Good afternoon, everyone. Thank you for joining us. It is at my pleasure to have with us today Aileron Therapeutics. My name is Edward Nash, senior biotech analyst here at Canaccord Genuity and Equity Research. Presenting for the company today is Brian Windsor, Chief Executive Officer. Aileron Therapeutics is developing compounds to address unmet medical needs in orphan pulmonary and fibrotic diseases, and they have two lead programs, which Brian will talk about. If there's time left over, we have a couple of questions for him. I will turn it over to you, Brian. Thank you for joining us. Yes. Thank you, Edward. Hi, everyone. Good to see you. Thanks for coming. Firstly, would like to thank Edward and the Canaccord team for having me, letting me talk to you about the exciting things that we're doing at Aileron. In October of last year, Aileron acquired Lung Therapeutics, and with it, their pulmonary assets, LTI-01 and LTI-03, and we are now focused on unmet medical needs in fibrosis, and orphan pulmonary, conditions. Our disclosures. Then I'm really going to focus my talk today on our LTI-03 program. I think this is a potentially very special program for idiopathic pulmonary fibrosis or IPF. It's obviously a devastating, disease. LTI-03 has really a dual mechanism in that, it inhibits the pro-fibrotic signaling, which is what the other drugs in development are kind of trying to do, but more importantly, it has a regenerative component. It protects critical cells in the lung epithelium, type II epithelial cells. These are progenitor cells that can remake new lung tissue, potentially restore lung function. This is not something that other drugs in development can really touch. Obviously, this would be a game changer for the patients who are living with this terrible disease. I'm going to focus the talk on LTI-03, but I will tell you, we have a second program, and from a risk standpoint, I think it balances very nicely. LTI-01 is a drug for a loculated pleural effusion. That's a severe consequence of pneumonia. It's a hospital-related condition, potentially fatal, no drug approved anywhere in the world. This would be the first drug approved. We've already seen this drug work in a phase IIb and phase II clinical trials, ready to go with a larger phase II trial, kind of pending funding. Beyond this, a lot we feel we could do in fibrosis. LTI-03 is presently in a phase IIb study in IPF patients right now. We completed a safety study in healthy, normal volunteers, and we're in a phase Ib study in patients. We released data on a low-dose cohort back in April. We'll release data on the entire study this quarter. So at least by the end of next month, we'll have top-line data on the final cohort, the high-dose cohort, and we will look to move into a phase II trial for this drug. For LTI-01, we did do a small phase II trial. Unfortunately, we started right at the beginning of COVID, didn't get nearly the number of patients that we, that we wanted. We're ready to go with a larger trial. There are some nice follow-on indications, for this. And then again, beyond this, a lot we feel we could do in fibrosis. I've got a great team. I just want to highlight, Cory Hogaboam, who is our Chief Scientific Officer. I wish Cory could be here. He can really, slice and dice all the IPF, stuff better than anyone. He's a professor of medicine at Cedars-Sinai Medical Center. 25-year career studying IPF. He's worked on more than 40 drugs in his lab, and his kind of coming to be with us at Aileron is a great story that I'll save for a little bit later. Beyond this, a great team, great board of directors, lots of experience, and great expertise. So again, I'm going to focus on LTI-03. This is a peptide drug that's related to the caveolin-1 protein indicated for IPF. You may be familiar with this condition. If you're not, it's a devastating disease, probably 100,000 people living with IPF in the U.S. alone each year, about 40-45,000 new cases of IPF. No one lives long with this disease. Median survival is only 2-5 years from diagnosis. There are two drugs that are approved as standard of care. I think saying they offer modest clinical benefit is a nice way of putting it. Both slow disease progression for about a year. They're very expensive, they have high tolerability issues, and neither is disease-modifying, so still a huge unmet medical need in IPF and also a very large market, projected to be almost $12 billion by 2031. That is just IPF proper. There are other related lung conditions called interstitial lung diseases, which can be addressed by drugs in the IPF space, so a lot of potential upside beyond just IPF. So LTI-03 is related to the Caveolin-1 protein, and Caveolin-1, we think of it as kind of a regulator of homeostasis in the cells. It affects a lot of different proteins and performs a regulatory sort of effect on those proteins. It affects the regulation through a 20-amino acid sequence called the Caveolin Scaffolding Domain or CSD. The job of that region is to bind and traffic proteins with a caveolin binding domain, of which there are many. It affects the phosphorylation of these proteins and thus affects trafficking of a large number of proteins, many involved across multiple fibrosis pathways. We think this is very important because the two drugs that are approved that work at all also work across multiple fibrosis pathways. I think what we've seen in terms of failures the past few years is targeting any single protein in one of these pathways, well, it ultimately just doesn't work out. Our CSO, Cory, says it's like a whack-a-mole situation. You knock one of these down, others are going to pop back up. CAV1 affects proteins across multiple pathways, and not only in the lung, also in the heart, in the kidney, in the skin, in the liver, in the eye. We've seen the benefit of the LTI-03 mechanism also in animal model studies of these other organ fibrosis as well. Unfortunately, CAV1 is lost in a fibrotic state, which really begs the question then: if your target is missing, then, well, what, what do you target? And the answer, scientifically is pretty non-intuitive. So LTI-03 is a seven amino acid peptide. It's the seven-mer sequence FTTFTVT down there at the bottom. It is a part of that caveolin scaffolding domain. We've done substitution, deletion analysis to determine it's the smallest fragment that retains full functionality of that region, and again, sort of non-intuitively, you put this peptide into a living system, it's like CAV1 has been restored in terms of the regulatory effects. So think of this more like a protein, kind of mimic or protein replacement type of therapy. We deliver LTI-03 by dry powder inhalation for direct-to-lung delivery. And on the anti-fibrotic side, what we have seen from LTI-03 are pretty broad and strong effects, very similar to the standard of care drug, nintedanib. So we work in a system called Precision Cut Lung Slice, or PCLS. This is where we take actual biopsy tissue from an IPF lung. It's an IPF lung that's been removed due to transplantation. We're able to get a sample of this lung, and then we can interrogate it with, in this case, either LTI-03 or nintedanib, one of the two approved drugs, both at concentrations that would be very similar to what are given in the clinic. And we look for inhibition of a large panel of bad actor proteins, really is the best way to describe them. On these panels, the darker the purple color, the more inhibition there is to kind of each one of these bad actors. Now, this is a single patient sample. I'll show you a composite of six patients here in just a moment. But in this one patient, we had inhibition for LTI-03, virtually identical to nintedanib in terms of the breadth and strength of inhibition. I mean, you look at these, it's quite remarkable how well they match up. So very good match-up against nintedanib. We look at a composite of 6 patients, we had response in all 6 samples, so no non-responders. 3 concentrations of LTI-03 kind of moving left to right in terms of increasing, and you can see better and better effects as we move to higher doses. And the 10 micromolar LTI-03 right there in the middle, really good, broad, strong effects across all 6 patients. You will note that nintedanib was stronger at inhibiting several of these proteins, but this concentration of that drug will also light up markers of necrosis, apoptosis. It's a really, really toxic drug. A quarter to a third of patients who go on to nintedanib have to come off, typically due to GI side effects. Another 25% ask their doctor to lower their dose. A really toxic drug, we just haven't seen any sort of tolerability issues so far with LTI-03. We've run a lot of animal studies, dozens of animal studies. This study, if you're familiar with IPF, you've seen this, this model. It's called the bleomycin model of lung injury, which mimics fibrosis, uses an old cancer drug, bleomycin, which was found to cause fibrosis in the lungs. We do a 21-day model in which we injure mice lungs on day 1, but we wait 14 days until the literature would say that fibrosis is well established. Then we dose once a day for 7 days by inhalation, take down the animals. We look at trichrome stained tissue sections, as well as fibrotic markers like hydroxyproline and soluble collagen. Just focusing on tissue sections kind of left to right, the far left is a saline control, there's no fibrosis. Second from left is a bleomycin positive control, so the darker purple represents the fibrosis. Third from left is bleomycin injury with seven-day administration of LTI-03. Really no fibrosis to speak of, and then if you look at the markers on the right-hand side, the LTI-03 animals look about exactly where the saline controls are in terms of hydroxyproline and collagen levels. On the far right, CP stands for control peptide. We always run a control peptide with a scrambled sequence to ensure that it's our sequence-specific drug that has the effect. You can tell in this case, the control peptide had no effect. We've done dozens of animal studies, single-dose bleomycin, repeat dose, TGF-beta injury, all with the same sort of beneficial result. Now, all of the data I've talked about has been kind of on the anti-fibrotic side. That's the stop the scarring process, kind of side. That's where all the other drugs in development are focused. This data right here was kind of the start of us understanding there's a whole other aspect to LTI-03. So the lab that runs the PCLS model for us will add a LysoTracker dye to every culture that they run to check the health of the culture. LysoTracker is the bright green dots against kind of the dull green background of these panels, and it is specific for type II epithelial cells. Those are progenitor cells in the lung epithelium. It localizes to those cells. The lab just wants to see, do we have any viable type II cells? Do we have a viable culture here? Those cells will die off typically after a couple of days in culture, just like they're gonna die in an IPF patient. The technician that ran our studies had a medical emergency. She couldn't come back to the lab for 48 hours, and when she did, she called us and said, "These are some crazy compounds you have. They're keeping type two cells alive." And what we could see qualitatively was an increase in the LysoTracker staining, indicating we felt an increase in the viability of those critical progenitor cells. Now, at the time, we were consulting with Cory Hogaboam, like many other companies in IPF. I was really excited about this data, packaged all of this up, sent it off to Cory, who promptly threw cold water all over my excitement. He said, "Well, I don't really believe it. I've never seen anything like this, so I think this is an artifact." He gave me a lot of confirmatory experiments to do. He said, "You know, if you're really protecting type two cells, they should be making Surfactant Protein C, which is one of their jobs." So we went back and did more studies. Sure enough, with LTI-03 administration, we could light up production of Surfactant Protein C, which is the red image in the quarter panel there on the lower right-hand side. It was not lit up with the untreated control right above it. We could also light up its transporter, ABCA3, the green image, and then the Western blots on the right just confirmed. In an IPF lung, you get diminished levels of surfactant protein C, which we can raise with administration of LTI-03. So sent all this data back to Cory. He said, "Wow! I've never seen a result like this before in my life." Six months later, he calls me. He asked me if he can join our company as our CSO. He said, "I've been offered this job before. I could never get behind their compounds. I think I could put my career behind this drug." So huge vote of confidence and a great partner for me to have in this endeavor, someone that is so skilled in IPF. With all of this data and a lot more, we went into a healthy, normal volunteer study, first in man study. It's a dry powder, inhaled drugs, typical SAD/MAD design, very high doses in the single ascending dose. In the multiple ascending dose, we did hit a dose-limiting toxicity at 40 milligrams. What happened? Someone woke up in the middle of the night on about day 10, had some distress. They measured his lung function, had a drop in lung function that was brought back up immediately with an albuterol inhaler. So not an SAE, but obviously concerning. The next night, someone woke up, had a bit of wheezing, also not an SAE, but we said, "Stop the study," you know, "Wanna make sure everyone is safe." We were quite concerned. I was concerned we were causing an allergic reaction or something very serious. Turns out we did a year's worth of work, no elevated IgG or cytokine levels or anything in anyone, so we ruled out allergic response. What happened? It turns out that it's a very hydrophobic peptide, and at concentrations over 20 milligrams, we were likely oversaturating the airway lining fluid of the lung. Then we did some NMR studies with Lonza. They showed at 40 milligrams, the peptide would aggregate, and aggregated peptide would cause a lung irritation effect that could result in a transient drop in lung function like we saw. Fortunately for us, all of our PCLS and animal model studies would point to a human equivalent dose of between 1-10 milligrams. We were 4-10 times higher than really where we needed to be for a human equivalent, efficacious dose. At 20 milligrams and below, it's perfectly safe, well-tolerated, so we decided to move the 5 and 10 milligram doses forward into our present study, our 1B study. This is a schematic. It's a 2-week dosing in IPF patients, diagnosis of less than 3 years. They can't have been on antifibrotic therapy for at least 2 months, so treatment-naïve or washout for 2 months. 24 patients total, 12 in each dose group, 9 active, and 3 placebo. The low dose is a 2.5 mg capsule inhaled in the morning, and then 1 inhaled in the evening. The high dose is two 2.5 mg capsules BID. In addition to the 2-week dosing, we require a bronchoscopy at a baseline screening and also a bronchoscopy after their day 14 dosing, because in addition to safety and tolerability, we are looking at a really large panel of biomarkers. Now, in terms of safety, we released the low dose cohort data back in April. I think the safety was How'd they put it? Remarkably unremarkable, which is exactly what you want in terms of your safety. We had 3 adverse events total that were related to drug. All were grade 1, all were mild. In terms of the biomarkers, what we saw was, to me, pretty incredible. So we were able to assess 8 biomarkers. 7 of the 8 trended in the direction that we were hoping they would go. 3 were statistically significant. For such a small N and a low dose, I was absolutely thrilled with this. A lot of companies in IPF, if you're not familiar with this space, move through blindly through their clinical trials. Some occasionally will have one, maybe two biomarkers. For us to have seven of eight go the right direction was just really thrilling. So in terms of biomarker selection, we looked for proteins that were indicative of different cell types in the IPF lung: the fibroblasts, the basal-like cell, which is an aberrant cell type that's unique to IPF lungs, and alveolar epithelial cells. We had markers from each of these and all that moved the right direction. Three of the markers, collagen 1A1, IL-11, and the soluble RAGE, or sRAGE, have been significantly associated in the literature to lung function. Lung function measurement is the measurement that the approved drugs were approved on and will be the measure for us going forward in later stage clinical trials. So to have three of these significantly linked to lung function and all move in the right direction was, again, it was really thrilling for us. I don't wanna go too deep into the data, although I'm happy to go as deep as people like. But just to show you kind of an example of what we saw in these Galectin-7, TSLP, two markers that were significant, again, the N is really, really small. I'm looking forward to getting high-dose data so we can combine these datasets, see what they look like. Now what you're looking at is the delta between the post-dose and the pre-treatment values, and these are normalized to milligram of protein. What we typically saw was an elevation in these markers in the placebo group. You can see in the placebo, these are on average up versus baseline. Not surprising, these are highly proliferative cells, constantly making these factors. So to see an increase in these over even over two weeks is not surprising. So an increase in the placebo group and flat to down in the active group for LTI-03. So the gal-7, the TSLP, IL11, again, not significant, but trending in the right direction, and the collagen 1A1, significantly down versus placebo. p-SMAD and total SMAD is one that did not work out for us. We're tweaking the assay to maybe better measure phosphoproteins. But, you know, this one did not go the right direction. And then soluble RAGE went up versus placebo, CCL, CXCL7 down versus placebo, both in the right direction. Phospho-AKT was a safety marker for us. We did not wanna see this move relative to placebo, would've maybe indicated causing inflammation, which we didn't see. So again, really great biomarker data for us in our low dose. We'll get high-dose data here by the end of this quarter, and then look to move this drug forward. Again, really special drug in IPF. That's what I have for you today. Would be happy to answer any questions. Great. Thanks very much, Brian. I would like to ask, so IPF is obviously a very large indication by dollars, and there's many companies that are in development and trying to get new therapeutics for all the reasons you've talked about, the reason why the two drugs out there are just very lackluster at best. But can you talk a little bit about within the umbrella of ILD, going after PPF and why you chose if you can go after PPF, why did you choose IPF first? Yeah, so it's a great question. Progressive pulmonary fibrosis, that's something that now Avalyn is focused on, I think for good reason. In, you know, a PPF study, you can there's no drug approved, so you can do a true placebo control. For IPF, because of the standard of care, we've got to have background. You know, I think the reason that we went forward in IPF versus doing PPF first was really just because that's where, you know, we had the expertise, that's where we had kind of the initial data. We weren't sure about other ILDs at first. We have a lot of evidence in IPF proper of a loss of CAV-1, so, you know, we had evidence. I believe in PPF and other ILDs, it's gonna be the same way. We're actually thinking about, you know, should we move into PPF or another ILD? It would be a really, you know, thing for us to do. So you, as you mentioned, you need to be able to do background therapy, if you're going after IPF. But given what you've seen so far, is there, albeit early, with this drug, is this something that you believe would supplant what we see now as standard of care, or would it be still continue to be add on to what we currently have? Yeah, it's a great question. I personally believe that LTI-03 would be a great standalone therapy because of what we've seen on both the antifibrotic side and the regenerative side. But because of the regenerative aspect of the drug, which is another reason why we were comfortable going into IPF, there's just a lot more that this drug can do versus other drugs. So ultimately, if IPF is treated with a multi-therapeutic approach, as some investigators believe, we think there would be a place for LTI-03. But yeah, I'm hoping that the trials are gonna bear out the fact that it's just a great monotherapy. You'd have the ability to c learly, you need to go into phase II testing, but phase III's for these trials usually tend to be very large. Yeah. So from a funding standpoint, is this something that you feel a biotech can handle the heavy lifting for something like this, or would a partnership be needed for something like this in your mind? I think a biotech can handle the heavy lifting, mostly because, you know, in the investor community, and we've had great support so far, but we also have had a lot of groups who have said, "You show me lung function data, and we wanna be there with you, you know, when you do that." So there's a big risk reward in IPF, like with a lot of things, but I think a lot are ready to help with the heavy lifting if you can show some proof of concept. And then we didn't talk about the CF program, but you do have an earlier stage cystic fibro- Correct fibrosis program, right? Yeah. And so speaking of heavy lifting, is this something that you potentially, do you have enough data in hand to interest the Cystic Fibrosis Foundation as far as to help to fund any additional progress as well? It's a good question. Yeah, we've talked with the CF Foundation. I think when we spoke with the CF Foundation, it was really kind of early on. We haven't been focused on that drug. I'd like to go back and sort of put together enough to where, you know, maybe CF Foundation support would be appropriate. You know, I'm bullish on other fibrosis indications as well. You know, beyond CF or IPF, I think there's a lot that we could do with the 03 mechanism. So eager to see about those as well. Great. Well, thank you so much. It's really exciting. I think it's one of a really exciting story in the IPF space, so we look forward to continue watching it and watch it, evolve. And, clearly, you're excited about it. Yeah, I'm very excited. It's great. Great. Thank you very much. Yeah. Thank you, Edward. Thank you.