This is day one of Citi's Biopharma Back to School Summit here in New York City. I'm Yigal Nochomovitz. I'm one of the biotech analysts. It's my great pleasure to introduce Zenas BioPharma, Lonnie Moulder, Chairman, CEO. Lonnie, I've known you for a long time, so great to see you again running yet another company. Love to discuss everything you're doing. I know you wanted to make some introductory remarks, going through a little bit on a high level on the slides. So over to you to get it started, then we can dive into some of the details. Great. Thank you, Yigal. We appreciate the invitation and being here at the Citi conference that we've attended many years in a row and at various companies along the way. Today we're here at Zenas. We've had a good day with investors. I thought it would be good maybe to start out with a few comments. Of course, we'll be making some forward-looking statements. I would refer anyone to our SEC filings. As a company, before we get into, I think some of the things that people have in mind, some of the topical items, is to step back and what are we building here? Right now in 2026, if you look at Zenas, we have two late-stage programs that are substantial. One of them, obexelimab, is under review with the FDA for IgG4-related disease with a PDUFA date of May of 2027. Three additional programs that have great potential, that we brought into the company through our business development activities, and a team that we've assembled that, many people who we've worked with previously that have brought medicines across the finish line and ultimately commercialized successfully, and an infrastructure that's global in scope from a development standpoint. We conduct all of our trials globally. Finally, the company's well-positioned from a cash position. If you take our last reported cash of over $670 million and, with an obexelimab approval, an additional $75 million coming in from Pharmakon and $75 million from Royalty Pharma, we would have a cash runway through the second quarter of 2029. So well-positioned. Just look out five years. With execution, we have the potential approval of three molecules across multiple indications, in large markets totaling over $50 billion in sales globally. I think we're well-positioned. Now what we need to do is execute. What's in the near term? Meaning even the next quarter and the next couple of quarters for obexelimab, as I mentioned, the IgG4-RD BLA is under review. We have an investor event coming up September 29th, where Dr. Guy Katz from Massachusetts General Hospital, an IgG4-related disease expert, will cover clinical data. Management will describe all of our commercialization activities and how we view the market. Then in October, we have the IgG4-RD Symposium. In November, the American College of Rheumatology Conference. We've submitted to those meetings our open-label extension data from the original INDIGO phase III IgG4-related disease trial. People may recall that in that phase III trial, we had a flare protection rate of about three-quarters, about three-quarters of the patients. We previously reported in the open-label extension, the OLE, that at the six-month point, we were protecting over 90% of the patients, and we are really excited to share the 12-month data at these medical conferences. In addition, the vaccine substudy data where in the open-label extension, we are looking at the administration of either flu or COVID vaccines, and how that can be utilized in patients that are on obexelimab. Then, of course, people are well aware of our lupus program, our SunStone-SLE phase II-B top-line results in the biomarker population and the overall population will be available in the fourth quarter. The orelabrutinib phase III program is ongoing, both the PPMS study, PriMroSe, and the MONARCH SPMS study. ZB021, that is garnering quite a bit of interest now because we are in the clinic. Our oral IL-17 inhibitor will have the SAD and the MAD study results, that safety tolerability and pharmacokinetics, in the fourth quarter as we prepare to move into a patient clinical program next year and report results in a patient setting. ZB014, the anti-CD19 FcγRIIb long-acting molecule will have SAD and MAD studies up and running next year with clinical data. Then finally, our ZB022 brain-penetrant TYK2 inhibitor, part of our neuroimmuno franchise, will have clinical data next year. So a lot going on. Indeed, a lot going on. All right. Well, maybe we could start with obexelimab. Just the data that you are going to show, this longer-term flare protection data, I gather the data is going to continue to improve, and what time point are you looking at for this next look? Yeah. So what I had mentioned was that we previously reported the patients who had achieved six months on therapy in the open-label extension, that the flare protection was over 90%. It was 92%. Okay. You will have to stay tuned for what the data will be. I would say, I am not going to categorize it as an improvement because that is about as good as it gets. Okay. Fair enough. You will see the data when it comes out, and what we will be sharing is the 12-month flare probabilities, and people can assess that data when it is available. The PDUFA is next year. Tell us a little bit more about what you are doing in terms of understanding the market in IgG4-RD. Obviously, we have one other drug that is approved there and has launched. Talk about what your commercial team is doing to understand where you would expect the uptake for obexelimab and how its profile would be competitive relative to the Amgen product. Yeah. I would back up and just look at the whole treatment paradigm and how it is evolving for IgG4-related disease patients. As you know, historically, glucocorticoids, an intensive steroid dosing regimen, and then tapering the dosing down, is what was used in patients who flared. That is still used in a reasonable number of patients. Over time, it was determined that targeting B cells was effective, and that was with rituximab. The challenge with rituximab has always been that it is not FDA approved, and there is not data from a randomized phase III controlled trial. It does work, but it is many times hard to obtain and get it paid for. As you mentioned, another drug has launched, and that has now been in the marketplace for just over a year. It is still early days of the first and only approved drug, so there is a lot of market development still to take place. When I speak to market development, that covers several areas. One important area is diagnosis. So an improvement in diagnosing patients. We believe there are 30,000 to 40,000 patients that have IgG4-related disease in the U.S., but the actual diagnosed and treated population today is 20,000. So, h ow does the diagnosis rate increase? How are patients identified and brought into the treatment market? Then the other aspect of the market is, because historically there were no approved drugs and what was used were steroids, and steroids just cannot be administered chronically, the market was intermittent administration of steroids. So patient flares treat their flare. Some patients maybe give them low-dose steroids for a period of time, but that is just not sustainable. It is hard for patients to tolerate. So that was intermittent. The drug that is approved is a drug for maintenance. It is based on a maintenance design of a phase III trial, similar to the maintenance design of our INDIGO trial for obexelimab, so we would anticipate the same thing. This is long-term maintenance, and it is shifting the paradigm to go from the steroid intermittent treatment to continual therapy. That is important. That is what we are going to need to do in this marketplace. It is important to build the market, but importantly for patients, these patients have a chronic disease with chronic inflammation, and they do not always have symptoms. They may not have symptoms, but they have inflammation, lesions that become fibrotic that then lead to a decrement in the organ. To continually suppress that inflammation is critical, and that is why the first drug, we would anticipate our drug, is for continuous administration. We believe our drug as an at-home subcutaneous formulation, which really fits the paradigm in rheumatology, and we know from the GLP-1 market that at-home subcu administration is something that is well accepted by patients, and with our drug, also well-tolerated. So the market obviously is evolving to drugs that are approved and needs to evolve where there is continuous therapy. For our drug, a drug that is an inhibitor of B cells as opposed to a depleter of B cells, if you consider the other two biologic agents, they deplete B cells, so you are depleting, if this is continuous therapy to protect these patients, you are depleting the B cell compartment every six months for years and years. For clinicians, they pause in thinking about that in rheumatology. They have had patients with severe hospitalized infections. They have had patients who have succumbed during COVID because they could not mount a vaccine response. So having a highly effective agent like obexelimab that has perhaps flexibility in, of course, being an inhibitor where you could pull it back if you needed to to treat a comorbidity, to vaccinate a patient potentially, is highly desirable. In our market research, you asked about what our team is doing, we are doing a lot of market research, and we have shared some of this publicly. Point to that profile leads to a preference share of 50% of the frontline treatment, with the other two agents dividing the rest of the share. Our goal is then to achieve that, but that is what the market research is telling us. The team is being built to execute and deliver that type of outcome. We have had our medical science liaisons in the field for some time now. We have had our commercial infrastructure marketing, sales leadership, market access in place for some time. Really what we need to add finally would be the sales force, and that is a team of about 45 - 50 people. That is the right size for the number of rheumatologists and gastroenterologists that treat IgG4-RD. We have a good sense from claims data where these treatments take place, where these patients exist so that we deploy efficiently this group, and we will be well prepared for the approval. You have 50% share from your market research, and then the other two agents that would split the residual part of the market would be the other drug, UPLIZNA, and then what- Rituxan. Rituxan. Oh, as an off- That's what the market research. Okay. Outcome was. Okay. Even though the Rituxan didn't have any approval there, it would be an off-label option. That's how it's being used now. Yeah. When it can be obtained. Right. Okay. Then, of course, you mentioned this vaccine sub-study. The point being regarding the ability to maintain or mount a vaccine, a response. Just at a high level, just Yeah. kind of outline what you're going to show there. The open label extension study I mentioned before has a sub-study within it, where there is clinical sites throughout the world that are participating and entering patients that would receive either a flu vaccine, a COVID-19 vaccine, or both. What happens is obexelimab is paused for varying periods of time, so we are investigating that. The vaccines are administered, and two weeks later, titers are assessed. We are looking at protective titers, which is a standard that is known, and whether those are achieved in a reasonable percentage of the population in the study. That is the type of data that will be shared. Okay. Then you will sort of figure out, you said it is sort of staggered in the sense that you will withdraw obexelimab for different periods of time and then do the vaccination and see what the minimum amount of time is you need to stop obexelimab. Is that kind of where you are going with that? Yeah. It is measured in weeks. Yeah. Then the vaccine, and then measure the titers in two weeks, and then restart obexelimab. Okay. We'll get that data later. That's right. Later this year. This fall. Yeah. On one of the earlier slides, you mentioned, well, you have your own R&D day, but then there's also this IgG4 summit or symposium. Yeah. Tell us a little bit more about that. Well, it's typically every two years. I think during COVID, it might have been every three years. But in every other year, it's going to move to annual, IgG4 international symposium, where the top 100 or so IgG4 experts get together. This year, John Stone and Massachusetts General Hospital is sponsoring it. So it's a Boston-based meeting in October. It's a typical medical conference, except there's only one room, right? There's presentations from those who have submitted abstracts, so there'll be posters, oral presentations, et cetera, across all aspects of diagnosing, treating, managing IgG4-RD. Okay. Of course, ACR is in November. Right. As far as outside of the United States, can you just quickly elaborate what you would do in terms of filing ex-U.S. for obexelimab? Yeah. We have plans to file this half of the year in Europe. We will file an MAA. We already have medical science liaisons in the field. We have market access in Europe, and Europe was a really important part of our phase III program. Quite a few KOLs there, were investigators. We are close to the IgG4-related disease community there. When you say a launch in Europe, you typically talk about Germany. For us, we are going to submit, obviously, we have strategic assessment to do relative to MFN and what impact that could have on pricing. We are not making any strategic decision about Europe yet, but we will move forward, at least with the submission at this time. We have plenty time to think through the strategy. Just big picture, like the scale of the opportunity in Europe in IgG4, is it just scaled by population or is it? Yeah, it scales by population. Okay. Europe, depending on how you define Europe, but if you are defining Europe of the more the 350,000 or more the 400 million population, you are going to get a market size that is similar to the U.S. population. Okay. Japan is a future consideration or that is Japan is our partner, Bristol Myers Squibb. So they'll take the lead there? They'll take the lead on that. Okay. That makes sense. And now you mentioned the second generation, longer half-life version. That one, that would be sort of a life cycle extension or would it launch, you mean you have both available in the market, I gather? Yeah, that's a way to think about it, life cycle extension. Our current dose administration for obexelimab is a weekly subcutaneous administration. We'll launch with prefilled syringes. We'll submit an SBLA for the auto-injector pen as soon as the BLA is approved, and then that should launch within a year. And it's a low viscosity, 2 mL solution, so it's about an eight-second subQ, pretty convenient. And then the product profile for ZB014, which is CD19 FcγRIIb antibody with two mutations in the FC portion of the antibody. The target, and based on the preclinical data, would be a monthly administration. And then we would also anticipate longer exclusivity. So strategically, we'll make decisions about which future indications would go to obexelimab and which indications would go to this new molecule. Obviously, those strategic decisions will come after we have the initial clinical data next year. Okay. All right, let's switch over. The other big catalyst you mentioned is SLE. Actually, I'm getting a lot of questions on that one from people interested in the story. Everyone's trying to understand the expectations. Just tell us, well, first of all, just sort of summarize the SunStone study. Sure. What the design is, and then what are the endpoints, and what are you aiming for in terms of a profile there that would be competitive? This is a randomized study, one to one, obexelimab versus placebo with background lupus therapy, corticosteroids with a target de-escalation down to 5 mg of prednisone equivalent. The study really takes in moderate to severe disease. We put in place a screening tool where investigators who then assess inclusion/exclusion criteria to enroll a patient, leads to a screening additionally by an expert, which interestingly enough, removes a number of patients to make sure we truly get moderate to severe disease that controls the placebo response. The trial also, although we would call it an all-comer trial, is interrogating a biomarker in all patients, and that biomarker was based on some earlier work that showed a much higher level of responsiveness to the drug in a phase II-A lupus study. It's a biomarker assessment in a classical design looking at BICLA. We'll also look at SRI-4 and a number of other measures. Okay. The biomarker is something that you haven't specified yet, or you talked about it? Actually, in the phase II-A study that was previously published, the biomarker is well-described in that publication. Okay. At that time, it was RNA sequencing, identifying a gene profile, several gene profiles, that happened to be highly responsive. We've taken that, and we're working with a commercial entity who have simplified the whole process, so that it's not deep sequencing, and that's what we're using in our study. Okay. As far as what you're looking for in terms of an effect size relative to placebo, potentially reduced use of background therapy, can you speak to some of those endpoints as far as what- Yeah. investors should look for? Sure. The study, as you know, the currently approved agents on the market, there are two on the market that are approved for SLE. Both of those had effect sizes in the teens, and then there is some recent data from a B-cell targeted agent, an anti-CD20 depleting antibody that had an effect size just over 20%. We are looking at that around 20%, put an error bar around it. That says you have a drug. We think our profile, based on our ease of administration at home, the tolerability would play well. Then we are assessing the biomarker population. In the fourth quarter, we will present the biomarker top-line results and the overall top-line results. Where we go from there really depends upon that data. The biomarker in the phase II-A study showed up in about a third of the patients. We think it could be a little higher than that based on the work we have done since. That alone could be a standalone if in fact the effect size was dramatic enough that that would be a really compelling program. If the overall fits into the range I was talking about before, that could be a program, or you can combine it where you would do an overall population, but test the biomarker population first, and then test the overall. Think about oncology studies. Think about PD-1, think about PARP inhibitors. That is the concept. We will not know. We have plans for all scenarios, but let us see the data. I guess at the risk of getting too into the weeds on this, can you frame what aspects of this biomarker signature that you have got from the prior studies would suggest or imply a stronger performance with obexelimab? Is there evidence that would suggest that? In the original phase II-A study, on the primary endpoint of the study that was conducted by the discoverer of the molecule, the overall effect size in intent-to-treat population was 17%. In that same study, that was using an IV dosing regimen that lost target coverage at C trough. In that same study, if you looked at patients that were at the median of C trough or above, the effect size doubled to 35%. Our current subQ regimen puts every patient at C trough above that level. That is encouraging as a signal-finding study, and that is why we went into this program. In the biomarker population, again, smaller numbers, retrospective, the effect size was 52%. That was the signal that told us we should investigate that in a phase II program. Okay, so there is sort of two higher levels there. There is the exposure, as you point out. Right. And then this additional lever of the Right. of the biomarker. Okay. And the timing for that, you said fourth quarter, but I gather you have not been more specific than fourth quarter. No, we haven't. Okay. All right. Great. Let's talk a little bit about the product that you got from InnoCare Pharma, the orelabrutinib. Which one? We have three. That's true. Okay, well, let's talk about- Let's start with Let's start with orelabrutinib. Let's start with oral orelabrutinib. There have been some interesting, good developments in MS, even last week. Right. RMS data from Novartis. Just tell us a little bit more about the MS strategy at Zenas because you had started, and after the IPO, there was a potential for obexelimab to be an MS drug. You have brought in oral orelabrutinib, the BTK inhibitors, as we know from Right. speaking with the experts in MS, is sort of the next frontier in terms of innovation. Tell us a little bit more about orelabrutinib. How does it differentiate from some of the notable pharma molecules that are getting a lot of attention too? Yeah. We have two strategic components to the franchises we are building, rheumatology and neuroimmunology, with MS being the initial focus. As you mentioned, obexelimab, we had conducted a phase II study in RRMS, and those results were highly positive. In RRMS, the challenge is today to start a phase III program with a primary endpoint of ARR, or annualized relapse rate, is challenging because the patients who are available for clinical trials have such low relapse rates. The ones that tend to have higher ones are already receiving a B-cell targeting agent. It is a bit challenging. Now, if we can evolve to a different primary endpoint, let us say disability progression, then it is a different story perhaps. That is B-cell targeting with obexelimab in MS, and if we get an evolution in regulatory thinking, perhaps ZB014, our extended half-life molecule, might be a reasonable thing to consider. We landed on, at this point, we are pursuing progressive MS forms, which is where the greatest need is, and that is primary progressive, PPMS, and secondary progressive, and specifically with FDA guidance, non-active or naSPMS. That is our strategy, progressive MS. We know level setting across the BTK inhibitors, of course, we had the tolebrutinib challenges that they faced with FDA in non-relapsing SPMS, which is not quite what FDA is asking for, and some toxicity. That drug, though, is now approved in Europe for patients. Then we had, earlier in the year, fenebrutinib from Roche report out RRMS data, but relevant to us, the progressive data in PPMS. You might recall that their PPMS trial compared fenebrutinib to OCREVUS, which is the only approved agent for PPMS. A data set that is probably not overly impressive, but it works. It is approved. Numerically, fenebrutinib beat it. Not statistically, it was a non-inferiority trial. That NDA is in, and we would expect an action in the first quarter if they get priority review. I think that is likely in the first quarter of next year, and I think that will be interesting news for the BTK inhibitor class in MS. Then most recently, you mentioned remibrutinib from Novartis in an RRMS trial, with data to come at the MS Toronto meeting, where we will also be with additional data on orelabrutinib. We will get to see, I would assume, their full data set from an efficacy and a safety standpoint. Then that molecule is also in an SPMS trial that we will report out at some point. At least what's publicly available, it doesn't look like a pure naSPMS trial, but for us, we're focusing on PMS, PPMS, and naSPMS, and both of those phase III trials are up and running, and results from those trials should be in 2030. Got it. Now, when we look at the molecules, we think this molecule, although it's indicated in other parts of the world in heme malignancies, it is purpose-built for progressive MS. A combination of potency and CNS penetration. If you look across the BTK inhibitors, you'll see that tolebrutinib and remibrutinib have the lowest CNS penetration. Very modest CNS penetrance. Remibrutinib, very potent peripheral agent, effective, hits B cells, works in RRMS, but we believe in progressive disease, need to get in the central compartment, not only hit B cells. Centrally resident macrophages, microglia, that's what's going to make a difference on disability progression. Those agents, less brain penetration, reasonable potency. fenebrutinib, a combination of potency and brain penetration steps up just a bit. It's multiples when you look at our orelabrutinib ratio of CNS concentration to potency. We think this molecule has an opportunity to best in class, and also compared to those other two agents, might sound simple, but really important to patients, it's the only once a day being investigated in progressive disease. That's how we see it, and we're executing on the studies right now. That is the efficacy side and the convenience side. In terms of the safety side, obviously in this class, we have seen the other compounds have seen liver signal. Can you just speak to your comfort around that with orelabrutinib and what you might expect? Yeah, I think, across the agents that did phase II trials, all of them showed up with an elevation of liver enzymes and sometimes bilirubin. A few Hy's Law cases here and there. In the orelabrutinib program in phase II, some was also observed. No clinical sequelae, no clinical symptoms, all patients recovered. That moved everyone towards doing liver monitoring because you need to catch the trajectory early. Interestingly, remibrutinib was not the subject of phase II, so everyone else experienced that in phase II, then put the monitoring into phase III. Remibrutinib went right to phase III and put the monitoring in. So it is a different ballgame. The other thing to think about here is this disease. These patients, the orelabrutinib phase II trial, 7.5% of the patients had elevated liver enzymes in the placebo group. A year ago, Roche issued a dear doctor letter on OCREVUS to assess liver function before starting therapy because a number of patients had shown up on the liver transplant list who had taken OCREVUS. Dear doctor letter went out. What does an anti-CD20 antibody have to do with driving liver toxicity? There is something background happening in MS patients, and we would hope to figure it out, but no one has figured it out yet. So for us, in our trial program, aligned with FDA and EMA, we have liver monitoring over the first three months. You catch the trajectory, you should be in good shape. What is really interesting, these patients that have elevated liver enzymes, a large percentage of them, if you pause the drug and restart it, you do not see it again. It is a real interesting dilemma, but what you do is monitor, and you keep patients safe. This is progressive disease. This is PPMS, SPMS. This is serious disease. The risk-benefit, we believe is there with a highly effective agent, and that is why the agency is allowing for these trials to go forward with monitoring. RMS, you mentioned potentially the longer half-life next generation could be applicable there. If we see the full data from Novartis that you mentioned, in RMS in a few weeks, would orelabrutinib potentially be something you would consider for an RMS trial or not necessarily? Or the bar would not be good there? Yeah, I think RMS is in a parking lot until Okay. the primary endpoint evolves, potentially. Okay, fair enough. All right. Some of the other assets, if we could speak to those quickly. The IL-17 and the TYK2 inhibitor, where are those? The TYK2 inhibitor is an IND enabling, and we will initiate the initial phase I next year. The IL-17 inhibitor, it is an A/F inhibitor, is really exciting and moving quickly. We are almost through all of SAD, the single ascending dose. We are well into the MAD. We will report the fourth quarter, the safety tolerability, and the pharmacokinetics, and then we will move right to a patient proof of concept study next year. What we will want to look for is the kind of exposure we are getting. I can tell you now, and we have already discussed this openly, that this is a once a day drug. This is a true small molecule. In primates, it had 80% bioavailability. That has been a challenge in trying to come up with good molecules in this area. We are excited about the potential here. It is early days, but we will have that data next quarter. Okay. Looking forward to that too. One more, which we are asking all the companies today and tomorrow, is just anything you want to say in terms of the use of artificial intelligence tools at Zenas, either on the drug discovery level or the efficiency level, helping filing your, you have submitted the BLA. Right. Has that helped in any way? Just quickly tell us. Yeah. Obviously, this is a topical subject. We are not a discovery organization, so we do not use AI in that arena. Sure. We don't do drug discovery. We search, and we in license. But across the organization, we spent some time, and we picked what we would use, and we use Claude. And we have a number of use cases and a lot of training going on and appropriate policies in place, and it's touching all parts of the business. In the administrative parts of the business, obviously. We do a lot of it, things that you would do with internet searches in the past. How quickly you can assemble information across a field and all the published studies and all the science in an area and have that summarized for you in writing. We use it in writing. We did not use it in the BLA for obexelimab. For our very first BLA, we did it the old-fashioned way, and I'm- Good call. quite comfortable doing it the old-fashioned way. Okay. So over time, it will expand, and we imagine all the ways that we can use it. I can't say we've implemented nearly what's possible at this point in time. Sure. I don't think any- But we're getting started. any of us have fully- Yeah. leveraged its potential. All right. Well, there's a lot to look forward to with the several readouts next quarter, and then of course, the PDUFA in the second quarter of 2027. So very good. Looking forward to all of it. Thank you. Thank you. Thank you, Lonnie. Thank you all. All right.