it's now been publicly reported that the program has been deprioritized and a dose intensification trial has been announced, but there's no further information about this. What you'll see, therefore, if you look at the available data is that there are multiple agents that are out there such as nemvaleukin, which is an IL-2 CD25 fusion and a whole host of IL-2 antibodies. But there is a clear trend, which is trying to generate proof-of-concept data in melanoma and renal cell carcinoma primarily given the original indications for aldesleukin and expansions in certain key tumor types, wherein the single-agent activity of PD-1 is low, suggesting that you can overcome the response and produce meaningful responses as a single agent. And there are a couple of key unexplored indications, which I think are actually quite important and that includes a neoadjuvant setting in both melanoma and non-small cell lung cancer and also other cutaneous tumor types, wherein CTLA-4 has not been added. So cutaneous tumor types are very interesting because the primary reason why they respond to immune therapy is because of a high tumor mutation burden. So these are tumor types like cutaneous squamous cell carcinoma, single agent response to checkpoint inhibitor therapy, 35% to 45%. Merkel cell carcinoma single agent response to checkpoint inhibitor therapy, 40%, 50%. And you don't add CTLA-4 to these, right, the CTLA-4 is not FDA approved in these agents. And it represents an area where you can potentially supplant PD-1 monotherapy if IL-2 has got an active efficacy in this space. So I've highlighted a couple of these programs. And I think what we are very excited about is the willingness of a company like Ascendis to consider these relatively unusual indications where we clearly need a big team thinking about how to go into this space. And they represent potentially transformational areas where a company can make a huge impact. And so neoadjuvant melanoma, for example. The drug checkpoint inhibitor therapy is approved in melanoma for -- since 2015, all right? So that's 8 years. When's the last time a Phase III trial in melanoma was done? Well, it hasn't. The first approval of neoadjuvant immunotherapy to treat cancer has been in non-small cell lung cancer, breast cancer. And the primary reason why that has been the case is because it's been a lack of willingness on the part of mostly investigators, people like myself, to try to push the boundaries of novel agents. And so hopefully, now that we have partners in the pharmaceutical space, we can start thinking about doing some of these things. So why are we very excited about this? Well, the key thing is that immune checkpoint inhibitor resistance is actually under spoken. So we have this idea that immune therapy is going to cure all cancer. And that's kind of sort of true but not completely. And the reason it's not completely true is because as you've seen in the plot from Stina, the best available immune therapy we have, cures cancer, about produces durable responses about 40% of the time, right? So CheckMate 067, ipi/nivo with ipi at 3 milligrams per kilogram dosed every 3 weeks for 4 doses, the 5-year -- 6.5 years OS data has already been released, but the durable response rate is 39%, all right? So the best available stuff we have is 39%. And as much as cell therapy gets all these hype about curing patients, we have to keep in mind that the vast majority of patients are not cell therapy eligible, right? Because cell therapy requires chemotherapy to cause essentially a reduction in the amounts of immune system function to allow the cells to take root. And that immune system depletion with lymphodepleting chemotherapy is actually quite hard for anybody above the age of 75 to tolerate. So where -- what we have here is a novel setting in which checkpoint inhibitor resistance can be overcome by key elements of both the adaptive and the innate immune system. Innate is a very interesting target. The reason, the innate system is very important, is because you, me and reptiles have toll-like agonists. And the reason is because we've been fighting predators in this case, bacteria for a very, very, very long time. And the innate immune system has been designed to be able to do that. And unfortunately, and attempts at targeting using the innate immune system to target cancer have not worked up until relatively recently. So for example, attempts at using STING, RIG 1, NLRP3 have not worked primarily because their preclinical data did -- even though it was excellent, did not quite translate into effective antitumor cancer responses in humans. The exception to this has been the toll receptor pathway. So the TLR agonists that have been developed, TLR 7/8, resiquimod; TLR9 CheckMate's vidutolimod. These have shown repeatedly demonstrable evidence of antitumor immune responses in cancer patients, and they have now gone on to further development. And so what we are very excited about is the use of immune checkpoint inhibitor combinations, innate agonist plus certain arms of the adaptive immune system to overcome immune resistance. So toll-like receptor pathways are very well-validated targets for the activation of innate and adaptive immune system. They represent means by which you can expand and produce type 1 interferon, which is essentially the fuel that funnels T cells. And resiquimod, which is the active ingredient in the Ascendis TLR 7/8 Agonist program essentially is a very, very potent TLR 7/8 agonist. And in combination with -- by producing a huge amounts of type 1 interferon, you're essentially expanding T cells, you're educating T cells. The type 1 interferon signal is magnified and cascades downstream. And hopefully, what you have is an antitumor immune response. So resiquimod small molecule agonist of 7 and 8, 7 is expressed on PDCs, 8 DCs as well as macrophages and potent activation of the innate immune system. The importance of TLR immune activation cannot possibly be overstated. So the classical example that I give people is the Shingrix vaccine, right? So almost everybody in the room, hopefully, has been vaccinated against hepatitis B. If you did not have a TLR agonist in the hepatitis B vaccine, you'd be vaccinating people repeatedly. On the other hand, you have vaccination schedule with Shingrix is 3 doses, 0, 1 month, 6 months. And the reason for that is because of memory responses. And the memory responses happen because of the vaccine ingredient, in this case the TLR agonist. In the transcendIT-101 trial cohort, there were dose optimization and dose expansions. The dose optimization was involved a monotherapy arm with -- that basically enrolled any number of patients, any line of therapy as long as they had an injectable tumor, combination therapy in tumor types where there was known checkpoint inhibitor benefit in combination with checkpoint. And then there were dose expansions, multiple dose expansions as you've seen in Stina's slides. But the interesting dose expansions are really the neoadjuvant melanoma and squamous cohorts. In summary, from the PK and PD data that we released at SITC earlier that I presented, it's a well-tolerated agent. There's a low incidence of DLTs, the one DLT that was seen was a Grade 3 injection site reaction. And all the treatment-related adverse events that were considered related to Grade 1 or Grade 2, except for the 1 injection site reaction. In the PK, there's very low resiquimod Cmax systemically, likely due to the fact of the construct and there's no drug interaction with pembro. The mean half-life of the drug is 9 days and it doesn't appear to accumulate. And that's actually a very important thing, the lack of accumulation, you will see there was a paper from Novartis. The first author is Filip Janku, and the reason for that is because 7/8 has got a very narrow therapeutic index. And what Novartis did was they actually created this rather interesting agent, which was essentially a HER2-linked-TLR7/8 program, and they gave it to patients, there was some very, very nice progressions, but the toxicity was quite overwhelming. And so the fact that we're not seeing a lot of DLTs, with a low systemic concentration is actually very valuable because it tells you that the drug is having an effect from a PD perspective, but it's not having an undesired effect. And that's very important, given the narrow therapeutic index of 7/8 from a biological perspective. You can see here that we've got several patients now with durable responses, several of these patients are patients that I treated. 2 out of the 11 had a PR, 1 confirmed, 1 unconfirmed and 3 out of 11 actually had a CR, meaning a complete response even in uninjected lesion and some of these responses are actually ongoing. The most exciting data is actually the translational data. And what you see is that the overall idea of this drug is to activate innate and adaptive. And how is it doing that? Well, one, it's activating. There's clear induction and sustain of intratumoral TLR programming, resulting in type-1 interferon release. So I said that, and you're seeing it. And very importantly that activates macrophages because macrophages have the receptor on it, and the macrophage activation is seen both by immunohistochemistry as shown in the bottom left panel on the right, but also by plasma MCP-1, which essentially is a macrophage cytokine. Canonical TLR pathway activation results in CXCL10 induction. This is a graph that you've seen almost every single TLR paper, the 2 papers we published on vidutolimod have the same CXCL10 induction. What you'll see here is that the CXCL10 induction is significantly high. In fact, that Y-axis had to be broken to allow for the upper limit of CXCL10 induction to be illustrated. And that is associated with the PD effect in this case, the T cell influx. And you can see that the T cell influx is quite dramatic. And it's also very early, one week after dosing, you see T cells that are influx. So again, there are several candidates that are in development. The intratumoral candidates, Ascendis, major highlight sustained release, several systemic candidates, TLR-7/8 from Seven and Eight Biopharma, which is a salt form of resiquimod. The intratumoral agent initially from CheckMate now since acquired by Regeneron, vidutolimod currently in development as well. And then there are a couple of other agents such as the TAC-001 from Tallac. I will highlight the NKTR-262 agent has since been discontinued. So there are several agents that are in development, and we're going to hopefully see in the next couple of months to years how all of these agents will shake up. The major thing to highlight about these compounds is that when you look at the key properties that make for successful drug development, sustained exposure, a schedule that is tolerable, agent that has got limited systemic exposure. And the limited is key because, as I told you, look at the data from Novartis. When you have high amounts of systemic exposure, you have tox, which you don't want. And you have enough drug that you're having early sustained releases of pathway activation, CXCL-10 induction being the proximal measure of that. TransCon appears to have all the properties. The indications that are currently under development, include head and neck cancer and neoadjuvant melanoma and squam and potentially the opportunity to combine with a very exciting partner, in this case, beyond checkpoint, potentially with an IL-2 agent so that you get synergy without immune-related adverse events. And that would be quite exciting. So in summary, checkpoint inhibitors have been transformational. There's no getting away from that, but they have limitations. One, they don't work in everybody; two, they uncouple response from tolerance. And that is a problem that cannot possibly be overstated. So it is transformational. There's no getting away from that. But when you start seeing tox, grade 3 tox, grade 4 tox without means of addressing it, that becomes a real issue. Keep in mind that the first drug to treat stem cell transplants were FDA approved kind of sold in the 1960s and '70s to treat patients with hematological malignancies. The first drug to treat GVHD 2022, so that's 50 years of drug development in the hematological malignancy space before the primary dose-limiting toxicity of heme malignancies was addressed. And that's the problem with checkpoints. We are causing significant grade 3 tox and we don't have a way of treating it because the understanding of immune-related adverse events, the biology behind it, it means to treat it have lagged. Cytokines and intratumoral agents that at as innate agonists represent a means to overcome that. The primary target cells that we are hoping to target with this program, antigen-experienced T cells as well as NK cells. And that platform offers the ability to transform active drugs into prodrugs with sustained release properties. Both of these agents, therefore, have the potential to be quite transformational and the development strategy that you've heard outlined, I think, is a very promising one, and we're hoping to help partner with Ascendis and the Ascendis team. to at least try to get this advanced into human cancer patients with at least some of the indications. So with that, I'll thank you, and I'm happy to take any questions either now or later.

Thanks so much for really inspiring presentation and we come to questions pretty soon. I will make it very, very short. So I would just sum up. We saw the competitive landscape here from Davar and I actually saying, I will not talk more about it. But what we have done and seen in our TransCon TLR7/8 agonist is we solve a safety profile, generally well-tolerated below systemic effect exactly how it was designed. We solve a long effective half-life over weeks, 1 single injection inside the tumor -- exposure inside the tumor with low systemic effect, exactly how it got designed, sustained inflation in the tumor. We saw all the biomarker. We see the initial clinical response exactly as we have. We see abscopal effect in the non-injected with more patients having a complete response. Going to the IL-2 beta/gamma. I'm really excited about IL-2 beta/gamma because we see the unmet medical need. We heard the story about a checkpoint inhibitor. This is not a free launch. You are moving a national checkpoint system in the body. Not only we see the side effect, we also see the long-term complication of organ dysfunction and other things like that. We designed TransCon IL-2 because we believe in the vision of cytokine therapy. Think about a car, it's easier to get speed on by pressing a speeder than removing a brake. So we designed it. We solve a safety profile, generally well-tolerated, no DLT at the recommended Phase II. We saw the long effective half-life below Cmax we see exactly all the pillars. We have studied the 20, 30 years literature, trying to understand all the biology, how to decide it, how to build out the optimal compound, then we saw it in the preclinical data. And now we start to see it in the clinical data. I would like to compare some way to pass the benchmark that is out in the industry was THOR-707. And when we look on the compounds, they are built in some way in the same manner. Both of them have a pegylation directly into the alpha. One have 30 kilodalton PEG, one have like us have a 5-kilodalton PEG. We saw Kennett's presentation how you really are decreasing the potency when we go for 5 kilodalton up to 30 kilodalton. So when we look on the key element, we have about 120-microgram recommended Phase II THOR went down to 24 micrograms per kilo, more than fivefold difference. And then when you look on the potency, we believe the potency is somewhat much higher with the IL-2 for TransCon IL-2. Half-life, huge difference. This is really important because as we heard about it from the stories today, you need to have long-term exposure, really have a potent immune system for a long time, 35 hours compound to 9 to 12 hours, non-alpha both of them, but when we look on just the fold expansion and it's not really taken into the consideration the duration of the response. But just the fold expansion, you can also see the difference. When we look on expansion of CD8 cells 5.6 or 6 to 4, but expansion of NK cell for 20 to 8.4. Why CD8 is little bit different because CD8 is not like NK cells. As we heard the importance of NK cells. CD8 is really much more difficult to quantify it in the blood compartment because they also have a strong migration when they get activated into the tissues. So when you look on the NK cells, we don't have this, you really see the real proliferation of our system. We're not seeing any meaningful change in either eosinophils or Tregs. And when we see 3 available patients, we saw already one partially response. So THOR-707 is actually being repositioned now, as we said and heard before, it's basically going down to really trying to compensate for where we see this optimal treatment need to be is going in as a once weekly treatment now. It's being repositioned, start up again in Phase I, right, where it's been repositioned as a once weekly for the first 6 weeks and then moving over to a twice weekly or biweekly treatment regime. So where are we with Ascendis immunotherapy program? We see the diversity. We hear how we really want to make paradigm shift treatment regimes. We see the initial data coming in now. We see how we have now recommended Phase II from both programs. We saw the expected safety profile. We also saw the expected single clinical activity. This is exactly what we had hoped for in our initial clinical trial. We're now going into what we call cohort expansion as Stina said, and you heard about how we're going into more well-defined clinical indication, early-stage patient. So we really can see the clear effect. And what we believe we have started enrolling this patient and in 2024, it will be the year where we really come out with all the clinical data that really proving how we really are moving into oncology with these 2 paradigm shift compound. So I think we open now for the questions. So Scott, you are directing?

Patty, you'll have a microphone, and we'll come around and we just ask that maybe Tazeen, if you start, you can say your name and show everybody how you can identify yourself and then say the question out loud.

Good morning, everybody, Tazeen Ahmad from Bank of America. Just wanted to get some clarification about your chosen dose of 120. How are you thinking about durability of response and how long patients can stay on therapy? So if you go back to some of your earlier slides, you did see -- again, the ends are very small, but discontinuation at 80 from one case of cytokine release syndrome as well as at the 120. And I'm just trying to get a better sense of how you chose the 120 over the 80? And also perhaps for the doctor on pancreatic, I think you started the patient on 80 and then down dose to 40. How are you thinking about the 120 in respect to that particular type of patient?

Stina, will you start?

Yes, sure. Thanks for the great question. So in choosing between 80 and 120, we see that 120 has better pharmacodynamic effect than at 80. And the question is really, is that tolerable, right? So what we see in clinic is that if you start a patient at a certain dose and there is so much variability in how patients tolerate study treatment, if they need to, if you are at 120, it allows you a couple of dose reductions. We know 80 is effective. So it allows the dose reduction down to 80, if you start at 120. And we also know that patients have dose reduced down to 40. So it allows a couple of dose reductions as patients tolerate study treatment, where we think that starting out as a more optimal pharmacodynamic effect may be beneficial for patients. But to your point, we have very short follow-up so far. So I think with longer data, we'll be able to let you know how long are patients able to stay at 120 before they require a dose reduction.

Davar?

So just to answer your question about the patient at -- the pancreatic cancer patient. This patient started at 80, was dose reduced to 40 because of a Grade 2 cytokine release. I think Stina's point has to be really well taken, right? Like in a development program, you do not want to start low and go lower. You want to start at what you think is the right dose. And then if you have the opportunity to develop over time, and you see that there's [ stocks ], that is cumulative, you can always go down. But you can't do things the other way around. You can't declare your dose at 20 and then say, "Oh, you know what, I kind of wish I had gone to 80". That's what happened in tremelimumab, all right, and not going too well. So I think the key thing here is the Stina's observation that you pick the dose based on clinical activity and PK and PD parameters. And the best PK/PD appears to be at the 120 dose. And if you start there, you can always dose reduce, you can give patients the option to go down.

I think Stina there's also one additional point. When we look on day zero in the different cycles. We actually see we see an increase in baseline of the different lymphocyte. So when we add-on, add-in, we actually see a dose staggering effect. And this is potential also why you later on will see potential demand for lower doses.

Maybe across the other side of the room [indiscernible] .

I guess my first question is, have you seen any correlation between the lymphocyte count and the clinical benefit? And just how sustained this lymphocyte elevation that you've shown is after dosing? And also, do you have any infiltration data that you can show for these T cells and NK cells? And my second question is it looks like at 160-microgram dose, the activation of the lymphocyte is not as high as 120. So just wondering if there's just some variability here or there could be some other reasons?

Yes. I think I heard 3 questions in there. Let me see if I can remember them all. So first question is, I think it follows from what Jan said. So there appears in the few patients. So again, in Phase I dose escalation, you have heavily pretreated patients, right? So not many patients actually stay on stage treatment for a long time. So we have sparse data on repeat dosing and what is that level of lymphocyte count as patients stay on treatment. But a few patients who are able to have repeat dosing what we are seeing is that the baseline pre-dose every 3 weeks, the lymphocyte count seems to climb up. So I don't have long enough data or enough data to really show you, but we hope that by enrolling more patients, we'll be able to have that information for you. The second question on tumor infiltration and lymphocytes. We have sparse data of available biopsy data. We do see infiltration of lymphocytes on study treatment as correlating to study treatment infiltration of T lymphocytes into tissue. But again, sparse data, we hope to with additional patients provide you more information. The third question...

Variability of lymphocytes. .

Variability of lymphocytes at 160 dose. So if you remember, so we dosed 5 patients at the 160 dose. 2 of those patients have significant cytopenias, so I think the absolute lymphocyte count is actually confounded by the fact that these patients had cytopenia. So one patient had pancytopenia with all the different cell types. So even in that patient, his absolute lymphocyte count has increased, but the magnitude of increase by full change. That's not very impressive. So I think it is at the 160 dose, you are seeing an exaggerated IL-2 effect. And it has -- the absolute lymphocyte count, it's confounded somewhat if you're trying to interpret the amount of lymphocyte expansion.

And then actually, just a reminder for those online, you can send questions to ir@ascendispharma.com, and Tim's ready to ask them for you. Maybe next let's stay on this side of the room.

Jess Fye, JPMorgan. It looks like you're taking the IL-2 into a number of tumor-specific expansion cohorts. Depending on what you see from those cohorts, how would you characterize Ascendis' appetite to continue advancing that agent into what could potentially be a broad late-stage development program in the context of your other pipeline priorities?

The question that is reflecting -- what we call our success in oncology? What do we do with success in oncology? And I believe we, as a company, can never be a leader as we want to be a leader in endocrinology. We can be a leader in endocrinology. We cannot be a leader in oncology. This is why we feel that if we really want which is our mission is to come out with as many patients as possible to really to benefit them in the treatment, we need to have strategic partnerships. We need to work with other company really to expand our vision to develop IL-2 beta/gamma to be a backbone in oncology treatment. So you're 100% right. We will really be looking about how we really can do the best for the patients. How can we really get this treatment out to as many as possible different trials in different indication, and we need partnerships for that.

Maybe on the other side of room. Dave?

This is Dave Lebowitz from Citi. You referenced the Cmax being a contributor to the tolerability issues with prior generation IL-2, how definitive is that correlation? And how much do you think that the more steady PK of your IL-2 will improve the tolerability?

Will you start Kennett or?

It's yours. It is clear that tox comes from the amount of immune stimulation that put into the system. So what we have then tried to do with making the prodrug is, yes, you have a potent molecule, but it's slowly released. So you can give what you want a drug that is supposed to last in the treatment interval of every 3 weeks, for example. But you're only gradually releasing it into the system. So while you're giving all of the drug on day 1, it's not active but only slowly becomes activated. In contrast, if you have a permanently pegylated compound, everything that you give on day 1 is active all of it. So the max exposure you get at that time part is multiple times higher and then it gradually declines over time. So there's a kinetic dissonance between the tolerability and the exposure that you can get with the permanent conjugation technology compared to a prodrug technology. And this is where we saw and believe that there is a clear benefit of using prodrug technology in order to kind of get the exposure you want, the potency you want, but with a low Cmax.

I think Patty gave up. Paul, you have the...

Paul Choi with Goldman Sachs. Maybe for Stina and Dr. Davar. Can you -- I think you provided some baseline demographics on patients who are PD-1 experience. But could you maybe comment on sort of how many patients in your baseline were PD-L1 positive at baseline? And did you see any conversions of patients who are negative to positive status with increased exposure? Dr. Davar, do you think that's particularly important?

Yes. So we -- so not -- as you see, many of those tumor types actually are not really appropriate for checkpoint inhibitors, right? Checkpoint inhibitors is actually not in many of those tumor types. So which means that a lot of those patients, we collect the local lab information on PD-L1 status, but many of them don't provide it because it is not standard of care to check for PD-L1 status on those tumor types. So we have collected of available patient tumor biopsies on treatment. We have collected the information. It's very sparse information right now, and we plan to disclose the information at a medical conference later.

So your question for me is, do I think that the conversion from PD-L1 negative to positive if observed is important. Is that right?

Yes. Increase your conviction in IL-2 beta/gamma there.

So what I would say is that, the problem with PD-L1 as a biomarker is that outside of maybe 3 diseases. it's in the frontline setting, it's quite uninterpretable. So I think what you would -- if you're looking for a proximal readout of the efficacy of a drug like IL-2 beta/gamma, any IL-2 program, right, it probably behooves us to focus on the effect of the T cell. Because the issue with PD-L1 is functionally PD-L1 is a transient protein that is upregulated by interferon gamma. So what it means is you need to know when to look, where to look and you have to be lucky, right? And so using that as a biomarker of the PD effect of the drug is not necessarily the best way to gauge the PD effect of the drug because it doesn't mean if it's not there that you won't see it, it could just mean that you looked at the wrong time, the wrong place and did not use the right, in this case, stain. So the possible way to solve this problem is to really look for T cells and NK cells, which are the most proximal effect of having a successful immune engagement, right? So if you did that, what you would probably do is look early, right, 1 week ideally, 2 weeks up to and look for sustained increases in CD8 T cells and NK cells, you'd be looking in the tumor. And if you happen to see PD-L1 there, then, okay, fine, that's great. If you didn't see it there, but you saw T cells that, that's probably more important. It's probably more important to see T cells than it is to see PD-L1 status. Now you can look at that collectively, but probably T cells and NK cells would be what I would focus on.

And then just one more. You showed us some data on the CD8 expansions that you've seen so far. But can you maybe also comment on what you've seen with CD4s, how that looks relative to the data here? And is that an important consideration as you're thinking about your expansion strategy?