Hi everyone, good morning, and thank you for joining us at TD Cowen's 2025 I&I Summit. I'm Joe Tholm, one of the senior biotech analysts here on the team at TD Cowen, and it is my pleasure to have with me today Dan Faga, the President and CEO of AnaptysBio. Dan, thanks for joining us to kick things off. You've been very busy this year at Anaptys with some key data readouts and then also the announcement to split the company into a royalty co and a biopharma co. Maybe if you want to spot a high-level set of expectations, what should investors be looking for for Anaptys maybe just into the end of the year and in the first part of 2026? Yeah, good morning and thank you, Joe. Appreciate the opportunity to be here this morning. All in, we had a, we really did have a great 2025, and this will further lead to exciting events coming up, as you're alluding to. I'll take a couple of minutes and just highlight three areas of value and excitement that walk us into next year. The first is with Rosnilimab. It's a selective and potent depleter of pathogenic T cells. We did complete a phase II-B trial through the course of this year in arthritis. It was a robust trial of 424 patients. The overall safety, tolerability, translational data, the efficacy profile all exceeded our expectations across the board. We hit stat sig results at week 12. We had differentiated low disease activity and remission rates that deepened through six months and then off drug out through nine months. I mean, data has been exceptional overall. The translational data really supports how we believe this mechanism works in the disease, not just with T cell depletion, but also downstream B cell reductions. We were just featured a couple of weeks ago at ACR. We were the number one late breaker presented by Dr. Paul Emery in the session. We're really excited about that, and there's a lot of momentum and expectations really that this drug moves forward into phase III. That'll really be the story for the first half of 2026, establishing what does the phase III program look like and then how we finance that moving forward. The second is a drug that we're really excited about, ANB033, a CD122 receptor antagonist, homegrown at Anaptys. We are currently enrolling patients in a phase I-B trial in celiac disease, and we will announce, we'll look to announce a second disease in a new indication in 2026. We will have data next year across two different cohorts being enrolled in celiac disease. Lastly, on top of all this, we have a very significant royalty stream for a drug called Jemperli. It's payable to us by GSK. This drug inflected in 2025 off of a launch in endometrial cancer last year in the U.S. and really just getting going in Europe, likely this quarter. We believe Jemperli is going to exit the year with a $1.5 billion run rate. Plenty of opportunity from growth from there. GSK is guiding to greater than or far greater than $2.7 billion of sales. We estimate that's achievable well before 2031, which is where their guidance is set to. In a year that they achieve that peak, we would receive $390 million in royalties. Given this profile and just the substantial nature of that asset alone, we did announce that we're going to separate the business into two, a royalty-focused company that will be GAAP profitable right out of the gate, and then the biopharma business really featured by the two assets that we just walked through. Lastly, we're well capitalized. We anticipate to have greater than $300 million coming out of the year, which does include a milestone payment that we do expect to get from GSK or at least accrue this quarter. Perfect. Great. Maybe we'll start with the spin of the two businesses because the stock reaction since you did the announcement has been quite great. Maybe if you could just go into a little bit greater detail as to the rationale and kind of the thinking around that, were people not paying enough attention to what Jemperli could offer the company? Maybe how is the spin going to benefit shareholders of both companies once it's done? Yeah, so we, thanks for the question. We're always proactively assessing strategy here, right, and our options. We've been watching this closely for a long time, but about a year ago, a year and a quarter ago, it became clear this was going to be a very big deal. I started talking about it a lot, really launching around JPMorgan this year is how big this opportunity is going to be. In fairness to investors, this inflected very quickly. I mentioned earlier, Jemperli received approval in frontline endometrial cancer really about a year ago in the U.S. It's the only PD-1 antagonist that has overall survival data in this indication. It is quickly becoming or has become the market leader. There's a lot of growth ahead of it. That's just in the United States. We also established a second collaboration with a company called Vanda on Imsidolimab. That BLA is set to file for a disease called generalized pustular psoriasis, where we ran two successful phase III studies that's set to file later this quarter. There is really going to be two royalties put into this business. Jemperli alone, we believe Jemperli alone, the value of those royalties is well north of our market cap today. There is a lot of runway here just on that one financial asset that's passive. It is rare to have this opportunity, particularly something of this size. It has not really existed much in biotech. Something I appreciate is a little different, which is why we needed a more unique result. The whole idea here is the business is set up for success on day one with the royalties moving out, but also the biopharma business outside of, I think, the shadow really of what's become a huge royalty will have at least two years of cash. I mentioned the different programs in there. Multiple catalysts to get us through beyond those two years. I think both businesses set up for different types of investors potentially in the future without impeding on each other and how to focus on valuation. We saw recently that Jemperli received one of the CNPVs from the government. I guess, have your internal expectations for rectal cancer changed? Do you think this is currently included in sort of the Wall Street consensus, or would this be kind of an important growth opportunity, you think, in addition? Maybe related to that, I guess, what are sort of the remaining gating items until the split happens? Yeah, it's interesting you bring up the consensus. I'll address the receipt of that award. What that means is that instead of the typical filing timelines, when the pivotal rectal cancer trial reads out, GSK is guiding to the second half of 2026, they would look at one to two-month review periods. That's based on the quality of data to date. GSK actually just repeated this yesterday. There's about 50 patients now, continual patients that have been enrolled at Memorial Sloan Kettering, 100% complete response rate. I mean, the drug obviously works in this disease. There are expectations here. The interesting thing with consensus, GSK, like I mentioned, is guiding to far north. Those are the words from the CEO, far north of GBP 2 billion, which is $2.7 billion at peak. Wall Street consensus, which is published on GSK's website, is at $1.9 billion peak. There's a major gap between consensus and the expectations just from GSK. The challenge with Wall Street consensus is Jemperli is somewhere between the 10th-20th biggest revenue producer at GSK. It's just not the focal point for a GSK investor today. The management team over the last many months has really been loudly saying this, that that's the gap. We agree. I mean, you do a bottoms-up forecast. Like I said, this year, it's going to do greater or be on a $1.5 billion run rate. I'm not sure what's in consensus forecasts for large companies when it's not an asset in focus. If you take their expectations on their own, and GSK is the top four or five drug over there. I think GSK's consensus is really a backwards-looking, laggered way to think about this when you look at the GSK numbers. Our market research, right, and when we build up bottom miles, that's why I sit here confidently and say this royalty is worth far north of our market cap. It's improved in that frontline endometrial cancer. They have the DRISC data in dMMR rectal. dMMR colon also has DRISC data, 82% complete response rate in the phase II as well. They're running pretty thoughtful trials in multiple other diseases where there's enriched populations, MMRp colon and head and neck cancer, two that are in pivotal trials right now. They're talking a lot about future combinations. There's a ton going on there. It's really exciting. Just on its own, there's its own set of catalysts even through next year. Every quarter is double-digit, high teens, growth, which is really driven on the U.S. Every quarter ends up being its own catalyst in terms of the revenue expectations there right now. Perfect. Maybe we'll jump over to rosnilimab in RA. Maybe if you could just hit the high points of the data, specifically in reference to kind of the current standard of care. Where do you think the current standard of care is lagging that rosnilimab can improve? Is it in the initial post-biologic setting? Is it in both? Is it on safety? Kind of how are you seeing it slot in? Right. What's interesting with arthritis is in the U.S. alone, more than 500,000 patients are taking biologics and progressing beyond TNFs. You have, on the other end, over 100,000-150,000 patients that have cycled through four or five lines of different therapy or different classes of therapy. There's a huge opportunity for just new classes of drug that compete like other biologics. They generally all get used. I think that's a little bit what's missing in the Wall Street perspective, why there's a mismatch between the average fund and the excitement in the medical community. What we showed in our data, and this was just presented again at ACR, is not only was our drug clearly bio-better, approaching JAK-like in naive patients, the real opportunity for us is in third and fourth line and to some degree in second line, how does the drug perform with patients who have already been on other therapies? What we showed at ACR, when you cut through the data, we had a very large phase II-B trial so you could do this. I mean, it's not statistical in any way. Post-IL-6, post Orencia, which is abatacept, another T cell modulator, post-JAKs, we had 30% of this trial was already on a JAK. This drug still works. Pick whatever is in front of it, the mechanism of action here, and this is really driven by this disease, there is an exceptional amount of inflammation that is T cell driven with downstream B cell effects. We are hitting both of those pathways. We saw deep remissions over time, but importantly, the drug works quickly. At 12 weeks, we hit in the 70% higher ACR 20, 25% spread over placebo, and then deepening remissions over time. The vast majority of patients in this trial hit low disease activity. It is successful off the drug too. It looks like we have a true induction maintenance therapy. Almost every approved biologic in this disease has a black box. Patients have a ton of comorbidities. Through a number of data sets, it appears our drug is highly tolerable. We had less than 2% of patients off for AE. One patient, one or two patients dropped off this trial after three months due to AE. We saw that consistently with the colitis trial as well. I think we have a safe, tolerable drug that's making a big difference for patients. There's a lot of excitement to move it forward in phase III. Perfect. Can you kind of outline the next steps? I know at the beginning you alluded to partnership funding or something to move the program forward. I guess, will you approach the FDA on the design of the phase III? What kind of deals are you considering to fund the RA program? Yeah. So there's almost two parallel paths there. Operationally, I've been saying this for a long time. We can't move forward independently on our own in two huge markets. We have one huge market that we're going to move forward in right now. Operationally, there's a lot of work being done. What does the phase III program look like in RA? We are going to meet with the FDA later in Q1 of next year and into phase II meeting. That's the plan. That That has to happen. In parallel to that, we are going to look for various different ways to move forward and fund the program. I think there's a relatively modest way to do this. There are various different approaches how to put together a phase III program. We're going to keep that under wraps for right now, but we have choices on where and how to do this. We'll look for a relationship as well as part of it. That's one of the ways we can move forward in a strategic collaboration. There are all sorts of flavors of collaboration. There are many different players in RA. There is a broader set of players in rheumatology. I think there are different flavors of collaboration for different parties. We're really going to sort through that over time. We said we'll give an update in the first half of the year. That gives us about eight months to work through this. I think that's a substantial amount of time to figure it out. Great. Unfortunately, we did see that the UC phase II did not quite meet the mark this week. The drug did look like it did what it was supposed to do in terms of depletion of the target T cell population, which I think is good. Can you kind of just walk us through the differences between the two populations? Maybe why do you maintain confidence in RA despite the miss in UC? How should investors be thinking about any sort of parallels there? Yeah. We were surprised. I mean, clearly surprised at the results. You kind of mentioned the highlight. A couple of things come out of this trial that I think are incremental read-throughs that are positive for RA. I'll focus my comments there. The trial was set up where we're driving through an induction period of six months. We moved to maintenance. You had monthly or every other week dosing that first six-month period. You moved to every eight-week dosing. We had all patients through 12 weeks. At this point in time, we are winding out that trial. We had a substantial, almost all patients have gotten through six months and a lot of them beyond that as of this moment in time. On a safety basis, there's absolutely nothing there of interest, which is what you want to see. No malignancies, effectively no MACE, no severe infections, no increase in liver enzymes. The drug was clean, highly tolerable. Patients stayed on this drug. We did see activity in the drug. There was a lot of hypothesis going into this. I think at the end of the day, what was clear from the translational data, we had an impact in the periphery of reduction of TPH cells or PD-1 high cells of 90% at both doses or greater than 90% at both doses. It looked pretty quickly. Just it's all the same. There was an elevation there. Within the lamina propria, we saw a substantial reduction that's equivalent to what we saw in the synovium of RA patients. The drug worked exactly like we thought it would work. We had enough drug to get there at both doses. Importantly, we got there at 400 milligram monthly, which is the mid-dose we used in RA. Translationally, we saw what we wanted to see. I think importantly, and this helps with phase III design for RA, we saw sustained impact on the PD when we were in that Q8 week dosing at 400 mg. That is really informative as we model out how to think about a maintenance setting for RA. In the end, I think what became obvious is that we did not perform substantially better than placebo. While responses really did deepen over time, given the rate of depth of response, where we got to at month six was not going to be competitive. We do not feel it was going to hit a very high bar we set for the TPP. I think the conclusion here is colitis just isn't a T cell driving disease in the way that I think a lot of literature, KOLs, animal model data, other anecdotes from other types of mechanisms of action all really let us down a track to believe. Perfect. I know we're getting close on time, but I want to touch on the CD122 program as well. You had a great R&D day a couple of months ago on that. Can you kind of walk us through the trial design? You're doing this sort of two-cohort design to look at if you see benefit on mucosal healing and also prevention of mucosal damage. Maybe when should we expect data from both of those? Will we get a good idea on both of those two paradigms when we see the initial data and maybe any rationale behind why you're looking at the two cohorts? Yeah. When we decided to announce the separation of the company, I think in the end, this drug really can serve as an anchor for the BioPharma company on its own. We had to believe that in order to come out and make that announcement another months ago. There is a lot to do here with ANB033, targets the CD122 receptor, which is found on various immune cells that drive inflammation, particularly in celiac and the gut tissue of celiac. IELs and CD4 cells. There is a strong biologic rationale. You're asking about the trial design. Yeah, we actually did something that I think is creative. We worked with a lot of KOLs to figure out this design. It is a phase I-B. It is 60 patients overall, but there are two different cohorts. The first cohort is a classic gluten challenge where we're enrolling well-controlled patients that have a baseline villus height to crypt ratio of greater than two. It means that you don't see the depth of mucosal damage that you do in symptomatic, uncontrolled patients on a gluten-free diet. In the gluten challenge, you give drug or placebo for four weeks, then you administer daily gluten for 14 days or two more weeks, and you take a biopsy. What you're looking for there is the patients on placebo should have gotten worse now with the gluten. The patients on drug should have gotten significantly less worse. That's measured by VHCD. We'll look for reductions in IELs as well as symptomatic impact relative to placebo. We're looking to be statistically significant from placebo. The unique part is the second cohort, which are the patients who are less than two on the VHCD ratio. These patients, it wouldn't be ethical to give them gluten. They already have significant damage to the mucosal lining. They might not have the daily symptoms in a very significant way, but the damage was underlying there. We're going to capture those patients. Instead of giving them gluten, we will just administer drug versus placebo over four weeks. At week 12, we'll assess, did you improve on the drug relative to placebo? We're looking for a trend there. It's more exploratory. This hasn't been done in a phase I-B. What's great about this one is it does give us a proxy for that phase II population of these patients who are already damaged. I think it'll give us and investors a lot more information prior to moving into phase II. For mechanism of action here that unlike targeting the gluten, we're targeting the inflammation. There's proof of concept in celiac, both with IL-15s, which are in the same pathway, and with another CD122. There's already clinical proof of concept here. I think we have a smarter trial design that de-risk future development beyond the phase I-B. That data will be available next year. Awesome. Great. With that, we're unfortunately out of time this morning, but definitely a lot going on at the company and a lot for investors to pay attention to. Thank you for joining us. Thank you to everyone that was listening in. Appreciate it. Thank you for your time, Joe. Happy to.