Good day, everyone. Welcome to day two of Cantor's Global Healthcare Conference. For our next session, we are very excited to host AnaptysBio. And representing Anaptys, we have Dan Faga, CEO. Dan, thanks for coming. Thanks for having me. Before moving into specifics, maybe if you can start off with a quick overview of the company, the current focus, and the different assets that you have in the pipeline? Yeah, thanks. So we, exciting time for the company. Over the last couple of years, we've refocused in on our, checkpoint agonist program. We have one targeting the BTLA receptor, one targeting the PD-1 receptor. They're both co-inhibitory pathways, and we're focused on the treatment of autoimmune diseases, where immune cells are hyperactivated, beyond what you typically see in healthy individuals. The opportunity here with both of these drugs is broad, a top-down approach that can take a multi-pathway hit and drive broad immunological outcomes. Excitingly, we have two phase IIb readouts, one for each of these programs. For the BTLA program, it's ANB032. It's in atopic dermatitis that will have topline data in December of this year. And then for the PD-1 program, the drug is rosnilimab. In rheumatoid arthritis, we'll read out top line results in Q1 of 2025, so pretty quick thereafter. We also have a trial in ulcerative colitis, a phase II trial, that will read out Q1 of 2026. Two more points. We have two other drugs that we'll be moving into clinical development by year-end. There are other immune cell modulators, a CD122 antagonist and a BDCA2 modulator. Our last asset is cash. We're well-capitalized. We have about $500 million pro forma coming into the second half of the year with a recent raise we had done. It brings us out to year-end 2026, which delivers on these phase II trials, phase Ib trials for the third and fourth program, and now some of the phase III enablement in RA and AD that we're focused on. Okay. Lots going on in the company, but given the upcoming readout for atopic dermatitis, let's start off there for ANB032 and BTLA agonist. Just walk us through the mechanism, how BTLA's agonism is supposed to work in atopic dermatitis. Yeah. So both of the agonists are preferential to activated immune cells. That's on target, not the entire system. Unlike PD-1, which is T cell only focused, BTLA is present on activated T cells, dendritic cells, and B cells. The dendritic cell and the T cell angle is what we're focused on here in AD. So for the last couple of years, it's become much more accepted that AD is not only driven by Th2 pathways, so IL-13, IL-4, and there's lots of things that work there. But the issue with those programs is that you're topping out on efficacy. Only half the patients are seeing a 75% improvement on the EASI score. The reason for that is there's other pathways that are activated in this disease. It's a heterogeneous systemic disorder. What we're able to do with the BTLA program, it engages with T cells, Th1, Th2, Th17, Th22. They're all upregulated in this disease. What we've shown in vitro is a down regulation of the cytokines they expressed across the board. BTLA is also expressed on dendritic cells. Dendritic cells are amplified tenfold in inflamed skin in AD. By modulating directly on the DCs, we're reducing a mature conventional dendritic cell's antigen presentation, the costimulatory receptors like OX40 ligand, like CD80, like CD40, and we're evolving the way the DCs are then engaging with the T cells. They're gonna be less activated off the DCs, and what we've shown as the third mechanism of action here is inducement of T reg expansion. We're hitting this disease in a lot of different ways that are relevant. We have a lot of data out there that suggests correlations with expression of BTLA in activated cells, when you're in an inflamed state, when you're not in an inflamed state, a reduction. So a broad way that we're looking at tackling the disease, there's proof of concept now with the OX40 ligands. I think one of the challenges with the OX40 ligands is it's not also hitting the Th1 pathway. They've never shown data in that space, anything in that field, and they're also not impacting the DCs directly. So it's good proof of concept beyond Th2 only with the OX40 ligands, and we think we can do a lot more. Got it. The drug is in phase II, but you have shown some phase I data as well, so maybe just talk about what you saw there on the safety profile and the PK/PD. Saw that the drug is safe. So we're in approximately 100 patients in the phase I. Okay. No SAEs, mild to mild, transient AEs throughout the study, which is exactly what we want to see, no infections. The PK is, you know, standard two-plus weeks antibody, the PD, receptor occupancy. We're engaging BTLA on T cells and B cells, and we're also showing a PD out beyond one month, in terms of reduction of surface level BTLA on the T cells and B cells. So exactly what we'd want to see. No carcinogenic effect, whether that's preclinical or any signaling in the phase I, and we've not been asked to do anything unique. I mean, it's a standard antibody in that sense from the FDA as we move forward. So exact profile you'd want to see with an antibody in phase I. Sure. -because there's a lot of flexibility to do what we're looking to do in phase II. Okay. And for the upcoming phase II trial that reads out in December, maybe just walk us through the trial design, the doses being tested, and any differences in the trial population versus some of the contemporary atopic dermatitis trials that investors should be aware of. Right. So it's a robust phase IIb global study. We over-enrolled, we ended up with 200 in the study. It concluded enrollment in early July. We have three active doses versus placebo. placebo. The idea is to have a widespread not to miss on efficacy. We're looking at either every other week or monthly dosing through the life cycle of the study. We're dosing out through 12 weeks. Our primary endpoint is at week 14. We're then gonna have an off-drug observation period for six months. The other feature in terms of the inclusion criteria, exclusion criteria, ≥16 based on EASI, that's pretty standard. It's the definition of a moderate patient. At the end of the study, we ended up with a baseline EASI score in the mid to high twenties, so clearly a severe population is what we're looking for. We're looking for a robust, real result across the trial. The other feature we built into the trial is about 15% of the patients have Dupi experience. So translates to about nine per arm. It allows us to have a signal finding, so we're not powered for Dupi experience patients, but we are looking for a signal on EASI-75 or the other metrics that'll be replicated with a much more robust Dupi-naive population. Okay. In a market that is in growth mode, with the Th2-driven molecules, there's a huge opportunity here to just open up the second line minimally as a base case TPP. Maybe just talk about the target profile. You mentioned that you have 15% Dupi-experienced patients as well. How do you see the target profile in the naive population versus Dupi-experienced, and where do you see the biggest value proposition? Yeah. Well, one of the reasons, the commercial reason, to pursue AD first, the biologic reason is to prove proof of concept, across multiple mechanisms of actions, but commercially, it's not a high bar in atopic dermatitis. Dupi and everything that's Dupi-like, everything in the Th2 pathway, the EASI-75 rates are ±50% on an absolute basis. The OX40 class, whether it's Amgen's, that's in phase III, which should read out soon, Sanofi's OX40 ligand, which had phase IIb results earlier this year, at three months, their EASI-75 rate was 40%. So, onefold, that's not exciting. We did see further improvement out to six months, but the reason Sanofi is talking about this being a $3 billion-$5 billion drug in AD is that half of these patients are not responding on Th2-driven drugs, and they need alternatives. The mechanisms of actions of these immune cell modulators, we think, could be the solution there, right? So it's not a direct comparison. So with our Dupi experience population, we're looking for that signal, but if we can do anything 40% or better at three months with a completely different mechanism than the Th2 path drugs, we think we're gonna have a real alternative, and that's a base case TPP. There's upside. We think that this mechanism, mechanism of action is powerful. There's a potential that we have something in the 60% absolute basis of EASI-75. That's an upside that would drive frontline use relative to what's out there today or what's coming in the portfolio. And then I mentioned earlier that we're gonna be observing patients between the third and sixth month off drug, or actually the third, ninth month off drug. So we should be able to see a durable profile. The OX40 ligands are leading there. They showed 80% of patients that had a response, an EASI-75 response, sustained that response over time with every three-month dosing. If you came off of Dupi, half of those patients will be back to baseline between month three and month six. If you come off of a JAK, almost the entire patient population is back to baseline at three months. So if you're seeing durability out to six months, you have a differentiated profile. We do believe that by tamping down the immune system to a moderate level, you can get longer-term outcomes. Right, and on that point around durability, mechanistically, why is that happening? Is it more similar to because it's just an upstream mechanism? And will you be showing any data in December around this durability aspect? Yep. BTLA is engaging the BTLA receptor. It's a co-inhibitory receptor, recruiting SHP-1 and SHP-2 within the cell and toning down the amplified profile. So reducing proliferation, not only cytokine secretion. We're also, like I mentioned earlier, engaging the dendritic cells and reducing their activation with the T cells themselves. So we're tamping down the immune system. We're not over-suppressing it to nothing like a JAK would do, but we're reducing it, and we are seeing longer term PD, like I mentioned earlier with the phase I. So there is a good rationale to believe that we are modifying disease from the top, and we should see longer term outcomes. We're not tolerizing disease per se, right? We're not curing you of this disease, but we do think we could see longer term, a longer term profile with our treatment. Okay. Moving on to your PD-1 agonist, maybe for folks who are not familiar with this mechanism, just talk about the rationale for testing PD-1 agonist in autoimmune diseases, how it works, and impact on T cells. Yep. So the BTLA receptor is found on a broader base of immune cells. PD-1 is preferential to T cells, to activated T cells. And there's also a feature of PD-1 expression where the expression levels vary relative to the activation status. So we use the terminology PD-1 high for the subset of cells that are overexpressing PD-1, driving most of the proliferation, driving most of the cytokine secretion. Unlike BTLA, which is more ubiquitously expressed at a constant level if a cell is activated. If a healthy individual is measured, their T cell count, about 15% of T cells are PD-1 expressing at any given time in the periphery. Less than 5% are PD-1 high. That's a big difference compared to a patient with rheumatoid arthritis. In the synovium, 80% of your T cells are activated, and half of those are PD-1 high. So there's a lot to engage with, given T cells are driving the inflammation in these diseases. In ulcerative colitis, not what you're asking at, but 40% of T cells are activated in lamina propria, which is the inflamed tissue, and you see in the colon. So we know the engagement is there. What we've shown in vitro is a reduction of various cytokines that are correlated with this disease. But I think importantly, when you step back from this, there is proof of concept with this target. Eli Lilly has a less potent PD-1, but nonetheless showed pretty impressive results in a phase IIa trial that read out a couple of years ago now. They're also in phase IIb themselves. A couple of the highlights, 57% ACR50s at week 14. A typical biologic in the second line is a 20% response rate in ACR50. So ACR50, a higher bar than the regulatory approved endpoint of ACR20. So we know there's engagement in this disease. We know there's proof of concept results, and I think that's kind of a high-level way to benchmark here. Okay, and maybe just expand on the differentiation versus Lilly's molecule that's further ahead. You mentioned potency, other aspects of the molecule that you think could be differentiated now? Yeah. Given the preferential target for PD-1 T cells only, we were able to design our antibody as a depleter. We're looking to deplete those PD-1 high cells. One of the ways we show the difference in the potency, there's reasons that's driving it between the differences in the antibodies, but an outcome of that, immunologically, is the difference in the depletion of these PD-1 high cells. Lilly's presented data where they're showing a 60% reduction in PD-1 high cells. Our data sets in phase I or phase II, we're showing a 90% reduction in the periphery. So apples to apples in the periphery. Head-to-head, a similar delta of reduction in PD-1 high cells. So we know we're getting a difference, given the potency of the way the antibodies work, minimally on the PD-1 high reductions. So we usually describe us as having a strong depleter PD-1 cells and a strong agonist. Eli Lilly, moderate depleter and a weak agonist. Okay, got it. Which bodes well for us if they've shown proof of concept that we can show that as well and be better. Okay. So maybe talk about your phase II trial in RA, the population that you're testing, any differences with Lilly's trial? Yeah. Yep. So it's targeting 400 patients. We announced in August that we're almost through the enrollment period. We moved up our guidance to read out the top line, which is week 12 results in Q1 of 2025, so not far away. We're looking for approximately 40% +, that will be second-line patients. The remainder will be front-line patients, so a robust population in both sets. The standard primary endpoint here in phase II trials is DAS28 reductions relative placebo. Peresolimab, which is Lilly's drug, showed a change in one. JAK showed a change in one to 1.5 over time. So that's your natural delta. I think most folks will be looking for, though, is that ACR composite. ACR20 is the historical threshold. We're looking more at the ACR50s and ACR70s at three months. After week 14, if you have hit low disease activity, which is a threshold, we're measuring based on the CDAI score, similar to DAS28, you're eligible to remain on drug from month three to month six. So it's that design is driven from the rheumatology division, where you have to have been a responder to stay on drug through three, month three to month six. So we're gonna look for a consistency, if you hit response, that you stay in response. Historically, with a lot of biologics, a third half of these patients end up losing response out into six months and beyond for a year. So there could be a signal there. Eli Lilly's their phase IIb study that concluded enrollment last year. It's a 500-patient study, so relatively similar size to us in global studies, U.S., Europe. A feature of their study, though, is they have a crossover design at month three to month six. So something that we'll be looking for, that we could read through for us, is do they see incremental responses in that time frame? We don't think that you'll peak out in efficacy at three months. Right. We do think there's room to show further improvement over time. So that's something that we can learn from them, and if we have a better response rate at three months, that should translate into additional responses and durable responses longer term if they're seeing that. Right. And so in terms of the benchmarks and efficacy, given that you have better PD data than Lilly has, is the expectation to have better efficacy than what they have shown? I think that's a reasonable conclusion that we'd expect to see potentially more outcomes. Could be deeper outcomes, it could be faster responses. So we're really looking across the board. We have to generate the data first to know it. But I threw out a number earlier, 57% ACR50 is at week 12, week 14. You don't need to be anywhere near that bar in a robust study. The JAKs are somewhere in the order of 30%-35% ACR50s. If you're approaching that with a biologic, that is the type of profile that would get used in the second line and much more likely even in the third line. The second-line plus market here in arthritis is a $10 billion market in the U.S. today. It's projected to remain somewhat stable over time. On the back end, fourth line plus salvage therapy for patients, rituximab is still selling well north of $1 billion in RA alone in the U.S.. So there's a real marketplace here. While it's mature, there's been nothing approved for over 10 years. The JAK class was the most recent class approved in this disease. If you ask a rheumatologist, they just want another biologic. We think the bar is higher there to drive real value and revenue, but second, third-line therapy, competing with a new class, in $8-$10 billion market is a big opportunity for us. Okay. And what proportion of the patients in this trial will be biologic naive versus experienced, and do you expect efficacy to be similar or different between the two subgroups? Yeah. So, it ended up being around 40%+. That'll be biologic experience. Okay. So plus or minus, a couple hundred patients in each population. Sure. So it'll be a robust answer. It's three active arms versus placebo. Second part of your question? ... Do you expect efficacy to be similar or different between the naive versus experienced? So uniquely in Lilly's phase IIa study, they saw a consistent response in the front line, second line. In biologic classes, even the JAKs, is a pretty meaningful step down. Not sure if that's real or if that was just a law of small numbers. The important part there is there was a real response in both lines of therapy, and so minimally, we should be looking for something like that. Uniquely, patients that have more progressed disease, the percentage of T cells in the synovium trend higher and higher. So as patients get more severe, we know the engagement is minimally going to be there with PD-1 activated T cells. So it's not just causing the inflammation, it's consistent through the inflammatory cycle. Right. Doesn't necessarily mean you're going to get the same response. We'll see. Okay, and I'm not going to ask you when Lilly is going to present their data, but what could be the implications of whenever they? I think you just did. What could be the implications of Lilly's PD-1 in RA whenever they present the long-term data from their phase IIb? What matters the most at this point, where we are in the study, and there's a lot of questions on this a year ago, when will Lilly be presenting data from the phase IIb? Our data is going to be in Q1, so whether they present at one of the two big conferences, ACR in November, EULAR next year in June, it's all now within- Right ... six to nine months. They're still talking about the program. The program's still on their pipeline chart. I know that's probably where the hedge funds keep looking quarter over quarter. It's unlikely that patients remain on a trial that's 60 weeks in duration, if they didn't see re-achieve some sort of proof of concept. So I think things generally are trending favorable in what we'd want to see from them in the short term. It's a guess, though, if you'll see their data before or after ours. Right. And maybe talk about the long-term considerations of PD-1 agonism, especially for an older population like RA. What gives you confidence that the safety will look good from a mechanism perspective? Yeah, so just backing up from it for a second, we didn't see any cause for concern, similar to BTLA phase I. Our phase I for PD-1 was clean. We had run a six-month trial, and alopecia wasn't the right disease for this target. It lacked the translational evidence that was supported going into this disease. So this was a number of years back, but we do have six-month data with our molecule. That was a benign profile. Lilly's phase IIa at very high doses, 700 mgs IV over six months, benign, placebo-like outcome. Both of our trials now are in hundreds and hundreds of patients, 1,000 patients, more or less between us, and there's been nothing reported to date. So there's no short or midterm challenges. As it relates to the bigger picture, PD-1 is physiologically a marker for activity. It's not a marker for cancer. Okay. Right? And in these diseases, as I mentioned earlier, I gave some numbers of in disease, how highly activated T cells are PD-1. That's not normal. You don't want to see that. We are not shutting off the immune system. We're engaging only with those activated cells. In a healthy individual, 85% + T cells are not PD-1 expressing, and even as a depleter, we are not turning it to zero. We are bringing it back to a homeostatic state. So a 90% reduction of 40% of T cells that are positive brings you back down to the ± 5% PD-1 high activated T cells you'd have with a normal individual. So, you know, what we're actually doing to bring the disease back to a homeostatic level is what you want the outcome to be. It's not reversing the pendulum where we don't think you'd have a real issue. Okay. That we need to treat thousands and thousands of patients to prove that out. But the hypothesis here is this shouldn't be a problem, and we're doing what's natural in the body in terms of the outcomes. Okay, and the second indication that you're testing is UC, so maybe just talk about the rationale of going after that indication. Yeah. Yeah, so it's exciting we have so much going on, and I mentioned earlier, 40% of T cells in the lamina propria, which is the inflamed tissue in, in UC, are activated in this disease. So we know, again, we know we're going to engage in the tissue where we'd want to with a driver of the inflammation. Also, there's a twofold increase in the periphery, so in the blood of activated T cells. When you look at what's approved out there, alpha- 4, beta- 7s, even the S1Ps, they're preventing influx from lymph nodes in the blood or blood into the tissue of PD-1 activated T cells or activated T cells, which is the same thing. We should be depleting those in the blood. So minimally right there, we have an on mechanism where we know there's proof of concept data that exists. There's really good literature out there that correlates PD-1 high expression with clinical remission, which is the primary endpoint in the colitis trials. We have animal model data in this disease that we've invested into, showing that treatment with PD-1 treats the disease. There's other literature that treatment with a PD-1 agonist prevents prophylactically disease. So there's a lot of literature or evidence out there of this type of approach. And the fact that we're engaging with the T cells within the LP itself, the lamina propria itself, similar to TL1A, that's where they're engaging and activating to reduce cytokines. So we're reducing the T cell trafficking, the proliferation, the reduction of cytokines that are present all throughout the systemic disease. So I think a lot of evidence out there of why this rationally work. If it wasn't for Lilly's arthritis data, this was the disease we were most excited about initially. Mm-hmm. of where we wanted to go and take the program. And then just kind of final point on that one. Interestingly enough, in June, Eli Lilly at their medical booth at EULAR, as well as from their CSO, were both mentioning IBD or ulcerative colitis as other areas of interest for them to take their program. Okay. They haven't started the disease yet. Right. But there's a lot of anecdotal evidence out there. This is an exciting new approach for you know pretty big disease that just like AD with BTLA and RA with the PD-1 program, we're talking about 25%-30% + clinical remission at three months. That's the bar. That's not satisfactory. 70% of patients aren't getting any remission. Right. So there's a lot of headway here to show a differentiated outcome. Right. And so you have an ongoing phase II, and you mentioned some efficacy bars. So what, what are you hoping to see on efficacy for a optimal target pro- profile here? Yeah. So we haven't thrown out guidance yet on TPP. We'll wait till we get through our RA data that's upcoming. Okay. Guidance for the readout for the UC study, 130 patients. Similar, we're gonna be looking at a mix of biologic-experienced and naïve patients in that study. But, you know, that's gonna be one year later, and we'll see where the landscape's moving. But we are pretty optimistic we'll make a difference. Do you have plans to test it in Crohn's disease? Step by step, that could be a rational place to go first, and we chose UC. The disease in colitis relative to Crohn's is concentrated in the colon, where we have enough literature out there where PD-1 is expressed. Crohn's is a more broad-based disease within the digestive tract, so it could be a natural next step, but we'll have to see the results in UC first. Right. And maybe, some early-stage pipeline. You have a CD122 antagonist. Maybe just talk about that and what indications might make sense for that asset. CD122 is a receptor, dimeric receptor that blocks IL-15 and IL-2. It's found principally on cytotoxic CD8+ T cells and NK cells. Different engagements, another immune cell modulator, different engagement than what we're talking about here with the two different agonists. There's a couple other programs that are relevant. We haven't announced where we're going into phase Ib. We're just starting the phase Ia right now in healthy. We'll talk more about the Ib later. There's another CD122 that's being developed by Incyte right now in vitiligo, which makes a lot of sense for their portfolio, and they've guided the data in 2025 from their Ib. I mentioned that we're blocking IL-15. There's a number of IL-15s in development. Amgen, Teva, Novartis bought a company recently called Calypso. Talked about Calypso's IL-15 as a pipeline and product on that acquisition. They're looking at diseases like EoE and celiac, so there's a lot of choice for us on where we go. It'll complement what we're doing with the agonist but won't be overlapping out of the gate. Okay, and last question, AnaptysBio has a lot going on with multiple assets and large indications. So, high level, what's the current thinking on which assets may make sense to develop and commercialize internally, and which assets you may look to partner as you move into late-stage trials? Yeah. One of the best parts about what we're doing here as a company is we're not approaching targets and incrementally looking for improvements on them. We are looking to change and dramatically impact efficacy with novel biology. Our competition is Big Pharma, Lilly, Gilead, J&J. These are the companies that have existing agonists in clinical development. CD122 and the focus there is a new approach. BDCA2, our fourth drug, the only one out there is Biogen's. We have a more potent version of their drug, which is being developed right now in phase III for SLE and CLE. So where we're going is novel biology. We're differentiated as a SMID-cap company, where we're the only ones in clinical development with checkpoint agonists and a CD122 antagonist and a BDCA2 modulator. We've talked for the last thirty minutes about a pretty big step function where the possibility is for disease. That all summarizes we're gonna have a lot of choice. I'm not going out there saying we're gonna do it all on our own forever. These are huge markets. We're not gonna be the global commercial player in all of these areas. At some point, we're gonna need some help. After we read out the two agonist trials in AD and RA, we'll step back and decide which one makes more sense and the right timing to find a partner, but we're not gonna go into all these phase IIIs on our own. We have choice. We do have ambitions to move into phase III on our own in some of these programs. We're gonna ultimately need more capital, but some of that should come from BD over time. Okay. That's all the time we have right now, but thank you to the AnaptysBio team for joining us. All right. Thanks for having me.