Hi, everyone. My name is Maury Raycroft, I'm one of the biotech analysts at Jefferies. I'd like to welcome the Precision BioSciences team. Maybe if you guys want to give an intro and a brief intro to the company as well. A lot going on with the company, I'll let you take over. Thanks for joining us today. Sure. Why don't you guys introduce yourself first and I'll go last. Adam? Sure. I'm Adam Mischler, Translational and Research Lead of our Duchenne Muscular Dystrophy Program. Emily Harrison, Lead of the HBV Translational program. Maury, thanks for having us. Michael Amoroso, President and CEO of Precision. Precision is a gene-editing company, in vivo gene editing only. We are applying our proprietary ARCUS technology, which has some very unique properties to it. We talk about the cut, the very unique cut type, the size, and the simplicity. Those have some advantages with the types of programs, how you can deliver the gene editor, the type of repair mechanism for different functions like excising or adding function insertion. We apply that in our clinical programs where it makes the most sense. Precision is out of Durham, North Carolina, been public since 2019, have about 100 employees, and right now we are focusing on HBV, chronic hepatitis B. We just showed at the EASL Congress some really groundbreaking data of what PBGENE-HBV, our ARCUS gene editor wrapped in an LNP can do in chronic hepatitis B, directly eliminating cccDNA. We'll start in the clinic in the second half here in Duchenne Muscular Dystrophy very soon. We've got an IND approved. We have our onboarding sites, Next step is clinical initiation. Got it. Yeah, it's a great intro. You mentioned the updated EASL recently. There you had the first demonstration that cccDNA can be eliminated from the liver of a patient with chronic HBV. What's been the feedback from KOLs and investors since that update? Yeah. Emily was on the ground in Barcelona, and maybe I'll let you start of some of the buzz and excitement we heard in Barcelona, and I'll kind of cap us. Yeah, I think this is something the field has been waiting for decades to try to find a technology that can directly target and eliminate the cccDNA. There was a huge positive reception at the data showing that we can actually cut and eliminate cccDNA to drive, importantly, the loss of a key biomarker for cccDNA, pgRNA. There was a very positive reception. Yeah. I would say, Maury, obviously, we spent a lot of time together in the last week or so. I'd say the understanding that you could dream about a complete viral cure, right? I'll remind everybody, cccDNA is the only source in this chronic hepatitis B that makes infectious virions that can make replicating virus. It's during that stage of replication where some virus gets integrated in the host genome fragments, but those can never replicate. Those are not replication active. That's when cancer happens in patients. You really need to cure the source. To date, in drug development in HBV, we have tried anything we could do with the tools we had, targeting downstream viral transcripts and markers to try to turn the immune system on to attack the cccDNA, but we've never been successful as an industry. This is the first time we have proof of direct targeting and elimination, biopsy-proof, blood marker proof with pgRNA of elimination of the replicating viral source. Got it. That all made sense. You mentioned the pgRNA which was a key part of the update. How established in the field is the use of pgRNA as a direct biomarker versus traditional S antigen that can be assessed via a blood draw? Yeah, I'll start and then ask the team, Emily, to weigh in. I think pgRNA is obviously a very understood and collected biomarker, but it comes down to the biomarker for your mechanism. Remember, it was important to us that we needed a sole biomarker, not sole source biomarker for cccDNA elimination. These patients are controlled on NUCs. The FDA endpoint is very clear. It's HBV DNA eradication, virus, replicating virus, once you're off nucleoside analogues and off treatment. All pgRNA is for our mechanism, it is upstream of where the NUC works, and it is only produced from cccDNA. Every molecule of pgRNA is the precursor to package and make one molecule of infectious virus HBV DNA. pgRNA is well understood, hasn't been used as a lead biomarker, Maury, because as I said before, no one's ever directly targeted cccDNA. The FDA endpoint, crystal clear HBV DNA. pgRNA is our biomarker to eradicate, eliminate, and know when we can start to stop our NUCs, when we have the right dose and schedule. I would say it's very similar to how S antigen is used on other mechanisms of action. Other mechanisms can't target cccDNA. They try to shut down the S. What we've seen again is that's never turned into a true viral cure eradicating cccDNA. In fact, what is a functional cure, the endpoint that almost everybody uses today in HBV? It means you have viral suppression, not elimination of your HBV DNA and your S antigen off of treatment. However, it's not been a good predictive marker. We've used S because that's the tools we have, but we only have a 3% functional cure rate in 50 years. The bepirovirsen data just came out. That's a step forward for patients. Again, it's still not a viral elimination and eradication of the source that makes virions infectious particles. We're really excited, and I heard some of you guys wrote last week about the next generation of what HBV could look like, having a foundation of therapy directly targeting cccDNA like PBGENE-HBV. Emily, anything you'd like to add there about pgRNA? I think the one point I'd like to add onto that, Michael, is that there are a number of studies that have been done to understand what biomarkers are predictive of safe nuke withdrawal and effective nuke withdrawal in patients that have been on NUCs for a period of time. S antigen has been used, but there is a growing number of studies supporting that pgRNA may even be a better marker of safe nuke withdrawal than S antigen. We are evolving with the field to appreciate the importance of both cccDNA and the biomarkers that track cccDNA as an important marker of viral cure and sustained NUC withdrawal. Great point, Emily. One last point on this. S antigen is still a very important secondary marker of PBGENE-HBV. Think about it comes from two sources, cccDNA, the most important source, because that allows viral replication, and it comes from those integrants I talked about before, after the fact, those fragments that cannot replicate. Of course, if we're eliminating the viral source, S antigen's going to come down. We had a homogeneous effect in our data on 15 patients, somewhere between 35%-70% substantial reductions in S antigen. It's just not the sole biomarker for PBGENE-HBV because it's not specific to cccDNA. Got it. Based on your comments and the other studies that Emily referenced, with the pgRNA, if you're seeing patients that have that eliminated, that should give you more confidence to stopping NUCs rather than seeing the S antigen decrease. We agree. Yes. Okay. It is the precursor for HBV DNA. Right. Maybe jumping into the data a little bit more, you talked about cumulative editing after three doses. Do you have a sense of the kinetics of the cccDNA elimination and the expected dose response? What is the theoretical ceiling? Emily, why don't you start? In terms of the kinetics, the editing happens fairly quickly with the ARCUS nuclease expression peaking one to two days after. We think of one to two weeks complete editing has occurred, so that's sort of the kinetics we're looking at. We can see fairly rapid declines in biomarkers like pgRNA, whereas other modalities like NUCs, that erosion takes decades. That's the kinetics. For a dose response, right now, when we're looking at pgRNA in this patient population, we're seeing pgRNA loss across all the dose levels and schedules that we had pgRNA positive patients. Right now we're thinking there's a good flexibility to find that right therapeutic window considering both safety and efficacy. We're collecting more data from patients in our.4 mg/ kg and.65 mg/ kg cohorts to really nail down what the correct dose level would be for this drug. Yeah. That's a great point. I think you also saw from our biopsy data subsequent edits, subsequent administrations of LNP were very important here, very important to extinguishing the totality of the viral source. I'll remind you, we had more than 99% eliminated and/or inactivated cccDNA in our biopsy evidence of the pre- and post-treatment with PBGENE-HBV. Remember, PBGENE-HBV eliminates cccDNA directly at the source more than 90% of the time. That's the outcome of our edit. There is an edit where the cccDNA can come back together about 10% of the time, Maury, it's mutated, and we proved in those biopsies also that we have knocked out pol. Without pol, that mutated cccDNA cannot virally replicate. The most important thing for cure, viral cure, and to reduce the outcomes of HCC, right, hepatocellular carcinoma, must turn off viral replication capability. Got it. For picking a go forward dose for expansion, what are some of the key things that you need to learn in the ongoing study? I'll remind the group, in a phase I, part 1, completely dose finding of a nascent technology, we had the 0.4 mg/ kg, the 0.65 mg/kg, the 0.8 mg/kg, in fact we had two different cohorts of 0.4 mg/kg because remember I said there's multiple administrations in this part of the study, up to three. We have one 0.4 mg/kg group that's four weeks in between administrations and one that's eight weeks. All of these four options for the therapeutic window have shown really great results in eradicating and getting once detectable baseline pgRNA undetectable. Now, Maury, I think what you want to see, if pgRNA, as I said at the beginning, is a 1/1 marker, a precursor molecule that must be generated by the cccDNA to make infectious virus HBV DNA. You want to see sustained eradication and elimination of pgRNA. Right now we're looking at those first six patients. Those were the ones that had the blood marker at baseline. We want to get to about a six-month window. Then we'll consider that. That's an obvious group. We haven't been so clear yet. There's some reasons on that, right? We want to hold some things close to our vest. That is the obvious group where we would start to remove the NUC first. A six-month durability period there matters. Remember I said S antigen is also a very important secondary mechanism, a biomarker to illustrate our mechanism of PBGENE-HBV. Those patients with significantly reduced S antigen, we have over a year on the early treated where it shows the permanence of a gene-editing mechanism. We also look at the threshold where those people sit today and make sure there's no changes, they're stable, they have that durable response, and I think that's a group where we're going to start in the pgRNA at baseline in the blood who have the sustained S antigen reductions. That's a group where we would look to withdraw the NUCs next. In addition, I think Emily said this, we want to be even more robust than six. We're continuing to accrue relatively quickly here in H2, the 0.4 mg/kg, 0.65 mg/kg dose level right now to see is there any differences on that therapeutic window. Safety, of course, first, efficacy. We're pushing up our numbers here so we can make a very evidence-based decision on stopping NUCs. Got it. Okay. You'll be able to pick the dose after you stop the NUCs and get an understanding of that? I think so. We don't have to pick one dose. We could pick maybe two arms if they're- Right now what we're doing in this wait period, Maury, is really trying to differentiate, is there a difference between these four different dose and schedules? The great news is, so far, we don't see one. Multiple options is always a good thing. Right. Okay. For the data you showed, the S antigen declined across all the patients you treated. Can you give us a sense of the kinetics and the source of the S antigen and the declines, and if you're eliminating cccDNA and S antigen is only coming from integrated DNA, will the S antigen eventually just go away completely? Yeah. I'll start, and then Emily can clean up if anything I get wrong. Okay, how's that sound? S antigen, again, comes from the most important source, cccDNA, the replication factory of virus. Most S in E-negative patients, remember, I'm sorry, let me take one step back. This is in 80% of all chronic hepatitis B where everybody ultimately graduates to. They're E-negative. That means they're controlled on NUCs, their viral markers of S are coming mostly from the fragments of their integrations into the host genome. Very important point. While S has been used as a marker based again on the tools we've had prior to now, S that comes from the integrated disease cannot replicate more virus, and very thin data to say it's anything more than frankly inert. We feel good seeing the blood marker go down. The most important thing is we know we have a preferential impact on cccDNA elimination of S. We also target the integrated. We have an indirect targeting there where we hit the RNA transcript level. We disrupt regulation for the expression of S. I think the thing we're saying is always want to see S going down with a treatment for HBV. There's not a magic number for us in order to potentially stop the NUC, except refocus pgRNA undetectability. Okay? Biopsy sits above all. We can't get it in everybody, and then pgRNA sits above very close to biopsy. They're hand-in-hand. We showed the data that the biopsy was very predictive of the blood marker pgRNA. S antigen sits a little bit below that, quite a bit below that, when it comes to the mechanism of PBGENE-HBV. Emily, anything you'd want to add? Maybe just to reiterate that the primary mechanism for our product is elimination, that of course will get rid of all S antigen that is coming from the cccDNA that has been eliminated. We do expect drops, but in these patients, that contribution of S antigen from cccDNA is very small. That part of the drop might not be very big. Say 20%. We also have our secondary mechanism, which creates edits and down-regulates expression from integrants. That's where the remainder of that drop could come from. We think that these two mechanisms together contribute to the durable drops that we're seeing in S antigen that help represent the durability of the mechanism of action, and in combination with pgRNA loss, can help us predict a sustained response off of NUCs based on the current literature. Yeah, Maury, I guess the only thing I would just add to that is we've talked about other therapies in the space that target downstream about different viral loads, and maybe some therapies look better there. I want to be careful here. S antigen doesn't depict viral load. S antigen, if we knew only from the source of cccDNA, that absolutely depicts viral load. S antigen coming from integrants that cannot reproduce does not depict viral load. One of the things I want to tell you is what we showed in our data, 15/ 15 substantial S antigen reductions, not everybody had been cut three times, maybe 35% all the way up to high 70%, so substantial. The most important thing we showed was, to Emily's point, if our mechanism is permanent elimination, then what we cut should stay gone, and it did, 15/ 15. We've got patients over a year out. Whatever we cut stays gone. Durable and permanence of mechanism, super important to get viral, not functional cure. Yeah. Makes sense. Okay. Wanted to talk about the GSK data, the bepirovirsen data where they showed 19% overall functional cure, 26% functional cure in the patients with the S antigen less than 1,000. The mechanism's different. That does not eliminate the cccDNA. One could argue that the bepirovirsen data is good, but there's still limitations around the approach. How should investors weigh and value the GSK approach versus what you guys are doing? Yeah, I think the key word for me, Maury, is and. A-N-D, right? Bepirovirsen, and congrats to the GSK team. Luke Miels, a good friend of mine. Bepirovirsen took a big step forward. Functional cure rates after 50 years, guys, have been substandard, 3%. If we're now taking people to the early 20%, and Maury, remember, it's a suppression mechanism, right? Destroys some at the RNA level. The reality here is if you look at the phase II data versus the phase III, we have to see where people net out at 18 months, two years, three years. Even if a 20-ish% functional cure pulls back a little bit to the 10%, 12%, 14%, 15%, still a big step from 3%. That's great for patients. What we have to ask ourselves, and the next question is functional cure good enough? The answer is no, because cccDNA is still there, cancer risk is still there, viral replication still happens, we call it leakage at the liver level, even controlled on NUCs. There is some risk. The reality is bepirovirsen really takes a nice step forward for patients. I think you have to think about, and it's very synergistic, we don't have any plan to do it right now, but for me, I'm biased, but if you just look at the science, the foundation of the house is you now have the biggest culprit that we've always known for 50 years is the viral reservoir, cccDNA. Now you've got 99%+ elimination and eradication of the virus, plus whatever's left you could possibly target with a bepirovirsen. That could be very synergistic. I think it's a good day. I think last week at EASL was a nice day for patients with chronic hepatitis B. I think we're moving in the right direction. Yeah. For the GSK phase III design and the data, what are some of your key learnings from that that you could leverage to fast-track your program? I don't know if there's anything super groundbreaking there. I think they did a wonderful job with the study. I think that you need to have the correct biomarker for your mechanism. Remember, HBV DNA, we talk all about it, HBV DNA is still the principal foundation of FDA approvals as per the 2022 guidelines, the guidance for infectious disease and chronic hepatitis B. S antigen is the biomarker for them to know when to stop NUCs because that's what their modality does. Similarly, for us, HBV DNA is the gold standard, and we can only measure our complete elimination of that once we stop the NUC. Therefore, pgRNA tells us when to stop it. I think the biggest thing that comes out of it for me is use the right biomarker of your therapy to be predictive of your outcome of, in the case of bepirovirsen, functional cure, and in our case, I sure hope complete viral cure. Okay. You've provided some tidbits on just how you're thinking about stopping NUCs in patients. Maybe just go through the key next steps and framework for how you're going to do this? Yeah. Continue to collect data in the current cohorts that are having wonderful results. Continue to collect all things that matter for therapeutic window to compare the four different dose levels, safety, and durability and permanence of our eradication of pgRNA and cccDNA. When we can collect biopsies, of course, we'll continue to do that. Super informative and very important. Big step forward for patients, I think those biopsies were on the presentation May 27th. I think right now there's a path to stopping NUCs that's most evident in the pgRNA detectable at baseline. That's about 40% in the E-negative population where we've started. Remember, that doesn't mean we don't work wonderfully in the other 60%. Once we have the results, all of the patients, remember, Maury, I said all 15 had similar and the same results on the secondary biomarker, great permanent reductions from eliminating cccDNA of their S antigen. We will stop NUCs in that group second when they didn't have pgRNA at baseline. The obvious is to focus on the first six, add more patients who are pgRNA enriched, and continue to maybe take them off their NUCs in groups here and really try to see if we see any differences over time in the different dose levels. It's the most I can give you right now of exactly what that looks like. We'll give an update later in the year. Later in the year for how many patients you've taken off of NUCs? Later in the year. Okay. How much data in terms of number of patients and duration of follow-up can we expect by year-end? Is there a set number of patients or internal benchmarks that you want to achieve to clarify the development path and accelerate investment? Yeah. I don't want to be misleading or obtuse, but just we'll see how many patients stay in durable six-month pgRNA elimination. We'll see how many we stop. Obviously, we'll always come out at the major liver conferences make sense. We'll give some more updates as we know what that looks like. Got it. Okay. Have you guys done, which I'm sure you've done internal projections on just the relationship between the degree of cccDNA elimination, pgRNA loss, and durability of functional cure? How do you see those three different metrics working together? Yeah. I'm going to ask Emily to chime in in a minute here. First and foremost, we need to tweak the question, Maury. I get it. I don't mean to embarrass anybody, but yes, pgRNA, direct correlation to cccDNA elimination. No on functional cure. Got to change the verbiage, guys. This is a viral cure. A complete cure. Functional cure means I suppress S antigen and HBV DNA for six months and a day. Again, we believe that pgRNA as a blood marker is a wonderful biomarker, is the only sole source biomarker specific to cccDNA. One for one, you must have that precursor molecule to make HBV DNA, which will be the ultimate endpoint. Emily, anything you'd add here? I think if we're moving away from functional cure here for a second and talking about viral cure and the ability to come off NUCs and have HBV DNA suppressed, these NUC stop studies are the thread that connects loss of pgRNA with sustained HBV DNA expression. In a pgRNA positive patient, one of the key landmark papers had a 3% chance of that patient coming off of NUCs safely. With pgRNA loss, that brings them to a 30% chance of sustained safe withdrawal of NUCs. When we're thinking about the bepirovirsen data and where that's landing the field in a subset of patients, less than 30%, I think we're in the right direction here with pgRNA as a biomarker for viral cure. Awesome. Thanks, Emily. Got it. Yeah, all makes sense. Getting at the root cause of the disease with targeting cccDNA, I guess, what kind of feedback are you getting from doctors and even from some of the doctors at EASL on their level of confidence in stopping NUCs in patients who are on your approach versus an approach like the bepirovirsen approach? Yeah, look, I think a palpable excitement, right? You saw the [Journal's] quote that has been in New England Journal for a while. We've all known we got to get to the source of cccDNA. You saw on the May 27th presentation, Mark Sulkowski, [M.F. Yuen]. Top godfathers, if you will, of infectious disease, hepatitis B. We've got all the top thought leaders in the world respective to their country. Ed Gane, the French affiliates, the U.K. We've sites onboarded. Sites onboarded for phase I dose-finding in the U.S. We didn't see that with Sovaldi. There's a palpable excitement, and again, I don't think anybody thinks it's an arms race or who's going to be better. It's real excitement about what possibilities could be for IND. We took a step forward in functional cure with BEPI, and wow, now we might be able to dream about a true complete viral cure with PBGENE-HBV and HBV. Yeah. Okay. On safety, you implemented mitigation protocols with slower infusion plus higher steroid doses. Will these risk mitigation steps have any effect on editing efficiency or subsequent doses for patients? Yeah. Emily did a wonderful job of characterizing cytokines and some complement proteins that were present when you pushed dose level in subsequent doses. We know you need cumulative administrations to eliminate 100% of the virus. Amazing work that happened in her shop. I'll let her tell you kind of those findings and reassure you about the gene editing from two to five hours, please, Emily. Yeah, I think the team did an amazing job. What we learned is that the concentration in the blood is really what's driving some of the adverse events like the hypotension. The complement cascade leading to cytokine elevations can be reduced through these mitigations. When we think about actual activity of the gene editor, we're thinking about a different compartment of the body, right? This is the liver where we're trying to get this sync of LNPs to the right concentration to do the gene editing work. We are not concerned that this longer infusion time by a few hours is going to affect the maximum concentration in the liver and impact the ability of the nuclease to do its job to eliminate cccDNA. This is a good safety mitigation step that we have not seen impacting our efficacy. Maury, I just remind everybody that a simple mitigation, thank God, for patients, right? It can't be arduous. From a two-hour infusion to a five-hour, remember, that first day is when you have your LNP infusion reaction. They stay in the hospital one overnight anyway. That doesn't really change their course of action. We just took a 10 mg steroid dose to 20 mg, and that seemed to really blunt the complement proteins and the cytokines. We've had 20% of total doses in the study given under the new protocol, and the IRRs, the fevers, the hypotensions, these things have really ameliorated. We're really excited about that. Got it. All makes sense. Want to shift gears to DMD. You've got a DMD program where we could see data by the end of this year from that program. It's an innovative approach, using dual ARCUS nuclease and a single AAV to excise exons 45- 55, and you can restore near full length dystrophin, which could be relevant for about 60% of the DMD patients. Talk about the patients, age range, and functional measures that you plan to collect for this update by the end of this year. Yeah. We're super excited about a novel and unique approach in DMD. We've needed one. What we're doing there is just not enough. Adam, in a short time period, this has kind of been your birth right here. Please tell us why we should be excited about the DMD FUNCTION-DMD trial. Sure. We're creating one of the most functional dystrophin proteins that hasn't been seen with the gene therapies today. We've shown pre-clinically that we're able to produce up to 35% dystrophin in up to 85% of the cells overall, and those levels increase over time. We've shown durability functionally as well, and then from the data that I presented at ASGCT, I've shown that when we treat even early younger mice, that we see even higher efficacy. When we're treating the patients, the age range is about two to seven in the clinic. We're hopeful that we will see strong efficacy based on our pre-clinical results. Adam, maybe in our last couple of seconds here, can you just tell me, the basic conventional gene therapy approach is about sending an AAV and looking for episomal expression for like a synthetic dystrophin approach versus gene editing. Can you give me one or two complete differences why it's unique? Yeah. We're editing the source of the disease, once we edit at that DNA level, that's permanent. All with cell proliferation, all daughter cells will contain that edit and produce that functional dystrophin. With gene therapy, with cell proliferation, you're losing that therapy over time, and it waxes and wanes, especially when we're seeing the movement move to a younger patient population where that cell proliferation is even more exacerbated to it than an older population. Thank you, Adam. Yeah. Makes sense. One of the key differences between gene therapy and editing, which sometimes people get confused on. I think durability is key for these kids, and we've shown that pre-clinically, and I'm confident that we can show that clinically as well. Makes sense. We're pretty much out of time. Maybe in closing, if you want to highlight your cash position or runway and key catalysts over the next six months investors should be focused on. Yep. We just reported our cash runway at the end of Q1, $125.8 million. That takes us through. We're very operationally savvy. That takes us through 2028. Key milestones, which is that could take us through the ELIMINATE-B trial, through its expansion, and well into phase II, maybe completely through phase II for PBGENE-HBV. Now we feel like these studies will continue to ramp up and go forward based on the latest data that we just showed you at EASL. That money cash runway takes us through our phase I. The design that Adam and team put together, it's a phase I, II, III. You know once you treat the first patient, you're already collecting BLA-ready type of endpoints. This takes us through all the way into pivotal and potentially through pivotal our cash runway here for PBGENE-DMD. That's our FUNCTION-DMD study. Inflection points for the rest of this year, updates the second half of the year on PBGENE-HBV at probably at the major liver conferences. I know all eyes will be looking at those six patients who are pgRNA negative. Did they stay undetectable? Did they stop the NUCs? We'll continue to add to the robustness of that data. Initiation and commencement of first patient dosed in the PBGENE-DMD FUNCTION-DMD trial. Some data by the end of the year. Early data, definitely safety from a couple of patients, maybe some early efficacy or early efficacy maybe into Q1 of 2027. Got it. That's where we're at. Michael, Emily, Adam, thanks so much for joining us today. Yeah. Thank you. Thank you.