All right. Good day, everyone, and welcome to day two of Cantor Fitzgerald Global Healthcare Conference. For the next session, we are very excited to host the team of Aclaris Therapeutics. From Aclaris, we have Dr. Neal Walker, CEO. Neal, pleasure to have you here. Thank you. Thank you for having us. Maybe we can level set expectations and start with a quick overview of the pipeline and some of the key near-term, and even medium-term, priorities for the company. Sure. What I'll do maybe is give you an overview of what the next nine months looks like. Sure. That's a good starting point. Next up on deck is we're going to be releasing, in tandem on the same day, both bispecific data sets, both 1B's in asthma and atopic dermatitis, and that's with our IL-4Rα TSLP asset. Subsequent to that, the next data set that you'll get is a TSLP mAb in atopic dermatitis. That'll be gapped by about six weeks or so. Intermingled within that, we have some regulatory milestones in that ATI-2138, our oral ITK/JAK3, will start our study in lichen planus in the fourth quarter. Finally, we will be getting into IND with our next gen ATI-9494. The importance of those two small molecule, I guess, regulatory catalysts is that that actually paints the path for data disclosures in early 2027, in fact, and I think a lot of people don't realize that on the LP study, although we're formally disclosing data top line on ATI-2138 in the second half of 2027, there's an opportunity to pull that forward. We're going to enroll most vigorously in oral mucosal LP, and then we're going to take an interim look at that data when about 60% of the patients are through 16-week endpoint. If that is positive, because we have Fast Track designation, we ought to be able to go have a conversation with the agency about perhaps a registrational study. That could happen as early as the first half. No promises, but that's- Okay -that's what we're kind of guiding to. Finally, you'll get SAD/MAD and POC data on 9494, the next gen ITK, also, throughout 2027. Okay. Maybe we can start with lichen planus first. Sure. Because, I feel like this is one of the most under-the-radar derm indications that nobody talks about but should. Maybe just level setting expectations, what drove the decision to test ATI-2138 in lichen planus? Yeah, so we actually, as I think you remember, we took a long time to think about down selecting to the right indication, and we decided to go with a niche indication like LP, and it was for a variety of reasons. One is obviously there's nothing approved in that category. I think the second most important is the mechanistic fit. I have yet to have come across such an ideal mechanistic fit with this drug in that we know that LP is driven through an antigenic stimulation of the T cell receptor, and this is exactly what the ITK portion of our molecule does. And we also know that JAK3 in some literature reports is overexpressed in mucosal LP lesions. So in both ways, both upstream and downstream, we're impacting the disease from a mechanistic standpoint. The other thing I really like about this indication is that the pathophysiology is the same, but it generates three distinct phenotypes. One is mucosal, which typically affects patients in the oral cavity area, also in the genital area in females. Then cutaneous, and the way to think about that is just like moderate to severe AD. Then third is just the scalp involvement, which is called lichen planopilaris, and that you can get fibrosis, scarring, and eventual hair loss. So, you basically get a three for one, I guess is the best way to say it. We've designed a basket study that encompasses all three phenotypes. We'll have about 40 some odd patients per dose group. We're going to look at 10 and 20 milligrams BID plus placebo. Again, the first to enroll will be mucosal. Okay. That will trigger everything subsequently. Okay. But the mechanism, I guess, should work in all different subtypes based on. Yes. Okay. Because the pathophysiology is all the same. It just manifests itself in different ways. Okay. Scalp is a different kind of endpoint than mucosal versus cutaneous. Right. The prevalence in this is I think the other thing to like is that it's anywhere between 0.1% and 2%, and I would guide people more to that upper bound. The 0.1% is more of a function of kind of some perverseness around claims data. We do think it's a very rich opportunity, and certainly just an oral LP itself, it's an over $1 billion market opportunity. Then you layer the rest in and it becomes a multiplier there. Right. What do physicians typically use right now for these patients? We've heard JAKs are being used off label. Yeah. Cyclosporine as well. Yeah. Maybe just lay it out. Yeah, those are a few of them. Things like oral corticosteroids, and by the way, all these treatments, especially the old ones, corticosteroids, whether topical or oral, cyclosporine, Plaquenil, it has like a 60% failure rate. Obviously, a mucosal LP where you are getting erosions and ulcers in the mouth and very painful, that is just not going to cut it. So those are, you know people using those old medications are also using occasionally JAK inhibitors off label. It is tough though to get those approved just because of the cost and it is not an approved drug. That is the other nice thing, actually you reminded me another reason we like it is we have a high confidence and probability of success here because we have seen a number of case reports that are direct read-throughs on the mechanism itself. Cyclosporine is a great surrogate for impacting the T cell receptor, right? We know this, and there is lots of case reports in the literature of cyclosporine working quite well. Unfortunately, it is pretty toxic, right? On the flip side, we've also seen case reports with ritlecitinib, Pfizer's drug in mucosal LP, also show some pretty good results in one-off patient case reports. Okay. I guess on the JAK side, a lot of off-label use maybe for different roles is RINVOQ, tofacitinib, they hit a JAK1 a little bit more. Two and three, it is more JAK3, makes a difference or? Yeah, I think the key there is just hitting the interferon gamma piece. Okay. We do that with our molecule. We've demonstrated that in our preclinical and clinical studies, and then we layer on top the ITK portion, which nobody else can do. Nobody has this pharmacology. That's the beauty and why we're so excited about it. Okay. The trial will start in 4Q. Yep. Oral mucosal. What could be the endpoint here that you are testing? It is 16 weeks of treatment, and we are looking at what is called an ODSS, or Oral Disease Severity Score, as the primary. Way to think about that is like an EASI score in atopic, where it just rolls up extent and various measures of severity, and it is a very sensitive tool to tease out dose response. Then you have the IGA, and way to think about that is just IGA in atopic, where it is a gestalt to a certain extent, but it is validated with, okay, do you have ulcers at the high end that then go to erosions, that then go to resolution? That is usually the regulatory endpoint, and that is for mucosal, so obviously in cutaneous there are some different endpoints there. All of them have IGA as a component for sure, but much like AD, you have a variety of those secondary endpoints. You will be testing all those endpoints? Yes. Okay. Yep. And this is placebo controlled? Yes. Okay. Yep. Got it. How many patients would you expect to enroll in? You said at 60% you will take an interim look? Yes. We're going to start with oral mucosa, and we're going to enroll 40 patients in that cohort. Okay. Whatever the math is there, 12, 12- Yeah. Got it. -something like that. Our goal will be to come out of that cohort with a very good idea of the go forward dose for the other two. Okay. We would expect to then maybe drill down with just one dose and do like 20/ 20 in each of the others. We are going to stagger it a bit, get mucosal well underway, then start enrolling the cutaneous and LPP after we have learned something in the mucosal side. Got it. In terms of the registration pathway, could you do one trial with all three together, or you have to run separate trials for each? That's a good question. I think that just from a speed perspective, I think it would be quicker to get mucosal under our belt, go have a discussion, convert it into a registrational study, and go with that while we're letting the other ones percolate along. The endpoints are going to be different, right? Yep. Because they're just different phenotypes, so I think it makes more sense when we've done the math to break them apart. Okay. All right. Sounds super interesting. Maybe we can touch on ATI-052 as well, given the- Sure. -impending readouts. Maybe just talk about the differentiation here because the one feedback we get is there's so many TSLP bispecifics out there. Why is Aclaris different? Yeah. I think if we start at a high level and look at what might drive max efficacy, which we tend to over-index on, let's put dosing interval to the side for the moment. I think target selection's important. We've said from the beginning that we think it makes more sense to be able to hit the receptor and take out two inflammatory mediators rather than just IL-13 alone. And we also think TSLP's important to bring in the heterogeneity component to it, and certainly this approach with hitting 4R and TSLP gives us breadth of indication, which I don't think one can say if you're just targeting IL-13 because we've seen this once again that how effective is that going to be on the respiratory front? That's why we chose that. We certainly have the ability to dose up to quarterly. We think that's plenty in I&I. But again, our goal is to max out efficacy, and I think hitting three inflammatory mediators is better than two. Okay. And at ERS, Sanofi had some data for their asthma phase II for lunsekimig, which is a TSLP/IL-13 nanobody. I guess what are your high level takes on that data, and if there's any implications for ATI-052, given the asthma readouts coming as well? Yeah. So, different targets. They're leaving IL-4 on the table, and I think again, there's been a debate out there for some time about the validity of using 13, and what does that add to the party in respiratory. And I think maybe we saw a little bit of that because the data didn't look too different from Tezspire. And so it looked more TSLP driven. I think also just as a general comment, I think we all have to be very cognizant of the potency of the individual components of these molecules- Yep. -and really be thoughtful about that, and how that rolls up, and what the epitopes are that they're targeting. For all we know, with that data set, perhaps if they dosed a little bit more frequently, it looked like the dose response just wasn't quite- Sure. -there. Maybe something in the two-week timeframe would've generated something a little bit more robust. Got it. One more competitor data set that actually has generated a lot of excitement is Pfizer's trispecific on the atopic derm side, TSLP/IL-4/IL-13. 50% EASI 75 versus placebo. I think Pfizer is running a head-to-head trial against DUPIXENT as well for superiority. What's your take on that data set? Yeah, with the limited data we've seen, it looks quite interesting. I do think that is at least from the same inflammatory mediators that we're hitting, it's the most direct read-through to us and what one might expect. We just have it in a bispecific format. They have a trispecific. I'm excited to see some- Yep. -additional data, which will be, I think, made available at EADV in about a month. Got it. You have two phase I-B readouts coming soon. Maybe we can start with asthma first. Just outline what are you going to present, what data set should we expect on the asthma side? Sure. We're dosing, just as a reminder, it's a single-dose study, which is just important to keep in mind because some data we've seen recently is multi-dose studies. Yep. But single dose, and then we track the patients out through day 29, and then follow them up an additional six weeks post that. You're not going to get the full 10-week curve out of the gate at top line. You'll get likely through day 43, is the data that we'll have available. Certainly, we'll be presenting both FeNO and FEV1. What we think makes sense in terms of framing on that is just with a single dose, we'd like to see FeNO reduction in an upside case with a four handle on it, and home run case with a five. On FEV1, we'd like to see over 150 mLs on an absolute basis. That's your home run or that's. Yeah. Okay. I think that with the FeNO data is a pretty compelling package given what we've seen recently. Right. This phase I, how different is it versus, let's say, the Sanofi phase I that was run a few years back now in terms of just comparing the trial population, because- I think the trial population, that's a very good question because it's an important nuance to all these data sets is what is your baseline lung function look like Yep. On FEV1. We're going to be, I think, pretty similar, more similar to lunsekimig, their phase I trial population- Right. -in general. Right. The reason that's important is because you have a ceiling effect on the FEV1. Correct. You're always going to have a mix in these studies, which we certainly do. We haven't released anything on our baselines, but we'll have some patients that look quite a bit more severe and those that have maybe a little bit better lung function. So, we'll certainly be presenting the entirety of the cohort and then looking at the subgroups so that people can easily compare to drugs like DUPIXENT, Tezspire, and lunsekimig. Okay, great. You already made plans to commence the phase IIb trials in asthma. Yep. What drove that decision? How much was it based on some of the blinded data analysis that you may have looked at? Well, we always have our internal data that we're looking at, and certainly, we've always felt confident on the asthma side. I think most people would feel confident on that too, knowing that DUPIXENT and Tezspire both work, and if you're putting those two mechanisms together, you should be able to drive a nice effect. I think if we had the balance sheet, we would put up both AD and asthma together. But we're fully funded now to do the phase IIb in asthma. We're excited to start that in the fourth quarter. Fourth quarter? Okay. Yep. What could a phase IIb look like in terms of the trial design? We are going to take a slightly different approach. We did a lot of work looking at the various costs and push-pulls in terms of doing a one-year AER study. I think where we have come down on is that we can do a six-month FEV1 primary with a COMPACT as a secondary, which incorporates AER, but does so in a more sensitive way, picks up other forms of exacerbation. I think AstraZeneca popularized this back Yeah. in 2017. It is a nice surrogate. It is not perfect, but I think it would guide dose selection decision-making for phase III. You lose no time. You do it in six months, and it is literally well over 1/2 the cost. Okay. Yep. I think we've seen companies report out AER data and people kind of shrug. I don't know that that's the goal. Right. The goal is to figure out your dose for phase III- Yep -and drive a good FEV1, and COMPACT will be a good surrogate. I think we've come up with a good plan there. Okay. That data would top-line in 2028. Of 2028? Okay. Yeah. That's great. On atopic derm side, we will release both data sets together. Yeah. Maybe just lay out a walkthrough what we should expect in terms of the atopic dermatitis data set. Sure. That's a little bit different design than the single-dose asthma study. For that one, our goal was to look at, really understand what a load-in dose looks like. In AD, as we all know, there's a load-in dose as part of the typical induction phase from zero to 16 weeks before you get to the maintenance phase. We are doing a load-in dose. Last dose is at week four, which is pretty typical. We are going to start looking at efficacy as early as week eight and track that out. It's a full 20 weeks. You are not going to get all that, but you will get at least through week 12 where you have a meaningful enough number of patients through that. The key here also, there's another nuance that we are treating all severes. We did that on purpose. It's a small study. We have a placebo group. We do not want a low, moderate, weird response sort of thing. Yep. That's one reason. The second reason is we really want to show the efficacy in a tough-to-treat population because it's easy to extrapolate down. If you're doing really well in severes, you're going to crush the moderate disease. It's just math as it relates to that. Yep. Because EASI scores are much more chunkier in severe patients because it's multiplicative. Our EASI scores are all above 21, and the vast majority of the patients are IGA 4. Okay. That's a very different data set than you've seen recently. Just as an example, DUPIXENT is 50/50 split in SOLO 1, SOLO 2 on IGA 4, IGA 3, and then the recent data sets from EBGLYSS and also amlitelimab were 75/25 IGA 3 -I GA 4. Okay. This is an enriched population for severe. Okay. Is it enriched by just the IGA and EASI scores, or are these patients' biologic refractory as well? We didn't go that far. Most of them would be biologic naive on that front. Got it. Got it. You will present the full 12-week data? 12 weeks. For most patients. Some smattering of patients who have made it through the outlier endpoints. Right. What endpoints will you be disclosing? The three that we will definitely be disclosing are mean change from baseline, because these are our early indicators, EASI 50, and then itch scores, and then to be determined on the rest. Okay. Because this is a little bit of a different population in terms of the severity, what has DUPIXENT shown in IGA 4 or- Yeah. I think if you look at, we want to show at, let us say a week eight time point, where somebody might show something with a low five handle on it in terms of mean change from baseline EASI. We want to show something in an upside case, a 5% bump on that. Clinically meaningful is about 6% or so, right around that level. Yeah. Then 10%, to me, would be a home run, particularly not even taking into consideration the severe patient population. Right. Just on an apples-to-apples basis, with the idea that if we had moderates in there, you could expect a 10% bump on that. Right. That endpoint is percentage change in EASI score. Correct. Okay. Got it. Got it. EASI 50s are a little bit all over the place, usually 60 some odd percent, something like that. We would expect to show, again, I'd give you the same guidance, 5%, 10% bumps. Okay. Given that this is just a pretty short trial duration and some of the other endpoints, like EASI 75 and IGA, what are your thoughts on those endpoints given the trial duration? Yeah, I think those are a little tough to do that early on when all you did was induction dosing. We'll present what we can. Okay. Got it. I guess same question as asthma, you also made plans to start phase II-B already. I'm guessing it's based on some informed decision from the ongoing phase I as well, given- Yeah Can you just talk about that? I think it's everything that we've generated to date. We recently put out good data around Eos- Yep. -and showing really fantastic suppression there, and that's a real EO count. That's not a percentage of WBCs or anything like that some others report. We're presenting an absolute reduction in Eos there of 70+%- Yep -in healthies. I think it's all those kinds of data points that we have available to us, some of that we've presented, some haven't, that guide our enthusiasm. In fact, we're pretty excited about opportunities potentially in EoE as well. Yep. Got it. I mean, that was my next question as well. Tezspire recently had data in EoE. Right. How fast can you go after that indication? It seems to be that we have same validation as asthma, right? Yep. I think our base case plan was to do a small proof of concept study. But we're right now evaluating whether we just go to a phase II-B in that. Okay. Because I think we have the same visibility there as we would in an asthma. Right. Got it. Got it. Okay. Maybe on the TSLP monotherapy as well, because that readout will come from six weeks after. Hmm. -the bispecific readout. Maybe just talk about your expectations from that data set. Yeah. Look, I think most people doubt that the mAb's going to work there. We get probably less than zero credit for it. Yeah. To me, if it comes out stat sig, given we're investing heavily in the bispecific, I think that's a home run. If it does show efficacy that's approaching DUPIXENT, then I think we have to reevaluate what we do with that asset. Right. But we'll see. We're excited about turning over that data card, and I think our base case assumption is that it's an interesting asset to out-license for people who are interested in combo treatment. Okay. But even if it shows stat sig but DUPIXENT, you're probably going to prioritize- Yeah, I think bispecific is where the market's going. Yep. I think if that continues to generate powerful data, then that would probably always win. Got it. Got it. You talked about the selective ITKs as well. Can you just talk about the portfolio in terms of how does it compare versus some of the other competitors out there that are ahead of you? Example from Corvus Pharmaceuticals- Yeah. -they have a selective ITK. You have a portfolio-based approach. Just talk about the similarities and differences. Yeah. I think obviously we've been following that for quite some time. Potency wise, we're about 25X in biochemical assays, and 10X in cellular-based assays, which is meaningful. We also have about 2x - 3 x the half-life, so we have the ability to dose QD. We also think it's important to pull in hitting TXK. That could be a subject of debate, but in our hands, in our internal work, we've shown that generates a more robust response and doesn't really bring any safety liabilities to the table. So those would be the key differences. You have the TXK, but do you plan to do a more selective ITK as well? We do. The lead is the ITK, TXK, and certainly still working on the other one. We'll see. Okay. We have two shots on goal. Okay. I guess in terms of making sure that you accelerate the timelines for that and catch up with the competitor, any creative ways to basically do a phase II-B for atopic derm or because you already know the target customer data? Yeah, we're looking at all that. I think we're going to We have a much better handle on the dosing- Okay. -than I think maybe our peers did early on, because they kind of led the way there, right? They're trying to figure out what the right dose was for that particular indication. We've done a lot of this work in vitro and in vivo to understand the characteristics of the molecule. I don't think it's going to take us very long to get to the right dose. We do the SAD/MAD, put in atopic derm patients in the MAD cohort- Okay -get a pretty early look there. Got it. Could this mechanism, like the ITK specifically, apart from AD, what other indications could make sense? We like asthma too. Those would be the two I would peg against at the moment. Right. I think there's others, but I like both of those for an oral small molecule that addresses Th2 but also ropes in Th17 and Th1. I think those are very easy to get your arms around and understand the efficacy there. Okay. With the cash in hand now, given you have your hands full in terms of the different assets and different trials that are ongoing, maybe just talk about what does it cover. Cash on hand gets us through to the end of 2028. We can do everything we just talked about, including fully fund the phase II-B in asthma. We can only partially fund the phase II-B in AD. EoE POC is fully funded. We get the full LP study, including all the three cohorts. Then we get the two ITK programs through POC. Okay. So. Maybe last question. Seems like Aclaris is still under the radar in terms of the comps in the I&I space that are valued much. What are investors missing about the story right now? Yeah, I think, look, biologic space is pretty competitive, so sometimes it's hard to tease out who might be the ultimate winner there. But I think the phase I-B data will take us a long way down that path to just proving out that concept, because we don't have data in patients with disease yet, right? So, I think that's an important checkbox. Getting the ITK inhibitor to an IND is an important checkbox as well. Then, of course, starting a whole new value stream with lichen planus, which is really new- Yep. -to the story. Like I always tell people, we spend about 50. It is a 50/50 conversation with investors when we meet, talking about either the bispecific or LP with ATI-2138, and that has evolved over the year. Yep. I think getting Fast Track helps. Okay. Well, looking forward to the updates. That is all the time we have. Thank you, Neal, as always, for joining us today. Thank you.