Morning. Thank you for joining us today. My name's Elizabeth Webster, and I'm on the biotech equity research team here at Goldman Sachs. Today with us, we have Rand Sutherland, the CEO of Upstream Bio. Rand, to start, can you introduce Upstream, your lead assets, and how you see the company positioned today, and where you're most focused as we head into the second half of the year? Sure, I'd be happy to. Elizabeth, thank you for having us. It's a real privilege to be able to share the Upstream Bio story here today. Upstream Bio is a clinical stage company. We're developing an asset called verekitug. verekitug is a monoclonal antibody. It targets the receptor for TSLP. We are active in a space that is, I think, getting a lot of interest from drug developers right now. We do so with an approach that is actually unique in that space, in that we target the receptor. By virtue of targeting the receptor, we have a very potent molecule. We can spend that potency in two ways. One is efficacy and the other is dosing interval. We are now emerging from phase II studies in two major indications, severe asthma and chronic rhinosinusitis with nasal polyps, with an ambition to deliver efficacy that is best in class, to do so with convenient quarterly dosing, to provide that in a very broad population, irrespective of biomarker status, and to be able to do it with clean safety and, importantly for launch, with self-administration at home via an auto-injector. That's a very potentially competitive TPP for what we hope to deliver here. We have these aspirations not based on ideas, but on actual data from hundreds of patients coming out of phase II, and I'm sure we'll get into those as we go through here. Great. Thank you. Before going into the individual programs, maybe just speak a little bit more about the choice to block the receptor for verekitug versus other approach targeting the ligand and mechanistically what that means for the clinical profile. Sure. The TSLP ligand receptor system pair, the TSLP receptor is a heterodimer. Development of verekitug is that by virtue of targeting the receptor, we can actually completely shut down signaling through that TSLP pathway. We very early on after administering verekitug achieve 100% free receptor occupancy, and we've shown in preclinical studies and now early clinical and now mid-stage clinical development, that that is associated with efficacy that meets or exceeds that of TEZSPIRE and, in fact, all other biologics in the space, does so with four times per year dosing. We believe that in large part, this is due to the fact that the receptor is expressed at quite low levels versus the ligand. Even many half-lives out in a fully human IgG1 that is not engineered at all for half-life extension, we have enough drug around to continue to have effect at quarterly dosing. That's a very distinct approach from the competition, which in every other case is targeting the ligand. The circulating ligand is expressed at a much higher level than the receptor. What's being done there, rather than modifying the potency of the molecule, is actually employing half-life extension. There are different approaches to trying to provide efficacy at extended dosing in this space. Ours is unique, and we do believe on the basis of our data that it is also potentially quite differentiated. Great. We can get started with asthma maybe first. Sure. Earlier this year, you presented phase II VALIANT study data in the severe population. Just to level set, can you recap the highlights from that data? As you mentioned, VALIANT was our second phase II placebo-controlled trial in a major indication, in this case, severe asthma. The intent of the VALIANT trial was really to help inform the pharmacology, further understand the pharmacology of the molecule, and to inform our approach to phase III. VALIANT did a beautiful job of doing that. Just at a high level, this was a study in around 480 patients in which we tested three different dose regimens versus placebo, 100 mg every 12 weeks, 400 mg every 24 weeks, and then as a sort of a low dose regimen, 100 mg every 24 weeks as well. We went into this study with the hypothesis that it was going to be really important to deliver efficacy that, again, met or exceeded that of best in class, and did so with extended dosing. We also went in with the belief that the most important thing to deliver here is efficacy. We know from a lot of market research, from a lot of one-on-one with physicians and patients and payers that efficacy is king. Convenience is nice to have. It may actually result in improved compliance and drive better outcomes over time, but nobody's willing to make a trade-off of efficacy just to get to extended dosing. We went in trying to understand what was the best way to optimize the characteristics of verekitug, and what we found was with the highest dose regimen at 100 mg every 12 weeks, that we were able to deliver a significant and clinically meaningful reduction in the annualized asthma exacerbation rate of 56%. That was accompanied by clinically significant improvements in lung function and symptoms, asthma control, and also by important reductions in disease-associated biomarkers like exhaled nitric oxide. We did also see degrees of efficacy with the other dosing regimens, but they did not meet our test of highest efficacy and durable dosing over a very convenient dosing period. For that reason, we've really now focused on quarterly dosing as the approach that we're going to take going forward in the program. We very much, again, want to achieve that convenient quarterly dosing and pair it with really top-of-class efficacy. That's our ambition coming out of phase II. I would say that this is based not just on the data from the VALIANT trial in severe asthma, but also from our data in the VIBRANT trial with CRSwNP, in which we also delivered really outstanding efficacy across all endpoints at quarterly dosing with that 100 mg Q12 as well. Maybe just frame the impact of quarterly dosing for patients and clinicians and any market research you've done about how that profile is being viewed by the clinical community. Sure. I think just to level set, it's important to understand that biologics currently available, with the exception of dupilumab, are all dosed every two or four weeks. Those are also the most efficacious of the molecules available. Of course, they differ in which patients can get them, which efficacy according to which parameters. I make these points because it's a complex landscape. What physicians, again, and patients and payers all want before quarterly dosing or twice-yearly dosing is great efficacy. When you then do market research and you hold efficacy, let's just say at a level equal to TEZSPIRE or potentially better than TEZSPIRE, and you start to extend the dosing interval, that actually becomes a very competitive profile. It becomes one, at least in market research settings, that can compete very effectively for a new prescription, and which may, in cases where a switch is necessary, also be a competitive profile there as well. Extended dosing is nice to have, but it has to be paired with great efficacy. I keep making this point because we do think that there are challenges in this space, and you really have to be able to deliver both to have a competitive profile. Just remind us of your timelines for moving to phase III and your interactions with the FDA so far. Sure. We have been prosecuting both of these clinical programs essentially contemporaneously all along. We had our nasal polyps data in the fall of last year. Of course, earlier this year, the severe asthma data. We've taken the time to very carefully model and understand those data in aggregate. We have 500+ patients worth of data. We've been looking at a number of things, including overall efficacy. We've been looking at dose response, and I know we'll talk about our plans for dose going forward in phase III. We've been very careful about understanding the safety profile of the molecule, and we've now taken all of those data and actually contemporaneously are looking to engage with the FDA on the path to phase III in both indications. We expect to be done with those interactions by the end of Q3 of this year and remain on track to dose our first patients in the phase III programs in both indications simultaneously in the first quarter of next year. One of the things, and maybe we'll get to the commercial space a little bit, but one of the key attributes for access and formulary, of course, is having multiple indications. For us to be able to potentially launch with two indications at the same time, we think could be an advantage as well. We've been very careful to try to leverage the findings from each program to support the other, both from the standpoint of safety and efficacy, and want to move forward relatively, again, at the same time so that we could potentially launch with a label that can both indications. Got it. Maybe just touching on that commercial front. When we think about the reimbursement landscape and payer dynamics, how do you see that playing out with a longer-acting agent, assuming efficacy at par with TEZSPIRE? This is all very forward-looking, right? Yeah, of course. We're a few years away from this. Maybe just to step back and comment on the space broadly and what we've learned over the past decade or so that biologics have been around. What's interesting today, even though there are now seven biologics approved in severe asthma, they're all unique in some way. They target different aspects of the type 2 inflammatory process. They have been shown to be efficacious in specific subgroups. They have differing degrees of efficacy. The value of that in terms of physician decision-making is that you can actually look at a patient and you can ask, "All right, based on the clinical status, the inflammatory status, what's the right drug for the right patient at the right time?" The market has very much supported having this optionality because of the biology of the disease and how we try to treat individual patients. It's kind of a heterogeneous landscape, but it's one in which there is enough white space occupancy by all these entrants that everybody, for the most part, has been successful from the standpoint of commercialization. You really, again, want to deliver something that's unique, either from the standpoint of efficacy, eligible patient population, convenience, et cetera. When we have seen that happen over time, particularly with DUPIXENT and then TEZSPIRE, these are differentiated agents, they have very successful launches. They are able, in the case of DUPIXENT, to extend it to many indications. They gain share, actually, not necessarily by eroding the share of others, but by driving the overall penetration. Yet, despite all of this, penetration is still around 25%, meaning that there's 75% of patients who don't have access to these drugs right now. We believe that you have to come in, you have to be differentiated. In our case, the ambition is to be differentiated on efficacy, to have that same broad label that tezepelumab-TEZSPIRE does, and then to deliver this convenient dosing, which may be actually associated potentially with greater compliance, greater long-term outcomes. I think then gives when it comes time to compete for access and in the market, a very differentiated profile versus the others. We think that all of these things matter. It's going to be really key, I think, for formulary access to be differentiated in these ways. Other things like pricing and sort of DTC and all of these other things start to matter. Efficacy, number of indications, clear differentiation. If you start with those, you start on the front foot. Great. That's super helpful context. Just want to touch on CRS with nasal polyps. Maybe just frame what the profile you're looking to achieve is in phase III and just reminding us of what you've shown to date in that indication. Sure. Yeah. CRSwNP, it's not a disease that gets as much attention as severe asthma. It's certainly less prevalent, there's substantial unmet need and substantial commercial opportunity associated with it. It's essentially a form of inflammatory sinusitis. Patients get thickening of the lining of the sinuses, and then these outgrowths of tissue called nasal polyps. Those basically obstruct the sinus. They make it hard to breathe. You know, apnea, difficulty with taste. Historically, treatment has been surgery and steroids, and it's really only with the advent recently of efficacious biologics that there's been sort of a new potential standard of care that's been brought to bear here. This is a disease that is highly type 2 driven, we know if you can modulate this biology effectively, you can have significant clinical impact, and that's in fact exactly what we showed in our phase II trial, the VIBRANT study. Again, placebo-controlled 100 mg Q12 weeks of verekitug over a 24-week study. In that case, we showed an almost two-point reduction in the endoscopic nasal polyp score. We showed both clinically and statistically significant improvements in all secondary endpoints. Most importantly, showed a substantial reduction in the need for surgery and/or oral corticosteroid or systemic corticosteroid rescue. That was a big win for us. It really showed the fact that verekitug is very successful at modulating type 2 biology. That translates quite meaningfully to clinical endpoints. We are very optimistic that we are going to be able to show something quite similar in phase III. We are moving forward quickly there. Of course, it's maybe the purest of the type 2 inflammatory diseases of the three that we're studying, but we know that there's clear read-through, and we've actually shown in asthma subgroup data from our nasal polyps study that there is efficacy on both diseases when they are comorbid. Again, we believe that there's a, I think, a very de-risked program here that's going to go into phase III, see what the data show at the end of the day. This could potentially be a best-in-class medicine for that disease. Again, with convenient quarterly dosing administered at home or potentially in-office. We actually have done the work and the investment as part of our program all along to have both an auto-injector and a prefilled syringe. I think that's important to recognize as we think about potential in-office administration in sort of an ENT or allergist setting versus at home, maybe more consistent with how pulmonologists practice. Great. Could you speak to the translation you expect from phase II to phase III, and how you're planning to manage placebo responses in the phase III? Yeah. I think it's a bit of a different answer in CRS with NP. Yep. Versus severe asthma, partly because of the nature of the phase II studies. I think the robustness of the data from the CRSwNP study versus the more sort of, again, sort of pharmacology informing approach that we took in phase II in severe asthma. Again, forward-looking statement, but I think that there's a high degree of translatability of the data that we saw in phase II in CRSwNP forward to phase III. We would look to recapitulate the same magnitude of efficacy, do it in a very similar patient population, and again, try to, across the board, show impact on endoscopic nasal polyp score, nasal congestion score. Actually, we looked at CT indices of sinus inflammation. There are a lot of sort of symptom and quality-of-life indicators. Then again, this important clinical endpoint of need for surgery or rescue steroids. That will be the approach, I think a high degree of translatability there. I think, as we look at how the phase II was designed, recall that the statistical power in that study was really focused on the primary endpoint of reduction in asthma exacerbations over the course of a year or annualized. We feel that those data are quite translatable. All of the secondaries, all of the subgroups were more exploratory in nature. They're there to help understand how the drug might perform in phase III. What you see, and this is true really across many of the biologics programs in severe asthma, is that while the phase II is helpful in informing the design of phase III, some of the statistical import of the subgroup analyses are really quite fragile and not as robust. I would not predict to say that we will see one thing or the other as directed by phase II and phase III in severe asthma. What I will say is that we are very clear about what the things that we need to do are coming out of phase II. The first is, we've learned from our phase II data that there is clear evidence of exposure-response. For that reason, and I think we'll get to this in a minute, we're potentially going to take a higher dose forward in phase III to really drive the magnitude of efficacy, both in severe asthma and CRSwNP. We're also going to look very carefully at what we can do in phase III to make sure that we have adequate background exacerbation rates in the placebo and treated arms, such that we don't run into a situation similar to what we ran into in our phase II, where the exacerbation rate was so low, for example, in the low EOS group in our phase II, that there just was no ability to break through that and show efficacy. You can do that by changing exacerbation requirements from the inclusion criteria standpoint. You can do it by looking at how standard of care therapy is applied. You can look at it and modify it by where you go in the world. There are a lot of approaches that companies take going from phase II to phase III to really help enrich the signal so that you can then break through that with an efficacious therapeutic. Great. You mentioned the dose work that you've done. Yes. Expand on that and how to think of the PK and the PD of the molecule. Sure. Again, we're fortunate, and I think unique amongst the competitive landscape, to have now hundreds of patients of data coming out of phase II and going into phase III. Again, the antibody is a fully human IgG1. It was actually a product of Regeneron's VelocImmune platform. It has a fully human IgG1 half-life of around 20 days. No half-life extension there. The PK, I think is quite well understood. It's really, again, the potency that drives the pharmacodynamic effect with regard to biomarkers and the clinical efficacy that we've seen in our clinical trials. We, I think, understand this very well. What we've learned from these hundreds of patients' worth of data is that when you look at the relationship, if you just take, for example, the highest dose regimen of 100 mg Q12, because you're administering this to a population of humans and humans are variable, you're going to have some patients who get higher exposure and some patients who get lower exposure, even holding the dose regimen constant. When we take the overall population and divide it into thirds, we just compare very simply the highest exposure tertile to the lowest exposure tertile, what we see is that there's a significant additional degree of efficacy. When I say significant, not statistically, but clinically with regard to the magnitude in our asthma trial and FEV1 response, and in our CRS with NP trial of nasal congestion score response. What we see is as you push the exposure, you push the efficacy. Our approach to the upcoming negotiations with the FDA is to share all of this work with them. We've seen this not just in the sort of qualitative analyses that I've discussed with you, but really in very precise quantitative modeling from a PK and PD standpoint, understand that by pushing the dose potentially as high as 400 mg every 12 weeks, we can get that potentially additional efficacy and very clearly maintain patients above not only the concentration levels that are needed to meet that sort of highest tertile level that we observed in the phase IIs, but also well above the EC90 for exhaled nitric oxide in the population. We can do that 400 mg in a simple 2 cc administration because we have a very concentrated formulation. Again, would do that with a PFS or an auto-injector at launch. We'll know very shortly if the FDA agrees with us with regard to this. Again, we don't think that this is too speculative because it's based on, again, very robust data sets, very high-quality modeling. The ambition, again, is to push the efficacy as high as we can and deliver convenient dosing with that. In your dosing regimens for phase II and potentially phase III, just kind of remind us whether there's increased dosing in the induction period, what that regimen is. Yeah. We're very fortunate that induction is not required here. Correct. We get very robust, in fact, 100% occupancy of free TSLP receptors within two weeks, actually sooner. You do not need to load or do any kind of induction to get efficacy. We've pretty clearly seen that. There is some element of dose response even at the first time point of measurement in our phase II trials. For that reason, again, we're going with potentially a higher dose here. But yeah, we do not need to induce. That's actually, from the standpoint of the overall convenience and I think potential performance in the commercial space, quite potentially differentiating as well. Switching over to COPD. You're running a phase II placebo-controlled study in the moderate-severe patients with quarterly and then I think biannual dosing. Can you just talk about your confidence in the TSLP mechanism in this indication and differentiation for verekitug here? Yeah. We were actually really excited by the data that Amgen AZ produced with tezepelumab in COPD, because I think just very simply, they showed great efficacy in that trial. That, of course, was paired with efficacy that had been observed with DUPIXENT. Also even with IL-5s like NUCALA in COPD as well. I think if you just step back to the biology of the inflammation in COPD, we touched on this a little bit, it's probably the most heterogeneous of the three indications that we're targeting. There's clear type 2 driver inflammation in this disease. There's also a lot of type 1 inflammation as well. We know that TSLP has an advantage in working across both of those pathways of inflammation. We believe that actually this maybe of all the diseases is the place where the potency profile of the molecule could be the most translatable. We'll see what happens with our data. We initiated a, as you mentioned, a phase II trial, again, placebo-controlled, testing multiple dose regimens in COPD. That study has actually enrolled quite well. As we got the data from our phase II studies in CRSwNP and severe asthma, and as we learn more about this dose response, and as we decided from a strategic standpoint to potentially take a higher dose regimen forward in CRSwNP and severe asthma, we've elected now to truncate that final bit of enrollment in the COPD study, use the patients that have been enrolled and the dose regimens that are being studied to really help us understand more about the potency of the molecule in this disease, understand the translatability of that potency to efficacy signals, but also not necessarily wait for those results to initiate a phase III trial in COPD, again, contingent on dose regimen sort of selection and alignment with the FDA. That actually is a good thing for us because it allows us to get a lot of information out of the phase II program in COPD, but it doesn't require us necessarily to gate initiation of phase III in COPD on that, given how much we've learned from the program. We've been very careful about trying to be able to leverage the maximal amount of information from the program writ large as we move forward in these various diseases, and we see an exciting opportunity here. We're going to learn more about the data as they start to emerge, and we expect that in the second half of next year, 2027, we will have a fairly robust understanding of the performance of verekitug in COPD from that program, and again, are potentially prepared to move forward quickly in phase III as well. Great. Do you anticipate, ultimately to have both quarterly and biannual on the label, and then just how are you approaching that kind of alpha spend that you mentioned around potency, in COPD, evaluating both of those kind of dosing frequencies? I think it would be surprising to see in COPD greater or more durable efficacy really in any of the dose regimens, versus say CRS with NP and asthma, again, just rank ordering that based on the degree of type 2 inflammation. We do believe that by taking a high dose regimen forward with quarterly dosing, we can deliver efficacy in COPD. We need phase II data to help reinforce that. We are not in any of the indications contemplating having multiple doses or dose regimens. By single dose regimen, again, we need to maximize efficacy. We do not believe that there is any, and this is not just a belief, but again, on the basis of a lot of market research and data, we do not believe that the difference between Q12, Q24, Q26-week dosing is substantial when it comes to any trade-offs that might be required. It is important to look at sort of what is out there from the standpoint of the data. If you look at our data, while we did deliver actually a reasonably significant reduction at Q24 weeks in asthma exacerbations, when we looked overall at the data, those data were not as durable. We started to see loss of symptom control, lung function control with Q 6-month dosing. That actually has been replicated in the clinical programs of the long-acting IL-5. There are some early clinical data from some of the long-acting TSLP ligand-targeting antibodies that use half-life extension that raise questions about the durability. Nobody wants to take the risk with us and patients and physicians I'm talking about here of having a loss of efficacy just to get to Q 6 months. We believe that quarterly dosing is quite competitive. It is incredibly valuable when paired with optimal efficacy, and that's what we're going for. We're putting our nickel down, we believe that that's the best profile, we believe that it actually may be the best profile that any of the competitive landscape can potentially deliver. Speaking of the competitive landscape, what are your thoughts on some of the either co-formulated IL-13 TSLP therapies or the IL-13 class in general here? Just, is there any efficacy that's kind of left on the table, so to speak, with a single target? I think, the short answer is that it's hard to know because we haven't really seen much in the way of data from anybody yet. I think the soonest that we'll get a read on this is probably from Sanofi's bispecific program on lunsekimig and severe asthma. They have data that we are all expecting to see here in the second half of the year, and which at top line at least have been reported to be positive. They did a phase I multiple ascending dose trial in asthma, very similar to ours, and actually showed very similar degrees of reduction of exhaled nitric oxide versus ours. How that translates to differential efficacy, we'll see. That rather than speculating, I think once we have those data, we'll have the answer. I would note that there are other data sets of TSLP IL-13 combinations in type 2 inflammatory diseases that haven't actually shown additive effects. Those data are mostly from atopic dermatitis programs. There was even the study that Sanofi Regeneron published a few years ago combining dupilumab with an anti-alarmin, the itepekimab anti-IL-33, which did not demonstrate additive efficacy in severe asthma over that achieved with DUPIXENT. It remains to be seen whether if you're targeting TSLP, which is upstream of everything else, and you're doing it really, really well, I think there is an open question around whether or not you get any additive efficacy by targeting things downstream. We'll see. There are Pfizer's trispecific data in atopic dermatitis, which may have demonstrated, at least from the EASI-75 standpoint, some differential efficacy. I think we're learning more about this, there are data, sort of Pfizer's trispecific on the positive side, a lot of other data not demonstrating differential efficacy, and I think lunsekimig may teach us more here soon. Having said that, what is very clear is that verekitug delivers efficacy as good as TEZSPIRE or better in two type 2 indications with quarterly dosing. The only way we could have done that is via potency. Again, we have a high degree of belief that that will translate with appropriate design and appropriate dose selection into phase III as well. In the last few minutes here, remind us of your cash position and runway and how you approach capital allocation across your pipeline. Sure. As of last quarter, we had almost $300 million. That continues to fund us through 2027. What that funds is actually really sort of a max plan for everything that is in our ambition. That's sort of the initiation of our phase III programs in severe asthma and CRSwNP. It's the continuation of our phase II program. As I mentioned previously, we are very fortunate to have a formulation that is very close to, if not, I mean, we still have to do PPQ and everything, but the commercialized formulation. We are making heavy investments in device, as I mentioned, and we believe that these are all critical for a successful launch. I would note that our understanding, that also puts us in a very differentiated position versus much of the competition. We will continue to fund all of that as we move forward. In terms of approaches to raising additional capital, we of course have a lot of tools available to us. The equity markets. We are constantly talking with potential partners about approaches to non-dilutive funding, we'll be very thoughtful and careful there as we move forward. Great. To close out, are there any aspects of the story here that you think are underappreciated at the moment by investors? I think we feel that there's a dislocation between the value that's being reflected in the stock market right now and the value of the company. This asset has been extremely well-studied. De-risked is always a fraught word because you never know till you know. Again, we are unique amongst the competitive landscape in that we have many hundreds of patients worth of data. We understand the pharmacology of this molecule. We, I think, have a very rational and reasonable approach to the FDA interactions that are upcoming here. I think the other point is that we've really executed quite well over the history of the company, we are in a position to have a potentially quite differentiated molecule not that far from now. Back to the market dynamics, if we can deliver that, verekitug will be a very differentiated molecule. It will potentially transform the care of patients who don't have access now and are not being treated with biologics. We're very optimistic and excited about what's to come next. I do think there's a lot of competitive noise right now. There are a lot of things going on. There are a lot of these open questions, they need to be answered, our approach has been, we're going to answer them. We're going to provide the data. We're going to make it public. We're going to share them, and we're going to give people a reason to believe. We're extremely excited. We have a lot of work in front of us, we do believe in the potential of verekitug to be a transformative medicine in this space, and we really are working hard to deliver that. Well, with that, thank you so much, Rand, for joining us today. Thank you. We appreciate it.