Hi, everyone. Good afternoon, and thank you for joining us at 2024 TD Cowen Chronic Urticaria Summit. I'm Joe Thome, one of the Senior Biotech Analysts here on the team at TD Cowen. And it is my pleasure to have with me today the CEO of Third Harmonic, Natalie Holles. So Natalie, thank you so much for joining us. It's a pleasure to be here. Thanks, Joe. Of course. Maybe at a high level, if you could just kind of level set with us the current state of the company, and for our investor audience, maybe what should they be looking for, in terms of the company's progress into the end of this year and maybe throughout 2025? Certainly. So Third Harmonic Bio is focused on the development of oral wild-type KIT inhibitors for the treatment of mast cell-mediated diseases, which collectively represent large, established markets that, despite a lot of development activity in the space, still have a high degree of residual unmet need. Our lead candidate, THB335, is currently in a phase I clinical study, with data reading out early next year, the first quarter of next year, which we're very excited about, and from phase I, we will be moving quickly into a phase II study in chronic spontaneous urticaria, from which we, in which we plan to study multiple doses, in a fully powered-for-efficacy study design that, hopefully will enable us to move directly to registration studies from there. So exciting times ahead for the company, and certainly a lot of progress through the last 12 months. Perfect, and I forgot to mention to our investors, but if you do have a question for Natalie, feel free to drop it into your Wall Street Webcasting chat box, and we will integrate it into the conversation. But we've obviously heard a lot about the different mechanisms that companies are pursuing to look at CSU and just urticaria in general throughout the day. But maybe why is KIT the target of choice for Third Harmonic, and maybe specifically, what might an oral bring to the table that maybe some injectables could be differentiated there? Sure, certainly. So, one of the great things about working in the KIT space is that the biology is very well understood here. We have a lot of preclinical, mechanistic data, as well as now a significant amount of clinical data validating KIT as a really powerful target for mast cell-mediated diseases. Because we know that KIT acts as the master regulator of all elements of mast cell function and survival. And so by inhibiting KIT, you have the potential to inhibit mast cell activation, regardless of the activating pathway that is turning the mast cell on. So it really has the opportunity for broad utility across, a heterogeneous patient population like you see in CSU. Since it also not only has this broad upstream mechanism, but has this very potent inhibitory and depleting activity over time, we believe you really have the opportunity for best-in-disease efficacy and durability with a KIT inhibitor. That being said, I think as we were just chatting about before we went live on the webcast, I think that CSU is really a story more of market development than it is of market share. One approved therapy currently for patients who don't respond to antihistamines, with you know low penetration of that population overall. I think that there is the opportunity... Really, the opportunity in front of all of us in this space is to increase the catchment of physicians diagnosing and treating urticaria, increasing the number of urticaria patients who are caught, essentially, and treated, rather than continuing to sort of shuffle among physicians looking for someone who can address the disease, so from that respect, I think that there's lots of upside collectively, but I think if you look at the data that have been generated to date, our own and from our colleagues in the field, I think it's fair to say that the KIT is setting the high water mark in terms of efficacy in this disease. In terms of an oral small molecule approach to the target versus an antibody, I think that there are a few potential points of differentiation which could end up being clinically meaningful, or excuse me, commercially meaningful. The first is, I would say, a long-established physician and patient preference for oral therapy in a lot of these dermatologic inflammatory markets. We've seen this in psoriasis and other places, that orals typically are used in the front line. And so we have the patient convenience, the physician preference angle. I think another important element of the oral small molecule approach, which is intriguing, is the ability to more finely interrogate the therapeutic index for systemic KIT inhibition. There's this open question in the field of how much tryptase reduction, how much systemic KIT inhibition is required to drive maximal efficacy in urticaria? I don't think we actually have the answer to that. With a daily oral small molecule, I have the ability to dose titrate and really identify the sweet spot and keep it there, in a way that is more difficult to do with a biologic approach, where you're really trying to optimize for dosing frequency. Perfect. And then I think the third potential advantage, and then I'll stop talking. No, no, no. It's good. Potential advantage of an oral approach to KIT is that we completely sidestep this risk of paradoxical mast cell activation due to antibody cross-linking, leading to anaphylaxis. That is a modality-specific safety risk that is avoided entirely by a TKI approach to the target. And I think that, you know, based on the experience with Xolair in the field now, I think that teaches us that any sort of risk around anaphylaxis, understandably, given the fact that it's not a monitorable, not predictable, and potentially fatal side effect, could have a meaningful impact on the commercial potential of a particular approach. ... Perfect. And I know at the beginning you mentioned the current lead candidate is 335, and we'll definitely dive into that. But wanted to touch first. The company did start with THB001 in the clinic, and maybe we'll start on the positive side. So what did you see from an efficacy standpoint in that initial study with 001 that kind of gives the team the confidence that you're headed in the right direction,- Yeah, certainly. -and then iterations? Yeah, yeah, yeah. And thank you for starting on the good news. Yeah. So with THB001, we were in the early phases of a three-tiered dose escalation study in inducible urticaria. So we were dosing subjects when the study was halted at our lowest planned dose, and we planned to dose escalate from there. And certainly, it was from our view, our intention was a suboptimal dose level. Nonetheless, in that study in which we only treated five subjects, only one of whom made it through the entire twelve-week treatment period, we saw four out of five patients respond. We saw two complete responses and two partial responses, which far exceeded our expectations, frankly, and to our eye, demonstrated clear clinical proof of concept that if we could figure out what was wrong structurally with the molecule and fix it while retaining the rest of what we were seeing in THB001, we had a very good shot at being able to develop a really important medicine. Perfect. And then, and then maybe on the AE profile that, that did end up popping up the, the DILI. Obviously, the company has done a lot of work in sort of interrogating why that, why that happened and, then generating obviously 335. So, maybe can you just walk us through what the company identified as the root cause of, of the AE that you saw, and maybe how you were able to correct that for the next generation candidate? Ah, certainly. So I'm gonna summarize a tremendous amount of work on- Yeah ... behalf of my research team in just a couple of paragraphs here. But in brief, we are able to identify that one of the major metabolic pathway for THB001 in humans was generating a transient reactive intermediate that was causing oxidative stress, leading to hepatotoxicity, and that manifested as these asymptomatic elevations in ALT and AST in two of the first three subjects that we dosed in that study. And so, in understanding that this was a metabolic liability, a structural metabolic liability, by analyzing the Met ID, the structures of the major metabolites of THB001, we were able to back into the sites on the parent molecule or the site on the parent molecule, where the metabolic pathway that was generating the reactive intermediate was starting. And so we introduced structural changes, which functionally blocked that metabolic pathway, and diverted the metabolism to other parts of the molecule. And in so doing, in moving from 001 to 335, what we see is just visually, in terms of looking at the Met ID, in terms of mass spec traces, they're very different molecules from a metabolic profile perspective. And the end product metabolite of that bad actor metabolic pathway, if you will, a diol that you see very plainly, very clearly in the human Met ID with 001, is absent in the 335 profile, as you would expect, since we've blocked that metabolic pathway. But importantly, when we went back and did additional work preclinically, we also saw that across species and test systems, we also detected very clearly the presence of glutathione adducts with 001 which is an indication that there's an oxidative species that the body needs to detoxify. And with 335, we saw no diol, as you would expect, but we also importantly saw no glutathione adduct formation. And then we did a whole series of orthogonal assays, just looking phenotypically at what happens in a sophisticated human hepatocyte culture system when you treat for long periods with 001 or with a close analog of 335 from the same chemical series. What we see there is at two different concentrations over three weeks of dosing, clear upregulation of gene signatures associated with hepatotoxicity with THB001, and nothing with the next gen. It's a combination of the metabolic data that we generated on 335 versus 001, combined with the phenotypic assays, that really gave us the confidence that we had fixed the structural liability in 001 in moving to 335. In addition, we were able to maintain everything that was pharmacologically fantastic about 001, so the potency and the selectivity of 001 were preserved in 335. The altered metabolism, we believe, eliminated the DILI risk, but we also were able to improve the PK profile, improve the solubility, lower the lipophilicity, make a peripherally restricted molecule, and importantly, reset the composition of matter clock. With the new composition, we now have base IP protection out through the end of 2043. Perfect. And my next question was gonna be on the selectivity profile, because obviously the activity of the first generation was there. I guess, did the selectivity change at all between 001 and 335, or is it- They are essentially equally selective. I would say 335 is slightly more selective against CSF1R, which is one of the more closely related kinases in the kinome to KIT. But from a functional perspective, there's really no difference in selectivity. And we know that with 001, we were achieving sufficient selectivity with the profile of the molecule, because we ran that molecule all the way through chronic tox. When the clinical program was paused, we were in the middle of the chronic tox studies, we made the decision to continue them. And what we saw was that in both species, over the chronic tox dosing period, all of the safety, all the tox signals that we saw were on target related to KIT inhibition and reversible with recovery. And so there was nothing, no pharmacologically relevant activity against any other kinases, at, you know, doses that were above clinical exposures, again, in two different species. And so that was very reassuring that we didn't have a selectivity problem that we needed to fix. We just needed to maintain what we had and make other improvements. ... Perfect. And then in the phase I 335 study that's ongoing right now, we're gonna see those data in from the beginning of next year. What are you looking for in terms of a readout that'll give you confidence that you can rapidly move into that phase II in the CSU population? Yeah. We have the benefit, as I'm sure others have talked about today, on a CSU day, of this really powerful biomarker in serum tryptase. And what we know about serum tryptase is that it's beautifully correlated with efficacy, certainly in the kit programs that have published data, ours and from the antibody program as well. But also importantly, tryptase values aren't elevated at baseline in urticaria patients. So healthy volunteer tryptase data are very informative for what we're gonna see, what we'd expect to see in the patient population. And serum tryptase, as I said, sits right on top of efficacy curves. So we get a really powerful look at efficacy in this first-in-human study. I think that is somewhat unique within drug development, that we get that much information from a healthy volunteer study with respect to disease efficacy. Perfect. In addition, of course, safety across both the SAD and the MAD, and then PK is the other interesting readout from this study. We have our models of our human dose projections from all of the preclinical work that we did, but until you actually get in and run the human experiment, you don't actually know, is this going to be a once-daily dosing drug? We believe so. That's to be confirmed. What are my dose levels going to look like? What dose levels do I need to in order to get the target coverage that I believe I need in order to drive tryptase and efficacy to the degree to get optimal efficacy, so a lot of good, useful information coming out of this phase I study in the first quarter. Perfect. And obviously, predicting the future is always hard. But how quickly do you think you could start that phase II study in CSU, and can you give us an idea of kind of the design? It seems like companies are converging around like a 12-week UAS 7 in terms of sort of the efficacy endpoint that they're looking at. Is that what the company's thinking, or would you believe- Yeah, it is. You know, the answer for how fast can we move from phase I to II, I would say we have. We've designed the program, and our operational efforts are focused on making that transition as quickly as possible. One of the reasons that we are running the phase I study in the U.S. with an open U.S. IND is that you can turnaround a little bit faster with amending an open IND, rather than putting a new IND in front of FDA. We're also in parallel with conducting the phase I study. There's lots of start-up activity already ongoing within the company in terms of CRO selection, site identification, investigator outreach, all of those things, so that we're poised when we have the data in hand. In addition, sub-chronic tox studies are ongoing, drug product manufacture is ongoing. All of those things are sort of neck and neck on the critical path for starting phase II as efficiently as possible. In terms of the design, you're absolutely right. 12-week UAS7 is where we will be looking, and we will look at, you know, sort of all flavor of UAS7, so percent reduction, absolute reduction, proportion of patients who are well-controlled, complete responders. We'll look at all of those analyses, as well as angioedema scores, patient quality of life scores. It'll be a robust, as I said, multi-dose, powered for efficacy, study that from which we hope to select our doses and move directly into registration studies. Perfect. And we have seen some CSU data readouts, obviously, over the past couple of years, including, obviously, the injectable KITs. I guess, have you and the Third Harmonic team, I guess, learned anything about the specific kind of patients that you would like to enroll, maybe from these readouts? Have you been able to tease anything out there, or? And then maybe secondarily, how has the efficacy bar changed over the past couple of years, if at all? Mm. Great question. In terms of patient selection, and I go back to one of the really powerful things about working with KIT is that it's upstream of everything. One of the useful data readouts is seeing with the antibody program, that you're really not seeing a differential effect in omalizumab-experienced versus naive subjects. Our intention is to go for sort of all comers post antihistamine, because I think the mechanism can do that. The mechanistic basis supports a broad patient population, so that's our intention. In terms of the efficacy bar, I think, well, I do believe that the KIT antibody program, it has set the high watermark in terms of efficacy, which is outstanding. And, you know, again, we have this powerful biomarker in serum tryptase that allows us to extrapolate from what we're seeing in tryptase to what we can expect from the medicine from an efficacy perspective. I'll say that with the first generation, we came out of phase I with this nice broad range of doses that gave us a broad exposure range in terms of KIT coverage and tryptase reduction, and we wanna do the same thing with 335 moving into CSU. We wanna study a range of doses, so that we can understand, you know, what is the sweet spot in terms of systemic kit inhibition that drives maximal efficacy. If it really does... If I do need to bottom out tryptase in order to get maximal efficacy, I showed with the 001 study that we could do that. and so if we need to, I have confidence that we'll get there. But to our mind, it's the lower doses that are actually almost more interesting, just to see if you really could get by with a more middling level of systemic KIT inhibition that drives maximal efficacy because of just the, you know, the power of the mechanism. Perfect, and we are seeing a few more oral compounds entering the clinic. We have the X2 family, obviously the BTK, and then others like Blueprint do have a oral KIT as well. I guess, how do you differentiate between these different options, and maybe how can Third Harmonic kind of best position themselves in the field? Yeah, well, I'm to be a broken record. I think market development is the name of the game here. So I think actually more oral agents coming into the market available for patients is a net positive. Certainly, it's a net positive for patients, but I also just think it's a net positive in terms of increasing the addressable market here. It's early days other than the BTK inhibitor, we don't have robust clinical data from any of these other approaches, I would argue. You know, the 001 experience is probably as good as any in terms of what we've seen thus far. And again, the results that we saw at that lowest planned dose with THB001 in terms of, you know, four out of five subjects responding, that was pretty astounding. So I think that the efficacy of KIT as a mechanistic target, I think if you just look mechanistically across the orals in development, I think the potential for KIT to have the broadest utility is very clear. And then, you know, the once-daily dosing, I think, is a potential advantage over the BTK, that at least the current BTK that's in front of us, although that's to be confirmed in our study now. And I think, you know, in general, it will be the safety and efficacy profiles compared head-to-head across these things that will determine, you know, which ones will be used where. But I do believe that there's. I'm not, I'm not gonna pick. I believe that- Yeah There's a place for everyone, and I think our data will stand on its own merits as our program evolves. Perfect. Maybe as it stands with the current market, obviously, we touched on some of the benefits of an oral therapy and things like that, but why aren't more patients taking Xolair, given that you know kind of is the only option currently post-antihistamine? What are you hearing from your physicians? What we're hearing is that the anaphylaxis risk is a meaningful impediment. The requirement for in-office monitoring for at least the first couple of doses, you know, that's a business constraint for these office practices that I think is not to be underestimated. But I also think, as I said earlier, just the nature of anaphylaxis as a risk, in the fact that it is not predictable, not monitorable, and potentially fatal. I think that's a scary profile for at least some physicians who would otherwise treat this disease. And so what you see is that these patients sort of get rotated around the antihistamine carousel, as Marcus Maurer used to talk about it, and then they just sort of, you know, fall off in terms of not getting diagnosed, not getting treated. I think there's also efficacy left on the table with the currently approved therapy. And so even for physicians and patients who are willing to live with, you know, the small anaphylactic risk, but non-zero, there's still patients who aren't responding for whatever reason. So I think it's a combination of things, but we see this time and again, that more development in a space just increases the awareness. It increases even just the diagnosis of the disease, because there's another tool that a physician can offer a patient. So I think, at the end of the day, it's gonna be a positive for all of us, for more new agents to come to the fore. Perfect. And there are some on-target toxicities that the KIT mechanism does have that we've kind of seen over the past couple of years, or at least know to watch out for. Maybe when you talk to physicians or patients, which ones are maybe most important for them to look at in a data set if they had to pick or several, if there are several? And maybe how are you looking at managing these, especially with an oral compound? Yeah, so I think what I would say is that we used to wring our hands a lot about the profile, safety profile of, you know, long-term chronic KIT inhibition. And I think as the data have matured, I don't think that there's nearly as much to worry about as we thought there would be. So, to answer your question, the main safety concern that we hear come up is the anaphylactic risk. Again, that is a modality-specific safety risk. That's a biologic therapy approach risk that we sidestep completely with an oral, and so you can't dose your way out of that. I think that's the most meaningful differentiation from a safety perspective between the oral and the biologic. Perfect. And how are you thinking about maybe to take a step away from CSU, how are you thinking about pipeline development outside of this indication? What, obviously, mast cells are implicated in a lot of different diseases. What's of interest to Third Harmonic? Well, I mean, as you say, we know that mast cells are involved, are effector cells for inflammatory disease in all of our barrier tissues: skin, airways, gut. So there really are, you know, a number of indication directions that we could take 335, or follow on KIT inhibitors, because we continue to do medicinal chemistry in this space. We're very active in continuing to iterate on the work that we've done to date. We are benefiting from our colleagues in the KIT space doing running studies in a number of other indications that we're interested in. I don't think it makes sense for us to duplicate efforts, so we are very keen to see how some of these studies read out, and if the data are encouraging, we wanna be positioned to move quickly to follow. Beyond the indications that, well, I should say inclusive of indications that others in the field are studying. We've always liked severe asthma for an oral KIT inhibitor. There is meaningful clinical validation for the utility of KIT inhibition in severe asthma. We are doing a significant amount of preclinical pharmacology right now to further elucidate that and provide more data to inform study design, patient selection, et cetera. But importantly, from a commercial perspective, many new biologics for treatment of severe asthma in the last decade, no new orals since the anti-leukotrienes in the 1990s, so we see clear commercial white space, so good, strong biologic validation, good clinical data supportive of this, and a big, clear commercial opportunity all make severe asthma an attractive space for us. But I would expect us to go more broadly beyond just CSU and asthma as well, as more data come out from the field, as we make our own decisions about sort of where we wanna place our bets, but this is most certainly a pipeline and a target opportunity that, you know, we sort of have an embarrassment of riches in terms of the directions that we could point this, this approach for the treatment of, some high unmet need inflammatory diseases. You mentioned something that I thought was interesting, or that I wanted to follow up on, is that the other KIT inhibitors that you probably do have in your pipeline. I mean, the team was able to come out with 335 very, very rapidly, and interrogate that signal very rapidly, at least from my standpoint. I guess, how do you balance expanding out 335 in sort of that pipeline in a molecule versus looking at another KIT that might be more better positioned for a different indication or what have you? Yeah, so the short answer is we're doing both right now. So, we're advancing 335 as aggressively as possible, and doing ongoing medicinal chemistry, with the notion that we have the first-in-class. If there's a best-in-class coming, we want it to be ours. It's too early to say sort of where we would deploy 335 versus another molecule. Some of that will be borne out in the profile of the molecule, or molecules I should say, that we bring forward. We also just think about life cycle management. Life cycle management, particularly in the age of the Inflation Reduction Act, and how we sort of have this reverse incentive against stacking additional indications on top of an approved therapy, which, yeah, is an impediment to think about sort of broadening indefinitely, indication expansion for a given molecule. So we're balancing sort of the de-risking and the safety data, frankly, that we're accruing on 335, versus the ability to ensure durable shareholder value creation over the sort of the life cycle of the portfolio. Perfect. And I know over the past kind of twelve months, the company has indicated BD could be a focus outside of the KIT space. I guess, is it still a focus? Have you looked and maybe weren't particularly interested in things, or, how are you viewing BD? Yeah. I would say it was more important for the company last year, when our future was less certain. You know, we didn't... When we weren't quite sure we understood what happened, when we weren't sure how long it was gonna take us to get back on our feet, we were doing the right thing and just looking at all the options for recapturing shareholder value. What happened in the meantime, I would say, is we kind of earned ourselves out of that. We came back with a clear mechanism and a frankly better molecule the second time around, and I would think the other thing that happened in the meantime, is that the world sort of moved to us. There's just this increased focus on CSU as a space, hence this event today, more focus on mast cells, more validation for KIT as really the target in this space. And so I would say it was a combination of our own internal progress, the external validation of the work that we were doing, that has led us to be more focused on just really maximizing the opportunity within this really exciting space that we're currently in. Perfect. And maybe last question in the last minute here. The company does still have a sizable cash balance, as of the last quarter. What are you guiding that gets you to, either in terms of a timeline perspective or a clinical development perspective? Yeah. So we have a very strong balance sheet. We're at $255 million as of the end of the second quarter, and what we've said publicly for the last year and a half is that we will make sure that the company is well-capitalized through the phase II CSU readout, with ample cash on the balance sheet from there, so we can continue to execute sort of with full pedal down. That is still the strategy, and we are still in very good stead on that with respect to the balance sheet. Awesome. We look forward to the data in the first quarter of next year, but thank you so much for joining us today. I appreciate it. Thanks so much, Joe. It was fun.