Right. Good morning, everyone. Welcome to Guggenheim Healthcare Innovation Conference. My name is Yatin Suneja, one of the biotech analysts here. It is my pleasure to welcome our next presenting company, AnaptysBio. From the company, we have President and CEO, Daniel Faga. Dan, thank you so much for joining us. Always a pleasure to have you. Why don't you make some opening comments, you know, highlight some of the upcoming or near-term milestones that we should be focusing on? And then I have some Q&A prepared for you, and then we're going to fireside chat. Thanks, Yatin. Appreciate you having me here today. We have had a, I mean, overall, a really good year in 2025, and it's leading to multiple different value creation streams in 2026. On one hand, we've had a large readout in arthritis with rosnilimab, which is a depletor of pathogenic T cells, a 424-patient positive study, and was recently highlighted at ACR in a late-breaking oral. And nine-month data, really good data there. And the path forward in the first half next year will be moving through to Phase III in arthritis. Number two, ANB033, CD122 antagonist. We've initiated our first Phase Ib study in disease. It was in celiac patients. We have two different cohorts there, unique trial design, so that's ongoing. And we've committed to starting a second disease indication next year as well. That celiac data will read out by Q4. And then third, we have a very large royalty stream in Jemperli, driven by sales from GSK. We announced a couple of months ago we will be separating the company next year into two pieces, a royalty business and a biopharma business. So I assume we'll talk a lot more about that. And we've telegraphed that we'll end the year with approximately $300 million of accrued capital between cash and a milestone from GSK. So we're going into next year well-funded. So a number of different catalysts across the royalty and biopharma sides of the house. Very good. Thank you for that. I'm going to start with ANB033. As you know, that's an asset or that's a target that I have done, you know, a fair amount of work, and you guys are, and there is significant interest from, I think, strategic and other companies. So tell us a little bit more about 033. What is the differentiation here relative to IL-15 or other, you know, CD122 targeted agent? What exactly you have presented so far on preclinical level? Yeah, so we recently had an IR event focused on this that's available on our website. It's about an hour long, and it also featured a KOL, Dr. Joe Murray, who's an expert in celiac and EoE disease. ANB033 is a CD122 antagonist. It's expressed on NK cells, CD8s, and CD4s, as well as other unique immune cells that you see exacerbated in disease like IELs for celiac disease, ILC2s in diseases like EoE and atopic dermatitis. There's a very potent antagonist, and what it does is it binds to a dimeric or trimeric receptor depending on the cell type and blocks IL-2 and IL-15. What we showed preclinically is best-in-class potency of CD122 blocking. We've also now generated animal models in celiac disease and EoE that show improvement in functional disease indices. We're excited about where we can go with this. I've gone more into the details, but we've also run a Phase Ia study that showed the drug was safe. We had no dose-limiting toxicity in animals, and same in the Phase Ia, so we have a lot of flexibility, and we have a subcutaneous formulation. Got it. Do you have, so you know, a couple of pharma players are in the space. They are going with the IL-15 approach, and you and your competitor are targeting CD122. Do you have a view on which approach might be better, why we should go with CD122 versus IL-15? This is, I mean, it's still relatively early for the space overall, and we're excited to see interest across the board. You're referring to the landscape. I'll outline it. Teva has an IL-15 that's in development for celiac disease and vitiligo. Novartis acquired a company 18 months ago or so called Calypso. They described this as a pipeline and a product. It took them a while, it looks like, to transfer in-house, but they've now launched their first Phase II in atopic dermatitis, and they described the interest in CD8-driven disease. I'm emphasizing that because IL-15 blockers, IL-15 disease, you see it expressed through epithelial cells principally, and IL-15 drives the uptake and survival of cells like IELs. By blocking IL-15, you'll see a reduction in IELs. There's proof of concept out there from Calypso, Novartis, and from another competitor with the CD122 program that these drugs are effective in reducing IEL count, and there's proof of concept in celiac disease. What IL-15s won't do is impact IL-2. The IL-2 expression from CD4 or Th2-driven inflammation. You're not going to get a benefit there from IL-15s. The second piece is not all IELs are going to be responsive, as in celiac, not all IELs are going to be responsive to only elimination of IL-15 because they are sensitive, less so, but sensitive to IL-2. So by blocking the CD122 receptors, you're going to be able to impact multiple drivers of disease or multiple pathways of inflammation. So we can do what an IL-15 blocker does, plus with the CD122. The preclinical data shows that pretty holistically. Got it. So what is the unique feature about ANB033 relative to other CD122s? We've differentiated on potency, and that's going to be driven by two functions. One is affinity. Our program is ultra-high affinity. The second is the binding epitope. We're in how we sit in the pocket where we very specifically are going to block both IL-15 and IL-2 binding within the trimeric receptor. So we've done a lot of mapping on this, and the drug was optimized on those two components. I think that's the read-through then on the in vitro data that we've shown across various different cytokines and the impact we've had and shown on CD8s and CD4s in terms of reduction of the cytokines or those immune cells. Got it. So. But importantly, not all CD8s or not all NK cells or not all CD4s express CD122. You see an increase of CD122 expressing cells in these diseases. So it's not ubiquitous across everything. You're not going to have impact across the board on your immune system. Very targeted. Got it. And then the reason for you to prioritize celiac disease is driven by what? I mean, we have seen some data from IL-15 and CD122 in celiac. Is that the reason or just talk about the rationale and then your study because it's unique? Sure, thanks. So I think there's three big reasons why we're focused on celiac out of the gate. One is there is human proof of concept study work, right? So we know this mechanism has an effect on this disease. And again, that's IL-15s and CD122s that have de-risked us. So that's number one. Two, disease biology here and all the preclinical state of information, I think is pretty compelling what we've already shown when we believe that we're going to make an impact and likely a differentiated one relative to the competition here. But three, there's nothing approved on the market. There's no therapeutic approved in celiac disease. And there's a number of reasons for that that we've outlined in detail, but at a high level, most of what's been developed in this disease has targeted the breakdown of gluten. Very little, until the IL-15s and CD122s have come along, have actually targeted the inflammation of the disease. As we think about autoimmune diseases out there, the drugs that have worked for countless autoimmune diseases are targeting the inflammation of the disease. And that's where we are on that. Like I mentioned earlier, relative to IL-15s, we're hitting two different pathways of inflammation in celiac. So we did look at this, and we've really assessed all the studies that have been done in celiac prior. You do need to go run a gluten challenge study, and we're doing that. I'll get into detail on this, but we're also running another cohort of patients who have too much damage to their mucosal system. There's too much injury where it's not ethical to give them gluten. We're capturing them and treating those patients in another cohort, and we're looking for improvement of that injury. It's a proxy for the actual Phase II, Phase III commercial population that we'd be looking at, which are patients who are not tolerant to a gluten-free diet and showing symptoms that have injuries, and ultimately, you're looking to improve your mucosal injury, and that's where we're going, so this is a proxy of that, so we're doing the gluten challenge. We're looking at these damaged patients as well, and we're looking for a signal there that should help us de-risk not just absolute efficacy in the Phase II, but also the trial design for the Phase II as well. Got it. And so what exactly are you looking for? Like when you say a signal, what exactly does that mean? You look at the symptoms, histology, what are the endpoints, and what is your hope? Yeah, so there's draft FDA guidance. While there's no approved therapeutic, there's draft FDA guidance for the endpoints you need to ultimately hit to get an approval. And they're really going to be co-primary. You need to hit two things: symptoms and histological benefit. On the symptoms, there's a couple of PROs that have been validated with the FDA. We're looking at one of them. It's a celiac disease diary. It's a daily diary tracking symptoms. And on the histology side, what we often refer to as VHCD ratio, the villous height to crypt depth ratio. And that ends up being the hard criteria between do you get into the gluten challenge or are you in the other cohort? And we're looking at a ratio of greater than two. So I mean, in this disease, the villi are destroyed. They decrease in size. You're not absorbing nutrients you can't process, and that's the issue with celiac disease. So a higher ratio implies more healthy villi. Lower ratio implies destruction of that villi. So greater than two, gluten challenge, less than two, you're in this other cohort. And what we're looking for in the second cohort is a trend. And the reason I'm saying that way, this hasn't been done before. We're treating patients over four weeks with drug. So at baseline, week two, week four, then we're going to assess those patients and how they improve in this cohort at week 12 with a biopsy. The PD and through our modeling, we hold these above IC90 for that period of time, so we should see some benefit. And this is a placebo-controlled trial. We'll see if the early portion of the drug sees a longer-term benefit for patients who are going on in normal life, not intentionally ingesting gluten. Got it. So we're looking for a trend of improvement. And then we're also looking relative to placebo. We don't know if we're going to see an impact on symptoms because these patients are presenting without them, but we might see a difference there versus placebo. So it's a trend line versus we are looking for a stat-sig impact relative to placebo and the gluten challenge. Challenge, got it. Is there an alignment in the community in terms of what is the right gluten challenge and what is the right period for gluten challenge? I think there's a consensus around needing enough gluten where you're going to generate a negative impact in placebo in terms of damage, but you need to ensure you don't give too much where you're not going to have compliance. So we're giving six grams a day for 14 days. There's a plethora of data of giving two to three, four grams isn't enough. Giving nine, ten, twelve is intolerable, and the answer is generally somewhere in between. Six grams seems to be a universal. You're going to see what you need to see on placebo such that on drug, you should be able to see a difference relative to the placebo patients getting worse. Got it. So the regulatory. So we're giving a six-gram cookie every day. There's no run-in on that. There's no step-up over time. It's six grams from the first day through 14 days. Then at week six in that cohort, you do a biopsy. Got it. What about dosing? Is it how are you? We're doing every other week subcutaneous dosing. We haven't disclosed a specific dose. It's a one-shot approach here. We're not going to miss on dose. And we went high enough. We had a lot of room to work with here based on the tox work and what we didn't see there to dose this such that we don't think there's risk that we're not going to get antibody to the tissue. Got it. But we did formulate in a way where it's subcutaneous every other week. Yeah. Is EoE the right benchmark from the type of, let's say, co-primary endpoint because there also you have histology and symptom? I know it's a different disease, but that sort of is the concept. I think generally speaking, in all these diseases, at three months, you need to be showing benefit for all these autoimmune inflammatory diseases. In EoE, yes, I think it's the same thing. DUPI is approved in EoE. It's once a week given subcutaneous dose. So it's two x the dose they give versus an AD. Yeah, we'll be looking at 12-week endpoints in EoE ultimately if we end up running that trial in a Phase Ib. Bigger picture, you're going to be looking at six-month plus endpoints in any later stage trial. Got it. Can you put market in perspective? How big is the market, especially for an antibody or an approach like yours for celiac disease? Yes. So for celiac disease, we're estimating approximately 250,000 patients in the United States not only are diagnosed with celiac, but are non-compliant, not non-compliant. They're unable to instill a gluten-free diet without symptoms and have damage. Right? So what's interesting about celiac is to confirm you need a biopsy. Right? So there's an estimate of two million patients that have this disease. A million patients have confirmed biopsy, and you kind of drill down from there. So 250,000 patients are biologically eligible once there's actually a therapy approved. And based on at least preliminary work, it looks like pricing here would be like no different than the broader IBD market. Okay. In terms of the second indication, I think during the R&D day, you flagged a lot of indication in your slides. What is needed? Like when exactly will you disclose? Are you waiting for some preclinical data for you to make the announcement? Yeah. And so there's a lot happening in this space. We started this conversation that way. One of our competitors has trials ongoing in vitiligo and alopecia. Novartis just initiated atopic dermatitis. Teva is looking at not just celiac, but also vitiligo. We're going to see a lot more data, particularly in derm inflammatory diseases that are driving the CD8 pathways. So we don't need to go run trials in all these diseases to get some helpful information. Doesn't suggest that we have or have not done the preclinical work already. We did feature data from an EoE preclinical experiment that we did. We did an outline here of disease biology in EoE and why we think a CD122 antagonist uniquely, I think much more so than IL-15 only, could be a compelling option in this disease. We did run animal model work. We showed an Aspergillus model that we're reducing Eos both in the esophagus and in the lung. Now, our drug does not target Eos, right? So we are hitting the CD8s and the ILC2s in EoE. But downstream, we're still seeing the Eos reduction. So that's important, right? So you're getting a benefit by treating the inflammation, and you're seeing that lack of recruitment or reduction of the recruitment of the Eos. So a lot of the drugs that have failed in EoE target Eos or target other indirect mechanisms that don't have an Eos reduction. So that's one of the two co-primary endpoints you're going to need to see to get an approval in EoE. The other piece is the symptomatic scores, and that we think we're going to have benefit by treating the inflammation more holistically. EoE is a huge market. DUPI is already doing over $2 billion a year a few years after launch just in that disease. We think it's a $5 billion plus market on its own, and 30% of patients are non-responsive to DUPI, and DUPI is only treating one side of the equation. There is human proof of concept in EoE with an IL-15, so Calypso did run a Phase Ib trial with an IL-15. That's only going to impact the CD8s. It's not going to impact the CD4s or TH2 or ILC2s, which is where DUPI is effective, and we already know there's proof of concept by just targeting the CD8 path. So we feel confident here that just that alone, plus what we're able to show preclinically impacting the ILC2s, there's a really robust preclinical validation, plus the animal model work, plus that human proof of concept that if we could run a Phase Ib trial, not only show Eos reduction, but also robust powered symptomatic improvement, that that could be a path forward. But that said, there's another number of other readouts and there's other choices for next year. So we haven't made the decision yet to do EoE or not relative to other diseases, but we will pick one other disease at least next year and run another Phase Ib. Got it. Very helpful. Okay. Then move to PD-1 depleter. Give us an update on the program. I think you announced data very recently in UC. The good thing was, at least on the safety side, seemed to continue to look pretty clean relative to the Lilly molecule. So just give me an update there. Yeah. So we're disappointed. We obviously just had colitis results for rosnilimab. The drug did not show significant enough improvement to hit our TPP at six months, which was premised on having substantial clinical remission, endoscopic remission that we thought would be competitive with everything else going on in the space. We had a high bar. We didn't hit that bar. But to your point, we have one year long, up to one year long safety data. Data was clean, consistent with every other trial we ran rosnilimab, no malignancy, no MACE in any meaningful way, no imbalance of infections, no serious or opportunistic infections. There's nothing here of interest, which was great. We were also dosing at higher doses than we used in RA. Again, that was partially to ensure we got enough drug to the gut. So we were at high doses. But the other thing that matters here is the PD was exactly what we saw in RA. So we know the drug was doing what we hypothesized it was supposed to do: greater than 90% depletion in the periphery, similar depletion of these TPH and or PD-1 high expressing cells in the gut that we saw in the synovium of RA patients. So that all checks out. But what's interesting in this trial, after six months, we did move to maintenance dosing where it was q8 weeks at 400 milligrams, so a lower dose, and we saw stable PD impact. This data in totality helps us with the designs of what the Phase III trial would look like or program would look like in RA as we think about three- to six-month induction and then maintenance. More importantly, I think in the RA trial, now that trial is complete, and as I referenced earlier at ACR, we did show full nine-month data, which was six months on drug, deep remissions, and we saw them in remission in a broader percentage of population, low disease activity, not just first and second line, but also third line, and then we broke it down by prior treatment. 30% of patients in this trial were on a JAK, and the response rates there were equally as attractive, so this drug is working regardless of prior class, and that's important. It gives us a lot of flexibility as you think about what's the commercial market for arthritis, so while you would run a trial to get the second, third, fourth line, third and fourth line right now is $6-$8 billion in the United States alone. People don't really. Orencia is doing $4 billion a year in arthritis in the United States. It's a huge number. And that's generally speaking a third plus line treatment. Rituximab still gets used a lot. Now there's biologics in the market today, but that's a salvage therapy with drivers of high infection, which we're not seeing on our drug as they deplete out all of the B cells, which is pretty characteristic of B cell depleter. So we're pretty excited about where this can fit. We always have been. I think UC was a more straightforward path, I think particularly for investors to understand how we could access the second line. But if you're a third, fourth line dominant player, you have pricing power, you don't need a discount or contract, and there's a lot of run room there. 500,000 patients fail first or second line TNF. 150,000 patients end up in salvage. That's a lot of patients who already take biologics in the United States. The market's there, and there's a need to just have another biologic. You don't have to be better than anything. You just need to work. You just need a choice for patients that's different. The opportunity is so much better than that, but that's the minimalist way to think about this. I think there's a clear development path forward. We're going to meet with the FDA by the end of Q1 of next year, have an end of Phase II meeting, and we've given ourselves the entirety of the first half to work through how to appropriately finance this program through strategic or other means of capital. Explicitly, we will not be depleting the royalties to move this forward, but I think there's lots of ways to move this program forward in RA and Phase III. Got it. And when are you meeting with the FDA? By the end of the first quarter. Okay. So Q1 is when? It's a target. Yeah. Yeah. I would agree. I think the market in this later line RA is there, and I think there is a recognition, not only you, there are other companies moving in there now. There are new pathways going there. I think it is interesting. Three years ago, everyone's like, there's no market on the investor side. Now there's Merck, Roche. There's other competitors, SMID cap with other mechanisms. There's real opportunity here. There's folks digging in and really understanding the patient need and this is why we're excited about UC as well. Second, third, fourth, fifth line biologics. Patients are switching through classes. They're not staying on these drugs long enough. Yeah, but would you run a study yourself? I think we could execute on the Phase III program, and we already ran an almost 500-patient trial, so it's not an ability issue. It's how we're going to capitalize and who we're going to do that with, and that's what we're working through. Yeah. Okay. So talk about the Jemperli. I think there was a good announcement you made where you're deciding to split the company. What is left? Like how long it will take for this split to happen? And how are you feeling about the future of Jemperli? So the separation will occur in 2026. I think there's good reason it could happen in the first half of the year. We'd spend a lot of time in ANB033, which I appreciate. It's an anchor asset for the biopharma company definitively. Yeah. You You have Jemperli and other royalties, and then you have rosnilimab. What we have to do is work through where's rosnilimab going to sit and who and how that's going to be executed and is it part of which business. Now, the default is it's going to be part of the biopharma company, right? But that's not definitive sitting here today. The fastest we can execute a separation would be towards the end of the first quarter. And that has to do with regulatory and SEC work in the background, financial audits. There's just work that has to happen that puts us out on a certain date, and then we have an option of when to do this. I think it's going to come down to how we move forward in finance rosnilimab. So it'll happen next year. It could be the first half of the year, and we'll update as we go, but beyond that, for Jemperli, GSK has repeated that their guidance. They assume they're going to far exceed their $2 billion-$2.7 billion U.S. guidance. Now, Wall Street consensus for GSK is not nowhere near that yet. Unfortunately for GSK, Jemperli is still a top 10-15 asset, but if you take them by their word, it's going to be a top five asset. And so there's going to continue to be inflection, I think, on consensus thinking here. We're seeing Jemperli exit this year on a $1 billion run rate, right? And so we're already into the third tier of what is an 8% to 12% to 20% to 25% tiered royalties. This is going to be a very massive and unique royalty stream that you don't see in our sector too often. And royalties are generally worth $100 million, $200 million, $50 million. This is a multi-billion dollar potential PD-1 asset. Just to put it in perspective, if GSK hits their peak, which we anticipate them doing by 2031 or earlier, right, based on their own guidance, and that's where the trajectory is, their peak results in $390 million in royalties just that year. Just that year, right, when you work through the tiers, and it's all out there in the public domain how this works. They've launched an endometrial cancer where they have overall survival data that's differentiated from KEYTRUDA. And we think there's reasonable protections from KEYTRUDA LOE given the data set that they have. In rectal cancer, the drug works from the Phase II, 100% complete remission rates or response rates. That pivotal reads out next year. KEYTRUDA doesn't play there. Head and neck. They guided as recently as yesterday, 2027, for the readout in the pivotal trial. KEYTRUDA doesn't play there. So they're protected in a lot of the markets they're focused on. They're taking a very good strategy at GSK to situate this program in a way where you're making a big difference for patients and you're not going to be exposed to the LOEs of the rest of the sector. So we're really excited about where this goes. They're talking about combinations and ADCs. There's a lot of development happening at GSK, and it flows through straight to us at the top. But when you have a royalty this big, it's almost a derivative of GSK's growth franchise over there. It's not just this little royalty that's going to be sitting out. So I think it's a really interesting play in a growth franchise that GSK is talking up a lot relative to the core base business at that company. So that can sit alone. Imsidolimab, which is another drug we've developed, we outlicensed it earlier this year. It's for GPP, the BLA by the licensee is going in this quarter. So a lot happening there. We're excited about it. But what we're creating is a situation if you like both of these parts of the business, we're not going to dilute one to fund the other. Post the separation, you can make a choice. Me as an investor, I really like the royalty business. It's more or less a guaranteed profit center. It'll be GAAP profitable right out of the gate, and then we have, I think, a really interesting R&D business that, disassociated from the royalties, people can appropriately value. Got it. So what happens when the split happens? Everybody gets each one share. You own 1% of the company today. You don't own 1% of each company the next day effective post the spin. Okay. And then you owe something to your something back on Jemperli, right? When do you expect that payback to happen? Yeah. So we did a non-recourse debt monetization with a group called Sagard that's being paid down actively. We've given a range just to explain that range. On the longer dated end, Q2 2028 will be paid down. That's based on Wall Street consensus as of September. Again, it's overly conservative, but it's what's out there. If you just take 10% quarter over quarter growth, it pays down Q2 2027. Jemperli has grown quarter over quarter between 16%-20% the last three quarters. That's driven on U.S. launch in endometrial, and we're just getting going in Europe just from that one indication. So every single quarter that they beat 10%, it'll pull in forward from Q2 2027 in terms of that paydown. Got it. Got it. Yeah. No, definitely significant value there. Okay. Maybe finally, one question on the BDCA2 modulator. There is going to be a lot of data coming for that class of drugs hopefully next year. What are your plans? You have an asset there. Yeah. So BDCA2 modulator, there's one other in development. It's by Biogen. They're in three Phase III trials, two in SLE and one in CLE. They've just updated their guidance recently. All three trials will have data in the back half of next year. We have a more potent drug driven on preclinical data as well as emerging Phase I data and healthy volunteers. That trial is still ongoing. We haven't committed to when we're going to read that out, but we're excited about it. Development strategy minimally is, I'll say it like an option from a financial sense. If Biogen really looks good, I think Wall Street will care a lot about what our differentiation data looks like, and we can move forward in one or both of those diseases. If Biogen doesn't look good, unclear what we do, right? The potency differentiation there, I have to see their data to decide. Does it make sense to still go into one of those markets or there's other markets or in combinations? What this drug does is it depletes pDC, plasmacytoid dendritic cells. That's what's ultimately happening here by the drug. So we have choices of what to do with it, but we're going to keep some of that in our pocket for right now and make some decisions once we see the Biogen data. I think it's financially prudent to play it that way. We have a lot of other things going on as we've discussed here. Pretty significant here. Many things going on on the CD122, then you have PD-1 and the royalties. So yeah, that's very good. That's all I had for you, Dan. Thank you so much. Appreciate it.