All right, great. Good afternoon, everyone. Thanks for joining us here at the Leerink Partners Global Healthcare Conference. My name's Tom Smith. I'm one of the senior biotech analysts here at Leerink. It's my pleasure to welcome our next company to the stage, Aclaris Therapeutics. Really happy to be joined on stage here by Chairman and CEO Neal Walker and President and COO Hugh Davis. Gentlemen, thanks for joining us. Thank you, Tom. Neal, you guys recently, I guess what I would call, reloaded the pipeline with the in-licensing of multiple antibody assets from Biosion. There's some really important data that's coming here over the course of 2025 that we'll walk through in more detail. Maybe, Neal, why don't you go ahead and kick us off with a little bit of an overview for those in the audience who may be less familiar with the story and kind of what you guys have been up to at Aclaris. Sure. Aclaris is a development stage biopharmaceutical company focused on both now large- molecule and small- molecule therapeutics for various immunoinflammatory disorders. We actually, with the addition of the two new assets, have quite a rich pipeline now. We have two clinical stage assets, one near to clinic. The bispecific will be filed in an IND this month. We have a preclinical ITK inhibitor. Over the next two years, we're going to have about, I would say, seven or eight catalysts and runway with over $200 million on the balance sheet into 2028. Great. Awesome. A lot of programs, a lot going on. Let's talk about the in-licensed antibodies. Maybe just start high level, walk us through sort of the diligence process that went into that. I guess the decision to pivot into antibodies, you guys historically have been focused and developed a lot of expertise around small molecule chemistry, pivoting into antibodies. Just walk us through the diligence that went into in-licensing those programs. Sure. It was quite extensive, actually. Hugh, who joined us from Biosion along with five of his colleagues, was a great help in shepherding this all along. We spent about six months under an MTA doing a whole slew of tests, repeating all the testing and all the great work that Biosion had done, copying the TSLP mAb to TEZSPIRE, and then also the bispecific, and then extending that into the relevant competitive landscape. What we were able to ascertain through all that was that our TSLP mAb had an exceedingly long residence time, which we think is really important in an alarmin- mediated disease like AD and the various respiratory diseases, that you want to be able to bind to that TSLP and stick to it, not bind to it, cycle off, and then allow it to hit the receptor again. That was a key finding and gave us a lot of confidence in heading to the next step of completing the deal. I think the other important thing too there was that we were able to get a view on the clinical translation. It's all well and good to show all these great in vitro studies and say that you're best in class potency, etc. Being able to show the clinical translation in a single-arm AD study was quite important for us. That's great. Yeah, we'll get into the single-arm data. I guess high level, just talk through a little bit the rationale for targeting TSLP in AD and maybe some of the learnings that have come from other programs, TSLP-targeted programs in atopic derm? Yeah. Sure. Like Neal mentioned, TEZSPIRE obviously had looked at TSLP or Amgen had looked at TSLP with TEZSPIRE. Their phase 2a data looked very reasonable in terms of pursuing. When we decided to go forward with AD, it was on that backdrop. Since then, a number of other players have come into the market, as you saw in ClinDev, where we're looking at assets against both the receptor as well as bispecifics. We really thought about ATI-045 as a key indication being AD because of that potency and that long residence time. As Neal mentioned, we also then did look across some of the other assets in this space, primarily moving into severe asthma and the respiratory indications. Not many are moving so far into AD. I think AD is interesting in that we know from a biology perspective that it works at the top of the funnel. We've seen some recent data come out of the folks that are studying OX40. It's the same pathway. I think there's enough reasons to believe, including the literature, the mechanism, and some of the clinical results that we've seen of late. That's why we're excited about it. Yeah, that makes sense. You alluded to the phase 2a open label experiences. This was a trial that was conducted in the U.S. Can you just describe, I guess, the rigor that went into that study? We get a lot of questions from investors just broadly now, it feels like, across the atopic derm space. We have seen in the last several phase 2 readouts what appears to be somewhat of an elevated placebo response. Maybe just talk through what gives you the confidence that the effects that you're seeing in this open label study are true disease-modifying effects rather than some sort of placebo response. Yeah. Hugh, do you want to, since you presided over that study? Yeah. When we went in, we had looked at all the placebo responses previously. You were looking at EASI responses in 40%, 50% from SOLO-1 and 2, from DUPIXENT and the like. Since then, to your point, we've seen upwards of 70%, 80% responses. More recently, it was actually nice to see in the recent data set with the OX40 that we're now looking at a more reasonable placebo response, more around 15%-20%. When we looked at the 2a trial, we made sure that we brought people into that study that were truly AD. I think this is one of Neal's points when I've listened to the story, is being a dermatologist, he has the advantage of looking at pics coming into our trial. When we look forward to what we're doing now, moving the 2b forward, we really want to make sure that we get the appropriate patient into the trial. That's really a key to success. Right. Maybe you could just elaborate on that. What, I guess, specific steps are you taking or implementing into, at least how you're thinking about the phase 2b design to make sure that you're getting true AD patients and, I guess, working with investigators that also are comfortable scoring these patients appropriately so you end up with a true sense of treatment effect? Yeah. I mean, other than the inclusion-exclusion criteria, which is a little bit generic, the single best thing you can do from my perspective is have a central reader and screening those patients in, have very tight criteria around what you want to see in those pictures. The reason I say that is because EASI scores, an EASI 20 in one study is not the same as an EASI 20 in another. It's a composite index that you roll up extent and severity. You'd much rather see something skewed more to the severity side, particularly if you're doing placebo-controlled work, because if you see it, if it's more weighted on the extent, that patient, think about somebody who just has a lot of dry skin, they might fall into the placebo group and respond quite well. To get rid of that, you have to really be rigorous and make sure you have dermatologist-run sites where the derm is actually on site doing the adjudicating. You do not want to have people rotating through because there is a lot of inter-rater variability, especially on EASI score. That is the other big thing that is a problem that people do not often talk about. You want to have that same person adjudicating everything through the study. Also, the other piece is maybe having a healthy dose of ex-U.S. patients. The fact is, now we have a lot of approved treatments in the U.S., and you are losing that top end of the spectrum that otherwise would be great to have in a clinical study. Got it. Ok. Yeah, we'll go through the plans on phase 2b in just a minute. You also alluded to there being some data, I guess, relative near term. I think you have a China partner who's generating data in a couple of indications in China. Top line data, I think you've said is kind of first half 2025. Correct. Just, yeah, walk us through sort of your expectations, what you hope to learn from those readouts, and any, I guess, considerations around the fact that they're generating the data in China in those settings. Yeah. I think it's nice to have that we get to see this kind of play out, this clinical translation in short order post our transaction. Sometime in the next four months, we don't know exactly when, we'll be getting severe asthma data, 52-week data with over 200 patients out of China. A nice robust study. Also, CRSwNP patients, 24-week data. I think we have to see what it all shows us. I think when we think about investing in these indications, let's say the data is fantastic, I still think it makes sense to think about partnerships. From a U.S. perspective, for us, these studies are quite expensive, quite involved. I think from my perspective, it makes sense to explore that option first as we get the data in. Then we'll see. I think obviously TEZSPIRE has shown very nice data in severe asthma and just released CRSwNP data. They also just put out some data out of China, which was interesting. We are optimistic about it. Yeah. That makes sense to me. How does the dosing that's being used in these studies in China, how does that compare to the open label atopic derm data that you have? Yeah. The asthma is 210 and 420 every four weeks. With the 2a in AD, we went with a 300 mg dose. The idea was TSLP had not been fully validated in AD. We wanted to make sure we had the right exposure or maximum exposure in order to be able to say if this trial had failed, no one would ever have to look at TSLP as a target again in AD. In fact, it did not fail. The data, as I mentioned, were quite good with response rates of IGAs of 88% of subjects getting an IGA 0/1. As we think about that dose in the U.S., the 210 and 420 as it relates to the 300, we are going to consider bracketing that in our 2b trial as we move forward. Yeah, that makes sense. I imagine the learnings from the dosing experience in China are quite informative for the phase 2b AD study. Is that a gating factor for you? We're kind of looking at that. We can't keep holding things up in perpetuity. We're moving forward with some assumptions. If we get that data sooner than expected, we may change course. Ok. Just the last point, I guess, on the China data, when we look to kind of benchmark those results against TEZSPIRE or other antibodies, what would you consider, I guess, a win there? Is it just in line? Is it a little bit better? What are you guys thinking? I mean, of course, in an ideal world, I'd love it to be a little bit better. I think we have to look at the aggregate of all the endpoints. Obviously, you have FEV1, FeNO, AAER, how rapid is the response, looking at all the subsets. As just kind of an example, if we won on 75% of those, I'd be pretty happy. I think if it validates the thesis that we've generated preclinically, that would go a long way to getting even further support for AD in the U.S. Right. Ok. And yeah, on the planned phase 2b AD study, I guess any specific considerations that you would call out, any kind of tweaks that you're thinking about? Or are you thinking about this as more of a traditional moderate to severe atopic derm study? I guess, playing that forward, how should we think about expectations for that readout? We have not officially guided on anything like that. It would be, you can imagine, later in 2026, just assuming we are initiating all these activities now. I think going back, again, the special considerations would be all the things I mentioned to stack the deck in our favor for success. I am willing to take some lag on enrollment just to make sure we get the right patients in and making sure that we educate the folks that, look, if you have an EASI 16 cutoff, it is OK to way overshoot that. Because part of the problem is that people are like, you do not want EASI 14 that is just making their way into an EASI 16 study. Just being super rigorous on that front is the way to go. I've done enough of these studies now to know how many people actually slip in that, not for any other reason except that sometimes AD looks like other types of eczema. When you get those patients in, they're more apt to respond to placebo. Right. In this phase 2b study, are you considering, are we enrolling biologic experience patients or JAK inhibitor experience patients? What's the population? Yeah. We're looking at both. We're going to have some caps on that, which we'll message later. I think predominantly the ex-U.S. contribution to that will mainly be biologic naive. In the U.S., you'll pick up some more who have experience there. We're certainly not going to overweight it to the experience side. Right. Ok. That makes sense, especially in this kind of signal to finding phase. Exactly. Yep. Exactly. Yep. I guess playing that forward commercially, it would seem, I mean, we're in the very early stages of kind of building out second line, third line, etc., in AD. Where do you think TSLP-targeted antibody falls into the treatment paradigm? I mean, from my perspective, what we hope to see is a better smoothing out of the flares over time. I think DUPIXENT is a reasonable acute use medication. I think over the course of the year, it tends to fall off. To me, from a dermatology perspective, I think you want to see those flares just muted and just create a more uniform experience for the patient over the years. There is still a ton of room. We are just at the very front end of this market. It is just like psoriasis in that regard. There is just a ton of efficacy headroom. There is still some safety headroom. This market is growing both on the oral side and the injectable side. It has a long way to go yet. Yeah. Yeah, I agree with that. OK. Let's shift gears a little bit and talk about your bispecific, now ATI-052, TSLP IL-4R bispecific antibody. And we get a lot of questions from investors around the multi-targeted bispecifics versus combination approaches. I guess, what drew you specifically to the multi-targeted bispecific? Why do you feel like that's the best approach? The way it was built, first of all, we used the same TSLP antibody as we have in 045. That has that very long residence time and the high potency. It's also been YTE extended for half-life. On top of that, with the scFvs against IL-4R, the combination is a 2+ 2. You're going to get avidity against both targets. You're also going to be able to have that extended half-life. When you have the high residence time on TSLP, you're able to really inhibit that completely. With IL-4R, we're able to make sure that we're also at least severely limiting the impact of IL-4 and IL-13 and the inflammatory cascade. We saw this with the 2a trial in that when you can turn that pathway, the Th2 pathway, around, you can really get to a place where you see extended response over time. That is what we think the bispecific can do for us. In fact, the potency, when we compared it to TEZSPIRE and DUPIXENT in a CCL17 release assay from PBMCs, we actually saw that it was about five-fold more potent than that combination of TEZSPIRE and DUPIXENT in inhibiting CCL17. We are really excited about it. I think there is a lot of opportunity for multiple types of indications for that. Got it. Ok. And you've got it to an IND filing, I think, later this quarter. What are the gating factors to getting that filed? And then what are the subsequent plans? Now it's in publishing. We're only a couple of weeks away. There are no gating factors to the filing. Beyond that, we'll move into a SAD/MAD in healthies. That's primarily PK, safety and tolerability. We'll move into a 1b setting. At the end of the year, we should have some of those plans put together for looking at patient data in 2026. Got it. Yeah, talking about getting to patient data, how are we thinking about indication selection and prioritization of this versus the TSLP antibody? It's really a function of the data as it comes in. When we're looking at the China data that's going to come in, as well as other competitor factors, I think you can look at derm or respiratory indications by the time we get there. We'll make that decision later in the year. We've created plans for both just as an in case because it is going to be a little bit fluid. Got it. That makes sense. In terms of kind of post-in licensing, can you just remind us, I guess, on a manufacturing drug product level, where is the manufacturing being done? Have you guys kind of brought that in-house? Is there a tech transfer aspect to it? Where are we on CMC? Are we talking about 052, both of them? Yeah, for both. Yeah. Both of them are manufactured in China at the moment, 045 with WuXi and 052 with Xencor. They're both world-class GMP facilities. We used both of them to create all of the batches we need. That takes us through the phase two studies. We're considering moving them into Europe or the U.S. in tech transfers. We haven't made that call. Got it. Ok. Let's shift gears and talk about ATI-2138. This is your ITK/JAK3 small molecule. You have it in an open- label atopic dermatitis study. Neal, just remind us sort of the design for that study. Then we're looking for data from that in the relative near term. Expectations for that? Yeah. Over the next three months or so, we'll be toplining that data. It's a 12-week study, one dose, 10 milligrams b.i.d., looking at moderate to severe AD patients. Our whole idea here is to show both safety and efficacy in patients with disease and also get a view on the PD profile, particularly of the ITK component. That will serve as a bridge for the reason to believe in the ITK selective that's coming down the pike in 2026. Post this AD study, where we're likely to go with 2138 because it's a fast follower to ritlecitinib, is to go into alopecia areata. It's kind of they've already paved the way there. They had good data. They're obviously approved in that indication. We like that indication. I think it's a little bit less frenzied competition than AD. I think that's important whenever you have JAK in the name. Although I think the interesting thing about this molecule, and this was designed on purpose this way, it has very unique pharmacology. If you think about it almost in a bispecific construct way as an oral small molecule, it's like we've got half the powers going into ITK. The other half is JAK3. A lot of people forget that JAK3 is not ubiquitous like JAK1 or 2. It is theoretically a better safety profile in that it just hits the hematopoietic cell. We are excited about that molecule. We're excited about the whole ITK franchise. Yeah. I guess maybe if you could just expand on that and some of the biology behind what you're trying to target here in AD and alopecia. Is there a world where I guess you think you could perhaps escape some of the JAK inhibitor class box warning language that's been applied pretty ubiquitously? Yeah. I would say it would be tough to do that with the 2138. I wouldn't go in with a base case on that. I would certainly hope to get better language, which is the trend you've seen. I think that the JAK3 and ITK are relevant for atopic and some of these other diseases in that JAK3 sits below the common gamma chain. ITK definitely has a Th2 skew, hits Th17, bounces out Tregs. There's just a lot of horsepower there. Again, it's a pretty unique molecule. We know a competitor has an ITK selective out there. Ritlecitinib is the only other one that kind of tickles the TEC kinase family, but not to the same extent we do. Got it. Just on the competitor ITK data, they had some initial data towards the end of last year. I think they updated it a little bit in January. Yeah, maybe you could just comment on the signal that seems to be coming out of their program and then how 2138 stacks up versus that program. Yeah. I think we've shown in a variety of models that we're more potent than that molecule. I like their data. I think they showed good signal in the first slug. They doubled down and showed nice dose response going up from 100- 200. So far, so good on the safety. I think they've done everything they said they were going to do. Got it. You feel like advantage on potency, a number of advantages. Are there specific benchmarks that we should be looking for in the open- label sort of proof of signal, proof of concept study? How would you benchmark it? I mean, I think just looking we have the same endpoints that every AD study has. Looking at all those plus the PD biomarker data. Those would be what I would look to. Yeah. Ok. That's great. How quickly, I guess, can we move with next steps post that open- label study? Pretty quickly. We already have a design. We worked extensively in alopecia areata in the past. We know that indication well. This is not going to be a heavy lift to get this up and running. What we would hope is to have data by the end of 2026. Got it. Ok. That's great. You also have a topical JAK program where you've generated phase 2b data. Maybe you could just remind us what you saw in that study. This is one I know we have kind of positioned it for strategic partnering, I guess, where you feel like we are in that process or what you're looking for from a strategic partner. Yeah. Still ongoing discussions on that front. The 2b data that we generated was, from an absolute responder basis, quite good. It was right in line with the 2a. We saw a little bit of compression on the placebo-adjusted response, which had some various reasons for that. I think it's a good product. It's a soft JAK. It replicates what an OPZELURA may do. It has no systemic absorption. I think it's a great asset. At the time, we made the decision, just given where we were at at that point in time, to put that on the block for partnership. Just because we did not want to invest in that, just deploy capital against that, given the other areas we were funding. Right. With the profile and the data that you generated there, this concept of it being a soft JAK, it did seem like you at least had your eye on potentially avoiding the class labeling. Yeah. I think that is a you can never totally predict. You never know until you get to the end of an NDA review. For sure, if you show essentially no systemic absorption, I do not know how one would make the argument that you should get class labeling there. Right. Ok. I want to take a step back and talk, I guess, kind of bigger picture here. As we've made the move to in-license the antibodies, we still have the KINect platform and all of the medicinal chemistry and expertise around the JAK-STAT pathway. As we think about things that could emerge, I guess, from the organic Aclaris pipeline, how are you guys thinking about that? Are there intentions to build out maybe antibody discovery capabilities? How should we think about that? No. It's a great question. Actually, the guys have such a rich set of experiences. This is part of the value of the Confluence acquisition, is the multidisciplinary approach, all ex-Pfizer guys. It's not just small molecule expertise. They've actually dived right in. We are looking at some interesting antibody targets. The beauty is we can do a lot of this work in-house because we have all that full kind of soup-to-nuts capability, which is important from a testing funnel perspective and just finding the right concepts. Obviously, we have a proprietary chemical library for our small molecule platform. Joe and the guys have been working with Hugh to identify those kind of next-gen biologic targets as well. It feels pretty good. We've got a pretty unique offering. A lot on the plate clinically, also a lot of, I guess, potential to advance things out of that pipeline organically. That said, we just did this in-licensing deal. Are you still, I guess, engaged in external conversation? Are you still looking externally at other opportunities? We always keep that faucet going because you never know. We have a lot just like with the Biosion transaction, just our expertise in being able to evaluate these assets all internally and robustly. We always keep our eye out there because you never know what's going to shake loose in these markets. Right. Ok. The clinical focus being exclusively now I&I, except is there still an ongoing MK2 program in oncology? There is. That is an investigator-driven process out of Washington University. We are not really, other than providing some drug supply there, we are not really involved in that. Yep. Ok. Great. Maybe last question. I know we have a little bit of time left. We're kind of running up against it. Just when we think about we did the raise on the back of this in-licensing deal, your cash resources, and I guess how you think about runway, what explicitly is kind of contemplated in that runway? What data sets are we going to get here over the next 12- 18 months? Yeah. Within that runway, we get the following. We file the bispecific IND this month. We start the AD study and read that out in 2026. On the bispecific, we do the SAD/MAD and read out a POC sometime in 2026. With 2138, we read out the AD study, then roll in and report out on an alopecia areata study. With the ITK selective, we get to IND and then get through POC. We get, for all four programs, at the end of that kind of total two and a half years or whatever, four clinical stage assets clipping along in a variety of indications. Great. Perfect. All right. Thank you, Neal and Hugh, for sharing the updates. A lot of data to look forward to here over the next 12 to 18 months. We'll stay tuned to the Aclaris story. Thank you.