Good morning and welcome to the Forte Biosciences Investor Webcast. At this time, all attendees are in a listen-only mode. A Q&A session will follow the formal presentations. As a reminder, this call is being recorded and a replay will be made available on the Forte Biosciences website following the conclusion of the event. I'd now like to turn the call over to Dr. Paul Wagner, Chief Executive Officer of Forte Biosciences. Please go ahead, Paul. Great. Thank you very much. Welcome, everybody, to the FB102 Celiac Disease phase 1B Results Conference Call. It's a very exciting day for us, and I think for patients as well. On the call with us here today also is Professor Jason Tye-Din. Professor Tye-Din is the head of Celiac Research at the Walter and Eliza Hall Institute at the Royal Melbourne Hospital. In addition to being a key thought leader in celiac disease, Professor Tye-Din was also a principal investigator in the study. I think enrolled close to 20% of the subjects, so has direct experience with the study as well. Thank you again for joining us, Professor Tye-Din. This is just the forward-looking statements. As a refresher and to level set for people that may not be as familiar with FB102, FB102 is an antibody to CD122, which is a subunit of the intermediate affinity receptor for IL-2 and IL-15, and it's expressed on NK cells and certain subsets of T cells. The idea behind FB102, and we'll talk more about the mechanism here in just a minute, is that we wanted to intermediate both the IL-2 and the IL-15 induced proliferation and activation of reactive NK cells and T cells, particularly autoreactive T cells and NK cells. The celiac disease phase 1B trial is completed. We're going to be talking about that today, and we're really pleased to announce that we've demonstrated positive histological and symptom data in the treated subjects compared to placebo. We're moving ahead very aggressively given the positive results of the phase 2 celiac disease studies initiating, and the data is expected in 2026. We also have a vitiligo study ongoing right now, and the top line results there are going to come in the first half of 2026. On to FB102, one of the things that we think is really exciting about this is the connection between the mechanism of FB102 and the biology of diseases with very high unmet need. On this table, I've highlighted some of those. There are maybe 10 or 15 different diseases that have shown activity and indications that have shown activity by blockade of CD122. We went through and did a thorough analysis of the biology of those different diseases and paired that up with the mechanism. These really came up towards the top, of course, celiac disease, vitiligo, alopecia, and type 1 diabetes. While these all look to be very disparate diseases, the reality is they're closely connected by the autoreactive T cells, which we believe that we're having a significant effect on with the mechanism of FB102. To that point, I'll just talk to the cartoon that's over on the right. As I'd indicated, FB102 blocks the interaction of the pro-inflammatory proliferation cytokines IL-2 and IL-15. It blocks the interaction with the intermediate affinity receptor, which, as I mentioned before, is expressed on NK cells and certain subsets of T cells. By blocking that interaction, we're able to prevent the proliferation and activation of those potentially pathogenic autoreactive cells. What we do not do, or we try not to do, is to inhibit the IL-2 binding to the high affinity receptor, which is in the upper right-hand corner, which is expressed on Tregs. The idea here is that we are able to impact the proliferation and activation of these autoreactive T and NK cells while not having any significant impact on the regulatory T cells, which are helping to modulate the immune system, particularly in autoimmune diseases. This is data that we generated recently. It really highlights the activity of FB102. In this experiment, what we have done is we put FB102 into the media together with CD4+ and CD8+ T cells. When that happens without FB102, what you see here is a very significant activation of those T cells, whether it is the CD8 + T cells or the CD4 + T cells. Activation, of course, meaning these are the cytotoxic, they become cytotoxic and release pro-inflammatory cytokines. Without FB102, what we see here is a 60% with the CD8 + T cells, a 60% activation. When we put FB102 into the mix, this really completely halts the inhibition, inhibits the T cell activation. You can see that because the cell only on the far right-hand side, that's with no cytokine whatsoever. What we did in this experiment is we put IL-2 into the mix for 24 hours and then IL-15 for three days, and able to completely inhibit that T cell activation. In terms of celiac disease, there's a very high unmet need here, and Professor Tye-Din can elaborate on that as well. The incidence here is around 2.5 million people, but probably underdiagnosed because there really is no treatment option for celiac disease at this point. It really is just attempting to avoid gluten. In terms of the biology itself, when gluten is ingested, the first thing that happens is the antigen-presenting cell breaks down that gluten to gliadin, it presents it to a CD4 positive T cell that then releases the IL-2, which is a signaling molecule that causes the proliferation and activation of T cells that is supported by IL-15. What we are able to do here is block both that IL-2 and that IL-15 signaling, and so really well suited for celiac disease. A significant amount of activity going on here. Again, Professor Tye-Din has been involved with many of these studies, but Takeda, Chugai, Teva, Sanofi, Amgen, and now, of course, Novartis with the acquisition of Calypso. A lot of activity in pharma going on here, again, because of the significant unmet need in celiac disease. I'll turn it over now to Professor Tye-Din to talk more about the morphology and histology measurements in celiac disease. Professor Tye-Din? Thanks very much, Paul. What we're seeing here is a villus structure. When we measure gut damage in celiac disease, which is really the primary kind of readout that we want to assess, celiac disease with the immune response that develops to gluten causes damage to the small bowel. It's really these villi that get inflamed. You can see the arrows here at the tip of the villi pointing out these T cells called intraepithelial lymphocytes. We shorten that to IELs. Increased numbers of IELs and increased density represents inflammation of the small bowel. This is what we really want to reverse in celiac disease. In active celiac disease, we get a lot of these inflammatory cells in the lining of the gut, and these release mediators that lead to changes in the lining so that you get flattening of the villi, and you get what we call villus atrophy. These cells are expressed as a density, usually the number of IELs per 100 small intestinal lining cells called enterocytes. Next slide. What we can measure here is what we call the villus height to crypt depth ratio. You can see here on the figure a villus structure standing out to the right. It's finger-like projections that help absorb nutrients from ingested into the small bowel. The longer line there represents the length of the villus structure, and the smaller green line represents the crypts. The crypts are what produce the cells that make the villi. What happens in celiac disease is the villi become shorter, and the ratio between the villus height and the crypt depth starts to fall. A normal ratio is around two and a half to three in celiac disease. This falls down. Next slide. The best way we're learning to conceptualize both the inflammation with the IELs and the damage that results from these IELs is a metric called the VC-IEL. What this does is it combines both those things, the IEL count and the villus height crypt depth. It is considered a very useful marker because it is encompassing both those two independent metrics of gut damage, and it has high statistical precision. Because of this higher precision, it's probably better to detect changes that do exist more sensitively. This is likely to be a scale that's going to be adopted for many clinical trials moving forward. Next slide. Okay, let's jump into the actual data from the phase 1B trial. I'll pass across to you, Paul. Sure. I'll start off with just the design, the baseline, and then I'll turn it back over to Professor Tye-Din to talk about the data. This is just a refresher on the design of the study. It was a 32-subject study. We enrolled at nine sites in Australia and New Zealand. It was randomized three to one FB102 to placebo. Twenty-four were on active FB102 and eight were on placebo. The subjects received a total of four doses of FB102 weekly. After receiving three of those four doses, they started a 16-day gluten challenge, and we up-titrated the gluten from 2 gm to 4 gm and then 8 gm for 14 days. This is a total of a 16-day gluten challenge. In part, the reason we did that up-titration was based on feedback, in part from Professor Tye-Din, suggesting that we do not want to see a lot of dropouts in this proof-of-principle study. We started at a lower dose of gluten at 2 gm and then up-titrated it to 4 and then up to 8. As we will show you shortly, there actually were a significant number of symptoms, and we were able to see some differentiation there. The endoscopy biopsies were taken at baseline and at the end of the gluten challenge so we could look at the morphology and histology inflammation, as Professor Tye-Din was just outlining. We also had gluten challenge symptoms that were measured. This was done through the collection of patient diaries and AE reporting, and all of these subjects completed the day 32 biopsy. In terms of the baseline demographics, quite well balanced here across all of these different parameters, including the villus height to crypt depth ratio and the IEL counts. With that, let me turn it back over to Professor Tye-Din to talk through the efficacy readouts. Thanks, Paul. Jumping straight into things, this is the marker of inflammation in the small bowel. This is the intraepithelial—oh, no, sorry, sorry, we have the VC-IEL. This is the composite score of the intraepithelial lymphocytes as well as the villus height crypt depth. What you can see here is clear distinction between the placebo group that worsens small bowel histology, as expected, with a 16-day gluten challenge. Patients get damage and inflammation, and quite a striking difference in the treatment arm with FB102. There is none of that deterioration to mucosal health, and that is statistically significant. Next slide. When you break it down, this is the intraepithelial lymphocyte density now. This is the marker of inflammation, the inflammatory cells that come into the small bowel that lead to the damage. You can see an increase of around 13.3 of these IELs per 100 enterocytes in the placebo arm and a decrease in the active arm with FB102 of 1.5. This is statistically significant. It tells us that FB102 is able to prevent the gluten-induced inflammatory damage. Next slide. With the villus height crypt depth ratio, you can see that there is this trend for FB102 to have a reduction in the worsening of villus damage. This time, it is not statistically significant, but there is a considerable difference between the placebo arm and the FB102 arm. This supports the notion that both the villus inflammation and the villus structure is improved by treatment. What is really striking is the symptom protection that is afforded by the treatment arm. Here on the graph, you can see the 16 days of gluten challenge that participants undertook. You can see here shown the cumulative symptoms that each particular individual experienced. You can see over time, not surprisingly, as they went along with their 16-day gluten challenge, the number of symptoms per subject started to increase, but there was about a 42% symptom benefit in the FB102 arm. In other words, it abrogated the gluten-induced symptomatology, which is a very striking finding. Really, the symptoms captured here were the most important ones induced by gluten, such as nausea, diarrhea, vomiting, abdominal pain, and bloating. These are the common and very often disabling symptoms. Certainly, in our group of patients that we had through the trial, there were some people who would typically vomit with the exposure to gluten, and these people were absolutely comfortable sitting there, eating their gluten, having no issues. This was quite striking to us. It was immediately apparent, not necessarily clearly demonstrated in this slide, but this slide does demonstrate how FB102 is reducing gluten challenge-induced symptoms. Excellent. Thank you so much. We will touch on just the safety profile as well, very consistent with what we saw in the Healthy Volunteer study. Again, only one grade three severe AE, and that was in the placebo group. That was associated with the placebo, excuse me, with the gluten challenge. That was a patient who had two events during the gluten challenge. One was nausea and one was vomiting, both grade three. Again, that was the only grade three event. Everything else was predominantly mild AEs. Again, quite well balanced in terms of the organ class as well, in fact, favoring FB102 across all of the different organ types, including infections and infestations across all of these different parameters. With that, we are moving aggressively ahead. Very positive data. Thank you again, Professor Tye-Din, for your leadership in the study. As I mentioned before, Professor Tye-Din enrolled about 20% of the subjects in the study. Moving ahead now, we're going to be initiating a phase 2 trial in celiac disease, looking to enroll 100 patients. They'll be enrolled two to two to one to three different arms. Two arms will be on FB102. There will be an induction period where they will get five doses of FB102, followed by a maintenance of every other week at either 3 mg/kg or 5 mg/kg. In this study, they'll be getting more gluten as well. There will be an eight-week gluten challenge. It will start out at 8 gm per day for two weeks, and then it will move down to 3 gm per day for the next six weeks. We are initiating the study imminently here in the second quarter, and we do expect a US IND late in 2025 or early 2026. The top-line data readout from this study should happen in 2026. Again, we need to see the enrollment rate, but assuming that the enrollment looks similar to the phase 1B, we should have that readout in 2026. In terms of the development timelines, we just talked about celiac disease. I mentioned earlier we have a vitiligo study ongoing as well. The top-line data readout there in the first half of 2026 and starting phase 2, also in 2026, likewise with alopecia and type 1 diabetes, where we've got some really compelling data there that we've generated in-house, and it's part of our corporate tech now. We're evaluating the study design and looking at the potential for initiation there as well. Again, thank you, everybody, for joining, and I'd like to open the call up to questions. Thank you, Paul. Now we will begin our Q&A session. At this time, if everyone can please hold for a moment while we pull for questions. Okay, our first question comes from Yaron Kalin. Hey, Yaron. Hey, good morning. Congrats on the data. Really great to see, and thanks for taking a few questions. Maybe just the first one, can you put a little bit in context so that the baseline IEL data looks really compelling? I mean, you're starting on both of them at around 25.6 and 23.5. What's considered clinically meaningful and maybe give us a sense? Stats, obviously, showing a nice differentiation and separation early, but what level do you want to see, and how does it translate into clinical benefit? On the baseline villus height to crypt depth, you're starting at 2.8. Maybe do you think that data gets better with time? Maybe put in context just how meaningful this data is. Thank you. Professor Tye-Din, did you want to comment on that? Maybe I can add a few comments as well. Yes, of course. Yes. Yaron, that's some great questions there. Typically, we'd consider a change of around 30% in IEL count to be significant. Really, the way we conceptualize things biologically is that the IELs are the key inflammatory cells that ultimately drive the villus damage. We know from many studies decades ago that this is a stepwise process. Early disease is often just the inflammation, and then with time, you get the villus atrophy developing. With a two-week gluten challenge, you probably saw that the villus change, the error bar was fairly wide there, which highlights that there is heterogeneity. Some patients got quite a lot of villus damage, some patients less so. I think over time, with longer gluten challenges, you get much more consistency in the villus damage. I'd be very confident that given the compelling reduction in inflammation that we've seen with FB102, that would translate into much more statistically significant protection against villus damage with time. I think this is really the rationale for the phase 2, to go longer with gluten to really get that consistency in causing the damage in the placebo arm and then showing greater differentiation in terms of the villus structures. I hope that answers your question. Great. Maybe on the phase 2, is it going to be powered? What would be the primary endpoint? Is the primary endpoint going to be still IEL, or is it going to be a villus height to crypt depth, and is it powered for that? Excellent question. Yaron, this is Paul. In the phase 2 study, yes, that is powered to look at, and not only are we looking at the histological and morphological parameters that we've demonstrated here, there will be a composite analysis. We are looking, of course, at the IELs, which are critically important, the VHCD, but also we will have using a validated scoring tool for the symptoms as well. Given that in this study, in the phase 2 study, we do not have that dose escalation of the gluten, that 2 gm to 4 gm to 8 gm as we did in the phase 1B, to try to mitigate symptoms to keep patients in so that we really could see these histological effects. Here in the phase 2, we are going to start off directly with that 8 gm per day for the first two weeks. I think we're going to see some significant further differentiation on the symptoms, as Professor Tye-Din was just alluding to earlier. Okay. Maybe just a final question for me, and I'll jump back into the queue. On the GI disorder side, there seems to be a little bit more, well, both of them are sort of 88%. You have actually less nervous system disorders. Can you just put that in context, less than active than placebo? Just put that in context. What are you seeing there? Thank you. Yeah, those are just individual patient numbers. The actual event rates, as you saw in that symptom slide, are significantly less for FB102, and that really is the important part. I mean, if we go back and we look into the symptoms specifically, I think about 30% of the patients on FB102 had no symptoms whatsoever to the gluten challenge, and that compared to only about 10% or 12% of the patients on placebo. Again, a significant differentiation there, and it really has to do with the number of events in terms of those symptoms relative to a patient maybe having recorded one. Also, I think it's important to point out that there was only one individual that had that severe grade three AE, and that was associated with the gluten challenge. Actually, that one patient, as I mentioned before, had two grade three AEs. One was nausea. One was vomiting. A significant differentiation, not only in the number of events in those patients that had no symptoms on the gluten exposure, but also a difference in terms of the severity of the symptoms. Okay. Thank you for the questions, Yaron. The next question comes from Dan2l Gataulin at Chardan. Hi, Danil. Yeah, hey, guys. Thanks for taking the question. Quick one, just to kind of understand the thinking that went into a phase 2 design. So maybe can you talk about key learnings from phase 1B that informed the design of the phase 2B study and what went into the decision of going with the single or high dose that you selected and high gluten challenge right away? Yeah, absolutely. Thank you very much. In terms of that dosing, we have the induction and the maintenance. One thing that's still being explored is the possibility that there is an immunomodulation that's happening so that it's not just a PK. We're still trying to understand this point, but the possibility exists, and it's been, I think, a view that's shared by others, other researchers, and others in the industry about the possibility that you're able to affect the population of these antigen-specific tissue-resident memory T cells. If that's the case, then upfront, we want to have this induction so that we can deplete those cells and have a longer durability of effect. We're going to be investigating that in the phase 2, but that's the idea behind having that induction. That 10 mg/ kg dose has shown very good safety and tolerability to date, now from the Healthy Volunteer study all the way through this celiac study. We are going to be continuing that, providing a good protection upfront, and then starting that 8gm gluten challenge for two weeks without doing that dose escalation so that we can see even further differentiation on the symptoms. As Professor Tye-Din was saying, the IELs really are what are driving the damage to the villi and, frankly, causing the symptom effects as well. The fact that we have seen such great control in the phase 1B leads us to believe that in that longer gluten challenge, we are going to see even further differentiation and even more positive data than the data we have generated here. That really was the thinking behind it. Got it. Thank you. A quick follow-up for the endpoints for 2B, how critical would it be to show static improvement in VH:CD ratio? I'll turn it over to Professor Tye-Din to provide his comments. As we've talked about, IELs are really the mediators of the damage, not only in celiac disease, but also in these other disease indications that we're pursuing. To see that level of control that we have here in this study, I think, is really, really encouraging, leading to the symptom benefit, leading to what we saw with the VH:CD. These composite endpoints, particularly the VC-IEL developed by Professor Murray at Mayo, really are able to more holistically look at the damage to the gut. Professor Tye-Din, what are your thoughts? Yeah, look, I agree. I mean, I think that the FDA guidance for industry is fairly slim on what the right histologic endpoints are. They talk about co-primary endpoints of symptoms and histologic protection. As gastroenterologists for decades, we've looked at both the villus height, crypt depth, and the intraepithelial lymphocyte count. The sort of scoring systems we've used, like MASH in the past and nowadays with VC-IEL, tend to sort of look at a composite of both the villus damage and IELs. I think it would be nice to see both IEL protection and villus damage protection. I'm actually pretty confident with what the phase 1B data is telling us that this is likely to be the case as long as we drive enough damage into the placebo arm. 8 gm a day, which is almost about three slices of a bread's worth of gluten. This is a decent amount of gluten that participants will be consuming. We would imagine that after the seven or eight-week period of the challenge, there will be much more substantial damage, both with the IELs and the villus height, crypt depth. I think it would be very nice to see both, and I think this is what will happen. I think that if you can combine that with the symptom readout, then you're essentially meeting that composite co-primary endpoints. Got it. Thank you very much for taking my questions. Congrats on the data. Thanks. Thank you for the questions. The next question comes from Elemer Piros at Lucid. Hey, Elmer. Are you on mute? Good morning. Sorry, I was on mute. What I'd like to ask from Dr. Tye-Din is if he could put this dataset, which is obviously from a small trial, to the perspective of other agents that have been examined in celiac disease, and particularly when comparing it to other IL-15 inhibitors. If there is a thought process here that the combination of IL-15 and IL-2 modulation may be more important than just focusing on a single pathway. Thank you, Elmer. I think that's an excellent question. To start with your latter query, absolutely agree. I think that, honestly, the IL-15 data alone has shown protection against gluten-induced damage, but I haven't been completely blown away by that data in isolation when it's just IL-15 blockade. I have not seen any data showing that this blockade can protect against gluten-induced symptoms. It may seem to abrogate some gluten-induced gut damage. What I think is really the strength here, and my background in celiac research has been very strongly focused on interleukin-2 as a key role in expanding the gluten-specific T cells that cause celiac disease, is the blockade of interleukin-2 is, I think, a major benefit of FB102. I think that's probably what is really contributing to the substantial beneficial effect on blocking gluten-induced symptomatology. I agree. I think it's the combination of potent IL-15 blockade as well as IL-2 blockade that's contributing to the therapeutic effects. Now, I've forgotten what your first question was. Sorry. Oh, yes, that's right. It was just comparison to other sort of agents currently under development. You know, I've been impressed by this data, in all honesty, and also being involved in the clinical trial with my nurses. We've done seven other celiac disease-sponsored trials in other agents. This has been, by far, the trial that they've enjoyed the most because participants were very tolerant of the agent. Many who were expecting to vomit with the gluten challenge did not, so they were able to push through. I think that our experience and sort of insights into the other therapeutic compounds, you know that there are tolerogenic approaches. There's a number of groups now looking at ways to try to induce gluten tolerance. I think that's a very high bar. I was involved in the very first gluten tolerogenic study of NextVax-2. That was a U.S. and Australia, New Zealand phase 2 trial that unfortunately failed. As you may be aware, there's other groups now developing tolerogenic therapies. I think biologically, that's a very high bar to cross over to induce tolerance against gluten, which is very strongly established. You have these tissue-resident memory-specific gluten T cells that are a very hard population to get rid of. You have glutenases, which are gluten-degrading enzymes, but these are really needed to be taken on demand, really, or regularly because whenever there's gluten, you need to have this agent around. This is not something that will hang around in the system. You'll need to take it every time you have a meal. I think that's a niche need. I think that might be useful for people traveling, but it's certainly different effects than an immune-based approach. There are other groups developing other immune approaches, such as bispecific antibodies that block the T cell response to gluten. I think that they're still fairly early days with that approach as well. On the whole, I think that if you can demonstrate, I think the key is to demonstrate protection from gluten-induced gut damage and symptomatology, and that'll really set you up for future trials and demonstration of protection in both treated disease but also in active disease. Thank you very much for your perspective, Dr. Tye-Din. Congratulations, Paul. Thank you very much. Thank you for the questions. The next question comes from Kumar Raja at Brookline. Good morning. Thanks for taking my questions and congratulations on the data. With regard to the density of the CD3 positive cells, what are your expectations with the longer duration of treatment? Do you think there will be an ability to further reduce it? With regard to starting the trials in the U.S., can you please share what are the next steps there? Thank you. Sure. I can provide some perspective on that, and then I'd be interested in hearing Professor Tye-Din's perspective. Above 25 is considered healthy; IEL is considered a celiac disease subject or patient. Healthy individuals, to my understanding, have IEL densities that are maybe closer to 10, 10 or 15. Certainly, even in the treated celiac patient population, to my understanding, and as evidenced here with the baseline characteristics of these treated celiac patients, we did have a baseline up around 25. I think there is room to continue to move that down towards normalization of the IELs in the villi. We did see that. We did see that over this relatively short study, we're already seeing a decline in the IELs. We'll have additional data on the TCR gamma deltas and the subsets of the Ki-67s that I'm very optimistic about, let's just say. Those subsets are also responsible for some of the cytokine release as well as the inflammation. I think in totality, the dataset was really encouraging in terms of the control and further normalization of the inflammatory component of the disease. Professor Tye-Din, did you have any perspective on that? Oh, I guess I'd just add that even though we're targeting treated celiac disease, what we know from other studies is there's no such thing as perfectly treated celiac disease. I think this really underscores the fact that a lifelong strict, absolute zero-gluten, gluten-free diet is aspirational but rarely attainable. You often find quite a high proportion of patients entering these trials with so-called strict adherence to their gluten-free diet who have evidence of some degree of inflammatory activity, both with raised IELs over 25 and also a villus height to crypt depth ratio less than 2.5. In some studies I've been involved in, 60% of patients with treated disease had VHCDs less than 2.0. I think this underscores the importance of targeting the treated group who still have evidence of disease activity. I think that, again, demonstrating that protection from gluten-induced inflammation is the key. Great. Thank you for the questions, Kumar. I'll now hand the call back to Paul for concluding remarks. Fantastic. Thank you so much. I really appreciate everyone joining this call and for your support. I also want to thank, I know they're going to be listening in on this call, the investigators in this study, the colleagues of Professor Tye-Din who really did a phenomenal job on this study, and also the Forte team, just incredible, incredible hard work to get to these results. Thank you to the team. I look forward to following up with you all throughout today and tomorrow, and look forward to continuing to have your support. Thank you again.