All right, hi everyone. Welcome to our fireside chat with Connect Biopharma. My name is Jennifer Kim. I'm one of the biotech analysts here at Cantor, and I'm excited to welcome Barry Quart, CEO. Thank you for being here, Barry. Thank you very much for the opportunity. Always. Maybe to kick things off, can you introduce yourselves and run through the company's evolution over the last year or so? I think you joined fairly recently. Just over a year ago. Yes. So I think that's a great place to start. I have been at both large pharma and biotech for almost 40 years. I've run two previous biotechs and joined Connect in June of last year with a mandate to really change the focus of the company in terms of the development pathway of our lead product, rademikibart, and also turn the company into a much more U.S.-centric organization. This was a Chinese-based biotech formed by two Chinese scientists focused on monoclonal antibody technology. And the goal was to make a greater U.S. focus so that we had the opportunity to find some U.S. healthcare funds and increase the interest amongst the U.S. investor base. So in the last year, we've been quite successful in terms of identifying a very interesting, exciting pathway for development of rademikibart, as well as moving the headquarters to San Diego. Announced today that we've changed and got rid of the ADRs and now trading ordinary shares. Started filing the usual Ks and Qs. So for the investors, we should look like any San Diego-based biotech. Great. Maybe can you give us a snapshot where rademikibart stands today? Yeah, definitely. So rademikibart, which we consider a second-generation Dupixent, is an IL-4 receptor alpha antibody. And the goal for development was initially atopic dermatitis and asthma. And we have focused currently on respiratory diseases, asthma, and COPD. And the reason for that is that we have a very unique opportunity with rademikibart because in a previous phase II asthma study, we saw a very rapid onset of effect. And that gave us the opportunity to focus on treatment of acute exacerbations. And so we've completed, previously, we have data from phase II use of the drug in a chronic setting for both asthma and atopic dermatitis. But we're focusing on the acute setting right now in the airway area asthma and COPD. Okay. Outside of the decision to target the acute setting, are there other aspects of rademikibart that help support your view of this as a second-gen Dupi? Yeah, actually, they all kind of converge on the respiratory pathway. So we have, from the point of view of differentiation, what we believe is a longer half-life. We've demonstrated Q4 week dosing is highly effective in the atopic dermatitis area. We plan on pursuing Q4 week dosing on the asthma and COPD side as well. We also have a differentiated safety profile to Dupixent. Dupixent in the respiratory diseases, both asthma and COPD, has a very unique adverse event of increasing eosinophils very dramatically. That results in a large number of very serious adverse events being submitted to the FDA database. Again, just in the asthma and COPD area, it wasn't seen previously in atopic dermatitis. This gives us an opportunity to differentiate the product in terms of more friendly dosing interval, differentiated safety profile. In the chronic study, if we compare across trials, we see the greatest increase in airway function with rademikibart compared to Dupixent or any of the other biologics. That actually moves me to the next question. For people who may be less familiar with the history here, can you just go over what we saw in the phase II-B trial in asthma, what the key learnings were, and sort of what moved you to go into the acute settings? Yeah, definitely. So the primary endpoint in the previously conducted phase II study was FEV1. So FEV1 is the amount of air you can expel out of your lungs in one second. It's a very classic standardized measurement of airway function. And so that was the primary endpoint. Data was collected starting at one week in the clinic. And we saw very dramatic improvements in FEV1, averaging around 250 ml at that one week period, and then continued to be maintained or even improved over the 24-week study. But we also had data from home spirometers. So patients were given these devices to take home. And from that, we determined that this very dramatic improvement at one week actually was almost entirely there by the first day. So within hours of receiving the drug, we started to see improvement in the airway. And then the next morning, after the first dose, patients had over 70% of that one-week improvement. So that very rapid onset is what we've now turned into an opportunity to treat people having an acute episode of asthma or COPD. And why that's novel is that the current biologics have never been systematically evaluated in this setting. None of them have an indication for acute treatment. And in fact, in their precautions and warnings, it explicitly says, "Do not use to treat an acute exacerbation or bronchospasm." So all of the other biologics that are approved for asthma or COPD cannot be used in this setting currently. And so it would be a very unique indication for us in an area where there are millions of patients experiencing these acute episodes. Can you walk us through the size of that market and what are the points of unmet need? Yeah, definitely. So if we take a look at the asthma as an example, we have in our slide deck, most recent data was just published a few months ago on where patients go to get treatment for an acute exacerbation. And we know very clearly from healthcare databases that about a million patients a year with asthma go to the emergency room. About 1.3 million COPD patients go to the emergency department. And then when you look at where else they go, you see even greater numbers going to urgent care, greater numbers going back to their clinician, their pulmonologist or allergist for treatment of an acute episode. And so when we look at that pie chart, you see there's almost four million patients that would be addressable with a drug to treat acute exacerbations. Just to note, there has not been any drug development or novel drugs approved for acute exacerbations for over 30 years. We're still using the standard of care of prednisone and a bronchodilator. That's it. Okay. And then where would rademikibart fit alongside standard of care? Certainly for initial development, we're focused on patients coming into the emergency department. That's an area where we believe we can produce very dramatic improvement in airway function very quickly. The other thing that's underappreciated with these exacerbations is that almost 50% of patients treated and walking out the door will come back to the ER or to another point of care within four weeks. While we are treating them effectively to get them out the door, we're not treating them very well in terms of preventing them from getting worse or having a second episode in that four-week period. And so with 20%-30% of patients going back to the ER, which by the way, it doesn't get paid again if they come back within four weeks, it's an opportunity to really demonstrate a health economic benefit if we can keep those patients healthy and not coming back to the ER or some other point of care. That's probably a good segue into your ongoing trials. Can you just walk us through the designs of the two phase II programs? Yeah, most definitely. So these are designed in parallel studies that what we're looking at is patients having an acute exacerbation with the underlying disease of one study is asthma, one is COPD. Very similar mechanisms in terms of the inflammatory pathway and the importance of IL-4 and IL-13 in a subgroup of these patients. So that's the population that we're targeting, people who have T2 mediated airway disease. And at the time of an exacerbation, they would receive standard of care, and then they would be randomized blinded fashion to either receive a single dose of rademikibart or placebo. And then we would follow that patient for 28 days looking to see if they got worse or if they had a second episode. And so in both situations, they would be coming back to receive additional treatment. And so they would be considered a treatment failure. The goal is to reduce the incidence of treatment failures by at least 50%. We expect the control arm to be about 45% within that four-week period. Okay. Is that how the studies are powered to what they're powered to show? Correct. Okay. And then how is enrollment going for each of the trials? The studies are just starting up as I know, you're familiar. You don't just turn a light switch and get every study that every site that you want up and running. We're right now in the process of getting sites activated, getting drug out to sites. The sites that have initiated already are moving along very nicely in signing patients up. There's two pathways to enroll a patient in this study, and it's a very novel approach. One is, as you might imagine, a patient comes into the ER with an exacerbation. We are working with several ERs. That patient could be enrolled at that time. But because that's a very hectic period of time, patients have difficulty breathing, giving informed consent may be challenging. We have a second approach to enroll patients, and that is patients can be enrolled by their pulmonologist pre-enrolled. So we get informed consent, we sign that patient up, give them a card that says, "If and when you have an exacerbation, call this number and go to this and we'll meet you there." And so that's going very well with people being pre-enrolled. And the expectation is at least half of those patients will have an exacerbation over the course of the next six months. Okay. Is the top line still expected in the first half of next year? That's correct. Okay. And other than the primary endpoint, what do you see as sort of the important efficacy endpoints and what do you need to show on those endpoints and safety? Yeah. So the secondary endpoints here are really just as important as the primary endpoint because it's information that nobody's really collected previously, so we can't go to some literature and figure it out. It's really looking at how quickly the airway improves in these patients. So looking at serial FEV1 collections, how quickly their symptoms abate. And so really it's a focus on the acute setting that a couple of days of the acute exacerbation will provide a great deal of information in terms of future studies. And I think there's an interim analysis that's embedded in the studies. Can you just walk through what that entails? You're absolutely right. So because there hasn't really been a lot of studies done this way, in fact, there's really only one. And a lot of the powering decisions came from that data, which was published earlier this year. We want to make sure, just as a double check, that we have appropriately powered the trial. So when about half the patients have been enrolled, we have a blinded, unblinded group that will look at the data and make sure we're seeing the correct underlying treatment failure rate in the control arm and that we've appropriately powered the study. So it's not designed to early terminate. It just provides insight back to the company that, yes, you powered it correctly, or no, you need to enroll 20 more patients in our arm or something. Okay, so no futility angle. Correct. And then you said 20 more patients. What are the different scenarios or outcomes of the interim? I can't imagine we're off by any more than 20 patients if we are off at all. There's no explicit limit on the information that they'll transmit back to the company. Okay. Since you touched on it, how might one expect the control groups to behave? And is it too early to ask what you're seeing on a blinded basis so far? Yes, it's way too early, but the information that we use for powering and the expectations comes from the ABRA study, which was published in Lancet earlier this year, and in that study, it showed that the control arm, so very similar design, the control arm, which was both asthma and COPD patients, had about a 45% treatment failure rate at four weeks, so that's what we are expecting in our trials. These patients should look pretty much like patients treated here in the U.S. Almost every country uses the GINA guidelines in terms of treatment, and so treatment is very similar. This was done in the U.K., but treatment of patients is very similar there, and in that study, they used benralizumab as the biologic that they're giving to these patients having an acute episode. Two really interesting things from that study. Number one was the underlying rate of 45% at four weeks. The other was confirmation of what we had anticipated, and that is it usually takes days to weeks for biologics to start working, reducing airway inflammation. In the case of benralizumab, it was about three weeks before the curve started to separate. With our drug, where we see overnight benefit, significant benefit in terms of airway improvement, we believe that there's an opportunity to do much better than benralizumab and show very rapid onset of that benefit. Okay. And just to clarify, the interim analysis is based on the evaluation of the control arm only, or is it based on like a? They'll look at the difference and make sure that, again, make sure the study is powered correctly. Okay. And then in terms of the top line data, can you walk through how you're thinking about the disclosure and the level of disclosure that we should expect? Top line results, obviously, it would be the primary endpoint. And we will certainly look at all of the key secondary endpoints. I suspect we will most likely give that information as well. But it's a little premature to say categorically what data, aside from the primary endpoint. Okay, and the primary target there is a 50% reduction. Correct. Okay. You've also talked about just thinking beyond the phase IIs. You've talked about working in both the chronic and acute setting for the phase III program. Could you walk through what that could look like? And do you have a sense on the potential design costs and timing of that program? So what we found in market research was that clinicians, number one, were very excited to have the opportunity to use a biologic in the acute setting. As I said, they have not had anything new to treat these patients for a very long time. And so that was exciting. But what was particularly interesting was that the vast majority told us that we should also develop the drug chronically because if the patient did well in the acute setting, they would almost always want to keep that patient on the same drug. So even though we initially looked at maybe just developing the drug for the acute setting, it was overwhelming that clinicians wanted to continue the patient on the same drug. So for an ultimate phase III program, we would want to do both acute development as well as a classic chronic development program. The plus side for us is there are partners in China. We've licensed the drug to a Chinese pharmaceutical company. They are currently conducting a large phase III chronic asthma study. And so our hope would be that we could use that as one of two chronic asthma studies. So we'd need to do one large chronic asthma study in the U.S., Europe to submit along with the study done in China for the chronic indication. And we need to do two phase III studies in the acute indication. Okay. And a sense on potential costs and timing? You know, the acute studies are remarkably efficient from a cost point of view and time point of view. They're in the $12 plus million range. And so we don't think phase III will be really any different than the phase II studies. We believe that the current studies are highly powered, and we would probably not do something very much larger. But obviously, we'll have the learning from the phase II studies. A phase III asthma study, probably $50-$75 million. How are you thinking about dosing in the different settings? One thing that I've learned from selling drugs in the hospital market is that no matter how beneficial to patients, you still have to demonstrate it's cost-effective to the hospital. You can't sell a biologic at the current WAC price for Dupixent in a hospital. It's too expensive. Our goal is to have a presentation of the drug for the hospital and then a different presentation at a more premium price for outpatient treatment. There would be, for example, a hospital-use-only vial for acute treatment and then prefilled syringe or auto- injector for the outpatient treatment with different price points. Would the transition between an acute because you said that might be an advantage that you would want to keep your acute patient maybe on the same treatment? Would that present any challenges, like the different presentations or no? No, not really, because patients they get a dose. And we currently have a small phase I study looking at IV dosing, which should produce an even faster onset of effect. So let's say, for example, in phase III, we pursue an IV dose. So you'd have a vial with an IV dose, which, by the way, is smaller than the sub-Q dose. And patient does extremely well. They see their pulmonologist in the outpatient setting two weeks later. Clinician decides, you know, it's time for you to be on a biologic chronically. They send them a script into the specialty pharmacy. Patient gets a box with an auto-injector. Fair enough. I meant to ask this before, but with the phase II trials, both are guided to first have 26. Do you anticipate to disclose those in tandem, or does it depend on enrollment? I think that while we don't know really anything today, I think it's probably unlikely that they will both enroll simultaneously. It'd be great if they do, but chances are more likely that one goes faster than the other, my guess is that when we have the data from the first one, we'll probably put that out when it's available, then if the other one is lagging a week or two, we might wait, but otherwise, chances are they'll come out in sequence. All right. I have to ask this. Can you remind us where your balance sheet stands? And then looking out over the next 12-18 months, what are sort of the key value drivers you would point investors to? Yeah, absolutely. So at the end of second quarter, we had approximately $72 million, which is enough to complete the current trials that we're doing and cash down to $27 million. So catalysts this year, I think we'll have some potentially very interesting data from this phase I IV study that we're doing. We're now going to be transitioning into some patients. It's a small study, but really very focused on the biology. Why does our drug work so quickly? It works too fast for it to be inflammation. And so we think that, in fact, there is an opportunity to show a direct bronchodilating effect by blocking IL-13 and IL-4. So we'll be looking at that, and we should have that data before year-end. And then the next very important catalyst would obviously be the phase II data next year. Okay. Looking forward to it. Barry, thank you so much for joining us today. Thank you very much. Great questions. All right. Thanks, everyone.