All right, we will go ahead and get started. Good morning, everyone. Welcome to Guggenheim Emerging Outlook Biotech Summit 2026. My name is Yatin Suneja, one of the biotech analysts here at the firm, joined here with my colleague, Dalma Caiati. We will be moderating a discussion here with our next presenting company, Cabaletta Bio. From the company, we have a few executives here with us. We have President, CEO, and Co-founder, Steven Nichtberger; we have David Chang, who's the Chief Medical Officer; and we have Steve Gavel, who's the Chief Commercial Officer. So we have prepared some Q&A that we will be moderating. But Steven, why don't you make some opening comment, maybe set the stage for our investors, what we should be focusing on, and then Dalma and I will moderate the discussion. Great. Thanks for having us. We appreciate it. So, Cabaletta, for those who aren't as familiar, was formed in order to develop and launch the first targeted curative cellular therapies for patients with autoimmune diseases. And, recently, we announced that we have initiated enrollment in our first pivotal program for myositis. It's a 17-patient study that is expected to result in a BLA filing next year. In addition, we recently announced that the manufacturing of rese-cel in a system that has fully automated capabilities, which is to say, you can manufacture an autologous CAR T rese-cel with no human intervention in a fully automated system. That IND amendment was cleared as an alternative form of manufacturing rese-cel, and I would tell you that that is the most- Mm ... important thing, to pay attention to, because it will permit scalability to the 5, 10, 15 thousand level with minimal capital investment and, very healthy margins. So it's a really fundamental frame shift for an autologous company. In addition, we are continuing to expect to report Phase 1/ 2 complete data sets in lupus, in scleroderma, and in myasthenia gravis in the first part of this year. In addition to the no preconditioning, so we took on the task that people have asked for a very long time: Is it possible to use the rese-cel cellular product with no preconditioning and still get a treatment effect? And we presented, to our surprise, very effective acute outcomes in pemphigus vulgaris patients. We have continued to rapidly enroll that program, both at the initial dose and at the next higher dose, and we've initiated the program as well in the treatment of lupus patients, because in lupus patients, they would prefer, we think as much or more than any other autoimmune patient, being of childbearing age often, they would prefer to avoid the cyclophosphamide. And with so many competitors in the field, we feel this is a way to leapfrog all of the competition to the front of the pack if we're able to demonstrate the efficacy and safety and durability that we have seen in our preconditioned lupus program. So when we put all of that together, it makes for a really robust year. We're just excited, frankly, for the prospects that rese-cel can bring this sort of safety, efficacy, and durability to patients. We'll see if we can do it with and without preconditioning, and we'll begin to see some data from our automated manufacturing program in partnership with Cellares in the next couple of months. A really exciting year coming up for us. Very good. Yeah, maybe, David, why don't we start with the myositis program, the pivotal trial? So that's a very streamlined single-arm trial with 17 patients. Can you walk us through the rationale behind that trial design and the statistical assumptions, and what's the bar for efficacy and safety? Yeah. So as you indicated, it is a single-arm trial, which is based on our responses compared to a background rate, utilizing a registry database, which we believe is very robust and of high quality. Our number of 17 patients assumes a certain background rate, which we believe to be very low compared to a response rate, which you've seen in publications, that these patients are getting very good response rates, so a moderately high level response rate. But we want to be very conservative. So out of the 17 patients, we would need about 5 patients to hit statistical significance, and 5 patients achieving response out of 17 to achieve that statistical significance. So, and I think there's a question about why we went to 17 from 14. So initial 14 patients was a combination of dermatomyositis and antisynthetase syndrome in one study cohort, and the natural distribution is about 80/20% between those two patient populations. So it would have been approximately 11 patients, dermatomyositis, and 3 patients with Aantisynthetase syndrome. When we looked at our data from the phase 1, 2 study, the patients we've treated, we saw that the strongest responses and the longest durability were in those patients who had Ddermatomyositis, so we wanted to ensure that we are optimizing for success. So rather than having only 11 dermatomyositis patients, we're looking at having 14 dermatomyositis patients and 3 antisynthetase syndrome, again, to really maximize the probability of success. That makes sense. Just to put it in context with other programs, other CAR T programs there, that are running randomized controlled trials. What gives you the confidence that the FDA will not request another trial, randomized controlled? Yeah, I mean, first of all, is that we already had that discussion with the FDA, achieved that alignment, and they were- they endorsed or supported our single-arm trial. And that has been with the FDA before and the new FDA, because we've had conversations with the FDA subsequently, in addition with our other programs, and there has been a leaning towards accepting single-arm trials in the autoimmune population with CAR-T therapy. So that's number one. ... The other portion in terms of thinking about, I think you're asking about the FDA's acceptance- Yes. Is that when we think about not only our company, other companies are also doing single-arm trials in different indications in autoimmunity with CAR T. Mm-hmm. FDA has certainly accepted single-arm trials- Yeah - especially if you have therapies that are particularly, robust in response. And I think the third thing here is regarding, how we set up our endpoint. So if we are able to use an endpoint that is very stringent, meaning it's hard to hit- Mm-hmm ... and also more objective, meaning that there's not some wiggle room with subjectivity, it's more likely to be amenable to a single-arm trial. So high response rate, more objective, more stringent, and in terms of stringency, we actually are requiring patients to be off of medications. So that's both stringent and objective, right? Because you can't—you're either on medications or you're off, and on a low or reduced to steroids, again, because that's measurable, it's objective, highly stringent. So I think being able to incorporate that into the particular endpoint, not only getting a response that's moderate or major improvement, we're including the component of no immunomodulatory medications and low-dose steroids. And if, if you saw the FDA commentary that came out last week, they talked about the importance of immunosuppression-free therapy because the chronic toxicity with taking these medications is very high. They certainly are open and actually very interested in patients achieving drug-free remission. Okay. Yeah, because this is of such importance to investors, and, reiterating and endorsing everything that David has said, I want to make a fine point on the fact that, Bristol Myers and Novartis are both running single-arm studies in certain of their autoimmune indications where alternative therapies are available. And more importantly, Novartis terminated a comparative study in order to initiate a single-arm study within the last 4-5 months. So if it is true that single-arm studies are inadequate, it will be true that no autologous cell therapy is going to be approved for each of these indications where these single-arm studies are being performed. Yeah, that's a very important point that you touched on. Following on the differentiated design, another feature of your program is the optionality for outpatient administration. So maybe, David, can you give us a flavor of how that looks like in real clinical practice? So what's the rate of adoption that you have seen so far? How are physicians taking that option, or what's the feedback you are getting? Yeah, I mean, we have not discussed the patients who have enrolled and been dosed yet, but we do have that optionality of no inpatient admission. Outpatient, yeah. So patients can be treated as an outpatient. No preconditioning important, too. But the patients being treated as outpatient, and I think that really reflects the high degree of safety- Mm-hmm ... that we've seen in our with rese-cel. So if you look at our numbers, we have actually, it's now less than 30%, with CRS grade one. And overall, 95%, more than 95% of patients are only grade one or no CRS at all. And when does it occur? Approximately day 7, which Steve will talk about later. And with ICANS, we reported on two ICANS previously. It's been almost a year since our last ICANS. Other than those two patients, no other ICANS have we reported. Zero, other than those two patients. And those after those two patients, we instituted more strict criteria for following these patients. Mm-hmm ... and not enrolling certain patients that are at high risk, and I think that really led to a high, good degree of safe profile with regards to no ICANS. So having seen low levels of CRS, low grade, only 30%, less than 30% of grade one, really almost no ICANS, really gives us confidence that we can treat these patients as outpatients. And I think the sites have understood this. Investigators are saying, "This looks like an opportunity for us to try this out with your therapy. Maybe just one last question on that point. Are there any specific criteria that you need to hit in order to have the outpatient opportunity in on the label? Like, do you need to track any specific parameters beyond safety? Yeah, I mean, we're looking into that. I think Steve can talk to that as well, but we're looking to gather as much data as possible with regards to how this was done. Were there any safety events? You know, did they come back to the clinic as soon as they needed to come back, et cetera. Got it. Thank you, Dharma. Steven, a couple of questions for you, and then we'll go to Steve, after that on the commercial side, because that seems to be the flavor, and, and we want to focus on that. So in oncology, if you look at the CAR T, they have struggled with scalability, margin, logistics, right? So in what specific ways, your product in autoimmunity sort of change the business equation rather than just an incremental improvement? If you can just put that in perspective, and then we'll have a discussion with Steve. Yeah. So thanks for the question. The partnership, the safety of our product and the partnership with Cellares change everything. And I don't just say that, we, the management team and the board, have put our money where our mouth is, having all gone into the market a couple of weeks ago to buy our stock. And it's not because any of us don't have enough options. It's because we fundamentally believe that the last piece of the puzzle has now fallen into place. Autologous CAR T has been a very challenging business to be in, historically. The advent of fully automated manufacturing, where human intervention is not required, where you don't have to train and keep available independent rooms, clean rooms, in which you can have a limited throughput per day. Instead of that, by partnering with Cellares over the last three years, so others could follow us, they'll have to do the same pathway, the same process that we started in 2023. The fully automated manufacturing of rese-cel is analogous to what Model T assembly line manufacturing was for the auto industry. Automobiles were fabulous, but you could only make about a dozen a year. When assembly line industrialized manufacturing came into play in 1908, the automobile exploded in its usefulness, and it's the exact same thing that's happening right now, and I frankly don't think people are aware of it. We will report the first ever autologous CAR administered to a patient in the coming months. Cellares has partnerships with many of the large pharma and other biotech companies. I personally believe there'll be, you know, many more to follow, but we're in the lead by a significant number of years, and that will allow us to scale without the need for capital investment. So what do I mean by this? Historically, there were no CDMOs back in the early 2000s. You needed to build your own factory. That's $30 million plus, you know, $30 million a year to keep the hundreds of people in manufacturing and quality warm and ready to receive the increasing volume that you hoped you would achieve. Now, what do we do? Well, assuming that we move forward successfully with our clinical data in the coming months, and then with commercial agreement with Cellares, in order to reserve another 560 or 600 spots next year, they don't need to, sell us, if you will, rent us three additional clean rooms, which is how many clean rooms it would take, with all of the staff training and maintenance, right? That's required over time while they wait for us to begin to fill that room. Three additional clean rooms is the equivalent of one Cell shuttle. One Cell Shuttle has essentially trivial capital impact, right, capital expenditure impact per patient on the 600 patients per year that can be produced in that shuttle. And so it fundamentally changes the business model. We've been encouraging investors, and we've been helping, frankly, many investors now to develop Excel spreadsheets so that they can understand our business. This is not yesterday's autologous CAR T, and I think that is the fundamental, most important thing that you can take away from this discussion. Yeah, we're, we're in pivotal. Yes, we've been implementing very, on target. We have hit milestones for years now, and we intend to continue to do that. But what is different is we're gonna launch, and shortly after launch, Cellares, we expect, is gonna be available as a source of manufactured product. So with minimal capital investment, we should have a biotech, biologic-like margin in a world where we can scale without a partner to the tune of 5 or 10,000 patients by our second year. That is an astonishing switch from yesterday's autologous CAR T companies. For us, that is, that is exactly why we're so excited. Couple questions, two more for you, and then I'm gonna go to Steve. So what are the plans now? Are you planning to stage the transition from CDMO base to Cellares base sort of model, or would you keep both of them? Just talk about that. Also, if you can outline the cost... How should we think about cost in the situation of Cellares? Yeah, um- COGS, basically. Yeah, yeah, COGS. Understood. Thank you. So our plan will always be that we have at least two sources of manufactured product, right? So Cellares, if and when we report some good clinical data, if and when we have a commercial agreement signed and done, will be one of those two. We currently work with Lonza, with what used to be WuXi, as two other manufacturers of our product. We will always have two sources of supply. So that's the first thing. And, you know, let's call manual CDMOs, are themselves interested in becoming more automated. So I think that is gonna progress as well. Regarding cost of goods, in a simplified manner, there's the price per run that you pay, which has been covered by some analyst reports over the last two or three years in the industry, $150,000-$270,000. Just depends what the price is for you and your carrying cost of your facilities and so forth. So that's kind of where people have been. In addition to that price per batch, there are other costs that are not really captured by, I think, investor models in large part, and they include the unused capacity that I'm paying. I'm paying for three more clean rooms to have an extra 500 patient runs per year. If I don't use that capacity, who's paying for it? It's got to show up in my PNL. It shows up in my COGS. So I could actually double my COGS because I didn't forecast well, and that is the bane of the existence of investors and companies that have ever tried to do autologous CAR T. We will have none of that with Cellares as a partner. Number two, in cancer, patients die waiting. In autoimmunity, they don't. When a patient dies and you've started manufacturing, you've done the work, you've spent the money, but you're not getting reimbursed. Yeah. Somebody's got to allocate that cost. And number three, cancer patients have poor T cells. They've been beat up by chemotherapy. Autoimmune patients don't have that. We have one patient manufacturing failure. We've now manufactured 80 or so products. We expect it's not gonna be very different in the commercial sense. It's gonna be low single-digit failures. Those costs have to be allocated somewhere. So we expect our cost of goods should be as low as, frankly, anybody has ever been in the industry, and that, combined with the value proposition that we offer, right? The value proposition, which is you don't need to take IVIG every year for hundreds of thousands of dollars or an FcRn for hundreds of thousands of dollars per year to get, frankly, much less benefit than a complete response outcome that we've become used to seeing with autologous CAR T products. Got it. Helpful. Steve, for you, can you just share with us why you joined Cabaletta? I mean, I saw you purchased, and I was having a discussion with Steven, also, shares in the company. In fact, all the executives bought it. You don't see that, so what is underlying that conviction? It's everything that he just said. Both of these guys have said, quite frankly, yeah, I mean, if you look at the clinical program, you know, that David's outlined. And I'll tell you what, I mean, I've been through this CAR-T kinda rodeo a couple of times, you know, with different CAR-T programs. The interesting thing is, when you hear these astounding clinical results, I've heard that before. I think where the Street has struggled, and quite frankly, where manufacturers have struggled, is actually treating that total eligible patient population, right? You have this great data, so it's like, why we're not seeing the hockey stick? And the hockey stick's been not seen for a number of reasons, right? We talked about scalability, we've talked about lack of automation, we heard about high out-of-spec rates, et cetera. The reason why I joined here was the patient population that these guys have been talking about is fundamentally different than a cancer patient population, and because of that, you don't have a lot of that downstream issues around out-of-spec, et cetera, et cetera, that we were working with and struggling with and scaling with in other CAR-T programs. So it was a combination, all, with all of that. Not to mention, outpatient is for real here. It's super important. I need to touch on that for a second. I'm- Yeah ... I'm looking at the clock as well. The challenge, and this has been a challenge now, it's sort of a different challenge in the marketplace, right? Now, with more and more CAR-T programs coming online, the CARVYKTI program, the one that I was managing, is a really good example with that. You got big patient populations now hitting the inpatient setting in hospital. When you do quick market research, you're gonna quickly find out there's not enough bed space in the United States to accommodate all these CAR-T programs and patients. The beauty with autoimmunity is the fact that these patients are so much younger, they're much more mobile. They're the perfect CAR-T patient for outpatient therapy. There were things that with historically with cancer, because these patients were so late lines, it was very difficult oftentimes to treat in the outpatient setting. CARVYKTI paved the way for it. Based upon the last earnings call that I was looking at, over 50% of the time now, CARVYKTI patients are treated in the outpatient setting. That's a very tough patient to do that with. This is a very different patient profile. We will basically take some of that- Yeah ... some of those plays from that playbook and really put them on steroids, so to speak, and really push forward with that. Got it. So in terms of pricing, how conceptually you think about pricing, and then also, how does the reimbursement framework for cell therapy looks like in India? Yeah. Yeah, so I'll take the latter point first, because that's a very important one. To the other point of why did I come to Cabaletta, why did I buy the stock that I did? So, first of all, because the patients are younger, it's the first time ever where the hospitals in the United States will be dealing with a largely commercially insured patient population. That's never happened before. Mm-hmm. It's very important for those of you who follow this space, and for any of the hospitals who are listening, I think would agree to that. And as I'm talking with hospitals, and we're talking about this, they are jumping up for joy for the first time that they're actually gonna be managing through a highly insured patient population and not having to navigate through the whole DRG payment model through Medicare. So that's the first thing. The majority of our patients, anywhere between 65%-70% of all the autoimmune patients we will treat, are privately insured, so that's a really big deal for insurers. The second piece, the fact we talked about earlier, is not only is the payment better, the fact is the fact that these patients are much healthier, they'll be able to treat more patients more effectively outside the hospital in the outpatient clinics. Where I'm going with this is that delta that you've seen from the Street in trying to reconcile, why aren't these CAR-T drugs treating that eligible patient population like they should, given the clinical profiles that they have? It's because a lot of the time, they couldn't necessarily treat them all. You see it with other CAR-T programs today, because fundamentally, they're being all admitted into the hospitals. The point David made is a really important point, because oftentimes it's missed. What also turns on the CAR, the CAR-T ability for hospitals to go outside the hospital and treat in the clinic, is the fact that you have a delay in CRS. It's a really important point. When the CD19s initially launched, the first ones out, you saw a very acute spike in fever. You saw that also with the Abecma program. That immediately then triggered an inpatient admission for monitoring these patients. Unfortunately, then that triggered a DRG payment model. It was a cascading effect, a very negative cascading effect. In this case, we have a delayed CRS. Ironically, it's identical with what you see today with CARVYKTI, except it's in a much healthier patient population. So now they could dose a patient, monitor them remotely, or bring them back to the hospital every day, every hospital does a little bit differently, and actually be, and treat these patients more, much more cost effectively, and in a sense, that's a key differentiating factor. It seems like the bottom line is that economically, it's just a completely different model. Completely ... and more beneficial from a hospital standpoint, which have been the bottleneck for oncology. Exactly. It's been a huge bottleneck because, here's the challenge, right? So you have these big manufacturers scaling- ... to accommodate the market potential, and what you're coming down to is a funnel, where there's only so many patients you could pull through by treating them all in the hospital. That's fundamentally been a huge problem. We diagnosed that problem years ago when I was at Celgene. The problem was the profile of the products didn't allow for that safety relief valve, in essence, to go outpatient. Yeah. This one does. Pricing- Yeah Quickly. I mean, I think you have argued for high-value chronic biologic-type pricing. Just touch about the frame, like, frame what we should use. Yeah, yeah. Again, Steven did touch on that earlier. This is what the payers want, the private insurers want to see, is what a one-and-done therapy will look like as comparing it to historical therapies to treat myositis, for example. That'll be what we'll be comparing ourselves against, and it's what the, our payers are asking to see data on. Got it. David, couple question for you on the preconditioning- Yeah ... because I do think, and based on the feedback we have gotten, that could be paradigm changing, right? What has been the experience so far, where you are on the dose? What are the next step? What are we gonna hear next? Yeah, so we treated pemphigus vulgaris patients, which are also autoimmune patients, with autoantibodies, very similar to many of the other B-cell-mediated diseases. Of the 3 patients we've treated, we've actually treated more than 3 now, we've actually seen 2 patients showing very good responses at the same dose, right? At the 1 million cells per kilogram with regards to B-cell depletion, clinical response, as well as cytokine elevation and BAFF elevation, which is a marker for magnitude of B-cell depletion. And we've seen reasonably good durability out to 6 months. We haven't gone beyond that, but I think that pemphigus vulgaris patient population, we are exploring higher doses. We'll report on that later this year. In addition, we have opened up a cohort in the lupus patient population to study, starting off with that same low dose, with no preconditioning, as Steven had talked about, the patients who are probably most in need of no cyclophosphamide. I mean, the safety profile for the product is already very good. Could there be even more advantage with no preconditioning, so you don't have any of the burst effect, like CRS, low CRS? Yeah, yeah. Yeah. So I think the main thing here is yeah, that would be one, is there... We've seen a slight delay- Mm ... in terms of the B-cell depletion, and then the peak expansion may be a little bit later. And secondly, with regards to the safety, there's no cytopenias. Yeah. Neutropenia, leukopenia. If you have neutropenic fever, you have CRS grade one, you have fever, many hospitals will hospitalize out those patients and not treat them as an outpatient. So for the lupus studies, SLE and LN, I think there is a potential to go with no preconditioning regimen, right? So when, like, will you have data to inform that? Oh, we've already opened up that cohort, so we will have data this year. Okay, so that's the data that's getting- Yeah. Okay, maybe final question in the interest of time. Steven, how is, I mean, obviously, with the launch and, and all the stuff that you're doing, how are you positioned from a capital standpoint? What are the spend? Yeah, so, excuse me. We have been spending $10 million-$13 million per month. And as we build out commercially, I'm sure that'll go up a bit. But I think we're in the zip code where we need to be in order to build out the business and take advantage of all of the opportunities that are in front of us. So we're really, just as you hear from all of us, I'm thrilled with what we're seeing rese-cel's capabilities, and now we just need to continue to develop more data and deliver the BLA next year and all that's coming with it. Very good. Thank you, gentlemen. Thank you. Thank you. Okay, thank you. Good seeing you. Thank you so much.