Good afternoon, everybody. Welcome to the Citizens Life Sciences Conference, day two. My name is John Walden, Senior Analyst here. Pleased to have ProQR Therapeutics, a name we've covered for quite some time in many iterations, but I think this is the most interesting version of the company we have today, and we have Chief Financial Officer Dennis Hom here joining us. Dennis, thanks for coming down and talking to us. Thanks, John. I appreciate the invite, and Citizens for setting all this up for us. With ProQR, tell us, you know, what are you guys working on? Like, what's the strategy and goal with ProQR Therapeutics? Sure. The company has evolved over time, as you alluded to, but since 2022, we've been exclusively focused on developing our Axiomer technology, which is our version of RNA editing. The strategy we're taking is fairly straightforward. We're developing our own wholly owned pipeline of programs, based on Axiomer, and we continue to innovate on that technology. I would mention that we're the pioneers of RNA editing. ADAR-mediated RNA editing, we started looking into in 2014, really before anyone even thought this was possible. It's all homegrown. We don't rely on any external IP, and we probably have the broadest IP estate of any RNA editing company. You came on board a little over a year ago. Talk to us about, you know, what drew you to ProQR, and then also how that first year has been, compared to your expectations. What drew me really was the potential of the science. I'm probably not like most CFOs you'll meet. I'm very much driven by what's fun and interesting in science to me. My education was in biology, but I've been in and around biotech and pharma for my entire career. When I looked at ProQR first, initially, I thought, "RNA, wow." When I used to work with RNA in a lab, you could not get that stuff to stick around long enough to do anything with it. Over the last couple decades, RNA therapeutics has really blown up, and in particular, when we talk about RNA editing, the potential of it is really amazing. It's essentially DNA-based editing without the downside. You don't have. Maybe it's too much of a blanket statement to make. There's always downside to any therapeutic, right? Think of the potential as you can create proteins with modified function of your choosing without permanent genetic modifications. Is that, you know, the DNA editing? We're getting there, and we're making progress, but obviously a lot of overhanging concerns. The benefit of RNA editing is the potential reversibility, the lack of that overhanging safety risk primarily? Right. Exactly. Do you miss anything from, you know, an editing capability, editing RNA versus DNA or application? Sure, of course. When you think about what makes sense for gene therapy or base editing of DNA, it's this one and done hope. As it turns out, as we study that more and more, one and done really isn't one and done. Mm-hmm. There's a waning of durability of gene therapy over time. There are the challenges of not being able to redose because most of gene therapy and those other approaches require all the machinery to do the edit to be delivered alongside the gene that you're trying to replace. Yes, the downside of RNA editing is that it's transient, but that's also its upside. Keep in mind, what we're using to attract the enzyme to do the edit is purely an oligo. What we're delivering to the body is just an oligonucleotide, about 30 bases of RNA, and the kinetics, the safety of that has been well studied in other uses of RNA therapeutics. When you say transient, you know, what are you guys thinking as far as a target durability and dosing it, administration schedule? Yeah. In our initial indication, or initial program targeting cholestatic disease, we're thinking three months is the target. For CNS indications where we believe the oligo will stick around a little bit longer, six to nine months. Mm-hmm. Those are the things we're aiming for. The tricky part also with these technologies, RNA editing, oligos, is delivery. Talk a little bit about kind of a lot of advances the past 10 years in delivery of oligos. How are you guys getting your medicines to where you need them to be? Yeah, that's a great question. We have purposely chosen target organs where the delivery is well known and established. For example, in our lead program for cholestatic disease, that targets the liver. GalNAc delivery or GalNAc conjugation of oligonucleotides has been demonstrated by multiple companies now in marketed product. That sort of eliminates that risk. In the CNS, for example, we are looking at intrathecal administration of a naked oligonucleotide. Again, a proven method of administration for getting drugs into the brain. You mentioned your lead program, AX-0810 in the clinic now. That's a big step forward fundamentally. Tell us a little bit about that program and asset. Yeah, absolutely. That is a huge milestone for us and the field of RNA editing. We are the second one to get into the clinic, behind Wave with their AATD program. We think that once, I feel sort of like we're on the cusp of showing Wall Street the real potential of this technology once you have more than one indication, more than one gene target. The lead program goes after a transporter in the liver called NTCP. What's unique about our approach here versus a mutation correction approach that companies pursuing AATD are going after, we're looking at modulating protein function. That's the real power of this technology. We're taking the transporter and blocking its ability to uptake bile acids from the blood into the liver, but we're allowing the transport of other molecules like thyroid hormones, vitamin D. We're hoping that that preserves sort of the regular function of those other molecules, but blocks the sort of bad function that we're trying to stop here, which is excess accumulation of bile acids in the liver. You guys put out, you know, some early data in January. What have you guys shown so far and talked about? Yeah, the early January data was really a little bit of a check the box, but keep in mind this is a phase I safety program, so that check the box is important for the first time our technology has gone into the clinic. It was the first few participants in the phase I cohort I, and the PK was as expected as we modeled and no safety signals so far. It is healthy volunteers, so talk us through what we're gonna learn in phase I. Obviously, with a newer modality, safety's super important, but what else can we glean from this first initial study? Yeah, great question. Unlike many phase Is where you're really just testing safety, in this case, we can learn a lot more because of the modification we're making to NTCP. When you modify NTCP the way we're attempting to do, you're going to keep the bile acids in the blood, that's what we're gonna look at. We're gonna see does this mechanism work as expected, and therefore, should work as expected in patients. In healthies, what we're looking for are three biomarkers of target engagement. The first one is a fairly blunt one. We're just looking at total bile acids. If you block the uptake into the liver, the bile acids will stay behind in the blood, so you should see elevated levels. To be specific, we're looking for a sort of a threshold of 2x increase in bile acid levels, and that's based on a lot of things. There is one, cholestatic animal model that has shown, when you achieve a 2x increase in bile acid levels, you should see improvements in liver health. Mm-hmm. There's also clinical proof of this mechanism with another company's drug that is a peptide sort of non-specifically blocking the NTCP transporter. That's approved in hepatitis D. In that case, you see patients with hepatitis D, though, who do not respond virologically. In other words, the virus is still there with the insult. In those patients, you're seeing an increase in level of bile acid in the blood, so you're seeing that the block is working, and you're seeing liver health improvement. A 2 x increase in bile acid levels is translating to liver health improvement in those patients. You know, we've tried to do this before is thinking about, you know, you guys are, your mechanism. Sorry, I should mention besides total bile acid, we're also looking at the portion of conjugated versus unconjugated. That's also important because we're drilling down on NTCP itself. NTCP is specific for conjugated bile acids, so you should also see the portion of conjugated bile acids increase in blood. The third thing, which is probably the most important, is a TUDCA challenge. Essentially, it's a tracer study. It's as specific as you can get for the action of NTCP. TUDCA is a synthetic bile acid that we're administering to these healthy volunteers, and we'll see how much of it stays in the blood versus gets moved into the liver. Okay. Yeah. That's an important one. Yep. How do we think about RNA editing efficiency and what's needed? Like preclinically, we're trying to line up all the different data points we've seen. Yeah. You know, you guys have shown some interesting preclinical data, but not like 100% editing. Do we need 100% editing? If we hit these metrics that you're talking about in humans, does it the drug's working, right? Yeah. How much confidence do you have? I think there's been a lot of focus on editing percentages. While it's a good measure for when you don't have human clinical readouts. Mm-hmm Ultimately, human clinical readouts are the more important functional measures, right? Are you doing what you think you need to be doing in a human in disease? To answer your question directly, I don't think 100% is required for any of these programs across companies. We've been asked often, "Do you think there's a theoretical ceiling?" Indeed, there isn't, because in our hands, not for every target, but there are targets where we've looked at where we've seen up to 80%-90% editing. Hmm. Sorry, I should also mention endogenously, so normally, without drugs or anything, the human uses this enzyme to edit 100% of certain transcripts. The efficiency is possible to get to 100%, right? You just have to design the right oligo. I see. I don't wanna make it sound like it's easy to just come up with an oligo that can do 100% efficiency. Yeah It's not easy, right? So. Just wanted to like level set so people understand the background. I completely agree that, you know, once you have clinical data in patients, that kind of fixes everything or answers a lot of questions. Right. You don't need 100% and- When are we getting the further data from the phase I? We have told the street that we'll be announcing data from all three healthy cohorts in the first half of this year. There's only a few more months left, but yeah. You said three cohorts. Have you guys talked about dosing, like levels that you're doing? Do you expect to see a dose response? How important is that in the readout to get more confidence? We do have three dose levels, 3 mg/kg, 6 mg/kg and 9 mg/kg. We would hope to see a dose response. That's what we're expecting. We have data coming soon. If we hit the targets, what's next? If we hit the targets and the three PD readouts are concordant, which we would hope they would be, we would move next into a patient cohort under the same protocol as the healthy volunteers. That's four weeks of treatment period. We would expect to translate some of the mechanistic data that we see in the healthies to potentially disease biomarkers. I would caution that in these patients, four weeks of treatment is very, very short. Sure. So. When we say cholestatic disease, a lot of options there. Like what makes sense, what may not make sense for an application? We've specifically narrowed down on those cholestatic diseases where there are no available treatments. For us, that currently means we're looking at PSC and BA. PSC being primary sclerosing cholangitis, and BA being biliary atresia. We have not announced which one we'll go with. We'll do that alongside the release of the phase I and the phase I data in healthies. That data will help inform that. Got it. We'll get the data, we'll get an idea of, you know, therapeutic area and then, you know, what then we can start level setting expectations for the subsequent data readout and proof of concept. That's right. Got it. Yeah. Single center study, correct? Correct. Yep. So- One center in the Netherlands. You're just adding on the cohort, so it should be a really streamlined path to moving forward. That's right. Got it. I think this might be a good time as we're talking about therapeutic areas, you know, the development strategy you guys are taking, the other players in the space are going after the same disease that has options out there, which, you know, gives investors the ability to benchmark and see how things are going. You know, as far as the actual application use, you know, brings in a lot of questions where you're going after more fresh powder. Yeah Obviously part of a strategy big picture wise, but walk us through how you guys think about prioritization and where you guys are going ahead? Yeah. When we thought about what are the targets that make sense, we have a very strong target hunting group, we call them. It factors in things like, where RNA editing has an advantage over other modalities or existing therapies. Generally, we try to pick therapeutic areas where there is no current treatment. PSC and BA are a good example of that, but not always. Our second program in Rett syndrome, there is an available therapy, but it is primarily focused on symptoms. Our strategy is generally to pick indications where we can showcase the sort of advantage of RNA editing. AX-0810 is in the clinic now, but you mentioned you have subsequent candidates in the pipeline, Rett syndrome, you have a MASH candidate moving forward as well. Tell us about the earlier candidates and where those are. Sure. Rett syndrome, we announced in January that we selected a clinical candidate, so we're going to be going into IND-enabling studies, and the first in human for that will start in the first half of 2027. The third program that we've talked about is targeting PNPLA3 for fatty liver disease, and we actually have not announced our specific development plan for that. We expect to have more on that later this year. With those targets and those conditions, can you talk about, you know, you mentioned Rett, where there's something available that you think you could have an advantage. What are the advantages that you're gonna be going forward from a, you know, target product profile? Sure. Well, clearly with what's available right now commercially, our approach is a correction of the mutation. The mutation here is in a gene called MECP2. There are clear advantages to addressing the underlying problem, which is the mutated protein than to what's available now. I think maybe the more apt comparison is with the two programs that are gene therapy programs that are in development. Here you have to think a little bit about the cause of the disease, which is the mutation in MECP2. When there are mutations, of course, that's a bit analogous to an under-expression of the gene. The flip side, there's also a problem. With overexpression of MECP2, you have something called MECP2 duplication syndrome, which have very similar symptoms to Rett syndrome. In levels as low as 1.5 x expression, you can already see symptoms, and when you get to 3 x overexpression of MECP2, that can be lethal. When you think about gene therapy and how that's delivered, tight control of expression will be critical. In addition, well, I should contrast that with an RNA editing approach like us. An RNA editing approach relies on the existing mRNA, so there's no need to regulate expression because we are not touching what exists endogenously or Mm-hmm What's already there. There's no overexpression or underexpression danger. In terms of durability, of course, the gene therapy approaches are hoping to be one and done, but as we're finding out, the sort of the durability of these one and done approaches are not really one and done, right? Mm-hmm. The effect can wane over time as the cells turn over, but also you have to think about distribution. Is the gene therapy getting to the various areas of the CNS and the brain, that are needed to help with the disease? With AX-0810 in the lead, how should we think about read-through on the platform, the technology to subsequent programs? Is it one of these where there's enough overlap that, you know, we have success here, we feel better about everything moving forward, or are these more bespoke applications and targets that, you know, require their own vetting more thoroughly? Yeah, I'd love to say it's the easy answer would be, "Yeah, of course. It's every program will be- This works, that'll work. Yeah. Yeah, every program will be exactly the same. As we're finding out, indeed, each target has its unique challenges in designing an oligonucleotide that can edit effectively. Having said that, the chemistries we use and the modifications we make to the oligonucleotides are repeatable from target to target. Okay. One program going into clinic and being successful and shown to be safe absolutely has a read-through effect on the other programs based on our specific Axiomer technology. We mentioned your MASH program targeting PNPLA3. Obviously, investors are very keen on seeing that space evolve because Madrigal's launch has done so well. Yeah. You guys are gonna be going after a subset of patients. What's the thesis on, you know, going after a subset when people can go after a drug that targets the more broader, bigger population? That's a great question. PNPLA3 is the strongest genetic driver of MASH. While programs like THR-β agonists can address the whole population at a very high upstream level, it's addressing the metabolic drivers of MASH, those individuals who are carrier for PNPLA3 may not be served as well from a broad, focused medication like a THR-β. Same goes for GLP-1, same goes for FGF21. With PNPLA3, you have to think a little bit about what it does, and PNPLA3 is involved in the breakdown of the big droplets in the liver, as well as breakdown of triglycerides, for example. You can imagine that even when you're treating the upstream effects, the liver is still having trouble breaking down those lipid droplets. And- I should also mention one thing that these metabolic approaches do not address is also lean MASH. Lean MASH accounts for 10%-20% of the MASH population, and PNPLA3 is at an even higher prevalence. Carriers in certain populations are seen to account for 70%-80% of the lean MASH population. Hmm. It has very high prevalence in lean MASH. It is a really interesting genetic subtype and target when you're in the weeds and things. Right. I think once people realize that, they'll start, you know, being even more compelled by like that program. But when we talk about cholestatic disease, I guess MASH, you know, could fit in that bucket, Rett syndrome, something different. When you're in charge of capital allocation decisions, how do you think about, you know, we're at the early innings of really cool science and figuring out where these could go, but then at some point, we're gonna have to start funding development programs and potential commercialization. How do you think about what can stay, what can go with a partnership or- Yeah How do you choose and prioritize these things? I suppose that really aligns with our company strategy, which is to focus on a wholly owned pipeline, continue to innovate on our technology. We really view ourselves as sort of, if you think about other areas of RNA therapeutics, there have been similar companies that have sort of built first, second, third generations of that modality, and that's what we really aspire to be. And then the third leg of that stool is partnerships. I didn't mention, but we have quite a massive partnership with Lilly across 10 targets. We received $125 million upfront from them. It's a total partnership worth about $4 billion. Of course, those are biobucks. Between non-dilutive funding from partnerships and moving our wholly owned pipeline forward, that's kind of how we focus our resources. Maybe the last minute or so, can you remind us, you know, at that point, your cash position and what kind of runway that gives you? Sure. We have about EUR 109 million at the end of September, and that takes us through mid-2027. In terms of milestones on the clinical side, there are three key milestones that'll get us through. I mentioned the target engagement readout of the healthy volunteers. That's this half of the year. The last half of the year is initiating the patient cohort of the 810 trial, phase I trial. The third is the initiation of the first-in-human trial for the Rett syndrome program. In terms of other things to look for, as our Lilly program, Lilly programs, plural, progress, we'll continue to recognize additional milestones, so you should look out for that. Also we'll give an update on PNPLA3 and the path forward for that program. A lot going on. We'll keep an ear to the ground. We got an update coming soon and then giving us more guidance on target indications will allow us to, you know, better, you know, capture the potential value down the road. You guys got a lot going on. Dennis, thanks so much for coming and telling us more about the story today. Yeah. Thanks for having me.