Welcome, everyone, to this session of our May 2025 MicroCap Conference. I'm Alex Hantman, and I serve as an equity research analyst here at Sidoti & Company. Today, we're pleased to be in conversation with CFO Alex Kelly and VP of Investor Relations Naresh Tanna of Precision BioSciences, ticker DTIL. During the presentation, please feel welcome to submit questions using the Zoom Q&A interface at the bottom of your screen. After the presentation, we'll open to your questions. With that, Alex, I'll turn it over to you. Great. Thank you very much, Alex. Thank you to the Sidotti team for welcoming us to the conference again this year. Really happy to be here. Before we begin, I just would like to remind the audience that some of the comments and statements that we make today might be considered forward-looking statements. I would ask all of the investors to refer to our most recent 10Q and also to our 10K. Those documents identify risk factors that might cause our actual results to differ materially from any of the statements made today. With that said, let's move on to the story about Precision BioSciences. Precision BioSciences is a clinical stage in vivo genetic company. I think when we were last together, we were still a preclinical company. As of the end of 2024, we are now in the clinic with our own wholly owned program for hepatitis B. It's called PBGENE-HBV. We are now treating patients in three different sites. We have five countries that are available for this clinical trial, with data readouts coming this year for hepatitis B. The next program that we just announced last week is a program called PBGENE-DMD. This is a gene editing approach for Duchenne muscular dystrophy. There's a lot of exciting things about this program. It's a big market opportunity. We think that with our gene editing approach, we have a chance to deliver what's not yet available to patients with Duchenne muscular dystrophy. That is a functional benefit that improves over time. We will have that program. We're planning to file an IND or CTA later this year, with data expected in 2026. Finally, we have a partnership with Eacure, which is a private company based in Pennsylvania. They are already in the clinic with a phase I program for OTC deficiency, in particular, severe OTC deficiency, which affects infants and newborns. They've had very encouraging data from this program so far this year, and more data is to come. The important thing about these three programs is we do expect to be able to achieve data readouts from phase I clinical data for all three programs within our current cash runway. Next slide. Real quickly, what is ARCUS? ARCUS is our wholly owned and novel gene editing tool. Our founder, Jeff Smith, and co-founders invented this technology. We own the intellectual property around this with more than 65 patents just for ARCUS for in vivo gene editing. Every time we make an ARCUS nuclease, we generate more intellectual property. This is a great place to be and a place that is very important in terms of gene editing. It is not CRISPR. Many people have heard of CRISPR. ARCUS is novel, not at risk of patent disputes, and at the same time, able to do more than CRISPR technology can. That is because we have three unique features of ARCUS: one, the cut; two, the size; and three, the simplicity. Let me just spend a little bit of time on each of those advantages. If you can go to the next slide, Naresh, on the cut. ARCUS makes a very unique cut. It is called a three prime cut, three prime overhang cut. It is illustrated on the left on the slide. You can see it is a staggered, like a staircase cut with ARCUS. You can see it is very differentiated versus all the other cuts that are represented on the right side of the slide, all the way from a Cas9, which is a blunt cut straight across both strands of DNA, which makes rejoining those two cuts very difficult. You also see some cuts like a TALEN or a Cas12, which kind of resemble an ARCUS cut. There is a little bit of a staircase cut, but it is going in the wrong direction. DNA is replicated in the different direction, the way that ARCUS is pointed. It is more efficient at driving homology-directed repair of those edits. Next slide, please. The other important feature about ARCUS that is differentiating is its size. ARCUS is the smallest gene editing tool out there. We can deliver ARCUS both via a lipid nanoparticle. We have a partnership with Acuitas that enables us to do that. It can also be delivered by an AAV, which is a viral vector. Why does that matter? An LNP is exquisite for getting to the liver. Diseases that affect the liver are easily addressed with LNP. ARCUS can do that. Other tissues are not as easily addressed with a lipid nanoparticle, like the eye, muscle, brain, and even hematopoietic stem cells. Those are not addressable with a lipid nanoparticle with today's current technology. ARCUS can also be delivered via AAV. There is also another feature about why the size matters. That is because with ARCUS, it is so small, we can actually fit not one, but two different ARCUS nucleases into a single AAV. An AAV is a relatively small delivery vehicle. It is much smaller than a lipid nanoparticle. This visual represents the fact that ARCUS is so small that two of ARCUS nucleases can be fit into one AAV. Meanwhile, if you look at the other gene editing technology illustrated by the black lines around the circle, those products do not fit even one of their nucleases into an AAV. Next slide. You will see this is important for one of our programs coming up. Final big advantage for ARCUS is the simplicity. It is a single protein that is designed to both cut—sorry, to recognize its cut site and to make the cut site with one single protein. CRISPR, for example, requires a guide RNA, as does a prime editor and a base editor. With ARCUS, we do not require a separate piece of technology to identify our cut site or to make the cut. Let's keep moving. The next slide just illustrates a key point for ARCUS. ARCUS is capable of doing many different types of gene editing cuts and edits. Unlike other technology, which is really designed for simple gene edits, which we call the low-hanging fruit, and those are usually knockouts in the liver, ARCUS is able to do much more even beyond the liver. Those are the areas that we're focusing with our program. Next. Real quick, I mentioned the OTC program with our partner, Eacure, briefly earlier. This is just a snapshot to show you in the first patient treated, an infant treated with OTC deficiency. They achieved a complete response, and the product was well tolerated. Why is that important? The mortality rate is extremely high with OTC deficiency when it presents in its severe form in neonates. As many as 74% of those children will not see their first birthday. What's important here? We treated a patient, Eacure treated a patient, and they achieved a complete response. That patient is now well past their first birthday, and they're on a normal protein diet again. Really strong validation for ARCUS. Next up is our hepatitis B program. That's really the first application of ARCUS. Let me show you what's important about that. The unmet need here is very large. There's about 300 million people in the world with chronic hepatitis B. That's the ultimate opportunity. Even today, being treated with the current standard of care, which is a nucleoside or nucleotide analog, there are more than 5 million patients being treated today with nucleoside analog. The market opportunity in hepatitis B is extremely large. Next slide. Why is it important to treat patients with hepatitis B? There is also a really high preponderance of patients that will develop either cirrhosis or hepatocellular carcinoma or liver cancer as that disease progresses. The data shows that up to 40% of patients with chronic hepatitis B will ultimately develop life-threatening complications like cirrhosis or HCC. Very important reason for getting those patients into treatment. Next. Now, how does our program work? Our program tries to eliminate the virus at its source. One of the things that happens in chronic hepatitis B is that the virus sets up shop in liver cells called hepatocytes in the form of CCC DNA. There is also some of the viral DNA that gets integrated into the human cells as well. Arcus is targeting the root cause of disease with this single component. Its small size is able to get into this area, which other technologies or other treatments today are not able to do. Next. This slide just quickly looks at the mechanism of how Arcus works. As I mentioned, Arcus is designed to eliminate the CCC DNA, which is the genetic material for the virus itself. We are trying to eliminate that. That will stop the downstream effects of having that virus in the body. On the right side of the slide, you see some grayed-out boxes. Those are the other mechanisms that are currently being deployed commercially, or they're in the clinic to development for chronic hepatitis B. The key point is they're all working downstream of the root source of disease, the CCC DNA. By going after the root cause of the disease, we think that we have an opportunity to establish more cures for patients living with chronic hepatitis B. That bar right now is pretty low. If you look at the--go ahead to the next slide. If you look at the current treatments that are available today, you're getting single-digit% of patients who get to what's called a functional cure. Frankly, the patients need better than that. Clinicians are telling us that they need functional cures in the 30% or higher range if they're going to really have a chance of eliminating chronic hepatitis B. Obviously, we have a lot of room to go with our program. But this is what we're trying to get to. We're trying to get to functional cures in patients living with this disease. Next. The next slide is talking about our Eliminate B trial. That is our phase I trial for chronic hepatitis B using our program PBGENE-HBV. As I mentioned earlier, we have approval to start these clinical trials in five different countries. Three of them have already started enrolling patients. Two sites, those in the U.S. and the U.K., which are more recent approvals, will be enrolling patients later this year. Next slide. The design of this trial is unique because we're looking at multiple ascending doses. The ascending dose part means we're going to continue to push the dose up to make sure we get maximal effectiveness. The multiple part means that at every dose level, we're going to treat patients three times. We're going to get three dose administrations spread over the course of four to eight weeks, each dose. We're going to then check to see the safety and the efficacy at each of these dose levels after we get all three treatments in. Right now, we are at dose level one. We've dosed all the patients in this trial at dose level one twice. We will dose them one more time. We will look to a data readout after we've dosed those patients three times. In the meantime, now that we've established safety at that low dose, and typically, it takes all three patients need to see the drug at least once. If the drug is viewed as safe at that point in time, we can also simultaneously start moving up the dose to dose level two. Right now, we've treated one patient at dose level two. We just showed some safety data last week at the ASGCT conference showing that at dose level one and also after the first patient dosed at dose level two, we see a very good safety profile for this program, which is really encouraging because in phase one, principal goal was about safety. Because we're treating a virus and patients that actually have the virus, we also want to start to see efficacy as well. We've already seen signs of efficacy in the first dose level. Okay. Next slide. Next slide just gives you a quick synopsis of what we've seen so far. I mentioned the five approvals by countries around the world, but I did not mention that we also have fast-track designation from the FDA that was received in March. That is quite an endorsement for the need for this program, but also the novelty of it as well. We hope to work with the FDA to quickly bring this product through the clinical trials and have discussions with them with frequency as well. We have shown safety now at the first two dose levels. We have also, in the first dose level, seen that there was substantial antiviral activity after just one dose of the product. As we get past the third dose in all three patients in cohort one, we look to say more about the efficacy for the program. Final slide here just is a recap of what we have seen in terms of safety for the drug. We've had, once again, patients at dose level one, which is 0.2 milligrams per kilogram, as well as one patient who received double that dose or 0.4 milligrams per kilogram. No serious adverse events have been reported. They've generally been mild or transient in nature. We've seen no cumulative adverse events after at least two administrations either. Really nice profile developing. This will give us the ability to explore how do we make sure that we get the S-A ntigen gone so that we can have the chance of achieving a functional cure. Next. Naresh, why don't I let you take the DMD slides? I know you spent a lot of time and energy on this. Thank you, Alex. Our second wholly owned program is called PBGENE-DMD. As Alex mentioned, this program is utilizing two ARCUS nucleases in a single AAV to really get to the mutation that affects 60% of patients with DMD. We will talk about that. This is really a unique opportunity for our company because this is a disease with an immense high unmet need. Patients with DMD, unfortunately, get this disease when they are born and unfortunately graduate with severe complications, regularly have them become non-ambulatory in their teens, and unfortunately succumbing to cardiac or respiratory death in their 20s. Immense unmet need in an area that we really can apply our ARCUS technology to. There has also been clear regulatory guidance here as of late. Multiple companies have advanced programs forward and really help trailblaze a regulatory framework based on the clearer endpoints, as well as the number of patients that are needed. Right now, you need anywhere from 11-40 patients to really seek approval through a process called the BLA approval, which is really meaningful for a company like ours and does provide a clear regulatory framework. If you take these two variables and put them together, this is a unique area that's a growing opportunity where the market welcomes innovation, given patients need better therapies, and there's a clear regulatory guidance to get these therapies to patients. As I mentioned, this is just a quick summary. Again, this is a disorder of the muscle. Given its genetic disorder, it does affect different tissues and cells of the brain, but mostly skeletal muscle. You will see issues both the heart as well as respiratory muscles like diaphragm and intercostal muscles as well as skeletal muscles. These all lead to the complications that I mentioned. Unfortunately, the majority of patients do succumb to an early death in their 20s. While this is not as big as HBV, it is still a very sizable and meaningful opportunity, primarily driven by the unmet need that I mentioned. There is also a large number of patients globally. There are about 300,000-400,000 patients with DMD globally, 15,000 patients here in the U.S. alone that have this as a prevalence in the world. Even if you look at this from an annual perspective, there are about 20,000 births a year in the world with DMD and 550 births a year in the U.S. Again, a big unmet need and a growing population as well as a growing market opportunity given new therapies are needed here to really help these patients. Our treatment, PBGENE-DMD, is really designed to really overcome the limitations we see in the market today. As Alex alluded to in the opening, you're not seeing therapies that provide functional muscle improvement. That's really what these patients need over time to be able to overcome the limitations of this disease. Our therapy really is a novel mechanism. This is a first-in-class opportunity to use a gene editing approach to really help the majority of patients, up to 60% of patients, really by correcting that human dystrophin where the mutation resides. Our therapy is unique that we're trying to help the patient natively or through their own body repair their root cause of disease so they can overcome this disease and produce that protein that's necessary or get close to it. We've also designed our therapy for safety. Given our current constructs, we're designing this for lower doses of AAV, which is really important for patients from a safety perspective. Just quickly to summarize, I won't spend too much time on this cartoon. As alluded to, you can see in the top row here, we're delivering two ARCUS nucleases in one AAV. That really then allows the ARCUS nuclease to go into the body and locate its target on the dystrophin gene and really excise exons 45-55, thereby letting the gene then re-ligate back together and form a functional dystrophin protein. That protein is absolutely essential and missing in patients who have DMD, which really lets them overcome the issues from a muscle scaffold perspective and a muscle integrity perspective. Just quickly to show you what has really gotten us excited and our stakeholders excited, right, we have really been able to show preclinically that we are able to deliver functional improvement over time, which has really been unique in this space. We did a preclinical study in a diseased mouse. This really is the gold standard preclinical model given these mice are able to get DMD. You can see when we normalize for untreated disease, if you are typically untreated and healthy, you will see a functional improvement over time from three months, six months, nine months. You can see on the two bar charts on the right here, at 1e14 or even 3e13, we are able to show a benefit or a functional improvement from three months to six months and maintain that through nine months. This is really measuring the force of the muscle in the diseased mouse. This is really novel, I would say, given most therapies today are not showing an improvement over time. At best, they show a stabilization or a reduction in the decline of patients' functional improvement. Again, we're really motivated by this. It's really this data that led us to nominate this as our second wholly owned program last week. Secondly, what's important here is there are cells called satellite cells, which are really the stem cells for muscle. In our therapy, we've demonstrated that we have the ability to edit stem cells, which is really important for long-term therapeutic benefit because it's these cells that eventually give birth to more mature types of muscle cells. If we're able to really fix that mutation at its root cause, we can give birth to more mature cells over time. This is absolutely critical for long-term durability, which is also very important to patients in this space. Let me just quickly touch on why our protein is different and why it's improved on what's currently available today. On the top, you can see the full-length dystrophin. This is the actual protein. All the boxes there are actually the domains of what make this protein when it's fully functional. Today, what you see in the middle row, there are the synthetic microdystrophins. It's actually a therapy approved today and many more that are kind of in development. They're really giving you a shortened or truncated version of that full-length dystrophin. A lot of the functional domains and proteins are missing, right? These are exogenously delivered in a hope that the patient will retain some function. While it does give you some short-term benefit, we're not seeing long-term functional improvement, right? That is really why we've designed our therapy to ultimately deliver to the patient their own version of the corrected dystrophin protein, which is what you see on the bottom. Through our technology and through that excision, the body is able to naturally produce a corrected dystrophin protein, which you can see is almost near full-length to the full-length dystrophin on the top. This is a huge step forward from a protein perspective and one that we think will give proven functional benefit over time. What's most important here is this is a protein that we already see in a subset of patients who have Becker dystrophin or Del 4555 dystrophy. A lot of these patients are mild, asymptomatic, and live into their 60s and 70s, not into their 20s as you see with DMD patients. We have a real-life animal model, if you will, with patients that are walking around today with this version of the functional dystrophin that we are generating, which is near full-length. We have evidence in the population that this is a much better phenotype. Here's a depiction of that, right? On the left, really being a DMD patient. Again, lifespan goes into late teens or 20s, a lot of issues with mobility, cardiac issues, neurological impairment, etc. What we see on the right are patients who have the protein that we're trying to restore, right? They can live into their 60s and 70s, often be asymptomatic or mild and have normal respiratory function. This is the ultimate therapeutic goal here and one that really gets us motivated. Again, we are targeting a product profile here for DMD, really keeping the end in mind, one that can ultimately deliver functional improvement over time for patients. That's absolutely important. Show durability over time. Again, as you saw with our potential for satellite cell editing, we can impact up to 60% of patients, not subset of patients as some therapies today do, and really correcting that human dystrophin gene at its root cause and natively producing it through the body, right? This would be a single administration, so it's convenient. We've seen signs of good safety and really being able to reach a broad type of muscle. Alex, I'll hand it off to you. [crosstalk] Maybe you can close this out. Great. There is a lot of excitement in Precision BioSciences. It is great to be in the clinic with our lead program for hepatitis B. It is great to see the validation coming off of the OTC program with our partner, Eacure. We've got $100 million in the bank as of the end of March. We think that that is sufficient to give us a cash runway well into the second half of 2026. As I mentioned earlier, why that's important? Because between now and the second half of 2026, we're going to see all three of these programs advance to the place where they're in phase I and generating clinical data, which we think will be meaningful for shareholders and we think ultimately meaningful for patients as well. Thank you very much, Alex. Happy to take any questions if there's time. Absolutely. Thank you very much, Alex and Naresh. A lot of compelling information here. Maybe we could start a little bit about something you mentioned, right? It's unusual to have a few shots on goal for positive clinical data. Now you're a clinical stage biotech company with plenty of runway. Again, that doesn't look like most companies. There are a lot of companies claiming precision with gene editing. I think you have some interesting data from ARCUS. Could we talk a little bit about the degree of efficiency and functional improvements that you're seeing and maybe talk about the safety that you're seeing with no off-target editing or stuff like that? Yeah, let's start with safety first. I think the efficacy is obviously paramount, but without safety, we'll never have a chance to get there. We're really proud of the safety of the ARCUS nucleases that we generate. We're also extremely proud of the scientists that work kind of behind the scenes to make sure that when we're designing a nuclease, we test it thoroughly to see if there's any risk of off-target effects. If there are, guess what we do? We redesign the nuclease to get rid of those effects. We have the ability to protein engineer and to make small little tweaks to the nuclease to make sure that we get to the right safety profile as well as getting to the right profile that will establish efficacy. Excellent work there by our team. I do not think any other gene editor has the ability that we do to make such modifications to establish safety and efficacy to our nucleases. I think in terms of the efficacy data, preclinically, we have seen it in our hepatitis B models. We have got a lot of confidence in what we have seen with not just one model, but multiple models in preclinical to try to give us the best chance of predicting what it will look like in human patients. We already see with the OTC program that there is a complete response in the first patient treated there. In the hepatitis B patients, even at the lowest dose after a single administration, we're seeing safety and we're seeing efficacy as well. It gives us a lot of optimism for the future. Absolutely. For folks newer to the name, but very interested in the gene editing space, they might take a look at the stock and wonder what are sort of the trends in the stock price that's lagging the company's progress because I know you've had a lot of exciting announcements. Maybe, Alex, we could get your perspective on what the street might be underappreciating. It's a good question. You see on this slide, we've got $100 million in cash. Unfortunately, that's more than our market cap is at this time. We think that there's a lot of undervalued biotech stocks, in particular in the space that we're in. That's been the result of the last four years of high interest rates, high inflation, and lack of investor strong interest in this space. It's also been because we were out of the clinic for a while. It wasn't until the fall of 2024 that we went back into the clinic with our hepatitis B program. I think that's an opportunity for investors to say, "Hey, wait a minute. There's something new going on at Precision. Let's see these data points come out." We had data last week in the ASGCT. We had data two weeks ago on safety that presented at the ESO conference in Amsterdam. We had multiple data readouts at ASGCT around other programs. The data's starting to come, but the clinical data, I think, is what investors are really focused on. Getting more clinical data from hepatitis B, especially on the efficacy side, I think will really open up investors' eyes to this company. If I can add to that, I would say we're moving this company forward with one-fourth the headcount of, let's say, other gene editing comps and one-third the budget of OpEx. I think we're being really efficient and good stewards of capital and really moving these programs forward to these inflection points that you see. It's great context. It's in a very exciting space. We are at time, but I'd like to thank you very much for sharing the Precision BioSciences story with us, Alex and Naresh. I'd also like to thank everybody listening for spending time with us today. You're welcome, Alex. It's great to be here again and look forward to the next time. Thank you.