Zenas BioPharma, Inc. (ZBIO) Earnings Call Transcript & Summary

Good morning and welcome to the Zenas BioPharma Obexelimab IgG4-RD Investor Event. [Operator Instructions] I will now turn the call over to Abby Gray, Director of Investor Relations. Please go ahead.

Thank you and good morning everyone. Before we begin, I'd like to remind you that today's presentation contains forward-looking statements, including statements regarding the potential approval and commercial launch of Obexelimab and IgG4-RD, the timing of our regulatory submissions and clinical readouts, opportunity ahead of us. These statements involve risks and uncertainties that could cause actual results to differ materially from what we discussed today. I would encourage you to review the full disclaimer on this slide, along with risk factors described in our most recent annual report and quarterly report, filed with the SEC, for a complete discussion of those risks. I'll now turn the call over to Lonnie Moulder, our Founder and CEO.

Thank you, Abby. Abby joined us a few weeks ago as our Director of Investor Relations, and I know she looks forward to meeting and interacting with all of you. Thank you all for joining us for our Obexelimab IgG4-related disease investor event today. We'll walk through the unmet need within the current IgG4-RD treatment landscape, the commercial opportunity ahead of us, and how we are preparing to execute what we believe could be a transformational launch both for patients living with IgG4-RD, with this disease and Zenas. We're also very pleased to have with us Dr. Guy Katz from the Division of Rheumatology, Inflammation and Immunity at Mass General Hospital, who will share his perspective on IgG4-RD and the unmet patient needs, along with the INDIGO study results. Joe Farmer, our President and Chief Operating Officer, will then walk us through the market opportunity and our launch readiness in detail. We'll then open up the line for questions. While we are laser focused on executing a successful Obexelimab commercial launch, if approved, we feel that it is important to highlight how we are well positioned regarding our overall rheumatology and neuroimmune pipeline, which spans multiple indications with recognized regulatory paths to approval and significant commercial potential. Of note, we are expecting top-line Phase 2 results from the SUNSTONE study of Obexelimab in SLE and pharmacokinetic safety and tolerability data for ZB-021, our oral IL-17AA/AF inhibitor, both in the fourth quarter of this year. While we are very excited about the opportunities across our broader pipeline, our focus today is on IgG4-RD and the upcoming anticipated launch of Obexelimab. We hope you will join us for a deeper dive into the SUNSTONE SLE study and our IL-17 inhibitor ZB-021 at our R&D event later in October. Zenas leadership and our overall team are deeply experienced across all aspects of drug development and commercialization. We are not a team learning what a drug launch looks like in real time, rather a team that is seeing where launches go right and, importantly, where they may quietly go wrong. We have a validated launch playbook and are ready to execute. Before we get into the specifics of our launch planning, I want to spend a moment on what makes a successful rare disease launch. In our experience, the disciplined execution of a strong launch plan is what sets a company and a launch up for success. We build our plan around 5 interconnected components. First, recognize and refer sooner, shortening the path to diagnosis instead of waiting for IgG4-RD patients to find their own way to a specialist. Second, find every diagnosed patient through data-driven identification, not guesswork. Third, earn physician conviction with evidence that is genuinely differentiated, not just differently marketed. Next, remove access friction. So a written or inputted prescription can actually become a filled one. And finally, the link most companies underinvest in provides support that extends beyond the prescription because a patient who starts therapy and quietly stops it months later isn't a launched success. This connected continuum is what can turn a good drug into a successful launch. We believe IgG4-RD represents a substantial market, assuming approximately 50% of the currently diagnosed and managed patients are addressable, and the benchmark price of the approved therapy for this indication, we estimate the U.S. market opportunity approaches $4 billion. We and others estimate there are 30,000 to 40,000 prevalent IgG4-RD cases in the U.S. today. Our analysis of claims data indicates approximately 25,000 patients are currently diagnosed and managed. Of this population, we estimate that the flare frequency and/or the potential consequences of flares results in approximately 12,500 patients eligible for ongoing maintenance therapy, and that's the core of today's addressable opportunity. It is expected that diagnosis rates, awareness, and referral patterns will keep improving with the availability of approved therapies. We believe Obexelimab can be positioned as the preferred first-line therapy for the majority of IgG4-RD patients, and this is supported by 4 key areas of potential differentiation. Efficacy and safety data that stand on their own, a mechanism that is genuinely different, the reversibility and flexibility to potentially pause around vaccination or intercurrent illness, which B-cell depleting therapy cannot offer, and the convenience of at-home weekly dosing. That combination is why, in our market research, approximately 2/3 of treating physicians told us they're extremely likely to prescribe Obexelimab, and 1/2 indicating they were prescribed at first line, and that is before any marketing or sales promotion. At launch, there will be 2 clear prescribing paths. The first is active flares. Newly diagnosed patients presenting with a flare and previously diagnosed patients who are not currently receiving treatment and are flaring again. Both are moments when a physician is actively making a treatment decision. Second is active treatment, where patients are currently receiving a biologic and cycling back to their physician prior to scheduling their 6-month infusion. Each of those visits is a moment where a physician will have the opportunity to introduce a new drug to patients, and we believe our profile gives them a compelling reason to potentially implement a switch. That is the difference between hoping for adoption and intentionally impacting it. With that, I'll now turn the call over to Dr. Katz, who is not only an expert in this disease but manages numerous patients living with IgG4-RD. Thank you, Dr. Katz, for joining us this morning and sharing your thoughts with investors on IgG4-RD and the unmet patient needs, along with the INDIGO study results.

Thank you very much, Lonnie. It's such a pleasure to be able to speak with you all today about IgG4-related disease. What we'll do is we'll discuss some overall concepts about how IgG4-related disease presents, how the diagnosis is made, and some key areas of unmet needs. And then we'll spend some time talking about the specifics of the INDIGO trial and the results. First, let's start with a – and next slide, please. First, let's start with a definition of the disease. So, IgG4-related disease is a systemic, chronic, and progressive immune-mediated disease. We think of it as a fibroinflammatory disease, meaning that there is a component of inflammation and a component of fibrosis or scar tissue deposition that results from the inflammation. And this is a disease that can affect nearly any organ in the body. There are a few important exceptions, but almost every organ can be affected. It's a chronic disease. The vast majority of patients will have active disease if they're not undergoing treatment. And after they undergo treatment, the vast majority of patients will eventually relapse after treatment is discontinued. And this is a disease that leads to very frequent irreversible fibrosis, organ damage, and is even associated with increased mortality. Some of the specific features that I would mention about it, it's typically multi-organ. The majority of patients have more than 1 organ involved and some patients can have 5, 6, 7, 8 or even more organs than that. It is a relapsing disease as we discussed. Most patients will have a relapse at some point after they come off treatment, and some patients might even relapse on treatment. And very importantly, there's a really substantial subclinical component to this disease, which we'll discuss in more detail soon. One of the ways that we come to the diagnosis is through histopathology. So biopsy is an important element of the diagnosis in many patients, not all patients. And on this slide, you see the typical histopathologic features that we associated with IgG4-related disease, which are a dense infiltration with lymphocytes and plasma cells. Most of those plasma cells, or at least many of them, staying positive for IgG4. We see very frequent fibrosis or scar tissue and in IgG4-related disease it's very often in this typical storiform pattern. And obliterative phlebitis is the third typical histologic feature that we see where there's inflammation of the veins within the tissue that's severe enough that it obliterates the lumen or the inside portion of the vein. We often see elevated serum IgG4 concentrations, which is part of the reason that the disease is called what it is. And imaging is an important part of how we make the diagnosis because we see very typical either enlargement or masses in the expected distribution depending on the organs that are involved by the disease. So as I mentioned before, this is typically a multi-organ disease and almost every organ in the body can be affected. The figure on the left side of the screen demonstrates the multi-organ potential of the disease. And you can see that there are certain organs that happen particularly commonly, and the most common manifestations are enlargement of the lacrimal or lacrimal glands, which are the tear glands, which are on the side of the eyes, as well as the major salivary glands. Your salivary glands, the submandibular glands, which are just under the jaw, and the parotid glands, which are just behind the jaw. And when these are involved, typically they present as painless and symmetric enlargement of the gland. Very often patients don't even realize that they're enlarged. And this is 1 of the few manifestations that even during active disease, when it's asymptomatic, the propensity for damage is not particularly concerning. There can be an increased risk of dry eyes and dry mouth. But with the exception of those, just about every other manifestation of the disease with or without symptoms has the potential for really significant and meaningful damage that can happen to the patient over time. After the glands, the next most common organ that's involved in the disease is the pancreas, and the pancreas by far is the most commonly damaged organ in the disease. When it presents, it can present either with enlargement of the pancreas or occasionally can present with a pancreatic mass. So it's not uncommon for these patients to be misdiagnosed as having pancreatic cancer, unfortunately, before they come to a correct diagnosis of IgG4-related disease. And once they have the diagnosis, it's actually very common for the pancreas to fail as a result of the inflammation from the disease, with about 1/2 of patients developing exocrine pancreatic insufficiency, where the pancreas is not able to produce enough digestive enzymes to allow the patient to digest the food that they eat. Or to also about 1/2 developing diabetes, which is the result of the pancreas's function of producing insulin being compromised by the disease. And the last manifestation that I'll mention is 1 of the most common and typical manifestations of the disease is retroperitoneal fibrosis. And you can see a picture of that on the bottom right of the screen here, where there's this soft tissue that encases the aorta in the retroperitoneum, which is the posterior aspect of the abdomen. And that is often asymptomatic until it leads to compression of structures in the area. A complication of that is when it obstructs the ureters, which are the tubes that feed urine from the kidney into the bladder. And it's very common to see backup of urine into the kidneys, which can actually be a medical emergency when that occurs. This slide shows that there are manifestations that can be seen in many other organs, and this is not a comprehensive list by any means. So it's important to recognize that the potential for damage in this disease is really substantial. Another aspect that really can contribute to the very frequent damage that we see is that this is a very frequently subclinical or asymptomatic disease. And at its surface, that sounds like a good thing. It sounds great that patients don't have to suffer when they have active disease, and of course that's true. But the flip side of that is that when patients don't have symptoms, they're very often ill but don't realize it. And this is an important differentiator between IgG4-related disease and many other autoimmune diseases, where typically when patients have active disease, they know that they're ill, even if they don't know what the diagnosis is and can't necessarily say that maybe they have inflammatory arthritis or interstitial lung disease, but they know they don't feel well. The same isn't always true in IgG4-related disease, where patients can have even severely active disease and have little to no symptoms. But that activity is still causing progressive damage to the organs, even if the patients don't feel it at the time, which is why we see such a large burden of damage, irreversible damage to organs, even very often the first time we meet a patient before they even have their initial diagnosis. And this schematic shows that over time, very early on, there may or may not be symptom onset while there is ongoing active disease. And then by the time there's the patients come to a diagnosis, they very often had active disease. And it's not uncommon for me to meet patients when we, in hindsight, are able to recognize that they likely had evidence of active disease for several years or even over a decade. Next slide. We don't know the true prevalence and incidence of this disease with 100% certainty and that's for several reasons. One is, there is still under-recognition on the part of providers, where many providers are not recognizing the typical manifestations of this disease and not coming to the right diagnosis. And 2, it's not until recently that we had an ICD-10 code for IgG4-related disease. So, claims-based analyses really only cover the past couple of years, and we don't have anything from prior to that. The data that we do have, which I think most of us agree likely underestimate the true prevalence and incidence of the disease, if anything. Indicate that the prevalence is about 5 per 100,000 in the U.S., and about 1.4 incidence of about 1.4 per 100,000 patient years in the U.S. In Japan, the prevalence is perhaps a little bit higher. But again, it's a little bit hard to know with 100% certainty, and I do suspect that at least the U.S. numbers are likely an under report from underdiagnosis and from many patients who are sick but don't have the right diagnosis. Next slide. The pathophysiology of IgG4-related disease is something that we've learned a lot over the past decade and 1/2 or so since the disease was first named and we started really paying attention to the immunology of the disease. I won't go through this slide in excruciating detail, but I'll summarize it as such. As is the case with most autoimmune diseases, we suspect that there is some antigen that leads to activation of a naive B cell. The cell is activated, it then communicates with a T cell. And that relationship between the B cell and T cell leads to downstream immunologic effects that range from activating plasmablasts and plasma cells, which are ultimately the cells that produce the IgG4 that we're measuring in serum. There's activation of CD4 positive cytotoxic T cells and there's downstream effects on fibroblasts and myofibroblasts as well as macrophages, all of which lead to the prominent fibrosis that we see. So it's a combination of T cells, B cells, and macrophages and myofibroblasts that ultimately lead to the tissue damage the fibrosis that we see in the disease, but it all really begins with that interaction between the activated B cell and the TFH2 cell, which is why, targeting B cells seems to be such an effective means of controlling the disease and why the B cells have been such a prominent target as a therapeutic target. Making the diagnosis of IgG4-related disease is notoriously challenging. There is no single diagnostic test for IgG4-related disease, and there is no single specialist that is kind of routinely known to be the person to make the diagnosis. Many people think of serum IgG4 or IgG4 staining in tissue as the diagnostic test for IgG4-related disease, but unfortunately, both of those are nonspecific. They can be seen in other diseases. Particularly serum IgG4, can be normal in up to about 20% of patients with IgG4-related disease. So this is part of the reason that there is under diagnosis is that particularly patients with normal serum IgG4 concentrations don't come to a diagnosis because people interpret a normal serum IgG4 as concrete evidence they don't have IgG4-related disease, which is simply not true. So as is the case with many other systemic autoimmune diseases, the diagnosis of IgG4-related disease really comes down to the clinician. The clinician needs to incorporate information from the patient's symptoms, the physical exam findings, the serologies, both the serum IgG4 concentration and other lab abnormalities that are associated with the disease, what radiologic features are present. We typically get imaging of the chest, abdomen, and pelvis in everyone that we're working up for IgG4-related disease because so much of it can be asymptomatic. And, of course, whenever we can, we incorporate biopsy results or histopathology into the diagnostic process. And the most important elements of the diagnosis are, 1, to identify the features that are consistent with the diagnosis, but just as importantly, is to identify the features that are not consistent with the diagnosis because there is substantial overlap between the way IgG4-related disease presents and the way malignant and infections and other autoimmune diseases present. So it's incredibly important for the clinician to recognize how complex the whole presentation can be. And that's part of the reason that it has been challenging to get many of the patients to do this, the right diagnosis. So it is a challenge, but fortunately I think there is increasing interest in not only the rheumatology community, but in the gastroenterology community and various other specialties, and I do think anecdotally that there's increasing awareness of this diagnostic process and that more people are working to get patients to the right diagnosis. Next slide. So, the burden of IgG4-related disease is quite substantial. I think we've talked a little bit about the clinical burden already. So patients with IgG4-related disease are increased risk for mortality compared to matched controls in the general population. And they very often have more comorbidities like hypertension, other cardiovascular morbidities, diabetes, malignancy, and coronary artery disease. And we've certainly discussed the damage that can happen in the diseases as a result of long-standing inflammation in organs, but there's additional damage that can happen because of the diagnostic and therapeutic process. It's very common for patients to have organ resections, including major abdominal surgeries to remove portions of the pancreas because of presumptive diagnoses of cancer prior to getting to the right diagnosis of IgG4-related disease. So earlier diagnosis has the potential to limit a really substantial amount of damage, or earlier diagnosis and, of course, treatment. There is also a significant treatment burden where over 85% of patients receive glucocorticoids as part of their treatment strategy. And there is a very well documented and very well recognized toxicity associated with glucocorticoids that many patients with IgG4-related disease end up burdened with. And it's probably more common for that to happen in IgG4-related disease than any other autoimmune diseases because it is a disease that tends to favor older adults. And because of the frequent exocrine endocrine insufficiency of the pancreas, these are patients who are already predisposed to getting diabetes, which is 1 of the most common toxicities associated with glucocorticoids. These are patients that are really at high risk for treatment-related burden, and they really do experience that. And of course, because of the relapse rate, where 30% relapse is in 6 months, and if you extend that out to 3 years, it's about 90% of patients will relapse. So these are people who go to a really significant amount of treatment, and they really need steroid sparing options. There is data that shows that IgG4-related disease impairs the quality of life for patients, has a significant psychological effect as well. And we also have good data that shows that IgG4-related disease is associated with increased healthcare utilization, with increased use of emergency rooms and hospitalizations, as well as direct and indirect costs associated with the disease. Next slide. So where we currently stand is we have a lot of unmet needs in IgG4-related disease. I'm pleased to say that we've made great strides over the past really 2 and 1/2 decades since the disease was first recognized. But we still have a significant need for earlier recognition of the disease. We need better education among providers of various different specialties and among patients who might have manifestations of the disease and not know it, because we need to reduce diagnostic delays and be able to initiate treatment before damage accrues. We need better diagnostic markers, again, to facilitate earlier and more accurate diagnosis. Serum IgG4 is currently the best biomarker that we have in the disease, which is pretty unacceptable considering 20% of patients will have a normal serum IgG4 concentration. We need longer term data with prospective studies and registries to understand the epidemiology on a deeper level, to understand the relationship between disease activity and organ damage, how much of the fibrosis that we see is reversible, and more patient-centered outcomes. And of course we need safer and more convenient therapies. We're very lucky to have therapies available to us, but as we'll discuss more over the next several slides, there is definitely an unmet need for having options that improve the safety profile and the convenience of the treatment. And with that, we can now move on to discussing the INDIGO trial results themselves. So this was a paper that was published in The New England Journal. And next slide, here are the disclosures associated with all of the authors on the INDIGO trial. Importantly, Obexelimab is investigational and has not been approved by any regulatory authority for the treatment of IgG4-related disease. So a bit of background before we talk about Obexelimab specifically. As we talked about, IgG4-related disease is a chronic progressive fibroinflammatory condition that can impact single or multiple organs and characterize the recurrent flares that lead to organ damage. Glucocorticoids are used as the initial treatment therapy for rapid disease control in the majority of patients, but patients almost invariably relapse and/or develop toxicity. Currently, the only FDA-approved approach for treating this disease is B-cell depletion, which is used for inducing and maintaining remission. But this approach has significant risks and limitations, both in convenience and in real-world application. Next slide. And here are some of those risks that are important to talk about. And this is the reason that it's really important that we have more options, because the reality is B-cell depletion is remarkably effective in IgG4-related disease. We've known that for over a decade, since the first large study of rituximab was published. However, there are significant downsides to be aware of with B-cell depletion and these are things that I think rheumatologists in particular are very familiar with. So the way B-cell depletion works is after administration, B-cells are depleted, meaning they're unmeasurable in blood for around 6 to 12 months, it's very significant from person to person. And during that time, it is irreversible, meaning that if a patient gets an infection or has a really significant need for a vaccine, like, for example, if there's a pandemic and we need the patient to be vaccinated, there's no way to bring those B cells back until they just come back on their own. And that can take a really long time. So that's important to recognize. On top of that, with long-term continuous B-cell depletion, meaning scheduled infusions every several months, typically every 6 months for most agents, when that's done, it's very effective in controlling the disease, but over time, the longer someone is on B-cell depletion, it leads to progressive reduction in the total IgG, the total antibodies that we measure in the blood, which translates into over time, it leads to cumulatively increasing risk of infecting. So unlike many other immunosuppressive agents, where as long as someone is on it, they're immunosuppressed, but essentially to the same extent, with B-cell depletion, the longer they're on it, the more it suppresses their immune system and the higher the risk of infection. In and of itself, that it's also important because occasionally those effects that it has on IgG are actually irreversible, and sometimes patients end up requiring lifelong replacement of immunoglobulins with IVIG, which is an added burden to patients, and that's also reduce the risk of infection. On the other hand, many of us treat with B-cell depletion using an on-demand approach where we treat for a short period of time, the disease goes into remission, and then we wait essentially for the disease to relapse before treating again with the intention of limiting the amount of cumulative exposure that the patient gets with B-cell depletion. And the challenge with that is that it requires patients to have to go through relapses, which is challenging for quality of life and for the psychological effect of kind of waiting to have a relapse of their disease. There's also the potential that by allowing patients to have multiple relapses, we're increasing the risk of damage over time. So both the on-demand and the continuous approaches have really significant drawbacks there. And then of course, B-cell depleting agents are also administered as intravenous infusions, which you know, the patient has to come to the infusion center, spend several hours there, it's less convenient. And just in terms of logistics, that often leads to a pretty substantial delay in treatment because we have to coordinate with the infusion center and there has to be availability and with insurance coverage and everything. It's not uncommon for it to take 2 months or so between the time that we decide to treat with B-cell depletion and when they actually get the medication through the vein. Next slide. Which brings us to Obexelimab and where Obexelimab differs. So, Obexelimab is a humanized, bi-functional monoclonal antibody, meaning that it's a single antibody that has 2 functions. It binds both to CD19, which is a marker on B cells, and it also binds to the Fc gamma R2B receptor, which initiates an inhibitory signaling pathway. So the way this works is it targets the B cells, but rather than killing them, it does not induce cytotoxicity or inhibition cell killing, rather than killing them, what it does is it inhibits them. It leads the B cells to stop functioning. The idea there that hopefully it would be less immunosuppressive but also it would be reversible. The B cells do kind of bounce back fairly quickly. And that's a major differentiator from Obexelimab and B-cell depletion. Next slide. Here's the study design of the INDIGO trial. This is a fairly standard and straightforward study, and it was the second global double-blind randomized placebo-controlled Phase 3 trial conducted in IgG4-related disease and the largest one to date. The trial required all patients to fulfill ACR-ULR classification criteria and have active disease requiring treatment with glucocorticoids. During screening, they were treated with 20 to 60 milligrams of glucocorticoids. And then from day 1, they were on 20 milligrams of prednisone that was tapered over 8 weeks in a pre-specified taper that was the same for both Obexelimab and placebo. Patients were randomized 1-to-1 to receive either Obexelimab, 250 milligrams subcutaneous injections weekly, or placebo injections weekly. And they were followed in the randomized controlled period for 52 weeks, at which point they had the option to roll over to the open label extension where they would receive Obexelimab for up to 3 years open label. Next slide. The endpoints of the INDIGO trial. The primary endpoint was time to first IgG4-related disease flare requiring initiation of rescue therapy. And this needed to be in the opinion of the investigator and confirmed by a blinded adjudication committee. Key secondary endpoints were time to first investigator determined flare requiring initiation of rescue therapy, which did not include the adjudication committee. The second was number of investigator and adjudication committee determined flares requiring initiation of rescue therapy. Third was the proportion of patients who achieved complete remission at Week 52. And fourth was the cumulative dose of glucocorticoid rescue therapy through Week 52. Next slide. Flares were assessed fairly systematically in this trial. So there were FLAIR criteria that were developed specifically for this trial by an international panel of experts. And there were organ-specific definitions that allowed for detection of subclinical and asymptomatic disease activity, which would count as FLAIRs in specific instances, depending on the organ involvement. The assessment of flares was comprehensive and included symptoms, physical exam findings, laboratory markers, imaging findings. And the criteria were tailored to every specific organ involved. At each visit, investigators evaluated patients for flare, and very importantly, this was the first trial to date that blinded investigators to serum IgG4 concentrations, which I think was an important element of this trial design because we know that any treatment that targets B cells going to have effects on the immunoglobulins, including IgG4. So it would be expected to see a reduction in IgG4 in patients who were being treated with the drug. And being blinded to that, I think, was really helpful in standardizing the assessments and making sure that flares were truly flares and not simply reflecting 0-90G4 concentrations. And all FLAIR determinations, as I mentioned before, were reviewed through a blinded, independent adjudication committee with a majority vote. And this approach was intended to ensure really consistent and rigorous assessment of disease activity across the study. Next slide. This is the largest clinical trial in IgG4-related disease to date. 194 patients were enrolled from 15 countries, in North America, South America, Europe, and Asia. And you can see here that there was a really broad representation across the globe. This is the trial disposition. This is what happens to the patients who are screened and enrolled. 287 patients were screened, of whom 194 were randomized to Obexelimab or placebo, 97 patients in each arm, and just under 90% completed the 52-week follow-up period, in each arm. Next slide. This demonstrates the baseline demographics of the patients enrolled in INDIGO, and this is fairly consistent with most of the literature that we have in this disease. There was an Asian predominance, which is not surprising considering there is a really strong representation of IgA nephropathy. of Asian investigators who are actively involved in this disease. The average age was just under 60, and there was a male predominance. These data are all quite consistent with the published literature, with respect to IgG4-related disease. And here are the clinical characteristics of the patients enrolled in the trial. So around 2/3 of patients had recurrent disease as opposed to newly diagnosed. And I would say that that's a higher percentage than the previous trial that was published that had a larger percentage of newly diagnosed patients. The vast majority of patients had multiple organs involved with around 60% having between 2 and 4 organs involved. And consistent with what we know about the disease, the most commonly affected organs were the salivary glands, the lacrimal glands, the pancreas, and lymph nodes that are also very commonly involved. The disease duration at the time of enrollment was around 2 and 1/2 to 3 years on average. 11 or 12% of patients had prior exposure to rituximab. Next slide. And here is the timeline Top line results, this is the primary endpoint, and I think it's a very clearly positive trial, as you can see from the Kaplan-Meier curve on the right of the screen. 73.2% of patients receiving Obexelimab remain flare-free through the 52-week follow-up period. And the hazard ratio for FLARE was 0.443 with a 95% confidence interval ranging from 0.277 to 0.711. So this was a strongly positive result. Next slide. All of the key secondary endpoints were also met. So the time to first investigator determined flare was 26.8% in the Obexelimab arm and almost double that in the placebo arm. The annualized rate of adjudicated flares requiring rescue therapy was again just about 1/2 in the Obexelimab compared to placebo. Patients achieving complete remission were also more frequent in the Obexelimab arm of 37% compared to around 20% in the placebo arm. And very importantly, the glucocorticoid exposure was substantially different between the 2 groups, and this is something that I would say rheumatologists in particular are really paying attention to because, especially over the past 5 to 10 years, there has been really significant interest in limiting glucocorticoids because of the really substantial toxicity that are associated with. And we'll go over that in a little bit more on the next slide. Next slide. Here's a little bit more about the glucocorticoid toxicity and the effects that Obexelimab had on that. So the glucocorticoid toxicity index is a validated index that measures the amount of glucocorticoid toxicity experienced by patients that looks at many different domains that are associated with glucocorticoid toxicity, ranging from body mass index, the glucose tolerance, blood pressure, lipid metabolism, whether the patients had infections, or if they had really specific manifestations of toxicity like glucocorticoid myopathy, skin toxicity, or neuropsychiatric effects. And the component of the GTI, the glucocorticoid toxicity index, that's shown here is the cumulative worsening score, which the way this is designed is it's a cumulative score, so it can only increase over time. So you can't have a negative score with a cumulative worsening score. And here you can see that, the placebo arm had substantially more glucocorticoid toxicity with respect to the cumulative worsening score, whether you look at a cutoff of 20 points or 30 points that was seen. Next slide. This slide shows the effect of Obexelimab on serum IgG4 concentrations. As I mentioned before, serum IgG4 is probably our best biomarker for disease activity in this disease. And consistent with the overall top line results, we saw that serum IgG4 concentrations were suppressed after the initial glucocorticoid taper that was done as part of the initial trial design. And those levels remained stable while the patients were on Obexelimab, as opposed to the placebo arm where you can see that as the glucocorticoids were discontinued, the serum IgG4 concentrations began to rise Next slide. Similarly, B cells were reduced in both treatments. We know that glucocorticoids reduce the total burden of B cells in blood and in tissue. And in the Obexelimab arm, the B cells were lowered compared to placebo, but very importantly, they actually remained above the lower limit of normal. So again, another kind of differentiator between B-cell inhibition and B-cell depletion, where with B-cell depletion, we really expect the B-cells to be essentially undetectable as long as the drug is still in their system. And here are the adverse events. I would say that this is quite reassuring. So almost all patients had at least 1 adverse event in both the Obexelimab and the placebo arm. But serious adverse events were numerically less common in the Obexelimab arm, and Grade 3 or more adverse events were also numerically less common with 11% in the Obexelimab arm and 24% in the placebo arm. Injection site reactions were Grade, Grade 2 or above were uncommon. So only 2% in the Obexelimab arm and 1% in the placebo arm. There were 3 malignancies in the Obexelimab arm and 0 in the placebo arm, but all 3 malignancies were deemed unrelated by the investigator. Next slide. In conclusion, Obexelimab significantly reduced the risk of IgG4-related disease flare compared to placebo through Week 52. There was reduced cumulative glucocorticoid rescue use, and it was associated with less glucocorticoid toxicity worsening compared to placebo. Obexelimab was generally well tolerated with no new safety signals. And overall, INDIGO demonstrated that B-cell inhibition through CD19 Fc gamma R2B co-engagement may present a novel subcutaneous treatment approach for the management of IgG4-related disease. Next slide. This is the manuscript for INDIGO that was published in The New England Journal of Medicine. And I'll hand it back to Lonnie to discuss the next part.

Thank you, Dr. Katz, for that comprehensive review, and we appreciate you staying with us for the upcoming Q&A session. I'll now hand the call over to Joe Farmer, our President and COO, who will take you through the IgG4-RD opportunity and our commercial launch plans in detail.

Thank you, Lonnie. I want to start by framing the size of the opportunity in front of us and then walk through how we're preparing to capture it. Lonnie alluded to earlier, we estimate that the current diagnosed and treated population, IgG4-RD, is about 25,000 patients in the U.S. Of that 25,000 approximately, we expect a payer mix of roughly 60% commercial, 30% Medicare Part D, and 10% Medicaid. Coverage requirements vary by insurance carriers, and we're preparing for those differences. For commercially insured patients, we're preparing to help physician offices navigate prior authorization and step therapy requirements. For Medicare Part D, we're building support for coverage exceptions and appeals. And for Medicaid, we're planning for differences in coverage requirements across states. Across all 3, our focus remains the same, helping patients seamlessly onboard and access treatment, which will be discussed later. Taken together, as Lonnie described earlier, assuming 1/2 of the currently diagnosed and managed patients are eligible for treatment, and assuming the pricing of the FDA-approved therapy in this indication as a benchmark, we estimate that the ideal treatment is going IgG4-RD represents a very substantial U.S. market opportunity approaching $4 billion. It's worth pausing on what we've already seen in this market. The first approved biologic in IgG4-RD received FDA approval in April of 2025, and its launch trajectory is giving us a clear and encouraging signal about how this market is evolving. As of August, we estimate approximately 1,200 unique patients have been treated with the approved biologic, prescribed by more than 950 unique physicians, a significant number of whom have prescribed more than once. The commercial infrastructure behind this drug has scaled accordingly, as we believe the field-based team supporting it has grown from approximately 35 at launch to over 50. The currently approved biologic is priced at approximately $150,000 gross per IV infusion, or $450,000 annually for new patients and $300,000 annually thereafter. Noting that new patients received 2 infusions 2 weeks apart and then an additional infusion every 6 months thereafter for the approved label. What this all tells us is that the diagnosed IgG4-RD patients are out there, they're treating physicians that are amenable to biologic therapy, and this market is actively growing. This is exactly the environment we want to be launching into. Let's turn to the current treatment landscape and why we believe there's still a significant unmet need. IgG4-RD is a progressive chronic disease that requires chronic therapy. That's the critical starting point. In a survey we conducted of 102 physicians, 94% agreed that IgG4-RD is a disease that requires proactive maintenance treatment. However, currently available therapies have significant limitations that may make sustained chronic treatment impractical and difficult. Most patients have received a glucocorticoid at some point in their disease journey because they're effective in treating flares. However, chronic steroid use comes with significant health issues and toxicity. Currently, current B-cell targeting antibodies, which are depleters, 1 approved and 1 off-label, have been utilized by a smaller percentage of patients, and while often effective, come with long-term risks and challenges, including increased risks of serious infection and an inability to receive necessary vaccinations. Older DMARs tend to be less effective, toxicities and therefore are used by an even smaller percentage of patients. Because the majority of patients are at a higher risk for toxicity, 40% are 65 or older, more than 30% have comorbidities and are at greater risk from infections, and 20% are less than 50 years old and facing decades of treatment. Therefore, B-cell therapy depletion and chronic steroid use may not be well-suited for long-term disease management for these patients. We believe that what patients need and want is a convenient and effective therapy for chronic use, an agent that supports safe, long-term disease management without the tradeoffs of currently available therapies. That's the gap Obexelimab has designed to fill, and it's a thread running through all we'll share with you today. To validate that belief, we went directly to the physicians who treat this disease and the patients who live with it every day. We surveyed 80 U.S.-based IgG4-RD treating physicians, with the majority of physicians being rheumatologists, immunologists, or gastroenterologists, hepatologists. Practice setting was well balanced between community and academic, and these physicians managed approximately for IgG4-RD patients on average over the past year, with more than 80% of those patients currently receiving drug therapy. We presented Obexelimab to them, de-identified as product X, along with the INDIGO study data, and asked about future expected prescribing patterns, assuming that product X was commercially available. And the results were quite compelling. The majority of physicians strongly agree that there's value in B-cell inhibition relative to depletion, with almost all of the remaining neither agreeing nor disagreeing. And we think the second group can be impacted for our education efforts. On the likelihood to prescribe, almost 2/3 told us they are extremely likely to prescribe Obexelimab, and 1 asked how they allocate their biologic use across Obexelimab and the approved and unapproved B-cell depleters, they assigned Obexelimab a 47% share, consistent with what we've seen in prior rounds of market research. In terms of when physicians would envision prescribing Obexelimab, the majority told us they'd use it first line, or immediately following GCs or other immunosuppressants. And importantly, when asked what they do if a patient flares while receiving Obexelimab, 1/2 said they continue the patient on Obexelimab and add GCs, rather than switch therapies entirely. That's a strong signal of physician confidence in Obexelimab is approved once patients are established on it. Finally, a large percentage of physicians expressed a preference for weekly subcutaneous dosing over infusion every 6 months, with the majority not having a strong preference. This is not a market like you sometimes see in oncology, for example, where buy and build may provide financial incentives that drive IV usage. Importantly, this data also showed that the physicians will defer to the preferences of their patients. To that point, in a separate smaller study of 20 IgG4-RD patients, 75% said they prefer subcutaneous at home administration, with most of the remainder neutral. Although it's a small sample, it supports what we're hearing from physicians and patients that weekly sub-Q is preferred over IV treatment. With that research as our foundation, let me walk through how we're positioning Obexelimab and where we believe it fits into the patient journey. We believe Obexelimab offers a genuinely new approach to long-term disease management in IgG4-RD, and that its unique profile positions it as the preferred first-line therapy for the majority of patients. The Obexelimab differentiation comes down to 4 key elements. First, long-term disease control without compromising safety. Second, the mechanism, inhibition, not depletion. Obexelimab is designed to potently inhibit B cells through co-engagement of CD19 and Fc gamma R2B, while importantly, B cells not dropping below the lower limit of normal. That leads directly into the third element, reversibility. We expect that Obexelimab may provide physicians a real-world tool to pause therapy for a short period of time to assist in the management of infections or to administer vaccinations, something depleting therapy can't offer. We look forward to sharing additional data with you on the vaccination sub-study in the near future. Finally, at-home sub-Q administration would eliminate the need for an infusion center, which as our research just showed, is largely preferred by patients and providers. We plan to leverage these 4 elements of Obexelimab's drug profile to position it as the preferred first-line therapy for the majority of IgG4-RD patients. Our launch will target 3 patient groups, patients in active flare, patients considering a treatment change, and patients in ongoing chronic management. Patients in active flare would include newly diagnosed patients, as well as previously diagnosed patients who aren't currently on therapy, but are experiencing a new flare. Patients being actively treated include patients currently on an approved or unapproved biologic who see their physician prior to their 6-month infusion and who the physician can then decide to switch based upon the Obexelimab profile we just reviewed. So, all this comes together into 3 strategic imperatives for our launch. Our first imperative is to make proactive product disease management standard of care. Shifting physician mindset away from simply treating flares as they occur, and building conviction that earlier, longer-term treatment is appropriate for more patients than are receiving it today. Second, differentiate clearly. We will make clear that inhibition as compared with depletion is an important clinically relevant distinction for physicians anchored in sustained disease control, reversibility, and patient safety. Third, execute with discipline. This means, among other things, build the conditions for fast, seamless uptake of Obexelimab for patients, providers, and payers. These strategic imperatives lead directly into our launch preparations, which include building the right customer engagement model. Our field model is built around targeted HCP, account concentration, and centers of excellence, along with understanding referral dynamics and community practice coverage, executing our engagement strategy accordingly to ensure we have all the key relationships and understand all these referral dynamics ahead of launch. We will also ensure that we prioritize the right customers. Rheumatology remains our primary specialty focus, with GIs also targeted at high-volume centers and referral networks. Let's now turn to how we're building out the commercial organization to execute against our strategic imperatives, starting with market access. We built a coordinated cross-functional model designed to deliver comprehensive education and support at every HCP touchpoint. Our sales team, which will include 45 territory sales representatives plus 5 regional business directors, will deliver the necessary clinical and product resources to help physicians understand how and when to appropriately use Obexelimab. Our market access team, including field reimbursement managers, will support HCPs and patients in navigating access and reimbursement, ensuring smooth patient onboarding and working to minimize barriers between a prescription being written and a patient starting treatment. We also have a strategic engagement team who execute our commercial KOL strategy and build trust and relationships that inform how we go to market. We will also have a team of immunology nurse educators who will provide in-depth peer-to-peer disease state and treatment education to HCPs. Together, these teams create the surround sound that will provide HCPs with the education, access support, and trusted relationships they need to confidently bring Obexelimab to their patients. We've done the work to map the full patient access journey, and we've turned those learnings into core operating principles and a comprehensive patient support model. Critical to the success of the launch is ensuring that once a prescription is written, providers and patients have a seamless experience, and we have developed a model that delivers on that. The model clearly defines responsibilities while delivering 1 coordinated patient experience. Once a patient is identified and a prescription is written, they enter through our patient hub or directly to 1 of our 2 specialty pharmacies. From there, we handle benefits verification and prior authorization support and affordability triage, which will include Quick Start, Bridge, Co-Pay, and patient assistance support programs. Obexelimab is then dispensed to the patient through our limited specialty pharmacy network. The goal is simple. Patients and providers should experience 1 Zenas model that allows the patient to seamlessly start and stay on therapy. To make this a bit more concrete, here's an illustrative pathway. Whether the prescription comes through our patient hub or directly through a specialty pharmacy, the model will support coverage, affordability, treatment initiation, and ongoing refills. We're also planning for where things can go wrong. Take a common scenario. Missing coverage documentation causes a delay. In our model, an assigned owner identifies the missing information, and then the hub, specialty pharmacy, and our field reimbursement manager coordinate the response with the office, and the office and patient receive a clear next step that keeps the prescription moving forward, including potentially through 1 of the support programs that I mentioned a moment ago. We've selected our access partners with complementary strengths in mind, so patients and providers experience 1 coordinated Zenas model no matter which partner they touch. RareMed will serve as our hub, managing co-pay support, our patient assistance program, QuickStart, Ridge, and free drug programs. For specialty pharmacy services, we've partnered with Biologics by McKesson for its scale and launch expertise and Orsini for its personalized rare disease-focused support. The expectation is that these partners work together as 1 Zenas support model that provides exceptional services for patients and providers. Let's now move to how we're deploying our field team in support of this opportunity. We've identified approximately 7,100 healthcare providers to prioritize at launch, organized into 4 tiers that correlate with known or presumed IgG4-RD patient volume under their care. The biologic use and physician specialty helped to further refine and assist with the targeting to determine our field sales team deployment. It's important to note that the physicians within these 4 tiers account for over 70% of all currently treated IgG4-RD patients, reinforcing the strength of our HCP targeting strategy. Having established our priority targeted HCPs, of which rheumatologists represent the largest number, we then moved to enhance our overall coverage by identifying the accounts, offices, or clinics where these patients are actually treated. This account level focus allows us to effectively target and cover over 90% of all currently known IgG4-RD patients, with the top 100 accounts representing 65% of the treated patient opportunity. This targeting effort, along with industry workload assumptions, resulted in the sizing of an optimal field force of 45 sales reps deployed across 5 regions to effectively cover the market. So, to bring it all together, we have an experienced team ready to execute a proven launch playbook, and we will be launch ready ahead of our May PDUFA Day. We believe we're very well positioned, appropriately resourced, and well funded to capitalize on this very substantial opportunity for Obexelimab in IgG4-RD.

With that, I'll hand it back to Lonnie for closing remarks. Thank you, Joe. I hope today provided a clear picture of the unmet need in IgG4-RD, the differentiated profile we believe Obexelimab offers, and the discipline behind our launch preparations. We're excited about what's ahead, both for patients living with this disease, and for Zenas as we prepare to become a true commercial stage company. With that, we're happy to open the line for questions.

Our first question comes from Cory Kasimov with Evercore ISI. Your line is open.

I guess I want to ask Dr. Katz, who I appreciate you staying on for Q&A, what are the key factors that are going to drive your future treatment choices between Obexi and Uplizna? What would make you choose 1 product versus another for a particular patient? And when you put a patient on Obexi, how do you think about the potential treatment duration? I know this can be variable, but in a case where a patient's able to achieve low disease burden, how long might you keep a patient on therapy? Thank you.

Thanks, Cory.

Yeah, thank you for the question. So there were 2 elements to that question. One is deciding between Obexi and B-cell depletion and the other is about duration of treatment with Obexi. So for the first portion of the question, I think the overall sense in the rheumatology world is that B-cell depleting agents are really phenomenal and we know that in IgG4-related disease, they work just about 100% of the time, which is really nice to have an option that we know is going to work. But I mentioned earlier the downside of B-cell depletion and why we worry about them. And in many other diseases, we really consider B-cell depletion to be 1 of the last resorts after we've exhausted other options. So I would think of Obexelimab as, in many patients with IgG4-related disease, a very appropriate first-line option for all of the reasons that we talked about in terms of the reversibility of it, the convenience, the fact that it is hopefully associated with a lower risk of infection. Of course, it's still too early to say that we'll need longer-term data to say that with confidence, but I think the early data support that. And so in most patients, I see that as a good first-line option. The exceptions to that would be patients with potentially the most horribly severe disease, patients in whom I'm worried any degree of active disease could be devastating. But the reality is that those patients are few and far between in IgG4-related disease because it's such an indolent and slow disease, it is something that we generally have the benefit of time to try options to see what works. So I see this as being potentially first line for a large proportion of the patients that I see. As for the duration, that's another important differentiator between Obexelimab and B-cell depletion. With B-cell depletion, I worry very much about the cumulative immunosuppressive risk of long-term B-cell depletion. But I don't think we have that same concern with the Obexelimab. So I see myself using the Obexelimab in most cases probably for at least at the very, very least a year, but probably more like 2 or 3 years, depending on severity and prior relapse history and things like that. Eventually trying to stop and see what happens to the disease. But I think many patients would end up sort of declaring themselves as patients who continue to relapse and as long as they're doing well and tolerating the medication, I would kind of treat this the way that we do many other autoimmune diseases, where we continue it indefinitely until such time that something changes in the patient's medical history that changes the risk-benefit ratio of the treatment. So I do see us using Obexelimab long-term much more routinely than what we're doing with B-cell depletion.

That's super helpful. Thank you. Thank you.

Our next question comes from Fiona Gia with Jefferies. Your line is open.

So for Dr. Katz, what is the differential risk of prolonged B-cell depletion in IgG4-RD versus other diseases? For a lot of these health depleting agents or approved for RMS, which seems to be less of an issue. And just a quick follow up, can you remind us when the vaccine data will be available and what are your expectations on the impact both on the regulatory perspective and commercial access? Thank you.

Thanks, Fiona. Let me comment on the vaccine data. It is the initial data has been submitted as we described in a recent news release. It will be present as Dr. Katz well knows as the lead author at the IgG4-RD Symposium, coming in the next few weeks. We'll be coming up in a number of weeks and then also at the ACR. And there is not a regulatory intent with that data set. That was your second part of that question, Fiona. But I'll turn it over to Dr. Katz for the first part of the question relative to B-cell depletion risk unique to IgG4-RD.

Yes, so I think this is an important question as well. If I understand the question correctly, the question is about what are the effects of or the potential risks of long-term B-cell depletion in IgG4-related disease as opposed to other diseases in particular. The challenge is because IgG4-related disease is a rare disease and it's not until very recently that we started having large clinical trials in the disease, we have relatively little long-term data. And when we're talking about risks of B-cell depletion, we're about rare risks. So rare risks in a rare disease become much more difficult to study. So we have many, open label and observational studies of rituximab and we have the Mitigate trial of inabilizumab and that's everything that we have in terms of the data on B-cell depletion and IgG4-related disease. And we don't have data in large numbers on patients who were treated for many, many years, just because those data don't exist. So a lot of what we do is we extrapolate from other diseases and we do know that the risks of B-cell depletion have been shown time and time again in every disease where they're studied. And that includes things like rheumatoid arthritis and ANCA associated vasculitis, where patients are very often treated with B-cell depleters B-cell depletion for many years. And there is a very consistent effort that the longer someone is on B-cell depletion, the lower the IgG levels are and the higher the risk of infection. This is kind of well documented across several different diseases. And so that I think has been pretty consistently shown, certainly in rituximab, which is the oldest B-cell depletion agent that we have, so the 1 that we have the most data on. But the other B-cell depleting agents that have been introduced to the market have also shown a very similar trend where with long-term administration, at least the IgG levels go down. Not all studies has been able to show that that is associated with an increased risk of infection. But again, we just need really high sample sizes and follow-up time to be able to demonstrate that in a study particularly a rare disease. It's very helpful, thank you.

Our next question comes from Yatin Suneja with Guggenheim. Your line is open.

Maybe just a couple of usage questions for me for Dr. Katz. Dr. Katz, could you maybe talk about your current practice and your usage of CD20 and CD19. As you see newer patients, how are you prioritizing CD19 over CD20? And for patients who are on a CD20 who are stable, what is your plan? Are you going to switch them and if you switch them how should we think about a switch to a depleter versus an inhibitor?

Thanks, Yatin and Dr. Katz.

Yeah, so I'm happy to share my practice. I think that there is some practice variability here. The way I see anti-CD19 and anti-CD20 agents is they're much more similar than they are different. There are some benefits of anti-CD19 compared to anti-CD20, in terms of convenience and differences in mechanism of action and things like that, but they are very similar and both of them are remarkably effective in just about every patient with IgG4-related disease. For me, when the anti-CD19 monoclonal antibody became FDA approved and was available, I started using that routinely for patients with newly diagnosed disease and in patients who I had previously treated with rituximab. I would discuss the benefits and risks of both options with the patients and kind of leave it up to them. And some patients prefer to stick with what they already tried and knew worked in the past and other patients preferred to try the newer agent because of the differences in how they work. So, to me, the decision of B-cell depletion versus B-cell inhibition comes to individual patient factors. In a patient with virtually every organ in their body being inflamed where I'm worried that something catastrophic is going to happen if I don't get them completely fully into remission yesterday, then those rare patients are patients that I would reach for B-cell depletion first before even considering other options. But that is a small proportion of the overall patients that I see and I have referral bias, with the patients that I see, I do see probably the most severe patients that are out there. I get referrals from all over the country and sometimes from other countries as well. So even in my particularly severe patient population, it is a minority of patients who are so severely ill when I meet them that I would jump straight to B-cell depletion before considering other options. Most other patients I would feel comfortable trying Obexelimab first because of its favorable safety profile and convenience. And in patients who have had prior flares after treatment with B-cell depletion and who have demonstrated that they kind of need ongoing treatment, those would be patients that I would be very interested in switching from the chronic management with B-cell depletion to Obexelimab, with the intention that hopefully we'd still be able to keep them in remission, but would be associated with less of the cumulative risk of infection over time.

Our next question comes from Judah Frommer with Morgan Stanley. Your line is open.

Just curious on your take for the convenience argument here. Do you have a sense for whether patients would prefer that weekly at-home kind of self-administration? And just maybe curious more from the company's perspective, I guess, how much are, you know, at-home administered injections like GLP-1s impacting, you know, the demand or maybe the receptivity for an administration route like this? Thanks.

Good morning, Judah.