Go ahead and get started. Morning, everybody. Thanks for joining us for today's Fireside Chat discussion with Aclaris Therapeutics. Really pleased to be here again with Aclaris. You know, this is Guggenheim's Emerging Outlook Biotech Summit. We host this every year. Immediately to my left is Neal Walker, the CEO and chair of the board. Hugh Davis is, I believe, to his immediate left. President and CEO. Yeah. And, Roland Kolbeck, who's the Chief Scientific Officer, to Hugh's left. So, again, thanks for joining us. You know, Neal, maybe just to kind of kick us off, remind us a little bit of what Aclaris is currently focused on and what you're bringing to market. I know there's a number of programs in development today that you're driving forward. Sure. Well, thank you for having us here today. So Aclaris is a clinical stage biopharmaceutical company focused on both, large molecule and small molecule therapeutics. So you can think about it in kind of two broad buckets. One, on the large molecule side, we have a TSLP mab that's currently in a 90-patient study in moderate to severe AD, due to read out at the back part of 2026. We also have a bispecific that's built off the same TSLP mab and has a IL-4R construct. We just reported out highly positive PK/PD data on the first three SAD cohorts. We'll be reporting out the rest of that study in the coming months. Then we have two phase 1b studies, one of which is already up and running in severe AD, and that's a placebo-controlled study, and then a moderate asthma study, very similar to what the Sanofi study looked like with Lonsicamig. That is due to kick off imminently. We'll have both of those readouts in the back part of 2026 as well, so pretty rich catalyst year on the biologic side. Then on the oral small molecule side, it's really underpinned by our ITK franchise. So 2138 is the lead molecule there. That's an ITK JAK3 inhibitor. That is a phase IIb-ready asset. As I've mentioned to you, we are in the process of down selecting a lead indication, which will happen shortly. and then what we've done is we've engineered out the JAK3 component to have an ITK selective, group of assets, and one is super selective for ITK, the other tickles TXK, and so both of those programs are moving towards IND. They're currently in IND enabling talks as we speak. And so in the next few months, we'll be getting into IND on that lead program and then getting into the clinic. So, you know, I think the, the two that we get asked most about are the next gen ITK and the, and the bispecific, and so we're really excited about those two assets. Great. So let's just maybe start with besakitug, and you know, the learnings that you would hope to kind of bring forward with the TSLP-targeted monoclonal, you know, and maybe you just can kinda contextualize what we've seen in atopic dermatitis in the past with other TSLPs. Sure. Hugh, you want to- Yeah, I'm happy to take that. Yeah, so bosakitug is a TSLP 20-23 day half-life, but really, its claim to fame is its residence time on TSLP over 400 hours. We tested that against a number of clinical candidates, as well as Tezspire, we're 70 times more potent than Tezspire, and more potent than the others tested as well. We had a Phase IIa study earlier run when I was at Biogen, and we showed that we could achieve, with six months of therapy, we could achieve EASI score reduction of 94, or 94% EASI-75, and then on top of that, an IGA 0/1 of 88% of our subjects. So that was really the impetus to moving that asset into a phase II study within Aclaris. And ultimately, the goal would be, you know, that this molecule, if it's anywhere near what we saw in the open label, we would be able to think about taking that forward with partners or licensing it or combining it with other assets that would be able to address the AD market as a first-in-class, best-in-class T-TSLP antibody. Great. And then, you know, remind us just sort of the differences that would be from the Phase IIa that you just mentioned, you know, and opportunity for the more fulsome Phase II program. Yeah, I mean, the, you know, the downside to an open label is it's open label. And so this time, you know, we have 90 subjects, it's powered on EASI reduction, and it ultimately is a 2-to-1 randomization against placebo. It's monotherapy, and at the end of this, it's 24 weeks of therapy also. And again, we're hoping to recapitulate at least, you know, two-thirds of the activity. If it looks anything like Dupixent, it would be a home run in terms of having another modality for derms to be able to treat patients. But at the same time, we also know that we have a bispecific using the same TSLP, and so there's gonna be some trade-offs in terms of indications that we would pursue. And given the residence time, and the half-life, can you just remind us what you would expect the dosing frequency to be? Yeah. So in the IIa, we stopped dosing at week 24, and we actually still saw an EASI-75 response at week 12 after that last dose. And so there's an opportunity, again, in a much broader data set to be able to see a longer dosing interval. 2-3 months would be our expectation. ... Great. So let's just shift gears to the bispecific. You know, ATI-052, you know, can you help us understand a little bit of the, you know, different characteristics and what we learned from the PK/PD dataset specifically? Yeah. So, you know, one of the major concerns going after IL-4R, as along with TSLP, is that you do have target-mediated drug disposition, and that's the reason why molecules like DUPI have a relatively short half-life, 8 or 9 days. So one of the key drivers for us was to make sure that our antibody had a longer half-life, and so it was YTE mutated. And ultimately, we showed in that dataset that we achieved 26-day half-life. So that was really quite a good win in terms of being able to dose that drug, with a wider dosing interval again, but also to be able to offset the TMDD that might be apparent, in the clinical plan. On the other side, the TSLP antibody, we have the same 400-hour residence time, and we're able to really knock TSLP down completely. When you look at the healthy volunteer data, even at the lowest three doses that we read out, we're able to achieve 100% of an IL-4 stimulated response or a TSLP-stimulated response for six weeks at 75%. So we really have not only a long-acting antibody now, a bispecific, where we see both sides of the molecule working very effectively in inhibiting their target. And we're looking forward to the upcoming 1b's in AD and asthma. Great. You know, in terms of the benefits of adding the bispecific, having TSLP and IL-4 alpha operating together, can you just remind us the sort of rationale, the biologic rationale behind it? Yeah. Yeah, so Aclaris is really after max response. We, we wanna see deep efficacy, and, when you look at, you know, what's available in AD, for instance, you're, you know, you're having two-thirds of patients with a 75% response. It's just not good enough. And so by having both IL-4R and TSLP as our target, we're expecting to take both of those down substantially. And the nice thing about TSLP is it works in T2 low and T2 high in asthma, and then, you're seeing broad response there across innate and adaptive immunity. So you're hitting dendritic cells and ILCs and the like, and then the Th2 cascade, it's the major regulator of Th2, and then downstream in Th2, you have your immune cell component and the T cells, and there we're hitting that with the IL-4R inhibitor, and really inhibiting the effect of IL-4 and IL-13 downstream. So we're looking for both a broad and a deep response, and it's an orthogonal approach to max efficacy. Got it. In terms of the, you know, sort of safety and tolerability from the healthy volunteer data, can you just remind us what we saw in terms of... And I know injection site reactions have started to kinda tick up in dialogue around some other programs. So just interested to hear what we saw in the HV study. Yeah. No, it's a good question. So yeah, with ISRs, that actually was the most common AE, but at the same time, they weren't dose-related, they weren't injection-related. What we saw was that within a day or two, they were mostly Grade one, within a day or two, without any medication, they resolved on their own. I think, you know, with ISRs, you have to be careful because if you have a drug that's formulated properly, and it's clean without aggregates and the like, you can really minimize your ISRs and your ADA. Sometimes it also is a little bit of injection technique. Is there a quality to that? There can be. Yeah. Okay. Yeah. Great. So, you know, in terms of just the next catalyst, you also mentioned the phase 1b program. So you've got the AD program underway, as well as the pulmonology asthma program. You know, maybe just help us understand, you know, what we would be shooting for in terms of baseline characteristics of the patients, what kind of the like-for-like comparisons are on from an AD perspective, and then on the asthma side, you know, what would you be looking for in terms of the types of patients that you're recruiting into that study? And what's sort of the most, again, kinda like-for-like comparison, because we can't help but try to do cross-trial- Make comparisons ... comparisons. Just our- Yeah ... our thing. Well, the like to like will be a little challenging, but I think we're gonna get a lot of information out of this 1B in AD. First of all, it's only severe patients. It's 9 active and 3 placebo, and we wanna make sure, you know, in a severe population, that placebo response is not gonna be very high. It's 5 doses weekly, which matches up with our healthy volunteer study, and so we'll be able to get a good population PK around whether the drug acts in a pharmacokinetic way in an AD population as it does healthies. See the same long half-life to 26 days in a disease population. But really, this target engagement that we saw in healthies, we're looking to see that again in the AD population, as well as looking at response. We'll be looking at EASI score, and with 5 doses, we should be able to see an EASI-50 response within that 28-day window after the last dose. So that'll give us a lot of confidence that this drug is working as we thought, and of course, we'll have the target engagement on both sides, TSLP and IL-4R, that we'll be able to also see in a disease. So that's for the AD, and then with the asthma population, it's more moderate, and we're looking at a high T2, so we're looking at FeNO greater than 35 and EOS greater than 150. And ultimately, it's just a single dose study. ... and we really want to just see the activity in, and again, in an asthmatic population with FEV1 and FeNO reduction. Okay, got it. I mean, just to, as a recollection, that sounds very similar to the sort of FeNO threshold that other asthma studies have been sort of looked at in, you know- Mm-hmm ... with a sort of even 50, kind of being the threshold or above that we've seen in some studies. Yep. Okay. We'll match up closely to that, I'm sure. Got it, great. So let's shift gears to the overall JAK franchise and the ITK franchise. Or I should say, the ITK franchise, because it's an ITK/JAK in ATI-2138. You know, in terms of the challenges in developing, you know, more selective ITKs, can you just remind us what the challenges have been there, as well as, you know, what's really needed to be overcome, over time, you know, in terms of your own study characteristics? Yeah, happy to take that question. Yeah, so ITK has been a, a very attractive target for industry for many, many years, but also has been a quite elusive target. What many companies have tried over the past 20 years was developing reversible ATP-competitive inhibitors for ITK, and indeed, it turned out to be a very tough target for that approach. So there, there were little, there was little success, that the compounds just didn't have the potency that was required, and also other drug-like properties in order to take them forward into clinical development. And I, I think we have really, with our specialty expertise in targeting the cysteine in the kinase pocket, and ITK is one of the cysteines, so you can target the cysteine with covalent inhibitors, and that's really our specialty. And I think that is really the critical difference from what we have done in comparison to what others have done in the past. So you mentioned 2138: that's our first generation ITK inhibitor. It's a covalent inhibitor. Has very, very good high single-digit nanomolar potency for ITK, as well as JAK3, which also has a cysteine in the kinase pocket. Mm-hmm. And, you know, in terms of what we've seen so far with ATI-2138, can you just remind us what we saw in the AD setting? You know, and potentially help us understand the indications that you're considering. We've, you know, I know we've talked about a range of possible indications, but, you know, maybe we can just help characterize that for investors. Maybe just a word again on the pharmacology of 2138- Yeah ... because a very special JAK inhibitor, it just hits JAK3. Based on the mechanism, it does not cross-react to the other JAK family members. I think that's very important to mention, because JAK3 is the JAK that is only expressed in immune cells, and we believe this is important. So yeah, we have run an open label study in moderate severe atopic dermatitis. The endpoint was at 12 weeks of the study. We tested a single dose that was a 20 milligram, sorry, a 10 milligram BID dose in that study. And we have shown really great efficacy. We got about 70% reduction in EASI and about 63% in pruritus, so that was a 4-point drop in the itch score. Mm. So that was a great finding, and then we also looked at a bunch of biomarkers. We did tape strips and biopsies and what we could show for the first time in that study, that indeed, ITK pathway biomarkers were reduced, indicating that, again, we hit ITK, and ITK biology is important in atopic dermatitis. We also looked at target occupancy, so we got very nice ITK occupancy between, I would say, about 60-70% at trough to over 90% at Cmax. And for JAK3, it was more in the range of 20-30% to 80%. So we're very pleased with the data, and it was very safe, was very well tolerated. In that context, you would probably characterize it as a balanced JAK3/ITK? Yeah. Okay. It's about the same potency on both- Yeah - kinases. Okay, great. Where does that sort of take you? You know, the JAK space is quite competitive. We've seen a lot of data from RINVOQ coming forward. So, how do you differentiate 2138 and the potential indications that you can move forward? Yeah, I think what we are thinking about, you mentioned RINVOQ in alopecia. There has just been phase 3 data, but I think the closest comparator to 2138 in terms of JAK3 inhibition is ritlecitinib. That's also a covalent JAK3 inhibitor. We are more potent on JAK3 and way more potent on ITK, so... But I think looking at indications where that compound went, so we're thinking about alopecia, for example, maybe other white space where indications where there is white space, like lichen planus, is something we are considering for 2138, and we are just about selecting the lead indication for that compound. Okay, great. And Neal, in that context, what are some of the kind of key characteristics as a dermatologist that you think need solving for? What are some of the disease states that you think really kind of jump out? Yeah, I mean, I think, there's still a ton because, you know, really, the most investment in so far has gone into indications like psoriasis, historically, now hidradenitis, and now obviously atopic. But there's still a number of inflammatory disorders that really we're still using super old medicines like cyclosporine for. And so when you look at that landscape, to me, it's wide open, but, you know, alopecia as an example, yes, there's three JAK inhibitors approved there, but, you know, we just put out really interesting data coming out of Angela Christiano's lab that showed quite a robust head-to-head comparison versus the in-market drug ritlecitinib for alopecia, where we showed in their words, you know, "The most robust and quickest effect out of any JAK inhibitor they've seen. Hmm. And we're attributing that to the ITK side of the house. So just, you know, that's kind of why it's taken us a little bit longer to down-select the lead, I think. Right. We have almost too many to think about, right? But I do think it's important to pick the right lead where we actually get credit for it. Got it. So let's go to the sort of more selective ITK, the real kind of... I, I'm not going to say it's the crux of what you've been working on for more than a decade, I think, but it feels like it's the crux of what the team has been working on for more than a decade. And, you know, can you just talk about how you've cracked the code to get to a really selective ITK that also happens to be once a day? Yeah, I think, maybe I'll start and then Roland. But, you know, at the end of the day, we have the ex-leaders of the Pfizer Immunology group within our company, and we had acquired that capability in 2017. And these are the folks that invented tofacitinib and worked for, like, 25 years at Pfizer. So it's really this large company capability within a tiny company. And so these guys just are experts at prosecuting anything across the kinome, and it all started with ATI-2138, and then as we started thinking more and more about it, the obvious thing to do is to engineer out the JAK3. So if you can preserve JAK-like efficacy but not have the specter of a potential black box, that's great, right? Because we hear a lot about STAT6 as being the next oral dupy. I'd rather be the next oral JAK, because the efficacy is just through the roof, and I think we saw some of that with the Corvus data. So, it's just the scientific acumen on the chemistry side, you know, blended with a multidisciplinary approach, and these guys haven't been there, done that, so. Got it. Yeah, maybe just to add to what Neal just said, I mean, so we dialed out JAK3, maintained the ITK potency. That was important, the same one as in 2138. Mm-hmm. Pretty much, and then also improved the metabolic stability of the compound. So we now have compounds which are able for once-a-day dosing. And then there is another sister kinase, TXK, which we can dial in and dial out. So we have compounds which are ITK/TXK cross-reactive. When you bring in TXK, we believe we have a stronger effect on Th1 biology. When we take out TXK, it's more a Th2/Th17 biology drug. So we have both molecules, and we are taking both forward. Okay, great. And, you know, Neal, I guess the question on that front is, you know, to have true Th2/Th17 biology, seems like great target in atopic dermatitis for sort of the regular way patient population. What are you bringing in with TXK? If, if there was more Th1, what would you say on the biologic side is sort of most similar? Oh, that's a good question. I think that's where the opportunity lies, actually, because most of the biologics that are going after these Th2-driven diseases are only focused on that. So they're losing that part of the patient population that has the endotype of Th1- Mm ... like, hanging out there. We see that 100% in AD, also in asthma. So I'm not sure that there is. You know, the only molecule that I can think of that addresses the Th17 piece is the bispecific out of UCB with- Right ... the IL-13, IL-17. So maybe that's the closest comp, and they showed some pretty interesting data in AD. And I do think, I do very much believe that either you double down on that pathway to pick up all you can out of Th2, or the other approach to get a deeper response across the patient population is you gotta have breadth, right? Yeah. I mean, it's kinda like the JAK, JAK inhibitor approach, you know? That's why they work so well across more patients. In terms of just sort of the introduction of, you know, concerns around a boxed warning or any of those kinds of things, you know, there were, I think, you know, with Xeljanz, there was. It was originally developed, you know, as a true immunosuppressive, you know, so as a transplant drug. So it was almost obvious that that was, it was gonna be hard to leap over some of the issues there. Where does ITK kind of fit mechanistically in that discussion? Yeah, that's, Yeah, I'm happy to take that. Yes. I mean, again, it's downstream of T cell receptor signaling. Yeah. It modulates T cell receptor signaling. It doesn't totally shut it down. I think that's a difference. I think, also, you just mentioned other JAK inhibitors, right? They just have a way more pronounced effect on immunosuppression in general. Right. It's way more global than ITK. So there are ITK knockouts, constitutive knockouts. ITK also has a scaffolding function, and there are some findings that you can get infections, but it's not what we are doing. I mean, it's not a- Right ... it's not a total suppression of ITK kinase activity, and then also, we maintain the scaffolding function of ITK. Mm-hmm. So, again, based on the safety data we have seen with our lead compound, 2138, in 6- and 9-month chronic tox, the human data we have in SAD/MAD studies and the phase 2a in AD, looks all very clean. ... Great. Yeah. Neal, Feel good about it. We just have very little time left, so just two quick questions. First, in terms of, you know, this is a preclinical compound, ITK, you know, the IND filing is planned for the, you know, towards the end of this year. Help us understand the pace at which you can, kind of, you know, potentially catch up to the next competitor, and maybe you can sort of frame the relative competitive landscape, for us as it relates to ITKs versus, you know, sort of the biologics landscape. Yeah. Yeah, I think we're about 12 months behind, and, you know, I don't worry too much about being able to catch up. At the end of the day, you know, you can put your POC study into the MAD portion. You can do that with atopic derm. And there's other indications that I think we're gonna look into pursuing as well. So to me, it's just about stepping on the gas across a broad swath of the indications. And ultimately, you wanna be best-in-class, right? I mean, that's the key. So I'm not too worried about being a few months behind at the end of the day. Right. The expansive kind of oral opportunity, as we've seen with the JAKs in RA and other Th1 disorders, crossing over into Th2 as well, would suggest that the opportunity could be— Yeah, I mean- - enormous ... if you just map out, just take Dupixent's indications and, and just map out all those and think about, you know, the art of the possible there with an, a oral small molecule. And, and that's the reality, is, like, there's always gonna be a certain set of patients that want orals, always a certain set of patients that want biologics. It's not, it's never, ever been the case in derm, where it's a winner-take-all, and you get all these oral patients that switch into, you know... Even if they're half-life extended and the dosing interval gets long, people still want orals. I mean, we've seen that in the obesity space, right? All over again. Yeah. 200,000 patients already on drug, apparently, so- Right ... fantastic. Well, thank you so much for- Thank you ... for taking the time. You know, it's been great discussion, and looking forward to actually quite a lot of...