Aclaris Therapeutics, Inc. Stock

Hi, everyone. My name is [ Matthew Guggenbiller ]. I'm an associate on Alex Stranahan's biotech team.

Thanks for coming to the Vegas Conference, day 3. I appreciate you guys coming out, and I'm pleased to be joined by Aclaris Therapeutics, who are going to be running through some slides. Over to you.

Yes. Hi. Good morning. I'm Hugh Davis. I'm the President and COO for Aclaris Therapeutics, and thanks to Bank of America for having us at their health care conference.

The normal disclaimer and cautionary notes regarding forward-looking statements. Aclaris Therapeutics is an innovator in immunological assets for important unaddressable disease. And addressing validated targets is key to success while we are really understanding how to take innovative approaches to our portfolio.

And 2 examples would be bispecifics and ITK oral inhibitors that will be best-in-class. We have a research lab in St. Louis that is state-of-the-art scientific platform in kinase biology and world-class scientific acumen across the company.

In 2026, we have a quite catalyst calendar that I'll speak to later. As I mentioned, addressable I&I diseases of dermatologic, immunologic in terms of respiratory and IBD disease is important with an impact in millions of patients just in the U.S. alone.

And so in Aclaris, we are going after these respiratory and dermatologic conditions with first-in-class types of molecules. It's unusual for a SMID-Cap to have such a strength in large and small molecule development and therapeutics.

And yet we have both ITK franchise that has JAK-like efficacy that we're looking to expand on with broad ITK selectivity as well as in biologics, where we have potential first-line therapies. And really what we're looking to achieve is with a higher efficacy ceiling in these patients with derm and respiratory disease.

We also have the opportunity for extended dosing intervals with our biologics portfolio, leveraging our biology and our drug design. Our pipeline, we have a Phase II Bosakitug anti-TSLP mAb that's currently going to read out by the end of this year. It's 100-subject placebo-controlled study NAD with moderate to severe.

Following this, the ATI-2138, which is our ITK/JAK3 inhibitor. This completed a Phase IIa study in atopic derm as a POC. And now we're pursuing lichen planus as our Phase IIb indication that will initiate by the end of this year. ATI-052 is the bispecific that targets both TSLP and IL-4R.

We cleaned the healthy volunteer portion of that. I'll go over that momentarily. And we have 2 Phase Ibs ongoing in severe atopic derm and moderate to severe asthma. And then our 9494 molecule is going to be moving toward an IND submission by the end of this year.

So in terms of Bosakitug, our TSLP antibody, TSLP is extremely important because it has a pleiotropic broad set of activities where we hit dendritic cells, mast cells, fibroblasts and even ILC2s innate side of the immunity.

And then it's the MAF regulator of Th2 pathway indications. So when we consider going after TSLP and inhibiting it, it's really with this pleiotropic activity in mind.

And we have a best-in-class molecule in our mind with over 400 hours of residence time on TSLP. And so we bind and it associates very slowly with 400 hours of residence time relative to other clinical development candidates that we've tested, and it's about 25 to 30x longer residence time than tezepelumab, the only approved anti-TSLP antibody to date.

And when we compare to tezepelumab, the structural crystal structure work that Amgen put out years ago and published, you can see that we have 3 CDRs on the heavy chain that's binding to the C-terminus of TSLP. It's an affinity-based interaction, whereas Bosakitug has all 6 CDRs in both the heavy chain and light chain that are contacting the TSLP molecule all the way from the C terminus to the end terminus.

So it's binding and it's not letting go. And this molecule has already completed a POC study in atopic derm, where the data showed over 90% of subjects had an EASI-75 response and in IGA-01, 88% response IGA-01.

So we've taken this forward into a Phase IIb or a Phase II, sorry, in atopic derm. And as I mentioned, that will complete by the end of the year, and that's in moderate to severe patients.

The same anti-TSLP antibody is a component of our bispecific. And this time, we have the TSLP and also scFvs that bind IL-4 receptor. And what we've been able to show is that this molecule is about 4x more potent than the combination of dupilumab and tezepelumab in inhibiting chemokine secretion from PBMCs that have been activated with TSLP and IL-4.

In the healthy volunteer portion of the Phase I, we've shown extended PK duration out to 20 weeks after the last dose at week 4, so 16 weeks of coverage at the 480 and 240-milligram dose. This pharmacokinetic profile also matches up with the pharmacodynamic profile and target engagement, where we've shown that TSLP activated whole blood from these subjects in the healthy volunteer portion of the study have 100% inhibition of the TSLP stimulated TARC and up to week 20 after the last dose at week 4.

And then the IL-4 stimulated is inhibited for at least 12 weeks at 100% inhibition by the 480-milligram cohort. So the PK/PD effect that we're seeing here actually gives us the potential to dose this drug up to every 3 months. The AE profile was very quite favorable, and we saw no SAEs and no TRAEs and no conjunctivitis. So this molecule will be moving into an asthma study. We're initiating that effort now and initiating the study by end of year.

And ultimately, we would take this into both respiratory and dermatologic conditions listed here. On the other side of the therapeutic wall in small molecules, as I mentioned, Aclaris is quite adept at ITK therapeutic development. And so we have a number of best-in-class oral inhibitors in this space.

So initially an ITK inhibitor would cross over Th2 and Th17 as well as innate lymphoid cell biology. And with the Txk bispecific, it would also cross over to Th1. And so you're getting broad applicability with an ITK inhibitor.

Our first molecule that was in the clinic is an ITK/JAK3 inhibitor, and this has a unique bispecific-like mechanism where we're inhibiting both the T cell receptor activation upstream and the effector cytokines downstream. And so we're able to hit where CD8 -- inhibiting the cytotoxic destruction of targets by the CD8 T cells, and we're inhibiting the T cell proliferation activation and survival by inhibiting cytokines.

And so 2138 was also in a proof-of-concept study in atopic derm. It was a 12-week study. And what it showed was that our itch profile was particularly good. We saw a greater than 4-point improvement in PP-NRS in 63% of subjects.

And this is, as you can see on the slide, against other biologics and other kinase inhibitors, this is best-in-class. Also on the skin clearance, EASI scores and BSA, we saw a 77% drop in EASI score.

So this drug has shown in a POC study to have a significant itch relief and improvement in disease severity and extent of disease. And so in addition to the clinical output, we saw in this -- in the pharmacodynamic analysis, we saw that we had marketed and sustained target occupancy and functional ITK inhibition across the dosing interval. And this is a BID drug at 10 milligrams. And so it's a very potent molecule. And so ultimately, we're showing that we're seeing strong downregulation of these ITK-dependent pathways across Th2, Th17 and Th1.

The safety profile was also quite good. And so we also have the potential then to increase the exposure of this drug in future studies. The next study that we're looking to initiate by the end of the year is a study in lichen planus. And so lichen planus is a dermatologic condition where we see impact in both the oral and cutaneous portions of the body as well as lichen planopilaris, which is a scarring alopecia in the scalp with hair loss and scarring.

And so you can imagine that this disease affects quality of life in these individuals. And so we're taking this on. The prevalence is between 0.1% and 1% of the population. And interestingly, as we've seen in other diseases like HS, where the indication is usually -- the prevalence is usually very low initially until drugs come on board that can treat it.

And then you see that you grow that population over time as there's relevant medications for it. We know that in this case, lichen planus does not have an approved therapy, and so it's an unsatisfied market and an opportunity for biologic-like pricing and even accelerated regulatory pathway is being pursued as it's an orphan indication.

And so with 2138, we're taking that into lichen planus, and it's a basket study with mucosal and cutaneous, as well as lichen planopilaris, and that will initiate by the end of the year. And then we have other dermatologic and respiratory indications that could potentially follow.

The other molecules, 9494 are moving, as I mentioned, into an IND by the end of this year. And then we also have a third-generation ITK selective inhibitor that would show up in 2027. So as we're looking forward, the momentum in 2026 is really taking us with multiple clinical catalysts by the end of the year.

So with ATI-052, the bispecific, we currently have the 2 Ib studies ongoing, one in severe atopic derm and one in asthma. Both of those are going to read out in the second half of this year with an initiation of the Phase IIb program in asthma by the end of the year. Bosakitug, the monovalent TSLP antibody is in Phase II, as I mentioned, and we're expecting top line results also by the end of this year. ATI-2138 is going to be initiated in a new Phase IIb trial by the end of this year in lichen planus, as I mentioned, oral mucosal and lichen planopilaris. And then our next-gen ITK inhibitor is going to be filing an IND by the end of this year.

And so we're able to do this with our cash runway out through 2028, covering all of the catalysts and efforts that I just enumerated. And so we currently have about $190 million on the balance sheet as of the end of March. So thank you for your time, and I appreciate again the opportunity to present at Bank of America Healthcare Conference.

Good day, and thank you for standing by. Welcome to the Aclaris Clinical Program Update Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Will Roberts, Corporate Communications. Please go ahead.

Thank you, Liz. Good morning, everyone, and welcome to the Aclaris Therapeutics conference call to discuss this morning's clinical program update, including the positive full top line results from our ATI-052 Phase Ia single and multiple ascending dose clinical trial and our plans to move ATI-2138 into a Phase IIb program in Lichen Planus. The press release on the clinical update was issued earlier this morning and can be found in the Press Releases subpage of the Investor Relations section of our corporate website at aclaristx.com.

Please note that we provided slides as part of this discussion -- they're now available in the webcast window and as a downloadable PDF document on our website. We'll reference the slide numbers throughout. A Q&A session will follow the prepared remarks. Before we begin, I'd like to remind you that today's webcast contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements.

For more information on such risks and uncertainties, please refer to our filings with the SEC, which are available from the SEC or on our corporate website. Any forward-looking statement represents our views as of today, April 28, 2026.

Joining me on the call today are our CEO, Neal Walker; Hugh Davis, our President and COO; Jesse Hall, our Chief Medical Officer; and Roland Kolbeck, our Chief Scientific Officer. Kevin Balthaser, our Chief Financial Officer, will also be available for questions following the prepared comments. And with that, I'll turn the call over to Neal. Neal?

Thanks, Will. Good morning, everyone, and thanks for joining us on our call. We are delighted to share a couple of key clinical milestones that we recently achieved. First, the full SAD/MAD results for our lead bispecific antibody, ATI-052, confirm and build upon the remarkable PK, PD and tolerability interim results announced back in January, providing strong clinical validation of the mechanism of this bispecific across a wide spectrum of single and multiple ascending doses.

ATI-052 effectively binds TSLP upstream and immune cells downstream in the Th2 cascade via IL-4R, the share receptor for both IL-4 and IL-13. As a reminder, the biology is additive and as such, has the potential to provide strong efficacy in a variety of indications with infrequent dosing, which lowers the injection burden for patients. There are numerous feedback loops and interdependencies in this pathway and data generated to date strongly suggests a synergistic effect of inhibiting TSLP as an initiator of the cascade and IL-4 and IL-13 as the effector cytokines downstream.

Second, we have completed a robust indication down selection process for our most advanced oral inhibitor compound, ATI-2138 and have selected Lichen Planus or LP as the next clinical indication for Phase IIb development. As you'll hear from Roland, ATI-2138 is the first and only oral small molecule that inhibits both key JAK related cytokines and TCR signaling. As such, 2138 has the potential to be an ideal mechanistic fit for LP.

Turning to Slides 3 and 4. Th2-driven indications represent large and growing market opportunities due to the tremendous unmet need for better treatment options. We believe significant efficacy gaps still remain in many of these indications, including asthma and atopic dermatitis. The opportunity we have with ATI-052, our bispecific that targets both IL-4 and TSLP is to redefine the standard of care. ATI-052 inhibits 3 inflammatory cytokines, IL-4, IL-13 and TSLP to more broadly suppress the Th2 inflammatory pathway that drives many respiratory dermatologic and GI diseases, particularly those with heterogeneous subtypes. By inhibiting both upstream and downstream components of the Th2 cascade, ATI-052 has the potential to raise the efficacy ceiling beyond what either target achieves alone, while also addressing the biologic heterogeneity seen across respiratory and dermatologic diseases.

This positions us to redefine the standard of care in Th2 disease and pursue first-line therapy status. Further enhancing its profile, ATI-052 has the potential for once every 3 months dosing, offering meaningful convenience for patients and providers alike.

I will now pass the call over to Hugh to provide an overview of the full ATI-052 trial results and the planned next steps. Then Jesse will discuss our next clinical steps for this bispecific, and Roland will be on to provide more color on our ATI-2138 Lichen Planus program. I'll be back at the end to conclude the call. Hugh?

Thanks, Neil, and good morning to everyone. I'll provide a quick overview of the compound itself before proceeding to the final results of the trial. As Neil mentioned, ATI-052 inhibits TSLP upstream and immune cells downstream in the Th2 cascade by simultaneously binding both TSLP and IL-4 receptor effectively and with high affinity.

Antagonism of the shared receptor IL4R block signaling of both IL-4 and IL-13 activity. We believe that 052 has the potential to raise the efficacy ceiling in a variety of immuno-inflammatory diseases. As a reminder of the construct itself, Slide 5 shows a diagrammatic representation of ATI-052. It has the same anti-TSLP ligand binding regions as our anti-TSLP monoclonal antibody, bosakitug, allowing it to retain the potential class-leading attributes and potency advantages over tezepelumab and comparator clinical stage assets. You'll also see that it has 2 single-chain variable fragments that have high affinity to the IL-4 receptor. This antibody contains a YTE mutation to bind FcRn more tightly designed to extend the half-life and an AQQ mutation designed to reduce off-target binding and potential toxicity.

As you will see in the results, we believe these mutations contribute to the strong behavior of the molecule. The next set of slides describe the key attributes of ATI-052, most of which were covered in detail on the January interim results call. First, on Slide 6, both ATI-052 and bosakitug show a very low dissociation rate from TSLP. The inverse of dissociation rate is residence time.

As you can see on the right panel, both bosakitug and the bispecific have over 400 hours of residence time on TSLP, which is considerably longer than comparator antibodies and about 25 to 30x higher than tezepelumab. We recently characterized the crystal structure of bosakitug bound to TSLP, which is the same anti-TSLP Fab binding region as in ATI-052. As shown on Slide 7, bosakitug has a much more extensive TSLP binding interface than tezepelumab, including all 6 light chain and heavy chain complementarity determining regions or CDRs, whereas tezepelumab only has 3 heavy chain CDRs in contact with TSLP. In addition, bosakitug and ATI-052 bispecific anti-TSLP Fab interfaces with the entire TSLP molecule, spanning from the N-terminal tyrosine at 29 to the C-terminal proline at 154.

It virtually envelops the TSLP molecule, while teze only engages the C-terminal portion. This explains the long residence time on TSLP by both bosakitug and ATI-052. This is important because TSLP is a very potent alarmin that drives a number of inflammatory diseases when produced at high chronic levels. And as such, it's necessary to have a very potent therapeutic that can bind and neutralize its pathological effects.

On Slides 8 and 9, you'll see that ATI-052 can also effectively bind 2 molecules of TSLP and 2 molecules of IL-4R simultaneously with high affinity, meaning that all 4 binding sites are acting independently. Importantly, binding to target first does not affect its ability to bind to the other. And all 4 binding sites act independently and maintain the same high affinity to their target at the same time. Functionally, the bispecific inhibits the activity of all 3 targets, TSLP, IL-4 and IL-13, leading to a significant potency advantage over the combination of dupilumab and tezepelumab, which we show on Slide 10.

This isn't surprising. Pfizer's data with their trispecific antibody tilrekimig show this synergistic potential when addressing the same 3 important biologically distinct targets. Moving to the results of the Phase Ia SAD and MAD trial itself. As you see on Slide 11, this was a randomized, blinded, placebo-controlled Phase I trial first in human designed to evaluate the safety, tolerability, PK and PD of subcutaneously administered ATI-052 in healthy adults receiving both single ascending doses and multiple ascending doses.

In the SAD portion, all 4 cohorts of 8 healthy volunteers were randomized 3:1 to receive a single dose of ATI-052 of 30, 120, 360 or 720 milligrams or placebo. In the MAD portion, 2 cohorts of 8 healthy volunteers each were randomized 3:1 to receive 5 doses of either 240 or 480 milligrams of ATI-052 or placebo administered every 7 days. As a reminder, the baseline characteristics were generally balanced across cohorts and were typical of a healthy population.

Let's start with the pharmacokinetic results. On Slide 12, the concentration time profile of the 4 SAD cohorts and the 240 and 400-milligram MAD cohorts are shown. This continues to be a very well-behaved molecule pharmacokinetic. Dose proportional increases in PK for both Cmax and AUC were observed across all SAD and MAD dose levels. Focusing now on the 2 MAD cohorts, we see at least 12 weeks duration above the target-mediated drug disposition or TMDD for both cohorts. We note that we did not measure PK at week 14. The accumulation ratio calculated using the AUC after the fifth dose divided by that of the first dose, measures how much a drug accumulates in the body after repeated dosing compared to a single dose. This analysis provides an estimated half-life of approximately 45 days. Considering this dose proportional PK profile, along with the remarkable PD effect I'll describe momentarily, these results help confirm our expectation that ATI-052 can be dosed as infrequently as every 3 months.

Let's move now to the compelling pharmacodynamic results. The CCL17 inhibition assay is widely considered the gold standard in our industry to quantify the inhibitory activity of certain antibodies and serves as an early surrogate for clinical effect. The stronger and more sustained the inhibition, the better the molecule. Both TSLP and IL-4 stimulate the release of CCL17, also known as TARC. But given that this trial was conducted in healthy volunteers and there's no disease, as such, endogenous levels of TSLP and IL-4 and consequently, CCL17 are very low and variable.

To overcome this limitation, as we show on Slide 13, we developed a rigorous whole blood assay to assess the inhibitory activity of ATI-052. We stimulated whole blood samples from participants in the trial with optimal quantities of TSLP and IL-4, which was up to 500-fold above endogenous levels seen in healthy volunteers in order to induce maximal CCL17 release and then directly measure the inhibition of CCL17 by the act of ATI-052 onboard in the blood at the various time points. Using the supra biological levels of TSLP and IL-4 for maximum stimulation even exceeded those that would be seen in disease provides a very high hurdle to demonstrate the inhibitory activity of ATI-052.

On Slide 14, you see the full PD results. Overall, we observed a sustained dose proportional PD profile across all SAD and MAD cohorts. Looking at the top panel, when we assess inhibition of TSLP stimulated CCL17 in the 480-milligram MAD cohort shown in dark blue, we observed 100% inhibition through the 20-week final sampling time point, 4 months beyond the last dose. We observed a similar result with the 240-milligram MAD cohort shown in green, with nearly 100% inhibition out to the same 20-week time point.

On the bottom panel, describing inhibition of IL-4 stimulated CCL17, the 480-milligram cohort of ATI-052 showed 100% inhibition of CCL17 for at least 3 months, 2 months beyond the last dose. It is expected based on the concentration of ATI-052 at week 14 that near complete inhibition would be achieved through the week 14 time point as well. It's worth noting that these results represent data from isolated systems. They don't take into account the expected synergy from the mechanism in vivo. We have summarized the results of these potential best-in-class PD results on Slide 15. Overall, these PD results support the potential to raise the efficacy ceiling with ATI-052 with an extended dosing schedule.

Slide 16 serves as a reminder of the strong tolerability and safety profile of ATI-052 in this trial. These results confirm the strong profile we described at the interim look in January. No safety signals were observed and more importantly, no conjunctivitis was seen. Regarding immunogenicity, in general, the impact of ADA is observed as either rapid clearance observed in a PK analysis or rapid loss of activity in a PD analysis. No impact of ADA on PK or PD has been observed in this trial.

These trial results not only corroborate, but also dramatically improve on the compelling interim results we presented in January and clinically validate the potential best-in-class binding and potency attributes. They also provide important clinical evidence supporting ATI-052 as a molecule with a particularly strong safety and tolerability profile and a robust PK and PD package, all of which support the potential for synergistically driven efficacy with an extended dosing schedule of up to every 3 months. I'll now turn the call over to Jesse to provide an update to our ongoing clinical program for ATI-052. Jesse?

Thanks, Hugh, and good morning, everyone. First, I want to echo Hugh's sentiments regarding the strength and importance of these results. They reinforce that this molecule has best-in-class potential and potential therapeutic utility in a wide variety of indications. In parallel, we've been focused on execution. We have initiated 2 randomized, double-blind, placebo-controlled Phase Ib proof-of-concept trials. These trials are designed to build the foundation that we need to move into our Phase IIb programs with confidence. At this stage, while we will be looking for initial efficacy signals, the objective is more about translational clarity. Specifically, we're looking to define PK, target engagement and biomarker response in disease populations and to use those data to inform next steps.

Turning to Slide 17. In January, we initiated a Phase Ib study in approximately 12 patients with AD with EASI scores of greater than 21, evaluating 480 milligrams of ATI-052 using a regimen consistent with our Phase Ia MAD cohorts, 5 weekly doses over 4 weeks, identical to what we did in healthy volunteers. The trial will assess clinical endpoints at week 8, including EASI, IGA and PP-NRS, followed by an additional 12 weeks of follow-up.

So we'll have 16 weeks of evaluation following the last dose. Importantly, we're also collecting PK and PD data, including lesional and non-lesional tape strips, which provide a direct bridge to established data sets, including dupilumab and should help contextualize biological activity.

Next, on Slide 18. In February, we initiated a second proof-of-concept study in asthma, a 3:1 placebo-controlled single-dose trial in approximately 16 patients on Gen Step 2 through 4 therapy. We expect top line readout at day 29 with approximately 6 weeks of follow-up. Endpoints include safety, PK and PD biomarkers with a focus on FeNO, eosinophils and FEV1 to assess biological effect and consistency with mechanism. Both studies are actively enrolling with top line data expected in the second half of 2026.

In parallel, and shown on Slide 19, we are advancing Phase IIb planning in both asthma and AD with the goal of initiating the asthma study in the fourth quarter of this year. We believe that ATI-052 has the potential to be differentiated and competitive across multiple important indications. With this, we'll now transition the call to ATI-2138. So I'll turn the call over to Roland.

Thanks, Jesse, and good morning, everyone. I'm excited to be with you today to provide an update on ATI-2138 regarding our plan to move into Lichen Planus or LP. As shown on Slide 21, Lichen Planus is an ideal fit for this molecule for a variety of reasons, including mechanistic overlap, market size, available white space, potential for cost-effective development and the availability of regulatory pathways that may expedite development. I'll touch on most of these factors this morning.

Let's start with the disease itself on Slide 22. It's an unaddressed chronic inflammatory CD8 cytotoxic T cell-driven interface dermatitis. There are multiple subtypes, the 3 most common of which are erosive mucosal, cutaneous and lichen planopilaris, which is a rare form of LP affecting the scalp and causing permanent scarring hair loss. Patients with LP experience stores, difficulty eating, severe itch, scales, plaques, permanent hair loss and fatigue.

Quality of life is also affected in most patients due to disease and symptom-related anxiety and depression. In fact, studies have shown that LP affects quality of life in up to 78% of affected individuals. As you see on Slide 23, LP is a significant white space market opportunity. There are currently no FDA-approved therapies for LP. So disease management has historically focused on immunosuppression and topical symptom control. Estimates of market size suggest that at least 0.1% and up to 1% of the population is affected in the U.S. Despite no targeted therapeutic intervention, up to 40% of patients with LP currently seek treatment.

This percentage would likely increase with new innovative targeted and effective oral therapies. The steroid failure rate in LP is also very high, as much as 60% in the moderate to severe population. We believe that new targeted therapeutics have the potential to dramatically increase diagnosis and treatment rates by providing rapid pain and itch relief and addressing multisite disease involvement in addition to minimizing flares and directly improving symptoms and potentially quality of life.

In addition, oral agents are far more practical for the treatment of widespread or multi-subtype lesions than topically administered corticosteroids or calcineurin inhibitors. As a reminder, ATI-2138 is a highly potent investigational oral compound which interrupts T cell receptor or TCR signaling by inhibiting interleukin-2 inducible kinase or ITK and Janus kinase 3 or JAK3 signaling of common gamma chain cytokines in lymphocytes.

Slide 24 further describes its mechanism involving dual inhibition of TCR-mediated and cytokine-mediated activation of CD8 cytotoxic T cells. ATI-2138 dual inhibitory activity results in a bispecific-like effect that could be very powerful in certain diseases like LP. In fact, it is the first and only known JAK-based therapy that also inhibits the TCR. First, on the left side of the slide, it inhibits TCR signaling through potent inhibition of ITK, which inhibits autoantigen-mediated T cell activation, cytotoxic destruction of targets by CD8 T cells and production of inflammatory cytokines, including interferon gamma.

Second, on the right, it inhibits cytokine signaling via JAK3 inhibition, thus impacting cytokine-mediated T cell proliferation, activation and survival. All in, on Slide 25, you'll see that this provides the mechanistic rationale for broad and deep efficacy in LP. ATI-2138 is the only known drug in development that precisely targets these 2 signaling axis that are the defining pathological drivers of LP, potentially positioning it as the first mechanistically complete therapeutic candidate designed to address the root inflammation underlying land symptom.

This also aligns well with the clinical rationale and efficacy of ATI-2138 in atopic dermatitis, which was on display at the 2026 AAD meeting. It's understandable that the medical community is excited about this potential therapeutic innovation. As you see on Slide 26, we intend to initiate a phase multipart Phase IIb basket study of ATI-2138 in LP starting with the erosive mucosal and cutaneous subtypes in Part A, then layering in lichen planopilaris in Part B as the trial evolves.

Our goal is to initiate this trial in the second half of 2023. We'll describe the trial design further as we approach initiation. We are also excited about the mechanism of ATI-2138 in other niche indications beyond Lichen planus, such as the 10% to 15% of asthma patients that are severe or refractory -- with that, I'll turn the call over to Neal for some closing comments. Neal?

Thanks, Hugh Jesse and Roland. Turning to Slide 27. The PK and PD results with 052 provide a convincing surrogate for clinical effect and exceeded our expectations across the board. The results showed complete and sustained inhibition of both TSLP and IL-4R, providing an estimated half-life of approximately 45 days. Beyond that, the safety and tolerability profile is exactly what we want to see, if not better, as we proceed toward Phase IIb.

On Slide 28, and as you heard from Roland, ATI-2138 is the only known drug that hits the key modulators of interface dermatitis disorders Lichen planus, both TCR signaling and CD8 cytotoxic suppression and as such, is an ideal mechanistic fit. This is a white space opportunity with an estimated U.S. market potential exceeding $1 billion with an opportunity up to nearly $4 billion.

We've had a productive first part of the year across the pipeline, including the new information we provided today, and we are looking forward to the rest of the year. As we show on Slide 29, we expect to achieve numerous important milestones throughout the year. Thanks for your time today. And now let's open up the call to Q&A, though I'll remind you that we may be limited to what we can discuss beyond what we've disclosed. Operator, are there any questions?

[Operator Instructions] Our first question comes from Thomas Smith from Leerink Partners.

This is Nat on for Thomas Smith. Congrats on the data. We have 2 questions. So first, the Phase Ib asthma trial, you to a single 480 mg dose, while the atopic dermatitis trial used 5 weekly 480 mg doses. What drove that difference? And second, what are your expectations on the top line Phase Ib data expected in second half '26 from both asthma and atopic dermatitis indications? Any specific bar that you aim to clear before starting a Phase Ib program?

Yes. So I can start and you feel free to chime in. So on the asthma dose, we're just mimicking the traditional FeNO study to get an idea of dose response in patients in a pretty quick study, both on FeNO and FEV1. It's a typical study that most people do on the asthma side. In AD, it's a little different because usually with atopic dermatitis, you have a load-in dose just because you got to get to the skin site of action. So we're trying to mimic that or at least use that as a surrogate in this study. And it also comps nicely and is a direct comparator to what we did in the healthy volunteer study. So that's kind of the background rationale. Hugh, do you have any other comments?

Yes. I mean the goal with the AD is to really get to an exposure response profile that can be done successfully with 5 loading doses. We will also be able to do a Pop PK analysis because we'll be able to combine the data from our healthy volunteers with that data set and really be able to hone in on any potential covariant. But at the end of the day, we'll be able to look at true activity and efficacy profile in AD in these severe patients relative to established historical data from Dupi, for instance, which has a 4- and 8-week monotherapy publication. So we'll be able to get some really good understanding of actual clinical effect over time and a PK/PD analysis that we'll be able to take forward into the Phase IIb.

Yes. We'd like to see a 10% bump on the efficacy front. I think that would be meaningful. There's various ways to look at efficacy, whether it's speed of onset. So for instance, in AD, we would like to see a rapid onset with this mechanism. That's why we're looking at a week 8 kind of top line day 57 number 4 weeks after the last dose in the AD study, but then we're going to track those patients out another 12 weeks. So you get an idea of what the curve looks like. But rapidity of response in something like AD is important. Remember, AD is very different than psoriasis as a treat the flare disease. So in terms of a quick effect, that's important. And then we'd like to see, obviously, depth of response. There's a lot of efficacy being left on the table with current modalities, and we think hitting 2 inflammatory mediators makes sense.

Our next question comes from Biren Amin with Piper Sandler.

Maybe to start on ATI-052. Your plans to move into Phase IIb trials in asthma in the fourth quarter of this year. What's driving the priority for asthma compared to AD?

So I think it's -- I can start and then if Roland or Jesse has any other comments. But I think the key for us is we know 100% that teze works well in T2 low asthma. It's doing quite nicely in that indication. It's been well received. We know that Dupi also does quite well in T2-high asthma. So if you look at our molecule, we're simply combining those 2 modalities. And as you can see, we're doing so not only in a very robust way with 100% inhibition over an extended period of time, but then we have the advantage of a dosing interval on both. So from our perspective, having a 1 plus 1 equals 3 in respiratory is very easy to understand and has a high probability of success. So that's why we're prioritizing that out of the gate. And then, of course, we still like a number of indications in the Th2 family, including atopic dermatitis.

Our next question comes from Jeff Jones with Oppenheimer.

Congrats on the updated data. Could you expand a little on how you're thinking about the Lichen Planus trial design? You mentioned erosive first, the drivers there to expand and how you're thinking about endpoints and bars for the bar for success?

Yes. Thank you, Jeff. So yes, it's pretty exciting. Lichen Planus is, in my mind, very similar to where hidradenitis was many years ago. And it's a disease that is a lot more prevalent than the numbers would suggest. That's why we provided that range of like 0.1% to like 1%. In fact, I've seen some that say it's upwards of 1.5%. And it is a spectrum of disease. That's kind of one of the things I like about this category is the pathophysiology is the same.

It's an interface dermatitis, but it attacks the mucosa. So you can get mucosal LP, which would manifest in the mouth, the oesophagus also in the general area. And then the severe extension of that is erosive. And these patients sometimes need tube feeding. That's how painful and distressing it is. And then you have cutaneous LP, which has its own issues with just the burden of itch, et cetera. And then the next layer in the spectrum is like lichen planopilaris, which is a pretty devastating scarring alopecia, which we heard about recently from a competitor.

So why I like that is we can develop -- we can design a basket study where we step through these indications. We're going to start with mucosal and cutaneous and we're going to test 2 different doses, 10 milligrams BID and then 20 milligrams BID. As a reminder, we tested 10 milligrams BID in the atopic derm study. And then once we see the effect there, then we'll take that kind of winning dose and move forward into the next layer, which is like in lichen planopilaris, which is a little bit more difficult to treat. We really feel strongly about the mechanistic fit here.

There's -- Roland alluded to it, but just to reiterate, there's kind of 2 pieces. One is the JAK-driven inflammation, but there's also an antigenic stimulation, which fits perfectly with inhibiting the T cell receptor. And the easiest way to think about this is 2138 has the efficacy of a cyclosporine by hitting the T cell receptor with the efficacy of a JAK3, which is a highly selective way to inhibit the JAK mu. And so basically, we get a 3:1 here in terms of the indication set, and there are opportunities for -- certainly opportunities for orphan designation within that category.

Our next question comes from Roger Song with Jefferies.

[Indiscernible] Helpful PK/PD data today. I have 2 from us. So this is Nabil on for Roger. One on the translation. So on the biomarker, I was thinking if you could help us better understand the predictive value of PARP suppression in magnitude and durability. And if you feel this is equally informative across asthma and atopic derm? Or do you also look at other biomarkers in those indications? And then a follow-up.

Hugh. Do you want to go first?

Sure. Yes. So the way we think about this is we have 2 sides of the molecule. We want to make sure both sides are equally active and contributing to the potential efficacy downstream. So by doing an assay where we have this target engagement, it really shows the value of the molecule. We had 500, even up to 1,000x higher concentration than what you would expect in disease with TSLP and IL-4 at the concentrations we used. And so if we can inhibit 100% of these targets that are added into this natural milieu of cytokines and cells and chemokines and the like, if we can inhibit it at these concentrations, with the doses that we used, then we're going to be able to show complete impact of both the 240 and the 480-milligram dose, where we're seeing 100% inhibition with TSLP out to 20 weeks.

It really shows the potency of the TSLP arm, as mentioned through the structural interface with TSLP and not releasing. On the IL-4R side, same thing. IL-4 is 10x more potent than IL-13 in driving downstream chemokine secretion in PBMCs. So if we can inhibit IL-4 at 2 nanogram per ml, which is 1,000x higher than normal and even greatly higher than AD or asthma subjects, then we're going to be able to have a molecule that's going to be able to take these targets and this pathway down to homeostasis. And so it will translate, but there's not a direct mechanism showing that if you inhibit TSLP generated TARC that you will be clinically effective. But clearly, the molecule is able to shut these pathways down completely for the complete dosing that we did.

And so it's going to translate to both asthma and AD. And in fact, I'm not sure why we don't use a loading dose in asthma to have an even greater earlier effect in patients. So at the end of the day, this will translate well not only to AD and severe asthma where -- but other indications as well that follow on behind that.

And then would you be sharing any updated -- any additional biomarker data in the later months?

So for the healthy volunteer study, we don't have that. But Jesse, do you want to speak to the Ib?

Yes. Thanks, Hugh. So what we're going to be doing is we're going to be looking at endogenous levels of all of these biomarkers in both the asthma study as well as the AD study. And we think we're going to be able to have a nice understanding of the exposure response as you mentioned over the time course of the treatment as well as off therapy. So if you recall, from the AD study, for example, we're going to be following subjects for up to 4 months after the last dose. So I think this gives us a really good opportunity to understand the duration of response and the ability to suppress these PD biomarkers for a sustained period of time.

Got it. And then congrats on selecting your lead indication for your ITK molecule. I was wondering if you could share any more updates on the ITK selective program.

It's all on track. ITK selective is due for IND in the second half of this year. We're very excited about that. And with the onboarding of that into the clinic, we'll have 4 clinical stage assets.

Our next question comes from Adam Vogel with Craig-Hallum.

Great to see a clean and support PK/PD profile emerge here. Just a couple of questions from me. Maybe first, beyond the biologic rationale and to as much as you can disclose, have there been any early insights from the ongoing Phase Ib studies that increase your confidence in clinical translation in asthma over, say, atopic derm? And then I have a quick follow-up from that.

Yes. I mean those are ongoing studies. We can't really talk about those, but we're excited about both. I mean the -- we obviously had a lot of this PK/PD data, particularly the 720 and 240 for a little while. We were just waiting for the 480. -- can't get much better than 100% suppression. And these are in isolated systems. And I think the whole promise of bispecifics is a 1 plus 1 equals 3 approach.

I mean I think we saw that with the Pfizer disclosure. So us, it's tremendously exciting. There's a reason we're looking at 8 weeks as a primary top line in the AD study. Traditionally, biologics will look much later at week 16 or so. We're looking at week 8 because we truly believe we're going to see a rapid response there based on the totality of the data that we've observed. And then on the asthma front, we're expecting to see robust effects on FeNO and FEV1. And I think for -- there's always a little doubt about TSLP and AD.

But remember, like we have a whole slew of indications on the respiratory side vis-a-vis everything that Dupi and tee is in that we can go after and kind of claim first-line therapy. And atopic dermatitis for us is an extra bonus, and there's great biologic rationale for TSLP there. So super excited about the Ibs. And I think enrollment is going well. So that augurs well. It means investigators are excited.

Great. And then maybe in the context of LT being a white space of high unmet need, how should investors think about 2138 versus the next-gen ITK selective development strategies?

Yes. I think it's a great question. I mean the next-gen ITK, we think, is more applicable to the traditional mass market indications like AD as an oral with very clean target product profile, kind of no JAK overhang, if you will, although that hasn't really played out in the market. Docs are pretty comfortable with that.

The mechanistic match here, it's important, right? We hit the T cell receptor with ITK, but then we mop things up with the JAK3. And the literature is pretty clear about going after the cytotoxic CD8 lymphocytes and going after an interface dermatitis.

This is a much better hammer to hit this disease pretty hard. This is a devastating disease. I mean if you see -- just look at the pictures, I mean, you can imagine these patients like if you wake up and you have mucosal involvement all around your mouth, pain, the effect on eating and this lasts for quite a long time. And then you layer in the cutaneous aspect and of course, the hair loss piece. So it's -- I think this indication is deserving more of a hammer approach rather than a more elegant approach to hitting ITK.

Our next question comes from Michael King with Rodman & Renshaw.

This is Jillian Rice from the line for Michael King. Just a follow-up on the TARP discussion for 052. The ex vivo cohort data show TSLP stimulated TARC fully suppressed out to about week 20, whereas IL-4 stimulated TARC is maintain only to roughly week 12 at 80 milligrams. Based on what you know from the assay design and your prior TSLP and IL-4 IL-13 work, can you share your working hypothesis for why TSLP inhibition appears more durable than IL-4, IL-13 in this setting and whether you think that difference will meaningfully impact clinical efficacy or your ability to dose every 3 months?

Yes, I'll start and then hand it to Hugh. No, we don't. First of all, this is 100% inhibition for 12 weeks over the course of the dosing interval. And actually, as we noted in our prepared comments, we didn't assay at week 14, but our simulations 100% support continued 100% inhibition. So somewhere between week 14 and week 16, it weans off.

But remember, these are isolated systems. And I mentioned this previously, we -- I think anybody that is developing bispecifics or combo therapy is expecting not just an additive approach, but a synergistic approach. So I think we easily get to 3 months, if not longer. And these data certainly support that. Hugh?

Yes. I would say on the TSLP, as I mentioned in my comments, the potency of the TSLP binding sites on 052 are just off the charts due to that complete developing and binding to TSLP and not releasing with that low dissociation. So I think that, that effect is just carrying through to the 20 weeks and maybe longer. On IL-4R, we already have drug bound to cells in that whole blood sample. And so at the end of the day, adding more IL-4 to be able to inhibit 100% for 12 weeks, while it's already bound to receptor is pretty amazing, whereas the TSLP components of the bispecific, even if it's bound to receptor can still bind additional TSLP because we have the 4 active binding sites that can be achieved simultaneously on the molecule. So I think it's a bit of high potency and also a bit of the dynamic of the assay itself.

Our next question comes from Seamus Fernandez with Guggenheim Securities.

So just a first one, what are you guys -- we know [indiscernible] had at least a successful data set in asthma. -- but really more of a monthly profile asset there. Interested to just know what you'll be looking for in that data set and then what you're hoping to see from a differentiation perspective. Obviously, the sort of failed effort on their part in AD sort of sets up a different opportunity for 052.

And then the second question is just what, if any, challenges were there to selecting Lichen Planus over alopecia? And what new learnings did you guys gain from the start of the year to kind of really move as aggressively as you are into LP and its subtypes.

I know, Neil, you've explained quite a bit about the sort of T cell dynamic, but it seems like there was a bit of a push and pull that you needed to kind of work your way through on the decision of alopecia versus LP. And it seems like, obviously, LP rose to the top. But wondering if there are some new learnings outside of just the competitive landscape in alopecia that really drove you to LP.

Sure. Let me take the question about [indiscernible] first. As I think everybody has seen, there wasn't much disclosed there, unfortunately. But I think we've always maintained that to maximize efficacy, it's logically better to hit 413 and TSLP rather than just going after 2 inflammatory mediators and potentially leaving IL-4 unsuppressed. I think the things we don't know about that program are what is the potency of that IL-13, what's the potency of that TSLP and that construct? We don't even really know the dosing interval there either.

Certainly, so far in the bispecific space, I think we're kind of class-leading in terms of the dosing interval potential here, which is important. But more importantly is the ability to max out the efficacy by hitting 3 inflammatory mediators, which I think we got a glimpse of that with the Pfizer data. It's hard to understand the totality of their data with the disclosure that was out there, basically alluding to a signal with EASI-75 and IGA, yet mean change from baseline, I guess, didn't hit the mark. So we really just don't know a lot there. But we're happy with our decision to go after 3 inflammatory mediators rather than 2. And just remember, we have the ability with this molecule to go after a breadth of indications across the respiratory landscape, anything that Dupi in and also AD.

So AD is just kind of one leg of the stool, if you will. So hopefully, that answers that question. On the LP front, you're right, like we took probably more time than I'd like to go through this, but it's important because these -- all these areas, everything in I&I is pretty competitive, and we're seeing more people jump into the alopecia space.

I like going after white space opportunities. We produced phenomenal data in Angela Christiano's lab with our mechanism, which is a tribute to hitting ITK at the T cell receptor level and hitting cytotoxic CD8 lymphocytes -- and also mopping up JAK3, very, very strong mechanism.

So then it just boils down to what do we want to lead with. We will certainly cycle back to alopecia at some stage, but I also want to be able to just own a category and own a category that I know very well is a strong mechanistic fit and also has kind of 3 shots on goal within the same indication. So that's what really drove that decision. It wasn't easy. There's probably -- if you just look at what [indiscernible], which is our closest comp is studying, they've got like 20 studies ongoing. So there's a lot to choose from. And if we were a bigger company, I'd put up 5 indications.

And would part of the sort of evolution be this basket study approach that you're taking? Or was that kind of planned all along?

I'm sorry, I missed that last part.

I think you -- was the basket study approach kind of planned all along? Or is that kind of a new kind of evolution to the strategy for LP?

It was on the list. We've seen -- as an example, there's been an IL-17 basket study out there. I think it's smart. It allows us to basically do a little dose ranging within the different categories. So what we would envision is starting a study that includes mucosal, which includes the most severe forms, erosive in that category, along with cutaneous and then look at 2 doses, 10 milligrams BID, 20 BID, so we double the dose. And then we look at how that does. And then we can basically, in an adaptive way, pick a higher dose, move forward with that and then get into like a IIb design that would be -- because there's orphan potential, I think be very seamless into a Phase III. So it's very capital efficient for us and answers a lot of questions in a very quick amount of time.

Our next question comes from Martin Fan with Wedbush Securities.

I wanted to follow up with the last question on the Lichen Planus trial. So I think you mentioned 10 to 20 milligrams BID for Lichen Planus. Any reason not to go higher with the dosing given what you've seen with the atopic dermatitis trial? And then to follow up on that, curious about how -- number one, how large do we think a Phase I and Phase II program might be and whether or not we might have any estimate on timing for conducting those trials, how long this might take to go through?

Yes. So just to clarify, so we're starting the IIb in that in the back part of this year. So second half. And obviously, we need to start it before we guide to a completion. But I would say that back part of 27 is a good marker to keep in mind. We think this is going to enroll pretty quickly. In terms of the dosing, this molecule is so potent. We can dose up to 40 BID according to the MAD, but the 10 milligrams BID showed really strong results in AD across both clinical and pharmacodynamic measures. So we just don't think we need to press dose that much higher. And we are doubling the dose. So 10 to 20, I think, keeps you in that window of not kind of begging for problems on the safety side, but driving incremental efficacy. So -- and that was informed through a pretty extensive analysis of all the PD biomarkers looking at kind of effect on natural killer cells and kind of everything in between. We're doing ILC2 work. And so we've got a lot of data to support all that. To your point, can we go higher? Yes, I don't think we need to given this mechanism in LP. We think that 20 milligrams will give us that dynamic range, double the dose.

Great. And then in terms of estimates of how long it might take to run a Phase III program, I guess, we'll see how long it takes to first do the recruitment for the Phase II. Is that right?

Yes. We think it's going to be pretty quick. I mean there's -- when we went to the AD, it was very evident in talking to a handful of KOLs in this space that there's a lot of pent-up demand, particularly on the mucosal side in addition to the cutaneous. And look, LPP, I've seen patients with LPP for years when I was practicing. And I would say that the prevalence is a lot higher than people imagine. These patients have nothing. I mean there's just nothing that they can turn to. And stopping -- putting out the fires is step #1 and then rehealing the mucosa and also growing hair is kind of step #2.

Our next question comes from Raghuram Selvaraju with H.C. Wainwright.

Congratulations on this exciting data with 052 and the plans on moving forward with 2138. With respect to 052, I was just wondering if you could comment a little bit on where in the overall indication panoply you expect the extended dosing interval to be the most significant competitive advantage? And if you could also comment on how you see the relationship between 052 development and bosakitug development evolving going forward? And I think previously, you have commented on the possibility of effectively regarding bosakitug as kind of feeder club as it were for 052. But I was just wondering kind of when we might expect bosakitug clinical development activities to ultimately wind down or if you do see potential applicability for bosakitug as a stand-alone asset going forward? And then with respect to 2138, I know there's been some questions around this basket trial approach in Phase IIb.

How do you see that potentially feeding into a registrational program? Do you anticipate that a registrational program would be sort of pan-LP in focus or that you would anticipate effectively moving forward with 2138 in specific subpopulations within LP for registration in a more sequential manner?

Yes. Yes, all good questions. So maybe on the first one, it's really -- these are evolving markets, right? I think the market, in my opinion, over-indexes on extended dosing intervals like to us, it's always been about trying to max out the efficacy first, particularly in diseases like AD, where you're trying to treat flares. That's why we're trying to look at an early endpoint in the Ib study at 8 weeks. We think a strong result there would augur well. I think it just depends how the landscape evolves. I don't -- as a former practitioner, I think anything more than quarterly, quite frankly, just doesn't make a lot of sense in diseases that wax and wane. And we've seen instances where longer dosing intervals than that in certain diseases might be problematic, right?

We saw GSK get a CRL with XtendZA and CRS with NP and the FDA flagged issues of what happens if the treatment effect wanes after up through 6 months, right? So I think the most important thing for all of us is to be thinking about how we max out efficacy and then the dosing interval question is on a case-by-case basis. And it is very indication driven, right? Like psoriasis is a much different market than AD, much different market than asthma. So it remains to be seen. But I think if you develop a drug that at the end of the day, docs and patients want the thing to work, and they want it to be safe.

And so that's what we tend to over-index on. Ong, look, we've got to see what the data shows, right? We're excited about it. We feel like the trial is going very well. We've gotten good feedback on it. There is a place just like there might be a place for mechanisms like Nektar or OX40 for TSLP Fab. -- TSLP is exceedingly safe. You can envision background therapy of that, particularly in a disease that skews young. And AD is always, always about polypharmacy and rotating therapies. That being said, the bispecific continues to move along as we've seen, there's a thought that, that might cannibalize things.

We're super excited about it. We'll have to make capital allocation decisions, maybe TSLP Pumping you out-license, right, to a bigger player that can maximize that across indications. we'll see. We'll see when we get the data. That data will read out, by the way, after the bispecific IB. So it will be interesting to see how that all comps. On the LP front, it's a very good question. I will -- I'll bounce that question to later. I could see constructs where I go after a Lichen Planus. It's the same exact pathophysiology histologic kind of process. So I can make an argument to get a global label there. A little too early to comment on that. If I get the opportunity to click off a couple of those because they're more orphan as very quickly, I'll take it and get it on the market. So that remains to be seen. But the beauty of the strategy that we've come up with is, again, it's a 3for1, and I have good -- in one construct, I have good short-term visibility on getting on the market.

Quickly. Our next question comes from Alex Thompson with Stifel.

Congrats again on the data. This is Charles on for Alex. Maybe just one on 052. I was curious as to whether suppression of STAT6 signaling was measured? And if so, how long did that last? And if not, is that a biomarker that will be measured in the Phase Ib studies?

Thanks, Charles. Appreciate the comments. So we -- yes, we'll certainly be measuring a spectrum of biomarkers in the Ib. We don't have data for that for the healthy volunteers. As we said before, healthy volunteer data has a lot of limitations in terms of just variability and they're healthy, right? So I think the construct that we put out today is kind of unambiguous. It's super high levels of both stimulation on TSLP and IL-4R. And I'm not sure how we can get much better than 100% inhibition.

I'm showing no further questions in queue at this time. I'd like to turn the call back to Neil Walker for closing remarks.

Thanks, everybody, for joining the call. We're tremendously excited. We feel like we've significantly derisked the 052 program, and we have great visibility on 2138 in terms of closer to -- getting closer to Phase III and thinking about how to get a great molecule like 2138 in the hands of patients. It took a little while to get there on the indication, but really like the white space opportunity. And we're a clinical stage company with 3 active clinical programs with a fourth to onboard at the end of the year. Really appreciate your time. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day and thank you for standing by. Welcome to the Aclaris ATI-052 Clinical Trial Update Conference Call. [Operator Instructions]

Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Will Roberts, Head of Communications. Please go ahead.

Thank you, Olivia, and good morning, everyone, and welcome to the Aclaris Therapeutics conference call to review the positive interim results from our ATI-052 Phase Ia single and multiple ascending dose trial. The press release on these clinical results was issued this morning and can be found in the Press Releases sub-page of the Investor Relations section of our corporate website, aclaristx.com.

Please note that we've provided the slides as part of this discussion, and they're now available in the webcast window as a downloadable PDF document. We'll reference the slide numbers throughout. As mentioned, the Q&A session will follow the prepared remarks.

Before we begin, I'd like to remind you that today's webcast contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. For more information on such risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, which are available from the SEC or on our corporate website, www.aclaristx.com.

Any forward-looking statements represent our views as of today, January 6, 2026. We also note that today's interim results are as of December 31, 2025, and the trial is ongoing.

Joining me on the call today are our Chief Executive Officer, Neal Walker; Hugh Davis, our President and COO; and Jesse Hall, our Chief Medical Officer. Roland Kolbeck, our Chief Scientific Officer; and Kevin Balthaser, our Chief Financial Officer, are also available for questions following the prepared comments.

With that, I'll turn the call over to Neal.

Thank you, Will. Good morning, everyone, and thanks for joining us on our call this morning. We are delighted to share the positive interim results for our lead bispecific antibody, ATI-052, which effectively binds both TSLP and IL-4R to block signaling of TSLP, IL-4 and IL-13. At Aclaris, our goal is to develop best-in-class therapies for people living with I&I disorders. There are options are limited at best and the need to improve tolerability and raise the efficacy ceiling is significant.

Today's results take us one step closer to achieving this. As you'll hear, these results highlight ATI-052's strong safety, tolerability and PKPD profile, reinforce its potential best-in-class potency advantage to drive potential improvements in efficacy and provide support for the potential of an extended dosing schedule.

ATI-052 is unique in that it provides the potential for improved clinical outcomes by inhibiting TSLP upstream and immune cells downstream in the Th2 cascade via IL-4R. The biology does not overlap, rather, it's additive and as such, has the potential to provide very strong efficacy in a variety of indications with infrequent dosing.

The next several quarters are anticipated to be an exciting time for Aclaris and for ATI-052. We expect to initiate our first proof-of-concept trial in atopic dermatitis imminently, followed shortly by the start of our second POC trial in asthma this quarter. We expect both to read out in the back half of this year.

Importantly, these results have enabled decisions to expedite development of the compound and planning is underway to initiate a Phase IIb trial in the second half of 2026 that would plan to assess multiple doses and a longer dosing schedule of ATI-052 that is supported by these Phase Ia interim results.

Hugh Davis and Jesse Hall will walk you through an overview of the molecule and the trial results.

I'll be back at the end to conclude the call. Hugh?

A quick overview of the compound, its scientific rationale and why it represents such an exciting opportunity in a variety of indications. As Neal mentioned, ATI-052 inhibits TSLP upstream and immune cells downstream in the Th2 cascade by simultaneously binding both TSLP and IL-4 effectively and with high affinity.

Antagonism of IL-4R blocks signaling of both IL-4 and IL-13 activity. We believe that ATI-052 has the potential to show superior activity in dermatological and respiratory I&I disorders compared to approved therapies and could also be efficacious in a variety of inflammatory immune diseases involving Th1, Th2 and Th17 inflammation.

Referring now to the slide deck that Will mentioned, on Slide 3, you can see a diagrammatic representation of the molecule. On the right side, you'll see that ATI-052 has the same anti-TSLP ligand binding regions as our anti-TSLP monoclonal antibody, bosakitug. It retains the potential class-leading very slow dissociation kinetics, long resonance time and high potency advantages over tezepelumab and other comparator clinical stage assets.

On the left, you'll see that it has 2 single-chain variable fragments that have high affinity to IL-4 receptor. Importantly, we added 2 Fc mutations: one, a YTE mutation to bind FcRn more tightly and as such, extend the half-life and the other, an AQQ mutation to reduce off-target binding and potential toxicity. We believe the results we are discussing today show the positive impact of these mutations.

We've spoken at length about the potency advantage of ATI-052 over other compounds on the market and in development, most recently at our October R&D Day. Potency is the concentration needed to drive an effect. One way potency is driven is by maintaining high resonance time on TSLP. Since TSLP is an alarming with high potency itself, it requires a therapeutic that also has high potency in order to neutralize its pathologic effects.

As you can see on Slide 4, ATI-052 has very slow dissociation kinetics, significantly better than comparators, which leads to a residence time on TSLP of over 400 hours, which is at least 30 and up to 116x longer than comparator antibodies. For example, compare the 416-hour residence time of ATI-052 to tezepelumab's 14.3 hours. This comparison shows that ATI-052 binds to TSLP target 30x longer than tezepelumab, thereby providing the potential for enhanced potency and efficacy compared to teze.

On Slides 5 and 6, you will also see that ATI-052 can effectively bind 2 molecules of TSLP and 2 molecules of IL-4R concurrently. This means that all 4 binding sites are acting independently. Importantly, the effective binding of ATI-052 to one target does not alter its ability to bind to the other target. So not only do all 4 binding sites act independently, but they also maintain their same high affinity to their target. Functionally, all of this leads to a significant potency advantage.

As shown on Slide 7, peripheral blood mononuclear cells from healthy donors produce CCL17, also known as TARC, when stimulated with both TSLP and IL-4. ATI-052 exhibits 4x greater potency in inhibiting CCL17 production than the combination of dupilumab and tezepelumab combined. The bispecific may be showing a synergistic effect that is more potent than the combination of the 2 antibodies.

Slide 8 shows the functional potency of ATI-052, comparing to the lead compounds in modulating CCL17 by inhibiting TSLP, IL-4, IL-13, combination of IL-4 and IL-13 and then all 3 TSLP, IL-4 and IL-13. ATI-052 exhibits the broadest activity among those approved biologics, again, confirming its potency advantage.

So to summarize these key attributes, ATI-052 effectively and simultaneously binds TSLP and IL-4 receptor, which is borne out by the clinical data I'll show momentarily. It is significantly more potent than comparator antibodies and its antagonism of IL-4 receptor blocks signaling of both IL-4 and IL-13. This is truly a unique compound.

With that, I'll turn the call over to Jesse.

Thanks, Hugh, and good morning, everyone. I'm glad to be here to discuss these exciting SAD and MAD results. We had 4 goals in mind as we designed this trial, as you see on Slide 11. First, to confirm a favorable safety and tolerability profile of ATI-052 in a healthy volunteer setting. second, to confirm a pharmacokinetic or PK profile to support at least 1 month dosing. Third, to understand its pharmacodynamic response and the ability of the drug to achieve complete target occupancy.

And finally, to clinically validate the compound's ability to efficiently inhibit both TSLP and IL-4R. I'm happy to say that we achieved or exceeded each of these goals. On Slide 12, you will see a schema of the trial design. The randomized blinded placebo-controlled Phase Ia portion of the first-in-human study was designed to evaluate the safety, tolerability, PK and PD of subcutaneously administered ATI-052 in healthy adults receiving single ascending doses and multiple ascending doses.

In the SAD portion, 4 cohorts of 8 healthy volunteers each were randomized 3:1 to receive a single dose of ATI-052 of 30, 120, 360 or 720 milligrams or placebo. In the MAD portion, 2 cohorts of 8 healthy volunteers each were randomized 3:1 to receive 5 doses of either 240 or 480 milligrams of ATI-052 or placebo administered every 7 days.

On Slide 13, we describe the baseline characteristics in the trial, which were generally balanced across cohorts with demographics and characteristics that are typical of a healthy volunteer population. Then on Slide 15 and 16, we describe the favorable safety and tolerability profile of the compound in this trial. And I'll preface this by saying that by all accounts and measures, we were very pleased with these outcomes. ATI-052 has shown to be well tolerated with a strong safety profile across all SAD and MAD cohorts with doses up to 720 milligrams.

Looking at some important outcome measures, we saw a low rate of adverse events overall. And when they occurred, they were predominantly grade 1. The most common AE was injection site redness, which was self-resolving and generally mild or grade 1. We saw no serious adverse events across any of the clinical cohorts and no adverse events that led to study discontinuation. We observed no Grade 3 drug-related AEs.We followed the SAD cohorts out to day 113 and will follow the MAD out to day 141. Importantly, we have observed no conjunctivitis cases in any cohort to date.

To conclude, ATI-052 was well tolerated across the SAD and MAD cohorts with a strong safety profile, including single ascending doses of up to 720 milligrams. And again, we know that conjunctivitis has been a concern for some who are watching the space. We have not seen it in any of our cohorts to date.

I'll turn this back over to Hugh for his assessment of the PK/PD results. Hugh?

Thanks, Jesse. The next set of slides describe the potential best-in-class PK profile observed in this trial. On Slide 18 and 19, the concentration time profile of the 30, 120, 360 and 720 milligram SAD cohorts and the 240 and 480-milligram MAD cohorts are shown and summarized. The dose range of 120 to 720 milligrams showed dose proportional increases in PK for both Cmax and AUC.

Linear PK was observed for a prolonged period above the threshold concentration for target-mediated drug disposition known as TMDD, which in the case of the IL-4R receptor is approximately 1 to 2 microgram per mL. As the concentration in blood approaches the TMDD threshold, enhanced clearance will occur. Duration of drug concentration above the TMBD threshold was observed for 6 to 8 weeks following a single dose and at least 8 weeks after the lower MAD cohort of 240 milligrams.

The higher MAD cohort dose of 480 milligrams shows a higher Cmax than the 240-milligram cohort and as such, would be expected to exhibit a longer duration above the TMBD threshold concentration. This was a very well-behaved molecule from a pharmacokinetic perspective in this trial. These PK results provided an effective half-life of at least 26 days, roughly 2.5x that of dupilumab. And considering the strong dose proportional PK profile, along with the sustained PD effect I'll describe momentarily, ATI-052 has the potential of up to 3-month maintenance dosing interval. We plan to explore this potential for extended dosing in the Phase II program, which is already in planning for later this year.

Moving to the compelling PD results, starting on Slide 21. We converted the typical buffer-based PBMC CCL17 TARC assay that I previously described to a human whole blood assay. This assay better reflects the human biologic environment since it now includes a milieu of cells, cytokines, chemokines and the like in whole blood, where we also have endogenous levels of TSLP, IL-4, IL-13 and CCL17.

We then stimulated the whole blood sample containing 052 with either TSLP or IL-4 and determine the percent of inhibition of CCL17 secretion by the drug. The results of these analyses are shown on Slide 22. The collection points for the PD analysis were on days 1, 4, 8, 22, 43 and 113. First, with IL-4 stimulated CCL17 at the top of the slide, even the 30-milligram cohort showed strong inhibition of IL-4 stimulation of CCL17 production. As mentioned, 30 milligrams was intended to be a sub-pharmacologic dose and yet the level of inhibition seen was quite strong even at approximately 100 nanogram per mL of ATI-052 that's present on day 4.

As the dose increases to 360 milligram, we saw strong inhibition of IL-4 stimulated CCL17 out to at least day 43, including complete inhibition that was observed out for at least 3 weeks. When we assess inhibition of TSLP stimulated CCL17 in the bottom panel of the slide, for those same cohorts, we saw an even more impressive level of inhibition. Even in that 30-milligram cohort, we saw greater than 50% inhibition. And in the 360-milligram cohort, we observed complete or near complete inhibition out to day 43 and continued partial inhibition beyond that. These data are more compelling given the high concentrations of the stimulants that were used in these assays.

ATI-052 was shown to bind, occupy and neutralize the effect of these stimulants on both sides of the molecule effectively with 100% inhibition of both targets at pharmacologically relevant doses for an extended period of time beyond even the PK profile. So we saw a sustained effect beyond what the concentration would have predicted.

As mentioned, the combination of the effective PK duration and the sustained and strong PD results support the potential for up to every 3-month dosing. These results allow us to help clinically validate the binding and potency attributes I described earlier. They also provide clinical evidence supporting ATI-052 as a molecule with a particularly strong safety and tolerability profile and a robust PK and PD package, all of which support the potential for an extended dosing schedule of up to every 3 months with the potential for best-in-class activity.

I'll now turn the presentation back to Neal.

Thank you, Hugh and Jesse. These PK and PD results provide a potential surrogate for clinical effect. Relative to the competitor data that has preceded these results, we observed complete and sustained inhibition of TARC at very low doses. The results showed inhibition of both TSLP and IL-4R with both arms effectively and simultaneously with this bispecific. Beyond that, the safety and tolerability profile is exactly what we want to see.

We have made the decision to expedite the clinical program for ATI-052. First, we expect to initiate the Phase Ib POC trial in atopic dermatitis imminently. That trial will be followed in short order by a second Phase Ib trial in asthma, which we now expect to start later this quarter. We plan to provide more information on each of these as they initiate. As Jesse and Hugh alluded to, we are planning a Phase II trial in atopic dermatitis to initiate in the second half of this year, in which we'll plan to assess the extended maintenance dosing schedule supported by these results.

As noted by others, ATI-052 could be efficacious in a variety of inflammatory immune diseases involving Th1, Th2 and Th17 inflammation. So the potential is vast. This is expected to be an exciting year for Aclaris with multiple milestones and data readouts expected from across our pipeline. Today's readout is an important first data point for the year. We're building a next-generation biotech company with a broad and deep pipeline and a world-class preclinical and discovery team in an effort to continually deliver innovative new compounds to the clinic.

Thanks for your time today. Let's open up the call to Q&A. So I'll remind you that we may be limited to what we can discuss beyond what we've disclosed.

Operator, are there any questions?

[Operator Instructions]

Our first question coming from the line of Biren Amin with Piper Sandler.

Maybe I could start off with -- on the PD data across both IL-4 and TSLP stimulated CCL17 assays, it seemed like the TSLP inhibition was a little bit more pronounced. In your view, what was driving that? I mean you clearly saw IL-4 inhibition as well, but it seemed like TSLP inhibition was slightly better?

Sure. So Hugh, do you want to address that, please?

So you're right, Biren. What we saw was the TSLP inhibition was definitely a little stronger. And I think this speaks to the way the molecule has been designed. It's meant to completely bind and inhibit with that long retention time and really take TSLP out of the equation at the top of the Th2 cascade. And I think that potency that we've seen with bosakitug has translated very well into the 052 molecule here. And then the IL-4, our binding sites were designed to have roughly the same affinity as dupilumab, and we were expecting that would be additive and in some cases, potentially synergistic. So your observation is accurate due to the potency of the TSLP side of the molecule, I believe.

Got it. And then maybe just a follow-up. I think you mentioned that the Phase II AD trial would potentially evaluate every 12-month dosing. But I wanted to ask on the Phase Ib, if you could tell us a little bit about the dose selection and the frequency of dose administration in both the Phase Ib trial for atopic dermatitis as well as for asthma and the endpoints that you're hoping to evaluate and I guess, the time course as well for both of those studies.

Yes. Just to clarify, we're anticipating up to 3 months, not 12 dosing. But Jesse, do you want to just comment on the Phase Ib study designs?

Yes, sure. Thanks, Hugh and Neal. So the plan will be to conduct 2 Phase Ib studies. The initial study will be in an atopic dermatitis study. We're going to be utilizing the same dose that was utilized in the high-dose MAD cohort, the 480 milligrams. We'll be dosing that over a 28-day interval. So the drug will be dosed a total of 5x over that 28-day interval. The primary endpoint for that clinical study will be at day 57. And from a design perspective, we want to make sure that we're studying the same dose from the healthy volunteer study into the AD patient population so that we have equivalent PK and PD comparisons.

To further elaborate our dosing selection in the subsequent Phase IIb clinical study. And then finally, we'll be utilizing the same dose in the asthma study that will be administered a single time with the primary endpoint at day 28. Does that address your question?

That's perfect.

And our next question coming from the line of Raghuram Selvaraju with H.C. Wainwright.

Congratulations on this data. I was wondering if you could comment on specifically the plan to explore 052 in asthma and how this fits into the overall clinical prioritization of indications for this asset, particularly in the context of what you previously had indicated regarding preference for dermatological indications versus indications within respiratory disease.

And also, if you could comment on what you see as potential advantages in either the asthma or atopic dermatitis indications from a competitive landscape and competitive positioning perspective. Also wanted to see if you could provide us with some additional color on what you anticipate to be the commercial implications of a once every 3-month dosing schedule, which was indicated in the press release as being a possibility for 052.

Yes. Thanks, Ram. So yes, clearly, we're interested actually in both dermatology and respiratory indications. And that's why we have 2 Ibs that will be kicking off very shortly here in both atopic dermatitis and asthma. And we think that the opportunity to expand into virtually all the similar indications that dupi is currently either approved in or being studied in is quite likely. I mean that's the big vision. And I think given the data that we showed here where we're getting complete inhibition at very low doses, this way exceeded our expectation, particularly for a healthy volunteer study.

So I'm really excited about the potential in both derm and respiratory. And I think atopic dermatitis is a very fast-growing market. We still have not maxed out the efficacy in that indication. And so I think it's a great time, particularly with those of us who have bispecifics. And now we're -- we show that the art of the possible there with an IL-4R TSLP. So we think that from a competitive positioning standpoint, we're well positioned to show potentially best-in-class efficacy, just extrapolating all the data we have from our TSLP MAD, all the in vitro data and then the data we just presented here today.

And then on the respiratory front, I think there's similar opportunity. Obviously, we're still hitting efficacy ceilings. That's why everybody is so interested in hitting multiple targets now. And I think the dosing interval, it's interesting. If you're talking about dosing intervals that involve Q2-week administration that then go to Q3 month or longer, I think that's a meaningful jump. I don't necessarily think that going from 2 to 3 months really matters or 1 to 3 months really matters all that much when -- if you're driving superior efficacy, right?

So we do think we can get out to 3 months based on all the data we showed. But if it was 2 or 3, so long as we're showing, again, complete inhibition of chemokines like TAR and we will be continuing our work on this study, generating additional biomarker data. So we're really excited about it. I mean I think if you go back and you look at this and just from a practical perspective and show the progression from 30 to 120 to 360, just beautiful dose response and not just complete inhibition, but sustained. Imagine what we're going to be showing with the MAD dosing.

And then can you just briefly comment on the immunogenicity profile of 052, particularly as this pertains to potential circulating neutralizing antibodies as well as the possibility of specific subcutaneous presentations of this asset, for example, in the context of non-needle visible subcutaneous delivery pen, like, for example, what is currently available in the case of dupilumab.

Yes. Thanks for that. All that work is in flight. We test all the samples in the study at the same time at the end of the MAD and SAD cohort. So we're using an in-study cut point using the baseline samples for the ADA. I think you can extrapolate from looking at our data so far, both on the PK and PD side that we're not really worried about that at all. We showed obviously nice -- really nice results in both PK and PD, and that would likely be reflected in those curves. So more to come on that. And in terms of just future development, certainly, we'll be looking at those sorts of things as we look at a to-be-marketed commercial presentation.

Our next question coming from the line of Roger Song with Jefferies.

Congrats for the early but very exciting data. Maybe a couple of questions related to the PD markers. So pretty clear, this is a very deep inhibition sustained. Can you just contextualize the assay you use for the ex vivo compared to other monoclonal antibody or the bispecifics in the similar context?

And then also, when I see those other competitive trials or the assay around 20%, 30% inhibition, any evidence to support the correlation of the level of the inhibition eventually can translate to the clinical results?

Yes. Why don't I hand that off to Roland to just talk about that assay compared to what others do. And I think the punchline is I think there's been pretty good data to support that this is why people use these biomarkers. When you look at the aggregate of them, they certainly are a guiding light to what one might expect in the clinic. And I think that's why we all try to incorporate that into our early decision-making. Roland?

Yes. Thanks, Neal. Great question. So CCL17 for our molecule is just a perfect biomarker because it's regulated by IL-4, IL-13 and TSLP. So we could use the same readout to really look at PD effects in our whole blood assay. And as you were pointing it out, I mean, the results are really outstanding. It's very complete and very robust inhibition. Now what others have done is, for example, also look at STAT6 phosphorylation as an alternative readout, which is triggered by IL-4 and IL-13 or you could also look at IL-4 receptor occupancy. But I would argue that readouts like CCL17 or TARC are really downstream of the TSLP cascade and the IL-4 receptor cascade. And it's a very well accepted and very robust biomarker. So we feel very good about our data.

Yes. And the way we did the assay looking at human whole blood, I think, is important because it more accurately reflects the kind of milieu in which we'll be operating. But yes, I mean, look, Roger, this was something where I was anticipating something a lot lower just as a signal. And again, just to highlight, we're seeing this at our lower doses. So I always like complete inhibition rather than partial.

Absolutely. A quick follow-up on the -- I understand this is the good assay for you. Have you tested any other PD markers beyond the POC? And then lastly, just on the clinical, you seems to want to accelerate the development path. Would you -- do you plan to start the Phase II without the Phase Ib data? Or you want to look at at least atopic dermatitis Phase Ib data before you will start the first Phase II?

Yes. Of course, the Ib will complete prior, but we're going to do all the spade work to get it going so that we can literally press the button this year on it. And we're pretty confident now given the totality of the data that we've seen. We are doing additional biomarker analysis. This was kind of the first cut and more to come on that as we evolve throughout the year.

Our next question coming from the line of Alex Thompson with Stifel.

This is Charles on for Alex. Congrats on the initial data. I think maybe a couple of questions from my side. Maybe first, is there anything you can say on the MAD portion that you're observing so far, either from a safety or PK/PD perspective? Does it seem consistent with what you've seen from the SAD side? And then I guess on AEs, I understand these are mostly ISRs, but anything else that was notable would be great.

Thanks, Charles. Yes. No, there was really nothing else notable. It was very clean. Of course, like everybody else, we look for things like conjunctivitis, infections, things like that. And so far, so good. We haven't seen anything related to that. And the ISR profile is actually quite limited and quite mild and even through the MAD portion. And you'll see that in the slides that we aren't seeing anything different in the MAD. In fact, it's just the curves are getting better. You can see that in the PK profile. We're out to 480 now, and we're going to continue to follow that data out through day 143 or so.

But yes, still -- that's why we're so excited about the SAD data because, again, just showing the PK and PD in particular, up through 360 and you're seeing the numbers that you're seeing with complete inhibition. And usually, the general rule is with these biologics that as you go up in dose, it's pretty predictable. And so we expect to see even better at 720 on the SAD and then even better on the 240 MAD and 480 MAD.

Awesome. That makes sense. And maybe just a quick follow-up. Have you commented at all on how you're thinking about like trial site location for your Phase II study in atopic dermatitis potentially?

We have not. We will going forward. And certainly, it behooves one to do global studies there. I will say that some have talked about placebo effects that are actually greater in the U.S. versus elsewhere in the world. There's really no basis for that. It doesn't actually make sense either if you think about it. The key thing you have to do in atopic dermatitis studies is actually screening patients with pictures to make sure they not only have disease, but also adequate disease. That's the single best way to exert control over the study to make sure you're getting the right patients in.

Our next question coming from the line of Prakhar Agrawal with Cantor Fitzgerald.

Congratulations on this update. Maybe just quickly on the injection reactions. I know it is only injection redness, but maybe if you can talk about the ISRs in general, what you're seeing? And then on the Phase I atopic dermatitis trial, maybe if you can remind us about the rationale for testing weekly doses in the Phase I, given the long half-life you are seeing with the bispecific?

Okay. I'll hand the Phase Ib to Jesse, but the ISRs, we really just didn't see much. The majority of it was mild, just self-resolving. If you look at across the cohorts, there wasn't any sort of increased incidence as dose went up. In fact, when you look at the 480 MAD, 2 placebo patients had some mild redness. So it was really unremarkable. So -- which I was really happy to see because as we all know that, that can be problematic down the road and I think gives us a lot of confidence in the program moving forward.

And on the Ib, my initial comment would be like we're trying to show in a proof-of-concept study in AD in a very short study, kind of a max effect to help inform decisions as we move to the Phase II. And so that's why we're going to dose aggressively there. And Jesse, do you want to maybe comment as well?

Yes. Thanks, Neal. So with regards to the design of the Phase Ib, as mentioned, we'll be dosing a total of 5x over that 28-day interval. So very similar to the design of the MAD cohort, the 480 MAD cohort. As Neal mentioned, one of the rationales is to make sure that we get adequate drug concentrations over that short 28-day interval. And then the other component is we really feel strongly that we want to match the dose that's utilized in the MAD Cohort 2 into the patient population with atopic dermatitis because that really aids our ability to design and develop POPPK models for our subsequent doses in the Phase IIb study. So that's the rationale is getting adequate drug concentrations and then secondarily, to continue to build out our robust POPPK modeling.

[Operator Instructions]

Our next question coming from the line of Thomas Smith with Leerink.

This is Pujan Patel on for Tom Smith. So a couple from our end. With the encouraging Phase Ia data so far that we saw with 52 on hand, how do you guys plan to prioritize internal resources between both and 52 programs moving forward? And then regarding the Phase Ib proof-of-concept design for AD, can you provide a little more detail about your patient enrollment strategy? Is there like a target mix between biologic naive and biologic experienced patients that you have in mind?

Yes. Thanks for those questions. Could you repeat the first one, please?

Yes, sure. So with the encouraging data that we saw today, how do you plan to prioritize the internal resource like between both end, 2? Could we potentially see like a strategic shift in capital R&D focus? Or is that something we'll see more so after the Ib?

Yes. No, it's a good question. And so we think both have places in the market. Clearly, the AD study is going to read out in the second half of this year. We're excited about that. I think this bispecific data just provides further evidence of the potency of our compounds. And so we do think that a tezepelumab has a place in the treatment armamentarium of dermatologists who want a nice background therapy. We know there's polypharmacy out there with AD. And we already had kind of messaged earlier in the year that we won't be allocating our own capital against respiratory indications there. We'd be looking at partnerships.

I think given the bispecific data that we have now, obviously, we're going to be prioritizing this a lot more. And that's why we messaged today about getting into a Phase IIb in AD at a minimum. So I think that's where you'll see us putting our dollars. We're really excited about the bispecific. We think we've shown quite a compelling profile so far. And in all likelihood, we'll partner the tezepelumab. And I would say that folks talk about combo treatments a lot, and we definitely have a best-in-class potential on our tezepelumab with our residents' time and think that, that would be a unique opportunity to combine with a variety of other constructs. On the -- what was the second question because I was having trouble hearing you.

Sorry, no problem. I can repeat it. Let me get off -- can you hear me better now? I'm off speaker.

Yes. Perfect.

Yes, apologies for that. Yes. So the second question, for your -- the Phase Ib proof of concept in AD, can you provide more detail like on your patient enrollment strategy? Like is there going to be a target mix between biologic naive and biologic experience specifically dupi, obviously? Or anything on that would be great.

Jesse, do you want to comment on that?

Happy to, Neal. Yes. So as we look at that Phase IIb study moving forward with the bispecific, we're still in discussions internally the appropriate mix between bio-naive and bioexperience. And clearly, there's an advantage to both. The bioexperienced patient population, there's a number of patients out there that have failed dupi or just unsatisfied with the every 2-week dosing. So we do think that there's a good opportunity in that patient population. I would just say that we're still working from the mix perspective, what proportion of patients will be bio-naive and which will be bioexperienced in that Phase IIb.

And I'm showing no further questions in the queue at this time. I will now turn the call back over to Dr. Neal Walker for any closing remarks.

Thank you, everybody, for joining us on the call today. We're really excited about these results, not just because it helps validate 052 specifically, but it continues to build the storyline of what our multi-specific antibodies can do for patients. More to come on this throughout the year, and we'll see many of you at JPMorgan in a week. Thanks for your time today and speak again soon. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Good morning, everyone. Good to see everybody here. My name is Will Roberts. I'm the Head of Comms for Aclaris, and I'm thrilled to be the first person to welcome you to our 2025 R&D Day up here in New York. Thanks to everybody in the room. Really appreciate you showing up. It's early. We know it. The weather is not ideal, but it's good to see everybody here. And to the folks attending on the webcast, thank you guys as well. So the cool thing is that I get to take care of what I think is the most anticipated part of the presentation, the forward-looking statements.

So before we get going on the presentation, I want to remind everybody that today's presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These are our judgment as of today, October 14, 2025, and may involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the content of this presentation. If you want more information on our risks and uncertainties, please refer to our filings with the SEC. They're available on our website and they're available through the SEC as well.

We have a packed agenda. So we have 5 presentations from management. Dr. Neal Walker is going to take the intro, followed by Roland Kolbeck, our Chief Scientific Officer; then Joe Monahan, our -- actually the Founder of Confluence. Hugh Davis will be next, our President and Chief Operating Officer. And then Jesse Hall, our Chief Medical Officer, will close the day, at least our part of it. That will be followed by a couple of presentations from 2 key opinion leaders, one in Pulmonology, one in Dermatology, Dr. Zuzana Diamant and Dr. Michael Cameron.

Assuming time is in our favor, we're going to have a live Q&A at the end, probably 15 minutes or so. Importantly, for the folks listening on the webcast right now, the window in which you are watching the presentation will also allow you to ask a question and we'll get it and as we can filter through those questions and ask the ones that we can get out. So thanks for everybody for being here. Let's get this thing going. I'll turn it over to Neal.

Thank you, Will. So I'm Dr. Neal Walker. I'm the Chairman and CEO of Aclaris Therapeutics. And as Will mentioned, we have a pretty dense slide deck here today. So I'm going to walk through a lot of the things that I view as take-home points that we love to have you walk away with. So '26 is going to be a huge year for us. It's a very catalyst-rich year. We have 4 anticipated readouts across our portfolio in addition to getting a new IND into the queue with our next-gen ITK selective. So right now, we have 3 clinical programs, 3 Phase I and Phase II programs, but we'll have 4 in 2026, which I think makes us pretty unique.

The other thing that I think makes us pretty unique is that we are positioned to look at both the oral side of the house and the antibody space. And when we get to the target addressable markets, I'll talk more about that later. And the 2 assets I really want to highlight here today are our bispecific and ITK oral programs. We really view these as potential game changers in multiple indications actually. And why do I say that? So on the bispecific front, when you have the ability to target 2 different aspects of the same inflammatory pathway, the hope is that you can raise that efficacy ceiling. And that's important. Obviously, we aren't there just yet.

On the ITK oral side, if you can think of it in the context of having an oral small molecule that goes after the Th2 side of the house, same indications that a Dupi will go after massive markets. But importantly, and we're going to show you this later in a few of the slides, we have the ability to tune these molecules and pick up Th1 and Th17. And so if you think about that from a broad perspective, we are hitting some efficacy ceilings on a broad basis in many of these indications because of the heterogeneity. And you'll hear about that a lot today. So I think that is one, in general, if folks get super interested about a STAT6 oral program, we're going to show you a slide about how narrow that is when it's addressing its targets and show you the broad base that ITK is addressing. And we often hear this, well, it might be the next oral dupi.

I want to be the next oral JAK without the safety baggage. I mean that to me is a better bar. So we are -- if you look at all of our complete asset base, we're underpinned by state-of-the-art scientific platform and world-class people. I always like to refer to ourselves. We've got large pharma expertise and capability within a tiny biotech. And I think that's important in these kind of intensely competitive landscapes. And I would say that I think it goes without saying maybe that we have the ability to be resilient over time. We're really good at managing capital, and we have runway now through into the second half of 2028 and can execute across the entire portfolio.

So a little bit about our specific assets. So bosakitug, ATI-045 is our TSLP mAb. We did an extensive amount of testing on this asset against both teze and the relevant competitive landscape. And if you really look at our data across numerous assays showing the best-in-class potential, right now, that asset is in a Phase II double-blind placebo-controlled study in patients with moderate to severe AD. We anticipate that readout in the second half of 2026. It's enrolling nicely, and we're excited about that compound. ATI-052 also came along in the Biogen license transaction. And this is a bispecific targeting TSLP and IL-4R. We already initiated SAD MAD work on this. We're through the SAD portion. We're into the MAD portion. We're right on track to complete that at the end of this year, likely top lining that in the very early part of Q1.

The next step for that asset will be rolling into 2 Ib studies, one in atopic -- moderate to severe atopic dermatitis, the second in moderate to severe asthma. You'll get all 3 of those data sets in '26. So just through the first 2 assets, we have 4 readouts coming in 2026. The next compound is ATI-2138. We already reported out exceedingly positive data across efficacy and PD biomarkers showing importantly, 2 things in atopic dermatitis. We show that 2138 itself has quite unique pharmacology. And I think that's important. There's all different flavors of JAK inhibitors, and it just depends on what indication you're going after. And then on the ITK side of the house, we painted the path to why you should be believing in ITK as a target rather than relying on others in the space.

And of course, we have a vibrant early-stage portfolio, which will be, again, headlined by our next-gen ITK inhibitors that will come into focus in 2026. So obviously, we all know this. These are large, massive markets in I&I across all these indications. We're learning so much about the pathophysiology, how to target these areas better. But I think the one thing that is absolutely true is that we have definitely not maxed out on efficacy and safety. And just to use psoriasis as an analog, a lot of these spaces are at the very early tip of where psoriasis was 10, 15 years ago. Look at indications like AD. But I think the interesting thing for us is that we have the ability to go after both orals and biologics. And that's important because if you think about it in these intensely competitive markets, we have 2 different ways to address Th1, Th2 and Th17 if the market changes in any way over time.

And so I think that's important. Some have mentioned that. It's like how are you guys doing that on both sides? Well, we have the expertise. We've got ex-J&J or ex Pfizer guys. We got all the folks in-house to be able to prosecute those targets. So what are some of the opportunities? I think the obvious ones, if you look on the left-hand part of the slide, obviously, would be great to have faster onset. I was practicing as a dermatologist, one of the best things you could get is a patient who's super happy at week 2, not week 16. You like durable, consistent effects, deeper effects, optimizing symptom control. We all peg off these primary endpoints. But at the end of the day, it's how a patient feels. That's the question you ask them when they come in. And so for atopic dermatitis, you're going to say, hey, you itch in a lot, you're able to sleep at night. If it's a respiratory patient, you say, how is your breathing.

So I think we have to look at that as surrogates for how well a molecule is going to do out in the wild. And I think the other important point on the oral side, and I already alluded to this, and we're going to show a number of slides on this. When you look at our ITK franchise, you'll see this progression where we've kind of tuned it from 2138, which hits ITK/TXK/JAK3 to an ITK/TXK compound and also an ITK selective. And that's really important. When you're looking at picking up better response rates across the patient population, we all hear about it. Every company talks about, well, maybe I could have done a little bit better, but it's a heterogeneous patient population. We're able to attack this with our oral small molecules. And I think that's a great differentiator.

On the other side of the house with antibodies, same thing, faster onset, durable, deep. And when we talk about raising kind of that efficacy ceiling, we talk about being able to hit both aspects of that inflammatory pathway. If you can hit TSLP, if you can hit IL-4R, we know each of those work individually. So you ought to be able to drive a better efficacy response. We also hear a lot about dosing schedules. My personal opinion is we're getting a little bit long in the tooth on some of that narrative when we talk about 6 months and 12-month dosing. It's just -- that's not going to be broadly applicable. When you're seeing a patient and the patient is happy on a drug and the physician is happy with it, they're loath to switch that patient.

And I don't care how many pieces of market research people do. There's a practical reality and kind of a ceiling on how much dosing schedule and mucking around that matters. At the end of the day, it's about efficacy and safety. So where are we at today? Like I said, our basis is our world-class platform and our scientific heft. We have 4 potential best-in-class clinical stage assets heading into '26, highlighted again by our bispecific and our oral ITK inhibitor franchise. We have an incredibly rich calendar of data events that will be clicking through all of '26 into '27. So it's a good time to get ahead of that. And of course, we have almost 3 years of capital, and that's not giving effect to any other BD transactions, and we're really good at managing the burn.

So this just -- you'll see the slide kind of repeated throughout the day. These are the 2 pillars. We have the oral side of the house. We have the biologics side of the house. And you can see on the left-hand part of the slide, that ITK franchise includes 2138, which is germane to a number of indications. You take out the JAK3, you get rid of the black box there and you look at an ITK-TXK, which is relevant to a whole new set of indications and then an ITK selective, which is even a little bit narrow. And I would encourage people to really pay attention during Joe's section there. And when you're thinking about that relative to a STAT6 target and how narrow that is versus breadth on these kinase inhibitors.

On the biologics side, again, we have bosakitug as a lead into the bispecific. We'll likely get some of the bispecific data ahead of the moderate to severe atopic dermatitis readout with the TSLP mAb, and that's just because of lower patient numbers. And then we have -- we've already started on what that next-gen looks like, leveraging that best-in-class TSLP mAb with a number of yet to be disclosed next-gen bispecifics. So we're excited, and I'm at this point, going to hand it off to Roland Kolbeck, who's going to go through our discovery engine. Roland?

Thank you, Neal, and good morning, good afternoon, everybody. My name is Roland Kolbeck. I recently joined Aclaris as CSO. And so what I want to do in the next few minutes is tell you about our world-class discovery engine, which allows us, as Neil was pointing out, to develop really high-quality small and large molecules for [ANI]. So what is it that makes us stand out among the pack? I think it is our ability with small molecules to address parts of the Kinome, which have recently been considered inaccessible, and I'll talk about this in a moment a little bit more. With large molecules, we are really focusing on developing best-in-class multi-specific antibodies that address the unmet clinical need in [ANI] and raise the efficacy ceiling. We have a world-class track record in drug discovery and development, state-of-the-art R&D capabilities and facilities in St. Louis, Missouri and a very experienced team of drug developers for seamless execution all the way from target inception to proof-of-concept studies in the clinic.

So let me start with our small molecule capabilities. So kinases are obviously a very successful class of targets. There are about 80 kinase inhibitors approved, which in 2024 drove about 60 billion of sales. And again, that market opportunity is projected to raise almost shy of $90 billion by 2029. Now these 80 kinases only target about 10% of the entire Kinome. So there is ample space to really expand in that space. And this is where our KINect platform is coming in. It allows us to interrogate kinases, which have been considered inaccessible in the past. Now you may ask what is that KINect platform? It is indeed a combination of a proprietary chemical library that contains structures, which are biased towards and binding to interrogating kinases.

This library allows us to not only pull out ATP competitive inhibitors, but as you will see in a moment, it allows us to apply different mechanisms of actions, how to target these kinases and opens up a much, much larger space that we can go after. But this, in combination also with our many years of deep experience in biology of kinases, understanding their mechanisms of action, the intracellular signaling pathways and also expertise in computational drug design, this combination with the library really makes the difference and allows us to develop high-quality inhibitors with high specificity and high potency much faster.

So I mentioned mechanisms of actions we are focusing on, and that's summarized on that slide here. So we don't mainly do competitive kinase inhibitors. We focus on developing covalent kinase inhibitors. So these are compounds which bind to specific cysteines in the kinase pocket and irreversibly inhibit these kinases. So these compounds normally come with very high potency and specificity. We also have molecular glues. So these are compounds that bind to kinases in their inactive confirmation, keep them in that confirmation and sometimes also set them up for degradation. We can make tissue-specific molecules, which have very little systemic exposure and therefore, a beneficial therapeutic window.

And finally, we recently also got into the protein degradation space with PROTACs. So these are compounds that label kinases for the proteasome mediated degradation. And therefore, you don't just inhibit the kinase activity, but you take out the whole scaffold. So you interrupt really the kinase and the binding partners of that particular kinase. Now let me move on to the large molecule to the antibody space.

So bispecific, multi-specific antibodies indeed are already a very successful class in oncology. There are about 18 molecules approved for various cancer indications, driving about $12 billion of sales in 2024. We believe that following the path the oncology has shown us and applying it to the autoimmune and inflammation space is a huge opportunity to really address the unmet clinical need in that space. And I talk unmet clinical need, I mean, things like patients only partially respond or they are refractory to any particular treatment. You're talking about indications which have diverse endotypes and phenotypes. So you need to really tailor your molecules to address that unmet clinical need. [ANI] is also a space with an ever-increasing health burden.

There global health care spend in 2024 was about $200 billion, and it's anticipated to increase to about to double to almost $400 billion by 2023. So how do we build this multi-specific bispecific monoclonal antibodies? So the way we are thinking about is that we either, for example, combine 2 validated clinical pathways into one molecule, which are non-overlapping. Our bispecific TSLP alpha receptor is one example. We can also take a validated arm and add a novel biology arm to it and therefore, expand the potency and the mechanism of a molecule or simply, we are inhibiting one molecule in any indication is not enough, we can combine it with another one so that these 2 arms synergistically work together and drive efficacy in the indication.

Now as we do so, we want to make sure that we really make the best molecules, which are fit for purpose. We select the right format, we humanize or they are fully human antibodies to avoid immunogenicity. We look at developability very early on. We certainly drive for high specificity and potency for the target. And we can also change the Fc effector function of these molecules. You can dial in, for example, half-life extension, again, which we have done with our bispecific ATI-052 or we can dial in and out effector function in these molecules. And this is something we are doing also in collaboration with world-class experts.

Now let me just show you 4 examples of what -- how we have applied our strategy. So 2 small molecules, 2 antibodies. You'll hear more about these molecules in detail from my colleagues in a moment. So I just want to highlight a few aspects here. On the left-hand side, ATI-2138, Neal was referring to already our dual ITK/JAK3 small molecule inhibitor. JAK3 is downstream of the common gamma-chain cytokines, inhibit cytokine activity like IL-2, 4, 7, IL-15. So very important cytokines in disease and ITK downstream of the T cell receptor. So you have, again, compatible pathways, which support each other for efficacy. This is a covalent inhibitor, and we are building on that experience to pull out the next-generation ITK inhibitors, which are now we are dialing out the JAK3 crossover.

So these molecules are ITK/TXK specific. Again, you'll hear more from Joe in a moment. Just want to highlight here, ITK is a hard kinase to target, and I think it just exemplifies how we can apply our KINect platform to pull out the really potent and selective inhibitors. On the antibody side, we have bosakitug, the TSLP inhibitor. I think with potential to be a best-in-class monoclonal antibody. It's about 70-fold more potent than tezepelumab. It has the potential based on its affinity and its target engagement for infrequent administration also. And then we used that backbone of Bosakitug and added an IL-4 receptor arm to make ATI-052, our bispecific antibody, which is in clinical development. Yet again, a molecule that is more potent than a combination of teze and dupi.

It's also an Fc-modified molecule. So it has a half-life extension for infrequent administration, and we dialed out effector function in that molecule. So just to illustrate how we apply our capabilities. We can do all of that and profile our compounds very deeply because we have state-of-the-art R&D capabilities in St. Louis. We have biochemistry, enzymology, we can do bioanalytical chemistry, computational and medicinal chemistry. We also have translational capabilities, which is important, so we can interrogate clinical samples for PD activity or biomarkers, which come from our own clinical studies or from other patient populations.

We have a whole plethora of different immunology assays. We can culture human, mouse hematopoietic cells and modify and interrogate them in vitro and also complement this with in vivo pharmacology and PK studies using our vivarium capabilities. So in summary, what I've told you is that we have a great opportunity with small molecules in the kinase space. With antibodies, we designed the best-in-class molecules potentially to raise the efficacy ceiling in [ANI] and address the unmet need, which is huge and very significant in that space. We have unique expertise with small and large molecule development, state-of-the-art R&D capabilities, which allow us to profile our own molecules.

But we can also use these capabilities to profile, for example, molecules we in-license, which we have done with the [Biogen antibodies], for example, or compare what we have generated internally with competitor molecules in a really apple-to-apple comparison, which gives us the confidence to take our molecules forward. And this is all possible because we have a great team of scientists, a very experienced group for seamless execution. And so we're expecting new INDs starting in 2026. So thank you for your attention. And with that, I'm going to turn it over to Joe Monahan, who's going to talk about our kinase franchise. Joe?

Thanks, Roland, and good morning, everyone. So I'm going to speak about the oral kinase inhibitors that we've been generating at Aclaris. And specifically, I'm going to be talking about the ITK franchise, which has been mentioned, is leading by the ATI-2138, which is in Phase II and the ITK selective compounds, which we're driving towards IND. So why is ITK something of interest? This is a picture of the T cell. T cells are activated by antigen in the context of MHC presented by antigen-presenting cells, activates a T cell receptor and it initiates a whole series of intracellular signaling, ultimately culminating in the translocation of transcription factors that drive the transcription and translation of a number of different cytokines and these cytokines drive the differentiation, proliferation and activation of T cells.

ITK is a central kinase in the signal transduction cascade. It's a member of the Tec kinase family, which has -- consists of 5 different members. And it's located upstream of calcineurin, which is a calcium-dependent phosphatase in the target of drugs such as cyclosporine. ITK has been shown to be upregulated in diseases, and we believe that inhibition of ITK should be effective in a number of I&I diseases. So this digs into a little bit of how ITK works in T Helper cell biology. So CD4 positive T cells can be differentiated into a number of different T Helper cells, and this would drive the immune response against both host protection as well as in the case of an abnormal response in inflammation.

And what you can see here is that ITK is critical and the only tech kinase that's expressed in Th2 cells and Th17 cells. So ITK is responsible for the biological activity of both Th2 and Th17, and that is associated with both allergy and asthma as well as systemic autoimmunity. There's a second Tec kinase called TXK and TXK and ITK are co-expressed in Th1 cells. So both these kinases are required for the biological function of Th1 cells. And again, that drives organ-specific autoimmunity. So if one were to be able to generate ITK selective inhibitors, you would expect them to have an impact on Th2 diseases as well as Th17 diseases. And if one were to generate ITK/TXK dual inhibitors, you'd also have an impact on Th1 diseases. So this kind of compares ITK inhibitors, TXK/ITK dual inhibitors against a number of different key cytokines from these T Helper cells, Th2 cells, Th17 cells, innate lymphoid cells of type 2 as well as Th1 cells.

And as you can see, ITK inhibitors and ITK/TSK inhibitors have a broad impact across all these different cytokines. In contrast, if you look at the biologics, we're restricted biology there. And even the bispecific, you'll extend that to some degree, but it's still going to be more limited. And that's similar to STAT6 inhibitor, which is an oral compound, but it still is restricted in its biology to targeting IL-4 and IL-13 similar to dupilumab. So when you look at this, ITK and ITK/TSK are oral inhibitors that could have much broader impact than some of the biologics, STAT6 inhibitors and potentially have JAK-like efficacy without the side effect profiles.

So if ITK is so interesting, why aren't there a bunch of drugs in development for this target? The problem with ITK, as has been mentioned previously, it's historically difficult to drug. Most drug companies had programs in ITK over the past 20 years, but these were mostly focused on developing reversible ATP competitive inhibitors. And unfortunately, due to some of the properties of ITK, this approach was unsuccessful. Why is it unsuccessful? I think from a chemistry standpoint, it was difficult to generate drug-like properties into these inhibitors because of some of the physical chemical limitations, poor PK properties and in some cases, reactive metabolites. But one issue that was found among all these inhibitors was the large shift in potency when you move from an enzyme into a cell, and that's due to low biochemical efficiency.

And so the situation with ITK is that it has a very high affinity for one of its substrates, ATP. And ATP is present in millimolar concentrations in cells. And so when you move from an enzyme into a cell and you now have these reversible ATP competitive inhibitors competing with millimolar concentrations of ATP that bind very tightly to ITK, you get a dramatic right shift in potency and it's to a point where you can't dose high enough to allow clinical development. So the approach that we took to overcome this, again, as has been mentioned, is to develop covalent inhibitors of ITK.

ITK is a member of the cystinome, which is a subset of about 300-plus kinases of the human kinome, and it has cysteine residues that decorate the ATP pocket, they're non-catalytic cysteines. And you can take advantage of these cysteines by building a molecule that contains an electrophile that can interact with the [indiscernible], ligate that and form a covalent bond.

And so we use structure-based drug design, coupled with our proprietary crystal structure of ITK and the complex of inhibitors to develop these covalent compounds. And what our strategy was is to maximize the reversible affinity of these compounds, so we can drive them into the ATP site and then minimize the reactivity of the electrophile and only have reactions when it's juxtaposed that [sulfhydryl] associated with that cysteine 442. And so I'll go through some of the successes that we had doing this. First-generation inhibitor that we have is ATI-2138, which has been discussed before. It's an oral small molecule covalent inhibitor of both ITK and JAK3. It just so happens that JAK3 has the cysteine residue present in the same spot as ITK.

So with the same molecule, you can ligate that cysteine residue in both ITK and JAK3. So in that regard, it's very potent against both molecules, and it's a true dual pharmacology where at a given dose, a given exposure, you're going to hit both targets similarly. This compound has moved into Phase II studies, and I'll talk a little bit about that later. So why is it unique? I think it's high potency for inhibiting both targets. There are other molecules out there now that -- a few other molecules that are covalent in nature and have either a bias for JAK3 or a bias for ITK, but there's nothing out there to our knowledge that has a true dual pharmacology for ITK and JAK3.

The fact that you're hitting downstream of the T cell receptor regulating T cell function and you're also hitting these gamma common cytokines that are T cell dependent such as IL-2, IL-4, [7, 9, 15 and 21], you have an upstream effect and you also have a downstream effect, which should be additive or synergistic. Inhibiting both of these pathways should provide a more complete and more potent inhibition of inflammation in the inflammatory response. The other, I think, important thing to note here is that both ITK and JAK3 are restricted in their expression to a subset of hematopoietic cells. So this is in contrast to the other 3 JAK isoforms who are ubiquitously expressed and potentially having this restricted expression could be beneficial from a safety standpoint.

We've done a lot of preclinical characterization of ATI-2138. We have a publication in JPET that describes a lot of this stuff. And I'm just going to go over a snippet of the in vivo data that we have in the mouse animal model just to give you a flavor of the breadth of potential that this molecule has. So on the left-hand side here, we're looking at a mouse adoptive T cell transfer model of IBD. And we're comparing ATI-2138 with another compound called ritlecitinib and looking at the histopathology score in the proximal colon and the ilium. Now ritlecitinib is a Pfizer compound that is a covalent inhibitor of JAK3 that has some small impact on Tec kinases such as ITK. This compound has been approved for alopecia and is in late clinical development for vitiligo as well as Crohn's disease and ulcerative colitis.

And as you can see in this model, 2138 basically has really good efficacy, both in knocking down the histopathology score in the colon as well as the ilium and is significantly better than what you see with ritlecitinib at the same dose and exposure. In the middle panel, we're looking at vitiligo, mouse T cell transfer model of vitiligo run at John Harris' lab. And basically, 2138 at both doses tested prevented the disease. And on the right-hand side, the classic mouse collagen-induced arthritis model, all 3 doses of ATI-2138 blocked the clinical arthritis in these animals and was significantly better than the TNF biologic Enbrel.

So now some of the data in the next couple of slides have been on our website, so I'm just going to go over this quickly. But this slide is just to describe this real dual pharmacology of 2138 in contrast to the Pfizer compound ritlecitinib. On the top panel, you're looking at the ITK component of the cellular activity, where 2138 is about 40 to 50x more potent than ritlecitinib and on the bottom, looking at the JAK3 component where 2138 is about 5x more potent. So this shows 2 things. It shows, number one, that the Pfizer compound is biased towards JAK3 and has minimal activity against ITK. And secondly, that 2138 has real dual pharmacology in these cells. The second compound of interest is the Corvus compound, CPI-818, which is a selective ITK inhibitor. So now we're looking at the ITK portion of 2138 and comparing that to CPI-818.

From a biochemistry standpoint, on the left-hand side, looking at the potency against ITK itself, 2138 is 15 to 40x more potent than is CPI-818. And at the right-hand side, we're looking here at cellular functional activity, looking at the activation of differentiated Th2 cells in the cytokine produced of IL-4, IL-5 and IL-13 with 2138 across the top and CPI-818 across the bottom, you can see good inhibition of all 3 of these cytokines with 2138, and it's about 30 to 100x more potent than is CPI-818. So we moved 2138 into clinical studies, and this is a summary of the SAD and MAD studies. The only thing that I want to point out here is, number one, over 2 weeks of dosing, 2138 was safe and well tolerated.

We dosed up to 80 milligrams daily. The PK profile was good with this compound. And from a pharmacodynamic standpoint, we're able to demonstrate that we could regulate both JAK3 and ITK. And in doing so, we are able to predict what the best dose to go forward with in the Phase II study was. So we moved this compound into the Phase II trial in atopic dermatitis. It was a 12-week open-label study with a single dose 10 milligrams BID in moderate to severe AD patients. Important readout here was over 12 weeks, we saw a favorable safety profile. We also saw efficacy a number -- across a number of measures, and it was comparable to drugs approved for AD. And importantly, we're able to show that we did have good pharmacodynamic modulation of both ITK and JAK3 and this modulation impacted key pathways involved.

This slide summarizes some of the efficacy that was observed in this AD study, which is the EASI score in the center panel of the bar graph all the way to the right, showing that's a favorable itch response relative to other drugs. And then on the right, the body surface area decrease as well as the EASI score decrease was significant, and we believe that this is a retained clinical -- retained consistent clinical response with 2138. We did a significant amount of pharmacodynamic assessment in this study. The part of it was to understand the PK/PD relationship, and that's where we looked at both function of ITK and JAK3 as well as ITK target occupancy. And then in collaboration with Emma Guttman's lab at Mount Sinai, we related PD with efficacy. And in that regard, we looked at punch biopsies in the skin.

We looked at tape strip analysis in the skin, and we looked at endogenous biomarkers in plasma using both RNAseq analysis for transcriptome signatures and Olink analysis for proteomic signatures. So first, I'm just going to have one slide to show that we do have good pharmacodynamic response, particularly in this case against ITK. On the left-hand side, we're looking at an ex vivo functional assay out of blood, looking at inhibition of ITK 1 hour post dose as well as a trough. We see 90% inhibition of ITK function 1 hour post dose and somewhere between 40% and 50% at trough. On the right-hand side, we're looking at ITK target occupancy.

Almost complete target occupancy is observed 1 hour post dose, so at [indiscernible]. And at trough, we're seeing somewhere between 60% and 70% target occupancy.

So this demonstrates that at this 10-milligram BID dose, we're getting near complete and sustained occupancy and inhibition of function of ITK. We'll then move to look at how this inhibition of this target impacted some of the key pathways that are involved in the disease. And this is a section of the data that the Guttman lab generated, and this is looking at tape strip analysis and proteomic data. The transcriptomic data look very similar to this, but I'm just going to show you the proteomic data. So here, we're looking at lesional and nonlesional tape strips over week 4, week 8 and week 12 and looking at gene signatures for immune set of genes, Th1 genes, Th17 genes and Th2 signatures.

And looking at, as I said, lesional in the orange and nonlesional in the blue and comparing it to baseline. So if you just look at the immune genes in the upper left, you see that starting at week 4, you see a significant reduction in this immune gene subset. So returned more towards baseline, and that's retained over the 12 weeks of the study. And you see similar results with Th1, Th17 and Th2. So this demonstrates that we're knocking down the target ITK and that knockdown of the target is impacting the key pathways that are involved in atopic dermatitis.

Another way to look at the data is shown here. And in this case, we're taking representative genes that represent general inflammation, Th2, Th17 across the top as well as fibrosis across the bottom. And we're correlating the regulation of those genes with a clinical readout. So if you just focus on the top center, for example, this is looking at TSLP as a representative Th2 gene. And for the clinical readout, we're looking at the EASI score. And what you can see is as you decrease the TSLP, which is induced by 2138, you get an improvement in EASI score and there's a good correlation with the correlation coefficient of 0.8. And you see similar results with the other readouts here as well. So now we've taken it a step further saying that knocking down the target, we're impacting the particular pathways, and we see a good correlation of the inhibition of these pathways with the inhibition of the clinical outcome.

So this is the summary. I described most of this already. What I would just say is that based on the safety profile that we have from the SAD and MAD study and from this study, coupled with the pharmacodynamic analysis, we believe that while the 10-milligram BID dose was a good anchor dose, we have the potential to increase the dose from a safety standpoint and potentially incrementally increase the pharmacodynamic and clinical responses in subsequent studies. I'm going to switch gears now and talk about our next-generation ITK inhibitors. This is a summary of the ITK inhibitors and the program status. I've already described our first-generation compound 2138. Our next-generation inhibitors come in 2 flavors, as Neal described. One is ITK/TXK inhibitor and one is an ITK selective inhibitor.

In these next-generation inhibitors, we wanted 4 parameters to be optimized. One is we wanted to retain good potency against ITK, similar to what we have with 2138. Secondly, we want to engineer out any cross-reactivity with JAK3. Thirdly, we want to extend the half-life to allow for potential once-a-day dosing. And finally, we want to be able to dial in and out cross-reactivity with TXK. So with these molecules, we have a single molecule, ACRS-3 that we're moving forward towards IND that is an ITK selective compound. And we have ACRS-1, which is our lead ITK/TSK dual inhibitor and ACRS-2 is our backup. So how are we doing this? The model on the left shows an overlap of the structure of the ATP domain of ITK and JAK3.

And at first glance, you can see that there's a significant amount of overlap here. But there's a couple of key components that allow us to take advantage of some differences to generate both potency against ITK and selectivity against JAK3. One is that phenylalanine 435 in the upper middle there. And that is a gatekeeper residue. It's a phenylalanine 435 in ITK, and it's a smaller methionine residue in JAK3 and allows us to take advantage of the potential interaction either by pi-stacking or hydrophobic interaction of our inhibitor with that Phe435 to increase potency against ITK and increase selectivity against JAK3. Secondly, there's on the right-hand side, JAK3 has a collapsed G-loop. And again, this allows us to engage the G-loop of ITK, improving the potency and decreasing the cross reactivity with JAK3.

So taking these 2 engaging the hinge region to form a nice reversible high-affinity interaction that's selective against JAK and then covalently engaging CYS442 with the electrophile allows us to potentially have a really nice next-generation set of compounds. And the results of this is shown here using enzyme-based assays. And what we're looking at here is comparing the first-generation compound, 2138 with the next 3 next-generation compounds and also CPI-818, the ITK selective inhibitor. And what we're measuring here is the efficiency of inactivation of the enzyme by these inhibitors. And that's measured by a term Kinact/Ki. So the Ki component of this term is the reversible interaction and the Kinact is the maximal rate of inactivation. And so if you just focus on 2138, we're looking at 3 enzymes here, ITK, JAK3 and TXK and the higher the bar in this case, the more efficient inactivation of the enzyme.

So 2138, which as we described, inhibits all 3 of these enzymes has a high efficiency of inactivation. If you contrast that to CPI-818 all the way to the right, we know that it's a selective ITK inhibitor, and that's borne out in these data as well. But what's also borne out is the low efficiency of inactivation of ITK with this inhibitor. So it is a selective inhibitor, but it doesn't have great efficiency of inactivation. Now if we look at these next-generation compounds, first, looking at the ITK component, all 3 of these molecules are highly efficient in engaging and inactivating ITK, and none of them have any interaction with JAK3 based on these data.

And then with TXK, you can see that we can tune in or tune out TXK with ACRS-3 having very little impact on TXK, ACRS-1 having greater impact and ACRS-2 having even more impact. So this allows us to categorize ACRS-1 and 2 as ITK/TXK inhibitors and ACRS-3 as an ITK selective inhibitor. We then looked at this in cellular studies using primary PBMCs, again, comparing the same group of compounds, looking at target occupancy of ITK, looking at ITK function and then looking at in the cellular studies, ITK/JAK3 ratio.

And so on the first column of data and the second column of data, we can see that these next-generation ITK inhibitors retain good potency against ITK. They have good potency with target occupancy, significantly better than what you see with CPI-818 and comparable to what you see with ATI-2138. And in contrast with 2138, the ITK/JAK3 ratio is significantly greater and comparable to what you see with CPI-818. So we've been able to, at least from a biology standpoint and a biochemical standpoint, generate inhibitors that have the properties that we're interested in.

This is another interesting way to look at the data that I just showed. On the X-axis here, we're looking at target occupancy of ITK on the y-axis, we're looking at functional inhibition, and we're looking at the correlation of those 2. And there are 2 things to point out here. One is that there's a good correlation. So as you occupy the target, you're also inhibiting the target, which is good to see and it would make sense. And then secondly, you see that the Aclaris compounds are clustered in the lower left, whereas ritlecitinib and CPI-818 in the upper right. This again demonstrates that the Aclaris compounds have superior potency against both occupying the ITK and inhibiting its function.

We then advanced this to look at -- to determine whether or not our hypothesis that inhibiting ITK alone will have a Th2 effect and inhibiting ITK and TXK should have a Th1 and Th2 effect by taking differentiated Th1 cells and activating them and taking differentiated Th2 cells and activating them and looking at the impact of the same set of compounds. In this case, the Y-axis is the average IC50. So the lower the bar, the more potent the compound, the higher the bar, the less potent compound. And focusing on the Th1 component on the left and looking at the first 3 sets of bars, that's ATI-2138 and [Aclaris] 1 and 2, they have a good potency against inhibiting Th1 function in contrast to [Aclaris] 3 and CPI-818, which have very poor ability to inhibit Th1 function. And so this is consistent with 2138, Aclaris-1 and 2 being ITK/TXK inhibitors and ACRS-3 and CPI-818 being just selective ITK inhibitors.

And then if you look at the Th2 biology on the right, you can see that all these compounds are reasonably potent at inhibiting Th2 function with the Aclaris compounds being more potent than the CPI-818 compound. And again, this follows that now all these compounds which inhibit ITK will regulate Th2 cell function. So we've been harping about how our compounds are more potent than some of the competitor compounds. And why is that important? So I think in general, potency is important in drugs. And in this case, when you have good inactivation efficiency that drives high potency and high potency results in lower dosing, less frequent dosing, lower drug burden. And any time you have a lower drug burden, you have an improved potential both selectivity and safety profile.

This is particularly important with covalent drugs because covalent drugs contain electrophiles. And these are reactive electrophiles that are indiscriminate in the proteins that they can interact with. So if you have poor potency, you'd have to have a higher level of drug on board in the tissues and in the circulation. You have to have it on board for a longer period of time, and it increases the probability that this reactive electrophile will interact with a nontarget protein, covalently link that nontarget protein, potentially impact its function and potentially drive a safety issue. So I think in particular, with covalent drug potency really is critical. So we've taken it now from the enzyme to the cell. Now I'm going to show you a little bit of the in vivo data that we generated with these next-generation compounds. And what we wanted to demonstrate in these studies was, number one, you can orally dose these compounds and you can have an impact on ITK.

And secondly, you can only dose the compound and you can generate -- retain the JAK3 selectivity that we described in the prior studies. So we dosed mice for 3.5 days with various doses of the next-generation compounds. We took the spleens out on day 4, and we looked at ITK occupancy in the spleens shown across the top, and we looked at a JAK3 functional assay that was the NK cell number in the spleens across the bottom. What you can see across the top is we get near maximal ITK occupancy at all doses tested with the 3 next-generation compounds. And in contrast, if you look at the bottom, you're seeing virtually no inhibition of JAK3 function at the 2 lower doses and in 2 of the compounds, no inhibition at the highest dose. And in the third compound, you see a partial inhibition at the highest dose.

And we're comparing that to ATI-2138, which we know is a JAK3 inhibitor, which gives a much more dramatic inhibition of NK cells. So this demonstrates that we have good doses and exposures that can maximally block ITK almost completely and have no effect on JAK3 function. So another component of -- that we wanted to engineer into these next-generation compounds was around increasing the half-life. And so what we have here is just an example of some studies that were done looking at the elimination half-life of these molecules in mice and comparing it to ritlecitinib and CPI-818. And you can see we have a significantly longer half-life of these molecules compared to the comparators.

And when we model this and project human dosing, it's still early days, but these would project to once-a-day dosing at a reasonable dose level. So in addition to the pharmacology that I described to date, we've been driving these compounds towards development and IND and initiating IND-enabling studies. There's a lot of other boxes that need to be checked. I'm not going to go over any of these, but around DMPK and safety. And all the analysis to date supports continuing to drive these compounds towards IND. And so in summary, I think we've successfully generated a portfolio of covalent ITK inhibitors, starting with the ITK/TSK/JAK3 going to ITK/TSK and then the ITK selective. We believe that these should have differential, but solid inhibition of T cell function and have the potential for both best-in-class and first-in-class categorization.

We're hoping, again, we're moving these next-generation compounds as quickly forward as we can and anticipate an IND in '26. So our last slide just summarizes where we are with these programs and how we think they could impact the biology in the I&I space. So we believe that we've established an industry-leading position with this, and we also believe that these molecules have platform potential. You see the range of indications, Neal had shown this earlier that both ITK/TSK inhibitors can impact as well as ITK selective inhibitors. You see the multibillion-dollar markets on the right. And you compare those with the improved inhibitors, and we went through this before, but the breadth of the impact of the mechanism of ITK and TSK is more -- much more broad than the single or dual inhibitors with the antibodies.

And we hope that these will have JAK-like efficacy without the associated side effects. So we think ITK is a great target. We think that we have an industry-leading position. We think that we have best-in-class and first-in-class capabilities with our cohort of compounds that we're moving forward. We think that these can impact a number of diseases with a great unmet medical need. And so with that, I'll turn it over to Hugh Davis to talk about the other half of our portfolio, the Biologics.

Thank you, Joe. maybe we need to do some jumping jack because of lot of science, they reenergize our brains. I'm Hugh Davis, President and COO of the company, and I'm going to talk about the Biologics side of the business and specifically focus on TSLP as our effective therapeutic target and the mono and Bispecific specifically as we move forward. So as you've heard, we're in Phase II with bosakitug, the TSLP antibody. And then we're in Phase I with the bispecific, and Jesse will talk about the Phase I data -- well, the Phase I study plan. And then the discovery targets that we have using our TSLP molecule as the basis for a synergistic approach to new targets and new opportunities.

So many of you are probably aware of TSLP. And what I'm -- when we think about this, it's an Alarmin just like IL-25, IL-31. But Alarmins are sentinels for the body in that they add border surfaces like the lung, skin, GI tract. They're on the lookout for any insult, parasites, infections, things of this sort. And it's their job to activate the immune system. And specifically, TSLP is at the top of the Th2 cascade. And so it ultimately drives innate and adaptive immunity towards these insults. And so other molecules have been developed against many of these targets already, OX40 and OX40 ligand and dendritic cells, IL-4 and 13 on immune cells and T cells. And then tezepelumab is the only marketed drug that actually inhibits TSLP.

And so tezepelumab moved into respiratory diseases. It's approved in severe asthma, but it also had an early program in atopic dermatitis. Phase IIa looked good and encouraging. And then in Phase II, they showed that they didn't have sufficient efficacy to continue on with that indication. And so they terminated their derm effort with that -- with tezepelumab. We thought about how do we create a better molecule. And you already heard Joe and Roland talk about high potency on the small molecule side. But we think high potency on the biologic side is equally important and maybe even more so because we don't have the bioavailability of these large antibodies and bispecifics that weigh 150,000 molecular weight, it's hard to get a lot of it into the deep tissue spaces where TSLP is exerting its pathologic effect. And so only about 15% of an antibody distributes into the skin relative to the serum.

And so when we think about the importance of driving better efficacy, it's really about higher potency and being able to deliver that locally. So when we think about our antibody to TSLP, bosakitug, the first thing that we wanted to generate were antibodies that ultimately had very low dissociation rates off of TSLP. And that was a goal. When BioShin created -- or identified this molecule, it was by very low dissociation. But this functional assay with peripheral blood -- PBMCs, peripheral blood mononuclear cells activated with TSLP, inhibiting it with bosakitug or tezepelumab, we saw a 70-fold greater potency of bosakitug compared to teze in this assay. And so trying to better understand this, and some of these data are already on our website. What we showed previously was that it's really a function of bosakitug and also our bispecific that I'll talk about with very low dissociation.

In fact, it's the very low linear line at the bottom of this dissociation using a TR-FRET assay. The other molecules in clinical development from GSK, Merck and upstream bio had very quick dissociation relative to bosakitug. And when you think about affinity, tezepelumab and bosakitug have very high affinity, picomolar affinity. It's very high. So how does potency differ? Potency is the concentration needed to drive an effect. And so how do we maintain this effectiveness through the properties of the molecule. Affinity is off rate and on rate, a ratio of on and off. When the molecule is off of the target, the target is able to exert its pathologic effect. And so you don't want it to release. And so very low dissociation translates into very high residence time. And so that's how we have 400 hours of residence time. And so it's completely resident on the TSLP molecule through the dosing interval, whereas these other molecules are on the order of 4 to 22 hours.

And so residence time is 20-fold higher in some cases compared to the competitors that we included here. And so when we think about potency, we're looking at functional assays. The effect here is to inhibit CCL17 production from activated PBMCs. And you can see that bosakitug all the way on the left is the most potent of all the clinical development candidates and tezepelumab that we tested. And so now how does this make sense? How do we get there? When we think about the key to potency, it's really about maintaining a concentration in a clinical trial, maintaining a concentration above the threshold that's needed to drive the effect. And so these are PK curves, so it's time concentration over time. What you see is in bosakitug, a very potent molecule with a very low concentration needed in order to drive effect.

And so that area above the threshold line under that curve is the effective amount of drug that's able to be used. Whereas tezepelumab, as an example, much more -- much less potent, very high concentration needed to drive an effect, your area above the threshold of potency and inside that area under the curve is much lower than what you're able to achieve with, in this case, bosakitug. So you're able to make up for -- drive this activity in a way that the potency is enabling a much more broader concentration and time profile in order to drive the effectiveness of the drug. And so case in point is looking at the clinical trials in dermatology that were used. So in atopic derm, tezepelumab on the left, 210 to 420 every 2 weeks in their Phase II trial, those were the doses used and that gave rise to the concentrations of 10 to 100 nanomolar. And again, these are in serum.

So obviously, the concentrations in skin would be even lower. What we show with the BAF3 proliferation, and these are their data, the BAF3 proliferation, CCL17 inhibition, the IC90 and IC99, the low part of the bar and the high part, overlap almost directly with the doses that were used. And so tezepelumab may not have had an effective concentration in order to be able to drive the effect in a derm in the skin. Whereas because the potency of bosakitug is 70x higher, we're able to have the same concentration, the 300 milligram every 2 weeks gave rise to, again, about 80 nanomolar. But in this case, this is substantially above the IC90 and IC99 in those same BAF3 and CCL17 assays. And so when we ask the question, how can bosakitug be so much more potent, we're looking at the structure of TSLP here. There's 159 amino acids, 28 of them are the signal peptide in blue that gets clipped off.

So the N-terminus of an active TSLP molecule that's secreted is the YDFT component in purple. The purple shaded residues are where bosakitug binds to TSLP. And so it binds at the C-Terminus, and that's also where tezepelumab binds. Those are the underlying amino acids. You can see that they both bind at the C-terminus, and that's where TSLP binds to TSLP receptor. That makes sense. But you'll also notice that bosakitug binds to the N-terminal motif YDFT. And so now what we're seeing is a biparatopic approach where the antibody is binding at the N-terminus and the C-terminus of TSLP. And even though each of those have their own affinity, so on rate, off rate, the molecule, the bosakitug never is leaving the TSLP, and that's how you get to 400-plus hours of residence time.

And so it's an avidity that's driving the effectiveness and the potency of this molecule. And so we took this into the clinic and Jesse Hall will speak to the data that we saw in Phase IIa that also then translated all of the work that was done preclinically and some of the understanding around the structural binding and activity into the clinic. Ultimately, this same TSLP antibody is the same basis then for the bispecific. We see that this antibody has -- so bosakitug has a very long natural half-life. So it's 23 days. And this is the same as your natural immunoglobulin pool. It also gives you a clue about the immunogenicity profile because if you're going to have a 23-day natural half-life, then that tells you that you don't have a high antidrug antibody incidence. Otherwise, you would have higher clearance and you'd have shorter half-life.

And so this molecule is very well tolerated in Phase IIa and the ADA profile on the PK was substantially high. And so then as we move toward the bispecific. Again, it's the same anti-TSLP antibody with a 400-hour residence time on TSLP, the same biparatopic binding nature on TSLP. And then it also has 2 SCFVs that are bound to IL-4R. I'll get to that in a minute. When we think about the multispecifics, and we're talking about bispecifics and trispecifics and every other construct you can think of, really, it's about increasing efficacy. And you heard Neal say it, and you heard Roland say it and you heard Joe say it. All of these diseases, whether it's respiratory or especially atopic derm, there is a huge headroom available to do a better job for patients.

When dupilumab has 2/3 of patients that have a 75% response, that means that 1/3 aren't responding adequately at all. And those that are responding still have 25% more to go. And I know when I was at J&J with STELARA and TREMFYA, I led clinical pharmacology, we heard from patients all the time that when they lose that escape from therapy at the end of the dosing interval, that was the worst thing. And so we want to make sure we increase the efficacy for patients and we maintain it through the dosing interval. We also want to make sure we have a reduced therapeutic resistance. And so the way you do this is by better immune response. So you're holding the pathway in check. And so by having 2 targets, as Neal had mentioned, both at the top and the bottom of the cascade going after TSLP at the top of the Th2 cascade and then the immune component on T cells with IL-4 and 13 inhibitor by binding to IL-4 receptor, we're able to have a more deeper and broader response.

And certainly, this market is huge already and growing. And so there's a huge opportunity ahead of us as we think about these indications. So the molecule itself, as I mentioned, is the same TSLP antibody with 2 SCFVs that bind IL-4 receptor. While the TSLP itself was designed to inhibit the TSLP completely and not lose residence, that's because Alarmin when they're overproduced, you want to take them back to homeostatic levels. So that makes sense to try to inhibit and neutralize it completely. At the same time, we don't want to completely neutralize the IL-4/13 response because then you're going to have greater or worsening safety profile. And so the way the scFv against IL-4 were created was to have the same affinity as dupilumab.

But since this molecule is now also binding to a receptor target, there's going to be target-mediated drug disposition, where the bispecific is going to be cleared from the blood by binding to the receptor. And so in this case, we added a YTE mutation to the Fc to enhance the half-life. And so it's a tug of war, half-life increase, TMDD. And so we're hoping to be able to have a much longer dosing interval than what dupilumab has been able to do. And then the AQQ mutation was added in order to silence the Fc, so we don't have off-target toxicity with Fc gamma receptor binding nonspecifically. And so this molecule has been optimized in every way.

New information today is about the molecule itself. We have 4 binding sites, 2 against TSLP, 2 against IL-4 receptor. What we're able to show today is that all 4 binding sites are acting independently. What we -- if we have 2 TSLP molecules bound, the IL-4Rs can still be bound to. You can saturate all 4 sites at the same time, and you can do it by maintaining the same affinity to those targets. And so I'm going to walk you through this [indiscernible], which is surface plasma resonance. What happens is you bind your antibody to a chip, and that's shown in this blue line with 052, and you get an increase in response units, these RUs. Those RUs are a direct relation to the molecular weight of that species. So in this case, the 150,000 molecular weight that's binding.

We then add TSLP and you can see a bump up in RUs. And then we add on top of that, different concentrations of the soluble IL-4 receptor and you get increasing RU again. What we're able to show is when the TSLP is bound first, we still can maintain the affinity of the IL-4R interaction to 052. And so the affinity constants of 348 and 215, relatively the same, not affected by that interaction. If we reverse that and we first have soluble IL-4 on the antibody, and that's the figure on the bottom, and then we add different concentrations of TSLP, we now can see whether TSLP is affecting the affinity of the soluble IL-4 receptor interaction. And again, you can see that the affinities here are roughly the same at 41 and 33.

In addition, what we're able to show using this SPR technology is that when one is bound, we can actually, again, because it's a direct relationship of molecular weight, we can see that those soluble IL-4 molecules are bound 2:1 even in the presence of 2 bound molecules of TSLP by looking at the response units on the SPR graph. And the reverse then is also true where we're seeing, again, all of these are roughly 2:1, 1.8: 1, 1.8: 1.9. So you're seeing 2:1 ratios of both [sIL4R] bound to 052 and a 2:1 ratio of TSLP bound and both in the presence of the other.

Affinities didn't change and complete saturation. And so functionally, and we had shown this particular graph previously, what we showed in a PBMC assay this time, the PBMCs are activated with IL-4 and TSLP. And so now both tezepelumab and dupilumab should be able to inhibit that effect in combination. And so our antibody 052 is shown to have 4x greater potency than the combination of dupi and teze combined. And so the bispecific is showing a synergistic effect that is better than the combination of the 2 antibodies. So as we think about other approaches to inhibiting this Th2 pathway, many drug developers have taken on IL-13 antibodies, for instance, or IL-4, IL-13 approaches with TSLP. And so we looked at this more closely.

And as you look at the biology around IL-4 receptor and IL-13 receptor, it's really the heterodimer in the middle here where you have the IL-4, IL-13 combination where dupilumab binds and so does 052. The type 1 receptor and IL-4 is open and so is the decoy receptor at IL-13. So we asked the question, what is the contribution of IL-4 and IL-13 in activating this pathway and therefore, the need for therapies that would inhibit this effect. And what we show here, and so these are new data, IL-4 is substantially better at increasing CCL17 production from activated PBMCs. It's about not only higher activity in terms of the amount of CCL17, but it's also about 10x more potent with an EC80 that's 10x lower than the IL-13 activation of CCL17 in these PBMCs. And so it appears that IL-4 is a much more dominant and consistent driver of this downstream chemokine activation, and we, therefore, assume also immune cell recruitment and activation.

And so using this picture, we have 052 on the left are bispecific. It binds obviously to the TSLP molecule, which is in yellow. The others are dupi, lebri and tralo that bind either IL-4 receptor or IL-13. And what we show here is the way in which these molecules are binding. And so obviously, dupilumab is binding at the receptor, inhibiting IL-4 and 13 like ATI-052 and lebri is binding IL-13 inhibiting this complex formation. And then ultimately, tralo binding the soluble IL-13 is inhibiting downstream response by that cytokine. And so when we look at now at PBMCs that are activated by various factors, on the left, we have TSLP. And obviously, Olink, teze, and ATI-052 are able to inhibit this CCL17 response. And again, here, we saw the 70-fold increase in potency of 052 compared to teze.

In the second, we're looking at IL-4induced CCL17. And again, now only dupi and 052 are able to inhibit this response and roughly the same IC50. In the next one, we have IL-13 and all of the molecules are able to inhibit that response. But again, you're looking at this case with lebri having a slightly better ability to inhibit that CCL17 response. And then we have 4 and 13 and now only dupilumab and ATI-052 are able to inhibit that. And lastly, we have all 3 activators. And so TSLP4 and 13 are activating CCL17. And here, ATI-052 is about 6x more potent than Dupi in inhibiting this response and the others can't compete at all.

And so 052 is exhibiting the broadest activity and the most potency of all of these assets tested. And so in summary, for 052, we have a molecule that has been optimized to completely inhibit TSLP with very high potency against TSLP. We have a similar affinity to IL-4 receptor as dupilumab. But in combination, both teze and dupilumab are not able to be as good at inhibiting a CCL17 response and 052 is 4x more potent than that combination. We have the opportunity for enhanced half-life and the safety profile has been taken into consideration with the AQQ mutation. And ultimately, we have the most potent of the molecules tested to date. And so now we want to think about the future. And so next-generation bispecifics where as you look at the immune cascades across the Th1, 217 biology, there are many opportunities here.

So as Neal mentioned, we want to take advantage of our best-in-class anti-TSLP antibody. And so the first order of business is trying to understand what would work best in using in combination as our next-gen bispecifics against these -- one of these various targets in a number of different constructs. And so some of the major concerns as itch is really a major concern. Alarmin combinations, going after just one alarmin, does that make complete sense, it might make sense to also think about combinations with alarmin. But we also really want to make sure that we're driving the efficacy ceiling. And whatever that means, reducing itch to the greatest extent, reducing the body surface area of lesions, et cetera, we want to make sure that we're driving the synergistic effect.

And mostly, we're focused on eosinophilic-driven diseases, but also non-eosinophilic are also reasonable to consider. And so the targets that we're going after are not disclosed yet as the combination partners for our 3 bispecifics with our TSLP, but I can tell you that we're moving toward an IND in early '27 when we move these forward. And then lastly, it's really even a much bigger picture that we're looking at. And so there are many other opportunities, both with bi and trispecifics in the multispecific arena to consider. And we've already been putting that in place in terms of plans and actions in order to even have a more sustainable biologic pipeline for the future of Aclaris. Thank you for your time. And I will turn the floor over to Jesse Hall, our Chief Medical Officer.

Thank you, Hugh. Good morning. My name is Jesse Hall. I'm the Chief Medical Officer of Aclaris. The theme of my presentation today is going to be clinical trial execution. You've seen this slide before. I'm going to be spending most of the day focused on 3 of our clinical assets. And I do want to emphasize that we have 3 assets currently in the clinic, 2 in Phase II clinical studies, 1 in a Phase I study and our future ITK inhibitor coming to the clinic in 2026. That will give us a total of 4 assets in the clinic, which is pretty remarkable for a company our size.

As you'll see from my presentation today, we have a diversified pipeline with multiple shots on goal in large market I&I indications. Over the next 6 to 12 months, we have a significant number of near-term catalysts. And maybe most importantly, we have a strong cash position that gives us a runway into 2028 that allows us to execute across all of the programs that I'll be presenting today. Many of you have seen this slide previously. I'll touch on most of these programs today throughout my presentation. The programs in orange are those being developed internally by us at Aclaris. Those in gray are being developed by our partner, CTTQ, in respiratory indications in China.

2025 was really a foundational year for us. It's an important time for our business. And we've been focused on clinical trial execution in 2025. Not only have we made great strides across our pipeline, we've also made great organizational strides, meaning we've incorporated the Biosion programs. We've incorporated the Biosion team members, and we've continued to build out our clinical capabilities to support all of the programs that I'm going to overview today. The progress that we have made in our pipeline throughout 2025 have allowed us to derisk a number of our molecules in multiple ways. We've seen clinical validation of inhibiting the ITK pathway through the 2138 atopic dermatitis study.

In our Phase II atopic dermatitis study with 045, we're focusing on the right patient. What does that mean? That means we're screening patients to make sure that they are eligible for the study through a unique photographic review process. And I'll be going through that in greater detail in future slides. We've also advanced the 052 program into the clinic, and we've made great progress there. Neal mentioned that we have completed dosing in our single ascending dose portion of that study, and we're currently dosing the multiple ascending dose portion. So we're continuing to learn more about 052 throughout 2025. And finally, we're preparing for new INDs with our next-generation ITK inhibitors, and we plan to file INDs with those molecules in 2026.

Portfolio execution has really been the theme of 2025. And we've made great progress, and that leads to a packed agenda for 2026 with us having clinical milestone readouts across the majority of our programs, including 052, bosakitug, 2138 and the ability to bring ITK into the clinic. Now what I'd like to do is dive a little bit deeper on some of our specific programs. Hugh overviewed our progress with 052 and our rationale for developing this bispecific antibody against both TSLP as well as IL-4. And I'm going to spend a little bit of time reviewing this from a clinical perspective. 052, as Hugh mentioned, has the same antibody binding regions as 045, and we believe 045 is best-in-class.

In addition to what was done with 045, 052 has a half-life that has been enhanced. So we anticipate extended dosing intervals for 052. We also believe that the combination of inhibiting TSLP as well as the IL-4 pathway provides for significantly greater potency of this molecule. 052 has demonstrated to be more potent than dupilumab or tezepelumab or the combination of those 2. And it's this increased efficacy that we're anticipating and we're looking forward to in our future clinical studies.

This is the design of the 052 healthy volunteer study. It's a single ascending dose portion with a large dose range. We have completed dosing for this portion of the trial. Currently, our multiple ascending dose portion is ongoing. We started to learn a lot about 052. We're starting to understand the safety and tolerability. And soon, we'll have a full understanding of the PK profile of this molecule. Neal mentioned that we have disclosed our indications to take forward with 052. So the plan in 2026 is to initiate 2 POC studies, one in moderate to severe asthma and a second in moderate to severe atopic dermatitis. So we will have a number of clinical readouts for 052 in 2026. This is the design of the 052 asthma study. This is a POC study.

We're going to enroll patients with moderate-to-severe disease. We believe it's important to focus on this patient population as it's the eventual indication of patients that will be treated with this molecule. This will be a single-dose study. Patients will be randomized to either 052 or to placebo. The primary efficacy endpoint will be at day 28, and we will continue to follow patients for a longer period of time to continue to assess the long-lasting PD effect of what we believe with this molecule can see.

In addition to the standard clinical outcomes, FeNO and FEV1, we will also be doing a significant amount of work from a PD perspective. The goal will be to enroll a patient population with Th2-high disease. We do recognize that Th2-low is an important and unmet medical need. However, given the size of this clinical study, we want to focus on Th2-high. Our future clinical plans will enroll patient population with Th2-low disease as tezepelumab has demonstrated a benefit in that patient population. However, this initial study will focus on that patient population with Th2-high disease.

That's the summary of the Phase Ib POC study in asthma. In addition, we have plans to start a study in atopic dermatitis. At Aclaris, you know that we have a rich history of studying dermatologic indications. We plan to apply the learnings from our previous atopic dermatitis studies to this patient population. The goal is to enroll a total of 12 patients with moderate-to-severe atopic dermatitis. A total of 5 doses will be administered to a patient population randomized to either 052 or placebo over a 28-day interval. The primary efficacy assessment for this study will be at day 57. We will continue to follow patients.

We will utilize our central photography approach that I'll get into more detail in when I start to discuss the 045 program. The primary endpoint of this study will be safety and tolerability. We will be looking at the classic endpoints in atopic dermatitis, including EASI, BSA and IgA. And based on our learnings from the 2138 program that Joe mentioned, we are partnering with Emma Guttman's lab to have additional PD outcomes, including tape strips. The plan would be to initiate this study in the first half of '26 with a readout by the end of 2026. So the plan would be to read out both of these POC studies by the end of 2026.

Now let me dive back into the 045 program. As you mentioned, this was a program developed at Biosion. We currently have a Phase II study ongoing in atopic dermatitis. This was the study that built our confidence moving into that patient population of atopic dermatitis. Biosion conducted a small Phase IIa study across 7 sites in the U.S. where patients were treated in an open-label fashion with 300 milligrams of Bosakitug. The primary endpoint was at week 24. And we learned a number of things from this clinical study.

We saw that we had sustained clinical response after the last dose, indicating to us that this molecule has the potential for less frequent dosing than every 2 weeks. And that's something that we will continue to explore in future clinical studies with 045. Now to dive into some of the more specific efficacy outcomes, which were very encouraging, if you look at the EASI-75 responses, 94% of patients achieved an EASI-75. If you look at the IGA, 88% of patients achieved a 0 or 1, clear or almost clear. This is quite a remarkable result and raises the bar in this indication.

And then if we look at the EASI-90 scores, 65% of patients achieved that and almost 1/4 of patients achieved an EASI-100. This was the background that set us up for our current ongoing 045 study or Bosakitug. In this clinical study, which is currently enrolling, we plan to recruit approximately 90 patients. Those 90 patients will be randomized in a 2:1 fashion between Bosakitug and placebo. The dose that's utilized in this study is similar to the IIa at 300 milligrams. The primary endpoint for this clinical study is at week 24.

We know that over time in these dermatologic studies, placebo response rates have continued to creep up. For me, the corollary is in IBD, where you saw placebo response rates over the last 15 years continuously increasing. What the field did to address that is to incorporate central review of endoscopy. What we are doing in this clinical study, not just to verify eligibility, but as well as to follow patients over time is to utilize central photography. I think this will become the future of dermatologic studies and just to overview our process with regards to central photography.

We have a vendor that has placed equipment at each one of our clinical sites. When the patient comes in for screening, they undergo a photographic evaluation. That evaluation focuses initially on the primary lesion as well as the total body surface area involved. Once those photographs are obtained, they go to our central photographic vendor. They go through a strict quality review process. Once they have passed that quality review process, they go to our CRO for central review.

The reviewer is checking the lesion and make sure the lesion is consistent with atopic dermatitis as well as checking the total body surface area to understand that this is a patient population with moderate-to-severe disease. And then finally, our internal dermatologist reviews the photos for the same criteria, ensuring that the lesion is consistent with atopic dermatitis and that the patient has the appropriate moderate-to-severe disease.

We believe that this process will decrease the likelihood of a high placebo response as well as give us the ability to monitor patients over the entire course of the clinical study. So some of the next steps with Bosakitug, we plan to read out this atopic dermatitis study by the end of 2026. We will continue to develop Bosakitug in dermatologic indications, and we are seeking partners in other respiratory indications for Bosakitug. We think Bosakitug has the potential to be best-in-class.

Let me shift gears back to our oral molecules. We have a first-generation novel ITK/JAK3 inhibitor for T cell-mediated diseases. Joe has shared some significant information on our Phase II results. I won't spend a lot of time on that study only to say that at the doses we studied, the drug was safe and well tolerated, and we believe we have the potential to increase dose and capture more efficacy in some of our future clinical studies.

What we've done is a broad look at other potential indications for 2138. We did signal early on that atopic dermatitis was purely an indication for us to demonstrate biologic mechanism. Our look at potential indications is ongoing. You can imagine with a therapy that impacts T cell-mediated diseases, we have the potential to pursue a number of different indications. We have started to focus on several. Some of those being vitiligo, Prurigo nodularis, lichen planus, alopecia areata and some of the scarring alopecias.

In particular, we're quite intrigued about the lichen planus indication, and we've been focused on that over the last several months. If you're not familiar with lichen planus, lichen planus is a disease that is a chronic inflammatory immune-mediated disorder. It affects the skin. There's a cutaneous component. It affects mucus membranes as well as some of the subtypes impact the hair and the nails of these patients.

Some of the most common symptoms are intense pruritus, meaning these patients are quite miserable with this disease. We know that oral lichen planus occurs in a crossover fashion in a number of these patients where they are affected by both mucus as well as the cutaneous components. There are very few treatments that are available for this disease. It's typically treated with off-label immunosuppressants or potentially high-dose corticosteroids. The prevalence of this disease is between 0.2% and 1%, and we think that this is a white space opportunity for 2138, meaning there are not many therapies that are currently pursuing this indication.

An [ approval ] indication has a great market opportunity, and we think that there's a significant unmet medical need for this patient population. As we continue to progress our plans for lichen planus, we will continue to assess the market components, but if we focus on the mechanistic fit, 2138 is an excellent mechanistic fit for this indication.

We know lichen planus is a chronic inflammatory disease. We know that there's aberrant activation of Th1, Th2 and Th17 cells as well as cytotoxic T-cells. CD8 cells. Joe overviewed the impact of 2138 on this pathway. Based on this mechanistic evaluation, we think 2138 is an excellent fit. In addition to those pathways, we know that these patients suffer from intense pruritus. 2138 has the potential based on the atopic dermatitis study to significantly impact the puritic component of the disease.

Putting all of this together, we believe lichen planus is an excellent fit for 2138, and we're going to continue to progress our plans for 2138 in this indication. Proposed efficacy endpoints for the indication would be IGA as well as secondary outcome measures of pruritus. Plan is to complete the market analysis, complete our trial design with a plan to initiate a Phase II study in the first half of 2026 in this indication.

We still believe that there's an opportunity in alopecia. The market is rapidly evolving here in this area, but we do believe that opportunities remain. Especially in some of the subtypes of alopecia, including scarring alopecias. We will continue to evaluate the opportunities in scarring alopecias, moving into 2026 with our primary focus being on lichen planus.

2025 was a packed year. It's an important year for our business. The work that we have done in 2025 sets the foundation for 2026 across our clinical programs with a number of near-term catalysts reading out for our programs over the next 6 to 12 months. And as has been emphasized previously, we have a cash runway that allows us to execute on all of the clinical programs that I overviewed today.

With that, I would like to turn the floor back over to Dr. Neal Walker, our CEO.

Thanks, Jesse. So obviously, we went through a lot today on the science, and we have some more presentations on the KOL side. This is where we're at in the cadence of data events. As we've mentioned a number of times, we've completed the SAD, moving into the MAD, right on track to report that. We're to finish that study at the end of this year, and then we'll be reporting that in early '26.

Then the next catalyst that you can anticipate are the 1bs followed by the top line data with Bosakitug in AD. And then we will be initiating 2138 work early this year. The chronic tox work is just about done. In fact, it is the in-life is complete, just waiting on [ Histo ] and assuming all that looks good as expected. We'll be moving into the next phase there, doing -- being able to do longer-term work.

And then as I've mentioned a number of times already, really excited about the ITK Next Gen, as you could see being able to target multiple aspects of some of these diseases, which I think everybody talks about whether it's Th2 or having Th1 effects in a variety of respiratory diseases, I think that is a real hidden gem that I think deserves more attention. So really excited about where we're at, where we're going. And now is, I think, a great time to think about Aclaris as we head into a catalyst-rich year.

With that, I'm going to turn it back over to Will to introduce our KOLs.

Thank you, Neal. So I'm very happy to introduce Dr. Zuzana Diamant. And I don't need to read her bio. Her bio speaks for itself. But she's a pulmonologist and clinical pharmacologists to affiliate with the Department of Clinical Pharmacy and Pharmacology at the University Medical Center of Groningen. Has worked with a variety of professional societies, as you see and is a world renowned in the space. I'm very glad to turn the mic over to her. Dr. Diamant, I'll be moving your slides for you. So thank you very much for your time and attention today.

Thank you, Will, for a nice introduction. And I'm very happy to speak about the background of the new applications and new developments within the area of chronic respiratory diseases. And especially since new exciting developments within multiple path blocking biologics are underway to optimize clinical outcomes in these type of diseases. So can I have the first slide, please?

So this is a little bit about me and that you already have elucidated. I think of importance here is that's a part that I work with several academic institutions across Europe. I also have more than 30 years of experience within the area of clinical development of novel drug interventions and I also hold positions at various scientific societies and have a huge network that I collaborate with.

So can I have the next slide that is introducing the topic of today. So it's about chronic respiratory diseases and chronic respiratory diseases here that I will discuss will be asthma, chronic rhinosinusitis with nasal polyps, so CRS with nasal polyps and COPD.

And as you can see, these are quite common and very prevalent conditions. And they partly share underlying mechanisms, although there are different -- differences, of course, not only in the anatomy, but also in the pathophysiology and immunology. But it's also important that these conditions can coexist as comorbid diseases based on the mutual underlying mechanisms, and this is called the united airways this concept. Can I have the next slide, please?

So in these conditions, typically type 2 inflammation can be quite prevalent. And in asthma, it amounts up to 70% of patients worldwide, in CRS with nasal polyps up to 80% of patients. And in COPD, more recently, up to 20%, 40% of patients have been diagnosed with type 2 inflammation. What is important to know is that the type 2 inflammation is not only prevalent, but it's also quite well defined in terms of underlying pathways and biomarkers.

It is also important to state that this is a more severe disease, usually also a bit more disease burden, like the patients have really more symptoms and a poor quality of life. It comes with frequent exudations with mucus plugging of the lower airways and therefore, also with accelerated lung function decline and also small airways disease.

Next slide, please. And just to give you a flare, it was already mentioned with one of the -- by one of the previous speakers, what the underlying mechanisms are of asthma and the related airway diseases, which consists of one part of type 2 pathways and type 2 pathways pretty much coincide. First with the upstream alarmins. So these are epithelial cell derived cytokines. Like TSLP of IL-33 and IL-25, which become released upon chronic noxious stimuli, then activate the more downstream pathway at the Th2 and the ILC2, which are respectively, the adaptive and the innate pathways and then these give rise to a release of the so-called type 2 cytokines, which are IL-4, IL-5 and IL-13, which then switch on and activate the effector cells.

So mostly the eosinophils. So that's so far for the type 2 pathways. And then there are also components that are beyond type 2 pathways. It can be called non-type 2 or type low pathways. But these pathways usually are about the type 1 or the Th1 and Th17, the neutrophils, but also importantly, the structural changes, not only at the epithelial level and the goblet cell level but also at the airway smooth muscle pathology. And these both mechanisms are important that and drive also the pathophysiology of the chronic respiratory diseases. Next slide, please.

So if we look closer at asthma, it is important to realize that not all asthma is the same. And severe asthma that can be especially very heterogeneous and amounts up to 10% of patients globally and can be quite difficult to control. It is currently sub-endotype or sub-phenotype, if you wish, into type 2 and non-type 2 or as I called on the other slide, the Beyond Type 2 end of time.

Type 2 asthma is characterized by type 2 inflammation, and it's important to realize that this can exist both by allergic and nonallergic eosinophilic inflammation and also coincide with high-pheno value. So pheno is a fractionated exhaled nitric oxide which arises from the iNOS pathway and is formulated or released by the epithelial cells under mechanism of the IL-13, which is one of the type 2 cytokines.

The other type 2 cytokines are IL-5 and IL-4. And as already said, type 2 asthma is associated with more severe disease exudation and lung function decline. Apart from type 2 asthma, there is also non-type 2 asthma. And this non-type 2 asthma is less well defined. And it means, usually, we would say, okay, this is non-type 2 asthma because we do not find these typical type 2 biomarkers being eosinophils and high pheno values.

But it can also be associated with neutrophilic inflammation, airway smooth muscle pathology, obesity, that's also one of the treatable traits, but also one of these associated phenotypes, if you wish, with chronic systemic inflammation and by relative corticosteroid resistance. Next slide, please.

So of course, in the attempt to treat this severe asthma, there have been several targeted biologics defined and developed in the past decades. And because, again, as I said, type 2 severe asthma is better defined than the non-type 2 asthma. Most of these currently available biologics are targeted against type 2 inflammation.

So historically, first, it began like 2 decades ago with anti-IgE and this biologic called omalizumab, is effective against allergy driven asthma. So just for select population that have truly allergy driven disease. Then it was followed in 2000 by the anti-IL-5 approaches for mepolizumab later on followed by benralizumab. And these biologics typically are very effective on a narrow scale on eosinophils and not as much on the other type 2 cytokines. So they do not affect as much the pheno.

And they have been shown to protect against exudations but have not a prominent effect on lung function, which is typically driven by the other type 2 cytokines. Then followed by anti-IL-4 receptor alpha approach, dupilumab, which blocks the common pathway of IL-4 and IL-13 and has been shown efficacy in type 2 asthma and type 2 COPD and CRS with nasal polyps.

And so again, this protects -- this compound protects against exudations but also improves lung function is corticosteroid sparing and potentially disease modifying as it also can affect the small airways in a benign way. Then the latest development has been the anti-TSLP. So that is very much upstream of the cascade as already shown in the other slide by tezepelumab which has been shown to act both in type 2 and beyond type 2 asthma.

And the activity overall outcomes have shown benign effects against exudations also to improve lung function and potentially to be disease modifying the fact that it also affected airway hyper-responsiveness and in some studies, even small airways. Can I have the next slide, please?

So altogether, if you see so many very, very effective biologics, what is the current status and what are still the unmet needs? So despite these effective treatment options, still too many patients with chronic respiratory diseases remain sub-optimally controlled. And the reasons for that are various, of course, and it depends per region.

But one of the reasons can be the evolving phenoendotype by exogenous factors, loss of efficacy of the treatment combinations, but also the occurrence of comorbidities despite the treatment.

So there is still an unmet need for more safe, even safer -- and safe effective treatment options that provide a sustained effectiveness that means an effectiveness over time that also treats the disease in a wide proportion of patients and also can treat the comorbidities with the same underlying mechanisms, and that effect can also be disease-modifying.

And so the aim being to stop disease progress and to improve patient quality of life. And of course, with further systemic corticosteroid-sparing effects that would help to overcome a severe side effect of corticosteroid, both for maintenance corticosteroid therapy. Can I have the next slide, please?

So to accommodate this unmet need, we have now exciting new developments within the field of biologics. And the exciting developments are that we try to block different components of the underlying pathways. So to combine multiple specific antibodies for us. And here, you can see a list that provides you an overview of the antibodies that can block both the anti-TSLP with other components of the type 2 inflammation, which is more downstream.

So the first example is the Aclaris ATI-052, which combines anti-TSLP effectiveness with anti-IL-4 receptor alpha, which then inhibits the joint IL-4 and IL-13 pathway. Similarly also the next compound by Innovent. Then there is a multi-spec antibody that blocks the 3 type 2 cytokines or the upstream on the TSLP IL-4 and IL-13.

And of note, the latest one is the [indiscernible], the anti-TSLP and combining the IL-13 activity in the bispec nanobody that has just provided the outcomes of a Phase Ib study in mild-to-moderate asthma, showing an improved efficacy against the biomarker. Pheno combined with the clinical beneficial effects on the small airways. And the efficacy on the pheno was, in fact, enhanced as compared with blocking the TSLP alone. Can I have the next slide?

So in fact, even more complete or even better efficacy can be anticipated to combine blockade of the TSLP with IL-4 receptor alpha bispecific antibody for instance, the ATI-052, which has the broad activity in the sense that it blocks the upstream TSLP which allows to include or to treat both patients of the type 2 and the non-type 2 phenotype endotype.

And again, because this approach does not fully block the type 2 inflammation because other alarmins like IL-33 and IL-25 can also drive the downstream type 2 inflammation. This molecule also inhibits IL-4 receptor alpha and which then blocks more downstream, the IL-4 and IL-13 cytokines and allow for a more complete inhibition of the type 2 inflammation.

And then it does not -- so combining these two approaches within one molecule will then allow for applicability in this broader patient population as already said, so the type 2 and the non-type 2 phenotypes and is anticipated to provide not only fewer exudations, but also to improve lung function, quality of life, but also small airways.

In fact, the systemic corticosteroid-sparing because that is also what has been shown with blocking IL-4 receptor alpha. And potentially, it will also provide a sustained effectiveness on disease modification and hopefully, not only on clinical remission but also biochemical remission, which is a more complete remission of the disease. Can I have the next slide?

So in summary, again, I hope that I can highlight now the things that I have said in my talk. So asthma especially the severe asthma is highly heterogeneous disease, which has also comorbid conditions, which can change pheno endotypes within patients over time. And this also applies to its associated comorbid conditions like chronic rhinosinusitis with nasal polyps and the COPD.

Type 2 inflammation is usually associated with more severe disease, but also non-type 2 or beyond type 2 inflammation has different aspects that are also detrimental for lung function over time and that also needs to be treated, and it's less well defined at this moment. And bispec that combines both the anti-TSLP and anti-IL4 receptor alpha inhibition. So here as exemplified by the ATI-052 is anticipated to be more effective both in asthma and not only type 2 but also non-type 2 -- beyond type 2 asthma and other chronic respiratory diseases given its broad mechanism of action, more complete inhibition of not only the non-type 2 component, but especially also the type 2 inflammation.

And therefore, its anticipated to have a more superior clinical efficacy because if you look at head-to-head comparisons that are both indirect and direct, the both mono components, so the anti-TSLP and anti-IL4 receptor alpha have proven already superior clinical efficacy in other studies. So, so far for my presentation, thank you very much.

Thank you very much, Dr. Diamant. Our next presenter, again, I think for anybody in the Greater New York area, he needs no introduction. This is Dr. Michael Cameron with the dermatology department at Mount Sinai. I think probably a bunch of folks here already know him very well. Not only experienced in the medical field, but also throughout the industry, well known across the industry with expertise in eczema, psoriasis, alopecia and a variety of other dermatological disorders. So Dr. Cameron, I'll turn it over to you. Thank you very much.

All right. Well, thanks so much for having me, everyone, and special thanks to Aclaris. So my name, as was mentioned, is Dr. Michael Cameron, I'm a dermatologist based in New York. I'm also the CEO of Equity Medical, which is a national clinical trial organization with 3 locations and 7 principal investigators, we focused on dermatology and allergy and respiratory as well as internal medicine.

And so I have the privilege of being a principal investigator for the ongoing clinical trial with Aclaris, ATI-045 AD-201, which, as you all know, is a randomized, double-blinded, placebo-controlled dose finding study for ATI-045. Their anti-TSLP asset in patients with moderate-to-severe atopic dermatitis. I don't have any slides today. So I'm just going to give some overall thoughts.

I've enrolled several patients on this trial. Things are going really well. Before I talk about Aclaris' execution on this clinical trial and what I view that they're doing differently and better than other companies. First, I just want to speak to the atopic dermatitis space. And so as we know, and some of this work has been done at my home department of Mount Sinai Health System in New York, where I'm a voluntary faculty.

But as we know, atopic dermatitis or eczema is a very heterogeneous disease, has multiple endotypes, really presenting as 1 phenotype. And so I think we should remember that we classified diseases and presentations of pathology, really for our learning purposes and for pattern recognition, right? So showed no different than -- so one patient's cancer is different than another patient's cancer and all cancer is really multiple diseases, even in the specific types of cancer.

Eczema really, in my view, at least, is multiple diseases. Everyone has their own inflammatory kind of pattern. And so in East Asia with papular eczema is going to present very differently than a Caucasian with flexural atopic dermatitis in terms of -- if you were to do biomarkers and take stripping and what have you. And I'm not in any way trying to suggest that we're going to really rapidly move to an environment where we're endotyping people commercially because there are payment constrictions with that.

But what I am trying to suggest based on that is that we need a ton of different biologics to adequately treat this disease. And we know that based on estimates that really this atopic dermatitis biologics space is growing at anywhere from 7% to 15% CAGR, compounded annualized growth rate per year. And so even though the space is really, really huge and dupilumab is one of the best-selling drugs in the world with over 1 million prescriptions now, the space is just growing and growing and growing.

And as more and more incumbents advertising market shape, whether it's EIi Lilly or Regeneron, Sanofi, and inside and more and more companies, these patients are really just coming out of the woodwork. I mean, we are seeing so much moderate-to-severe atopic dermatitis. And what we're finding is over time, patients lose response to one biologic or they never respond. And we just need a lot of different biologics to target really all the different endotypes of this disease. That's point one.

Point two is that, similar to our OX40 ligand assets that we're investigating, TSLP is really involved early in the T-cell inflammatory cascade when we look at atopic dermatitis pathogenesis. And so what's going to be interesting to find out is, if you target TSLP and we know that TSLP plays a really important role in initiating that cascade as well as allergen induction, can we affect the disease in terms of the long-term trajectory? And can we induce any kind of remittive effect. And so that's point number 2.

We also know, and this has also work done at where I'm a voluntary faculty and outside of health system. We know that the work done by Dr. Brian Kim that TSLP plays a really important role in sensitizing non-histaminergic neurons. And so we all know that antihistamines do not work for atopic dermatitis and really, they just induce somnolence. And there's actually a lot of potentially deleterious effects of long-term use of antihistamines.

And so, what we know from Dr. Kim's work is that TSLP actually auto sensitizes your non-histaminergic neurons up and it makes them more sensitive to pruritogens like IL-31, and so it helps potentiate that itch signal to the central nervous system in eczema. And so what I'm finding is that we're seeing really kind of early itch relief, obviously, I'm a blinded investigator, but what I'm hoping that we see with the results is that TSLP actually provides a really meaningful itch relief early and a deep itch relief as well.

And so my early experience with this asset has been very positive. I'm excited to see what this trial shows. And I'd like to just finish with what I feel like Aclaris is doing differently in terms of executing on this Phase II. And so we all know that this space has been plagued by high placebo response rates, some sites that did not perform well. We saw recently with Q32 Bio and their atopic dermatitis readout and other trials that, well, dermatology is a hard therapeutic area to conduct clinical trials.

There's obviously high levels of interobserver variability based on the fact that someone's EASI score, at one site in New York might look different than another person's EASI score in California. I think we would all say that there's probably some bad actors in the clinical trial space as well.

And so what I love that Neal Walker, Dr. Neal Walker and his team are doing at Aclaris is, first of all, they're requiring photographs. And so -- they're doing central read of their photographs. And Neal Walker is the CEO of Aclaris, is a board-certified dermatologist and he's actually involved in this because he wants to make sure that every single patient that goes into this clinical trial is a real moderate-to-severe atopic dermatitis patient.

And so I think that this level of attention to ensure that they're meeting the strict enrollment criteria, they do have the actual disease of atopic dermatitis. They do actually have the correct body surface area and moderate-to-severe disease. This is really resonating with me because what I think we're going to find is they're going to have much more high-quality data when this trial reads out. And so I just want to call out Aclaris for being a leader in the field and doing this.

And I'm hoping that this type of approach really kind of affects the entire therapeutic area because I think what we'll end up having is better data, better. High-quality clinical trials and ultimately better FDA-approved assets. And so that's really the message I want to send to you all, and I certainly would welcome any questions.

Perfect. Thank you, Dr. Cameron. Really appreciate your time.

Thanks.

So we're going to gather the team up here for some Q&A. So if the Aclaris team could join me up here, that would be terrific. For the folks listening in online, I'll remind you that through the window on which you're watching the webcast, you can also ask questions.

We've already got a litany of questions that have come in. So we'll get to the ones that we can. And for the folks in the room, we'll hand you a mic, just raise your hand, and we'll take [ you carry ].

Prakhar Agrawal from Cantor. Maybe for the bispecific, you mentioned that the SAD portion is completed and the MAD is ongoing. So maybe just talk about the initial expectations on the immunogenicity profile and the half-life for this drug based on the data that you're seeing. And will this MAD follow-up next year be enough to derisk the immunogenicity profile for this drug? And a follow-up to that, I realize that it's just healthy volunteer, but will you be measuring any biomarkers related to asthma or atopic dermatitis that can derisk as you move into the disease patients?

Sure. I'll start, and I'll hand it off to Hugh. So at least on the biomarker side, we are looking at that. I mean it's healthy volunteers. So it's somewhat limited, but I think it gives you at least reasonable information directionally. And as it relates to the other two questions, I'll pass that to Hugh.

Yes. So In terms of immunogenicity that you mentioned. So we don't have any readouts from the 1a yet in the healthy volunteers in PK or ADA, but what we do know is it's the same TSLP antibody has 045. And then that 2a trial in healthy volunteers, we saw a very low ADA and so we're expecting that we're going to see a similar profile. I'll be surprised if we don't, but you never know.

And so we're going to have to wait on that for the first part of the year. But as Jesse mentioned, the 1a, the SAD has already finished dosing, and we've already initiated MAD dosing. So that will be complete by the end of the year.

Tom Smith, Leerink Partners. Thanks for putting together this really comprehensive event. Two questions, if I could. I guess, first on Bosakitug and the photographic review that you've instituted in the Phase II. Just wondering if you could comment on the experience you've had with this to date. Any sort of visibility into the screen failure rates at the vendor or the company level? And can you just elaborate on how you're able to track patient progress through the balance of the study there?

And then on 2138 in lichen planus, I think there's been some Phase II studies, one with an IL-17 inhibitor, one with a topical JAK, can you just talk about some of the results there and how you think ITK/JAK3 could be more effective? And any learnings from the existing clinical experience that you plan to implement in your planned Phase II?

Sure. I'll take -- I'll start there and have the team fill in where necessary. So on the central review, I do -- I always kind of find it remarkable when folks talk about, well, I'm setting these bars of EASI 16 and 10% body service area. And the reality is none of that matters if you can't lay your eyes on the patient and see what you really have. And unfortunately, as Dr. Cameron astutely pointed out, there's a lot of things within atopic dermatitis itself that can be compounding.

But then think about just being very simplistic or red scaly rash that can look like a lot of different things. And there are some sites that throw patients in that have fungus or psoriasis. And believe me, I've done this a number of times, you wouldn't believe what I see, that comes into these studies. So I think it's -- I know you guys always try to dissect and cross-trial compare.

And if you saw what I saw, you would kind of give that up because it's really difficult to do that when you're seeing some patients who don't even have AD, which is a lot. And then you're seeing patients that don't even have the extent of disease necessary even if I set an EASI 16.

And Dr. Cameron also rightfully pointed out that there's a tremendous -- and this is in the literature. This is nothing new. There's a tremendous amount of inter-rater variability. So as you're seeing patients back, remember it's a static assessment. You don't get to go back and say, "Well, let me check the last picture." So you're better off having a provider who saw that patient coming in -- so at least they have a feel for extent when they're looking at the patient as a follow-up.

So I feel really good with what we've seen so far. And usually, when you do this, when I've done this in the past and you set the stage that you're going to be watching that you go in thinking logically that the screen failure rate is going to go through the roof, but nobody likes extra work, right? So if they know you're looking at this stuff, they're going to put in patients who make sense. And so we really haven't seen a big uptick.

You see -- you usually see that in the beginning of the study as everybody is getting a feel for what you want because there are certain trials that you want a certain type of patient within that broader category of moderate-to-severe. So I think we started out with a little bit of a higher screen failure rate, but then it just modulated out. And we're ahead of schedule on the enrollment side.

And I can tell you this, this will not fail because we don't have the right patients in. That is a guarantee. And it is a lot of work, right? I mean I'm sitting here doing that as a day job as well. But it's important because we really want to understand that. Any -- does that answer your question on that?

On the LP front, so it's interesting. There have been some investigator-initiated studies that have shown proof of concept. It's one of the things I liked about it there. I got to be honest, I watch with great intrigue, the strategy Roivant employed with their JAK, TYK2. I think it's smart. We are operating in intensely competitive times. Rinvoq just reported out data in alopecia areata. So now we're going to have another player in that space. And so the decisions that we have to make are we like all these indications, but what's the lead, because that helps set price, as we all know.

And so when I take a look at that landscape and try to decide -- do I lead with alopecia or do I go into something like a scarring alopecia, which kind of led us to lichen planus because lichen planopilaris is a very particular type of scarring alopecia, where we've seen good efficacy there. And remember, we just presented data with our ITK/JAK3 that showed remarkable effects on fibrosis.

So -- it's -- and we also know that LPP, lichen planopilaris is [ orphan ]. So there's a lot of different ways to go here. And we're not saying we're abandoning alopecia areata because we still really like that. But I think it's important what you go with as your lead. And so that's what we'll be continuing to assess going forward, but that's where we're leaning at the moment.

And Neal, I'll just add to the question with regards to the secukinumab study. So I think the secukinumab study was a very innovative study design. It was a basket design. It included three subtypes of lichen planus. I think there's many learnings there, although the study was not successful with the ability to recruit that patient population, the outcome measures that were utilized to measure outcomes in that study.

So I think we are modeling a little bit our program around that secukinumab program. And then finally, with regards to some of the work that has been done with the JAK inhibitors. baricitinib has done work there. Topical ruxolitinib has demonstrated effect there. And I think that's very encouraging because we know that we impact the interferon pathway and maybe potentially more intriguing with 2138 is our ability to also impact Th2-driven disease and pruritus. So we think there's a really good opportunity there in that indication.

Maybe I can take one from the web real quick. So this one is about synergies. How does Aclaris think about its portfolio as it relates to potential synergies between the biologics and the small molecule candidates currently in development?

Well, clinical drug development -- clinical drug development, the biggest difference with biologics is the CMC piece. And clearly, we've seen -- if you really think about it, honestly, over the last 15, 20 years, there are huge barriers to entry for small companies to get into biologics, mainly the CMC side of the house. So I think if you have the ability to do all the testing, which we talked about in St. Louis, and understand how each of these drug targets impacts pathophysiology, it just develops a rich data set. It's -- I always use that expression in large pharma capability.

A lot of these larger companies, they have that luxury of understanding how all these different data sets play together. So from my perspective, once you get past the CMC portion, it's -- we have -- it's about having the right experts. I mean we've got a lot of gray hair on the stage, my colleagues more than myself, probably, but these folks are 30 -- 35 years in the industry actually did the work, not just say they did the work, and that's important knowing where to go, and that's how we came up even with the ITK approach.

Roger Song, Jefferies. Thank you for putting together this presentation. Also a question related to the 052. So looking at the pharmacology and the in vitro efficacy seems on the IL-13, IL-4 side, maybe slightly lower than dupi, but comparable. But when you add on top of the TSLP much higher than dupi, so with this profile, how do you think of the position in terms of the biology wise, this will be better suited for dupi [indiscernible] versus experience. And then in terms of indication selection because dupi has a bunch of the indication, which one may be better for this profile with the combination?

Yes. We have plenty of opportunities because the efficacy across any of these disease areas is still really not addressed well. One indication that dupi can't do is dupi-resistant or dupi failures. But we're looking at refractory disease. We're looking across other important diseases that have really a dearth of real efficacy. So if you look at dupi in COPD, 35% response rate, and that's an approval. And that really shows the huge unmet medical need there. But really, you saw that first slide with psoriasis and the market opportunity in psoriasis is like 5x higher than anything else.

The reason that's higher, and I was part of the team that first puts Stelara out. The market cap on that when we looked at that was $3 million -- I'm sorry, $3 billion total. Well, now it's $30 billion.

So you grow the market when you have successful therapies that can address disease. And so I think that's what you're seeing across, AD was never thought of before 10 years ago. It was a wide open space. That's how dupi became so successful. But now that we have different approaches, especially bispecifics and other -- even in the small molecules that are new targets that you're now able to address, you're going to see that grow equally as well.

And so we'll look just like Neal said, the first out of the gate is the key. And then filling in behind it is relatively straightforward once you show that initial success. But there's a plethora of opportunities there.

Got it. Very quick follow-up. In terms of the half-life, looking at the current Phase III design is for the -- every once weekly dosing. So is that because you want to test the efficacy part and then to maximize -- max out the potential there? And then what's the eventual maybe induction versus the maintenance dosing regimen for the 052 potential?

Well, that's all to be seen, of course. But any time you do a POC study, the first thing you do with the trial is make sure it's going to be successful. And you don't want to leave any questions on the table. And so if you run that 1a -- I'm sorry, the 1b in either -- in this case, asthma, which is only a single dose that's just looking for signal finding. But in the atopic derm portion with 4 -- I'm sorry, 5 doses over 4 weeks, we're looking to maximize the exposure to look not only for the safety profile in patients, but also we had about a 50% decrease in the EASI-75 in the 045 trial in the POC within the first 4 doses.

So we do have an opportunity to show real effectiveness of this. Clearly, every -- the 1-week dosing is only meant to put maximum drug on board for safety and tolerability, ADA and any other issues that may show up. It's not meant to be a view into the PK. I would fully expect that we'll come out with a dosing regimen that will be longer than dupi. And the only reason I expect that is because of the YTE that is going to enhance that. But we can also dose higher. And that's the interesting thing. When you're first out of the gate, you develop the safety profile for all the drugs behind you. But then when you're sitting in second place or third place, it's very easy to pass in a typical race, you're sitting there waiting for your opportunity. And so they've already shown what that safety profile looks like, we could actually push more on that, I believe. So again, enhancing the efficacy.

I saw another one from the web. There's a handful of questions actually about the rationale or the process that Aclaris follows to prioritize one particular indication over another, specifically lichen planus over an alopecia or vitiligo. Can we talk a little bit more about the process that we follow to do so and whether that decision has anything to do with anything we saw in the data? The answer is no but...

No. I mean it's -- I said this earlier, I don't think I've ever -- I think we've ever seen a competitive intensity like we see today with fast follower approaches and within a therapy area within a target, within a little tweak on a target. So I think we have to always be thinking about what your lead is. And it's not to say, again, we still really like alopecia areata. We know it very, very well. And we think 2138 would do great there. But I also just want to be mindful of being maybe the fifth JAK inhibitor in the space.

And so as a lead, you start thinking about what are other diseases that have nothing approved like the scarring alopecias. And these are devastating, much more devastating than regular alopecia because you get scarring, which means it's basically irreversible if you don't catch it in time. So I think looking at that, looking at things like lichen planus as good leads obviously have impact on pricing, have impact on success of your launch out of the gate.

There are opportunities to get orphan status in a couple of these things, which I really like as well. And then you can think about layering in the other indications, which everybody does. So it is a multifactorial process. It's not just market size. It's a lot about the competitive intensity. I mean, look, RINVOQ put out really strong data in their recent alopecia areata studies. It's stronger than I actually thought. So it just makes you just think about that like and how much credit we're going to get as we make progress.

Charles here from Stifel. I guess a different question for me. In terms of the bispecifics, how are you thinking about what to target in addition to TSLP and how it fits within the overall portfolio?

Yes. I think that goes back to the comment I just made about competitive landscape. So we've spent a lot of time just trying to keep ahead of that. And we have it all mapped out in a spreadsheet when everybody presents their data. And I think the good news with that space is that I don't think there's a defined market leader yet. But in '26, we're going to get 3 or 4 pretty good data sets, like not just a pheno study, but Phase II data sets in patients. And we'll learn a lot, right?

And I think we have to be mindful of that and yet set our programs up in a staggered way so that we can be nimble enough to move if somebody puts out world-beating data. And the good news is, I don't think any of these constructs are going to dominate across all therapeutic areas. There's some that will be good in respiratory, like what we've seen with IL-13, decent data in AD, not so decent in respiratory and everything across the board. So you just have to be very thoughtful.

There's so many stealth companies on the private side that you just have to be aware of. And I don't know how many of you are aware of some of the really good alarmin data that's come out in AD. We've talked a lot about TSLP in AD as a mAb, some IL-25 data coming out of a China company that showed quite remarkable results, a little bit unexpected results that were presented at EADV with an IL-17 trispecific constructs. And so there's a lot of things to juggle around. And we're looking at predefined constructs based on what we know of the competitive landscape today.

Seamus Fernandez at Guggenheim. So a couple of quick questions, Neal. Not a lot of questions on the ITK and the ITK selective approach. We're going to get some -- potentially some information from the CPI-808 (sic) [ CPI-818 ] molecule in the near term. What are you going to be looking for in that data to really kind of maybe assess proof of principle as it relates to the opportunity in atopic dermatitis for that asset?

And then beyond that, when you just kind of think about ITK selectivity, obviously, you've got this ability to dial in, dial out. But what is the real advantage of ITK selectivity, especially from a safety perspective as you look at this?

So I think what we've seen out of CPI-818 is at their highest dose level, the 200 mg BID, they showed a signal in a small number of patients. I think you've seen what we've presented today that, that molecule has quite modest potency, and that does matter. And so I think the fact that with perhaps a molecule that's not optimized that you're showing a signal that should be encouraging. And I know they have additional data coming up, but it's only a longer-dosing interval. I'm pretty sure it's 400 mg QD and takes it out to 8 weeks.

So what I'm hoping is that, again, kind of coming out of this meeting, we presented a lot of data on that side. And what I hope is that people start recognizing what we've presented. We have an exceedingly potent molecule. We got new ones coming down the pike in '26. And again, I couldn't be more excited about the ITK next-gen approach and getting rid of just theoretical JAK risk because as we all know, JAK inhibitors are generating billions of dollars and everybody harps on the black box.

But we did just see RINVOQ get moved up in the pecking order with ulcerative colitis and now to be used ahead of TNF inhibitor. So I think as time goes on, it's as predicted that at the end of the day you want to get a molecule that drives great efficacy. And I know folks are fond of referencing, well, I can be a better oral dupi. I want to be a better oral JAK as it relates to the overall target product profile.

And I think the dialing in and out of TXK is important because as we talked about with the -- we know those are safe targets, at least for what we know today. And by dialing that in and out, you're able to have a more robust effect across the patient population. We talk about this all the time with people referenced respiratory with low EOs, high EOs and like TSLP worked in kind of both do be more so on the high EO side.

Well, what if you had a molecule that does really well on the Th2 side, but also pulls in that Th1 and can generate a more robust effect across a broader set of patients. That's what we're [indiscernible] off with. And the fact that, as Joe presented today, we got a QD version, that's a good setup for us.

Great. And then maybe just as a final question. When you look at the AD data for TSLPs that have been generated so far, tezepelumab had data, looked like there may have been a modest signal in that study. How do you look at those data and translate that to your own pursuit with your more selective TSLP?

Yes. No, I think you poached that well, modest signal because there are some who believe that, that was a total failure. And I just -- when I look at the data objectively, I don't think it was. It was just miss on a p-value. It wasn't what they wanted. But it's still on an IgA responder basis at week 16, they also generated a p-value, I think it was like 28%, 29%. So I think it shows that there is possibility there.

And the fact that we just showed this data, which we had generated a long time ago and just saved it to present today about the stuff that Hugh presented with the different concentrations, I think that gives you a plausible reason to believe that I get asked this question all the time, well, does potency matter? Well, in some indications, it does. If I only get 15% absorption of the mAb into the skin, if you look at literature that's what it'll say, I want something that's more potent, sticks to the alarmin and doesn't come off. And the other thing that gives me confidence on that side is what we've seen with other alarmins and other people's data sets, which maybe they're private companies, so they don't -- it's not as widely distributed, but it shows that, that's important.

And I would also point to at least some of the Sanofi OX40 data, it's in the same pathway, right? So we designed this study to be pretty efficient I would say, again, I've said this a bunch of times, I'm really very excited about the bispecific and ITK programs. But for us to do a smallish study that can read out within a year on TSLP mAb, to see if we're right, this is a pretty efficient study. And if we are, it would be a great addition to the armamentarium because as Dr. Cameron pointed out, you need to be thinking about layering of treatment, having a background effect. That's far more important than worrying about whether I'm dosing Q12 months, Q6 months, like it just -- to me, that's a little bit of going down the wrong path.

A question about ATI-052. Given the 2 studies that are ongoing, do we expect to be able to differentiate the impact of an anti-TSLP versus an anti-IL-4R impact in those studies?

Roland?

Well, yes, I think this is what we are trying to attempt in these studies. We're going to look at, obviously, a lot of PD and biomarkers in these studies in the atopic dermatitis studies. There are data for dupilumab for biomarkers. And so we're going to compare what we get with our bispecific antibody against this -- the data out there with dupilumab. We do this in collaboration with Emma Guttman's lab, she's had a lot of experience in that space. So yes, we are looking forward to getting this data.

Yes. And I just maybe add one piece on there. We get asked, are we going to do biopsies in that study. We don't think we need to. By doing the tape strips and in conversations with Emma Guttman, she didn't think we need to either because they have such a huge amount of historical data on the effect with dupi that it's not great because it's not all in the same study, it's not head-to-head, but still you can make that inference.

Biren Amin, Piper Sandler. Congrats on all the updates. So I have 3 questions on ATI-052. The first question relates to, I think you mentioned that we'll likely see PD data in the SAD/MAD cohort. Are we likely to see IL-4, IL-13 knockdown in the SAD/MAD cohort when you report that out? And would we be able to compare that to the Phase I SAD/MAD cohort data from Sanofi's lunsekimig? Second question, I think you had mentioned around immunogenicity the fact that 052 uses 045 component on the TSLP side. And so your confidence level there in terms of immunogenicity profile.

However, I think there is a modification of the YTE mutation, the AQQ mutation. Do you expect those modifications to have any changes on immunogenicity? And then third question, as it relates to the Phase Ib planned atopic derm and asthma studies next year, comparison to placebo, would the company consider comparing to bosakitug, for example, where you already have that component on TSLP side in 052 to discern an effect on additive effects on IL-13?

Yes. Thanks for the questions. So first of all, the healthy volunteer study, the SAD/MAD, there's not a lot to be taken away in PD there. I mean we can do, and we are, we'll take blood samples and do challenge studies and things of this sort to look at effect and remaining effect. But most of the PD that you're hearing about with 052 is going to be in the Ib studies with this single asthma dose and then the 5 AD doses.

And there we'll have a very rich PD approach, and we'll be able to also separate out some of the TSLP versus IL-4R component in that effort as well. In terms of ADA, right, there's a YTE and AQQ. Both of those are very well known and historically 30 or 40 years in the making with clinical data. And they don't generate or put a greater risk, I should say, in terms of an ADA profile.

If we were to receive ADA that would be different than 045, it would probably be against the linker or the scFv component on the N-termini of the fabs. And we'll know that because we'll have differentiating assays that will be able to tell exactly where those antidrug antibodies are binding when we do those studies. I think I answered them all.

Could you repeat that question on the Phase Ib?

So the Phase Ib, the planned studies in asthma and AD are comparing to placebo. Thoughts on comparison as an active control to bosakitug where you can differentiate the activity of IL-4 and IL-13.

Yes. Do you want me to take that or...?

Sorry, I forgot that question, but I had the answer. So the comparison is fine, and I'm sure we'll do that. As I mentioned in the IIa trial with 045, we had 4 weekly doses, but they're at 300 milligrams and the potency is slightly different than the 052 bispecific. But we will be looking at EASI scores after that because we did have a 50% reduction in EASI-75 in 045. So I'm fully expecting that when we look at 052 after 5 weekly doses, if we didn't see that, we would be highly concerned.

But I think with the potency we have, the exposures and the affinity against both targets, I'm sure we'll make that comparison. But head-to-head, it's not going to be all that meaningful. We're just looking for a gestalt on whether we're seeing a similar impact. It's not going to be, oh, it's more or less potent or active than 045.

A couple of questions from the web on business development. So could you, Aclaris, catch us up on how -- an update on business development on partnerships? I think it's a broad question, if I'm reading it correctly, but there was one specific question about ATI-1777 as well. So if you could answer it both ways, please.

Yes. So we're usually pretty open that we have active dialogues going on across the board. So we continue to have discussions on 1777. It always kind of comes in fits and starts. I think people are getting more interested in the topical side based on the success of Opzelura. So I don't have a material update there. Across the portfolio, we continue to engage on a number of fronts and anything from monetizing the kind of last of the JAK inhibitor IP for alopecia royalty streams to specific assets both on a regional and more global basis.

So we're optimistic that as we head into the back part of the year that we'll have more to report on that front. Obviously, you can't predict BD, but I think that's why we're so bullish about our cash position just at a basal level, we already get through midyear '28.

Prakhar from Cantor. Maybe a question for Joe. On the ITK selectivity, you talked about the selectivity versus JAK3, but maybe just broader off-target effects and what you saw in the [ kinome 3 ]. And second question, is there -- on the TSLP side, given that you have much better potency and inhibition compared to tezepelumab, what are the safety implications of too much TSLP inhibition?

So with regard to the kinome selectivity, the next-generation compounds, we've looked at that. We looked at about 200 kinases. And there's nothing that we saw that's really of concern to us. So I think we're in pretty good shape there.

Yes. So in regard to TSLP, so we have the IIa data where we dosed with 045, we dosed pretty high, right, 300 milligram every 2 weeks with a 23-day half-life. So there was a fair amount of accumulation as you saw also in the figure. And the safety profile was identical to teze. Nothing popped out. It looked very safe. It looked like you'd be able to go down into younger populations without any incident.

So with the last question, another one from the web, it's a pretty good one to end up on. This one is directed to Joe and Neal. What are you both most enthusiastic about in the pipeline?

Go ahead, Joe. I'll let you go first, and I can close.

So Neal said like his enthusiasm about 10 times already. And I agree with him. I think that the next-generation ITK inhibitors are exciting as is the bispecific. I probably am a little bit more excited about 2138 than maybe Neal is. I think the issue with 2130 obviously is that it has some JAK3 cross reactivity, which helps probably with efficacy, but also brings in the safety issue. But the drug, both preclinically and clinically to date looks really, really good. So I think for me, those 3 assets are the ones that I'd be most excited about.

Yes. I mean I would just echo that. You always have to be, I think, intellectually honest when you're looking across your portfolio so you can make strong capital allocation decisions, particularly in these competitive markets. And I'm not -- I don't feel like I'm a very big hand waver, but I definitely am super excited about the bispecific because of the impact it can make in terms of driving better efficacy, which we believe is always the first thing, the first kind of central tenet you should be thinking about.

And then on the oral ITK side, I mean, look, whenever you can get an oral that has this kind of broad-based activity and check the safety box. And I think we went a long way to doing that with an exceedingly potent molecule that hits JAK3, ITK. NTXK with 2138, we just saw nothing. So it's -- from my perspective, I'm really excited about that and why I use the term game changer or potential game changer there.

So with that, I appreciate the attendance of everyone who showed up in person and joined on the web. Obviously, we're really excited about what 2026 can bring and stay tuned, and we'll be in touch shortly. Thanks.