Okay. Good morning, everybody. Thanks so much for being here at day three of Cantor's Global Healthcare Conference. I'm Kristen Kluska, one of the biotech analysts at Cantor. Very happy to have Dr. James Helliwell of Eupraxia Pharmaceuticals here. Thank you so much for being here. Thank you very much for having me. It's a real pleasure. Yeah. Always appreciate the opportunity to speak with you. To kick things off, do you mind just providing us with a high-level overview of the company? Yeah, absolutely. First, thanks, everybody, for being here. Really appreciate it. Eupraxia Pharmaceuticals is a company where we're focused first on gastroenterologic disease, so we're looking at eosinophilic esophagitis and other GI diseases. But we take a really interesting approach, using a technology to be able to deliver drugs, called the Diffusphere. What it does is it enables us to be able to deliver zero-order kinetics. So from the period of about 48 hours to 52 weeks, the drug release is hyper-local in the tissue and delivering at a steady state zero-order concentration. That allows us to be able to avoid the peaks, where you get lots of side effects, but be able to maintain a really good area under the curve and to be able to maintain efficacy and safety. So, that's us in a nutshell. Okay, thanks. Would love to kick it off with some questions on EoE. You and I have been in a few situations where people say, "Hey, I think I may actually have EoE." Clearly, prevalence is going up, right? What do you attribute that to being? Is it that more people are just getting EoE? Is it that we are getting smarter and knowing how to diagnose patients, more treatments? What is causing this? Yeah. It is actually a little bit of all of the above. It is really interesting. This makes me feel old when I say this, but when I went through medical school, EoE wasn't a disease. We would see these patients in the emergency room with food that was literally stuck in their esophagus, and you would pull it out. You would rule out cancer and then say, "Gosh, I am not sure what the problem is." Well, over time, what they discovered is that these patients actually have an inflammatory esophagus, and so they have some kind of an allergic start to this. Then it just becomes this rolling inflammation. That inflammation leads to fibrosis. You get scar tissue, and your esophagus goes from distensible to a lead pipe, and then food becomes difficult to swallow, painful to swallow, and gets stuck. What is interesting is, as you can imagine, the beginning of that disease, food is not stuck yet. At the very beginning, when this was an orphan disease just three or four years ago, primarily we were diagnosing people after food had gotten stuck in an emergency room, and people said, "We have to figure out what this is." Often, they had this 10-year period of discomfort and moving from doctor to doctor to doctor before they got that diagnosis. Well now, as people are becoming aware of this, normal gastroenterologists, not just the quaternary specialists, are learning about this disease. Essentially what that means is we are diagnosing it earlier. A big part of these numbers growing very rapidly is earlier diagnosis and diagnosis coming from the community. There are big education pushes getting primary care physicians aware of this disease, and the other is the disease itself is rising. I think that the specialists, the KOLs here, they don't know exactly why. Is it something in the water, in the environment? Tide Pods, I heard someone say. We don't know. When we think about this disease, what are the latest findings about the correlation between the histological findings as well as the clinical measures? Do they go hand in hand? Where are there differences? Yeah. It's really interesting. We basically look at patient symptoms, and symptoms are difficulty swallowing and pain on swallowing. That's a really important metric, and you've got to hit that. When people started looking at this disease, EoE is eosinophilic esophagitis, and the natural first target from that is let's target eosinophils. What's been fascinating is watching many drugs target eosinophils and do a phenomenal job of reducing them, but not make a change in how patients are actually feeling and in the fibrotic outcome. In other words, they're not actually getting that fibrosis stopped or reversed. Looking at eosinophil counts themselves, while interesting, hasn't actually really told us much about the correlation to how patients feel and do they feel better. In fact, what seems to be coming up is there's another measure called EoEHSS, the histology scoring system, and it, on biopsy, directly measures four things that are related to inflammation and four that are related to essentially fibrosis and scar tissue. That is quite well correlated to symptom improvement, and we've seen some really interesting studies just in the last six months really driving into that correlation. I think as we look to the future, it's going to be this real sort of movement away from peak eosinophil counts and moving into looking at EoEHSS and symptoms. Okay. For EoE, there are a number of different endpoints and measurements one can look at and have frankly grown as we've become more familiar with the indications. Which of the indications do you think are the most dependable, most accurate, both about diagnosing patients, but also when it comes to assessing whether or not therapeutics are efficacious? Yeah. The number one thing, when you think about this just simply from a patient's perspective, they want to feel better. It is really important that whatever therapy you have, patients are feeling better. There are two main ways of looking at that. One is the Straumann Dysphagia Index, and so the Straumann Dysphagia Index is basically looking at how difficult it is to swallow. It is a really good index because it measures clinical remission. You can say if you get this much of improvement, you are essentially living a pretty normal life as a patient. Really critical, well-validated endpoint. The DSQ, the Dysphagia Symptom Questionnaire, is another. It is kind of asking about the same questions, slightly different format and timeframe, and also asks about pain on swallowing. Also well-validated. Two products have been approved using that endpoint. Really, we think looking at both is really important. It gives you a complete picture of how that patient is doing. There are other things people have done. Frankly, nobody has been approved on those. There is less data around them, and I think they create more confusion. I think SDI and DSQ are the two that are most important from the patient's symptom perspective, and we already really talked about from a histologic perspective. Okay, and then patients with EoE, how often are they monitoring their condition through endoscopies, biopsies, and just generally catching up with their GI specialists? Has this changed as new therapies have come on board? Yeah. This has changed a lot. It used to be that you would just sort of chase reduction in eosinophils. That was not really working, and then it was let's chase symptoms. But even with symptom control, which is excellent, you still need to monitor the disease. Both American and European guidelines have changed really recently. What they have said is it is really important to see your gastroenterologist once a year and to go and get a scope, and so you are getting that scope once a year, and about 60% of patients are compliant with that, which those guidelines are only two years old, so 60% already is not bad. But that number will start to increase, and essentially what they are looking for there is, even if your symptoms are controlled, what is happening with your inflammation and fibrosis. If that's progressing, then they want to advance treatment to control it. Because what you really want to do is to have patient's symptom controlled and not have a progressive sort of fibrotic esophagus. Patients really are going to be coming once a year to see their gastroenterologist. Okay, thanks so much. Now that we have a really good landscape of the indication, let's talk about EP-104GI. We can make the argument that this program is de-risked because its mechanism of action has been established already in EoE. What has fluticasone shown, and why do you believe it's effective in EoE? Yeah. If we think about this disease, it has this inflammatory component at its core, and that chronic inflammation is what's leading to the fibrosis. Steroids, we've known for 50, 60, more years that they work in inflammatory conditions, and this one is no different. When we look at how you go through the treatment algorithm here, patients start on a proton pump inhibitor, then they move to an oral steroid. Budesonide and fluticasone have been used extensively, both off-label and budesonide on label. There's a lot of sort of academic literature that is out there and a lot of literature on both of those steroids and their efficaciousness. The number one problem is with the delivery that they're doing to date, is basically compliance. About 70% of people become non-compliant with these oral steroid medications, but the drugs themselves are working. You're correct. We have a lot of sort of background that this mechanism of action should work. Okay. How does the Diffusphere technology allow for an extended release of fluticasone, and why can't someone else just replicate this technology? Yeah. The way this works is, at the beginning I talked about what we do with these Diffuspheres. Essentially, they're the size of a grain of sand, and what they do is think of them as like little balloons that are placed exactly where you want them. We just talked about these patients who are getting these once-a-year endoscopies. If you imagine you're a patient, you're a physician, you're bringing your patient in for a procedure. A procedure carries some inconvenience, some risks, some cost, but you're doing nothing therapeutic. What we suggest and what we're doing in our trial is that we piggyback on that procedure, and we add about 5 minutes- 10 minutes to that procedure for the physician to be able to actually do injections directly into the esophagus under direct vision, where they can see exactly where they're placing the drug and place these Diffuspheres, which then release drug at a steady state directly into the diseased tissue, not going everywhere systemically over a very long period of time. You sort of get this piece where the patient doesn't even realize that they're being treated at that time. The Diffusphere allows us to be able to also solve the compliance issue. Because it's once a year and because it's delivered by the physician, it's lasting till next year for that patient. We don't have to worry about patient compliance, which if you're a payer, you don't want to be paying for a drug that the patient's not taking and not getting the results. Okay. So what know-how do the treating physicians already have when it comes to how this product works, how it operates, and what would they need to be trained on to fully get comfortable, and what's been, for example, the experience for the PIs in your trials? So it's fascinating with our PIs. We go in and we train them, and we tell them, "Okay, you're going to do these submucosal injections," which are kind of just under the mucosa there of the esophagus. And we say, "This is what we'd like you to do." And they always do the same thing. They look at our team and they go, "You know I do this every day, right? I do this already with other drugs. Every single day I am doing submucosal injections." So we understand that for them, this procedure is absolutely routine. It is part of their standard of practice. They use all sorts of drugs already submucosally in the esophagus, in the colon, and so we really don't have much training to do. We clearly are there in training and talking a lot about the product, and trial conduct when we're there. But for the physicians, this is riding a bicycle for them, and they do it all the time. Yeah, just to sidetrack here, you had a great webinar over the summer, and we got to hear from some physicians, and they walked us through some of the examples that you alluded to about that. So anybody that's interested, I thought that was very well done. Yeah. Thank you, and it's interesting. On that webinar, even if you're a little squeamish, it's quite easy. There's a video of one of our PIs actually doing the injections in one of the patients in the study, and you can see it's five to eight seconds per injection. And you immediately see it, and you go, "Great, I got it. I get how this works. I'm still fascinated that they can videotape things inside an esophagus. That's for another discussion. How do the clinical findings of EP-104GI compare to standard of care across some of these endpoints we talked about carry so much weight? Yeah, let's start there. Yeah. First, what we're seeing, and again, I'll start with patient symptoms because I think it's the right place to start. What we're seeing is that first, we're getting actually a very rapid onset of response. When we look at our open label dose escalation trial, we're getting really standard of care level responses within two weeks. Whereas most standard of care therapies are taking somewhere between six and 12 weeks before they're really starting to get the onset of symptom relief there. But then our symptom relief continues to progress. By the time we get to six months, 80% of our patients have been in clinical remission. That means that 80% of our patients are essentially living a fairly normal life. Why that change between what we see at two weeks and what we see at six months? Well, it's what's actually happening in the tissue. On biopsy, we don't just see that we're reducing the eosinophils. Really importantly, on that EoEHSS metric, we see that we are reducing very dramatically from baseline, between 75% and 95% reduction from baseline inflammation, but also fibrosis. That means we are actually reversing scar tissue. One of the other things that we look at is a score called the EREFS. This is a visual look in scoring down into the esophagus. There, that means they're looking at signs of inflammation, but also strictures. They're actually seeing rings that are there in the esophagus, and those rings are melting away. That's a lot of why those symptoms are getting better. For the physicians, they're sort of reporting back and saying, "We haven't seen these strictures really dissolve like this." That's sort of the highlight of the data, and then safety. It's just been an incredibly well-tolerated drug, often associated with steroids, is oral candidiasis. We've had zero patients with oral candidiasis, versus the number one approved oral drug, which is used in the rest of the world, not in the U.S. Their product monograph states a 25% oral candidiasis rate. Okay. Keeping this in mind, where should investors view the bar for the upcoming phase II-B readout expected later this year? The bar is really interesting here because if you think about the progression, it tends to go PPIs, steroids, biologics. We've done a lot of work with KOLs, with payers, with patient groups, to really understand where a product like EP-104 is going to fit. It really fits between the PPIs and the biologics. In place of those oral steroids, so that you can get that effect, get that compliance, and have that long-lasting. Because it's lasting a year, because it integrates with something that they're already going for, the bar here is really just to be close to what's already available to them. As you can imagine, as a patient, it sort of becomes this, look, I can give you the same level of therapy roughly, without you having to take this twice-daily oral drug or this once-a-week injection, and I can just do it while you're asleep getting your routine endoscopy. That's why the bar here for commercial success and uptake by patients and physicians is really just being around the level where therapies are today. Now, if we can go beyond that therapy, that level, which we really hope we can for patients, that obviously then just expands the market opportunity as well as pricing flexibility. Okay. What can you tell us about what to expect in terms of patient numbers, how much follow-up we're going to get, the endpoints that will be included in this release? Yeah. This interim release is going to be a very large and meaningful release. The overall study is 120 patients. That is placebo, and then Dose A and Dose B, so 1:1:1. This interim release has been well planned out, and for the data nerds in here, we're not spending any alpha on doing this interim release. This interim analysis was built into the SAP, the way that this was done. What we're going to have is about 90 patients at the three-month time point. We're going to have about 60- 70 patients at that six-month time point. That's our primary endpoint. Patients are actually then flipping over. After six months, there's no placebo. The placebo patients remain blinded, and so there's a blinded crossover. We will have about 45 patients at nine months and about 20- 25 at a year. The data we're going to be releasing are going to be the metrics we really just talked about, the SDI, the DSQ, the EoEHSS, quality of life measures, safety measures, pharmacokinetics. It is a very fulsome release. Really looking at all of those time points and landmark analyses, with complete powering. Okay. Are there any differences we should consider between the phase I-B/II-A trial and this phase II-B study? I think that the big difference is that we just have two doses. The top two doses for the phase II-A are in the phase II-B. If you're looking at the phase II-A, it's really focusing on the data from those top two doses. That's what we're studying. The other thing is, of course, there's a placebo arm in this. That'll be really important. I think when we look at the placebo, what's interesting for investors there is that a lot of the data that we've reported are biopsies. These biopsies do not respond in other trials to placebo. We would not expect them to respond in our trial to placebo. It means you've already got a pretty good look at what's happening histologically in patients. I think a lot of people are going to be very, very focused in this trial on the PROs up against the placebo, and really looking for that. Those are the major differences there. Okay. Anything about the inclusion criteria? Inclusion criteria are very, very similar. Basically, our sort of primary analysis group is you've got to be moderate to severe in symptoms, moderate to severe in histology. We do have allowances for people who had previously had worse histology and show up at baseline with a milder histology. They don't enter our primary analysis, but because they went through all the setup for the trial, we actually do treat them and follow them. The reason that we do that is there's actually a very interesting sub-question in that group, which is, yes, our primary focus is these people who are moderate to severe in both dimensions, but there are actually a lot of patients who have mild histology because they haven't had the disease very long, but their symptoms are bad. They're often today treated with PPIs. The question is, can we actually treat those patients and prevent fibrosis ever coming on in those patients? That'll be an interesting sort of subtext in this phase II-B study, looking at that sort of pre-specified subgroup. Okay. You briefly alluded to this, but how might this profile lead to improved economic considerations? So for the physician, in a sense, both physician and payer have an opportunity for this to be an economic win for both of them. When we look from the payer's perspective, it is about paying for a drug that is delivering, ideally, hopefully we see this in the data, really good results for patients, but with guaranteed compliance. So your patients are going to show up once a year. They are going to get treated. You are already paying for this procedure. If patients are compliant, one of the problems with non-compliance is that patients then have spikes in symptoms. What happens when they do that is it leads to emergency room visits. It leads to unscheduled endoscopies, food impactions, really expensive things for the payer. So they want that consistency. From the physician's perspective, and again, the webinar that you referenced goes into this quite a lot, essentially what happens for the physician is they bill already for the procedure that is essentially a screening procedure, where they are going down and doing biopsies. Because they are now adding on a therapeutic procedure, there is another fee code for that. Because they have a different intent for being in the esophagus, there is actually an allowance that you bill both with a modifier. So it is an additional facility fee, it is an additional physician fee, and you are getting that for spending that five extra minutes. The other piece is this would be a buy-and-bill medicine. So all of a sudden then you are also getting that ASP plus 6%, which could be quite meaningful to the physician. This is a very different compensation model than would be writing a prescription to send off to a pharmacy for the physician. Okay. Thanks so much. Let's talk about the commercial opportunity. I am curious how you would view a conservative base and a bull case when thinking about the opportunities at hand. Yeah. When we look at this, I think really looking at just that absolute base case. Right now we know there are between, on the latest studies, which again, are looking back a couple years. They are telling us that it is between 450,000 and 600,000 patients. This is very much not an orphan disease anymore. Projections to 2030, which is our launch timing, is basically there is going to be 1 million patients in the United States with EoE. Roughly half of those patients at present are controlled on a PPI. When you listen, they tend to be on a PPI for a while and then progress. Really then we are looking at this post-PPI world, pre-biologics world. If you look at biologics penetration, it is somewhere in the 5%-10% range today. That sort of leaves you with this sort of 40% of that overall start. That is about 400,000 patients. If you look at pricing of products that are in this space, pricing that you can see out there, estimates of pricing, that might put this at $50,000. Even if you're getting just 20,000 of those 400,000 patients, you've got a billion-dollar product. When you start to look beyond that and really get realistic about what your numbers can be, it can be a whole lot larger than that. But I think even just understanding that floor is really important. That 20,000 patients out of 1 million is not a lot. But we hope that with great data from the phase II-B, if we're able to see that in December, and then progressing quickly into phase III, we hope we're going to be really meaningful for patients and hopefully be broadly used. Yeah. Thanks so much. If these data are positive, how are you thinking about expanding your platform technology and your pipeline beyond EoE? One example is esophageal strictures. How similar is the delivery process here, and do we know anything about steroid use in this setting? Yeah. This has been a fascinating one for me because, I would love to say that we were coming up with all the great ideas of where we can go beyond EoE, but it's amazing, the physicians are coming to us. If you think about these gastroenterologists, they're not just treating EoE. One of the other diseases they treat is benign esophageal strictures. 5% of benign esophageal strictures are EoE patients. The remainder are mostly reflux patients, chronic reflux patients, inflammations, fibrosis, and strictures. The treatment, there's 1 million patients in the U.S. that have strictures, 500,000 of them are getting balloon endoscopies. What that means is they go down and actually tear open that stricture, they rip the esophagus with a balloon. Sometimes that's once a year, sometimes that's once a week. This is a very debilitating disease. There are no drugs available. Nobody's working on anything from the pharmaceutical end of things to actually help these patients. What's standard of care? Well, physicians figured this out themselves. There are really good prospective controlled trials where they have been injecting triamcinolone, a steroid, very similar to fluticasone, a little bit less potent, and they inject it submucosally. In other words, exactly our procedure, they're doing that with triamcinolone, and they find that it makes a meaningful difference. Now, triamcinolone's only lasting days, but yet it's making a difference. They've come to us and said, "We have 500,000 patients. We're giving a three-day drug. Yours is lasting a year. We see the impact it's having on histology. We visually see the impact it's having. We really want to use this in benign esophageal strictures." We do intend, after this data, we've already sort of got a protocol ready. We've been working with the KOLs in the space. We intend in early 2027, on the back of the phase II-B data, to then get into benign esophageal strictures. I'd mention one other that the physicians have come to us with, and that is fibrostenotic Crohn's disease. This is really interesting because we think of Crohn's disease, there's lots of fantastic medicines in Crohn's disease that have really changed people's lives in such a positive way. Yet 40%-45% of patients in the proximal colon will end up with this fibrotic lesion, this scar tissue, that gets thicker and thicker over years until eventually it becomes obstructive and you need to have surgery. There isn't really anything to treat that today. There's a few people working on things, and we hope that there are solutions that are come up with quickly. The solution that they're looking at our drug is they're saying, "We can see that lesion when we do our annual colonoscopy. We want to inject it with your drug. We think that that will stop that lesion progressing." We're also busy exploring with KOLs what a trial might look like there. That would be later in 2027 that we would get into that. But again, those represent really big additional opportunities well beyond that base case that we talked about just for EoE. And create a catalyst path for the stock while you're kind of in execution mode of a pivotal EoE study in the background. Absolutely. Really, as we launch those two programs, you're really looking at you've got very frequent clinical catalysts throughout the next couple of years. Then there's other opportunities in GI as well. So there's a real GI franchise opportunity. From a commercial perspective, what's interesting is it's the same sales force calling on the same doctors, selling the same drug, and it's a very simple procedure for them. Again, we talked about the economic aspects for the physician that make its use in all of these things quite attractive. Maybe to close, anything I didn't ask you that I should have? Why should investors consider looking at the company now? You clearly have nothing going on in the next few months. Well, you always ask all the great questions, you did not leave any stone unturned. So very grateful for that. I think from our perspective, we view this as an incredible opportunity for investors. When we look at our valuation, we think that it represents great value with what we have ahead of us in Q4 particularly, but we have more to reveal before that Q4 data. When we look at the size of the opportunity in EoE, in other GI expansion opportunities, with the data that is there, again, we are talking about a drug that is understood to work in this disease. We are delivering that drug effectively, and we see that from the phase II-A trial. So a lot of the inherent risk you might have in a normal phase II-B placebo-controlled trial, we really hope is greatly reduced. People encourage you to look at the data, have conversations with us, read your great reports. So we think it is a really exciting time, both for us as a company, for our patients, but also for investors. Great. Thanks so much, James. Really appreciate you being here. Good luck with the data upcoming. Great. Thank you very much. Really appreciate it. Thank you, everybody.