Welcome to Arecor Therapeutics Interim Results 2025. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session through the phone lines, and instructions will follow at that time. I would like to remind all participants that this call is being recorded. I will now hand over the call to Dr. Sarah Howell, Chief Executive Officer, to open the presentation. Please go ahead. Great, thank you, and thank you for joining everybody this afternoon. As you said, my name is Dr. Sarah Howell. I'm the CEO of Arecor Therapeutics. I'm joined today by David Ellam, our CFO, and we're going to talk you through our interim results for the six months ending 30th of June 2025 and some significant post-period events that you may have seen announced this morning. I'll draw your attention to our customary legal notice. Just as a little bit of a recap here, Arecor is a clinical-stage biopharmaceutical company. We're focused on drug development and delivery for diabetes and other cardiometabolic diseases. We have our own proprietary pipeline and product portfolio where we're targeting areas of significant unmet patient needs where we can bring benefits here to the table for those patient populations in high-value markets and very much focused within the diabetes and obesity space. Our lead product within that portfolio is AT278, which is an ultra-concentrated rapid-acting insulin, and we'll be talking about that in much more detail throughout the presentation today. We also partner with major pharma and biotech companies, leveraging our technology to develop enhanced versions of their proprietary products, and this really validates the need and the value that we can bring to the table with our technology platform, the Arestat technology platform. We're in a very strong corporate and financial position. We have cash runway post the royalty financing deal that we announced this morning through to the first half of 2027. We have multiple near and medium-term value inflection points, really furthering our ambition to bring significant benefits for people living with diabetes and other cardiometabolic diseases, and in doing so, building value for our shareholders, and we'll talk you through those today. As I've said, we're very much focused on transforming patient care by bringing enhanced therapeutics to market that reduce burden whilst improving outcomes for people living with chronic diseases. We do this by leveraging our innovative and proprietary formulation technology platform called Arestat, and here we're developing novel formulations of existing therapeutic products with enhanced properties that would be otherwise unachievable. Across our internal proprietary pipeline, we have two clinical-stage insulin products, AT247 and AT278, where we've demonstrated best-in-class clinical data, and we're currently preparing for phase two clinical studies in the second half of 2026 for AT278, and we'll talk about that in more detail. We also are developing a novel technology platform for the oral delivery of peptides, starting with GLP-1. As you can see across our partner programs here, some of those we've been able to name those partners, and these are major pharma, biotech, and medtech companies within the industry. This, as I've said, validates the need for the technology, but also can generate value here. This generates revenue within the business today, but the real upside potential is if we can transition these through over to licensing with our partners. To move forward to talk a little bit more about the interim results, at the beginning of this year, we were very clear that we were refocusing the business on opportunities which would present the most significant value creation. We've done this, and we're making great progress. We've continued to advance our proprietary pipeline products, more specifically our lead clinical program, AT278, and we've entered into a deal, as we announced this morning, with Sequel MedTech, which I'll talk about in more detail, and also the development of an oral delivery platform for the oral delivery of peptides. Again, we'll talk about those in more detail. Across our partner portfolio, we've entered into three additional new formulation development partnerships. These are pre-licensed and bring in pre-licensed revenue of over £1 million and have that upside potential for future licensing. We said that we would wind down Tetris Pharma as a non-core operation, we're doing this, and this is on track. As you can see here, there are financial highlights, but I won't talk about these. I'll leave David to talk you through those later in the presentation today. Let's move forward and talk about the significant deals that we announced this morning. As I mentioned at the beginning of the year, we set out our priorities, and this was to pursue high-value R&D opportunities that can bring the most value to patients, and in doing so, to our shareholders. This morning, we've announced two deals that are significant milestones that enable us to drive this strategy forward and achieve these ambitions. For AT278, this is our highly concentrated, rapid-acting insulin. We've been really clear that we see the most benefit here for patients in combining AT278 with a next-generation AID system. This is an automated insulin delivery system, and our strategic priority has been to enter into a partnership with an innovative pump company. We've done this, as you've seen this morning, we've entered into a co-development partnership with Sequel MedTech, where both companies will commit up to $1.3 million to fund all phase two enabling activities for AT278 in their innovative AID system. We've also confirmed with our partner, Sequel, our strategic intent to enter into a broader co-development and commercialization partnership for phase two clinicals and beyond. In addition to this, this morning, we also announced that we've entered into a royalty financing agreement with Ligand Pharmaceuticals, where we've sold the royalty rights related to AT220 and all potential milestones and technology access fees related to AT292 to Ligand. Under the terms of this agreement, we can receive up to $11 million. $7 million of that is an immediate upfront cash payment and the additional up to $4 million on meeting certain conditions. David will talk you through the deal structure in a little bit more detail later. This, of course, immediately strengthens our cash position, allows us to accelerate the development of AT278, extends our cash runway into the first half of 2027, and also importantly strengthens our balance sheet for future deal making. I'm just going to move on to talk in a little bit more detail about AT278, its unique profile, our partnership with Sequel MedTech, and how we can partner here to bring significant benefits to patients and hence value to our shareholders. Just taking a step back, I'm not going to talk through everything on this slide, but it's really just to give a sense of the evolution really and the great strides that have been made in terms of treatment options and care for people living with diabetes since insulin was first discovered over 100 years ago in 1921. From an insulin perspective, this has really been around developing more physiological insulins when we're talking about meal-time insulins. It's really important that they're fast acting. These have really evolved and developed into insulin analogues that are much more faster acting, albeit not as fast acting as Arecor Therapeutics' insulins as we've demonstrated in the clinic. From a device and insulin pump perspective, there's been great strides there as well. As you can see on this slide, hopefully you can see the pictures here. The very first insulin pump was literally the size of a backpack. This was followed by innovations from Dean Kamen, who developed the first insulin pump for use outside of the clinic, the AutoSyringe, right through to today where we have what we call now automated insulin delivery systems. These are continuous blood glucose monitors that continually measure blood glucose. Those measurements are fed to algorithms which calculate, based on that blood glucose measurement, how much insulin needs to be delivered to stay inside that time in range or to tightly control your blood glucose, which is then automatically delivered via an insulin pump. The question is then, what's next? What's the next great leap in innovation and treatment options and care for people living with diabetes? Where does AT278 aid systems fit into this? It's really clear here that it's around improving control, so blood glucose control, and improving outcomes for people with diabetes, but really importantly whilst reducing their burden. This is a high burdensome disease to manage on a day-to-day basis. The patient needs here, and the big patient asks are, how can you reduce my burden? We know that people with diabetes, if they use aid systems, they have better outcomes, but why are only 40%, for example, in the U.S. of type 1 diabetics using aid systems and less than 10% of people with type 2 diabetes? This is because there's still some advancements we need to make. Some of the big asks here are around longer wear. They want to be able to wear these pumps for longer without having to change out insulin cartridges or intervene, so looking for seven-day wear plus, and they want them to be much smaller, whether they're body worn or tethered, to have a much, much smaller footprint. Both of these can be achieved with a highly concentrated but rapid-acting insulin such as AT278. When we look at improving outcomes, this is really about improving time in range to have that tight blood glucose control, which ultimately improves those outcomes. For this, you need much faster acting insulins, but also to have algorithms that are fine-tuned to the kinetics of these insulins so that you can get the best out of them. It is a real combination of technology innovation and insulins. With AT278, we have a much faster, highly concentrated insulin, and with aid systems such as Sequel MedTech's Twist, the ability here to fine-tune to this insulin and really deliver these longer wear, smaller pumps that can improve time in range. We also have this patient population that have high daily insulin needs. These are patients that require more than 100 units of insulin a day. The challenge that they have, of course, is that they can't even get to three-day wear, never mind seven-day wear. There is a real need here. The current aid systems are simply not practical for them. There are over a million of these patients, for example, in the U.S. A concentrated rapid-acting insulin would enable that three-day wear plus for this patient population. We are looking at an initial target patient population in the U.S. of around 2 million people living with diabetes. It is about half of those that are on intensive insulin therapy, which translates to an initial TAM opportunity here of around $2.9 billion in insulin revenue. If we can improve outcomes and reduce burden for patients, it is a significant commercial opportunity as well. A really quick recap on AT278, and I am going to talk in more detail about Sequel MedTech and their Twist pump. AT278 is the only highly concentrated rapid-acting insulin. It is five times more concentrated than the other rapid-acting insulins that are out there today. We have demonstrated across two clinical studies, both in type 1 diabetics and in high BMI type 2 diabetics, superior PK/PD profile. We see this faster onset of action, so faster absorption of insulin and greater glucose lowering profile compared to those best-in-class insulins that are available today. It really is the only insulin that has that fast profile and concentration to enable that next generation of longer wear miniaturized aid systems. Moving on to talk about Sequel MedTech and why we have partnered with them. Sequel are a company with a rich history in innovation. They were co-founded by Dean Kamen, who I mentioned earlier, invented the first insulin pump for use outside of the clinic, the auto syringe pump back in the 1970s. They've developed an innovative Twist aid system. In just over two years from founding, they've achieved U.S. commercial launch. They're bringing significant innovation to the table. Innovation is in their DNA, but also that commercial expertise and have the aid system on the market today in the U.S. currently. We have very much a shared vision here of bringing next-generation aid systems to people with diabetes, enabling that longer wear and that future miniaturization opportunity that can improve outcomes and lower disease management burden. There are some very specific technical features around the Twist aid system that make it the ideal pump for AT278. Clearly, safety is key here. This is a highly concentrated insulin. The Twist system is the only system that currently directly measures the volume of insulin that's delivered with each microdose. This is what they call their iSure technology. It's pretty cool, actually. It uses sound waves to measure each pulse of insulin, so the system knows exactly how much insulin is being delivered. This ensures really accurate delivery of insulin, which is absolutely critical for a five times more concentrated insulin such as AT278, so we don't have those margins for error here. This precision may also allow for improved algorithms. One of the features, as we've spoken about, of AT278 is its ultra-rapid acting profile. If we can be more aggressive with those algorithms to get the best out of the kinetics of AT278, then we have the potential here to significantly improve time in range, which ultimately improves outcomes for patients. It also detects occlusions, which are blockages in the pumps, up to nine times faster than any other aid system, minimizing that risk of prolonged hypoglycemia. From a safety perspective, particularly in combination with a highly concentrated insulin, it ticks all of those boxes. From a form factor perspective, it's already the smallest footprint of an aid system that holds up to 300 units of insulin, using the standard insulins that are available today. As we've spoken about, with AT278, this opens up the opportunity for longer wear and future miniaturization. Talking about next steps, as I've spoken about, both companies are committing up to $1.3 million to develop AT278 in the aid system to be phase two ready. Those development activities have started. They will run through the course of the first half of next year for us to be in a position to enter into a pivotal phase two clinical study during the second half of next year, subject to funding, of course. We're also very confident around that study design for the phase two clinical study because we very recently had very positive FDA feedback on that clinical study design and the use of the Twist pump and the compatibility of that Twist pump and that aid system within that clinical study. I'm just going to change track slightly and talk a little bit more about the oral delivery of peptides, which we've identified as a second pillar of value creation within Arecor. I think, as we've spoken about previously, you know peptides are an increasingly important class of therapeutics. There are over 800 peptides in development today, but only two are orally delivered that are on the market today. That's because oral delivery of peptides is extremely challenging due to their molecular characteristics, and that leads to very low bioavailability. This is a formulation challenge, right? What we're trying to achieve here with Arecor expertise, formulation expertise in the Arestat technology, is to develop an enhanced oral delivery platform. We're looking at improving bioavailability. We're starting with GLP-1. This is a good benchmark for us. It is a peptide that's orally delivered so that we can compare directly against that. If we see success here with oral GLP-1, that allows us to expand across more broadly to develop a platform for peptides here. We're currently at the phase we overcame the first challenge of stabilizing the peptide within the oral delivery matrices, and now we're very much working on the bioavailability. This is looking at identifying which approaches that we're using improve that bioavailability, which will then inform next development steps. We'll be looking to generate that iterative PK data through the second half of this year. Oh, the slides are stuck. Oh, fantastic. Hopefully, you can see the next slide. It was stuck on my screen. This is a slide you will have seen before. It's really just to demonstrate here that we know that there's very much a patient need for oral delivery of peptides. We know there's high interest from pharma. We talk to pharma all the time, and there's great interest in Arecor's progress and the oral delivery of peptides. We can see it also across the deal making in this space. There's significant market demand here, and it's a very active deal making space. This is a real opportunity for Arecor to generate significant value here if we can develop an enhanced orally delivered platform for peptides. I'm now going to hand over to David to talk you through the financials and a little bit more detail around the structure of the Ligand deal. Thank you, Sarah, and good afternoon, everybody. The financials show that we are doing what we said we would do back in January, which is focused upon the value-added areas of the AT278 insulin and the pipeline. The key message across this page is that costs are under control. With the monetization announced today, we're going to have a runway into the first half of 2027, which does include all the costs that we need to spend on the phase two enabling work. Just looking at the numbers in front, the revenues are level at $2 million. The partner revenue rose $400,000 to $1 million, and the Tetris revenue dropped $400,000 to $1 million. I guess that's what you'd expect when you're winding down a business. The SG&A expenses, again, we said at the beginning of the year that we expected a large decrease in Tetris costs and that we would also have Tetris be cash generating. Both of those are happening now. The gain on disposal, that was from the sale of the Tetris non-Ogluo assets to Aspire Pharmaceuticals. We ended the period with $1.9 million of cash, and obviously, that's now been augmented by the $7 million, which I'm happy to say that we've received today. That's cash-based. We're just whizzing through this. The royalty finance agreement with Ligand Pharmaceuticals, we sold the royalty rights. It's a true royalty sale for AT220, and then the milestone and access fees for AT292. As previously we've said, AT220 is a biosimilar, which was launched by an undisclosed partner in 2023, whereas AT292 is still in development with Sanofi. I'll badly pronounce the name of F-doralbenalfra. The terms of the deal, we received the $7 million today within our bank accounts, and then we expect to receive another $1 million within the next 12 months. The total of the $4 million that's receivable on satisfaction of conditions, that will obviously be over a different period of time. Additionally, Ligand are receiving just over 1 million warrants at over 10 years at a price of 67.39p. The key thing for this is that we have the money in the bank now. We have a co-development deal with Sequel, and we have strengthened our balance sheet and enabled to allow us to take the time and the negotiations that we need for partnering and also to accelerate the R&D opportunities. Thank you. David, just to summarize, and then we'll be happy to take questions, I think as we've spoken about today, we really set out our stall at the beginning of the year. It was around we were really clear here that we were going to focus on areas of R&D where we could drive significant value. This is areas where there's significant unmet patient need that we can address using the Arestat technology and our proprietary products in combination with strategic partners. In doing so, being able to drive significant value for the business. I think we've made great progress through the first half of the year and obviously the post-period events here. Entering into that co-development agreement with Sequel MedTech, a fantastic partner, a really innovative aid system, together here we have a real opportunity to bring the next leap of treatment options and care for people with diabetes and really opening up the market and the aid market to more people living with diabetes. Of course, in terms of outlook and what's coming up, we're very busy now with those activities throughout now to the end of the first half of next year to get ready for that phase two clinical study and to then be ready for that phase two pivotal study during the second half of 2026. The oral delivery of peptides, this really would be a game changer here. As I've said, it's a formulation challenge. This is what Arecor is fantastic at. It's our USP here. We'll be generating that key iterative non-clinical PK data through the second half of this year, which will really inform the next development steps and approaches for us as we're looking to enhance that bioavailability and expand it out past GLP-1 to a broader range of peptides. It's a real watch this space as far as the oral delivery of peptides. Of course, with the Ligand deal, I've just said Ligand for the first time. I think I've been saying Ligand, sorry, Ligand, Ligand all the way through, is an enhanced cash runway through to the first half of 2027. As we've spoken about, this enables us to accelerate the development of AT278, which is our lead insulin asset, of course, strengthen the balance sheet. That's going to be really important for future deal making. We have a really clear focus here on the areas of opportunity to create value to the business. We're very much focused operationally on delivering against these. Thank you for joining us today, and we'll be happy to take any questions that you have. We will now begin the Q&A session. As a reminder, participants can also submit questions by clicking the Ask a Question button on the webcast page. Please submit these, and the company will get back to you in due course. If you'd like to ask a question on the phone lines, please signal by pressing star one on your telephone keypad. We will pause for a moment to assemble the queue. We'll take our first question from Julie Simmons from Penn NeuroLibra. Please go ahead. Thank you very much. Excellent news on the deal with using the Twist pump. I was just wondering, Sarah, are there any other companies that you were talking to, any other pumps that you looked at before doing this deal with Sequel? Oh, yeah, definitely. I mean, we've been close to all of the insulin pump companies for a long time now, I think, as we've identified. We've seen a real evolution here in the landscape, which is why we turned our focus to partnering with an insulin device and aid system company here because we've seen that real drive towards moving more people with type 2 diabetes over to insulin pumps. They generally have higher insulin needs, this drive towards miniaturization and longer wear, all of which require a combination of device and technology innovation, but also insulin. It became clear to us that a requirement to really partner much earlier in the development cycle than you would ordinarily see for an insulin and the aid systems here. We've really been focusing our attention on building those relationships, understanding the technology landscape, and also really understanding the shared vision that we have with these companies. We've really kicked the tires on this, and you know we've entered into the partnership with Sequel MedTech for all of the reasons that we've talked about today. The Twist pump is a great fit for AT278, and you know their commercial rollout, quite frankly, and the pace at which they've done that in the U.S. is super impressive. They are innovative, they're ambitious, and they are executing at pace. That's all of the things that we need combined with AT278 to get this therapy to patients as soon as we can. That's great. Just one other question. Presumably, when you're doing this, the AT278 won't be approved just for use with that pump, or will it? How's that plan out for the future? Yeah, that's a good question. That really depends on the constructs of the next deals, essentially. How do we move forward into further development and commercialization there? It's a question really around exclusivity there. I think that's really dependent on the structure of the partnerships and the deals that we do there and the value share associated with those. What is clear here is that this isn't a case of taking an insulin independently to market and gaining approval because there are pump modifications and aid system modifications that are needed to be implemented in tandem. It becomes much more like a combination product of the therapeutic and the device, which requires close collaboration, co-development with those device partners. I think that's essentially on the table for discussion in this next phase. As we've spoken about, there's strategic intent there with Sequel MedTech and Arecor Therapeutics to move into a much broader co-development and commercialization partnership. Lovely. Thank you. Thank you. Again, if you'd like to ask a question, please press star and the number one on your telephone keypad. There are no further questions on the conference line. We will now address the written questions submitted via the webcast page. I'll now hand over to Rosie Morse to read these out. We've had a question submitted from Danny Young. Is the cost of the phase two clinical study included in your cash runway, or will that need separate funding? Do you want to answer that, David? Yes. Within the RNS, it states there that we are using the proceeds from the monetization towards the phase two enabling work, which is the $2.6 million between ourselves and Sequel. The phase two cost itself will be funded by other means, and that will be addressed also within the further collaboration agreement. Thanks, David. Will a phase three trial be needed with the pump, or is there a quicker pathway available? Yeah, and that's, you know, it's a really good question. We, at the moment, assuming that a phase three clinical study would be needed to generate patient safety data, and also we will need to generate some, what's called some HbA1c data. This is your average blood glucose there. There'll be some form of phase three required. I think the question then becomes the extent of that and the size of that study in terms of patient numbers, et cetera. We've looked at this and we're following a pretty standard approach. We're looking at assumptions it'd be less than 500 patients there, so a relatively small contained study. What we have seen with our feedback from the FDA on our phase two clinical design, that is pretty innovative design, actually. It will be the first time in the phase two clinical study that using time in range as the primary endpoint. That's really key because that's really what we're looking to achieve here with patients is about improving that time in blood glucose range. That means it's a much shorter study. It's a six-week study rather than, you know, traditionally a phase two study would be a HbA1c and be a 12 to 16-week study. Also, there are some other features of the clinical design that were pretty innovative, all of which have been received positive feedback from the FDA. We've got a really good relationship there and I think some opportunities to work with the FDA around innovative study design so that we can go through and generate the data that's needed for approval, but hopefully in an expedited manner. At the moment, yes, we assume phase three, but it will be a small contained phase three study. Lovely. Thank you. Another question in from Carl Keegan. How important is longer wear, really, for patients? Why is that important? Can you give us a bit more flavor around that? Yeah. Currently, you know, the current insulin aid systems hold up to 300 units of insulin. There has been a real drive towards this longer wear. If we look at the patient surveys, what do they want? It always comes within, you know, the top three is always they want pumps that are longer wear. The reason for this is, you know, they want as little intervention as possible. Some people describe it as a fit and forget. I don't think you're ever going to forget, but to be able to put your insulin pump on and know that's it for the next seven days. Once a week, you need to change out your insulin cartridges, et cetera, there. It is really all about lowering burden. That longer wear time is a key ask from patients. I think the other aspect of that is around that patient population that can't even get to three-day wear today. That's not an insignificant patient population. Of the 4 million intensive insulin therapy people with diabetes in the U.S., just over a million of them are in this greater than 100 units a day. Even getting them to three-day wear, so aid systems are accessible to them, is a significant advancement. You clearly need a much more concentrated insulin format. To get them to seven-day wear, you need an insulin like AT278. We're confident. We've done our market research here, our patient research with KOLs, patients. We've done this in parallel and in combination with Sequel as well. I think we've got a really good understanding of the patient needs and how we'll address those. Thank you. I think that is all the written questions for now. Thank you. There are no further questions. I will now hand the call back to the management for closing remarks. Great. Thank you for everybody joining us today and the great questions. I think as we've outlined today, we set our strategy at the beginning of the year. We've made fantastic progress against that. I think both the co-development agreement with Sequel MedTech and that combination of their innovative aid system and AT278 is a great step forward to achieve our ambitions of bringing AT278 to market in an aid system. Also, of course, the royalty monetization with Ligand strengthens our balance sheet, gives us that immediate cash injection so that we can really accelerate and supercharge those areas of R&D where we can generate the most value for patients. Of course, if we get that right, it will be generating the most value for our shareholders as well. Thank you for joining us today, and you know we'll be happy to talk offline as well if there's any questions that come to mind afterwards.