Good day, everyone. My name is Shell and I will be your conference operator today. At this time, I would like to welcome you to the Chimera Therapeutic Third Quarter 2026 results call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, and if you have joined via the webinar, please use the raised hand icon, which can be found at the bottom of your webinar application. If you have joined by phone, please press star nine on your keypad to raise your hand. At this time, I would like to turn the call over to Justine Koenigsberg, Vice President, Investor Relations. Justine, please go ahead.

Good morning and welcome to Chimera's quarterly update call, which will also include a discussion of the KT579 Phase 1 Healthy Volunteer results. Joining me this morning with prepared remarks are Nello Mainolfi, our founder, president, and CEO, Terrence Rooney, our chief medical officer, and Bruce Jacobs, our chief financial officer. Following our prepared remarks, we will open the call for questions from our covering analysts. In order to have as much time for as many questions as possible, please limit your questions to one. If you would like to ask a question, please use the raise hand icon which can be found at the bottom of your meeting window. A replay of today's call, including a copy of the corresponding presentation, will be available in the investor section of our website soon after the call concludes. As a reminder, today's presentation will include forward-looking statements about our future expectations, plans, and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. The description of these risks can be found in our most recent 10Q filed with the SEC. Any forward-looking statements speak only as of today's date, and we assume no obligation to update any forward-looking statements made on today's call. Before we begin, we have one housekeeping item. Starting next week, we will enter our previously planned quiet period ahead of our upcoming Stat 6 data. As a result, we don't expect to provide additional commentary on our Stat 6 program until we report those results. With that, I will turn the discussion over to Nello.

Thank you, Justine, and good morning, everyone. Thank you for joining us today. This is a very exciting time for Chimera. We're seeing our scientific vision take shape across our pipeline of oral medicines to address serious inflammatory diseases with KT621, our STAT6 degrader for atopic dermatitis, asthma, and more, and KT579, our RF5 degrader for lupus and potentially other autoimmune diseases. Together, they reflect our goal of developing medicines grounded in strong biology with the potential to reach many more patients than served by available treatments today. I'll start today with an update on KT621 as we approach its Phase 2b AD readout before year end. I'll then briefly cover the rest of our pipeline before we turn to KT579 Phase 1 results. Our STAT6 program continues to advance according to plans across both AD and asthma. As shown here, we've advanced KT621 through a series of studies, building on what we learned at each stage to guide the next steps. In phase one, we've evaluated KT621 in more than 200 healthy volunteers and observing deep statistics degradation and facts on downstream biomarkers and a favorable safety and tolerability profile. We then treated 22 patients with AD in Phase 1b, where we saw the first evidence of strong clinical activity in patients. With each study, we built a stronger body of evidence and further de-risked KT621, supporting its advancement into the ongoing Phase 2b studies. In the broadened 2 AD study, we're excited to report that we have completed the 16-week placebo-controlled portion of the study, with the last patient just recently completing their final visit. We expect that the remaining activities to close out this portion of the study will enable us, as planned, to share the KT621 Phase IIb data by year-end. At the same time, we're well into our preparation for the first Phase III study in AD, which we plan to initiate assuming both supportive data and alignment with FDA by middle of 2027. Before we move to an update on asthma, as we have shared previously, patients that complete the full 16 weeks of treatment in BRDN2 are eligible to enter a 52-week open-label extension. Today, we're happy to report that 98% of eligible patients have enrolled into the OLE. Now, turning to asthma, enrollment in the BREAD study continues to progress as planned, with top-line results expected in late 2027. In total, these studies have already enrolled hundreds of participants, providing a robust dataset to assess safety and efficacy of this exciting novel mechanism. and as a reminder the BREATH study also includes an open label extension which together with the ADOLE are designed to further support a long-term safety database for regulatory requirements and the potential registration of KT621. As we approach the Broaden II readout, I wanted to take a moment to put the opportunity for KT621 in AD into perspective. As illustrated on slide 7, published epidemiological reports show that there are approximately 6 to 9 million people in the US 12 years and up with moderate to severe atopic dermatitis. Despite this high prevalence, only an estimated 400,000 receive advanced systemic therapies, a penetration of only about 5% of the total moderate to severe patient population. As we've been advancing KT621, we've also been conducting market research to better understand the market dynamics of advanced systemic therapies. What we hear from both patients and prescribers is that the main reason for the limited adoption is that many patients don't perceive that their disease state justifies an injectable biologic or a medicine carrying a box warning. That perception creates a significant barrier to the use of currently available advanced therapies. Our market research tells us that patients and physicians want a safe, effective oral treatment. In fact, when we ask what level of efficacy that treatment needs to deliver, we consistently hear that it does not necessarily have to match biologics. We have seen that opportunity play out in other markets. Tesla launched more than a decade ago with roughly half the efficacy of biologics and went on to become a multi-billion dollar franchise. More recently, Icotide, despite efficacy that by cross-trial comparisons does not quite match IL-23 biologics is experiencing one of the strongest launches in psoriasis, bringing new patients to treatment in an already more saturated market. Going back to KT621, a safe and effective oral is what patients are looking for, and that is the profile we aim to deliver. Our focus is to serve the largest segment of moderate to severe AD population, those patients who are either untreated or in many cases poorly treated with non-systemic therapies. If we're successful, we believe that KT621 would have the potential to dramatically expand the number of patients accessing advanced therapies. All of that said, and based on the preclinical and phase one data we've generated so far, our scientific expectation remains that BRDN2 efficacy should land in the ballpark of what Dupilumab achieved at week 16 as compared to what was reported in the SOLO1, SOLO2 trials, while recognizing the limitation of comparing results across studies. Beyond KT621, we're also tracking with expectations and timelines across our broader pipeline. Our partner program are both progressing as planned. Sanofi continues to advance KT485, our second generation IREC4 degrader in a phase one healthy volunteer study that is also expected to enroll HS patients. And Gilead is advancing KT200, our CDK2 molecular glue into IND enabling activities with an IND planned for 2027. With respect to our research pipeline, our undisclosed programs are tracking with our expectations and to support our goal to advancing one program towards development candidate annually. Regarding the disclosure of our next program, given all that we have to share in the fourth quarter with today's KT579 data and the upcoming KT621 Phase 2b readout, we've decided to hold off on that introduction until next year. With all of that said, before I turn the call over to Terence to share the IRF-5 healthy volunteer data, I wanted to talk a little bit about the importance of today's IRF-5 data release. We have now successfully advanced multiple degrader programs from target selection and drug discovery through preclinical and into the clinic. This is in fact our seventh first-in-class degrader to enter the clinic, and today we're sharing that we continue to demonstrate impeccable human translation. While each target and molecule is unique and must ultimately prove itself independently, this repeated execution is indicative of the positive and compounding effect of all our learnings and experience across our programs. IRI5 itself is a highly compelling and genetically validated target that has historically been difficult to drive with conventional drug discovery approaches. And this study is an important first step in establishing our IRI5 thesis in humans. As you'll hear shortly, KT579, which was well-tolerated in this study, robustly degraded IRF5. Importantly, the potent IRF5 degradation led to meaningful reductions in multiple disease-relevant biomarkers. With this data in hand, we now plan to move the program with confidence into a Phase 1b lupus trial. The study is designed to establish whether KT579 can demonstrate the biological and clinical activity we would expect based on this mechanism. Overall, the KT579 data represent another important example of our ability to target a highly compelling but historically undrugged target, in this case a transcription factor. It also demonstrates our ability to translate our preclinical work into humans in a predictable and compelling way. We've now done this across multiple programs, and with each success, we're building on a strong and increasingly repeatable foundation for selecting the right targets, developing differentiated degraders against them, and efficiently translating those programs from discovery into the clinic. I know everyone is eager to get into the data, so with that, I'll turn it over to Terence to walk you through the results. Terence?

Thanks, Nello. It's a pleasure to join you all today to review the positive phase one results For KT579. As a rheumatologist by training, I'm particularly excited by what we've demonstrated with this program. The translation from the strong preclinical profile into humans is an important milestone and validates our confidence both in the biology and the potential of IRF5 degradation as we prepare to move KT579 into patients. I'll start with an overview of the phase one study design and the demographics of the healthy volunteers enrolled in the study. I'll then walk through the PD data, beginning with the depth and durability of IRF5 degradation in blood. Next, I'll cover the functional consequences of that degradation across three distinct IRF5-dependent immune pathways, assessed using disease-relevant ex vivo stimulation assays. And finally, I'll review the safety profile observed and then discuss how the totality of these data inform our plans to advance KT579 into lupus patients. As we've been saying for some time, primarily for competitive reasons, in some areas of the presentation we're sharing only limited data. As shown on slide 12, the phase one study was designed to characterize the safety, PK and PD of KT579 following both single and multiple ascending doses in healthy volunteers. We evaluated a range of doses up to 600 milligrams in the MAD cohorts. In the SAD portion of the study, 8 subjects per cohort were randomized 6-2 to receive a single oral dose of KT579 or placebo. In the MAD portion, 12 subjects per cohort were randomized 9-3 to receive once daily oral KT579 or placebo for 14 days. While the primary objective of the study was to evaluate the safety and tolerability of KT579, the study was also designed to establish proof of mechanism in humans. In both SAD and MAD, we evaluated IRF5 degradation across dose levels, and in the MAD portion, we also assessed the downstream functional consequences of IRF5 degradation using disease-relevant ex vivo stimulation assays measuring inflammatory biomarkers. Together, these endpoints allow us to address the key questions we set out to answer in the study. First, can we safely achieve deep and sustained degradation of IRF5 with KT579? Second, Does that degradation translate into the expected functional impact on our IR5-dependent biology? And as you'll hear today, the answer to both questions is yes. Turning to slide 13, the demographics of the volunteers enrolled in the sad and mad portions of the study. Overall, there were no meaningful imbalances in baseline characteristics that would impact our interpretation of the study results. Before turning to the MAD degradation data, although it's not shown in this presentation, we did want to mention that KT579 exhibited the predicted PK profile with dose-responsive exposures in SAD and MAD cohorts. Additionally, while we generated degradation data across both the SAD and MAD portions of the study, we're only sharing the MAD degradation data here, as repeated daily dosing most closely reflects the intended clinical use of KT579. Now, Looking at slide 14, which illustrates degradation across the MAD dose cohorts, with data shown at day 7 and 14. The top five dose cohorts all reached median IRF5 degradation greater than 90%, with saturation of degradation by dose level 3, with blood degradation achieving 94%. Importantly, while not shown, we also observed comparable reductions in IRF5 levels in skin, demonstrating target degradation in tissue as well as blood. Overall, KT579 demonstrated robust degradation of IRF5 at or above levels predicted by our preclinical work in both the SAD and MAD. And this profile shows that the target remains continuously suppressed with once daily dosing, providing sustained pharmacologic coverage of IRF5 expression. Now in addition to degradation, we also assess the impact of IRF5 degradation on downstream biomarkers, which we believe is an important indicator of the potential biological effects. As a reminder, IRF5 has a role in the regulation of three major immune pathways relevant to several autoimmune diseases. These include, first, inflammatory cytokines. IRF5 promotes the production of key inflammatory cytokines by myeloid cells, including monocytes and macrophages. And when dysregulated, these responses can sustain chronic inflammation. Second, interferon response. IRF5 helps connect nucleic acid sensing with interferon production and associated gene expression responses. Dysregulation of this pathway can amplify immune activation and inflammation. And the third pathway is B cell biology. IRF5 contributes to B cell activation and pathways associated with plasmablast differentiation and autoantibody production. So this breadth of biology is an important feature of the IRF5 mechanism. By degrading IRF5, KT579 has the potential to modulate multiple interconnected drivers of inflammation through a single oral approach. Now to assess this biology in Healthy Volunteers, we used three orthogonal ex vivo stimulation assays that our team developed internally. These assays activate distinct RNA and DNA sensing toll-like receptor pathways and measure downstream changes in inflammatory mediators and gene expression. This allowed us to assess whether IRF5 degradation translated into functional effects across all three key areas. And in the following slides, we'll focus on the impact of IRF5 degradation demonstrated in each pathway. In each graph, we'll show the median of all KT579 MAD dose cohorts combined compared to placebo. So shown here in slide 16, IRF5 degradation translated into deep and sustained inhibition Thank you for joining us. as this is a core pathway involved in lupus through TLR7-8 and in IBD through TNF-alpha and interleukin-12-23, two of our highest priority indications. We interrogated the same inflammatory cytokine pathway more broadly with transcriptomics. The transcriptomics provide a complementary confirmation of the cytokine data showing modulation of IRF5-dependent inflammatory biology. Though anonymized, the heat map shows the changes in selected pathway genes with placebo and across all KT579 dose cohorts at day 14 in relation to their respective pre-dose sample, while the graph quantifies the overall modulation of a gene set. We observed strong gene-to-protein concordance with genes like TNF-alpha and interleukin-12 moving in the same direction as the corresponding functional cytokine readouts, as described in the previous slide. The second major axis we tested was interferon response, another important component of IRF5-dependent inflammation and a particularly relevant pathway in heterogeneous diseases. The effect on this pathway cytokine is particularly pronounced. We demonstrated near complete reductions in TLR7 and 8 stimulated interferon beta levels, with the MAD dose cohorts showing a median inhibition of 98%. Importantly, the transcriptional data independently support and extend this result, showing modulation results in broad coverage across key interferon pathway genes. And these data validate the pharmacology beyond the inflammatory cytokine pathway we showed in the prior slides, demonstrating that IRF5 degradation can translate into profound functional modulation of the interferon axis, which is well recognized as overactive in the biology of several autoimmune disorders, including lupus and Sjogren's disease. Finally, as shown on slide 19, the effects of KT579 reach into the third major axis of IRF5, B-cell biology. Selected TLR9-driven transcripts are significantly modulated with KT579, including key genes associated with DNA sensing and B-cell activation, again, important steps in the pathogenesis of autoimmune diseases, including lupus. In summary, then, KT579-driven IRF5 degradation translates into coherent functional modulation across three major pathways we set out to interrogate. Inflammatory cytokines, interferon response, and B-cell biology. And that breadth of pharmacology is one of the key takeaways from this first in human data set. Okay, moving to safety. KT579 was well tolerated and had a safety profile comparable to placebo. As shown here in slide 20, there were no serious adverse events, very few mild treatment-related adverse events, no adverse events leading to discontinuation of study drug or from the study, and no clinically relevant changes in vital signs, lab tests, or ECGs. There were also no imbalances in the rates of infections. It's very encouraging that KT579 was able to robustly degrade IRF5 in blood and also functionally modulate disease-relevant biomarkers across three key immune pathways, while demonstrating a placebo-like safety profile. The Phase 1 data represent an important milestone for KT579, for our IRF5 program, and for Chimera. These results establish important human proof of mechanism for KT579. We've demonstrated that we can achieve deep and sustained degradation of IRF5 with an oral medicine with a favorable safety and tolerability profile. Importantly, we've also seen that IRF5 degradation translates into strong and encouraging downstream effects on the disease-relevant inflammatory biology. So taken together, this gives us increased confidence that we're achieving the profile we designed KT579 to deliver. and provide a strong foundation to move into patients. As the program following our STAT6 efforts, IRF5 is yet another example of Chimera's ability to develop potentially transformational medicines for patients. So on that note, we now plan to advance KT579 into its first patient study in lupus. Lupus remains an area of significant unmet need where many patients continue to cycle through therapies without achieving adequate or durable disease control and treatment often requires combinations of immunosuppressive agents with meaningful safety and tolerability limitations. We see significant opportunity for a new safe and effective oral therapy. Lupus is a compelling indication for this program given their strong genetic evidence linking RRF5 to lupus. And RRF5 plays a central role in lupus disease biology. We've previously shown disease modifying activity in multiple preclinical lupus models. and as you've seen today, we've now demonstrated exciting biomarker data suggesting a strong connection between IRF5 degradation and three important disease relevant pathways. So this gives us a high degree of confidence in the underlying biology and a clear rationale for evaluating the impact of IRF5 degradation directly in patients. The planned Phase 1b study will allow us to begin answering the next important questions, whether IRF5 degradation and downstream biology we observed in Healthy Volunteers carry through to patients with lupus, and whether KT579 can affect the disease pathways that are active in those patients. In Healthy Volunteers, we measured pathway effects after stimulating blood samples ex vivo, while in patients, we'll be able to assess those effects in the setting of active disease, as well as look for early signs of clinical benefit. We view this as an important next step for the programme and towards establishing IRF5 degradation as a potentially new therapeutic approach for patients with autoimmune disease. Here's a snapshot of the Phase 1b study designed for the trial, which we've named LUMORA. We plan to enrol approximately 30 patients with SLE, randomised 2 to 1 to KT579 or placebo, and treat it for 16 weeks. Oral corticosteroid background therapy is permitted. In fact, our upcoming oral presentation at the American College of Rheumatology Conference demonstrates that KT579 shows significant activity alone or in the presence of background therapies in preclinical lupus models. The Phase 1b will evaluate the impact on inflammatory cytokines, interferon signatures, B-cell subsets, and other key immune pathways implicated in lupus. And we'll also explore measures of lupus disease activity, including changes in the mucocutaneous and musculoskeletal symptoms that patients experience. In this small Phase 1b study, those measures will help us look for early signs of clinical activity alongside the safety and biomarker results. So with that, I'll turn the call over to Bruce.

Thanks, Terrence. Turning to our third quarter results, I'll quickly walk you through the income statement shown here. As expected, we did not recognize any collaboration revenue in the third quarter. And as a reminder, we do not expect additional collaboration revenue for the remainder of 2026, as the milestones and our previous deferred revenue under our collaborations with Sanofi and Gilead were fully recognized as of the second quarter. In terms of operating expenses, reported R&D expenses for the quarter were $128.5 million. Thank you for joining us. We ended September with cash, cash equivalents, and investments of approximately $1.6 billion, providing a runway into 2029, Thank you for watching. and to take KT579 through our planned Phase 1b study in lupus. We also expect to fund the KT621 Phase 3 studies in AD in the initial stages of the Phase 3 development in asthma within our current runway. Alongside these clinical priorities, we'll continue to invest in our research pipeline I'll pause here so Nello can provide a few closing comments before we open the call to questions.

Thank you, Bruce. To wrap up, we have an important milestone ahead for KT621, building on the compelling profile observed in Phase 1 healthy volunteers and patients with AD. In dermatology, we expect Phase 2b AD data by year-end, as I've said earlier. Subject to those results of regulatory discussions, we plan to begin Phase 3 development by mid-2027. and that planning is already well underway. In respiratory, our phase 2b asthma study is ongoing with data expected in late 2027. As for KT579, today's results are an important step for that program. In healthy volunteers, we saw evidence that degrading RF5 can modulate multiple disease driving pathways. Along with the safety and tolerability profile observed in this study, these findings support our plans to advance KT579 into patients with lupus by early next year. We also plan to expand beyond lupus and will be sharing more on our broader development strategy next year. These programs are emblematic of our strategy to build a world-class pipeline of wholly owned immunology programs that are directed at fundamental disease pathways with the potential to help large patient populations. In closing, I want to thank the study participants, investigators, and our team for making all of this progress possible. With that, we'll open the call for questions.

At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. If you have joined by phone, please dial star nine on your keypad to raise your hand. When it is your turn, you will receive a message on your screen inviting you to join as panellist. Please accept and wait until you are promoted to panellist. Please unmute your audio, turn your camera on and ask your question. As a reminder, we are allowing analysts one question today. We will now pause a moment to assemble the queue. Our first question comes from Brian Cheng from JPMorgan.

Hey guys, thanks for taking our questions today. On the Phase 1b Lumora trial design, I'm curious, you know, how you're thinking about the bar for success there and any color in terms of which doses you would pick to move forward into this study, just given that it is interesting to note that you're already saturating at dose level three. And, you know, just one tiny question at the end is, you know, any opportunity for patients to also taper off steroids as well?

Thank you. Thanks, Brian. So I'll take a little bit of the question and I'll pass it to Terence, who's our expert. So I think it's important to remember that the goal of this study is to demonstrate for the first time that in patients where there is obviously disease, and we believe this pathway of activation, we can modulate the biology of patients with the drug, obviously without the need of ex vivo stimulation. So it's really demonstrating for the first time that IRF5 is relevant in the disease biology of lupus. I'd like to, Terrence, maybe talk about some of the other specific goals that we have. I just want to touch a little bit on the goals. So as you pointed out well, Brian, again, we're so proud that in other first-in-class targets that has never been tracked before, we've been able to do it robustly, safely, and showing probably better than expected biomarker Outcomes. You know, we have many options in terms of doses, right? Because we've shown preclinically that 85% is actually enough to drive the biology. and you saw all of our doses had more than 85% degradation. So we will continue the mystery around the dose for now, but obviously we have several options and we'll pick the one that we believe will allow us to answer that question well. Clarence, on the Facebook one, maybe you can add our caller.

Thanks, Brian. Good to see you. Success criteria. So obviously we'll look to recapitulate degradation in the setting where the target is active and much more highly expressed than in healthy volunteers. And then downstream of that, we look for movement of relevant biomarkers in those three key pathways that we discussed in the healthy volunteer study. Inflammatory biomarkers, interferon response, and B-cell biology. We'll be able to do that without having to artificially stimulate the pathway ex vivo. We'll also have the opportunity, obviously, to also look at clinical outcome measures. And so we'll take heed of that, too. Steroid taper, I think, was your final question. We'll get into a little more detail around trial design at a later date when we launch the trial and post clinical trials, etc. But I think it's fair to say that across lupus studies these days, the expectation is that taper is incorporation design.

Great. Thank you. Congrats on this data. Thank you.

Our next question is from Thomas Smith from Learing Partners. Please unmute your line.

Hey guys, good morning. Thanks for taking our questions. Congrats on all the progress and these very nice IRF5 data. Just with respect to the IRF5 degradation, I was wondering if you could comment on how much intrapatient variability you observed. Were there any patients who didn't achieve at least that 80% threshold you were aiming for? Was there any difference in serum versus skin? And then I was also wondering if you could just comment on some recent data we've seen from the TLR78 class and how that maybe influences your thinking around probability success in an indication like lupus. Thanks so much.

Okay, so I'll take the first two. I do want to encourage people to try and focus on one because if you have three in one, we're not really doing one. This is for future questions. So on the degradation, I mean, if you look at our graph, the slides should be up on our website, by the way, to everybody listening, so you should be able to see it. Our degradation profile is now for... This is the sixth program we show data for. It's always extremely robust and consistent. Our error bars are extremely small. So there are no outliers in the degradation profile in the subject in our study. The difference between blood and skin is minimal, if any. The IRF5 expression in skin is extremely low. In fact, we actually did not set the expectation around skin because actually we thought we weren't going to be able to measure it. But we have an amazing team here that has developed unique assays some of which we're not sharing because they're assets that we've invented and we want to protect as well. But we were able to actually measure even very low expression level. We were able to robustly reduce with this drug. So that was another important milestone. So there was a question around the competitive landscape. Terence, you want to make a comment?

Thanks, Thomas. I'd say the TLR7 and 8 direct inhibition gives us confidence in probability of success. But of course, this mechanism goes beyond just TLR7 and 8. So that, I think, is a good guide for us too. I'm really looking forward to interrogating that profile in lupus patients very, very soon. Thanks, guys. We'll have to go.

Thank you. Our next question is from Derek O'Killer from Wells Fargo. Please unmute your line.

Hey, good morning and thanks for taking the questions and congrats on the data today. So more of a market question in terms of the atopic dermatitis, but kind of the beyond opportunities for KT621. So I was wondering if you could help quantify how the atopic dermatitis market may expand with the introduction of a safe and effective oral. And I guess the bigger question is, could you expect similar expansions in other indications like asthma, COPD and so on? Thanks.

Yeah, thanks, Derek. So actually, this gives an opportunity to also make another point, which sometimes we forget to do, which is KT621, potentially the first safe, effective oral for type 2 diseases, is something that has never actually been accomplished before. So not only we can focus on AD in a minute, not only this is a drug for AD, but it's the drug that will or should, I should say, be treating all comorbidities One of the main reasons for Dupilumab's success is not only the robust efficacy and pretty amazing safety profile, but it's the fact that it's the preferred option for most doctors because it treats comorbidities that most patients have when they have any one type 2 disease. So that is something that we often forget to remind, but I just wanted to take the opportunity to remind. This is a unique drug also because of it. Now, when we go back to your point about We had a slide today earlier in our presentation that there is millions of patients with moderate to severe AD in the US. Six to nine, we said. This is actually a publication. These are not our numbers. And another data that is not ours, but it's a fact, it's about 400,000 are on advanced systemic therapy. So the opportunity here that we have with potentially the first safe effective and the market of patients that are sitting on the sidelines because they're not comfortable with the idea of taking an injectable biologic. So we think this would be transformative almost regardless of where exactly the efficacy profile will land. Although, as we said, we expected obviously to be in the duplicated ballpark. And that could be applied, as you were implying, to other diseases where actually either there's mostly if not only biologics, for example, asthma, or diseases where there is only one drug or two drugs. If you think about EOE, only injectable drug, for so far only Dupixen, we probably have Tazzy being, we assume, approved relatively soon. CRS, again, these are dominated by injectable drugs that are not What people are looking for. So we believe that the opportunity here, we continue to make the case, is not so much that we will have to compete with biologics, which I'm sure we will do as a highly competitive team here, but it's actually about expanding the market to new patients. And even in psoriasis, as you've seen with agotide recently, a much more mature market, 60% of new prescription for agotide are new patients, which is pretty impressive. for a market that has been built for now almost 15 years. Very helpful. Thanks, guys.

Thank you. Our next question is from Jeff Mecham from Citi.

Hey, guys. This is Nishant Bond for Jeff. Thanks for taking our questions. So looking at today's data from KT579, are there any elements that most strongly support development beyond lupus, maybe like in IBD, sugars, or RA? Thank you.

Yeah, maybe I'll let Terence take this question, and then I might add one thing at the end.

Go ahead. Thanks. So genetically, there are strong genetic links to each of those diseases for IRF5 overactivity. So that gave us confidence as a starting point. From the data today, obviously, we looked at those three pathways, pro-inflammatory cytokines, type 1 interferon, and B-cell biology. And you can draw threads between each of those and rheumatoid arthritis and or Sjogren's disease. or IBD. So just as an example in IBD, obviously in the pro-inflammatory cytokine panel, things that we looked at included TNF-alpha and interleukin-23. Each of those have been successfully targeted as monotherapies and recently in combination. In Sjogren's disease, it's well-recognized as an interferonopathy with strong interferon signature, and we saw good damping of type 1 interferon in today's readout. And finally, it's also well-recognized as a B-cell-driven autoantibody-associated disease, and we saw signals there too. So I think we've got good evidence of a broad waterfront of opportunity.

Yeah, the only thing I would add, thanks Terence, is that the lupus lumora study, which is bound to start soon, you should expect

Our next question is from Michael's from Morgan Stanley.

Great. Good morning. Thanks for taking the question and congratulations on the data as well. Maybe I could just ask a follow up just on the upcoming broadened to data given you completed the last patient visit in the study. Just wondering if you can share any thoughts on baseline characteristics and how that might impact our thinking when we try and do cross-trial comparisons to the depiction phase three studies. Thanks.

Yeah, thanks Mike. I mean, as we've said in the past, we're trying to just preserve all the patient baseline characteristics as well as obviously the data when we report the data later this year, before year end, as we said. The only new update we gave today in our remarks was around the percentage of patients that went from the 16-week study to the OLE just because we have completed that study. And now the study is officially in an open-label extension. And we said that of the eligible patients, 98% enrolled into the OLE. That's the only comment we're going to make around that study. And then, you know, the next update will be when we share the data. But thank you. Next one.

Our next question is from Biran Amin from Piper Sandler.

Hi, guys. Thanks for taking my questions, and congrats on the IRF5 update. Maybe a question on KT621 and BROADEN2. What measures did you take in the trial to mitigate against high placebo response, which typically, you know, we've seen that historically in other AD studies? Thank you.

Yeah, Brian, thanks for the question. I'll let maybe Terrence take this one.

Thanks, Byron. So the priority of the company in enrolling that study was to focus on quality rather than speed. Hence, it was actually a particularly pleasant surprise that the study enrolled a couple of quarters early. Measures included careful site selection, careful investigator selection, control of factors that can sometimes drive placebo response rate like previous medications or concomitant therapies coming into the trial, careful patient selection coming in, including some fairly novel measures to assure that patients had atopic dermatitis that it was moderate to severe. So despite that tight filter, as I say, there was a lot of enthusiasm. The trial enrolled approximately two quarters early. Some of that enthusiasm, I think, came from appetite for a safe, effective oral in the space, comfort with the pathway, a high-touch approach by the team, and a transparent scientific disclosure. But really looking forward to disclosing the results very soon. Thank you, Byron.

Next question. I'm going to the operator as well today.

Our next question is from Alex Thompson from Stifel.

Hey, thanks for taking our question. Maybe another unbroadened too. What should we expect in terms of data beyond sort of the primary and key secondary endpoints as it relates to subpopulations like those with comorbid asthma and as well as biomarkers? Anything there would be helpful. Thank you.

Yeah, thanks, Alex. Obviously, we don't have visibility into the data yet, so it's really hard for us to commit 100% to beyond what we've already said. I think the goal of the first disclosure is to ensure that we share all the data that we believe is material to obviously the company to investors to assess the safety and efficacy profile of the drug. Some things that we believe are additional interesting scientific information but are not Thank you. Our next question is from Faisal Khurshid from Jefferies.

Hey guys, thank you so much for taking the question. Just wanted to ask maybe a little bit different of a question. With regards to your degrader platform, can you talk to us, there's like some interesting like extracellular degrader programs and platforms that are out there. Can you talk to us about whether that's something that is kind of like within the Chimera repertoire or is that something that you could be interested in going into in the future?

Yeah, thanks for the orthogonal question. So let me explain what we're very good at. I think we're the best at is, I think, identifying the right targets for the technology, identifying small molecule, highly specific ligand for novel targets, making exceptionally well-behaved and specific degraders, and I think designing and executing, so far, early to mid-development studies. in immunology. And obviously that sounds like sad to school, but actually that's really hard to do all in a completely novel company. Another thing that we're really good at is any type of heterobifunctional molecule chemistry. So that obviously could incorporate by just nature of the business, extracellular degraders, these Britax, obviously molecular glues. And so we, as a curious and well-financed company, we look at other contiguous technologies as well. What I will say is that I find it extremely hard to develop a technology, let's say an extracellular degrader solution that is not oral. Meaning, I think the power of heterobifunctional molecules is the ability to make these drugs are all drugs that can replace or expand beyond these injectable biologics. So I don't think you're going to see us making extracellular degraders that are injected because I don't think there is a need for that. There are other technologies that can trap extracellular proteins much more efficiently or even now probably a lower cost than other technologies. Thanks for the question. Next one.

Thank you. Our next question is from Jeff Jones from Oppenheimer.

Good morning, guys, and again, congrats on the really striking data. As far as phase three planning for 621 beyond AD and asthma, just any updates on your thinking around additional indications and programs there? You've disclosed some thoughts previously, but just if there are any updates to your thinking.

Yeah, thanks, Jeff. Great question. I'll try and address this quickly. So our goal is to launch KD621 in all the indications that we believe are relevant to type 2 inflammation. In terms of priority indications are the ones that we believe there is highest unmet need An opportunity for an oral drug to change the landscape. So those go beyond AD and asthma. I think we want to have that conversation post a broaden to data so that at some point early next year, we can share a bit more comprehensively what our late development plan is, because that will be obviously highly dependent on these upcoming data readouts.

Thank you. Our next question is from Brian Abrams from RBC Capital.

Hi, good morning team. This is Kevin on for Brian. Thank you for taking our questions. So on the phase 1B lupus study, will you enroll both interferon high and low patients? And, you know, for later stage development, do you think there is value in focusing on interferon high patients should the effect be sort of more pronounced there? Thank you.

Thanks, Brian. Thanks for the question. We will enroll both interferon high and low patients. It's premature at this stage, I think, to focus on a biomarker-driven subset. Obviously, we're well aware of interferon high and its potential for controlling placebo response rates in lupus trials. But just hearkening back to the mechanism of action here, obviously, the MOA includes but goes well beyond just interferon inhibition. So at this stage, we're in learn mode. will enroll a well-controlled, well-defined lupus population, but not necessarily tightly focused on just interferon high.

Yeah, I agree, Terence. And more importantly, because we want to learn whether there will be a different biomarker response based on heterogeneity of baseline. So I think at this stage, it's very important to be more open-minded than not. Next one.

Our next question is from Andy Chen from Wolf Research.

Thank you so much for taking my question. This is Jason on for Andy. And we just had a quick question on the PD for RRF5. Did the data suggest any flexibility in dosing frequency or rapid reversibilities if any safety issues emerge? Thank you.

So our drugs, as you can see, even from the biomarker responses, when you stop dosing, The degradation, obviously, the target comes back to baseline in a few days. And you can see it again in the biomarker response, whose kinetics is very similar to the degradation as Terence said. So I think we know how to obviously dose this drug, what doses we need to adopt. We personally, I should say, maybe I personally don't expect it will have to react to some emerging adverse event based on mechanism. But even if that was the need of cessation of dosing, again, these are drugs whose outliers are Thank you. Our next question is from Morgan Lamberty from Goldman Sachs. Please unmute your line and ask your question.

Thank you. This is Morgan on for Andrea Newkirk. Thanks for taking our question. On IRF-5, how are you thinking about the translation of biomarker reduction and healthy volunteers to lupus patients in terms of whether you would expect to see similar or greater reductions? And then how should we think about the safety or the ramifications of achieving greater than 90% IRF-5 degradation, just if there's any specific AEs you're monitoring there? Thank you so much.

So maybe just quickly, I'll try to answer and then parents can help me. So just remember the ex vivo cytokine activation is a, let's call it an artificial pathway activation. And this allows us to measure in the absence of IRF5 how much Thank you very much. Often they would be probably less robust than these. And so it's always difficult to being able to predict. I think the fact that we can block them fully gives us confidence that no matter what the stimuli is in patients, we should be able to see robust pathway inhibition. What was the second part? Safety. The safety. Terrence, you want to take that?

Yep. So thanks, Morgan. I think we expect to see movement in all three key pathways unstimulated in lupus patients, some of which are obviously clinically validated in that disease, including type 1 interferon and B-cell biology. On the safety side, we've been encouraged by the safety profile seen preclinically. Before this study, I'm particularly encouraged by the preliminary safety data we've seen here in phase one, including a lack of any signal with respect to infection. We'll continue to watch carefully, but so far, so good.

Yeah, we know that there are redundancies in the IRED5 family. So while, I mean, we'll have to watch with eye, we're not concerned about the long-term safety of this drug.

Thank you. Our next question is from David Hoang from Deutsche Bank.

Hi there, good morning. Thanks so much for taking our questions and congrats on today's IRF-5 data. So before you head into the quiet period ahead of the Broaden 2 readout in AD, just wanted to ask you, could you remind us what is your view of in the ballpark of DUPI for endpoints like EZ-75 and IGA 01, and then in terms of the scenarios that could occur, knowing what we know about STAT6 biology, is there a scenario where 621 could outperform 2p at 16 weeks? Thanks so much.

Yeah, thank you. So, I mean, the reason why we continue to talk about this ballpark is because For all the data that we have generated so far for more than half a decade, we've seen that blocking guide 4N13 with an upstream biologics or blocking guide 4N13 with a STAT6 degrader seems to block all downstream signaling in a similar way. So that's where our hypothesis comes from. The other aspect is if There are differences between the two drugs. Obviously, that could be driven by many things. It could be, obviously, these are different technologies, small molecules, antibodies. It's still an intracellular versus extracellular target, but it's difficult for us a priori to determine the impact of these nuances on the clinical and the fact that we will see. When it comes to defining the ballpark, it's actually, I'm trying to define unscientifically something that is also unscientific. So cross trial comparisons are technically not doable and they have an inherent flaw in the approach. And so it's impossible for me to tell you exactly what the numbers should be that we should be looking at, but I think for people that are students of the space, you should be able to have a reasonable interpretation when you see a data set across several endpoints between two studies that are around a decade apart. So you have to look at the placebo rates. You have to look at the absolute treatment effect. You have to look at the consistency across endpoint. And at the end of the day, it actually does not matter. because we're not trying to replicate the Pilumab study. We're trying to develop one of the most exciting oral drugs for type 2 patients that is right now in clinical development. And the important thing is that we demonstrate safety, efficacy, and tolerability. I know that there's a lot of focus on comparisons and we will do that comparison too. I'm not trying to be a purist here, but I'm just trying to say that actually the important thing is that we deliver on the profile that we believe would be commercially successful. And for the scientific curiosity, there are many tools that one can use to compare trials that will all be wrong, but will give us a sense of what it looks like. This is the definition of ballpark, what I said in the past one and a half minutes maybe. Next one.

Thank you. Our next question is from Tyler Van Buren from TD Cohen.

Hey, great. Good morning, guys. Thanks so much for the 579 presentation. Regarding Broughton 2, should we expect to see itch data with the initial release? And can you discuss the potential to differentiate there given the IL-31 reductions observed? Our KOLs have recently brought this up in discussions.

Yeah, we plan to have each data, of course, each sleep, each quality of life. These are actually important. measures of how well the drug is actually serving patients. If you do market research, the number one complaint for patients that are actually on therapy continues to be itch. So with regards to differentiation, it's hard for me, and obviously I should be the most biased person in the world for the STAT6 program, It's hard for me to over-index on the IL-31 data. It's great that we saw IL-31 blood reduction in the Broaden study. This is the Phase 1b. It is also true that it hasn't been measured by others. There was a study with dupilumab in Japanese patients where they didn't see a reduction of IL-31. Again, we're 10 years apart. We have an amazing translational medicine team under Terence's guidance. I think that it's probably more likely that we're just better at measuring than we are different biologically from the big sense. But anyway, we'll know soon. So we'll definitely share the data. Next one.

Thank you. Our next question is from Jeet Mukherjee from BTG.

Great. Good morning. Thanks for taking the question and congrats on the data. It almost seems you guys make degraders of this quality in your sleep now. My question was just focused around, you know, the KT579 phase 1B lupus study. Could you just elaborate on some of those exploratory endpoints and what would tell you that you have a clinically differentiated profile here for KT579? Thanks.

Terence, you want to take that?

Sure, Jade, I assume you're referring to the exploratory clinical outcome measures. We look at all of the usual lupus clinical outcome measures, including composites like SLEDI and BILAG. We look at the individual components, and obviously that'll sit alongside the biomarker data, which are the chief focus of the study. And we'll take the whole set of data together in making our decisions downstream of that.

Yeah, I want to add two things. So first, the reason why we make drugs in our sleep is because we don't sleep. So we actually can make drugs effectively. That's a joke, by the way. And then on the other thing, I just want to remind everybody, the study is not powered for clinical endpoints. That's why we say that we're, you know, they're more exploratory than the usual exploratory. So everything Terrence said, obviously, I agree. But just remind everybody, this is a small study. Thank you. Our next question is from Jasmine Fells from Barclays.

Hi, Jasmine on for Ellie Merle. So congratulations on the IRF5 data. I wanted to ask a little bit more about dose selection and dose response. So can you characterize the dose response you saw across the different MAD cohorts for the ex vivo stimulation biomarkers? So did you see a similar trend as degradation for these with saturation at dose level three or was there a wider range of dose response across the different biomarkers?

Yeah, thank you. It is a great question. So to be honest, the reason why we're not sharing what we usually share, Terrence said it earlier, is we want to retain some competitive advantage over the fierce competition that we've seen increasing over the past few years. We feel with KT621, we probably taught the market too much. and actually I should say the market, our competitors. And so we're trying to be a bit more thoughtful. So the reason why we're not sharing, let's call it the dose response on biomarkers, because I personally don't want to share what is the level of RF5 degradation that leads to the optimal biomarker changes that we're seeing. So we have a really good understanding of Thank you. Our next question is from Seamus Fernandez from Guggenheim.

Thanks for the questions and congrats on the IRF-5 data. The question that I have on IRF-5 and maybe at some upcoming meetings would be the potential links of the robust biomarker effects that you're seeing targeting IRF-5. and some of the data that we're going to learn coming out of ACR, particularly as it relates to Sjogren's disease. You know, Terrence, what would you be looking for from other disease states, you know, given this sort of B-cell versus T-cell dynamic CD40 ligand versus April bath and the opportunity that you see in other disease states from some of those learnings?

Thanks, Seamus. I think Sjogren's is a really good indication for the target. There's a lot of unmet medical need in Sjogren's, as yet no approved advanced therapies. The biology is a good fit. We've got good genetic links between IRF5 and Sjogren's risk, and some of the pathways are clearly activated. So, for example, we know Sjogren's to be a highly high interferon-flavored disease, and we know that B-cell targeted therapies have shown efficacy, including one that's hopefully on the cusp of approval out of Novartis. So I think we're very encouraged that Sjogren's could be a good indication and one we're carefully considering.

Cool. Next one. We'll try and accelerate. I've been told we've been too slow. Thank you.

Our next question is from Tazeen Ahmed from Bank of America.

Guys, good morning. Thanks for squeezing me in on a busy morning. A couple of questions. So for this big data update that you have upcoming, As it relates to safety, in particular for conjunctivitis, what if you don't see any instance of it? Because I think mechanistically it should be something to expect, but if at this juncture you're still not showing it, how should we be thinking about what that means? Could that differentiate from other treatments, for example? And then secondly, can you just give us a sense of what the top catalyst for 2027 in your mind would be as we think about next year and beyond. Thanks.

Thanks, Justine. I love that we haven't gone through the biggest catalysts, but we'll talk about the next one. So the next one, let's start with your second question. Obviously we have big data with asthma which will be a huge catalyst to initiate multiple phase three programs in asthma and other respiratory indications. So that from where we stand today is probably the biggest data set of 27. We have other things that we will be sharing more in the near future. But I think for now, I will say this year, next year was supposed to be both AD and asthma. AD has moved to this year. So this year is AD, next year asthma and other things. On your question about conjunctivitis, the mechanisms, as we've always said, biologically is coherent with I4N13 biology. So I've said it for a couple of years, we expect to see conjunctivitis. If we don't see it, obviously we could talk about potential reasons for it. But again, as we're saying, we're closing up and we'll have that conversation then what we see or don't see. Next question.

Thank you. Our next question is Mayank Mantami from B Reilly.

Good morning. Mike on for Mayank and congrats on the quarter and the data. When you report for Broaden 2, will you break will you break out IAEs using the same chondrovitis and keratitis clusters from DPS label? This is just so investors can kind of compare K2621 with like for like. And also considering that Nimluvio is kind of seen as the itch benchmark, how do you think K2621 compares to Nimluvio when it comes to itch? Thank you.

I think for both questions, we'll know soon. I mean, I don't know the data to know what's going to be put with what, but for sure, we will present the data in a way that, as I said earlier, everybody should be able to assess the efficacy and the safety of the drug, as well as whether there has to be any Thank you. Our next question is from David Dai from UBS.

Thanks for taking my questions and congrats on the RFF data as well. So you notice similar RFF reduction in skin and blood. So I'm just curious, how does the skin tissue data give you the confidence that the peripheral blood RFF degradation will be a reliable surrogate for target engagement in disease-relevant tissues in lupus and potentially IBD?

Well, the reason why we always look for a non-central tissue and skin really is the only thing we can look at in Healthy Volunteers is to, again, de-risk the distribution and degradation profile of the drug beyond the central compartment. So I'm a big believer through, again, 10 years of work here that Skin is actually the hardest tissue to degrade targets in, and that's why we always measure it, because we know that if you degrade in skin, you're probably going to be fine for the rest of the body. We also have preclinical data that shows that we can consistently degrade this target in all the relevant tissues. So this was just an additional validation of our profiles.

Thank you. Our next question is from Kripa Devarakonda from Tourist Securities.

Hey guys, thank you so much for taking my question and congratulations on the data. So, you know, you accelerated your atopic derm program because of the great high level of demand that you saw. Are you seeing similar demand with asthma program as well? And has that led to increase in enrollment rates? And if not, why do you think there is a difference? How predictive do you think the FEV1 endpoint is of eventual exacerbation benefit? Thank you.

I'll take the first question so we can move more quickly. So we are seeing the same level of enthusiasm in AD as we have in asthma. The main difference is that in asthma our inclusion-exclusion criteria are much more strict. and so the screen failure rate is much higher and that's what determines how quickly or not quickly we're enrolled in the study. Next question.

Thank you. Our next question is from Joseph Holden from Canaccord Genuity.

Hey everybody, this is Joe Holden on for Edward Nash. Thanks for taking my question. I just wanted to see if you could provide any guidance on expected R&D expenditure into 2027 given KT579 Phase 1 in lupus and the expected Phase 3 program in AD. Thanks so much and congrats on the data.

Yeah, I'll just be brief because we don't give explicit guidance, but I would guide you to the runway, which is into 2029. And you should see, I would say, increases in operating expenses that are gradual but consistent to get you to the point that you're into 2029. Obviously, the expenses will accelerate as we start the phase three study in AD, which we've added to by mid-2027. So we are also adding significantly to the team in preparation for those studies as well. So those will be the biggest factors in driving the cash year-over-year, I'd say, use of cash in 2027 and beyond.

I believe this was the last question. I want to thank everybody for attending the call and also staying to 940. Please take the opportunity to check out our website. The slides are there. We're very excited about where we're going with now two very exciting first-in-class programs in patients. And so we're happy to follow up with any of you in the next couple of days, apparently, but not beyond. Thank you.