MoonLake Immunotherapeutics (MLTX) Earnings Call Transcript & Summary

Good morning, good afternoon to all of those attending this MoonLake webcast. My name is Jorge Santos da Silva. I'm CEO and Chairman of the company. And I am accompanied here today by my co-founder and Chief Scientific Officer, Kristian Reich, and by our Chief Financial Officer, Matthias Bodenstedt. In today's session, we're really going to focus on HS, our main indication in dermatology. We will start off with a brief introduction just to make sure that everybody in the same page, but also to make sure that the key messages are delivered early on as they are very strong and important for the company and [indiscernible]. We will then spend some time and Kristian will take us through that. Looking at the final data of what is arguably the largest program in HS today. I remind everybody that this program is composed of for trials that will be important for the registration of the product, starting with a comparative trial MIRA, where we compared ourselves to the standard of care Humira and placebos, the 2 large VELA studies, where we tested our main dose versus placebo over time. And of course, a trial that is very dear to us, the VELA-TEEN trial, a trial that covered also adolescents first also NHS. Once we've been able to look at all this data together, I will take it back to recap how we're going to follow our label strategy and our BLA submission following all the conversations we've had with the FDA and now in possession of the full data set. Matthias will then take us to a very important part of the story, which starts looking into what happens next, which is really thinking about how we are planning to commercialize the product and where we are in this process. I will then take over at the end for some closing remarks. And we will, of course, as always, open for a Q&A session. For those that are less familiar with our story, I just want to make sure we spend a couple of minutes telling you a little bit about the company and a little bit about our assets. So MoonLake is a company that is now 5 years old. The company was founded focusing on a single asset, sonelokimab, which we always felt was a very, very interesting molecule that really needed to be developed for patients. As it inhibits IL-17A&F, very critical access of inflammation in many, many diseases, but also because it's the opportunity to introduce a very exciting new technology in terms of therapies for patients, the nanobodies, these very small molecules that retain many of the characteristics of antibodies, but have several advantages that I'll go over. The company went public in Nasdaq in '22. And obviously, since then, we've been able to raise a lot of money to develop all the indications that we're pushing for as we develop sonelokimab as really a pipeline in a product. In fact, we've now completed the Phase III results in HS. That's what we are also discussing today. Many of you know we're in Phase III for rheumatology indication with psoriatic arthritis, and we have other indications that we are developing. Very importantly, the company is transitioning to its next phase of growth as we plan to submit BLA for approval towards the end of Q3 this year for a launch next year. That's a little bit about MoonLake. Again, for those less familiar, I just want to spend a couple of seconds here talking about the molecule and reminding all those that are more familiar, how important it is to introduce new technologies into therapies for patients. As many of you know, the nanobodies take advantage of something that nature created, which is a heavy-chain-only antibodies, the antibodies that have a far less complex variable region, if you allow me to say that versus human antibodies, and the ability to take this less complex variable region allows us to really target important modules in medicine, but do so with very, very small domains, these VHHs. The other interesting element about these elements is that you can actually put several of these VHHs together, which is the case for sonelokimab, as you can see on the right side of the page. And we are able to target different elements that are important for therapy while maintaining a very small size of the molecule. In the case of sonelokimab, this means that we are able to target IL-17A, IL-17F, 2 very important MOAs and inflammation and also target other elements in the case of sonelokimab able to target albumin, which allows the molecule not only to be a little bit more stable over time, but to travel to sites of inflammation. And all of this is possible while maintaining a very small size. Just to give you an idea, sonelokimab is about 1/3 of the size of a normal monoclonal antibody. So very exciting technology, very exciting MOA. MoonLake as I said at the beginning, is now approaching registration. The company really focused the development. sonelokimab along 2 therapeutical areas, as you can see here on the page, we focused on dermatology and on rheumatology. The reason for this is we see vast opportunities to change the lives of patients, huge unmet needs, but obviously also interesting opportunities in terms of market size. And to achieve that, we started developing different indications along these 2 therapeutical areas. And as you can see there on the top, the first 2 lines hidradenitis suppurativa now completed Phase III, now moving on to registration. That's where we will spend a lot of time today. We'll also include in this discussion, the second line that you see here, which is the progress that we have done with adolescent patients suffering from HS, also this will be part of the registration. Today, we will not talk too much about the other indications that we're developing. I will touch base on PSA at the end because, as you can see there, that's also a Phase III that is ongoing, and we are approaching the primary end point on one of these trials, but I'll touch base on that at the end. Today, really, the focus is data wise on the top 2 lines in HS. And the interesting thing is as we've been developing these indications for Phase II to Phase III, not to registration, I think there's one trend that I think is quite apparent. And that is that sonelokimab is a drug that really has a leading profile in any of these indications. I won't go through the details that you see on this page, but as you can see here, when you look at key primary end points at different phases of clinical development. If you look at the endpoints that we actually target, which tend to elevate from previous trials done before us, what you really see is a level of efficacy that really shows a leading profile across all indications. And all of this together with a safety profile that we believe creates a very unique benefit ratio for patients, but also a very convenient drug. Oftentimes, biologics need a lot of injections, very regular injections, painful injections. And not only we have efficacy and safety, but we also do this in what we think is a very convenient dosing for patients across these indications, once again taking opportunities that are presented by nanobodies when it comes to formulation. So a very, very good profile. As you know, 2026, as all the other years before, that have been catalyst rich for our company. As you can see here in the great part to the left, all the things that we've already put out this year, which include a lot of new data and presentation at scientific congresses as keynote presentations. And then you can see to the right side of the page, all the things that are still to come this year. And as you see there in the sliver in the middle, today, we really focus on the Phase III readout of the 52-week readout for VELA as it completes the HS package. You will also see that after that comes IZAR-1 on rheumatology. Again, I'll come to that at the end of the session. If there is one slide that we would like you all to retain, this is probably the next slide and the key message that comes here is we truly believe that SLK is on schedule to be a potential best-in-class drug in HS, probably a best-in-disease drug for this important indication. And not only we believe that, but the facts are really starting to stack up to support that. For example, in terms of efficacy, what you will see today is that the drug really leads across several elements of efficacy. And I remind everybody that all of these have been elevated from previous trials, very well-known fact that before and still drugs are developed in Phase III with HiSCR50, a 50% improvement in the disease as primary endpoint. We've elevated that for HiSCR75. And we do so across many scores of efficacy and across many time points. Just some facts here to already start sharing light on what the data you're going to see. You can see that on our primary endpoint, HiSCR75 after 1 year, 67% of the patients have reached HiSCR75, 67% of the patients, which is obviously -- it's almost 70% of the patients here, a very interesting score. And by the way, for those that are a little bit younger, this is a very easy number to remember, it's a 6 and a 7, 6-7, you cannot forget this name. But very interestingly, also 1/3 of the patients reach not only HiSCR75, but HiSCR100. And 1 in every 4 patients reaches what we call inflammatory remission that is there is no abacus, no nodules, no draining tunnels. This is a target that I don't think was even in people's minds a couple of years back. And we believe that there is now a very good path for us to not only show good long-term data but to have a very good delta to placebo in our label at the primary endpoint of week 16. So really, the card of efficacy, I think, is being played very strongly here. Together with this comes what we believe is an advantageous benefit ratio, very rapid onset of response. But with the safety profile at week 16, that looks very, very promising, with no SIB, no liver signals, no IBD and other advantages, not only versus placebo, but obviously versus competitors. And as you will see a very consistent safety profile long term, which we believe very important for prescribers. We also believe that SLK will now have a broader label in HS. As you know, we've -- and as I've mentioned, we've -- we're the first company to do a dedicated clinical trial in adolescent patients with VELA-TEEN. It was the first molecule being tested here. And I'm very happy to report that we have great efficacy, for example, about 1 in every 2 patients reaches HiSCR100 at 6 months in this trial with no new safety signals for this population that obviously is very important for us. So a broader label on top of efficacy and safety, but also on top of that, improved convenience. As you know, we have a very, very convenient induction protocol with very few injections. Our injections are very fast compared to competitors. And on top of all of this, and I think this is really important also for dermatologists, also for KOLs really starting to move the boundary here with a very unique mode of action. The way we inhibit IL-17A&F is unique even versus the only other competitor that does that, but also a new technology that opens other opportunities for patients and physicians. So if you actually take on message, take this message no matter where you look, the profile of SLK really seems to indicate a potential best-in-class drug. So that said it for the introduction now. I will pass it over to Kristian to really take us through the final HS data package. Kristian?

Thank you very much, Jorge. And also a very warm welcome on my side. I was just looking at your slide, founded in 2021, and now we sit here and I have the pleasure to present indeed what will be the final data that will constitute the core of what we would submit in our BLA I remind you, just going back to the disease. And I remember when some years ago, we talked about this is very frequent, the prevalence, maybe as high as psoriasis. I think many people had question marks and these question marks in my eyes have completely disappeared. Now we see an increased awareness. We see that patient organizations are getting more active. Companies are getting more active. The dermatologists are getting more active. And we can already really see that this prevalence and the data that we can analyze approaches this 2% mark that we were always talking about. Matthias will chat about the fact that this awareness already leads to 300 patients being newly diagnosed in the U.S. every year. That's actually higher than the number of sadly higher than the number of patients that are newly started on the biologics. So there remains a high unmet need in this important chronic inflammatory skin condition. You know that I'm a dermatologist. So I've really seen many of these patients. This disease is unfortunately characterized by the fact that not adequately controlled inflammatory lesions progress to irreversible tissue damage that is kind of unique to this disease compared to other chronic inflammatory skin conditions. You have this formation of draining tunnels, you have the formation of scars. So what does this mean? We should be highly motivated to control the inflammation as early as good as possible with an eye on having a positive influence of the course of the disease, and Jorge already talked about the adolescent trial. I think this was a big motivation for us to actually go into juvenile patients with HS. It is a disease that has different phenotypes, you have inflammatory lesions like nodules and abscesses, you have draining tunnels. You have these irreversible lesions, the tunnels, the scars. I will come back to this when it comes to how do we actually measure the disease and what are also some potential limitations. What is shocking to me and I think to everyone working and interested in this field is that it still takes up to 7, in some cases, 10 years before the diagnosis is properly made. So that is the delay between the first onset of disease signs and the proper diagnosis. And of course, we really need to be better than this. If we want to not miss this window of opportunity that we will hopefully have with better and better drugs anti-inflammatory drugs in the future, we also need to be better in making the diagnosis early on. Last but not least, there are now a few modern drugs approved, but what we hear when we talk to patient organizations that those patients with significant moderate-to-severe HS, many of them have already cycled through the disease, so the disease treatments that currently exist. So a company will say there's an unmet need. We believe there is really an unmet therapeutic need in HS still. So it's a pleasure for us to present the data from the studies and I will talk about our Phase III program in a second to present the data to you that will hopefully lead to the approval of a new and potentially, I think, best-in-class, maybe best in disease drug in this important skin condition. What was our Phase III, 2 identical trials called VELA-1 and VELA-2. We put this Phase III program on top of a pivotal like Phase II study. Again, I will come back to this. And we did our dose finding work in Phase II. So in Phase III, we could clearly test our best dose, the 120-milligram versus placebo. And then as you see here, primary endpoint at week 16 or placebo patients being rolled over to get active drug. And as everybody else, you submit in your BLA, what we call the parental trial data, and that is 1 year. That is what we will talk about today. But I also remind you, these are chronic diseases these patients will not only get hopefully these drugs for half a year or year but for many more years. And we have an open-label extension program that runs an additional 2 years on top of the 1-year parental trial. And already toward your mouth, this will also include our adolescent patients. So we will be able to see over 1, 2, 3 years, how well adolescent patients are doing on sonelokimab. Jorge already talked about the fact that we wanted to use our clinical development program to also elevate outcomes. We wanted to understand how good is the drug in bringing patients to HiSCR75. We looked at HiSCR50 as well in order to allow comparisons to other drugs. And just to start talking a little bit about limitations. HiSCR, as you know, measures the reduction of 2 inflammatory phenotypes, the nodules and the abscesses, it does not measure the reduction of draining talents. This is why we decided to add another lesion count, if you will, into our program, the IHS form, which actually quantifies the decrease of all 3 types of inflammatory phenotypes and HS. Very importantly, we really do think that HS is a lot more than counting lesions. When we talk to dermatologists, my own experience, when we talk to patients, the patient organizations, we get the uniform answer that what really drives the disease, what matters, what constitutes the disease burden is not so much counting lesions, it is the pain. It is the order is that you have to change your dressings that you cannot need a normal life. You cannot do your sporting activities. You have problems with social interactions. This is why, for us, it was very important to include patient-reported outcomes that measure this real disease burden into our Phase III program. And you see a very conservative [indiscernible] on pain and then the HiSCR. Health-related quality of life instrument specifically validated to measure impairment in HS. So it's a disease-specific health-related quality of life instrument. And then we also put in the DLQI, a generic instrument that measures impact on quality of life across skin diseases, just to have a validation of the findings. These are 2 large studies. Actually, I think this is the Phase III program that has exposed more patients to the dose that seek approval for than any other Phase III program, and that is driven also by this very straightforward design. You know the results. This is the findings at the primary endpoint. This is the week 16 findings. I think we were very happy to see across what we call pivotal like trials, so adequate well-controlled studies. That is what you see here. And very happy that across all 3 trials, MIRA with more than 230 patients, VELA-1, VELA-2 with more than 440 patients. In each of these studies, we saw a consistent high response to sonelokimab. And you see the numbers here, these are the HiSCR75 responses. We also saw consistent placebo response with the exception of VELA-2. And of course, you know this -- this was the inconsistency. I personally, after many discussions with leaders in the field, we have done so many additional analysis, as you would guess, we see a very high quality, very high validity of our clinical trials. And I speculate here. But I think that the way the HiSCR is constructed, it is -- it will be subject to some impact of placebo maybe driven by nodules, may be driven by other factors. And we would not be surprised if we see more and more studies in the future where you have these outliers in the placebo response. But an outlier placebo is not an outlier in the response to drug. This was very consistent, by the way, very consistent not only when it comes to lesion counts, but even more consistent when it comes to these important PROs that I was talking about like pain and high school and others. I said it more than 500 patients exposed to the dose we seek approval for and a very simple measure, I think a first look into how safe and tolerable the drug is, is the dropout rate. And now let's talk about the 1-year data. Let's start to talk about the end of the parental trial. We see across our 1-year study, where we see a dropout rate as low as 26%. HS patients are complicated patients. They are sick patients. They have many comorbidities. Many patients have many other significant medical conditions. Many are on many other drugs, and I think drop at rate over a 1-year period of 26%, speaks to a favorable safety profile and a good tolerability of the drug. As I said, we are interested to collect more long-term data. We really want to show the world because this is a chronic disease. How good is our drug not only after 1 year, but after 2 and after 3 years on our approved dose. So for me, I'm delighted to see that almost 90% of the patients we enrolled in the study at baseline actually roll over to this open-label extension period. So there will be very interesting long-term data to come that should be very informative about how good is the potential of this drug to really do what this drug should do in a chronic disease, and that is delivering safe, long-term control. Of course, this is the slide that we have printed out as a poster and now every Mule employee has hang it on the wall. This is putting together the drugs that are in Phase III or are approved in HS and that have finished their parental trials, right? So this is what this slide looks at. These are the parental trial data of bimekizumab of secukinumab of fubarcitinib end of us. You see the color codes, we present the first 16 weeks. All the studies had week 16 as their primary endpoint. We present the first 16-week data using the method that was selected to measure the primary end point. And then uniformly, beyond week 16, we show the data as observed. So I think it is an apples-to-apples comparison as you can do it. You can see the very fast pickup of the response HiSCR75 with sonelokimab, you can see the great response in the long run and actually numerically producing the highest number, I think, that we have so far seen in a Phase III program of this time. And seeing that 70%, 7 out of 10 patients after 1 year achieve HiSCR75 response, I think is very good news of 4 patients, 4 KOLs and for the world. And you can see that there are really differences between these drugs. And I think it was important for us to get confidence that our drug has this potential to be the leading drug in the disease. Importantly, if you have a placebo wrinkle, allow me to call it like this, at one time point in one end point in one of your studies, is there something wrong with your placebo patients. Or is your drug actually providing irrespective of what the placebo response was a similar amount of benefit. And that is what you see here. This is why we decided to bring this slide. You see that the placebo patients that cross over to sonelokimab irrespective if they come from VELA-1 or VELA-2, they achieve the same benefit. And they achieve it fast. Within 4 weeks, they actually catch up to the response curve of the patients that started with sonelokimab at baseline. And for those of you who I know there will be some that will analyze and every time point, I can tell you it's amazing to see how similar the response after 36 weeks of exposure to SLK is because this is what we show you here. If you compare this to the response you see in the -- after 36 weeks of exposure to those patients that get to the drug from the beginning, it's identical, right? So I think this is not only a very strong validation of the findings in VELA-1 and VELA-2, but it's actually confirming this response that I already showed you for the active arms before and also confirming that there is nothing wrong with the drug and nothing wrong with the placebo arms and that these placebo patients that we saw have an identical response to each other and to the patients that receive drug from the beginning. Now let me do this now a little bit as a prescriber, right? Allow me to do an exercise with you. Now imagine you are a doctor that is interested in treating patients with HS and you have these several drugs now and you have a patient sitting in front of who that you consider a candidate for an IL-17 inhibitor. What you probably do in your mind is that you create these scorecards, when you look at all these outcomes, the lesion counts, we discuss this, the lesion counts that include measuring the decrease of draining tunnels, including these important PROs, you create the scorecard in your mind because you want to understand which is the drug that gives my patients the highest chance to respond, which is the leading drug. I think you will understand that all prescribers do this exercise. Whether there is a formal method analysis or not, that's what you need to do as a prescriber, and we try to do this. We try to do this year in the best possible way using the data that is available. And we used here the data from behind because we consider the IL-17 antibody as the so far best drug in HS. You see by the color code here, if you do the scorecard approach, I think you cannot escape the notice that sonelokimab really has the potential to be a leading drug I think not only best-in-class, but actually best in disease if you consider that bimekizumab is leading the pack as we speak. I think what you also see here, and that's a little bit a different exercise. We always compare responses and we look at the percentage points. But this is, of course, a little bit of an artificial analysis. When you want to answer the question, how many more patients benefit from using drug A versus using drug B, and this is the kind of analysis payers are interested in. This is the kind of analysis you do when you do a health technology assessment. So we allowed ourselves to put this column in to answer these questions how many more patients would benefit from SLK, and we show you the percentages here. And for many of the important outcomes, you see that the differences reaches a double-digit percent number. And we just put one here, this IHS4-100 which is very important for us because, as Jorge said, we think it indicates inflammatory remission and really cooling the fire, if you allow me to use this metaphor that HS is to really put this fire out, and you see that 10% more patients benefit from SLK when you look at this inflammatory remission compared to the existing IL-17A&F inhibitor antibody. So I think the scorecard looks very promising when we go through all these different efficacy endpoints. And you saw that this includes the PROs. This includes pain. This includes HiSCR, the things that we believe may matter even more for patients than the lesion counts. You would do something similar with safety, and I know that is rarely done, right? So I present these 2 slides now, the week 16 and then the 1-year data also as an attempt to reflect the scorecard exercise that prescribers will do. And as you are very aware, we tend to look at certain safety events of special interest. We tend to look at liver. We tend to look at IBD, we tend to look at suicidality, other things you see reflected here. And again, this slide is an attempt to do an apples-to-apples comparison as much as possible. And we think not only at week 16, but importantly, also at the 1-year mark, the end of the parental trial mark, you can't escape again, the notice that sonelokimab combines this high efficacy data that I was showing you with a very favorable safety profile. And I think this is what matters for patients. Of course, it also matters for prescribers. It matters for dermatologists. So we think it was important to put this side-by-side. So extremely promising efficacy and safety data from the 1-year parental trial data placebo trial. Jorge talked about the adolescent patients. And again, allow me to be a little bit emotional. Of course, you can always say, yes, we need to change the course of the disease and we need to treat inflammation in HS early on. But then you need to do a study to show that your drug is able of doing this. So we decided to use sonelokimab in a trial with adolescent patients from 12 years on with HS. Of course, an important first outcome of the study is, is the PK, is the drug when you dose these adolescent patients, is it behaving identical to adults? Because if this would be the case, then you can assume that all the data that you generate for adults are somehow transferable to the adolescent patient population. And I apologize for the complexity of the graph here, but what you should compare is the green and the blue. And this is showing you in green the PK data we observed in adults and in blue, the PK data we observed in this study and adolescents. And I think you can clearly see the drug behaves the same. By the way, the drug behaves very well. You see that this confidence interval are very narrow. And again, you see no difference between these adolescent patients from 12 years on and the adults. Of course, this is an important formal hurdle to jump over, and this was the primary reason we did the study. But of course, we look at efficacy. And you see the efficacy here. In the dark blue bars, you see the efficacy obtained in adolescent patients. And for reference, with the wide dots we put in the numbers we saw in adults. So great response in adolescent patients. These patients could be enrolled would not yet having a tunnel. So we really enrolled the patients to put this question to the test, can this drug potentially positively influence the disease course. And I think when you look at these numbers, at week 16, 80% having a response if you use HiSCR50 to define response. But more importantly, at week 16 and then at week 24, 60% to almost 70% of the patients achieving HiSCR75 and high numbers achieving HiSCR100. You know what this also tells me, and we have seen this in other chronic inflammatory diseases, the longer you wait to treat, the lower will be your response. In my own words, if you save your best drug for last, your last drug is no longer the best. This data is showing you this, right? It shows you that if you use sonelokimab early on in adolescent patients, you have a better chance to control the disease and will be super interesting to see the long-term data. How are these patients developing over years under treatment with sonelokimab? The safety profile in adolescents very clean. Many would perceive adolescent patients as a potentially more vulnerable patient population. So it's important to see that the safety profile is as clean as we saw it in adults. And last but not least, coming back to one other practical consideration, right? That is rarely talked about, but when you sit there in the practice and you give the first auto injector or you train patients to give the auto-injector, you will realize that it does matter. We think we have a very convenient way of administering sonelokimab. We have a very well used and established auto injector. We have a very low injection volume, and this auto-injector will inject the volume in a few seconds. We achieved our maintenance dose already after 5 injections by week 8. And from then on, we have what we think is this very convenient once per month, 1 ML, a few second injection. And let me say one last thing. We see that, oh, yes, but why not every 8 and every 12 and every 6 months, and this is my very personal view now. I think these very sick patients with HS, I think you run the risk that you lose compliance and adherence. I want to see my HS patient once per month. I not see a convenience benefit knowing that I spent 3 seconds here per month to give my drug, I don't see a convenience benefit to go to longer intervals I more see a risk that you lose the adherence. And you can already see this in the clinical trial. So taking this all together, and I hope you see the excitement level, the whole team is super excited to put all this data now together in the BLA. I hand over to Jorge to share with you what is then their BLA strategy. Thank you.

Thanks, Kristian. So how does this all now play into what we've already been discussing with the market, with KOLs, with patient associations, the foundations, et cetera, with regards to what to expect from our BLA strategy and essentially from our label. Obviously, everything in a label matters. But as we discuss sonelokimab, its strengths. And basically, from a scorecard perspective, that Kristian mentioned, how does it compare to others? There's essentially in our mind, 3 sections that are particularly important as they will black and white reveal the value and the official value of that drug when it comes to the market. And that's obviously Section 14, where you see all the data around efficacy, which trials were considered, what are end points that we can actually talk about in the market with physicians and patients and also 2 sections that in our mind relate to safety, Section 5 warnings and precautions, which we know can be limiting for some drugs. And obviously, the Section 2. How do you actually dose this when you give it to a patient. So if we take a focus on these 3 sections, we believe that the competitor data here leaves a lot of space for SLK to compete as the leading drug and especially after you saw the data that you've seen in this slide here, we collate Sections 14, 5 and 2 from the 2 competitors, one in IL-17A only inhibitor, secukinumab and perhaps more importantly, the only other competitor when it comes to the MOA of IL-17A&F, bimekizumab. And I want to call your attention to this to some of the elements here. To illustrate this concept of space being left for us to add something more, and then I'll tell you what that more is. On top, you see the Section 14 for both drugs. As you can see, obviously, there's no delta to placebos in labels. There's also [indiscernible]. But as you can see, the numbers that bimekizumab presented for their primary endpoint, HiSCR50 are quite competitive, but we believe that on HiSCR75, as you saw before, there is some value left on the table, if you will. And obviously, HiSCR75 is not the primary endpoint of the bimekizumab trials. Also, if you look at the secukinumab side, you, of course, see a lot of potential, but you also see that oftentimes, even if you don't meet statistical significance even from primary endpoints, some doses are approved like that. So as many people try to see what will happen to the VELA-2 data, et cetera, you don't need to look around into many other diseases and many other parts. There is a great example in HS, and that is illustrated right there with Cosentyx. So plenty of space in our mind to play here for efficacy. And obviously, Section 5 and Section 2 of the other drugs, we believe also give some opportunities, especially bimekizumab. As you know, some warnings and precautions there related to safety items where we think we can present an advantage in front of regulators, in front of prescribers and infra of patients. So quite some space. So what does it mean when we look at these sections, especially the Section 14 efficacy, which I know is of interest to many of you watching, how do we build this label now that we have all this data and now that we've had the unique opportunity to have quite a few interactions between primary endpoint and now with the FDA. So we believe that as our base scenario, what we're going to discuss first with the FDA, we can have a label. We believe that we can have a label that has exactly the same dimensions as bimekizumab, HiSCR50 and HiSCR75 with a big difference again that HiSCR75 in our case comes first because it is the primary end point. And we believe, as we've explained and as Kristian has already explained several times, that the 2 trials that will be considered here, as per guidance already received and discussed with the FDA, is that there are 2 trials that will be used to establish substantial evidence of effectiveness or efficacy. And that's VELA-1 and MIRA. And obviously, if you look at the numbers from both trials, that presents in our mind a very advantageous profile for the Section 14 table. We believe that our Section 14 should also be able to benefit from the pain scores, the highest calls. And importantly, as we said, the IHS4 efficacy scores, we believe in a base scenario, these will be presented in narrative points, so that the text that comes below the table. And as we have said before, we don't think that VELA-2 will be included as a trial in the table, they will more likely be included in narrative points in Section 14 but also it can also be included as a trial in the table. As you see, it doesn't affect at all the label. It continues to be a leading table. Just as a comparison, so that you understand when I'm saying a leading table, what are we comparing to. We're obviously comparing to our main IL-17A&F monoclonal competitor. And as you can see by the numbers, just looking at HiSCR75 and HiSCR50 obviously advantageous numbers for us. Also, if you want to calculate a delta to placebo, and I would like to call your attention to the fact that our competitor does not have high school or IHS data in their Section 14, neither on the table nor on the narratives. And the narrative is very in our mind, general comment on pain because obviously, pain did not reach statistical significance in both of the trials of that drug. So we believe that the proposed base case for our label as follows the discussion and the several discussions we've had with the FDA in the last few months really has a chance to show a level that is much more complete, much more interesting when it comes to prescribers and patients. With, by the way, as delta-to-placebo primary end point that goes back to expectations that were in the market last year. Now we believe that there is an upside case here, where, as you can see, instead of gaining HiSCR IHS4 being included in as narratives, we might even have the opportunity to have a longer table with even more endpoints with numbers right there in the table as an upside case, as you can see here. Obviously, this will present even more differentiation to our competitor. We don't believe that this is necessary, but this is something we will want to discuss and push for, especially because we believe that, as Kristian said, these patient reported outcomes really need to also take center stage. HiSCR is an important measure for accounting lesions. It's definitely important from a regulatory perspective. But when it comes to everyday life to prescribers that are perhaps less familiar with the disease, these PROs is what really changes behavior. So we're obviously very happy to have them on narratives, but if we can put them on the table, we are going to try for that. But our base case, as you see that we will -- that we believe that we will have a label on Section 13 that is just better than other competitors. I'm not going to go through the details for Sections 5 and 2, you can read this. This document will be made available to all of you. But there are several elements here, as you can see from the plethora of ticks in this page, where we believe we have an advantage over competitors. One interesting element to consider here as we think about our strategy is because we have this adolescent data, that opens the potential for a priority review for our whole BLA, including adults. Priority review from the FDA is a very strict set of criteria that clinical data needs to meet to justify the regulator spending the extra time, the extra resources to review this faster because it's important for the market. We believe that the data that you've seen is clearly pointing to our drug and our clinical data meeting this criteria. And obviously, we believe that -- and we've discussed this with the FDA that we are eligible for VELA-2 review. We've agreed that, that will go with our submission in September. I want to make clear that this is not our base case. Our base case is that we follow the normal BLA procedure. We understand that oftentimes, the FDA is limited in the resources it has to dedicate to these extra processes. So we don't want to consider that a guarantee by any means. So we consider this an upside case, but still a potential for our drug. What does that mean in terms of time line before we go to the commercialization section. Again, I won't go through all the details. I want to make sure that you all have it in writing for your perusal. Just call your attention to the blue boxes. The first blue box there on the left, this is when we, of course, expect the submission. We've been very clear with you on that no later than the end of Q3. And then as you can see on the upper part is the standard BLA process. Therefore, we would expect to have the drug approved right there at the border between Q3 and Q4 next year so that we launched then. That is our base plan. Below, you also see the blue square that talks about the priority review. If we were to be granted priority review, this would accelerate the launch of the drug by 3 to 4 months. Again, an upside case, but obviously something quite interesting for us to -- and a challenge also for us to deliver on this. So hopefully, this is clear. You've seen the whole data. You've seen what matters in the label. You heard us talking many times about the several interactions with the FDA, the clarity that we've put on our press releases around how this label will look like. You see now how it can be advantageous. So as we go to market, either later in '27 or earlier in '27, we go to win. But to win, we need a winning commercial approach and to discuss that, I will pass it over to you, Matthias.

Thank you, Jorge. It's my pleasure now to walk you through some of the commercial considerations and tell you a little bit more where we stand with respect to preparing for the commercial launch of sonelokimab. I think 4 years ago, when we started talking about the opportunity in HS and talking about this is a $10 billion-plus market, most of the people were looking at us and probably not really believing what we said. You see it here on this page, we are no longer alone. I think you hear it from us, $10 billion to $15 billion market opportunity. You also hear it from our competitors and the other companies that commercialize in HS. You see it from the various research analysts that also independently assess the market opportunity. I think consensus is really now there that this is a very large opportunity. But we also keep looking at claims data. Market research is nice, but I think claims data shows you the truth, and that's where we truly see right now 2.9 million patients in the U.S. right now are already diagnosed and treated in some sort of form for HS. So that's almost 2 million patients right now. Kristian talked about it earlier. We also see a substantial growth year-over-year, about 300,000 new patients being added to that. Commercially, also very attractive is the very high price in HS that is linked to the dosing in HS. Most of the drugs are given double the dose that they are given in psoriasis. So here you see the approved list price of bimekizumab in HS, which is well over $200,000. So even if you look at the gross to net, this is a net price opportunity that stays healthy above $100,000. Now the shocking thing in this indication is that still only 3% of patients are treated with a biologic. That's also what you see illustrated here on this page. 3% of the patients are treated with a biologic. So this is by no means a market where you have clearly established incumbent that the game is already decided because you have like some other big pharma companies in the market now. This is a very nascent market, where I think our objective and the objective of all other pharma companies as well as the HS communities is really to make sure that we treat these patients adequately. To elevate this 3% that you right now see in HS to numbers that are more similar to what you see in more mature inflammation markets, like psoriasis, like atopic dermatitis, like an axSpA, like a psoriatic arthritis, where you see numbers of around 15%. Those are very much feasible and also required think again that HS is a disease where you have irreversible tissue damage where you have scar formation that even with the best drug, you don't -- are not able to remove these tunnels. You're not able to remove these cars. For that, you need surgery. So we need to treat early on. I think it's our objective and the objective of other companies to increase the treatment rate here with advanced therapies. Now on the right-hand side of this page, you also see that HS is for various other reasons, a very attractive market for a biotech like us. First of all, the number of treatment options are very limited. It's not a market where you have 10, 15 available options. But right now, you only have a couple of approved therapies. We looked at the data and you see that they leave a lot of white space. I talked about irreversible tissue damage. And that's also one of the reasons why this market is not as closely managed by the payers. You see lots of medical exceptions that are actually approved by the PBMs, by the payers. You also see that the treatments that are in the market actually have very limited efficacy and have partially some issues with tolerability or safety or durability. So lots of opportunity for a company like ours to actually get into the market and successfully commercialize this drug. And actually, it's a trend that you see overall, even beyond HS, you see more and more biotechs actually launching drugs themselves and actually do it very, very successfully when comparing to analyst consensus. Now what do prescribers look like. Look for -- Kristian already talked about it and he the market research that we have been conducting. When asking dermatologists, what are the attributes that are most important when selecting a just drug, no surprise. People look for efficacy and for safety. But if you look at it a little bit more closely, you see that actually, it's not one of the dimensions that truly stands out. It's a lot of factors that matter. And on efficacy, it's not only a lesion count, it's the quality of life. It's the pain reduction. It's all these aspects and all these aspects that we talked about when we talked about the potential label for sonelokimab that truly matter for the prescribers. We even went one step further. We looked we conducted a conjoint analysis with actually 250 prescribers, 250 dermatologists that actively treat HS, and we did not ask them what matters to you. We actually presented them to potential attributes of a drug. We presented some profiles of drugs that are currently approved and the profile of sonelokimab with some variations on the label and try to understand now which drugs would you choose given on differences that you see on the label? Do you get a claim for quality of life in the label? Does it make a difference, whether you have a higher or lower HiSCR75, et cetera. And I think most importantly, we see that the prescribers are very excited about the profile that odelukimab brings to the table. We see a very high willingness to prescribe and you see it in the bottom also independently confirmed by research analysts some of the banks that cover us. I think also very important and very interesting for us was to see the importance when it comes to the label. And when you see the advantage that you can potentially get from having data on quality of life, data on pain, fewer safety warnings, those are areas that actually make a very big difference when it comes to prescribing behavior in the market. Where do we stand with the preparation of the commercialization of sonelokimab in the U.S. You see it here on this page, we have now incorporated the U.S. entity in the beginning of April. Our distribution operation setup is well advanced with respect to state licensing with respect to selection of a third-party logistics company selection of specialty pharmacy set up, serialization, we have produced the first commercial batches. We are starting to stockpile sonelokimab so that we have the supply that is needed for a very successful launch of this drug. Obviously, we've done a lot of work on the strategic positioning, go-to-market model pricing considerations. We've also further strengthened our collaboration network. We have very good partnerships with the leading KOLs in the field. We have a very strong partnership with the HS organizations that are very active in this market. And we've also started the first discussions with payers and PBMs and are very excited about the traction that we have on that side, very high excitement from their side about our product and also some opportunities for us as an innovative biotech not only innovate in the way we bring like we generate data and show some very innovative drugs, but also thinking of new approaches, collaborations with payers, with PBMs to actually disrupt this market. Also worked on the brand identity. Lots of more work left for us, very clear, but there is also a couple of key milestones ahead for this year. We're in the process of selecting or identifying the location for our U.S. headquarters more to be announced soon. We're also in the process of appointing the U.S. leadership for MoonLake. The commercial team will obviously expand very heavily, including expansion of a field force where we actually plan to have a field on the ground as of the beginning of next year. We'll continue to work with the payers, with the PBMs to build partnerships there. And obviously, importantly, we will also work on continued manufacturing of sonelokimab to ensure that our supply is sufficient to meet the demand that we expect for this product. Last but not least, you see it on the bottom of the page. We have a very strong and healthy balance sheet. We have runway as is until the end of 2027. So covering the expected approval of sonelokimab. And on top of that, we do have the collaboration with Hercules Capital through which we have access to up to $400 million more in additional funding and additional non-dilutive funds. So we're in a very strong position from a balance sheet from a capital perspective and actually very much looking forward to now preparing for what we believe will be a blockbuster launch. With that, handing over back to Jorge for some closing remarks.

Thank you, Matthias. As we're coming here up on the hour, I want to make sure we rounded off with some closing remarks, but also follow on my initial promise to shed a little bit of light in terms of what we expect for the IZAR-1 readout. But again, still keeping the focus in HS, I want to just take us back one step and look at what have we shown you when it comes to patients and prescribers. And I really believe that we here have the potential to be the best-in-class drug, possibly the best in disease drug in HS as we're proposing what I would call a well-aligned label with the regulator in the United States, the FDA, excellent position in terms of efficacy, real potential for a safety profile that really presents an alternative to patients. And as Matthias mentioned, something that really sways the decision when it comes to prescription and something that is very, very convenient and therefore, helps the patients to get patients to treatment. But as Kristian also mentioned, keeping that robot relationship about discussing the disease not about how you actually inject your drug. So from a prescriber perspective, as a closing remark, clear indication for a leading label supported by all the information that we've shared around our FDA interactions. If you actually see it from a payer perspective, as you started hearing from this, obviously, a very critical element in driving the commercial success of this product because the market is so unstructured very important to talk about the value of those drugs for payers. And I think the data that we've shown you, not only the label, which obviously payers will very, very carefully peruse in their decisions to support the drug when it's given to patients. But as you see on the left side, that element that Kristian introduced when looking at the scorecards because the base will also do the scorecards, the drugs and compare, what is that percentage of patients that I get further in treatment, be it in efficacy, be it in patient-reported outcome versus a competitor drug. And here, as you can see, I think we can have a conversation with peers where we say, for example, at a similar cost, our drugs just delivers 2-digit advantage when it comes to patients that reach certain objectives. So also from a payer perspective, which as you know, will be a major focus of our commercial model, I think this data and this overall program of HS really delivers something that is very, very competitive. Starting to look forward and continuing to go along the time line in 2026. Next up, rheumatology. We start now moving into the readouts of our dermatology programs in Phase III. Obviously, we read axSpA Phase II earlier in the year. And the first one is IZAR-1. I remind everybody that our bionaive study where we compare different doses of sonelokimab with placebo. Our largest trial ever, and that will read in about a month's time. What should you expect from this readout, we prepared a summary so that you know what's coming. Very important, remind everybody that IZAR-1 is a trial with 3 arms that run the whole year, placebo, 60-milligram SLK with induction, 60-milligram without induction. IZAR-1, another 4 arms also running for a year. So obviously, as you read on the primary endpoint, we're able to share some information. But obviously, we have to be careful not to unduly unblind the study and obviously follow the mark of the letter of the FDA on what can be disclosed or not. What will be disclosed is presented on the right side of the page. We believe that this is probably one of the most broad detailings of a primary endpoint in PSA. You should expect within Q3 a press release, the press release will say what any other press release says in PSA. Did we meet the primary end point? Or did we not meet the primary endpoint. But we -- as I said, we will go beyond that. We will be disclosing the absolute responses for sonelokimab in the main dose, which is the 60-milligram with induction, as you -- as we all know from the ARGO Phase II, we will be showing you the absolute responses for all endpoints. Well, of course, stating whether we meet or did not meet. This will allow us to not only talk about meeting overall but it will start giving you a sense of what kind of response can be achieved in a purely bionaive popular with sonelokimab. This will keep with the blinding approach that we that we agreed with the FDA. And we'll give you a very good sense of where they were in line with ARGO and what's the effect in these patients. We believe that anything that aligns with ARGO will be a clear success for IZAR-1. And obviously, why are we so focused here on the absolute responses of sonelokimab? Because obviously, in PSA, as you know, this is what matters much more for prescribers here. The delta-to-placebo element is less important. We know investors will want to look for this information. But as we all know, there's no real placebos in PSA patients are treated with many different drugs throughout trials in our trial and any other. So we truly believe that the absolute responses and the breadth of data that we will present will provide a unique view on the primary endpoint on IZAR-1 and will allow many people to do comparisons already at this time point. So we're very excited about it. Watch this space for a press release in the near future. Hopefully, that was a very informative and robust session as we always do. A great story on HS. We're really excited as a company. and obviously more to come in other parts of our clinical programs. So we will stop here and open now for the Q&A session.

So we have a couple of questions here related to the VELA-TEEN study. One of the questions here from Rami Katkhuda, LifeSci Capital. The adolescent HS data appear very strong despite the small sample size. How much this benefit do you attribute to earlier-stage disease? And do you expect the VELA-TEEN data on the label as well? Maybe Kristian, do you want to take this?

Yes. Happy to take it and Rami a good point. I think what you suspect here is true. We get -- we treat these patients, similar patients at an earlier stage of their disease. They are probably less recalcitrant. They have seen less therapies. They are more in the inflammatory stage of their disease. And I remind you that we allowed patients in the study that did not yet have a tenet, which in my eyes is completely meaningful, but you don't want to wait until the reverse of the situation destruction has occurred. So we see a better response, but this matter is not an artifact, it is really driven by the fact that you catch to start eating the disease at an earlier more inflammatory stage of the disease. And since we all use anti-inflammatory drugs, it makes a lot of sense, and we talked a little bit about the potential to do some disease modification. That would be the goal. And I shared with you that all these patients that we load in the adolescent trial, and we'll have a chance to participate in the OLE. So hopefully, even from our own relatively small study, we'll get a first evidence if this is indeed possible. Let me remind you, this is more than just saying I modeled it from some other juvenile indications and therefore, high drug can be used from 12 years old. This is actually generating data patients from totes on. So we want to get, hopefully, more in the level than just you can use the drug moderate to severe from 12 years on actually be able to talk about the pediatric population. There's the Section 8 used in specific populations. There is 8.4%, which is your pediatric population. So in the label, there is move to talk about it. And of course, we will try -- these are exactly the areas we want to make sure that people understand this is data coming from a real trial successful trial in patients with LLS.

All right. Then we have a few questions here on the commercialization part. One of them here from Prakhar Agrawal from Cantor. Why are access dynamics in HS different than in other I&I indications like psoriasis? Maybe I take this one. So I think first of all, in psoriasis, we have over 15 approved treatments right now, in HS, Also, if you look at the outcomes in psoriasis, you have quite a few good treatments that bring patients to a PASI100 response. So full skin clearance, we are far away from these response levels in HS. So arguably, the unmet need is a lot higher in HS. Also, if you look at the disease, you have to understand that in HS, you have a lot higher cost of care for the payers. Patients undergo surgeries, they visit the ER, they take opioids. So it's a very costly disease also for the payers. And then also, you do have really some irreversible tissue damage here. In psoriasis or in atopic dermatitis, if you treat a patient, even if they've had many, many years, the disease, you can get that too clear skin in HS, the tunnel that have already formed as per the point that Kristian just made about the VELA-TEEN data, once they have formed, you will not get them away without surgery. Same for the scared tissue. You can treat the inflammation, but you have irreversible tissue damage. That's also why it's a I would say interesting and makes sense for payers to actually be more open for innovation in a disease like HS where you have a costly care where you have a true unmet need or where you have a reversible tissue damage. Now the next question here on the commercial side. This one is from Tom Smith from Leerink. Can you comment on some of the precommercialization steps that you're taking in anticipation of potential approval? I believe this one I've already covered earlier, but then also another question here, how are you thinking about manufacturing capacity for sonelokimab and current drug supply. Jorge, do you want to comment on this?

Yes, I am happy to do that, Matthias. Thank you, Thomas, for the question. Perhaps I actually take the opportunity to underline a few of those elements on pre-commercialization. I mean, Matthias was very clear on that list, Thomas. And I think that reflects how much work has been going on. Obviously, a lot of focus on the company regarding, of course, approval data, et cetera. But we never stopped working on the commercialization setup. I would even describe the fact that I think we've already finished the first phase of pre-commercialization, as Matthias described, and now we're really moving to the next phase, hiring the team and preparing all steps, including supply and I think very importantly, all the elements around access that the Matthias already mentioned in the previous question, in answer to Prakhar's question. And I think that's really the focus. Now obviously, as you raised, Thomas, we need to make sure that we have drug supply in place. Here, I would like to add that in terms of absolute capacity to supply the market, and that includes the U.S. and other regions our current supply chain is ready to take us 2 year, 3 or 4 year 3 or 4 of our market, right? So some might ask how is that possible in earlier stage biotech. I think here, you were fortunate to inherit, if I may call it like that. already a very advanced supply chain when we licensed the drug from our partners at Merck and that allows us to be already ready to go all the way to those years into the market. Obviously, this is a tried and tested supply chain, Thomas. We've treated thousands of patients across both sides of the ocean. So we know it works. And as we said, following the BLA approval and the approval of our sites, we will be ready to go in terms of capacity likely 2 year, 3 or 4 of market. That doesn't mean that we will stop developing our supply chain right now. We're also looking into other opportunities, namely second sourcing, et cetera, that will allow us to go into further years of the market, but also continuously manage the risk of supply chain. So Thomas, I would describe it as a tried and tested supply chain, lots of capacity FDA inspected partners throughout. So I think we're very ready, but we'll continue adding to our supply chain as part of our pre-commercialization steps.