Good afternoon, everyone. Thank you for joining the 24th Annual Needham Healthcare Conference. My name is Joey Stringer, and I'm one of the biotech analysts at Needham and Company. It's my pleasure to introduce our next presenting company, Avidity Biosciences. Joining us today from Avidity is President and CEO Sarah Boyce and CMO Steve Hughes. For those of you joining us on the webcast, if you would like to ask a question, please do so at any time. You can submit a question using the chat box feature at the bottom of your screen. With that, we'll get started. Sarah and Steve, thank you so much for joining us today. You're welcome. Thank you for inviting us to the conference. Sarah, we'll start off. Can you give us a quick overview of the company and the three clinical stage programs? What makes Avidity's targeted delivery approach differentiated relative to the competitors in the space? Yeah, at Avidity, we really have—we are leading the field when it comes to delivery of RNAs outside of the liver. We have led the field from an aspect of the discovery of transferrin and targeting the transferrin receptor as a means to deliver RNA to our target tissues and cell types. This has led to our skeletal muscle platform, as well as our precision cardiology platform as well. Where we are today with three programs, all in the late stages of development, we are on track to file our first BLA this year for del-zota for boys and young men amenable to exon 44 skipping. Both in myotonic dystrophy and FSHD, we have led the field as being the first company—you know, in the case of myotonic dystrophy, the first company to actually initiate a global phase III program in myotonic dystrophy, the Harbor study—that's the Harbor study—which is enrolling away and on track and on schedule to meet enrollment as per our guidance. In FSHD, actually, we just announced on March 31 that we had completed enrollment of the cohort designed for accelerated approval in the U.S. Now, we will be initiating in Q2, we plan to initiate a global study designed for full approval and for global approval in FSHD. We really are leading the field in each of the therapeutic areas in which we're operating. Great. To that point, you mentioned the potential approvals kind of on the horizon here. I guess, what's the state of the current U.S. commercial buildout? Are there overlapping call points and things? I'm sure across indications, but are you prioritizing the expertise and sales force, MSLs, things like that, or prioritizing that for a specific indication, say DMD over DM1, for example? Yeah, that's a great question, Joey. I think one of the elements that really we believe is somewhat unique is we're on the cusp of three potential launches, all sort of one after the other. It's the same call points. For FSHD and myotonic dystrophy, there is a 100% overlap in the potential prescribing physicians. Obviously, DMD is a little different because that's where you bring in the pediatric neuromuscular specialists, of which there's about 100 in the U.S. So a pretty small call point from a sales force perspective. In terms of our organizational build, while we are very much prioritizing and placing a significant emphasis on in the U.S., is the building of our market access and patient services organization. That's really what defines success in rare diseases. We're looking to build, quite simply, the best patient services team in the industry. There are some very, very good ones that already exist today. With regards to our hiring, it's really looking for people with rare disease experience, but also in terms of we're prioritizing the patient services organization. We're prioritizing market access, patient advocacy, our MSL and medical affairs team through Steve's organization. Really kind of like the sales force and that aspect, that comes a bit later. The key elements where we're spending a lot of time on is market access and patient services. This isn't just the U.S. We are building a global organization and plan to globally commercialize all three of our programs and subsequent programs as well. Got it. Very helpful. What about ex-U.S.? What's the strategy there from an approval standpoint and commercial expansion? Is this indication specific? As a follow-up, are the call points overlapped set up similarly to what they would be in the U.S.? Yeah. We plan to globally commercialize ourselves. One of the reasons and the big rationales around that is because the call points are the same. It is an incredibly—when you think around from a commercialization perspective, it is an incredibly efficient organizational build. I think to launch one drug in one country, you know, as you go outside of the U.S., is challenging. We are looking at launching initially three. The way we have designed and the way we've always approached our strategy is from a global perspective. We did it with the Harbor study, where we aligned with the three key regulations, the big three, so to speak: FDA, EMA, and then Japan. We are doing the same thing with FSHD. We place a lot of emphasis on the Japanese market. It is the second largest market in the world. Japan was the first country outside of the U.S. to enroll patients in the Harbor. Actually, we announced today that we have received orphan drug designation in Japan. From an efficiency perspective, when we look at how do we generate most value, it is by doing the global commercialization ourselves. We are really excited to build that organization. You have to build it carefully and very thoughtfully. As a team, we have extensive experience in doing that. It is something that I myself have led three times in my career. This will be the fourth. There are always lessons that you learn. In terms of financial position for Avidity, what's your current cash position, cash runway expectations, and what assumptions are baked into that? Yeah, great question. You know, clearly in this market, we have to make sure that we are very fiscally responsible with our cash. We're in a very fortunate position as Avidity in that our last earnings, we have $1.5 billion. That gives us cash runway very comfortably into mid-2027. I say comfortably from an aspect of how we do our cash guidance. We're actually pretty conservative the way we do it and bake everything in. That includes completions of all of our global phase III studies. That includes launches, organizational build, pursuing our DMD programs and additional exons, as well as also bringing our precision cardiology portfolio to the clinic. Actually, what we don't include at this time point is sales. That is not baked into our cash runway. Obviously, we're filing our first BLA this year. Nor does it include things like pediatric review voucher. Should we expect to receive one for del-zota? That's not been included in either because we may keep that ourselves. We could sell it. It is very much designing for optionality around that cash runway as well in the approach that we take when we do it. Got it. One more question before we kind of dive into some of your programs. Big picture macro question, given some of the recent headlines. Just curious to get your take on some of the recent developments and layoffs within HHS and FDA and any potential impact to your company and your rare disease programs, specifically Peter Marks, who was a big proponent of advancing therapies, especially rare disease. What sort of conversations are you having with the new administration and/or key government stakeholders? Yeah. One of the things that we did last week was check in with our division. We sit within Neuro 1 of the agency, and we've had communication with the division last week. We have a lot going on, actually, with the division because we have three programs. All of the key people remain in place, even down to the level of our project managers that we work with. We have two project managers across three programs. We've had communication with them. The division, from everything that we can tell, and I've spoken to other CEOs who also work with this division, everyone seems to be in place. What I would say, looking at this from a humanist aspect, is that we are incredibly grateful, and we should all be, for the teams that are at the FDA, at the division level, who are showing up for work every day and getting the job done. What they saw happen on Monday, that is incredibly disruptive. When we look at and we talk about patient focus and patient commitment, we're really seeing that in the neuro division and in other divisions as well, where people are focused on getting the job done, meeting their commitments, and are very aware of the patient need that exists for innovation and to get drugs to patients. I would say from a then pulling to more of a macro level, because this is where the first thing you do is you say, "Okay, what do I know? Ground on what you need to know, what you need to know around what directly impacts. For us, that's what's happening. That's the neuro division. We have also, as a company, been engaged for some time on policy work, policy work advocating for rare disease policy and the rare disease community. As a result of that work, we've also been able to be active from a health perspective in providing our views to legislators, law members, and committee members as to what happened last week and around the importance of making sure that the FDA is the best regulatory agency in the world. Yes, it wasn't perfect. Yes, no agency ever is, but making sure that we protect that. Got it. Oh, it's very helpful commentary. Let's dive right into some of your programs. Let's start with del-brax for FSHD, since it has a lot of catalysts in the second quarter of this year. Can you just list what is going to be disclosed or several of them, but maybe just to level set everyone here? Yeah. Maybe if I start us off and then Steve, I think we can get into it more. For FSHD, there were four. I say there were four because one of them we have already achieved, which is completion of enrollment of the accelerated approval cohort, which we were able to complete ahead of schedule and did that in Q1. I know we did it on March 31st, but hey, I'm taking the win. We beat our guidance. We're really pleased with regards to, and I think one of the things we have always consistently shown as a team is we are on point and we can execute really, really well. That's another great example of execution from our team. I'm very proud of that work. In terms of the three that are to come in this quarter, firstly is the data from the Harbor study. Sorry. The data from Fortitude, and that's Cohorts A and B, and that's at the 12-month point. The second thing is around the initiation of our global phase III study, which is planned for full approval and then approval around the world. We plan to share the design of that study. That would be around the primary endpoint and then secondary endpoints, duration, size. The fourth aspect is around our progress on the accelerated approval pathway. This is the pathway around biomarkers and providing an update as to our discussions with the agency and the potential acceptability of the accelerated approval pathway for this disease, which really we're carving out the whole space here. We are leading the field and carving a path for FSHD, which we're incredibly excited to be able to do. That study is already fully enrolled. Got it. To follow up on the accelerated approval pathway, obviously, you'll be updating investors here, as you mentioned, second quarter. I guess maybe what are some of the puts and takes on the discussion points for the accelerated approval pathway? Talked about novel circulating DUX4 regulated biomarker and/or DUX4 gene expression. Maybe give us the arc frame, the argument around that discussion and a little more color on that. Yeah. Steve, do you want to take that one? Yeah, sure. FSHD is really a perfect disease for an accelerated approval pathway. On the disease characteristics side, it ticks all of the boxes. It's a higher unmet need disease. There's no current treatments available. phase III study, although doable, is complicated and would bring a drug into the market more slowly than FDA would like to see for promising new therapy. On the therapy side, we've got a promising new therapy. FSHD has a single underlying cause, is DUX4 expression. There's no ambiguity about that. Having DUX4 expression doesn't cause several other diseases. It only causes the one disease. If you don't have DUX4 expression, you don't get FSHD. If you do have DUX4 expression, you do get FSHD. That's fairly binary. The things that we're measuring in terms of the biomarkers are directly linked to the underlying biology of the disease, tells us exactly how much DUX4 expression we've got. We've seen already that we can push the muscle biopsy markers of DUX4 expression down by over 50%, no matter how we measure them, across different modalities of measurement, as well as different gene panels. We have a circulating biomarker that allows us to track changes in DUX4 activation over time. FDA can be very confident that what we're seeing at early time points plays out over the long term as well. We have changes in another biomarker, creatine kinase, that tell us about what's going on with underlying muscle damage. We've seen that the creatine kinase trajectory tracks very nicely with the circulating biomarker. As the circulating biomarker goes down, showing us that DUX4 activation is going down, creatine kinase levels go down as well. Finally, we've already seen directional improvements across multiple different clinical endpoints and patient-reported outcomes and clinician-reported outcomes. We've already seen many, many things that support the thesis that the circulating biomarker, the muscle biopsy biomarkers that we're measuring, are reasonably likely to predict clinical benefit. We would reproduce all of that in the Cohort C. In addition to that, we're working with natural history data sets. We've got access to plasma samples from the ReSolve study, for instance, where we can look at the circulating biomarker, where we can look at creatine kinase levels. We can see how the circulating biomarker predicts clinical course over time. We're doing some of that work right now. We believe we've got a very compelling case for an accelerated approval. This is the perfect disease for an accelerated approval. Our anticipation is that the conversation will really be around what the duration of follow-up needs to be before we can cut the data and file and what things FDA really wants us to see for biological and technical validation of the biomarkers we're using. I guess as a follow-up to that, for the accelerated approval route, do you feel that showing trends in the functional measures similar to what you've already disclosed in Reachable Workspace, QMT, things like that, would be sufficient in the eyes of regulators for full approval? For accelerated approval, there's actually no requirement to show changes in clinical data. If you look at the Duchenne programs for PMOs that have been approved, those haven't shown clinical data at the time of accelerated approval. That's been all in a full approval study. We've got a strong case on the biomarker side. That said, having trending clinical data isn't going to hurt the situation and will definitely help cement the thesis of reasonably likely to predict clinical benefit for the biomarkers. Got it. You also mentioned the planned update on the global phase III trial design and potential start in the second quarter of this year. I guess one of the main points of discussion on the design, is it mainly on the selection of the primary endpoint? What other aspects of the design should we be watching out for? Yeah. There are multiple things in the study design that we talk to the regulators about. Of course, the primary endpoint, but we'll have secondary endpoints that we're testing statistically as well. The methods that we would be wanting to use to preserve alpha across all of those endpoints so that we can do a robust statistical analysis. The size of the study in terms of the database, duration of follow-up before we can cut the data, statistical methodology for doing the final analysis. There are many, many questions we ask. In addition to that, we're also asking regulators about the other things that we have to do alongside providing clinical data, such as a non-clinical package. We have to agree on timing for things like carcinogenicity studies, applying for a QTc waiver, and getting buy-in to not have to do QTc studies, getting buy-in around what the drug interaction package is going to look like, for example. There are many other things that we're asking alongside the clinical trial design as part of those interactions. Got it. You have these two parallel approaches here. How should we think about the timing of the accelerated and the full approval, the regulatory updates? For example, if you receive regulatory alignment from either the accelerated approval, say, how would that impact the overall development path going forward? Yeah. I mean, it's our goal and expectation that these should all come together around the same time. For example, in the case of accelerated approval, we have had that discussion, and we've reached conclusion of that discussion with the agency, that is something that we view as being highly material. That would be something that we would show. Looking at our schedule of events and how things are coming together, it's most likely that they're all going to be around about the same time or at the same time. Okay. Great. Very helpful. You also plan to provide some longer-term follow-up data from the dose escalation cohorts from the phase I/II trial. Have you disclosed what type of data that you'll announce from that, such as how many patients, duration of follow-up, and I guess what data would be released? Yeah. If I take that, just stepping back a little bit just to remind listeners, this is the Fortitude study. All of the cohorts are one year in duration. There are two different doses that we're looking at in the data that we're going to be showing, 2 mg/kg cohort and a 4 mg/kg cohort. We'd already shared data last year, clinical data at the four-month time point from the 2 mg/kg cohort and circulating biomarker and CK data from both 2 mg/kg and 4 mg/kg out through four months and beyond. The first three doses are given at a six-week interval. We've got 2 mg/kg and 4 mg/kg. They're given day one, they're given on week six and week 13. After that, for the remainder of the follow-up, it's every 13 weeks. In terms of the data that we'll, so there's 39 patients in total across all of those cohorts. The duration of follow-up is one year. That takes us through to the end of the study, at which point patients roll over into the open label extension. We're presenting the top-line data from the completed Fortitude study. We'll have obviously patient safety data, and we'll have clinical endpoint data. The clinical endpoints are likely to focus on what we've agreed as being primary and key secondaries in the phase III study so that folks can get a clear line of sight to how those are going to behave over a one-year period of time. Any additional clinical endpoints we would bring forward in discussion with our investigators because they're going to be authors on whatever posters or abstracts that we put out there. There will be things that were felt to be the most clinically meaningful out of the data set. We will also be sharing updates on the biomarker data as well. Of course, we will have the circulating biomarker out through a full year, creatine kinase levels out through a full year. We will have a comprehensive safety update that will include not only Cohorts A and B, but also data going out through a contemporary data cut in the open label extension. We will have long-term safety data over more than a year of follow-up. Great. Last one from Moscow on FSHD. Competitive landscape question. A couple of programs out there. Roche has an antibody in phase II and Arrowhead has a program in clinical development. What differentiates del-brax in your view from these programs? A couple of things. The first point is that we're obviously years ahead of these programs in clinical development. We've already completed enrollment in one registrational cohort and are about to start enrollment in our global phase III study. Myostatin inhibitors do not target the underlying cause of the disease. They are very much downstream of DUX4 and work on maintaining or maybe increasing a little bit of muscle bulk. Because they are not disease-modifying, we do not expect them to substantially alter the trajectory of the disease. With the Arrowhead Sarepta program, although that is an siRNA very similar to ours, they use a different delivery mechanism. They are using an integrin-targeted approach. From their patents, we have actually synthesized that integrin-targeting mechanism and tested it. As Mike Flanagan, our CSO, would say, we prefer the AOC approach to the integrin-targeting approach. We would anticipate there that we're going to be substantially better clinically than the other siRNAs. I think, just to emphasize Steve's point, I mean, we're years ahead. We are carving this pathway for this disease and really leading the field. Great. Very helpful color on FSHD. Let's move to DMD44, del-zota. You presented some great data last month from EXPLORE44. Can you walk us through how this updated your data package and any key takeaways from this presentation? Yeah. Maybe if I start, and Steve, I'm sure, can add and expand. Look, at a high level, really what we've seen with del-zota is game-changing. I mean, this is game-changing for boys and young men amenable to exon 44 skipping, also for the overall DMD space as to what we're able to do from a delivery aspect in being able to get more PMO into muscle cells than any of the other delivery technologies. I mean, what that means in terms of then what you can produce from a dystrophin perspective. I mean, a 25% increase in near full-length dystrophin. That's something that we've never seen before in DMD. You match that with the changes in creatine kinase. Again, never seen before, where there's that drop that happens very quickly in creatine kinase, and then you see it stabilize and stabilize now out for a long period of time, kind of round about the levels of upper limit of normal. That's incredibly exciting for physicians who've dedicated their career in treating boys and young men with DMD. Importantly, for del-zota, for those who are amenable to exon 44 skipping. Yeah. Maybe if I just jump in a little bit. If we think about Duchenne, think about the biology of the disease. Dystrophin is a very important protein in muscle. It has an anchoring and protective function in terms of protecting the muscle fiber membrane from tearing during contraction. It anchors the muscle fibers into the interstitial tissue around the fibers. We see in patients with Duchenne that on exercising their muscle, they basically tear the muscle fibers apart, cause huge muscle fiber damage that results in inflammation, results in basically the muscles becoming replaced by fibrous tissue and fat over time. Dystrophin also has a number of biological functions like regulating nitric oxide production. There is a whole bunch of different functional domains. It is not just about the dystrophin level. It is about the quality of the dystrophin that you are making as well or providing. We see that with exon skipping that we make a near full-length functional dystrophin level. That is reflected in what we are seeing, these large, large changes in the measures of muscle damage, CK, AST, ALT, myoglobin. They all come down to either near normal or within the normal range, and they stay down over the long term. Given that at its heart, Duchenne muscular dystrophy is a disease of prolonged and repeated muscle damage. What this tells us is that we are really protecting the muscle fibers from damage over the long term. We anticipate that is going to translate into meaningful functional benefits for patients over time, unlike some of the other approaches where you are not providing a full-length dystrophin or anywhere near a full-length dystrophin and where you do not see CK levels coming down to near normal. The changes that you do see in CK actually occur over months and certainly within a one-year timeframe, returning to very close to baseline levels. We are really, really optimistic that this is game-changing for these patients. Got it. Makes sense. I guess in terms of the data package here, remind us why the 5 mg per kg dose was chosen over, say, the 10. Would this cover the full age range of patients? Maybe was there a dose-dependent efficacy in ambulatory versus non-ambulatory patients? Yes. Multiple parts to that question. Maybe starting with the dose selection. At both 5 mg per kg and 10 mg per kg, we saw very, very similar results. We saw near identical muscle tissue concentrations at those two doses. We saw around about a 40% increase in exon skipping at both doses. We saw around about a 25% or slightly over increase in dystrophin level at both doses. When you're faced with two doses that have exactly the same profile, it makes perfect sense. It is really good practice to go with a lower dose. That is why we selected the 5 mg per kg every six weeks to move forward with. In terms of exposure, the reason why we didn't see substantial differences at 10 mg per kg is there really wasn't that much difference in long-term exposure between 5 mg per kg every six weeks and the 10 mg per kg dose that we were giving every eight weeks. It's only about a 30%-35% difference in exposure, which really isn't enough to see differences for the patients. The good news is, though, that the changes that we have seen have been really unprecedented with extremely high levels of near full-length dystrophin production and the normalization of the muscle damage markers that we mentioned just now. In your guiding for top-line functional data from the OLE in the fourth quarter of this year, what type of data do you plan to disclose there? What type of data do you plan to disclose there? How could this data help from a commercial perspective? Yeah. So with regards to the data from Q4, first, this is long-term safety. We'll have the majority of participants having been on drug for a year. Some will be a little less. Some will be a little more, but primarily at a year time point. We plan for it to be a pretty broad look at a whole range of different functional measures. We'll also take a look at creatine kinase, although I think we all know what that's going to do. In terms of around looking at those different functional measures, we'll also look at the relevant measures for ambulatory and for non-ambulatory patients because obviously they're different. We'll look at a 12-month. What we have, the Explore study itself is pretty short, four months for 5 mg and a five-month study for the 10 mg participants. is a little too early to do that functional look. Certainly, we are seeing very encouraging signs. We hear very encouraging things from the patient community and from some of the centers as to those observations. We are really looking forward to sharing that functional data at a 12-month time point. Overall, if you look from as we look towards commercialization, this really is what we view as a total package from an aspect of a drug in the DMD space. Joe, I just realized I didn't answer the second part of your question. In terms of the changes that we saw in dystrophin and changes in the biomarkers, we saw those really across all patients, ambulatory and non-ambulatory. We involved a wide age range in the study from seven to 27. We saw it across all age groups and also across multiple different genetic mutations as well. As we come to the market, we are expecting a broad label that will include ambulatory, non-ambulatory, and all age groups. Yeah. I think building on Steve, it's also a broad label, but also about having the data for payers. In terms of having that data from both ambulatory and non-ambulatory is particularly important when it comes to for DMD in the U.S., a lot of that reimbursement and the payer discussions are done patient by patient. Having that data that shows the impact on dystrophin and creatine kinase, that it doesn't matter from an age range perspective or from whether a person is ambulatory or non-ambulatory, we view as being important from an overall reimbursement package. Great. Very helpful. I guess last one on DMD is just given the great data that you've shown so far in DMD44, how does that set you up for pursuing programs for other DMD genotypes? What's the overall goal? What's Avidity's overall goal for the DMD franchise? Yeah. At its highest level, our overall goal for the DMD franchise is to be able to make a profound impact in people's lives. That's part of our vision and mission as a company that we're looking to do. Our next DMD program is targeting exon 45, and that's currently in IND- enabling work. We also have other programs for other undisclosed exons. From us as a bar, we look at when we look at a program is we're trying to make a profound impact in people's lives. We're looking to get in the 10% range, which then puts you into a Becker's type range. That's really our target as we look at it. This is unadjusted. Many people adjust dystrophin. We don't. That's kind of the target that we're looking for for our programs. Got it. We're getting up on time. Maybe one last one on DM1. You have a DM1 program ongoing, phase III. Yes, we do. Save the best for last, I guess. Any updates there on the phase III enrollment? Is it still tracking to complete middle of this year? Maybe any closing remarks on DM1 from your view? Yeah. For the Harbor study, the Harbor study is enrolling beautifully on track, on schedule, typical with the type of execution that we do as a company. In terms of then as we look, a lot of our work in myotonic dystrophy now, as with FSHD and DMD, is all around preparing for commercialization and preparing for three launches in pretty close succession, which is just incredibly exciting to be able to plan for and prepare for. Thank you so much, Sarah and Steve, for participating. It was a very useful discussion. Yeah. Thanks so much, Joey. Thank you, everyone, for joining us on the webcast. Have a good day and a good rest of the conference.