Good. We're live. My name is Eric Schmidt. I'm one of the analysts at Cantor. We appreciate all your coming out early today and kicking off our conference. We're delighted to have with us Zenas BioPharma, a development stage oncology company. We're delighted to have with us from the company, CEO Lonnie Moulder, as well as Jen Fox, the company's CFO. Maybe before we get too deep into the weeds here, Lonnie, you just give us a kind of two-minute high-level overview of what's going on at Zenas. All right. First of all, we really appreciate the invitation from Cantor and look forward to sharing where we are with Zenas at this point in time. It is an exciting time for the company. As many of you may know, we're an autoimmune-focused company and we have a really interesting molecule that's obexelimab that's now completing a global phase III trial in a disease called IgG4-related disease or IgG4RD. The top line results from that trial will be at about year end. In addition to that program, we have two other global phase II programs that are ongoing, one in multiple sclerosis, specifically relapsing multiple sclerosis, and that trial will report out early in the fourth quarter. We're accruing a global systemic lupus erythematosus program that will report out about the middle of next year. A lot is happening over the next 12 months or so. The company is conducting trials globally. We have our team based outside of Boston, but we also have a team in Europe and a team in Asia. We're in that pre-commercial mode for our Medical Affairs organization that's already deployed in Europe and in the U.S., as we also work on the BLA for obexelimab for IgG4RD and are well poised to execute on a commercial launch at such time that we're approved. Strong cash position. Yeah, we are happy that we were able to announce the Royalty Pharma deal. As of June 30th, we had about $275 million worth of cash. The $75 million extends the runway to more than a full year beyond the IgG4RD phase III readout. It's a great transaction for us because it was unusual for Royalty Pharma to do a transaction ahead of phase III data. About $225 million of the total of $300 million is allocated to the obexelimab program and IgG4RD. We're eligible for additional milestones after the phase III data. That would be another $75 million, and again, at approval. Within 18 months, we would be able to get that $225 million. The last milestone is tied to an approval for SLE. Is there a type of data set that you need to deliver in phase III in order to have the next tranche available to you, or is it just how do you define success for a Royalty Pharma's transaction? Yeah, of course, we need to hit the primary endpoint of the study. There are some other elements to the product profile, but from a competitive standpoint, we're not revealing those, but they align with our internal expectations for the profile of the product. Since the deal is very timely, just hitting the tape yesterday, why was it in your best interest to do this deal? Why is this a good source of capital for the company? I think the opportunity to continue to extend the runway makes sense. I think also from a validation standpoint, the probability of technical success associated with the phase III for IgG4RD, given the MITIGATEd data of Uplizna's approval and their phase III data set, provided a rationale for royalty players to be interested in transacting ahead of our phase III data. It also, I think, validates some of the questions that we've gotten around the market opportunity for IgG4RD because folks know the required returns. If you just back into what they think the commercial opportunity is, it's beyond what consensus analysts have. Therefore, we thought it was good timing. I think just in volatile markets, we want to be capital efficient, of course, but we are also always looking to make sure that we're in a good position. Interesting math on the consensus potentially being too low relative to the payments from Royalty Pharma. What is the consensus estimate long-term? I think the way that the consensus is being driven is very fair, right? Because it's a new market. There's about 20,000 patients that are already diagnosed with IgG4RD that's confirmed. With a new drug on the market, people expect that that market's more like 35,000- 40,000 patients. Folks have used the 20,000 patients and then they have applied what they think is the right percentage of patients that require chronic therapy, which we think is about half of those patients, about 10,000 patients treated. They apply some numbers as it relates to the Uplizna price and come up with a market and give it a little bit of a haircut. Okay. Let's get into the drug itself. You know you're relatively newly public as a company and maybe a lot of people don't know the history here behind obexelimab. Why obexelimab? Where did it come from? What does it do that's different? Sure, sure. The molecule was actually engineered by Zencor and I think most people know how adept they are at engineering molecules. It's interesting in that the approach is unlike other antibodies that target B cells, whether you're pursuing CD20 with an anti-CD20 antibody or CD19, which Uplizna does. What was done with this engineering was to take the ADCC, CDC aspects out of the Fc portion of the antibody. The variable regions bind CD19. That way, you're getting to broad B cell lineage. The Fc part of the antibody is engineered to bind Fc gamma RIIb, also known as CD32b. That co-engagement on B cell lineage is really what sends the inhibitory signal. The Fc gamma RIIb receptor is the pathway to shut B cell lineage down at the end of, for instance, an infection. It's a highly active molecule in shutting B cell immune action down, which includes antibody production, cytokine release, processing of antigen for T cell presentation. I don't think too many of us are familiar with the FC gamma RIIb. Are there other antibodies that are addressing that receptor specifically, or where is the validation coming from? Yeah, there's some earlier stage work in that area. There's at least one other small biotech company that's trying to leverage that. There was an older MacroGenics molecule that co-engaged CD32b and CD79b. That molecule hasn't been moving along. From a validation standpoint, what we had in hand when we in-licensed this molecule was five completed clinical studies. The typical SAD study, cyclosidine dose study, a MAT study that was actually in rheumatoid arthritis and had demonstrated what I would consider to be really good activity in RA. A study in IgG4-related disease, that phase II study with dramatic results, was the basis for us to move into phase III. In addition, a lupus study. In the lupus study, unfortunately, the study was sized at only 50 patients per arm. Although the effect size in the ITT population was in the high teens, which is about where the two approved drugs are for AstraZeneca and Flaxseed/Cimaticline for lupus, it missed the P value. We have a lupus program with a study that's designed about twice that size and some other aspects that we think give us a better opportunity at making a difference in that disease. Like you said, CD19 works in many of these indications. You've got a CD19 antibody plus this secondary receptor. What's the best evidence that you are getting a differentiated profile, say, above and beyond what a CD19-directed molecule would do itself? Yeah, I would point to a few aspects of this molecule that go beyond your question, but let me start with your question specifically. The CD19 approach, or in some diseases, the CD20 approach, typically involves a dosing regimen that's every six months. Uplizna in IgG4RD is an every six-month infusion. It's a B-cell depletor. Ocrevus in multiple sclerosis, every six months. Rituximab in rheumatoid arthritis, or Rituximab off-label in certain autoimmune diseases, every six months. In the IgG4-related disease trial of obexelimab, the phase II trial that was completed, run out of Mass General, the results, as I mentioned before, were dramatic. That same group did a Rituximab study in a similar patient population. When we looked across those two studies, it's always challenging to cross-study comparison to the source. Same investigator, same study, similar patient population. The primary endpoint was similar between the two, how well it was constructed. Where the difference was the sustained benefit. What I mean by that is patients that receive a B-cell depleting antibody, many of those patients will replete only prior to the next dose. In fact, in the Uplizna label, you can see where 15% of patients have normal B-cell counts before the next dose. Those patients are at risk. In that Rituximab study, looking at sustained disease response, and then also looking at the obexelimab sustained disease response, obexelimab performed 20% better. Why is that? It's administered chronically and as an at-home self-contained administration going forward. The patient always has coverage, target engagement of the B cells, so that there's continuous inhibition, so there's no escape. We don't have the opportunity for patients to escape and have that underlying ongoing inflammation, which can occur with the dosing regimens of these depleting antibodies that are empirically dosed every six months. That's a significant opportunity to protect these patients long-term for the disease that otherwise leads to fibrosis. Of course, having at-home self-contained administration, many people believe is much more common in the patient. Being a Medicare Part D pharmacy benefit for obexelimab, where the annual co-pay is capped at $2,000 compared to an infusion under Medicare Part B, when patients are responsible for 20% of cost. When a drug may cost more than $250,000 a year, that 20% is problematic for the economic burden. There's a number of factors that we believe, we think, set us up to be able to gain reasonable share of that. Okay, one more product question or antibody question before we get too deep into IgG4RD. You've made a good case for the efficacy being differentiated relative to only single CD20 antibody. What about safety in autoimmune disease for always? What will the benefit be? How do you know what is the safety experience you have overall to establish that you're not incumbent? That's an excellent question. If it's your altering immune response, any agents in any category are going to have some level of infections. Now we know from the five studies that were completed before we licensed the drug, a safety database, patients, and healthy subjects of around 200. We can look at that and then compare it to the original safety database that existed, for instance, with Uplizna in the NMOSD indication. We know from a safety standpoint relative to infections that we're positioned well. Now we have the full phase III data set for Uplizna in IgG4-related disease, and we still feel that about it. There will be an incident of infections. One opportunity that exists that the key opinion leaders and investigators really like about this drug is that if you withdraw it, you get an intact B cell compartment in a few weeks. If there was a cohort in need leading to a real need to pull the drug away, you could do that. Obviously, you depleted the B cell compartment, and you had many, many months for this repletion. That's a bigger challenge. Something really interesting that's pointed out to us by a number of the investigators is during the COVID pandemic, they actually, unfortunately, had patients succumb because they were on a B-cell depleting antibody, they were unable to mount an antibody response to a vaccine. What they like about obexelimab is the potential to pause the drug for the annual vaccination regimens, whether it's COVID or influenza, or a patient of a certain age with the Shingrix or whatever, pause, vaccinate, wait a few weeks, and restart. We didn't initially think about that, but we keep getting that pointed out to us by the investigator at the other side. Okay, so you licensed the product obexelimab, you mentioned 200 plus patients, multiple different phase II data sets, you chose IgG4RD as the leading indication. Why is that? Obviously, it's great when you have validating data in hand. We had a phase II study. We spent some time looking at the disease, trying to understand what the patient journey is, what physicians are doing now, what the opportunity would be if we could bring a highly effective agent that would match what was seen in phase II. It was clear to us this is a disease of significant need. It's like many diseases in autoimmune diseases up early for their approved drugs, where you know there's not a patient support group yet. The diagnostic process isn't well defined, but we saw the same opportunity here with the education of patients, with physicians, with an effective drug. Another company in the space, Horizon and Amgen, bringing it forward, that we could create a real market for a drug and satisfy the significant need that exists out there. How would you stand up from a company standpoint as a small environmental company? It would be easier to run one phase III registrational study and potentially have an approved product that could yield $1 billion in U.S., sales, which was very attractive to us. We did also go through 40 different indications. We looked really closely at the other opportunities. We decided to go forward with IgG4-related disease, obviously, because we could start that phase III trial and then multiple sclerosis and systemic lupus erythematosus. The phase III readout is up and coming here, about your year end, as you're saying, not necessarily late this year or early next year. Last patient out is November 15th. Okay. You know the process to get you to a top-line database. Maybe you could just recap the phase III trial design for us. Give us benchmarks for what to expect. Of course, you didn't have this competitor out there. How do you compare your past? The design of the INDIGO study, that's the phase III study of obexelimab in IgG4RD is quite similar to the MITIGATE study, which is the study designed by Arezou and led to the approval in inebilizumab. One of the key differences is our study is the largest study ever conducted. It's over 190 patients. The MITIGATE study was about 135. The way the study works, unlike phase II, where the drug showed its value in inducing remission and then maintaining remission, this protocol design used by us at Zenas and Amgen is a maintenance protocol. Patients are first identified if they have a flare. The flare diagnosis is utilized in the ACR/EULAR criteria that were validated and published back in 2019. Anyone with a score of 20 and above is in a flare. The patients are then reviewed by the medication committee to ensure that the investigator has scored it right and they truly are eligible to enter the screening procedure. They're then treated with a steroid regimen that's prescribed in the protocol. Once they're in remission, they're then reviewed again centrally to ensure they truly have met the existing criteria. At that point, they're randomized. Now they're in the study, one-to-one, drug versus placebo, and the steroid regimen is tapered per protocol specifically over eight weeks in both arms. We monitor for flare in 52 weeks. The primary endpoint at this time is the disease flare. Based on our phase II, we anticipate that the flare rate we would see with obexelimab is about 10% over 52 weeks. That's what Uplizna demonstrated in the MITIGATE trial. The control arm in the MITIGATE trial was over 50%. It's about 60%. We would anticipate the same thing. When you put that together, you end up with a hazard ratio because the time the disease flare will report out, Kaplan-Meier error hazard ratio in the teens. That's the primary endpoint. The other endpoints that are important for the key endpoints, key secondary endpoints, it's what I've discussed earlier, complete remission. This is where we believe we can have differentiation because of our continual dosing and continual protection of patients. They're not in flare. They're between zero and 20 on the score that have inflammation. In addition, an important endpoint is corticosteroid use. They're trying to eliminate that. Both studies count that, but uniquely in our study, we use the glucocorticoid toxicity index, GTI, to actually show the toxicity reduction associated with reduced steroid use. That's really important to titers. That's what we'll be covering. Confidence in giving only secondary endpoints? How would you assess that? We're highly confident based on the mechanism, based on the phase II data set. If you had to just compete based on convenience aspects that you already mentioned, how would that look? Sorry, apologies for these lines. Yeah. For anyone who would be listening online, we've had some microphone issues. You can probably hear me now. Our apologies. If you just look at the profile of the two drugs and set aside efficacy and tolerability, let's assume they're similar. Just having an at-home subcutaneous administration is really important for a lot of patients. There are patients that have no problem going to an infusion center. Throughout the country, it's not easy always to get to an infusion center. Not only are you going to the infusion center, the patient then has to get premedicated due to potential hypersensitivity and anaphylaxis with the infusion of monoclonal antibodies, receive their infusion, and then stay for a while to be monitored before they can be sent home. As opposed to when we launch our autoinjector, once a week, less than 10 seconds, self-administration at home. I think that makes a real difference. When you add the economic burden to that, we think we can get a reasonable share based on convenience and economics. If you think about this real need, and it's our job to educate and ensure people understand, it's this ongoing underlying inflammation that will continually lead to organ damage. If we can manage that better with our continuous administration, I think we have a real winner here. What have we learned from Amgen's launch to date? They launched about a quarter ago, so it's a little bit challenging to discern exactly what amount of sales is coming from IgG4RD. When you look historically at their sales for NMOSD and compare that to the last quarter, it appears, and add that to the patient data that we are able to get access to, it appears that they are generating at least $20 million in the first quarter, which we think is a great start for them. In terms of the pricing benchmark that they have out there with the Uplizna, is that something that is quite relevant to how we should think about pricing for obexelimab? Yes, the way that we're pricing in our models is about $270,000, which is equivalent to theirs. Now, their dosing regimen is different, obviously. In the early days, they get two doses. In year one, it's about $460,000. Ours would just be the continuous dosing that Lonnie described. Lonnie, you briefly sort of mentioned some of the commercialization or pre-commercialization activities that you are already investing in. What size sales force, what size enrichment discussion did you go after? At this time, we have the key leadership in place. We have our Chief Commercial Officer, Head of Marketing, Head of Medical Affairs in the U.S., also in Europe, MSL teams in the U.S. and in Europe. When we size the sales force, obviously, we take a look at what Amgen's doing. With rheumatology being the primary audience, and some gastroenterologists are really focused more on liver and pancreas, it's under 50 from a sales force standpoint. We go about a dozen from an MSL standpoint. This is each in Europe and in the U.S. Of course, some other support personnel and account management and marketing. Altogether, around 100. Let's turn to MS, where I guess this is the next upcoming milestone data in the phase II or phase IV. This will be for the IgG4RD cloud readout. Maybe just first by level, how do you think you can differentiate from a CD20 antibody, given this is a very well-received class emotionally about? Exactly. The anti-CD20 antibodies now account for almost 60% of the market. It's over $10 billion. When we look at the profile of obexelimab relative to the CD20 market, specifically Ocrevus, you see some of the opportunity here because this is subcutaneous versus IV infusion, continual treatment to cover the target and provide ongoing efficacy. We all know in the MS community, there's a lot of discussion of the wearing off effect of the Ocrevus as they approach their next six-month dose. We can handle that. I think Concepta, an anti-CD20 that's self-contained and dosed monthly, shows based on their growth how much that is valued in the MS market. I think the opportunity here is similar in that we have this profile of at-home subcutaneous continuous dosing. Another opportunity here with obexelimab, excuse me, is that the mindset and the triggers of MS patients, they contemplate with these patients being diagnosed at a young age, whether they should be depleting the B cell compartment continually for decades, 10, 20, 30, 40 years of B cell depletion. There are some publications looking at when the B cells come back, some of them are hyperreactive. This inhibitory approach is appealing to clinicians. Okay. phase IIb study results again coming in the not-too-distant future. Maybe what we expect to learn from this study and how it's going to inform future. This study is a randomized phase II study that's classic in multiple sclerosis in that the endpoint, the primary endpoint, is new T1 GAD-enhancing lesions. The study is randomized two to one, drug to placebo, which is quite common. The readout is a 12-week rating. When you look at other studies that have been completed in this field that use a similar endpoint, some will get total at week four, week eight, week twelve. Some look at week eight plus week twelve. Some look at just week twelve. Some look at new lesions. Some look at total lesions. It's challenging to weigh through all the data that exists and land on what the right benchmark is. Our study looks at cumulative new GAD-enhancing T1 lesions, week eight plus week twelve. What we would like to see, of course, is driving it in the study arm, the drug arm, the obexelimab arm, down near zero and achieve about an 80%- 90% difference from placebo. These studies vary in a patient population that's brought in. Even though the exclusion criteria are almost identical in every study, some studies have levels that are down here, some up here. The closer you get to zero, the harder it is to show a 90% difference. I think it's cool to see how it all works out. Okay, so let's say you're in the ballpark of other antibody CD20s with this readout. Is that a dope decision on phase III or looking for something else? We have the 12-week data. It's coming early for a quarter. The study then goes on for another 12 weeks, and we have a whole 24-week readout. Everyone on placebo gets moved to obexelimab in the final 12 weeks. At that 24-week point, we have almost 20 secondary, tertiary, and exploratory endpoints where we're looking at a variety of novel biomarkers and scanning techniques of the brain and the spinal cord to show us whether there's translational medicine support for the drug actually impacting potentially disability progression. We know in relapsing multiple sclerosis, you can control relapses. The annualized relapse rates come way down over time. Where is the need? The need is this ongoing disability progression, the silent progression that's independent of relapse control. There's actually a clinical endpoint called PIRA, Progression Independent of Relapse Activity, that can be measured. It wasn't available and validated when the anti-CD20s conducted the phase III trials. Our opportunity with that translational medicine support is to move into a registration program where a key secondary endpoint would be PIRA, and that would significantly differentiate the drug. We believe this mechanism will have impact there because, in fact, the Ocrevus phase III program and a post-hoc analysis combining the two randomized phase III trials at relapsing multiple sclerosis actually indicated an impact on PIRA. If we could do that prospectively and have that part of the label, I think that would be quite compelling. Very interesting. Now we haven't outlined our final strategy. Let's get to the 24-week data. We have to think about capital to execute a phase III program. Okay. We just have a minute left, but maybe we can quickly address why this is an interesting molecule in SLE where you again dive into your own idea. I'll quickly go back to the original study conducted by Zenas, where when we analyzed it and saw that the IgG4-related disease population had an effect size equal to the two approved drugs. In patients that had the right level of exposure, they used an IV formulation as most drugs start in this field as an IV before they move to subcutaneous. CTRA was critical. The PK efficacy analysis, CTRA by supernodal efficacy. Patients that were above a median CTRA actually had an effect size of 35%, double the overall study. Our subcutaneous regimen that we selected provides a CTRA that's multiples of the median in that study. We think we have a better, higher activity dose on a larger trial that bodes well for SLE. Fascinating stuff. We are out of time. Lonnie, Jen, thank you so much for sharing. Thank you, Eric. Thank you, everyone, for your patience with the microphone. Your patience just didn't work for you.