Welcome to today's R&D call hosted by Xencor. At this time, all participants are in a listen-only mode. After the speaker's presentation, we will conduct a question-and-answer session. I will now turn the call over to your host, Charles Liles, Senior Director of Corporate Communications and Investor Relations. Thank you, and good afternoon. Earlier today, we issued a press release announcing positive interim results from our phase I study of XmAb942 in healthy volunteers. It is available at xencor.com. Providing comments on the call from Xencor are Bassil Dahiyat, President and Chief Executive Officer; John Desjarlais, Executive Vice President and Chief Scientific Officer; Dane Leone, Executive Vice President and Chief Strategy Officer; and Kenneth Hung, Senior Vice President and Head of Immunology Clinical Development. We are also joined by Dr. Vipul Jairath, Professor of Medicine in the Division of Gastroenterology at Western University and Chief Medical Officer at Alimentiv, who will join Ken for a discussion about the TL1A landscape in inflammatory bowel disease. After the prepared remarks and presentation, we will open up the call for your questions. Slides that we are using today should be visible here on the webcast and will be made available for download on the Events and Presentations page of our website around the time our remarks are concluded. Before we begin, I would like to remind you that during the course of this conference call, Xencor management may make forward-looking statements, including statements regarding the plans and objectives of management, future product offerings and research and development programs, as well as future financial and operating results, future market conditions, future operations, companies' partnering efforts, and capital requirements. These forward-looking statements are not historical facts, but rather are based on current expectations and beliefs and are based on information currently available to us. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including but not limited to those factors contained in the risk factors section of our most recently filed annual report on Form 10-K. With that, I'll pass the call over to Bassil. Thanks, Charles, and welcome, everyone. I'd like to start by putting today's TL1A program update into the context of our strategy and pipeline. Xencor's foundation is protein engineering and the rational design of drug molecules with new structures and mechanisms to meet unmet medical needs. Our XmAb platform has been validated by creating multiple approved drugs and promising oncology and immunology candidates in clinical development, both at our partners and internally. We're continuing to push the boundaries of protein engineering with new tools and structures. Now, looking at the details of our pipeline, we have CD3 T-cell engagers in both oncology and autoimmune disease and the TL1A programs we'll be discussing today. These programs are our high-potency, half-life extended anti-TL1A XmAb942, which you'll see has very strong phase I pharmacokinetic and safety data, and our TL1A by IL-23p19 bispecific lead candidate, which we designed to bring the two best MOAs for inflammatory bowel disease together into a single molecule. This initial single ascending dose data for 942 is the first of a number of catalysts across our oncology and autoimmune pipelines for 2025. We're also presenting some data from our multiple ascending dose study of 942 today, ahead of previous guidance. We're on track for the 942 phase II trial in ulcerative colitis to start in the second half and are providing more study design details in this presentation. We will also show data for one of our lead bispecifics, several of which are in early GMP production while we select the final lead for a first-in-human study in 2026. Now, we'll start the dive into the TL1A programs by touching on the lead indication, inflammatory bowel disease. It's a prevalent disease affecting greater than 3 million in the U.S. and Europe that puts a terrible burden on patients, shortening and greatly impairing the quality of their lives with diarrhea and rectal bleeding that often requires hospitalization and debilitating surgeries. Unfortunately, the existing medications are suboptimal, only to lead to remission in 10%-20% of patients and then a merry-go-round of treatment, relapse, and changing therapy. Now, the target TL1A entered this picture a few years ago, with antibodies against TL1A showing exciting results in early-stage clinical trials in IBD. It's a pro-inflammatory cytokine that is expressed mostly in monocytic lineages, but also by some lymphocytes, and it activates a range of lymphocytes, mostly in the NK and T lineages. Now, in addition to the validation of anti-TL1As in IBD clinical trials, there's human genetic data and animal models that support its role in IBD, as well as in other autoimmune and inflammatory diseases in a range of tissues. Perhaps the most interesting thing is the potential role of TL1A in fibrosis, mediated by its signaling to epithelial cells like fibroblasts. If this activity bears out, there's potential to impact fibrotic damage, which is a long-standing therapeutic challenge. Now, our approach to targeting TL1A was to use our XmAb tools to build molecules specifically suited for use in chronic autoimmune diseases. Our first goal was to build a best-in-class anti-TL1A to address the opportunities in monotherapy and for combination with existing agents in IBD by selecting a very high affinity and potency TL1A binding domain and combining it with our validated Xtend Fc domain for long half-life. Of course, improved biophysical properties are central to XmAb engineering, so we targeted high stability and solubility. The result is XmAb942, which we believe can deliver high-potency induction combined with a simple, infrequent subcutaneous injection during maintenance. Our second goal was to build the real killer app for IBD, a bispecific TL1A by IL-23p19, to combine the best two targets into a single, easy-to-inject molecule that avoids the development and reimbursement complexities of combination therapies or co-formulations. All the same tools, extend Fc domains and biophysical optimization, were used as for 942 for this bispecific, but we also added our bispecific Fc domain and additional potency improvements to create a set of molecules, our ZenP 53,000 lead series, that matches the activity of the leading bivalent antibodies, but with monovalent binding in an IgG structure that should avoid both immune complex formation and the stability development and immunogenicity liabilities of non-native multispecific structures. I'll summarize the positioning of 942 before John digs into the phase I results. By combining our greater than 71-day human half-life with potentially class-leading TL1A neutralization, we've checked all the boxes that are missed by the first-generation molecules for durability and convenience, and we're readying our phase II study with an efficient design and a Q12-week subcutaneous maintenance dosing schedule. Now I'll hand it off to John. Thanks, Bassil. Our phase I design was a straightforward double-blinded dose escalation study in healthy volunteers, exploring both IV and subcutaneous doses at three dose levels. Subjects were randomized at a 6:2 ratio of active versus placebo. We also explored two multiple ascending dose cohorts. Endpoints were safety, pharmacokinetics, and exploratory PD, as well as immunogenicity. Here you can see the baseline characteristics of the 64 subjects of this analysis are in line with expectations for a healthy volunteer study. Our blinded interim safety analysis supports the view that XmAb942 is safe and well tolerated with no unexpected events for a phase I dose escalation study in healthy volunteers. XmAb942 is expected to be aligned with the excellent safety profile demonstrated to date by the entire anti-TL1A drug class. Of course, aside from safety, one of the main goals of this first-in-human study was to evaluate the pharmacokinetics of this half-life extended anti-TL1A antibody XmAb942. With three cohorts of data at a low, medium, and higher dose, you can see the expected dose-dependent increases in concentrations with both IV or subcutaneous dosing and with sustained serum exposure through up to 16 weeks of data. From these data sets, we performed a pooled analysis yielding a half-life estimate of greater than 71 days for XmAb942. I'll note that we're still at less than two half-lives of data here, and we'll continue to collect additional time points as we process those data. The 71-day half-life is very much in line with our expectations, given its 23-day half-life in non-human primates, and is very promising for this program, with the ultimate goal of being a much more convenient dosing regimen and potentially improved efficacy through greater exposure. Finally, we're able to show some very early data from multiple ascending dose components of this study. Our key takeaways from this data set, shown on the right-hand plot, is that the MAD data aligns very well with the SAD PK data and that there's no observable deviation of the PK profiles upon repeat dosing, suggesting that there is no evidence from this perspective for any impact of ADA emerging. On this next slide, we're looking at the total TL1A in circulation. This is an expected effect seen with other anti-TL1A antibodies when the antibody complex is with TL1A in circulation. Here, we're seeing impressive dose-dependent increases in target engagement and impressive durability of this effect for at least 16 weeks, consistent with our high binding potency and extended serum exposure. This is reflected nicely in both the IV and subcu cohorts. Consistent with that total TL1A data, we can also look at the amount of circulating free TL1A. You can see here, for all of our cohorts, the free TL1A levels have reduced significantly compared to the placebo groups. The lower limit of quantification of this assay was 20 pg/mL, and for all of our cohorts, the measured free TL1A was well below this limit. As per convention, we plot them here at half the value of the LLOQ, and you can see that this reduction below the LLOQ is preserved through all the measured time points for at least 16 weeks after a single dose of XmAb942. The main design goal of XmAb942 was to have durable suppression of free TL1A levels to enable less frequent dosing. With the data we've accumulated so far, we've been able to build a quantitative systems pharmacology model for suppression of TL1A. Here you can see the output of simulations modeling the effect of XmAb942 on TL1A levels in the gut of IBD patients. We modeled low, medium, and high induction doses, then a low-dose maintenance phase at Q12-week dosing. You can see here that the simulation suggests that Q12-week maintenance dosing can maintain strong suppression of TL1A, in fact, below 1% of baseline gut TL1A levels out to 52 weeks, where all the regimens converge at steady state. Given that this level of gut TL1A would be maintained well below what is expected in healthy adults, we believe clinical benefit could be maintained with XmAb942 dosed every three months. In summary, we believe we achieved the goal set out for this phase I study: higher consistency of adequate exposure for better clinical outcomes in induction and maintenance. Our model suggests this is feasible with a single subcutaneous maintenance dose, with maintenance dosing every 12 weeks. So far, no apparent impact of immunogenicity on pharmacokinetics or suppression of TL1A. Now I'll hand the call over to Kenneth Hung, who joined Xencor last year and leads clinical development for our immunology programs. Thank you very much, John. On this slide, we see a high-level overview of the clinical development plan for XmAb942 and what we're calling the XENITH studies. The dotted box in the upper left shows our current seamless phase Ia/IIb in healthy participants and in patients with moderately to severely active ulcerative colitis. As just described, dosing in the phase I portion has completed, and we are now entering the startup phase for the phase IIb portion. We also anticipate exploring phase III planning in ulcerative colitis as well as potential initiation of development in Crohn's disease. In parallel, we are exploring disease expansion into the alternate disease indications as shown at the bottom of the slide. Here we show an in-house quantitative systems pharmacology model demonstrating that the target phase II induction and Q12-week maintenance dosing for XmAb942, shown in blue, are predicted to maintain higher overall exposure than the lead TL1A competitor, tocilizumab, shown in orange, based on their estimated phase III dosing schedule, which is pursuing Q4-week maintenance dosing. Of note, XmAb942 demonstrates higher exposure during the early induction phase when robust disease control is most critical in the subsequent maintenance phase, thereby minimizing the chance of disease flares. The phase IIb XENITH UC study leverages the emerging efficacy of the TL1A class of therapeutics to move directly to a full dose-ranging study that will enable phase III dose selection. The IV administration during the 12-week induction period is designed to maximize drug exposure to potentially achieve greater induction efficacy than observed in peer studies. The observed long half-life from the phase IA study supports every 12-week subcutaneous maintenance dosing, an extremely appealing feature to patients. The study population will focus on patients with moderately to severely active ulcerative colitis that have failed at least one conventional or advanced therapy. The primary endpoint will be clinical remission based on the modified Mayo score at week 12. The study is designed to yield approximately 220 completers that will be randomized in an asymmetric four to three to three to three ratio to minimize the number of participants that may receive induction placebo. To maximize potential study recruitment, all induction placebo participants will be eligible to receive active treatment during the subsequent maintenance period. In summary, the XENITH UC study is well-powered with achievable enrollment goals to support differentiated clinical outcomes. It employs an effective phase II dose characterization and supports efficient pivotal design and the potential for gating XENITH expansion into Crohn's disease and other disease indications beyond IBD. Now, it is my great pleasure to introduce Dr. Vipul Jairath, a leading key opinion leader in IBD and the Chief Medical Officer at Alimentiv, a leading CRO focused on IBD clinical trials. Dr. Jairath received his medical degree from the University of Leeds and his Ph.D. from the University of Oxford. He is a practicing gastroenterologist and a specialist in inflammatory bowel disease. Dr. Jairath has been a leader in the development of many of the novel instruments used in clinical trials today and has been instrumental in the design of the overall XENITH program. Welcome, Dr. Jairath. Thank you very much, Ken. Thanks for the introduction. Thanks for having me. It's a pleasure to be here. Thank you. Despite the growing number of registered drugs for IBD, there still remains a high unmet medical need. Anti-TL1A therapies are an exciting, novel class of IBD treatment on the horizon, if not already here. I'd be curious to hear your comments on the emerging data from the first-generation anti-TL1A antibodies shown on this slide and where you see TL1A-based therapeutics eventually fitting into the current treatment paradigm for IBD. Great. Thanks, Ken. I mean, I think, you know, I guess one of the questions is why we're still seeing so many drugs being developed in this space, because, you know, what I see is more activity in the IBD space than I've ever seen. That's because we've reached largely what these slides show to some extent. Other slides show this, we talk about this therapeutic ceiling. The best available agents that we already have approved today, we're at these sort of 50% absolute remission rates at one year of therapy, which means half of our patients, we don't achieve remission. Therefore, that's why there's a need for mechanisms that work in different ways. Now, TL1A is attractive for a number of reasons where it sits on the pathways upstream of TNFs, upstream of many other cytokines, is amplifying protein, which in theory dampens down many pro-inflammatory responses, but also might act on fibrosis, as is outlined. I think, as you see, there's now three other compounds which are outlined here. These aren't the absolute rates. These are the placebo-adjusted clinical and endoscopic endpoints seen at both the end of induction and maintenance, three different programs. My sense of these dates, and again, it's phase II and the caveats that come with the numbers of phase II, and it has to pan out in a phase III trial, is that these are shifting the need a little bit because the absolute rates of remission that we've seen at induction historically for many of our agents is 20% and 15% over placebo. Here, we're starting to see agents pushing that boundary. These are all fairly consistent, and that's what should give us confidence in this MOA that we're seeing about 25% placebo-adjusted rates at induction. For me, this is JAK-like efficacy, if you like. I don't think we have anything else in the clinic today other than JAK inhibition that achieves those rates at the end of induction, at least, and out to maintenance. JAK inhibitors have some safety issues which come with them. They have an FDA label for second-line use in the U.S.A. and require monitoring. I think two things. One is, I think, it's clear that this class works. It's clear from the phase II data so far that I think the needle has been shifted slightly incrementally. With every new compound, if we're getting an extra 5%, we're going to get north of the, going to get towards the 60% remission rates and more where we need to. I think the other aspect is, from a safety perspective, caveat: phase II programs, but across all three of these programs, there haven't been any safety signals at all. I think the next question around positioning, ultimately, positioning is what's determined by the payers in the jurisdictions. If you just take the example that I've already used of JAK inhibition, it's first line everywhere in the world and second line in the U.S., and that's because of the label. In the end, provided there are no safety issues which are not anticipated with this MOA and payers are willing to approve these therapies, then there's no reason it wouldn't be used first line and also subsequent lines of therapy. No, that's very interesting. Thank you so much. See emerging data from the vedolizumab, abrilumab, and KHK4083 clinical studies suggesting that clinical outcomes after biologic treatment may be limited due to variability in patient drug exposure. Do you believe we might expect a similar experience with the first-generation anti-TL1A antibodies? If so, how might this impact overall efficacy? Yeah, thanks, Ken. I mean, I think on the left, you've shown the classic quartile plot and these dose-response relationships. I think we've seen this. There's the vedolizumab, but I think you can show this for a number of the other proven monoclonal antibodies that you see these exposure-response relationships where those with drug concentrations in the highest quartiles at a particular time point have higher efficacy rates, and those with concentrations in the lowest quartiles have lower efficacy. Now, I think it's important to caveat that this association is not causality, but nonetheless, we see this observation across a number of the monoclonal antibodies, which has resulted in a practice of, or conceptually saying, could we get more drug into serum concentrations and therefore potentially more drug into tissue where the disease is by giving higher doses upfront? If we take the concept of ulcerative colitis, I mean, the way we've developed drugs for ulcerative colitis for going back to anti-TNFs for over 20 years now is this concept of high-dose induction and then dropping down to potentially slightly lower dose in maintenance on that. That is because these patients are sick, they're unwell, they've got high inflammatory cytokine burden, they have leaky guts, they're losing drug in the colon and the stool itself. The concept is that we want to give as much drug upfront as possible in ulcerative colitis to overcome that burden, get patients into remission, and then de-escalate to a dose that is safe in maintenance and adequate, of course. I think in theory, if we can give as much drug as possible based upon what you have in terms of tox data coming in and what we can model going in, the idea would be that if we can take those in the highest quartile currently and notch up a little bit and really improve exposure in those patients, and the converse, take the ones with the lowest drug concentrations and notch that up by giving more drug, that in theory, that might be associated with better efficacy. Really, we want to give as much drug as we can from a safety-tox practical perspective in induction to overcome that burden and then move down to a maintenance dose of choice. Based upon what we've seen here in other monoclonals, I think the same approach should be used here. No, that's very interesting. It sounds like, in a way, we could almost steal from the acute severe UC experience, try to maximize drug exposure during induction, and then could kind of back off during the maintenance period. If we just follow such a paradigm, we might be able to potentially improve upon the efficacy observed with the first-generation anti-TL1A therapies. Yeah, I think that's a reasonable analogy. Of course, those hospitalized acute severe critics typically aren't in these programs, but the concept is we give those patients 10 mg per kg of infliximab, and not once, but sometimes more than once, to overcome that whole antigen sink concept. I think the same principle applies today, even if we've looked at small molecules like JAKs or monoclonal antibodies, that we want to give as high a dose as possible at induction and then pick the maintenance dose that will be informed by the trial because it's that whole concept, first drug works the best, and give that drug as best possible, so the maximum dose that you can to overcome inflammatory burden. I think those principles still apply today. That sounds great. Thank you so much. On this slide, we know that IBD is a lifelong chronic disease that requires tight disease control to prevent the disastrous potential from disease flares. Does it seem reasonable to you that a more convenient maintenance dosing schedule may improve patient compliance and ultimately patient quality of life? Yeah. Look, I think if you, what's striking on here is if we think about agents that we give in maintenance, and most, many of our drugs now are IV induction, subcutaneous maintenance, you can go as frequently as Q2, as you have on the left here, to therapies that we have approved today are typically Q4 or Q8. The only exception is dacinumab, which is now biosimilar, which also does have a Q12 label in some jurisdictions, but it's not used Q12. It's Q8 and typically Q4. As we're developing, in this example, particularly with your antibody, the structure and the manufacturing of these to both lower immunogenicity, but also allow longer dosing interval. I think for my patients, if I think about patients I treat, that is really important. I wouldn't go as far as saying life-changing, but it's not far off. If you suddenly haven't injected yourself every two weeks with an agent or every four weeks, and now you have something, if it pans out to be successful, that you can give every 12 weeks, so you're basically getting four doses a year, that is life-changing for a patient because if they're in remission, what I always say to my patients is, "I want you to wake up in the morning and live your life not knowing that you're forgetting that you have the disease," right? The goal of our drugs is for you to forget that you live with ulcerative colitis or Crohn's disease, you live a totally normal life. The importance of that is getting people into remission and keeping them that way. I think if you're only giving something potentially four times a year, that is really a significant change in treatment paradigm for us and for our patients. I think the other aspect that goes alongside that, and I think you potentially alluded to this, is probably better compliance, right? If you only have to take something four times a year, you're much more likely to do it than if you have to take something every two weeks or one week. I mean, if we think, if I go back to adalimumab, most of our patients, we dose escalate and they get to weekly dosing. I think you're much more likely to be compliant as well if you only have to do it four times a year. If I look to the future and think, "TL1As are going to improve, that's going to be the next drug in our clinic." If I have a range of these and one of them is 12-week dosing and the others aren't, and there's nothing in terms of efficacy, I can't think of many situations where a patient would choose to have it dosed more frequently because it's not as if they're going into a clinic or hospital and having supervised dosing in the vast majority of these scenarios. It is important from a patient convenience aspect, it is important for tolerability and durability, potentially. I think in terms of sort of that shared care decision-making, it's a no-brainer that you would pick something that you only have to take four times a year rather than many times a year. No, that sounds great. Very happy to hear your thoughts and very excited that our next-gen anti-TL1A therapy is pursuing a Q12 maintenance dosing interval. Here on this slide, we show the VEGA study. I think this is familiar to many people. It demonstrates the potential for combined TNF and IL-23 blockade. As we know, it has wetted the appetite of the field for future combination therapy strategies in IBD. I'd be curious to hear your thoughts in general about the future of combination therapy in IBD and where it might fit in the current treatment landscape. Yeah. Thanks, Ken. I've spent quite a bit of time thinking about this and working in this area. I think I probably say the same thing to everyone who's developing new therapies at this time, at this stage of development, is that if they don't have a plan for combination, it's going to be challenging to see where agents are going to fit five years from now. Because outside of TL1A, I don't see anything in the clinic or in the clinical trials clinic right now at phase three that has a high chance of success. It's one or two agents, but not many. That's number one. I think you have to be for monoagents, if you're not at the bar of 23s and/or JAKs, it's hard to see how there will be a place in the approval, even getting through the development program, let alone getting something approved. I think it's clear from TL1As that we're in that line of efficacy, if not even more, right? That will play out. The phase two data certainly suggests we may be shifting the needle already a little bit on IL-23. That's the first thing. I say to everyone, we've got to have a combination development plan, even at phase two, potentially, or have subsequent plans after the monoagent. That's highlighted well in this slide. This is the VEGA trial in ulcerative colitis, which was a POC of TNF and IL-23. I'm not, and I think there was some basic work done in mice and some in silico modeling suggesting there may be synergisms between IL-23 and TNF in terms of the number of gene pathways they knock out and the modules that they knock out in terms of inflammation, epithelial repair, fibrosis. I think when you put two things together, they can either, one can either negate the effect of the other, one can promote the effect of the other, or they can be absolutely additive. If you look on the left here, I think this is endoscopic remission or clinical remission. Essentially, one plus one is two. I mean, not far off. If you look at the endoscopic remission data, they're almost double. When you put together the monoagents, it's almost twice as efficacious as single agents. Here's the first tantalizing data that why combination therapy might get us to breaking the efficacy ceiling that we started off talking about at the start here. I'm not sure when we'll see the results reported, but we will see at some point the duet trials reported, which are the subsequent trials to here, which are IL-23 and TNF for both CD and UC, and a number of other late-stage assets that are already being married up in combination trials, largely phase four, non-label enabling, non-regulatory trials. It's really where the field has to go if we're going to get anywhere near a psoriasis-type remission ratio. If we're going to get to 60%, 70%, 80%, this is the only way I see in the foreseeable future that we go, unless we have a companion biomarker-driven study, which we're still searching for that biomarker, or if something comes along that's related to the fundamental biology of the condition. This has to be the future. I guess the question is, what do you marry together? I say some of these combination studies that we're starting to see at late phases or phase fours are almost marriages of convenience, sponsor has the assets and they put them together. I think there has to be a bit more than that. There have to be orthogonal mechanisms of action, number one, that might be complementary. Number two, that there are not going to be major safety concerns by putting them together. I think from the aspect of TL1A, and I know we're not showing the data, not a deep dive in this, but I think there was some post-hoc work done from the Tuscany TL1A program suggesting that there was upregulation of IL-23, I think, in some of the ways who had lower response rates, which makes sense that you might combine IL-23 in this pathway. If I was going to pick up a marriage partner for most agents today, I think it probably would be IL-23. I think we've got a few years of safety data from other indications as building in IBD. I think treating patients with that agent for the last three years now, it has shifted the needle in both certainly Crohn's, and we'll see that in UC too. I think there's some basic reasons why it might be good to put those two together, both from the gene pathways knocked out and the modules from epithelial and inflammatory pathways, but also from an efficacy perspective, if those seem to be orthogonal enough that they may be additive, I think from a safety perspective, it makes sense. I think that's one potential combination, but no doubt this has to be the future if we're really going to make a difference. No, no, completely agree. Very excited to hear your thoughts. Completely agree. Mirroring TL1A, IL-23, very favorable safety profiles, orthogonal mechanism of action, and the very exciting results from the Tuscany study showing that the TL1A non-responders show continued IL-23 tone. I think this is a very rational combination and very happy to hear that you agree with our initial thoughts. With that, many thanks for joining us today, Dr. Jairath, and sharing your welcome insights. Now I'll hand the call back to John for an update on our TL1A, IL-23 bispecific lead candidate selection. John? Yeah. Thank Thank you, Ken. Thank you, Dr. Jairath. It is well established now that both IL-23 and TL1A inhibition can have positive impact on disease control in inflammatory bowel disease. We set out to create a novel TL1A by IL-23 bispecific antibody. First, we wanted to create a bispecific antibody format that looks as much like a classic monoclonal antibody as possible. We firmly believe that is the best way to ensure minimal immunogenicity and long half-life. We have also included our extended half-life substitutions to promote durable in vivo persistence. Finally, we also wanted an antibody that can match the functional inhibition potency against both axes. You can see here in these in vitro assays, using one of several leads as an example, that we compare favorably to the leading anti-TL1A antibodies for TL1A functional blockade. That is on the left-hand plot. At the same time, compare favorably here on the right-hand plot on the IL-23 side against multiple approved anti-IL-23 antibodies. We're very excited about this new program, which we believe has strong potential to provide improved clinical benefit to IBD patients. We expect to have this program starting in first-in-human studies in 2026. Dane? Thank you, John. Our first-in-human data presented today is an early but important step for Xencor to support patients and clinicians that continue to need more and better treatment options for inflammatory bowel disease. We are continuing to build dialogue in partnership with the IBD community to ensure the design of our TL1A pipeline delivers on what matters most to patients and their care providers. We are encouraged that the phase two data from the first-generation class of drugs targeting the TL1A inflammatory pathway have built up excitement for a new treatment modality that could be a highly utilized and early line option for treatment of IBD patients with advanced disease. Current expectations from a survey of gastroenterologists that treat a high number of moderate to severe reactive ulcerative colitis patients indicate that at least one-third of advanced ulcerative colitis patients could end up receiving a therapy targeting TL1A. Nine out of ten gastroenterologists surveyed believe that anti-TL1A drugs will likely be used as either the first or second line of advanced therapy. We sought to ask what makes the next-gen best-in-class drug targeting TL1A. Drug exposure matters. There continues to be mounting evidence that per-label dosing of biologics to treat advanced IBD unfortunately leaves a significant fraction of patients with lower-than-target drug exposure, and very likely higher levels of drug exposure could equate to improved clinical outcomes in both induction and maintenance periods of treatment. As we presented today, XmAb942's greater than 99% inhibition of soluble TL1A in the gut across both induction and maintenance period, with higher serum concentration than a leading first-gen anti-TL1A drug, provides an opportunity for XmAb942 to deliver better drug exposure and potential disease control versus the first-generation IBD biologics. The use of subcutaneous dosing with biologic drugs as maintenance for patients with IBD has improved the patient experience, but there is a limit to the injection burden, which is why we are excited to develop XmAb942 as a single subcutaneous injection formulation for maintenance period dosing. Dosing frequency matters. Over 90% of gastroenterologists surveyed thought that XmAb942's every 12-week dosing in the maintenance period could be a very meaningful or meaningful improvement over the dosing frequency of the first-generation anti-TL1A biologics under development. While we are excited for the start of our phase two study of XmAb942 as a monotherapy for ulcerative colitis in the second half of 2025, we have already been planning for the future of IBD treatment. Dual targeting of different inflammatory pathways is emerging as this future. We have designed our TL1A pipeline to accommodate a treatment landscape in the 2030s where clinicians will want flexibility to combine novel branded therapies with potentially biosimilar version of today's standard of care drugs. Retaining flexibility with XmAb942 to be a best-in-class combination partner of choice is a key tenet of our current development plan. Given the safety and effectiveness of both TL1A and IL-23 biologics, we have observed a great deal of interest in dual targeting both inflammatory pathways. We are excited to bring the full strength of the Xencor protein engineering platform to build a novel TL1A and IL-23 p19 bispecific antibody. As John highlighted, we have made great progress with our TL1A IL-23p19 bispecific program, achieving lead development candidates that are equally potent to the respective class leading monospecific antibodies, which means in a single molecule, we are poised to deliver on the promise of combination therapy with more manufacturing efficiency than co-formulation approaches, offer potential ease-of-use administration, and be as accessible to patients as the current class of biologics for IBD. The clinical development plan for our TL1A pipeline is full of important development milestones during the next three years. Our busy but clear roadmap includes the start of Xenith UC during the second half of 2025, with potential triggering for additional development into Crohn's disease. During 2026, we also expect to evaluate potential indication expansion opportunities for XmAb942 into diseases that could also benefit from a best-in-class anti-TL1A drug. We are on track with our lead selection of XmAb-TL1A-IL-23p19 bispecific with first-in-human study initiation expected during 2026. This could support phase II study starts during 2027. With that, I will hand it back over to Bassil for concluding remarks. Thanks, Dane. This year has seen major achievements for our TL1A team in delivering critical data and in advancing operational plans. First, our phase I PKPD data for XmAb942 supports our goal of a molecule that can give effective drug exposure to maximize the fraction of patients who benefit from therapy while providing convenient maintenance dosing. Second, we built bispecific leads that have the heightened potency needed to mesh two monospecific antibodies, but with half the mass in a simple IgG format. Both programs are on track for efficient phase II clinical development with the cash as supported. Very important in this landscape. With that, we'd like to open up the call for questions. For the Q&A session of today's call, we will be utilizing the raise hand feature. If you would like to ask a question, click on the raise hand button at the bottom of your screen. Once prompted, please unmute yourself and begin with your question. We will now pause a moment to assemble the queue. Thank you. Okay, our first question comes from Gregory Renza with RBC Capital Markets. Gregory, your line is open. Please feel free to unmute and ask your question. Can you hear me okay? Yep, can hear you, Greg. Okay, yeah, great. Hey, how's it going, guys? Congrats on the progress. Thanks for taking the question, Bassil and team. Great to have Dr. Jairath on as well. Just with respect, Bassil, to the doctor's commentary on the positioning of a next-gen TL1A, just curious if you can comment on how Xencor is sort of preparing for that. There are a lot of moving parts. We've counted several TL1A agents that you've alluded to under development, but maybe just point us to how Xencor is kind of preparing to run those clinical trials. Bassil, what can you do to attract those patients and centers amidst what is an increasingly crowded space? I think first of all, it's build the best molecule that we can with what we believe, at least to date, is the most compelling profile. I think that's going to attract patients. The maintenance dosing, the excellent potency that we've demonstrated all show that kind of promise. I think the other piece, and this is where I'll let Dane comment in a second, is having a really efficient and aggressive clinical development strategy, right? We want to be positioned to be the agent of choice for those combinations with existing agents that are out there that are going to be biosimilar in a few years by having the best monovalent and the fastest monovalent long-acting TL1A out there, right? The The fastest to develop. That's the overall strategy. I'll let Dane comment maybe on the particulars. Sure, thank you, Basil. Thank you for the question, Greg. Yeah, I think there's a number of design features that we put into the phase two study discussed today at a high level that hopefully make us a good partner with the clinical sites globally that will be enrolling these studies and would have interest in the phase two study despite, to your point, the phase three studies that are ongoing at the moment with several different peer anti-TL1A targeted drugs. One is we've made this phase two as attractive as I think possible and are working hand in hand with the important investigators. Thankfully, we have one of those on the call with us today to make this not just a good clinical experience for patients, but also the caregivers as well. Furthermore, it's our commitment to IBD innovation, really. We have a pipeline now with a bispecific antibody that hopefully really entices that view of what's next for breaking through that ceiling of response and clinical remission that we highlighted today as being really in a cap on monospecific therapy. We are really excited to already start the process heading into 2026 of, again, going back to a lot of these investigators that will be working with us on the phase two for XmAb942 and discussing what the future could look like for our bispecific antibody. I think that commitment to the pipeline of innovation is going to be a big differentiator, not just amongst our peers, but for the IBD clinical community at large. Yeah, that's really helpful, guys. Maybe just a quick follow-up and just to broaden the question. When we think about the larger players involved just more strategically, would you consider a more typical outlicensing strategy with 942 or even as you develop the bispecific, or is the base case that you will continue to have the capacity to take this all the way through? Thanks again and congrats on the update. Hey, thanks a lot, Greg. Our base case is that we're certainly committed to running this phase two study, which we hope will establish XmAb942 as the most attractive agent. I think what we want to do, though, is in the meantime, accelerate every opportunity to understand how it's going to fit in the landscape long term by exploring the idea of how we might do combinations as we go further into development, combinations with existing agents. I'll say never say never on partnering, but you have to have a base plan for how you're going to move forward for a number of years. You've got to make those decisions based on what's going to get the most rapid access to patients of your new agent. We believe we have the resources to take this molecule a long way. I'll commit to all the way when we take that next step. I think how we can rapidly combine is something we definitely have keenly in our mind, but we think we can also find ways to do that going forward, controlling the asset and developing it ourselves. Thank you for your question, Gregory. Our next question comes from Tara Bancroft, Cowen & Company. Tara, your line is open. Please feel free to unmute and ask your question. Hi, yeah, thanks for taking the question. My question is about the phase IIb or even later. One is, do you have thoughts on if you might look specifically at a biomarker population like 3101 and Cholestech Kyburz? In the context of all the data that you and Dr. Jairath talked about in the prepared remarks, what do you think is the bar for efficacy for 942 specifically in phase two? What remission rate would you view as competitive? Yeah, I'll touch on the biomarker question, and then maybe I'll let Dane touch on what we think the bar for success might be and how much we're willing to talk about that at this point. I think, just to be clear, we have a very active biomarker program, and we're going to be looking at a lot of biomarkers in the study. We're allocating a lot of effort and budget to that. I will say I think it's an exploratory effort right now. I'm not certain that the biomarkers that have been looked at so far have given a clear direction yet. I think we're very committed to being in that exploring phase with the rest of the field. We'll see how that evolves over the next few years. I guess, Tara, I'll weigh in with the kind of non-answer to your question. It depends. When you look at the field of clinical studies in IBD biologics and JAK inibs, clearly there's a difference in clinical remission, treatment effect size relative to placebo based on the prior treatment history of the patients. I would say kindly at this point, we're probably not in terms of discussing what we expect the complexion of our study participants to be to kind of determine what we would think the overall efficacy hurdle would be. I see. Yeah, that makes sense. Okay, thank you so much. Thank you for your question, Tara. Great. Our next question comes from Yen-Der Li with Leerink Partners. Yender, your line is open. Please feel free to unmute and ask your question. Hey, can you hear me? Yep, we can hear you. Okay. Yeah, yeah. Thanks. Hi, good afternoon. This is Yen-Der Li for Jonathan Chang. Congrats on the positive data, and thanks for taking my questions. I have two questions. The first one, on the 942 program, you mentioned that there is no apparent impact of the anti-drug antibody on PK. Could you share more details on how frequently you observe any drug antibody within the phase one study, and how does that compare with the other published TL1A data? Thank you. Yeah, so just to be clear, what we were writing about, any impact on PK of ADA. All of our ADA data, the actual measurements of anti-drug antibodies, is still pending because we're still in the midst of the study and gathering samples. So we don't have any direct ADA data yet. We will report that when we publish these full study results in a medical conference, obviously. Now, what we're saying is the biggest consequence of ADA that you worry about is that it's clearing your drug and that it's pulling it out of circulation. What we're saying is, even with multiple doses, we're not seeing any apparent impact on PK that might be from ADA. There's no reductions in drugs. There's no outliers in our data sets or data points that are pulled down. We think that's a great start, and we're very encouraged by that. We're trying to get this data out to investors as quick as we can. All the full data sets coming soon. Got it. Understood. I guess the second question also kind of related to ADA. For the TL1A and IL-23 bispecific, can you share your thoughts on how to avoid immunogenicity with the bispecific that targets two soluble targets and that might cause forming of immune complex? Thank you. Yeah, maybe, I don't know, John, are you happy to handle this one? I mean, that goes right at our design philosophy. Yeah, sure. You probably noted from the schematic that I showed that we designed a one-plus-one bispecific antibody. It is monovalent engagement for both IL-23 and TL1A as opposed to other types of molecules that would have sort of a dual bivalent engagement. Basically, the more valency you have, the more potential you have for immune complex formation. We wanted to minimize the valency to the extent possible, and one-plus-one is as low as you can go for a bispecific antibody. There are other factors as well. We have a super clean set of FC effector function knockout substitutions included in our bispecific antibody that minimizes engagement of the FC by edge of presenting cells and so on and so forth. Beyond that, we just work really hard. We mentioned we've got six or so leads that we're working on, a whole series of them. The example I showed was just one of them. Really, the only thing that's going to determine the lead selection is the intensive analysis of the developability and the biophysical properties of those leads. Optimizing for biophysical properties is thought to be one of the best ways you can minimize immunogenicity. Yeah. We took the time to make very, very high-potency binders so we could get what we think would be maximal effect from this monovalent binding. You avoid forming those higher-order oligomeric immune complexes when you have soluble targets getting bound by two domains. When we looked at formats, we wanted to avoid bivalent formats and really do the hard work upfront of making a really great set of binders into a bispecific structure. Understood. Thank you so much. Congrats again on the data. Thank you, Yender. Thank you, Yender, for your question. Our next question comes from Brian Cheng with JPMorgan. Brian, your line is open. Please feel free to unmute and ask your question. Hey, guys. Thanks for taking our question. Maybe just first, just have you looked into the effects of downstream biomarkers like C-reactive proteins or interferon gamma just to see if there is any downstream effect? If so, is there a downstream linear relationship? Second, on the doses that you have disclosed here, 942, the low, medium, high, what is the relationship between each of the doses? Is it a linear step-up between each of the doses? Thank you. Sure. I'll answer the first one. Given that these are healthy volunteers, looking at downstream effects on cytokines is really almost impossible because the baseline function of those cytokines, at baseline, the serum levels are quite low. I mean, John, I'm not missing anything, right? You said exactly what I would have responded with that. Yeah. There's not enough signal to look at. You're assuming the noise is trash. Yeah, yeah, yeah. I'm sorry, your second question, Brian? On just the dose at the low, medium, high. Oh, right, right, right. Linear step-up between each of the doses? Let me think for a second before I answer. Actually, it was a geometric step-up, so stepping up by a fold. In our single-inciting dose study, that's what we did. In our phase two design, it's a little bit less specific. The step sizes are different. They're based on our QSP modeling to have doses that hopefully span the range of efficacy so we can really narrow down what our best dose for phase three is, again, do the hard work of the dose ranging in the phase two. Thank you. Thank you for your question, Brian. Our next question comes from Alec W. Stranahan with BofA Securities. Alec, your line is open. Please feel free to unmute and ask your question. Hey, guys. Can you hear me? Yep. Okay. Great. Just a quick one for us, and I appreciate the questions here. Both are kind of around the safety that you're seeing. I appreciate the study is still blinded, but would be curious if you can see in the data that you have access to if there's any dose-dependent increase in AEs, say maybe more grade one at lower doses and more grade two at the higher doses. Just based on patient makeup in the phase IIb, I guess, how would you expect safety to maybe change when moving into the disease setting? Are there any key items you'll be looking out for either as an on-target or versus other medicines? Thank you. Yep, sure. We do not see any kind of dose relationship, and the slides are going to be posted on our website, I think, momentarily. You'll see there were just three potentially related AEs. There was no dose relationship for all AEs, related or not. Really very clean phase I that we saw. We're very happy with that safety data as to what to anticipate in a patient population. I think we anticipate our agents should behave like the other TL1As, just longer acting and more potent. It's hopefully something that's going to be a pretty uninteresting story. So far, it's been pretty uninteresting in exactly the ways we'd hoped. Okay. Maybe just one quick one, if I can. Just the dosimetry reflecting your observations or your expectations from your non-human primate models on PK/PD, curious if there's any read-through to your other ongoing dose escalations, either for ENPP3 or [PLOTin6], and whether this data maybe gives you more confidence on the doses that you're testing in those studies. Thank you. Oh, yeah, no problem. Yeah. Not really a lot of crossover here given the real divergence of mechanisms we're talking about. You've got an inhibitor of TL1A here, which is sort of just quietly kind of stoichiometrically mopping up a cytokine. On our oncology programs, our T-cell engagers, you're actually agonizing a T-cell, kind of a total different paradigm. It certainly gives us added confidence in the quality of Xencor molecules, the biophysical robustness of them. It's a pretty high bar to get to this kind of half-life. We already knew that. There have been so many agents, marketed agents, partnered agents. It is nice to see another really beautiful performance by an XmAb. Makes sense. Congrats on the progress. Thanks. Thank you for your question, Alec. Our next question comes from Eva Fortea Verdejo with Wells Fargo Securities. Eva, your line is open. Please feel free to unmute and ask your question. Hi, guys. Can you hear me? Yes. Thanks for taking our question, and congrats on the data. A couple of formats. First, could you provide some clarification? Maybe a misstep on the dosing schedule for the IV portion of the UC study? How often are these patients going to be dosed during this initial 12-week induction period? The second question is, how are you thinking about indications for the TL1A IL-23 bispecific where it could provide most benefit or would make the most sense to start with over 942? Thanks. Sure. It's a pretty standard induction schedule we're planning on using. You can see it from the modeled PK and PD plots that we showed. Again, the slides will be up in a minute. You can just see where the peaks go. It's an IV induction. You can just read it right off there. It's been a long call, so I don't want to read it off wrongly because I don't have the slides in front of me. Does anybody else want to let Eva know? We'll pull that up while I talk about other indications. How differentiated do we want to be with the bispecific versus 942? I don't know that that's the first place we think. Certainly, there could be a different range of uses. Again, the initial objective has been, what's the really killer app for how to give combination therapy to UC patients in a way that, as Dr. Jared said, you hopefully can make them forget they have a disease. That's what we all want to do for patients. A bispecific that lets us do that in IBD is maybe our primary initial indication. There's a lot of biology around both 23 and TL1A to explore. You saw what's on the slide. We'll guide more as we do a lot more preclinical work and vetting work. Oh, yeah. I just pulled up the slide. Day zero, week two, then week six, week ten is our induction schedule. Very standard. We go into a Q12-week maintenance sub-cue. Okay. Makes sense. Thanks. Thank you for your question, Eva. Our next question comes from Matt Phipps with William Blair. Matt, your line is open. Please feel free to unmute and ask your question. Hi. Thanks for taking my question. Congrats on this update here. Curious following up on the induction. I guess with the IV versus sub-cue, it does not seem to be that big of a difference in kind of the total TL1A concentrations by two or four weeks. Do you think higher, faster Cmax is going to be important in the induction phase? That medium sub-cute dose you plan to take into the phase IIb, is that something you think you can fit into an auto injector or some kind of self-administered type pen eventually? Thank you. Sure, sure. Our current plan right now and the dose we're taking forward in maintenance, we believe can be given in a single injection, right? It, in fact, has already been given in single injections in our phase i and SubQ, and it's worked out quite nicely, as you can see. The work on putting that into things like auto injectors, people, syringes, etc., absolutely something we have on the drawing board. I don't see any reason why not. Obviously, we'd have to guide on that as we go forward. Our goal is to have it to be really simple to give. You're right on the mark. That's exactly what we're aiming for ultimately. Thank you for your question, Matt. Our next question comes from Sean McCutcheon with Raymond James & Associates. Sean, your line is open. Please feel free to unmute and ask your question. Sean, you there? Sean? There we go. I should be—can you guys hear me now? Yep, yep. We got you. Okay. Cool. Thanks. Yeah, thanks for the question. Can you talk a bit more about what you'll need to see in order to trigger development in Crohn's and maybe what you would expect the variables to differ within ulcerative colitis? Can you give some detail on the remaining gating factors for the bispecific IND and when you can get that into the clinic? Thanks. Sure. Maybe I'll touch on the second one first. The gating factors are we've got this handful of leads, all of which look to have really exciting and excellent potency. They're going through the early run-up of GMP production all in parallel so we can stay on our 2026 first-in-human timeline start. It's going to be what John said, the developability. I mean, all the nitty-gritty basics of biophysics and formulation and all of that, we put several of them forward so we can pick the best one. Hopefully, that gives us what we want to see, which is a high-concentration formulation, high-storage stability, etc., etc. Again, we've been very successful at doing that in the past for a wide range of bispecifics, so we're hopeful there. That's really the only—I wouldn't say there's a gate to moving forward to first-in-human. It's just picking which one of these—all pretty promising from the data we have so far—leads, which one is the winner. I guess your question on what are the remaining gates, I guess it's really looking at peer or competitor data as they look at other indications. We're watching closely all of those studies to see when should we peel off and add an indication. It's also the progress we make at operationalizing our phase two and UC, the XENITH UC study, and advancing it so we can make sure we allocate our resources judiciously. It's kind of a combination of internal and external drivers. Anyone want to add anything on that? I think I kept rolling. Sorry. Great. If we want, you can move on to the final question of the day. Right. Our final question comes from Peter Lawson with Barclays. Peter, your line is open. Please feel free to unmute and ask your question. Peter, you there? Yes. Hey, can you hear me? Yep, yep. We got you. Okay. On the phase two, I may have missed this, but just the rationale for starting with IV and then switching to subcutaneous. And then if you've already seen an MTD. MTD, no, we have not seen any DLTs or any serious AEs or high-grade AEs. It is perfectly clean all the way up in the escalation. There is no reason to go any higher. We are loading them up pretty good. Maybe, I mean, Dane, do you want to take the other one on the rationale for the route? Sure. Thanks for the question, Peter. Yeah, I think it's fairly standard at this point to an earlier question around potential CMACs of using an intravenous infusion in the induction period, especially with patients that are refractory, have disease flare, to attenuate the symptoms as quickly as possible. Once you've brought the disease under control with your normal 12-week induction cycle, you would then go to the convenience of the maintenance period where, in our case, we'll be dosing every 12 weeks with a single subcutaneous injection, which we think will be very favorable to patients and clinicians. Thank you. Just getting back to the phase two design, final question, just what percentage of patients you're expecting or what line of therapy you're expecting? Is there a mix between, as you kind of phrase it, conventional versus advanced therapy? Yeah. We haven't gotten to specifics. I think there was an earlier question just in terms of what we expect treatment effect size to be, which, as you know from experience with advanced therapies in ulcerative colitis and Crohn's, varies greatly depending on the prior treatment history of the patient. In our case, we think it's probably a little premature ahead of the phase two actual start to get into the complexion of advanced therapy that we may expect across the different clinical sites we'll be using globally. Great. Thank you so much. Thanks, Peter. Thank you. Thanks, Peter. All right. This concludes the Q&A section of the call. I would now like to turn the call back to your host for closing remarks. I'd like to thank everybody for joining us today to review these really exciting interim results for XmAb942 and our go-forward plans for our TL1A programs. We look forward to further updates on these and others in our portfolio in the coming quarters. I hope everybody else has a wonderful rest of your day.