Eledon Pharmaceuticals, Inc. (ELDN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Eledon Pharmaceuticals Phase II BESTOW Results Conference Call. [Operator Instructions] This call is being recorded on Friday, November 7, 2025. And I would now like to turn the conference over to Dr. David-Alexander Gros. Thank you. Please go ahead.

Thank you, operator, and good morning, everyone, and thank you for joining us on our call to review Eledon's Phase II BESTOW data that we presented last night. I'm -- this is David-Alexander Gros, I'm the CEO of Eledon, and I'm joined here today by my team with Steve Perrin, our President and Chief Scientific Officer; Paul Little, our Chief Financial Officer; Elie Katz, our Chief Medical Officer; Dave Hovland, our Chief Regulatory Officer. And we're also happy to be joined today by Dr. Andrew Adams, who presented the data last night at ASN. He is Professor and Chief of the Transplantation Division at the University of Minnesota. Moving on to the forward-looking statement slide. We will be making forward-looking statements, so please review this slide carefully. Moving to Slide 3. We are developing tegoprubart principally around transplantation. We believe that tegoprubart can become the cornerstone maintenance chronic immunosuppressive medicine across all transplant types. So, across all solid organs, cellular types of transplants, as well as regardless of the source of organs. So whether organs are coming from diseased donors as is most typical living donors or as we advance the technology, even xenotransplantation. Today, we'll be covering the data from our latest kidney transplant study. We presented data over the summer from a Phase Ib study as well and the patients from both this study as well as the Phase Ib study can opt to continue in a long-term extension study that will allow us to have data that we can report out in the future. Other than kidney transplantation, we also have trials ongoing in islet cell transplantation and are poised to start a study in kidney tolerance. And aside from that, we have -- we are continuing to do work in the xenotransplantation space. Before we go and review our data, maybe we'll take a step back to talk about immunosuppression overall and the unmet need in transplantation. And for that, I will turn the microphone over to Andrew.

Yes. Thank you, David. I think for transplantation, the success that we've seen over the last few decades has really been mirrored with new development of drugs to prevent rejection. And while those drugs do a great job at that, the control of the immune system is really the foremost piece that we need to think about. And so, when a patient comes in for a transplant, unless they have an identical twin, they're going to see it as a foreign piece of tissue or organ. And the immune response will try and reject that organ. And so, we divide immunosuppression up into 2 phases. The induction phase is the initial phase when they get the transplant. And it's given at that time. Usually, nowadays, it's Thymoglobulin, which is a polyclonal prep to reduce the number of immune cells that can attack the organ. And then secondarily, they're placed on chronic immunosuppression, which they have to take for their life. Any time they stop that immunosuppression, their organ will be at risk for rejection, and that will be taken for years. So, the unmet need in kidney transplantation really surrounds the drugs that we're using to prevent rejection of the organ, keep it healthy. And tacrolimus is a calcineurin inhibitor, a small molecule that's been around for a few decades now. And while it does a great job at preventing acute rejection, it has some limitations. And so right now, it's the primary immunosuppressant for kidney transplant recipients. It's the standard of care. But as we see patients take that medicine over their lifetime, we understand that the limitations that it brings with it, including prolonging the life of the kidney is only in a limited phase. So, we expect diseased donor transplants only to last 8 to 10 years, living donor transplants a little longer than that. And many of those are related to the effects of the drug. It's toxicities that patients have to endure, including kidney injury, neurotoxicity like tremors, headaches, other things like increased risk of hypertension, nuance of diabetes, which increased their cardiovascular risk for their lifetime. And then lastly, it's really a complex drug to use. There's a therapeutic index that's very narrow with calcineurin inhibitor. Unlike a daily drug that you might take an aspirin or another medicine for high blood pressure or high cholesterol, tacrolimus is very complex. The dose changes often, especially in the early transplant period. There are multiple capsules that are needed to take twice a day. And so it's really a high pill burden and that leads to problems with adherence and complexity of care. So it really makes the case that we need a new medicine to help reduce toxicity and prolong the life of the kidney transplant.

Thank you. Moving on to the BESTOW study itself. The BESTOW trial was the first study comparing head-to-head tacrolimus, so the current standard of care to a CD40 ligand antibody. The study was designed around standard of care. So essentially, we had 2 arms, one on standard of care, including including rabbit ATG as an induction immunosuppression and a second arm where we removed the tacrolimus and replaced it with tegoprubart. So, a calcineurin-free arm. Moving on to Slide 8. The endpoint of the study was superiority as measured by eGFR or kidney function. The reason why we used that as an endpoint was that eGFR as a single variable is the best single factor to help predict how long a transplanted kidney is likely to function. Historically, eGFRs have been in the low to mid-50s range. And as you can see on this slide, over time, the side effects of calcineurin inhibitors that Andrew mentioned, so the direct nephrotoxicity as well as the indirect nephrotoxicity from hyperglycemia and hypertension can eat away that kidney function and so cause the eGFRs to decrease. As one of our secondary endpoints, we also looked at what is the actual approvable endpoint today from the U.S. FDA's perspective. And that is a different endpoint. It does not use eGFR. It's a composite endpoint looking at biopsy-proven acute rejection, graft loss and death. And the approvable endpoint has been noninferiority based on that composite. Moving on to the conclusion slide. Overall, we are very happy with the way tegoprubart performed. Tego did everything that we could have hoped that tego would do. If we start with approvable endpoint, so the composite endpoint that I mentioned, despite the fact that the study was not powered to demonstrate noninferiority between tego and tac, we were able to demonstrate noninferiority between the 2 drugs looking at that composite endpoint. From the eGFR perspective, so from the graft function perspective, tego again delivered strongly. The graft function that we saw on tegoprubart, which was around 69, so in the high 60s range is very consistent with levels that we've shown in the past, and we believe is the highest that's been demonstrated in a clinical trial to date. In terms of safety, the safety that tegoprubart demonstrated was excellent and showed significant reductions versus some of the typical side effects that one sees on patients with tacrolimus, including those that Andrew mentioned, such as the new onset diabetes, the tremors, the brain fog headaches, hypertension and delayed graft function. In terms of the endpoint looking at separating eGFRs between tego and tacrolimus, we showed numerical superiority of tego versus tac, but not statistical superiority since tacrolimus ended the year with a mean eGFR of approximately 66 mls, principally driven by one subgroup, as you'll see. Looking at all of these endpoints together, we believe these results support advancing tegoprubart into a Phase III and considering the efficacy that was demonstrated as well as the safety, we believe that this can position tegoprubart as the next-generation cornerstone of kidney transplant maintenance immunosuppression. Moving on to participant flow. There were 127 patients enrolled in the BESTOW study. The goal was to enroll at least 120. The patients were enrolled pretty much 50-50 between tego and tacrolimus. We had slightly more study discontinuations on the tacrolimus arm, and we had slightly more treatment discontinuations on the tego arm, principally driven by patients that had experienced a rejection and switched on to tacrolimus. But overall, the completion rates were similar between both. If we now look at the donor and recipient characteristics, overall, these resemble what we would have expected in a kidney transplant clinical study and both groups were quite similar. I will point out that numerically, the biggest difference in donor or recipient characteristics can be seen in the deceased donor group, in the deceased donor organs tended to be in the tac arm, organs that had KDPI scores of less than 35%. So, these are considered the highest quality organs that can be transplanted, and there were about 20% more patients in the tac arm. So, 57% of the patients in the tac arm that received a deceased donor received one of these organs versus only about 37% of the patients in the tego arm. And we'll look later on what impact this may have had on study outcomes. With regards to additional immunosuppression, which is a topic that we've covered in the past, we were targeting for patients to receive an ATG dose of 4.5 milligrams per kilogram. And on average, physicians came pretty close to that with a 4.3. There were still some patients that got some low ATG doses in the 3 or just under the 3 range, as well as some patients who got some higher doses. If you look at this page, you'll notice there was one patient that got a very high dose of ATG, but that appears to not have been intentional. The other difference in terms of induction immunosuppression is around the corticosteroid use. We did note a lower average dose of corticosteroids that were used for the patients on tego and physicians tended to wean patients down on corticosteroids faster in the tego arm than the tac arm. So, they wean patients down on tego in 23 days versus about 31, 32 days on tac. What this tells us is that there are still -- there may still be room to optimize induction immunosuppression as we move into Phase III, which could help improve some of the early rejection that we saw. Moving on now to the efficacy endpoint. As you can see on Slide 13, the mean eGFR for patients that completed treatment at 52 weeks was 69 on tego versus 66 on tacrolimus. Importantly, tegoprubart was numerically superior at every measured time point in the study. Although as I discussed, it was this numerical difference, the 2 -- and you can see this in the 2 curves overlapping here was not statistically significant. Moving on to the next slide. If we look at our prespecified subgroup analyses, we see once again that in almost all of the subgroups, and these are the principal subgroups where that can lead to different outcomes in kidney transplantation. There was a numerical advantage for using tegoprubart. The one subgroup where that advantage was not seen was in the diseased donor subgroup. And as you can see on the slide, particularly in this subset of patients that received the highest quality kidneys. So, let's take a deeper dive into this. Moving on to Slide 15. If we look at the mean eGFRs for living donors, we see a very nice separation of the curves of about 10 points of eGFR. So, tegoprubart being at 72 versus tacrolimus at 62. And then if you look on the right-hand side of the slide, you'll notice that for the diseased donors, the curves overlap with tacrolimus actually doing better in the deceased donor arm than it did in the living donor arm. And this is surprising since typically living donors are the best organs and do as well, if not better, than diseased donors. Now taking a further dive into the deceased donor arm, we noticed separating out the kidneys between high-quality kidneys, which are those with a KDPI less than 35 and medium to lower quality kidneys, which are those with a KDPI of over 35. As an aside, to help remember that in KDPI in this index that's used to score the kidneys, 1 is the best and 100 is the worst. So, it's good to be #1 when one is using KDPI. On the arm with KDPI over 35, tego has a nice spread, again, all -- nearly all the time points versus tac, but the curves come together in this subset of KDPIs less than 35. Now what is surprising here, as you'll notice, is just how high the tacrolimus came in at an 80. So, we're seeing a 30% improvement in kidney function between this subset of patients and the living donors that we just reviewed. Now importantly, even in the subset, tegoprubart did exceptionally well with a 78 average eGFR, but the curves -- this is the area where the curves overlap. Now if we remove that subgroup of patients, so those patients with the best kidneys, then the curves separate nicely once again. There's about a 10-point delta at 12 months between the 2 arms, and this becomes statistically significant. We expect that -- we expect that ibox will be approved by the FDA as a potential endpoint moving forward. And this would be an additional endpoint on top of the current approvable endpoint of non-inferiority and so potential bonus, if you will. And here, in this study, we saw an excellent ibox, the lower is the better on the patients with tego at a negative 3.9., although since the primary driver of ibox is eGFR, there was no difference between the tego arm and the tacrolimus arm in terms of ibox. But you can see just how much or how well tacrolimus performed here if you compare it to the historical trials of calcineurin inhibitors in the past, which -- where C&Is have typically performed in the negative 3 range using ibox. Moving on now to biopsy-proven acute rejection. We saw numerically more rejections on tegoprubart than tacrolimus. The acute rejection rate on tego was about 20.6%, which is similar to what we've reported in the past, and that compared to tacrolimus at 14.1%. If you look to the right to the Kaplan-Meier curve, importantly, you'll notice that patients on tegoprubart did not experience a rejection event after the -- after month 6. So, all of them were early. We did see later rejections on tacrolimus as well as multiple incidences of rejections that were found on protocol biopsy, which suggests that there might have been an underdiagnosis of rejection on patients on the tacrolimus arm who might have been treated empirically and so not biopsied within the first 12 months. If we look at how the patients on tegoprubart did, overall, patients did very well. Patients that experienced a rejection and remained on drug finished the year with an eGFR in the 70s. They finished the year with an eGFR of 73, and this compared favorably to patients that discontinued tego to move on to tac who, while their final kidney function was acceptable was inferior to what was demonstrated for the patients that remain on tegoprubart. The patients that switched to tac ended the year with an eGFR of approximately 50. Moving on to the next slide to look at the composite endpoint. The composite efficacy failure endpoint on the tego arm was 22.2% versus 17.2% on the tacrolimus arm. And this is a difference that is within the non-inferior range, so the non-inferiority range between the 2 drugs. Also, this failure rate is in the same range that has been seen with historical drugs that have been approved in the past for rejection. Of note, at the end of the treatment, 1 patient on tego and 2 patients on tac demonstrated donor-specific antibodies. So, similar between the 2 arms. Moving now to safety, and this is really where we see tego shine. If we look at the overall treatment-emergent adverse events, the percentage of patients that where an adverse event was observed was similar between the 2 arms as was the maximum severity of those adverse events that were seen. Both arms saw a death and both arms saw one case of graft loss. Now if we look at all of the AEs that were observed at least 5% of the time in one of those arms and we pull out any AEs where one arm demonstrated 2x or more the incidence of that adverse event, we added it to this slide. So, this is where one sees the biggest differences in the common AEs that we're seeing. And after this, we'll dive into the full safety tables. But before doing so, we can begin to get a picture on where the biggest differences were seen here. On this slide, green is used to demarcate where tegoprubart demonstrated better safety than tac. I'll start by talking about where tego was inferior, and that was proteinuria. We saw, as you can see, more proteinuria on the tego arm than the tac arm. Of note, this proteinuria was typically diagnosed in the physicians' offices, so dipstick proteinuria, if you will. For most of these patients, the proteinuria was transient. It started at different periods of time and then went back down to baseline. The 2 patients where that was not the case that had persistent proteinuria were patients that experienced a recurrence of the underlying autoimmune disease that led to them losing their kidneys in the first place. So, there was one case of FSGS and one case of membranous nephropathy. Looking at the rest of the AEs, where we saw a big difference between the 2 arms for infections, we saw many more cases of bacteremia, 7x tego versus tac, and that translated into 2.5x the cases of sepsis we're seeing on tacrolimus. Now sepsis is important because for hospitals and the system, it can be very expensive since typically a case of sepsis after transplant requires an ICU admission. And also sepsis is one of the leading causes of death in the first year post transplant. If we look on the metabolic side, and this is when we talk to physicians, probably the #1 complaint that we hear from physicians about tac. Tac is known to be beta cell toxic, so it causes hyperglycemia as well as new onset diabetes, and we saw a dramatic difference in the number of patients that developed diabetes on tac versus tego. So overall, there were 7x as many patients on tac that developed diabetes. But if one pulls out those patients that already had diabetes, since diabetes is one of the most common reasons why patients need a kidney transplant in the first place. So, one looks at just the pool that wasn't a diabetic at the time of the transplant, it's about 1 patient in 6 on tacrolimus that develop diabetes. And this compares to less than 1 patient in 40 that developed diabetes on tego. We noted that there was an increased hyperkalemia that was seen on tac that can be seen with weak worse graft function sometimes and can also be associated with cardiac arrhythmias. In terms of neurological side effects, and this is the -- when we talk to patients, the #1 complaints that patients tell us about with tac, the tremors were very pronounced in the tac arm with 1 in 4 patients on tac reporting tremors, as well as 1 in 6 patients on tac reporting muscle spasms. Now if we put these AEs in context with the eGFRs that we reported, the eGFRs show that these were some of the best treated patients ever, considering how well they were doing. And yet despite what appears to have been as optimal care as a patient could receive, the AE profile continued to demonstrate the typical AEs that are seen with tacrolimus. I'll come back to the cardiovascular and blood AEs on a later slide. Moving on to opportunistic infections. We saw overall similar amounts of viral infections between the 2 arms. If we look at end organ viral disease, so where the virus infect is found in the transplanted kidney. We found more CMV disease numerically in the tac arm, as well as more BK nephropathy in the tac arm, although those are purely numerical and overall, the numbers are obviously quite similar. And you can see the difference in terms of sepsis and bacteremia on the slide, which we just discussed. Otherwise, in terms of fungal infections, the number was similar between the 2 arms. Moving on to the renal AEs. What stood out here was delayed graft function. So delayed graft function is what happens when a patient receives a transplanted kidney, but the kidney does not start to function immediately. And so these patients need to go back on dialysis. And this can obviously from a patient's perspective, adds a psychological weight. And then from the system and the hospital's perspective can add significant costs, especially since some hospitals can keep patients as inpatients while they do the dialysis in order to see if the kidney begins to start. So, what we observed with regards to the late graft function was that we saw more higher incidence of delayed graft function for the patients on tacrolimus, where 1 in 4 experienced DGF. And when patients experienced delayed graft function on tacrolimus, that delayed graft function lasted for longer than it did when patients were on tego. So, patients that had DGF on tego needed about 4.5 days of dialysis versus over 6 days of dialysis for the patients on tac. If we look at the deceased donor arm, which is where delayed graft function is seen, that translated to an estimated difference of 115 days extra on dialysis for every 100 diseased donor patients that would be transplanted. So, if we extrapolate out these numbers, one would assume that one would see many more TGFs and associated dialysis for the tacrolimus arm. In terms of the metabolic arm, we discussed the high blood sugars, the diabetes and the hyperkalemia. We did see more hypophosphatemia, so low phosphate on the tego arm, but that did not appear to be clinically significant. Moving on to CNS. We mentioned the tremors and the muscle spasms, which are the #1 complaints we hear from patients. The #2 complaints that we hear is around the brain fog, headaches and dizziness. And with those complaints, we saw about twice the incidence on tacrolimus as we saw on tego. If we move on to the cardiovascular side effects, hypertension is a well-known side effect of tacrolimus, and we observed more hypertension in the tac arm. Importantly, this translated into 5x as many patients experiencing a hypertensive crisis on the tacrolimus arm versus the tego arm. And finally, we did note that 5% of the patients in the tacrolimus arm experienced heart failure, while no patients experienced heart failure in the tego arm. Moving now to differences in blood. We noted more leukopenia in the tego arm, as well as more lymphopenia in the tacrolimus arm. The leukopenia tended to be seen early on. So, during the polypharmacy phase, while the patients were also on induction therapy. And in terms of the impact on infections, we covered that on an earlier slide. There were numerically some more non-melanoma skin cancers on tego, although the numbers were similar and within the range that would be expected and not much difference in terms of GI. So, to conclude, looking at all of the data that we just covered, we are very excited about the prospects of tegoprubart, where we believe we have a drug that could be approved if we're able to replicate in a Phase III, what we observed in this Phase II. Importantly, we were able to demonstrate noninferiority between the 2 drugs, which is the current approvable endpoint. From a graft function perspective, the graft function that was observed on tego was excellent in the high 60s in a future trial. Although tacrolimus did very well here, there could be reversion back to the mean and to where those arms used to be. And we'll also obviously take deep dives into our data to understand if there are changes that we need to make in a Phase III design in order to make sure that patients are equally distributed between the 2 arms. From a safety perspective, tegoprubart did better than what most of us would have expected and is demonstrating a very favorable profile versus tacrolimus. In terms of our current financial profile and what to expect moving forward, we ended September with about $93.4 million in cash, and this is sufficient to fund our operations for another year, so into late 2026. We're going to have a lot of milestones coming up over the next 12 months in terms of tegoprubart in kidney transplantation, we will now take this data and go see the FDA to talk about path to approval in Phase III design. We expect to do so in the first quarter or first half of next year. As I mentioned earlier, all the patients in our Phase Ib and our Phase II studies have the option to enroll in a long-term extension study. About 90% of patients elect to do so. And so next year, we look forward to presenting data from that long-term study. We expect that with time, the direct and indirect nephrotoxicity of tacrolimus should impact patients' kidneys so that over time, we would see more separation of the curves versus what was seen at the 12-month endpoint. And assuming that we get support from the agency in the start of the year, that would give us the opportunity to launch a Phase III study in late 2026. Aside from kidney, we're running other programs, particularly in islet cell transplantation. We currently have 6 patients enrolled in the study. We expect to report out data on the first 6 patients by year-end. We also expect to enroll another 3 patients or 9 patients in total into the study by year-end, which would allow us to have to report out in the first half of next year on those 9 patients. And once we have 9 patients of data, we believe that will be sufficient for us to go talk to the agencies or to the FDA about what could be a path to approval for tegoprubart in islet cell transplantation. Next, we are getting ready to launch another Phase II islet cell transplant study. This would be another investigator-sponsored trial, but in multiple sites. And this one would focus on patients that have high-risk diabetes that also have kidney dysfunction. And so because of their kidney dysfunctions, these patients are -- wouldn't normally get an islet cell transplant or pancreas transplant since once wouldn't want to give them tacrolimus since the tacrolimus could end up destroying their kidneys. We expect that once we have a chance to talk to the FDA about islet cell transplant and have a path to market, we could be in a position to launch a Phase III study in islet cell transplant. And with that, I will turn over the call to the operator to take questions. Operator, please open the line.

[Operator Instructions] And your first question comes from the line of Thomas Smith from Leerink Partners.

First, with respect to the eGFR primary endpoint and the tacrolimus outperformance, appreciate all of the subgroup analyses that you presented. But maybe a question for the company and for Dr. Adams. Is there any rationale for why tac would have outperformed in that diseased donor subgroup? Any sort of mechanistic rationale or anything else notable about the patients that were included in that subgroup that could explain that?

Yes. Thanks. I think part of it, DA went over with regards to that subgroup having what we think of as really good kidneys. And so, some of the effects that we see on tac don't always occur in the early period, and it can be seen later. So -- and I think the distribution even within that, it's a lump of less than 35 was even uneven within that group. So, I think it's a continuous kind of measure of donor variables that would impact the survival of the kidney long term. So, when you have a really good kidney and you have something that impacts kidney function, you may not see that early on, you'd see it later. I think based on all the data that we know about C&Is is long term, we'll see the effects of that as it goes on, more prominent on kidneys that are of a lesser quality to begin with and more prominent later in kidneys that are better functioning.

Got it. That's helpful. And then just a question on the path forward from here. Can you talk about how you're going to approach the FDA and what you intend to propose to the agency here with respect to the Phase III design? Are you currently thinking that you'll follow the established pathway with the non-inferiority on composite efficacy failure? Or are you still thinking that there could be a path to a superiority claim over tac on ibox or some other endpoint?

Sure. It's DA, and thanks for the questions, Tom. In terms of path forward and discussions with the FDA, it's not any different from what we've been discussing in the past. So, the current approvable endpoint is the non-inferiority composite endpoint. What is in front of the FDA today with regards to ibox is the potential for a expanded label for an additional label claim of long-term or expected long-term superiority in terms of organ survival, so 5-year superiority. But that claim is an additional claim to the base claim that is based on the non-inferiority endpoint. So, our plan is to approach the agency the same way we were going to do so. We're going to propose the traditional endpoint, which the FDA continues to make clear is the primary endpoint. And there is no downside to -- if the FDA agrees to including that second superiority endpoint. Since if one hits it, it's a bonus, if you will, right? You get the bonus extra claim on your label. But if you don't get that extra claim, you still -- the drug is still approved. And obviously, here, with the performance that we're seeing in terms of the very good organ function as well as just the superiority profile that is becoming more and more evident with tego, we think that commercially, that will be very viable.

Understood. That's helpful. And if I could just sneak in one last question here for Dr. Adams. So, I was just wondering if you could talk about your view on sort of the totality of the efficacy and safety data here. Like what do you view as the most compelling benefit shown for tego in the study? And how do you think this drug would be incorporated into your renal transplant service, call it, 5 to 10 years from now, assuming this profile is replicated in Phase III?

That's a great question. The transplant community has been waiting for a better drug for 30 years. And while we use tacrolimus, we see its limitations day in and day out with patients and then the long-term effects of it. And so having the option to have a drug like tego that provides superior or really good kidney function in the short term and in the long term by preventing the immune response, preventing donor-specific antibody, we know that from its mechanism of action. The expectation is these kidneys will last longer over time. But secondarily, it's the patients that we see day in and day out that experience the various side effects that we see on tac that, in some cases, can be quite serious. The neurologic effects it's not just we see tremor and the brain fog. But in other cases, we see serious effects like seizure, the diabetes that comes in. All of those we know are going to contribute not just to the effects on the kidney, but overall effects on health. And so having the opportunity to use a drug that has a much more favorable safety profile like tego, I think, is a great opportunity and something that we would incorporate in our practice. You can see that difference when you compare apples-to-apples like in the living donor transplants, where you know the kidney function difference there exists. But expanding to diseased donors, the number of older donors of donors with more comorbidities, so in the higher KDPI group where tego performed better is only increasing in the U.S. So those are more of the kidneys that we're using in the disease, more DCD donors. Those are all things that contribute to KDPI. And so I think there'll be more of an opportunity to use in that population as well.

And your next question comes from the line of Pete Stavropoulos from Cantor Fitzgerald.

First one is for Dr. Adams. You just sort of did touch on it, but if you can go a little bit deeper. From a clinical standpoint, how meaningful is the differentiated safety and adverse event profile observed with tegoprubart and particularly the reductions in new onset diabetes, hyperglycemia, tremor and hypertension for long-term efficacy, patient management and drug adherence.

Thanks. You hit on a few good points there. I'll start with the diabetes and hyperglycemia. We see patients that come in, again, not having had diabetes before. The first episode that they have is I saw a patient the other day in the ER with a blood sugar in the 600s. This is not an uncommon event that we see in patients treated with tacrolimus. And so, it does have a clinical impact, not just on kind of their health status, where they're admitted to the hospital. Now they've got a new diagnosis of diabetes and all that comes with that, including the health complications. So having a drug that has a significantly less propensity to cause that really will, I think, help patients in the long run, not just with their overall health and the health of the kidney as we know, diabetes causes damage long term to the kidney as well. So having a drug that has that profile is something that will be desirable to use in place of tacrolimus, if that's an option in the future.

And a reduction in the delayed graft function, it looks notable, the difference between tego and tacrolimus. How clinically meaningful is that difference in your experience? And does fewer days on dialysis early post-transplant translate to a better long-term graft outcomes or hospital resource savings?

Yes. Absolutely. Patients that experienced delayed graft function ended up -- on average, end up staying in the hospital longer. They're on having to get sessions of dialysis that hopefully they wouldn't otherwise have to get when a kidney is functioning well. I think part of it is also thinking about where if we're using kidneys that are more prone to have that, again, increasing number and percentage of DCD transplants, older donors, longer cold ischemia times, all increase your risk for DGF. And so that's -- if you look over the last 5 years, those are only increasing in our practice. And so in the future, having a medication instead of like tego that can decrease the rate of DGF is going to help in that practice reduce cost but also improve kind of the function of the kidney and the patient's overall kind of recovery after transplant.

And one last question. We've seen patients who stayed on tego through acute rejection, maintain strong kidney function, whereas those switch attack declined substantially. How do you interpret that? And what are possible drivers of this difference? And this was also seen in the Phase Ib.

I'll turn that question over to Eli. So, Eli differences in...

Yes. So, this is a very important point. When you start a study like Phase II with investigational drug like tegoprubart, the first instinct of physician when rejection happen is to switch to tacrolimus. We talk through the study, we talk to investigator and told them that it's really important to learn how to treat rejection on tegoprubart without stopping tegoprubart. And what we learned is that if you treat the rejection in a standard way, like usually being treated either with steroid pulse or sometime thymo globulin and you maintain the patient on tegoprubart, you avoid, again, all the negative impacts of nephrotoxicity and others that tacrolimus has, especially in vulnerable kidneys like kidney that sustain rejection. So, what you see here is that when patients switch to tacrolimus and usually, they are being switched at this study because of this uncertainty about continuing investigational drug when patients develop rejection because the physicians are very used to use tacrolimus and trust tacrolimus. So, the switch was not really for any specific medical reason, or not because the rejection was more severe than others, but more kind of type of behavior of the investigator. So, this difference at the end of 1 year is pretty clear. And I think what we learned that if rejection happens on tegoprubart, treat it and keep the patient on and the patient will do very well, the kidney will do very well. Those who will sustain rejection and on top of the rejection, you add insult to injury by giving them tacrolimus, not surprisingly, end up the first year with 50 ml per minute eGFR.

And your next question comes from the line of Rami Katkhuda from LifeSci Capital.

Two quick ones for me. You may have touched on this already, but were rejections with tego observed more frequently in patients receiving lower than recommended doses of ATG similar to the Phase Ib study? And then maybe another one for Dr. Adams. I guess, how do you view the higher rate and severity of rejections with tego just given the totality of eGFR and safety data that's been observed to date?

Rami, thanks for joining the call and for the questions. I'll take the first question. Here, we did not see a difference in terms of rejections from lower rates of ATG. Although as you saw, the most patients and typically the patients were getting the target dose of about 4.5 mgs per kg. But we have observed -- if you take our Phase Ib data, as you know, we have observed that when patients get lower doses of ATG, rejection can occur more frequently with tego. And in terms of what the differences numerically mean, I'll turn that over to you, Andrew.

Oh, sure. No, I think you bring up a great point and something I think the community is been challenged with is historically, before the time of tacrolimus, rejection was -- acute rejection was really something that was focused on. And so almost hyper focused. And so now when we see a slightly higher rate of rejection, the real question is what is the penalty for that? And as Elie pointed out, when you stay on tegoprubart and maintain renal function, excellent renal function in that case, the long-term prospects or prediction for survival of that kidney are excellent. And so I think the class of medications like tegoprubart is in the co-stimulation blockade, there is a different flavor, but the long-term consequences of that are better than you see in tac, where you see a penalty when patients are on tac and have rejection, their kidney function declines, as Elie kind of pointed out, kind of 2 hits where you have a drug that doesn't impact kidney function and you can treat rejection and maintain good kidney function overall, that's a much better predictor of how that kidney will do long term, which is what the community now is focused on, not 1-year survival, but 5-, 10-, 15-, 20-year survival. And without a new class of medicines to help support those kidneys long term, we won't see those benefits.

I'll add one point to what Andrew just said, which is that acute rejection in the first year is a very poor predictor of long-term of long-term kidney graft function or survival, which is why if you look at the ibox algorithm, rejection is not a part of that calculation. That calculation is principally driven by kidney function, by eGFR. And the reason why rejection is not included is because it just doesn't predict how well those kidneys are going to do long term or how long they're going to survive.

Makes sense. And I guess maybe more broadly, what key changes could you potentially make in a Phase III study based on the results?

So for potential changes in the Phase III study to improve outcomes, I will turn that question over to Steve.

Yes. Great question, Rami. I mean, obviously, we're 2 weeks post data here. So, looking at our data carefully. But some of the trends that you saw in the presentation that DA highlighted, there's certainly room to shore up the immunosuppressive regimen. There was a significant amount of variability on how methylpred was administered around the time of transplant as far as total dose and when it was administered, how the steroid taper worked over 30 days was very variable. So, we can protocolize some of these things to try to improve consistency. As you might recall, we saw all of the rejections in the tego arm in the first 6 months and then none thereafter, and that could be due to variabilities in immunosuppression as an example. And then, of course, we need to dive in and figure out how you might stratify patients in the Phase III study.

And your next question comes from the line of Vamil Divan from Guggenheim Securities.

So, maybe just building off that last question, I'm also thinking about the Phase III here. And one, I'm curious on thoughts on the longer-term trial because obviously, as you've discussed, the tacro side effects and toxicity I think that would sort of allow for more separation for tego over time. So kind of driving it as a 2 or 3-year trial to really show that superiority in the primary endpoint of the trial as opposed to just sort of longer-term follow-up. Just curious on your thoughts there. And then tied to that also, I know it's still early in your planning, but you mentioned you have about a year's worth of cash on hand right now. Just your thoughts on how much this Phase III program will likely cost. And then I don't know if Paul or anyone want to comment on just sort of your thoughts around your capital position and having proper financing to run the trial.

Okay. So, Vamil, thank you very much for joining and for the questions. So you had 2 questions. The first one was around longer-term endpoints. And the second question was around finance, and I'll turn that one over to Paul. But in terms of the endpoint, we don't foresee changing the duration of the trial, again, the primary approvable endpoint today is noninferiority at 12 months. So that is what -- that will be the core endpoint that we'll use. In terms of whether we see separation of the curves at 18 months and could those patients be followed by 18 months, we could add that as a secondary endpoint in terms of the ibox endpoint, that would be a discussion to have with the agency about 12 versus 18 months. But for the core endpoint, we expect to keep that at 12 months and not delay our time to approval. And in terms of the cash needs, I'll turn that over to Paul.

Hey, Vamil, yes, at this time, we have 1 year of cash left, which is we expected at this time. And we're not providing any guidance at this point on what that Phase III is going to cost. It's still a little early in the process.

But you can look at how much money we've been spending. This study was about 130-patient study, so 60 plus in each arm. We would expect the Phase III to be in the 200 to 300 patients per arm size.

And your next question comes from the line of Robert LeBoyer from NOBLE Capital Markets.

Thank you for the presentation and the comprehensive answers that you've been giving. I'm looking at Slide 16, the one that mentions the KDPI scores and the differences between patients who were above 35 and those that were below. And I'm wondering if this was a new finding or whether this was something that was known before the trial that just came out in the trial.

Thank you for the question, Robert. In terms of the KDPI finding, this was not an expected finding. So, this is something that we noticed during our post-hoc analysis of the data. Elie?

Yes, remember also, this is, as we mentioned, this is the first ever study that put tego or CD40 ligand against tacrolimus. So, this information wasn't tested before. This type of concept was not tested before because this is the first study that tried to look at differences. And when we try to understand kind of what we saw, it became apparent that this KDPI and the quality of the disease donor kidney is important factor that affect the function and affect eGFR. So, we're actually learning is that the only 2 weeks after data, and we still need to dive into that in more details, but it seems like that the KDPI is something we need to take in account in disease donor moving forward.

Okay. And is this something that you would consider as an entry criteria for the next studies to secure a superiority and claims of a larger difference between the 2 groups in patients over 35 to get a label for usage in those patients? Or is it too early to say design of the Phase III.

Yes. Sorry, yes. One thing for sure to say is that we're going to take it in account when we design the study as far as stratification and how to balance this patient in a more equal way between the groups. Because as Dr. Adam says, right now, we see imbalance between the distribution of KDPI, even in the less than 35 group, there is imbalance in distribution, so-called in favor of tacrolimus. So, we need to find a way when we design the Phase III study to enroll patient in a way that this imbalance is going to be corrected. This definitely we need to do. Other measures, of course, as I said, we are still looking at the data to try to understand it in a more deep way. And if other thing needs to be done in order to take this in account, we definitely will do that.

But in terms of the label, Robert, this is DA again, we -- the goal would be to have as many patients in the label as possible. So, this is not a reason to exclude patients. Again, we -- these patients did exquisitely well on tego. The KDPI group, less than 35 finished the year with a 78 eGFR on tego. So, there's no underperformance here from a tego perspective. Tego did great. But what was surprising was how well tacrolimus also did in this arm. And obviously, this is what led to our ultimately not hitting the statistical difference between the 2 arms. And no reason to exclude these patients. They're benefiting.

And your next question comes from the line of Albert Lowe from Craig-Hallum.

I had a few questions about safety. Can you tell us a little bit more about what grades of that proteinuria were observed? And can you also tell us more about what some of the AEs that led to treatment discontinuation?

Sure. So, in terms of the proteinuria, aside from the 2 subjects that I mentioned that had a recurrence of their underlying disease, so that had significant proteinuria, but that was associated with FSGS membranous nephropathy, the other patients typically had very low-grade proteinurias and those proteinurias returned back to baseline. So that was the first question. Did you -- sorry, did you -- was there another question?

Yes. What were some of the AEs that led to discontinuation of the study drug?

Sure. The most common AE that led to discontinuation was those rejections that you saw. So, where those patients experienced a rejection and were switched from tego to tac.

And your next question comes from the line of Yi Chen from H.C. Wainwright.

Based on the data presented today, would you consider for the Phase III trial enroll patients into prespecified groups and which could potentially increase your probability of approval?

So, as I mentioned a minute ago, I think that's definitely something we need to take into account and think about how to stratify what are those factors that you stratify by. And as you know, stratification is related to what factor can impact the endpoint. And this phase, we know now that this KDPI is really important factor that affects outcome related to eGFR. So we definitely will take it into account when we design a study and try to provide the right randomization scheme with the right certification to ensure equal distribution of this patient between the group. I think that's the basic thing we need to do. If the other measure we need to do, I think we'll take it. But right now, this is the obvious one to do.

And could you also tell us how long do you plan to follow up the patients in a Phase III trial setting? And also, what is the average life span of a kidney transplant patients with takeoff?

It's DA again, and thank you for those questions. So, I will let Andrew answer your second question in a second. To answer your first question in terms of the duration of a Phase III study, we expect that endpoint will be 12 months. Now for those patients, we would expect to continue to follow them in a long-term extension study as well. So, it's going to be important for us and for the field to see how tego does versus tac over many, many years. So, we offer a long-term extension to all the patients in our study that way -- on both arms. That way, we can continue to follow them and see how they evolve over time. And in terms of how well kidneys typically do, I'll turn that back over to.

Yes. So, your question was about the kidney transplant survival or the patient survival?

The average lives -- I mean, the patient survival after kidney transplant?

I mean that's a great question. So, the -- I would say that it can be impacted. When we look at how long a kidney transplant survives, it's attributable to either -- does the kidney fail or does the patient die from other conditions, including the kidney failure. And I'd say those things that contribute to deaths of kidney patients primarily are cardiovascular disease, infection. And I think when you consider the safety profile that tego showed in the Phase II trial with lower rates of problems that contribute to cardiovascular disease like diabetes, like hypertension, heart failure, other things. And we know from other trials, even long-term profile of cholesterol lipids, other modifiable things that you can do for cardiovascular risk that puts patients at higher risk for death over time in traditional immunosuppression with tac. And so, I would expect one of the benefits long term is longer patient survival, and that's borne out in previous trials with non-C&I containing regimen.

There are no further questions at this time. I'll now hand the call back to Dr. David-Alexandre Gros for any closing remarks.

Thank you very much, operator, and thank you to everyone on the call for joining us early in the morning to discuss our VESTO study results. Have a great day.

And this concludes today's call. Thank you for participating. You may all disconnect.