Aeglea BioTherapeutics Inc Stock

I am Sam Semenkow. I'm one of the senior biotech analysts here at Citi, and it is my pleasure to be hosting Spyre Therapeutics at Citi's 2026 Biopharma Back-to-school Summit. I'm joined by Cameron Turtle, CEO of Spyre. Cameron, welcome, and thank you so much for being here.

Appreciate you having us.

So maybe we just start a little bit high level. You made a ton of progress this year across the pipeline. We still do have a couple more readouts through the rest of the year. Can you just level set where the company stands today and what we can expect from you through year-end?

Sure. So broadly, our goal is to develop products that elevate the standard of care in autoimmune diseases. In general, our approach to doing that is developing what we think are best-in-class monotherapies, long-acting optimized antibodies against what we think are the best biologic targets in each indication. And then in most cases, we're quite interested in evaluating how these best-in-indication or best-in-class antibodies can be combined together to hopefully do better than we're able to do with the monotherapies alone. I would say in inflammatory bowel disease, that approach and strategy is most mature. That's where we started. We have the 3, I would say, near top, if not the top 3 mechanisms in the space, long-acting antibodies against each of them.

Over the last few months, including this week, we've shared data from each of them that I think shows that they're at least as good in terms of best-in-class molecules in terms of efficacy and better dosing than anything else in each of those spaces. And at least I think in our a4ß7 case, maybe can even do better than the first-generation products in terms of efficacy. And then there, we've actually since about April of this year, we've been enrolling the combinations of those assets, which we think have a realistic probability of delivering efficacy that's above and beyond each of them individually.

Beyond IBD, we're first exploring where TL1A should work. I think everyone who has TL1A is interested in this pipeline and a product potential. what indications will TL1A be excellent as a monotherapy? Or is it a combination component in these different indications. We're looking at a basket of rheumatic diseases. We reported RA results recently where the drug is certainly active and well tolerated. We didn't think it was sufficient to advance as a monotherapy in Phase III, though we do think it looks like a potentially good combination component. And then later this year in fourth quarter, we'll have both psoriatic arthritis, PsA and axial spondyloarthritis (axSpA) data, where we'll be making the same evaluation. Is this good enough to advance as a monotherapy? Or does it make sense to combine with the other great mechanisms in those spaces? And then we're also expecting data from others as well that inform our strategy.

So I think in total, there are 7 TL1A proof of concepts this year. I've just talked about a few of them. We'll see the HS data shortly. We know it's positive from Merck. And then we expect to see atopic dermatitis as well as MASH data from Roche as well in the upcoming months. And again, in each of those indications, we should evaluate whether we think it makes sense to advance our molecule on its own or whether we should consider combination therapies. We made an initial bet in HS already, which is that we might be able to leapfrog the monotherapies by combining TL1A with bimekizumab or IL-17A/F. And we think that's a really exciting trial, again, like our IBD strategy, combine the best mechanisms in the space. And hopefully, we can do better than anything else that's out there today.

That is a lot to dig into. Thank you for that. Wonderful. Why don't we start with IBD then? And I know you've been asked this a lot, but the SPY001 data was better than I think what we've seen on the approved drug. And then you have the other data sets that are also looking quite competitive. So what is in your mind right now, now that we have monotherapy data for all 3 assets, the best potential combination? And how will you make that determination when you consider advancing one or more of those forward?

Yes. I think the obvious hint in terms of our certainty about which one is best is given by the fact that we're testing them head-to-head right now, meaning we don't know which of these combinations is best. I think we look at the biology of these and know they're quite orthogonal in terms of how they're benefiting patients with IBD. And we've tested these in a variety of animal models and see that all 3 are additive with each other.

And so I think there's good reason to believe that they'll be additive clinically as well. In terms of which one, we don't know. That's why we're testing them head-to-head. I think we feel very -- increasingly good about the safety of all of these.

Until recently, I would have put a4ß7 and IL-23 above TL1A in terms of our certainty of the safety, though I think in recent months, both in our randomized Phase II data as well as Merck said in Phase III that their TL1A was well tolerated. I think at this point, we feel pretty good about the safety of all of them and the efficacy of all these is good as well. I have a slight bias towards our a4ß7 containing combinations because I think it's an elegant solution to a gut predominant disease to have one agent that's acting in a gut-selective manner and the other being a broader immune suppressant. So you're functionally getting double suppression in the target tissue and then only single suppression everywhere else.

And I think you said in the past, you might just take that best one forward and advance it from there. Is there ever a scenario or an opportunity or even a need in the market where 2 different combinations might be necessary for some patients to cycle through?

As much as I'm hopeful that our combinations could deliver much better efficacy than monotherapy today, I think it's unlikely that we're getting to majority patients in long-term remission forever with our combinations. I would love if that were the answer. I just think that's quite unlikely, meaning I think it's still likely to end up being a cycling market. But IBD is a cycling market that is highly concentrated to the best products. If you look over the last decade, the top 3 drugs have taken almost 70% of the revenue here, and those top 3 drugs have changed. But as soon as you beat the prior standard of care on efficacy without a safety downside, those drugs take the lion's share of the market. I think it's credible that our combinations have the possibility of beating today's standard of care by a meaningful amount.

And I frankly think all 3 of them have a decent shot at that in terms of being those next-generation top-tier products. And I think it will make sense to advance more than one if they're all in that top tier.

And have you started to outline for us what that bar is? Like how much higher do you need to go in terms of efficacy above some of these standards of care? I guess it's combination dependent, but how do we start to think about that?

Yes. I think we look at 2 data sets that help us inform what enough better looks like. One is the history of IBD. I think that's frankly more informative, which is we talked about the transition from the first generation products in the space, which were Humira, Remicade, Stelara. And now today, we see Entyvio, Skyrizi, Tremfya. And these drugs beat that first generation, in most cases in head-to-head trials with a delta of about 10% on clinical remission. I mean about 8% in Varsity, plus or minus 10%, depending on which of the IL-23p19 versus IL-12/23p40 studies you looked at. And so that 10% delta is about what we see when we survey gastroenterologists in terms of what a superior result to them looks like.

And so I think that's our bar as well. We have to beat the best monotherapies by about 10 percentage points. And I think those drugs would then be superior on efficacy, hopefully no difference on safety. I think our combinations are more convenient than any monotherapy on the market today, and I expect we price them in the same range as a branded drug. If those -- all those pieces come together, I think you just have products that are the best in the space.

And so maybe we take -- spend a little bit of time on 003, the monotherapy data that you presented earlier this week. What stood out from that data set? You mentioned safety already being key. But what else stood out that convince you that this is just reinforced that it's a part of the combination?

Yes. So I think we started going into all these data sets with an expectation for them, which is in the TL1A and the IL-23 cases, we looked at these classes and see that, one, the molecules within the class are not meaningfully differentiated in terms of placebo-adjusted efficacy in either the TL1A or the IL-23 class. They're more similar than they are different. And particularly in the IL-23 case, the dose and exposure responses are quite flat, meaning we don't see this steep relationship between the amount of drug on board and efficacy. And this led us to expect going into our readouts with both our TL1A and our IL-23 that they should perform like the in-class molecules. There's no strong reason to believe that they would be better. That's a bit different than our expectation in going to the a4ß7 readout, where we did see a pretty strong exposure response for vedolizumab, both in their Phase III data and in the real-world setting, which is why we chose a higher dose to go after with our SPY001 readout.

And again, all of these are -- they're 40-odd patient open-label studies, and so we take them with a grain of salt, but I think it supports the idea that the a4ß7 might be doing -- deliver greater efficacy and then the TL1A and IL-23 are similar.

And what about the potential for ADAs for the TL1A? I know that that's been a concern for some of the assets, but perhaps less so for you. Just walk us through that.

Yes. I think in general, I'm not convinced yet that we know that immunogenicity of TL1A has caused a reduction in efficacy. At least in the data we've seen to date is one of the best classes in IBD, if not the best class overall. I think there's some question as to whether the maintenance data is as good as you might hope it to be, and therefore, maybe that's an immunogenicity issue that's causing a reduction in efficacy and maintenance. I'm not sure that's necessarily true as they're either half-life issues in terms of dosing interval and these molecules or potency as well. Any of these things could basically lead to an incomplete target suppression in the maintenance setting that may not be ADA related. But we'll see more as we get, I think, these Phase III data sets from some of the other sponsors, especially Merck, for example, doubled their dosing frequency going to Phase III in the Crohn's study.

And I think that will give us an indication of whether it was underdosed in maintenance and can you get greater target capture. And often, you can dose through an ADA issue, and so we might see that in the Merck case. So I'm not sure it's an issue yet. I don't think we've -- in terms of the range of the TL1As, ours is towards the lower end, more comparable to the Merck and Sanofi/Teva molecules. Some of the others have much higher rates of ADAs. I think they would make a strong case that they don't think it's impacting their efficacy.

And you brought up Crohn's. At what point do you think that Spyre could consider moving into that? What do you need to see what data set do you want in hand before that?

Yes. It's our strong expectation that we'll advance whichever programs advance from the SKYLINE study will advance in both in UC and Crohn's. I mean we know each of these mechanisms works in both UC and Crohn's. And I think over the data over the last few months, both from J&J and AbbVie from the DUET studies and the TargetCD study, give us pretty good confidence that combinations work quite similarly in UC and Crohn's as well, including a4ß7, including IL-23 and including TNF. So I think you have mechanisms that are the same as or similar to ours. I think we have good confidence that they're going to show additive efficacy in both of these indications. And so our expectation is whichever winner or winners we're advancing from the SKYLINE study will advance in both UC and Crohn's.

Got it. Okay. And when you -- you've alluded to this in the beginning, but when you think about the competitive landscape, there's a bunch of different combinations out. Some of them are oral and injectable. Some of them are clearly not fit for purpose necessarily like yours have been developed, some are bispecifics. I mean what is specific for why Spyre chose the co-formulation approach to start there? And like what are the advantages there versus all these other approaches?

Yes. I mean I think it's fair to say that we were a little bit at the right place at the right time when VEGA came out. And basically, we've been working in this space for 30 years, looking at different mechanisms and hitting this therapeutic ceiling. And then the combination comes out and shows that if we add these mechanisms together, we break that. And we were there picking development candidates against the 3 best mechanisms in the space and could pick them not just for best-in-class for the individual molecules, but could pick antibodies that co-formulate incredibly well at high concentration that we could run combination tox for and prove that they're well tolerated together to run these animal pharmacology studies as well.

And I think that setup leads to what the differentiation here now, whereas most other players in the space basically were combining what they had in hand when Vega came out, and that has tended to be a mix of things, includes orals and injectables, which some people for one or the other, no one wants both. I think that's tricky from a pricing perspective, combining antibodies with different half-lives. And so the dosing intervals are challenging, combining antibodies that were not designed to co-formulate together, and it's certainly no guarantee that any 2 antibodies are going to be stable with low viscosity and the same pH and excipients as each other.

We have that. It's not guaranteed that others get there. And then also our ability of having these all at the same time has let us run this what I think is a pretty efficient and innovative development program to get them there quickly.

And on the regulatory side, how should we think about demonstrating the efficacy from each of those? What's the latest from FDA on requirements for approving the efficacy from each component?

Yes. So I think in general, we believe that we have to test contribution of components. We need to demonstrate the monotherapies beat placebo and the combinations beat the monotherapy components. Statistically, benefit would be the best, of course. And that's the design of the Skyline study is to accomplish that. So we have all 3 monotherapies against placebo, and we have all 3 combinations that can be compared against placebo as well as their monotherapy components. Obviously, we're hopeful that we're going to hit that in this trial. And I think if we do on any of the -- we have 3 shots at this as well, I think that sets up a relatively straightforward pivotal path.

I think we actually have a reasonable idea of what that path looks like, learning from precedent in the space, most obviously J&J, who they ran a number of Phase II studies with their combination, aiming for contribution of components, frankly, didn't quite hit it in terms of -- in a single study showing that the monotherapies both beat placebo and then the combos beat the monos. That never was quite accomplished on a primary endpoint and yet their Phase III looks pretty straightforward. It's a 2-arm Phase III. It's actually the first non-placebo Phase III in IBD. I think that's a very important precedent and actually helpful precedent because a non-placebo-controlled Phase III both gives you an active comparator, which could be incredibly helpful from a pricing and access perspective.

And no placebo Phase III is going to enroll much more quickly than a placebo-controlled Phase II.

How much risk do you think in your study there is to proving that we're hitting on contribution of components?

I mean I think the study is well designed to achieve the deltas that we expect to see. I mean we know pretty well what the monotherapies will show versus placebo based on our data and others. The combination additivity, this is -- these are all first-in-class. I think we have a reasonable estimate of how much we think they will win by, and we're testing that. We also have 3 shots at it. So I think that gives us pretty good odds of having at least one that shows it.

Is there anything else we're missing from the IBD conversation, do you think, before we move into rheumatology?

I don't think so. I mean I think we've proven all the pieces of our portfolio work. I think we'll see how good the combinations add up. I think all the evidence is pointing towards these are likely to provide some additivity.

I think additivity in the 10% range, I think, is very achievable between these multiple mechanisms, and I think that would be enough to shift the market towards these products in a meaningful way.

When do you think we could get more granularity on when the study will read out in '27?

Yes. So we've been enrolling the combo since April. So we're 5 months into the Part B enrollment. I think we feel very comfortable with our '27 guidance. We'll probably provide a narrowed window, I would expect towards the end of this year, early next year when we're a bit further along.

Okay. Perfect. Looking forward to that. So then maybe let's just move into the rheumatology piece and beyond, including HS now, I guess, we have to say, beyond IBD rather than rheumatology. So the RA, maybe let's just start there. So that data, you noted was clearly active, but maybe not at the bar that you were looking for. But you mentioned interestingly about a potential combination approach. So how should we think about just combination, I guess, with your second TL1A072?

I think -- I mean, for any combination, best case scenarios, 2 active agents, neither with safety concerns. Challenge in RA is there aren't very many of those. Most things in RA that have demonstrable efficacy in deep placebo also carry meaningful safety risks. And so -- and we have actually seen combination trials run in RA previously that weren't successful that saw some additive safety concerns when mechanisms that individually have them were added together. So I think in RA, we're a little more cautious about combining TL1A with other mechanisms. I think if we didn't have so many other exciting things ongoing, that would be a path that we certainly could have or might have considered pursuing. Today, though, I think we want to see the results in PsA and axSpA. There, I think the combinations are much more obvious. We already have the agents that would be most obvious to combine them with.

Same in HS. I think if TL1A is in the range of BIMZELX efficacy and then we're combining it with BIMZELX or a long-acting version of BIMZELX, I think that's incredibly likely to be the best agents in those spaces as well. RA is trickier. I think it's something that we could explore over time, but it's not something that we thought this is an immediate priority for us.

And we had talked about this. If RA worked or didn't work, how much does that read through to psoriatic arthritis or axSpA? And I think there was a general consensus that if it worked in RA, it should work in psoriatic arthritis and axSpA. Just based on the preclinical data you have, it went the opposite way. It worked, but not quite as much as you want. So what does that read into the expectations for the psoriatic arthritis and axSpA data later this year?

Yes. I mean there's incomplete correlation between these. the TNFs and JAKs work across all 3. I would say this TL1A is active in RA. I do expect it to be active in PsA and axSpA as well. We do see that there's decent differences between these indications in terms of individual mechanism efficacy. 17s and 23s would be the classic case that don't work as well enough in RA alone, but they're the leading products in PsA and axSpA.

So -- and I think there's some similarities between the TL1A activity on Th17 cells with the IL-17 or 23 paths as well. So we certainly don't write off the potential that TL1A could work in these indications well enough as a monotherapy. I think that's still a reasonable possibility. And I think in many ways, I might actually increase my probability that it's a great combo component. If it's effective on the joint scores and it doesn't have a safety downside, I think it's actually a good bet.

So maybe with psoriatic arthritis first. Let's say it works. It meets that minimum bar that you've set for moving forward. But I mean you've made this point several times that you have the IL-23, you could do a combination, and we know IL-23 works. So why -- is there a possibility that you could run that combo study in addition to the monotherapy study to really figure out if this is worth advancing combo?

Because I think psoriatic arthritis is one of those -- you cycle through a lot of therapies kind of in a little way similar to UC. So why not just raise the bar there?

Yes. Actually, it's something we think about in every indication, as you can imagine. I think our a4ß7 data is amazing in IBD. That could be a great monotherapy agent as well, but we feel quite confident that combos will add up and they're not different in time line relatively compared to the monotherapies. And so that has led us to prioritize the combinations there. In the rheumatic diseases, first, we need to see how good TL1A is individually. So we need this proof of concept. And then how good it is, I think, will determine, does it make sense to advance to the mono, -- does it make sense to advance to the combo. There's a small sliver where it could make sense to do both. And so we'll see depending on how good the data are.

HS, same decision, right? I think we'll see soon enough how good TL1A is relative to BIMZELX. I think if you have BIMZELX like efficacy with safety that could be cleaner than BIMZELX, frankly. And I think we would have the most convenient product in the space. It could be a leading monotherapy in this space with high probability. Combo still could beat it, but that's in an immature market that is growing, it may actually make -- it could make sense to have both.

Right. And so for HS, when we see that Merck data, they commented on HiSCR50. And I think we know that the field has sort of moved beyond that to HiSCR75. When we see the detailed data, like what are you hoping to see? Like what magnitude of efficacy would be convincing for you?

Yes. I mean, yes, the question for us is, is it good enough to advance ours as a monotherapy. That's the decision for us. I mean it sounds like they're advancing theirs, which I suspect means it's pretty close. And from a powering perspective, we thought it had to be pretty close as well. So I think we're encouraged by that. I think the combo is always going to make sense. When we test among dermatologists, beating BIMZELX or TL1A by 10 points is enough. It's like the IBD answer as well. It's a very serious disease. Patients and physicians are looking for greater efficacy. I think combining top 2 mechanisms is a pretty good approach for that as well. So that's what we're looking for is how close is the efficacy to BIMZELX basically. And if it's in the range, I think that would be very exciting.

You mentioned the long-acting IL-17 as a potential. That seems feasible. Would that be, I guess, a partnership? Or do you have one on your own pipeline?

We we have our own. So we have our 007, our coolest name asset is a long-acting IL-17. And so we're running the current study with 5072 plus BIMZELX against BIMZELX alone. Basically it will tell us how much better is the combo than the current standard of care. And then if that's successful, then we would plan to advance co-formulated combination of our TL1A and a long-acting IL-17.

Got it. Okay. And HS is difficult. I mean we've seen these trials with the placebo arms behave not as you would like them to several times now.

So how do you think about managing that with this market just because it has so much heterogeneity?

Yes. So in this initial study, it's actually -- it's just combination against BIMZELX, right? So I think we'll have a pretty good sense. I think we roughly know where BIMZELX will land. We think we know what we need to beat it by -- you made an interesting point about the field moving from HiSCR50 to 75, and we generally agree. So you'll see in our study design, the primary endpoint is HiSCR75. I think we've learned from IBD that combinations tend to outperform more on the deeper endpoints, which I think makes sense. Monotherapies only have a certain level of efficacy, the combos get to a deeper level of response or remission. I think that we roughly know where HiSCR75 is going to land for BIMZELX.

I think we'd be hopeful to beat that by a meaningful amount.

And so you have the psoriatic arthritis, the oxy cards to turn, you have HS starting up, but you mentioned plenty of other potential indications from third-party data that you could consider. How are you thinking about capital allocation going forward, I guess, outside in the rim and derm space or beyond? And how many of these proof-of-concept studies could you reasonably start up with your current capital?

Yes. So as of last quarter, we have $1.1 billion on the balance sheet. So -- and we say the runway is into the second half '29. That, of course, includes all of these Phase IIs and well more than a year beyond a couple of years beyond all of them.

So I think we're very well funded for all the proof of concepts. I would even say we've prepaid some amount or prefunded some amount of Phase III work. Which Phase IIIs it will be, we don't know yet. I think this year, we're going to have a bunch more monotherapy readouts as well. Next year, we could have as many as 4 combo readouts, 3 in IBD and 1 in HS. I think those are going to be very high priority products to fund. I suspect if we have an indication-leading product, those will be trials that folks are going to be willing to fund. So far, we've been 100% equity to date. I think as we get into late-stage development, more opportunities are available. I mean I think equity will continue to be a part of the story, but I think we'll have lots of choices.

Okay. And I guess then you have a lot of choices. How do you prioritize the indications? Like are there any certain criteria when you think about what you need in terms of like size and competitive landscape?

Yes. I mean I think in all of these markets are all large. I mean HS is the smallest. And I think by when we're launching, we expect it to be closing around $10 billion. That's the smallest of the markets we're looking at. So I think if we have indication-leading products in any of them, it's going to be kind of an obvious decision, and we would look for the ROI in each of them individually.

And when you think about the business, let's call it, 5 years into the future, I mean, you would have presumably multiple Phase IIIs running in IBD and hopefully, other indications as well. What do you start to envision for the business from there?

Yes. I mean I think the opportunity here is vast. I think the potential for indication-leading products in some of the largest markets in our business, I think we have many shots at that, and I think there are reasonably high probability shots at that. I feel pretty good about our ability to go execute on these Phase IIIs. Frankly, the Phase IIs that we're running are very large and complex relative to most Phase IIs that biotechs take on. So the jump to Phase III is quite a bit smaller here. I mean our Phase III and our Phase II in IBD is 300 sites across 30-plus countries. It's a Phase III size Phase II. I feel confident in our ability to scale up and do that. In 5 years, we'll definitely be thinking about, if not actively commercializing things as well. That then we need to think about what things can we take on ourselves.

Can we really go build sales forces in rheum, derm and IBD, -- we'll see. But I think if these products deliver what we think they could, I think we'll have lots of choices.

And I mean, I guess your play is best-in-class efficacy almost across the board, right? Like that's sort of how you're going to win this share when you think about competing against these large pharmas who own a lot of these markets right now.

I mean, yes, each of them is a little bit different. But yes, in IBD, the products that win on efficacy in a meaningful amount take the lion's share of the market. I think we have 3 -- today, I wouldn't trade my -- one of my combos for anything else in development. I'm not promising we're going to have the top 3 drugs in the space when we ultimately get there, but I think there's a good shot we'll have at least one, if not more than one in that category.

And just a quick AI question, if I may. How is Spyre leveraging this within the business? Are you building new tools, new drugs with it? Are you leveraging it for productivity? Just curious how it's been most impactful for Spyre.

We use it, I would say, almost every function in the company uses these tools all over the place, from accountants to lawyers to clinical development and regulatory folks, everyone is using the tools for various things. I would not say any of our antibodies are AI designed or anything like that, but I think these tools are getting used ubiquitously throughout. I frankly think it's easier to incorporate new tools in a small growing company. Everyone here is excited about everyone is busy. We're doing a lot of complicated hard trials and folks that can find ways to be more efficient in their day-to-day. It's great. Frankly, it just means we grow slightly slower and our headcount growth is slower than it might have been if we didn't have these tools.

Fair enough.

Well, Cameron, we've been very efficient with our time. I want to just offer you an opportunity to say any closing remarks and recap what's next for us as you will.

Yes, sure. I mean I think it's one of the most exciting times in biotech's life here, which is figuring out which of our products could be indication leading across, as I said, some of the largest markets in biotech. And I think we have good shots at having these best-in-indication products across IBD, across HS, and we'll see in the rheumatic diseases in the next few months as well. So it's an incredibly exciting time, a lot ahead.

Great. Well, thank you so much. This has been wonderful. I appreciate the time.

Thanks, Cameron.

Okay. We'll continue with the next session. I'm Paul Choi, and I cover the mid-cap biotech sector here at the firm. It's my pleasure to have Spyre Therapeutics here and Cameron to my left.

Maybe what we'll do is kick it off with Cameron talking about maybe what the company's strategic priorities are for the remainder of the year and going into 2027.

Yes. Sounds good. So as a brief background, Spyre is a company that's aiming to improve the standard of care across the range of autoimmune diseases. Our initial focus was inflammatory bowel disease, where we're working on 3 validated targets, alpha 4 beta 7, TL1A and IL-23 and developing them not only as monotherapies, but in advanced combination therapies as well, where we think we have some of the most interesting co-formulated long-acting combinations of these agents.

Outside of IBD, we're also interested in exploring the potential of TL1A as a pipeline in a product candidate in a range we're testing in a basket of rheumatic diseases. We're looking at rheumatoid arthritis, psoriatic arthritis and axial spondyloarthritis. And really, the next 12 months, I would say, is one of the most interesting periods for the company and I think more broadly in I&I or biotech in that we'll have 5 more Phase II readouts this year. We've already had our first a couple of months ago that we thought was quite encouraging. We'll next have our TL1A data as a monotherapy in IBD, then our IL-23 as a monotherapy in IBD in the third quarter.

And then on the rheumatic disease side, we expect the RA placebo-controlled data in the third quarter and the placebo-controlled data for psoriatic and axial spondyloarthritis in the fourth quarter of this year. And if that's not enough, as we get into '27, we expect to read out our combination therapies. So again, we expect this to be kind of one of the most interesting times in the space where we'll hopefully see multiple products that could be indication-leading products across some of the largest markets in the space.

Clearly, a lot going on here. So a very busy next 12 to 18 months for you guys. But maybe starting with some more background on the company. There are multiple approaches and multiple technologies to creating long-acting antibodies. Can you maybe talk through what is -- or what is Spyre's sort of special sauce in terms of the approach here? And can you characterize the engineering and the work that goes into developing these co-formulatable, if that's a word, of antibodies here?

Yes. I think you actually hit on, especially in the inflammatory bowel disease side, the key differentiator, which is that, look, it's not trivial to make any antibody, make long-acting ones. I think that's never trivial. But making high concentration co-formulatable ones that fully address each target and have the potential to have additive efficacy in a convenient product format that's particularly tricky. And we spent quite a while picking antibodies that could do that. throw multiple ones that could not be co-formulated at high concentrations.

And what we've seen in IBD, there's these really interesting proof-of-concept studies that read out a couple of years ago. And seeing that we -- in our discovery campaign, we picked antibodies that could be co-formulated that way. Whereas if you're starting with existing antibodies against the target, it's never guaranteed that you can actually get to that ideal product profile. So our ability to get kind of both of these agents at high concentration in a single injection is quite unique.

Okay. I guess maybe at a high level, what are the advantages to developing co-formulations versus bispecific antibodies. And there are some companies working on just dual targeting approaches within a single asset versus your strategy. Can you maybe walk us through what are sort of the pros and cons here?

Yes, sure. It's a topic that we've thought about for years, obviously. And even as we were deciding how to pursue these, we considered the bispecific formats. And the fundamental reason that we went after the co-formulated strategy is that this is a different case than what I would consider some of the really elegant applications of bispecifics, really what you see in oncology, where the goal is bringing 2 targets together and causing some unique biology where you're causing the depletion of some cell type or some target that's driving the disease. That's not the target in what we're working in, in the autoimmune space.

The goal is fully blockading each of the 2 targets independently of each other. And in fact, I think there could be, in some cases, especially where you have a membrane-bound target on one side and an inflammatory cytokine on the other, that you actually get biology you don't want at all when you bring these things together and you could actually get immune activation instead of the suppression that you're targeting. And so really, that was the fundamental reason that we pursued kind of the co-formulation approach of independent antibodies versus the bispecifics.

I think in terms of the product profile of our combinations, we do expect them to have at least a high probability of being superior to the bispecific approach as well on a few properties. One, the stotiometry, we have the ability to flex. They don't have to be 1:1 or 2:1 or whatever the bispecific construct that's chosen. Two, I think we've seen avidity issues with multiple antibodies as in the engagement of each target is different when they're in a bispecific construct and when you have independent antibodies that I think we've pretty well characterized.

And then lastly, immunogenicity is always a concern for biologic targets where you form antidrug antibodies against your therapeutic antibodies. And we know on at least one of our targets, TL1A can be immunogenic on its own, but you can get antidrug antibodies. And typically, when you move to a multi-specific construct, it increases the immunogenicity. I think we've actually seen that with the 2 TL1A bispecifics so far that have reported data that the immunogenicity has actually gone up when they add another target to it because you can form these large immune complexes.

Interestingly, in contrast, we have an example of a co-administered or co-formulated product from J&J, where they looked at a TNF and IL-23. TNF has a lot of similar properties in terms of TL1A, including why it can be immunogenic. And what we saw is that the addition of an IL-23 actually suppresses the immunogenicity to the TNF. So whereas in the bispecific construct, I think immunogenicity is more likely than not to increase. I think the co-formulation or co-administration is actually more likely to decrease immunogenicity and get greater functional exposure of your antibodies.

So yes, something we thought about a lot for years. I think there are many reasons why we believe the co-formulation approach is likely to be superior in the long run.

For those listening online and in the audience who may be unaware, you recently top line some results for your lead asset 001. Can you maybe briefly recap the data for us, Cameron, in UC? And I think earlier, you said the approach is to work on developing assets for validated targets. So I think investors kind of knew that this would likely work, but you also surprised by showing efficacy that was much better than expected. And can you maybe elaborate as to why you think that might have occurred?

Yes. So for background, our first agent, which is called 5001, targeting alpha 4 beta 7, the same target as Takeda's ENTYVIO. And we knew that the epitope and the potency was quite similar. But what we found interesting from the Phase III and real-world data from Takeda's ENTYVIO is that what they saw is that individuals that had higher exposures of the drug, both in the Phase III context and in the real world, tended to have much higher rates of clinical remission.

And so what we were aiming for with 001 was to test whether that was correlation and just something that occurred but not due to the drug itself. or causal as in the more drug actually does lead to higher remission. And so what we intended to do, and I think what we've shown with this is test a much higher concentration overall with the majority of patients in our study into the fourth quartile of where vedolizumab exposed patients. And we saw, as you mentioned, what we thought were really encouraging results on clinical remission, on endoscopic improvement, on histologic improvement that granted is a small open-label 40-some patient cohort, but I think supports the idea that it's at least as good and potentially might have superior efficacy compared to ENTYVIO.

And as we think about the totality of our pipeline, it's really a great place to start. I mean, as exciting as those data are, I still think it might be our fourth best product in IBD and that I think the combinations with TL1A or IL-23 are reasonably, if not very likely to add efficacy on top of that. And I think those products could be some of the best in the space.

You talked about 001 getting into that fourth quartile of sort of AUC and exposure compared to what has historically been seen within ETYVIO. And so not to necessarily create outlined expectations, but does this, in your view, potentially indicate that your next in line assets for 002 and 003 could similarly see better results than their respective historical comps?

I would love if that were true, but unfortunately, I don't think the data really suggest that, that's likely. So in alpha 4 beta 7, I mentioned we had this historic data that higher exposures lead to better efficacy. I'm not sure that's the case for TL1A or IL-23. So in both cases, we have 3 first-generation molecules in the TL1A case, it's now Merck, Roche and Sanofi. In the IL-23 case, it's AbbVie, J&J and Lilly who have IL-23. And across 3 in both indications, we don't see a dramatic difference between these 3 agents in terms of placebo-adjusted efficacy.

And I think the most likely read of that is that these are at the plateau or kind of the top of the exposure response relationship for each of these targets. And so really for both 002 and 003, what we're expecting to see is that these kind of replicate the first-generation molecules in terms of efficacy, but we're able to do it with much less drug because we have these long-acting kind of YTE modified antibodies. We can do the same thing that others are doing with grams and grams of drug with a much smaller amount. And that is incredibly important as we think about these co-formulations.

And I think uniquely, to get to a single shot kind of co-formulation that is able to fully engage both targets, you again really need both antibodies to be designed for that to be long-acting as well. So you can just deliver much less drug and get it into a single injection. That's very hard to do if you have even one agent that isn't modified in this way.

Great. Maybe just to double-click on that. Is that something that will only be true for the induction data that you're currently pursuing right now with the 3 drugs? And then do you think -- maybe just sticking with 001 and then extrapolating to the other 2 candidates, the maintenance data versus historical comps might be improved upon? How do you think about those 2 different areas?

Yes. And I should have mentioned, I think TL1A and maintenance, I think that answer is not yet. No. So I think in all 3 of the first-generation TL1A cases, I do believe there's some evidence that we may not have fully saturated TL1A in the maintenance setting, whereas in contrast, I think in induction, we have. So I think we may see more TL1A maintenance data, both from others and then us we'll get our maintenance data next year.

There, I do think it's possible that TL1A has not been fully saturated. And I think for the first-generation molecules, it's for different reasons. Actually, it could be a relatively short half-life to the dosing interval, could be a potency weakness, could be immunogenicity, bioavailability issues with those molecules that could lead to incomplete target coverage in the maintenance setting.

I think with our molecules that have the high potency, low immunogenicity, great formulation and bioavailability, I think we'll be able to test whether TL1A has not been fully saturated in maintenance, but we'll see those data next year, not in the induction readout that we have in the upcoming weeks and months.

We have a little more data given that there are multiple commercially available IL-23. Does this also hold in your view for that target as well?

No. I think IL-23 and alpha 4 beta7 and look like they're saturated in maintenance. Even for ENTYVIO, we don't see the same striking exposure response that we did in the induction setting. It really weakens and goes away in maintenance. So I think kind of the increased target coverage in maintenance may lead to greater efficacy for TL1, whereas in induction, I think the best bet is for alpha 4. On the IL-23 cases, I think that target has been pretty well covered.

Okay. I want to turn your combination products, which, as you mentioned, will start to read out in 2027. We have some historical precedent data from J&J, as you referenced. First, the VEA data from many years ago. And more recently, we got an update from the DUET program. Can you maybe talk a little bit about what are the learnings from those 2 studies? And then we'll turn to maybe some of the other competitors working on combinations as well, too.

Sure. So I think, first of all, the field is a debt to J&J in terms of taking on the first randomized combination study in the space with VEGA, which really set the field on fire. I mean for background, 2 decades of development, half dozen approved classes. We've hit a therapeutic ceiling as the physicians refer to it of about 25% placebo-adjusted remission in the space. And then the J&J VEGA study comes out, first-line naive patients, roughly double the remission rate in that population compared to either of the 2 components. And I think really directs everyone who's serious about IBD that combinations are likely the future.

I think the challenge with that combo has become evident in the more recent DUET studies in that in this -- in the DUET trials, we moved from an all naive population in VEGA to a fully refractory population. So they failed at least 1 drug and in many cases, 2 or 3-plus drugs. And what was observed in that study is, one, the overall deltas declined in the combination relative to the components. And what we saw in particular is that one of the components, gilimumab or SymPonNy, the response and remission rates to that drug in the context of having previously failed another TNF low single digit, in some cases, response and remission rate for that arm. And I think it helps explain why the delta for the combination doesn't look as good. And I think really highlights the fact that what components are in your combo matter and what your trial population or your target population is matters a lot.

And so for us, we think it's a very encouraging setup that replacing a TNF, in particular, kind of not one of these -- the leading TNFs in the space with a likely -- or definitely superior class in alpha 4 beta 7 or a likely superior class in TL1A is likely to lead to a better outcome than using a TNF in your combination. And then beyond that, running the trial in a population like ours where we have -- about half of the study is naive. So it will, we think, look more like the VEGA results.

And then in the half of our trial that is refractory, we're actually limiting the number of patients that have failed our mechanisms in that portion of the study. And so we think it's much less likely to see the decline of the individual contribution of our mechanisms in a population where they haven't failed our specific classes.

So in total, I would say the J&J data incredibly encouraging and that combinations can be additive even with these weaknesses, and I think really sets an opportunity for us to come with combinations that are both better components individually and then a trial population that doesn't limit the efficacy of our drug.

There is a competitor who's instead of using a TNF using 2 of the targets that you guys are prosecuting, which is AbbVie 382 plus Skyrizi, the alpha 4 beta 7 plus IL-23. Can you maybe comment at a high level what you think of that and just how -- what that may inform for your potential learnings here?

Yes. We were surprised and encouraged to see the data. I mean, granted, we haven't seen the totality of the data, kind of endpoint, one time point, interim readout of an ongoing open-label study. So we wait to be seen the totality of the data, but certainly encouraging to see that an alpha 4 beta 7-based combo showed roughly additive efficacy in the Crohn's population.

Prior to that readout, I would say the leaders in the field, some of our Scientific Advisory Board members would have said alpha 4 beta 7 may not be a great target in Crohn's disease because we see that the ENTYVIO efficacy is not quite as good there. Now I think that might have been slightly biased...

Versus you see.

Versus you see where ENTYVIO is an excellent product. And I think partially that might have been biased by the fact that when ENTYVIO was initially approved in Crohn's, it looked at a week 6 endpoint, which we know is just too early for maximum efficacy of alpha 4 beta 7. And so we've always wanted to test our combos in both indications, even including alpha 4. And this AbbVie disclosure, I think, really increases the probability that alpha 4 beta 7 is a great component in both ulcerative colitis and Crohn's.

In fact, I've always thought it's one of the better choices as we think about combinations in general for a GI predominant disease to use one component that is gut selective and has the cleanest safety profile of any mechanism in the space combined with a systemic drug like a TL1A or an IL-23, which both individually clean, but the combination then is duly suppressing the immune system in the target tissues it got, but only single suppression everywhere else. I think that's kind of how it's most likely to develop an ideal risk-benefit ratio for an IBD patient.

Do these J&J and AbbVie data between DUET and what they've recently disclosed with 382 give you any insight beyond what you've said, what might be the best combination here in IBD. You haven't really spoken to TL1A necessarily here. And so I'm just sort of curious if that is substituted for ilimumab or TNF alpha, might that be a potential avenue for improvement here?

Yes. I think prior to the AbbVie disclosure, you might have said our TL1A, IL-23 combination is most similar to the J&J combo that TNF and TL1A have some similarities. And so we might expect type of additivity or synergistic activity seen there. Now we see that alpha 4 and IL-23 work pretty well together, at least in the Crohn's disease side. So I think when we look at the totality of our portfolio, I think they're all quite validated in terms of the likelihood that these will work in both ulcerative colitis and Crohn's disease.

And then I think kind of the way that we've optimized each of the individual mechanisms and can dose them together sets them up to be really a differentiated product compared to what both of those companies are planning to advance in monthly formats, including as on-body devices relative to auto-injectors. I think we have kind of the best possible versions of these combinations.

This is more theoretical, but your choice of words earlier was primarily around the word additive versus synergistic. Just curious how you think about room for incremental improvement? Are there synergies from -- potentially from the combinations you're pursuing? I would agree, and I think most investors would agree that the DUET data and the Vega data look more additive than anything else. So just maybe your high-level thoughts there for the potential for incremental improvements.

Yes. So in general, we start with the biology that we think across these mechanisms, but in particular, with alpha 4 beta 7 combined with the cytokine, they're very orthogonal and they're blocking different pathways of this disease. Alpha 4 is a trafficking mechanism in terms of immune cells getting into the affected tissue versus TL1A and IL-23 cytokines and blocking the inflammation itself once you're in the target tissue. So I think those do seem like additive effects with alpha 4 combined with each of these other 2.

In terms of synergy, I think it may be more likely that you'd see what I would call synergy between TL1A and IL-23. Maybe in terms of the signaling pathways, there's some described escape pathways between TNF signaling and IL-23 signaling that could be evidence for synergy. And then I would also describe, as I mentioned previously, the reduction of immunogenicity to other targets, I would describe that as a synergistic activity. that IL-23 actually reducing immunogenicity to your other targets, I would call that a synergistic effect.

So I think depending on which combination we look at, could be somewhere between additive and synergistic. How that will translate to the endpoints in IBD is why we're running the trial. I don't think we know exactly the endpoints in IBD, they tend to be threshold measures, kind of at this level of response, it's a response, at this level, it's a remission, at this level, et cetera, kind of how those additive and synergistic effects translate to those endpoints, we'll have to see as we run the study.

Great. Can you maybe provide a quick update on the enrollment status for your combination programs? And just how -- at least at this point, you might think about the potential time lines for those studies reading out in 2027?

Yes. So as a reminder, it's a 2-part study. Part A, which is the monotherapy open-label portion. And then in Part B, it's the 6 different active agents against placebo. And we announced back in April that we finished enrolling in Part A, which sets up the Part A readout over the next few months and the initiation of Part B enrollment. So now we're enrolling across more than a dozen countries, all of these different arms.

We expect ultimately to have almost 300 sites active in the study, have north of 150 already going. So the enthusiasm I've always suspected would be high. I think it has been in terms of both the low placebo rate, proven mechanisms and 3 very interesting combinations. But we're only 2 months in. So, so far, our guidance is reading out this next year. I would expect as we get towards the end of this year, we should be able to narrow the window in terms of when we'll expect the full readout next year.

Okay. Maybe turning towards how you think about clinical development strategy of whichever combo sort of emerges as the potential winner here or best product. Can you maybe talk to us about the rationale of pursuing a development plan in naive patients versus treatment-experienced patients, just as you think about maybe both regulatory and payer considerations in particular, down the road?

Yes. So first, we think it's important to generate broad data, and that's why we're running a study that will include naive as well as refractory. So we'll see the response from first line to likely third line plus in terms of the response of our combinations in all those different populations. Of course, that will help us guide where we advance it. I think we can learn from J&J, as we've talked about, that the naive setting is really where they saw the most impressive results in terms of the delta, maybe again in the very refractory population, but I think that might be due to the particular mechanisms that they have and their populations as we talked about.

I think in general, what we would love to see in this space and what I think the physicians would be hoping for, this is a top-down market, meaning that physicians want to use the best drug first because there are irreversible and substantial consequences of this disease, hospitalizations, surgeries, resections, you don't get that back. And so what physicians have learned and we have great studies, the profile study in particular, showed that top-down therapy is not only better for long-term outcomes for patients, but it also is cost effective. And I think that is really what we are hoping to see, which is that [indiscernible] line as a naive population [indiscernible] I think that's where we're going to see the largest benefit and that patients can hopefully get a higher proportion of them into remission early and keep them on there longer, avoiding some of these extraordinary costs of caring for IBD patients.

And I think what's interesting about this space, if we look back over the last few years, we've seen head-to-head efficacy improvements of about 10% on remissions about ENTYVIO beating HUMIRA and Skyrizi and TREMFYA beating STELARA have led to massive practice shifts towards those drugs, including in very early line for second-line patients, even though there's a pretty substantial price differentiation between the biosimilars now and these branded drugs. I think if we're able to deliver a combination product that beats those drugs by that type of level and we can get it early, I think this is really what will be best for physicians, patients and payers alike.

Yes. So you're right. This -- the availability of biosimilars has not stopped ENTYVIO from becoming a multibillion-dollar product in recent years. Maybe putting it all together, Cameron, as you think about your pivotal studies down the road after you present all the data coming up here in '26 and '27. In a situation where your combination candidates or monotherapy candidates are more differentiated by inches versus yards, how do you think about selecting either one candidate for advancement into pivotal versus multiple candidates? And just sort of what is the, I guess, the calculus behind that?

Yes. I mean kind of linking to my prior question, I think we're going to find in the 5-plus year time frame here that combinations provide some level of additive efficacy. And even the TNF combo from J&J did not see meaningful safety downside for that combination. And so it's just a superior product if it's priced rationally. And I think what that will lead to is a substantial shift of this market towards combination therapies over time. And I think what -- and I think we may have 3 of the best combination [indiscernible] product profile relative to others in development. So I

think it may be [indiscernible] one going forward. And really, our question is which one comes first, second and so on. I think really, it will come down to, of course, what we see in the data, and it will also come down to what our long-run view is. So if I had to pick today, I think alpha 4 beta 7 and IL-23 are the 2 safest approved classes in the space. I think they're very likely to work across both UC and Crohn's since we have so much data, and I feel pretty comfortable about that combination. I said it's very hard to ignore TL1A, which is perhaps the most interesting monotherapy efficacy in both spaces.

So that's why we're running them head-to-head. We'll see the data next year and be able to compare and decide what order of programs we advance forward.

Okay. Great. Speaking of TL1A, I want to turn to your rheumatic diseases program and the SPY-072. Can you maybe compare and contrast 072 versus some of the other agents we've seen in the field. We do have some more data on those from Merck, Prometheus, Teva and others. And just sort of what are the key properties, I think, that you've seen so far that make you like the asset?

Yes. So for us, I mean, we -- in contrast to 01 and 03, where we thought that building on the proven efficacy and profile of ENTYVIO and Skyrizi made a lot of sense. For our TL1A molecule, we thought each of the first-generation programs had enough issues that we wanted to start de novo. And in particular, we think our product is unique and that it has very high potency, great bioavailability, great formulation, much extended half-life compared to any of those first-generation molecules. So I know I think we'll see data here, but I think it could be a best-in-class TL1A agent.

And in IBD, we know we won't be first as a monotherapy. I'm not even sure we think the monotherapy is really the most valuable thing in IBD as we've talked about the combinations of TL1A likely being the highest value there. Whereas in the rheumatic diseases, we actually have the opportunity to be first. And I think we have a potentially best-in-class molecule and a potentially first-in-class molecule, and that's usually a good place to land if it's successful.

Great. And maybe just the strategy behind choosing 002 for the IBD space and 072 for the rheumatic space and pursuing 2 individual molecules versus a single one?

Yes. So we advanced both TL1As into Phase I due to the immunogenicity uncertainty around TL1A for at least one of the first-generation molecules, we've seen pretty high rates of ADAs and something that you would want to avoid. And so that's something that's quite hard to derisk preclinically and you need to look in humans. And so when we saw our Phase I data for both of our TL1As, so that they both looked excellent, no safety concerns, highly potent and no immunogenicity problem in terms of ADA formation against IPO.

And so in terms of what we decided to do there is advance one in the IBD portfolio, 002, which is really the tiebreaker there was that it was a better co-formulation with the other 2 assets, kind of lower viscosity, able to get into a single auto-injector with single-digit second injection kind of really an excellent combination product, whereas 072 to explore as a monotherapy, again, a great 200 mg per ml format of it as a monotherapy. And so that's why we chose to use that one in rheumatic disease.

And we think that gives us maximum strategic flexibility here in the upcoming months as we get these large Phase II readouts across both IBD and the ex-IBD portfolio and the ability to -- we could partner, sell, license, develop royalties against one without impacting the other business. And I think that gives us the maximum ability to ensure the maximum sum of the parts for the total portfolio.

Great. The same sort of principles in terms of YT engineering underlie 072 that underlie 002. And so can you maybe talk about how you think about potential efficacy in RA here might look like versus some of the historical benchmarks. There are obviously multiple therapies, multiple classes approved in RA. But as you think about sort of the key clinical endpoints that you're going to be looking at like DAI and so forth, what are sort of your potential expectations here?

Yes. So I mean this is first-in-class, right? I think there's great evidence for why TL1A should work in these indications, human genetics, human tissue, animal studies, mechanistic rationale for it, but it's first-in-class. So it is kind of the normal biotech uncertainty around the readout.

In terms of what we expect is necessary to have an attractive product here, I think it's first to look back and know that this is a $15 billion-plus post-TNS biosimilar market. It's a very large commercial market. If you look across the existing commercial drugs, you still don't get the majority of patients into long-term remission. They lose responses over time and patients still cycle through many products and run out of options.

So -- and when we look across the existing commercial drugs, most of them have black box warnings. Most of them are dosed monthly or more frequently. And the efficacy range is reasonably tight. It's around 1 on the DAS28 CRP of placebo-adjusted change from baseline. And then across ACR20, 50 and 70, the placebo-adjusted ranges are about 30, about 20 and about 10.

I think if we have a TL1A asset that is dosed 2 or 4 times a year in an auto-injector, so far, we don't have safety signals from TL1A that would justify a black box warning. And so if we have efficacy that's in those ranges that I just described, I think this could be a leading branded product in the space. And given the scale of the market, this could be a very large opportunity.

Assuming positive proof-of-concept data for 072 later this year, starting with RA and with the other indications after that, can you advance directly to a pivotal study? How does that work? Or do you feel like you need to do potentially more investigation before going to a registrational study?

Yes, the intent, if successful, would be to go to a pivotal study starting next year. I mean this is 2 doses against placebo with placebo-controlled readouts in additional indications as well, totaling approximately 300 patients across this. So it's a relatively large Phase II effort here. And we've seen precedents actually in these exact indications with the TNS class, where studies very similar to this led to immediate pivotal studies afterwards. So again, we'll see these data in the next 6 months here. But I think if they were encouraging, we'd be interested in going to Phase III immediately.

You're obviously already prosecuting 3 indications with 072, but there are implications for TL1A across a number of diseases outside of the rheumatic spectrum, including lung fibrosis-related diseases. How do you think about the opportunity there and the applicability of your candidate for those areas?

Yes. So I think between Merck and Roche, we expect Phase II data to be available in SSc-ILD, NASH, atopic dermatitis and HS, all within the next 6 to 12 months as well. Now I think I have different probability of success assumptions for some of those indications relative to what we're doing. But obviously, we'd be convinced if they have encouraging data, and I think we'd be excited to go pursue some of these also large commercial markets where kind of a new entrant with the product profile that we have could be super attractive even if we were a year or 2 behind player set that we think we have a differentiated product relative to.

Okay. As CEO, you're obviously going to have to monitor the competitive landscape. Is there anything -- any program out there, whether it's at a large pharma or a rival biotech that keeps you awake at night as you look at the competitive landscape and say, this is the key company we need to look out for down the road?

Look, I think in all these cases, we either have first-in-class TL1As in the indications that we're pursuing. And on the IBD side, I think we're right in the game in terms of when these combinations are being first-in-class with our combinations. And I think the product profiles that we have are unique relative to ours that are kind of within even a couple of years of us in either direction in terms of their profile.

So I think we're pretty well positioned here. Of course, things can always come out of the woodwork. But if anything we were in the clinic that I thought had the likelihood of being superior to us, I really haven't seen it yet.

Great. And just since we're coming on time here, can you remind us how you're thinking about potential time lines to commercialization? You said you might go directly into pivotal for the rheumatic programs following your Phase II data here. But just generally, how you're thinking about reaching the commercial stage?

Yes. So I think in terms of Phase III initiations, we're expecting them that they could be as early as next year for the rheumatic disease portfolio and then the following year for IBD. Enrollment in each of these spaces is slightly different, but approximately 1.5 years to enroll and then data thereafter. So I think early next decade, I think, is the likely launch time frame for these depending on which indication we're talking about.

Okay. Great. We're out of time here. So my thanks to Cameron and Spyre for joining us today, and we'll end it on that note.

Thanks Paul.

Good day, and thank you for standing by. Welcome to the Spyre Therapeutics SPY001 Part A induction Top line Results Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I will now hand the conference over to your speaker host for today, Eric McIntyre, SVP of Investor Relations. Please go ahead.

Thank you, Olivia, and thank you all for joining. We're thrilled to be speaking with you this morning. As you saw today, we issued a press release outlining positive top line induction results from Part A of our SKYLINE trial of 001 for the treatment of moderately to severely active ulcerative colitis.

Press release and slides that we will be using today during our call are available on the Investors section of our website. I would remind everyone that during this call, we'll be making forward-looking statements related to our current expectations and plans for the company and our clinical programs, including the IBD market opportunities, the best-in-class potential of SPY001 and its safety and efficacy potential.

And that of our product [ candidates ] and combinations thereof for the treatment of IBD as well as the expected timing of our additional data readouts. These statements represent our views as of this call and are subject to certain risks and uncertainties covered in our SEC filings and should not be relied upon as representing our views as of any date in the future.

Please review our forward-looking statement legend carefully. On the call today with me are Cameron Turtle, our Chief Executive Officer; and Deanna Nguyen, Senior Vice President of Clinical Development. Following our prepared remarks, we'll have a Q&A session, during which Sheldon Sloan, our Chief Medical Officer; Scott Burrows, our Chief Financial Officer; and Kate Tansey Chevlen, our new Chief Commercial Officer, will also join. With that, let me turn the call over to Cameron.

Thanks, Eric, and good morning, everyone. We're excited today to be sharing the first patient data from our ambitious development program that aims to address the substantial unmet need in autoimmune diseases by developing potential best-in-indication products with uncompromising profiles across safety, efficacy and convenience.

Today's call will focus on our efforts in inflammatory bowel disease, a condition that causes substantial morbidity for more than 2 million American patients and represents a $25 billion and growing global market. Despite the scale of this market, today's standard of care leaves much to be desired.

The half dozen approved therapeutic classes are unfortunately capped at what physicians call the therapeutic ceiling. Shown here is an approximately 25% placebo-adjusted clinical remission level, leaving the substantial majority of IBD patients with incomplete responses and continued disease activity.

Today's drugs are also dosed inconveniently with subcutaneous injections as frequently as every 2 weeks and even long-term maintenance IV therapy, both of which impact patients' lives and reduce adherence. In addition, many of these therapies carry safety concerns or monitoring requirements that further increase patient burden.

Fortunately, the blueprint for breaking the therapeutic ceiling in IBD is increasingly clear. Advanced combination therapy has been shown in randomized trials such as JNJ's VEGA study shown here and real-world cohorts to provide additive efficacy without apparent safety downsides, for the first time, opening the possibility of providing long-term remission to the majority of IBD patients.

With this future in mind, we believe success will ultimately be determined by the thoughtfulness of combination construction. Spyre is unique in that we design our combinations from the ground up, selecting validated mechanisms with the best safety and efficacy profiles, engineering next-generation molecules with potential best-in-class properties and designing them to work together as a convenient product.

The results are combination products that we believe will stand apart, certainly from what exists on the market today in IBD, but also other combination products in development. If any of the Spyre combinations are successful, we believe they will set a new bar for product performance in IBD across efficacy, safety and convenience.

Today, we'll start with proof-of-concept data for our first component targeting alpha 4 beta 7, which we believe is the ideal backbone for IBD combination therapy as this gut-selective mechanism and well-tolerated class safety profile have the potential for lower off-target immunosuppressive risk relative to drug classes that reduce systemic immune activity.

Further, we believe that an anti-alpha 4 beta 7 antibody is likely to provide additive efficacy with cytokine blocking agents such as our anti-TL1A or anti-IL-23 molecules, given alpha 4 beta 7's unique mechanism of blocking immune cell trafficking to the gut.

This hypothesis has been well supported by real-world studies using vedolizumab in combination with other advanced therapies. Our approach to inhibiting alpha 4 beta 7 is an optimized version of vedolizumab, SPY001, which targets the same validated epitope with comparable potency and matched effector function silencing to ensure gut-specific activity and avoid off-target immune suppression.

Our design improvements to the molecule include sequence modifications to meaningfully extend 001's half-life relative to vedo and a high concentration, low viscosity subcutaneous formulation to enable maximum target coverage and patient convenience.

With this optimized product, we aim to learn from prior vedolizumab data and test whether increased target coverage during induction could lead to improved efficacy. Specifically, we saw an induction data from Phase 3 trials and real-world cohorts that maximal efficacy of vedolizumab was observed in patients in the highest quartile of drug trough concentrations.

So we aim to achieve 001 exposures in this fourth quartile for patients during our 12-week induction period. Though our final PK analysis is not complete, preliminary data suggests that the substantial majority of 001 dose patients had Week 12 concentrations in this fourth quartile of vedolizumab exposures.

We, therefore, believe that we're effectively testing the exposure response hypothesis in this study. On the back of the Part A results that we'll share now for 001, our conviction in this exposure response hypothesis for alpha 4 beta 7 has substantially increased.

Specifically, the SPY001 Part A induction results suggest a potentially best-in-class anti-alpha 4 beta 7 product profile. The molecule was well tolerated as expected and across all key efficacy measures outperformed results from vedolizumab in precedent trials. In fact, as we'll show later, we believe the 001 efficacy compared favorably to data from precedent trials for mechanisms of action even outside the alpha 4 beta 7 class, suggesting that 001 could be one of the leading monotherapy products in development today.

But without getting too far ahead of ourselves, I'll turn the call over to Dr. Deanna Nguyen, who will go through the trial and data in more detail.

Thanks, Cameron, and welcome, everyone. Over the next few minutes, I would like to walk you through the SPY001 Part A induction results from our SKYLINE platform study in patients with moderately to severely active UC.

The overall study design for the SKYLINE study is shown here. And as we have previously described, this is a platform study with an induction maintenance [ treat to ] design investigating each of our 3 monotherapies and 3 pairwise combinations conducted in 2 parts.

Part A is an open-label evaluation of our investigational monotherapy, whereas Part B is a placebo-controlled evaluation of our combinations as well as our monotherapies. We have said previously that enrollment was ahead of schedule. And today, we're thrilled to announce that Part A recruitment is complete after open enrollment with approximately 130 participants across the 3 cohorts.

We're starting to enroll patients in Part B in various countries across the globe. And the excitement continues to build with investigators as we leverage the infrastructure built in Part A to begin testing monotherapies in combinations. The focus of today's discussion is the first readout of the trial, the SPY001 Part A induction data.

And as a reminder, each of our monotherapies was added to the study after its interim Phase 1 study results became available, beginning with SPY001. You can see here on the slide that participants were enrolled using standard eligibility criteria for a moderately to severely active UC trial, and these criteria are largely consistent for Part A and B, including allowance for failure of up to 3 classes of advanced therapies.

And in addition to using specific objective criteria to ensure patients have active UC, our team is leveraging our experience in executing UC trials to minimize placebo response rates. The objective of Part A is to demonstrate proof-of-concept safety and efficacy for our 3 monotherapies.

Though these Part A results are open label, we are using clinically validated and objective endpoints that correlate closely with placebo-controlled results in UC. Our primary endpoint is change from baseline in RHI, the Robarts Histopathology Index.

And RHI is clinically validated instrument for measuring histologic disease activity in UC and is scored from 0 to 33 based on inflammatory infiltrate, neutrophil infiltration and epithelial ulceration or erosion. One key secondary endpoint was endoscopic improvement, reflecting the proportion of participants who had a mildly active or normal endoscopy, meaning a score of 1 or 0 at Week 12 by central reading.

As a reminder, every participant enrolled in the study had to have a moderate or severe endoscopic score, meaning a score of 2 or 3 at baseline. Another key secondary endpoint was clinical remission, which is a composite endpoint that includes an endoscopic component as well as a symptomatic component as reflected by patient reports of stool frequency and rectal bleeding.

Importantly, both histology and endoscopy have blinded central readers for the SKYLINE study. That means that global experts with GI pathology or endoscopy expertise are reviewing the histology and endoscopy images, unaware of whether the images are coming from participants at baseline at Week 12 or another time point such as the end of maintenance. Baseline characteristics were in line with our expectations and with precedent studies in moderately to severely active UC. The first cohort enrolled in North America and Europe, given the quicker regulatory approval time lines in these regions, hence, the advanced therapy naive predominance, which is comparable to the VARSITY study.

Disease severity at baseline was typical with more than half of participants with a baseline endoscopy score of 3 and a mean baseline modified Mayo score of 6.8. As you can see on the left side of the slide, 43 participants were treated with SPY001 and 41 completed the induction treatment period.

Two participants early terminated before Week 12 due to withdrawal of consent. One participant dropped out of the study due to personal circumstances and a second after a nondrug-related adverse event that we'll discuss on the next slide. Overall, SPY001 was well tolerated with few treatment-emergent adverse events.

The benign nature of this profile appears consistent with that of the anti-alpha 4 beta 7 class broadly, which is considered one of the safest advanced therapy classes in IBD. The most common treatment-emergent adverse event, meaning occurring in at least 2 participants was back pain. No AEs were deemed drug-related, and there were no deaths or adverse events of special interest.

As mentioned previously, there was one serious adverse event in a participant in the induction treatment period, which was deemed not related to study drug. That SAE was chest pain in a 68-year-old male with a history of coronary artery disease and angina, diabetes, hypertension and hypercholesterolemia who presented with chest pain and ruled out for an MI.

Now turning to efficacy. SPY001 met its primary endpoint in Part A with a change from baseline in RHI at Week 12 of negative 9.2 with a p-value of less than 0.0001. Certain prior studies have required a baseline RHI score of 10 or above for inclusion. So we prespecified a sensitivity analysis of that subgroup in our study.

When we look at that subgroup, our change from baseline was even larger at negative 10.6. For our key secondary endpoints, 40% of participants achieved clinical remission, 51% achieved endoscopic improvement and though not shown on the slide, we observed a mean change of negative 3.7 in modified Mayo score from baseline to Week 12.

So our sample size limits our ability to interpret subgroup analyses, we were also encouraged to see little difference in clinical remission or endoscopic improvement rates among patients who had or had not previously been exposed to an approved advanced therapy.

Beyond these top line measures, we observed consistent and substantial improvements in both endoscopic and disease symptom measures between baseline and Week 12. As shown on this slide, our study population had moderately to severely active disease at baseline. And following 2 doses of SPY001, the population had dramatically improved across all measures.

Lastly, we'll highlight the time course of improvements observed during this induction period. As shown by the change from baseline in both partial Mayo score and level of fecal calprotectin, a biomarker of intestinal inflammation, participants receiving SPY001 improved rapidly and consistently. And taken together, we believe these data are clear that SPY001 significantly benefited UC participants enrolled in this cohort.

And with these data in hand, we're thrilled to be progressing into Part B of this guideline study in which SPY001 will be tested as a monotherapy at 2 dose levels and as part of combinations with anti-TL1A's and an anti-IL-23 with a large number of sites activated globally. I'll now turn it back over to Cameron.

Thanks, Nguyen. Before providing a few comparisons of these 001 results with the broader UC landscape, I first wanted to take a moment to acknowledge the team behind these data. As you see on this slide, completing enrollment of over 130 ulcerative colitis patients across 3 investigational agents in 10 months represents an unparalleled pace in this disease area. This outcome reflects tremendous execution by our team and our partners and also substantial investigator and patient enthusiasm for even our monotherapy product candidates as long-acting versions of some of the best mechanisms currently available.

As we now transition into Part B and introduce 3 combination arms to the study, we believe enthusiasm will only increase from here. To begin to put our 001 data into perspective, we first want to compare the population that we enrolled relative to populations enrolled in benchmark alpha 4 beta 7 trials.

As shown on this slide, the 001 Part A cohort had comparable disease severity as the VARSITY, GEMINI and EMERALD studies by either baseline modified Mayo or endoscopy scores. The population of advanced therapy naive participants in our cohort was comparable to VARSITY though somewhat higher than GEMINI or EMERALD.

Acknowledging the uncertainties with cross-trial comparisons with similar trial populations, the 001 efficacy results were meaningfully above benchmarks reported in precedent alpha 4 beta 7 trials across all key endpoints. We're particularly excited about our 51% endoscopic improvement rate given the purely objective nature of this endpoint.

This value compares favorably to Vedolizumab's data in the GEMINI study despite that study not requiring central endoscopy reading as well as to the MORF057 result in the EMERALD study with a very similar trial design as our own. Overall, we believe these results support the hypothesis that increased target coverage of alpha 4 beta 7 with SPY001 due to its extended half-life and higher induction dosing will lead to greater or faster efficacy than other agents in this class.

As we begin to look beyond the alpha 4 beta 7 class, our SPY001 results continue to compare favorably. There are fewer benchmarks for RHI given the novelty of this endpoint, but the change from baseline of 9.2 that we observed is larger than any previously reported up to Week 12 in precedent trials.

Turning to our first key secondary endpoint. We're showing on this slide the absolute clinical remission rates for relevant approved and investigational therapies in UC. As you can see, the 40% clinical remission level observed in the SPY001 cohort represents one of the largest response rates seen in precedent UC trials to date across mechanisms.

Whereas clinical remission includes stool frequency and rectal bleeding components that could be impacted by the open-label nature of our trial, endoscopic improvement represents an objective endpoint that is difficult to bias. On this slide, we show the absolute endoscopic improvement rates observed in the prospective industry-sponsored trials of approved and investigational therapies in UC.

Again, our 51% rate of endoscopic improvement is one of the highest rates ever observed. Combining the well-tolerated safety profile and efficacy data shown in today's top line data and our ongoing development of maintenance dosing as quarterly or twice annual subcutaneous injections, we believe SPY001 is one of the most promising single agents in development in IBD. With the completion of Part A screening announced today, we've begun screening patients for Part B, which includes both placebo-controlled dose ranging of SPY001 to potentially enable streamlined pivotal development as well as combinations of SPY001 with SPY002 and 003.

Speaking of our combinations, we believe the SPY001 data provide increased confidence in our approach, given our continued belief that better components will lead to better combinations. The efficacy data that we've shown for SPY001 is higher than that reported for either combination component in the VEGA trial, which enrolled an almost entirely naive population with comparable disease severity as our cohort.

And additionally, on certain endpoints, our SPY001 monotherapy matched or even exceeded the efficacy of JNJ's combination. If our anti-TL1A or anti-IL-23 agents were to provide additive efficacy on top of SPY001 as has been observed for other IBD combinations, we believe SPY001 containing combos could outperform other combinations in development. We further believe that advanced combination therapy it will dramatically reshape the IBD market.

Gastroenterologists treating IBD patients have shown that top-down therapy, meaning the use of the most effective products first leads to substantially better long-term outcomes than step-up therapy in which more efficacious products are reserved for later line use.

In addition, top-down therapy has been shown to be cost effective due to the high cost of caring for uncontrolled IBD. If the top-down treatment paradigm continues, we believe that advanced combination therapies are likely the winning approach.

If improved efficacy can be conferred without substantial safety concerns and delivered in a convenient product priced as a single agent, we believe combos are likely to displace branded monotherapies in the treatment paradigm and become the leaders in this large market. We further believe that Spyre is uniquely designed for success in this future. With this first patient -- set of patient data in hand, we've officially entered the [ prove it ] period for what we believe is one of the most ambitious and high potential pipelines in biotech.

From here, in the SKYLINE UC trial, we expect to read out SPY002 data midyear with 003 coming in the third quarter. For these 2 agents, we're targeting comparable efficacy and safety as in-class comparators as these mechanisms don't share the same dose or exposure response opportunity that we've tested with SPY001.

For our efforts outside IBD in the SKYWAY trial of our potentially best-in-class anti-TL1A antibody, we expect accelerated RA top line data next quarter after that sub-study overenrolled with more than 140 participants randomized between 2 doses of SPY072 and placebo.

Again, the team here continues to deliver ahead of schedule. We also remain on track with both PsA and axSpA substudies with top line data expected in Q4. We expect to provide an update later this year on one in '27 to expect the Part B data from the SKYLINE study. With that, we're done with our formal presentation. I'll turn the call back to the operator to begin Q&A.

[Operator Instructions] Our first question coming from the line of Sam Slutsky with LifeSci Capital.

Congrats on the great data. Just 2 for me. I guess, first, given the strong data, does this open up the possibility of developing 001 as a monotherapy through approval? If so, would you have to run a head-to-head versus vedolizumab?

And then were you able to look to see if any single site or region particularly drove the high response rate? Or was the data pretty consistent across sites?

Yes. Thanks, Sam, for both those questions. I actually think the first one is the one that we've debated quite a bit internally as these data started to become clear in terms of is 001 a viable commercial product. And I think from the data that we've seen today, if they were to hold in larger placebo-controlled studies, I think the answer is absolutely yes.

If we're differentiated on efficacy, very clean on safety, and I think we have the most convenient product as a monotherapy, I think that this could be a very successful monotherapy product.

However, we still also think that it's very likely that TL1A or IL-23 will provide additive efficacy on top of this result. And if we see increased efficacy beyond this, I think that product, those combination products would be even more attractive in this field. So I think the short answer is we likely have multiple things that are going to be attractive commercially coming out of this. And the Part B of this study will both enable a streamlined monotherapy development with 2 doses against placebo as well as help us see how much better those combinations will be to help us pick which agents go first into pivotal development.

In terms of will we require a head-to-head study, I don't think it's been the case that you've ever required head-to-head studies to get drugs approved in this market. But certainly, head-to-head superiority has substantially shifted the market. And think differentiation on the order of 10% in clinical remission is enough to massively shift the market.

So again, as we see more data, we can decide what the most attractive way is to advance this. And then maybe the last question on regional differences. I mean, of course, this is a small trial, so substudies are kind of subgroup analyses are always challenging. But maybe Deanna, I'll ask you to comment on whether we saw anything different in different regions.

Sure. Yes. Thanks for the question. We did see consistency across the sites and across the geographic regions.

Yes. So I think we showed both the naive versus refractory subgroups, but we didn't see anything different when we looked at, for example, the U.S. versus rest of world [ either ].

And our next question coming from the line of Tyler Van Buren with TD Cowen.

And big congratulations on the data, which are absolutely tremendous. But the -- so can you elaborate on your confidence that you're likely maxing out the alpha 4 beta 7 exposure with this dose?

And given that the SPY1 monotherapy remission rate is already approaching that of the combo in VEGA's at the 47% level. How are you currently thinking about the theoretical upper bound for remission rates that combination regimens can achieve in the future?

Thanks, Tyler. Yes, great questions. I think when you test a higher dose and seem to support the idea that, that higher dose has better efficacy, I think always questions was, is there something even beyond this. I think we tend to believe we're getting close to the level of plateau here for a couple of reasons.

Most obviously is that when we look at that highest exposure quartile of the vedolizumab patients, we see remission in a very similar range to what we're seeing with this exposure where we're putting most patients into that range. Now when we see the full Part B data and we have our full PK analysis, we'll do -- we'll conduct sensitivities where we look at exposures and efficacy within our cohort, though I'm skeptical that there's going to be any dose level where we see near complete remissions just by having higher drug levels of alpha 4 beta 7.

And I think that gets to the main hypothesis here, which is that blocking any individual mechanism is quite unlikely to fully cure this disease in any individual patient. And the way that we're more likely to get substantial incremental efficacy from here is by blocking orthogonal pathways.

And that gets to your second question, which is how much better do we think they can be. That's why we're running the experiment. I think so far, we've seen on different endpoints, a level of additivity between mechanisms on clinical remission.

I certainly think that starting with a higher baseline here on alpha 4 beta 7 is obviously a great start. And I think IL-23 and TL1A have orthogonal ways of benefiting this disease that I suspect will provide additive efficacy on top, but we'll have to see in the Part B data just how much that is.

And our next question coming from the line of Akash Tewari with Jefferies.

A couple on my end. Can you go over the steroid tapering protocol for the patients on background TCS? I know European doctors can sometimes be more aggressive and did efficacy differ in those populations. Also, we're seeing Mayo improvements as soon as 2 weeks with your data, which is impressive.

Can you go over -- I know you were targeting kind of quartile 4 exposure from the Rosario analysis. Can you comment about how much more exposure patients were receiving out of the gate versus the VARSITY trial?

Good question. Maybe I'll take the last one first, which is that we haven't said exactly what we're dosing here, but that initial dose that we're providing is kind of a multiple of where vedolizumab starts with the initial IV dose. And so I think we are getting quite a bit of drug on board right away within a lower dose at our later IV.

And so I think that may be what's driving that fast efficacy in terms of getting exposures up very rapidly. In terms of steroid tapering and whether we see any difference in steroids by efficacy, Deanna, would you mind covering that and maybe comment on both kind of how we're handling it in Part A and then Part B as well as we introduce the combos?

Sure. So Part A, patients were not tapering during the induction period. But for Part B, we will have a taper starting at Week 6, just like the VEGA study since we will have combinations in Part B. And we want to minimize the time when a patient may be on triple immunosuppression.

So in Part B, by Week 12, patients should be off steroids and therefore, that should help with the placebo response rate. In terms of the Part A data that we just showed today, as you saw, we had 40% of patients on steroids, which is commonly seen in other studies. And therefore, the effect of steroids is similar to what you observed with other studies.

And then, Deanna, I'm not sure we've conducted any subgroup analysis of the steroid users versus not, but maybe we can look at that in subsequent analysis.

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

Let me add my congrats on the data as well. Maybe you could talk a little bit about overall trial conduct here as you expand beyond Part A into Part B, expanding sites, et cetera, and sort of your level of confidence in the procedures in place to make sure that these data translate to a broader placebo-controlled setting, just given some of the higher placebo responses we've seen across clinical remission in some contemporary studies.

Yes. No, it's a very good question, obviously, top of mind as we start Part B and introduce the placebo into this trial. So I think in terms of how I started this in terms of managing the company was bringing on folks that have done it the best in the past few years. So Sheldon here is the Chief Medical Officer, having just run studies for Abivax and Arena with kind of great results there.

And then Deanna, who you're hearing from, who helps run some of the Prometheus studies with some of the lowest placebo rates in the space. Deanna, maybe I'll ask you to comment on the things that we're doing to help manage placebo rates, especially in Part B of the study now, but most of those were included in Part A as well.

Sure. So this is a 3-pronged approach. First is our eligibility criteria where we have criteria that should select patients whose symptoms are from mainly active UC. And then second is, as you heard, the steroid taper in Part B done mainly to avoid immunosuppression with 3 different drugs during the induction period, but also that should help with the placebo response rate. And then lastly, I think site training, good site training to remind sites to instruct patients on how to accurately report their symptoms, and that should also help with the placebo response rate.

And our next question coming from the line of Yatin Suneja with Guggenheim Partners.

It's [ Min ] dialing in for Yatin. Congrats on your strong data. So 2 questions for me. For the 19% advanced therapy patients, are you guys able to provide some breakdown of any between, let's say, biologics versus oral therapies such as JAKs and [ SPRs ].

And my second question is for the Part B enrollment, are you guys able to comment on the patient randomization process? So for example, like do we know if the SPY001 cohort in Part B would be enrolling a certain cap percentage of ENTYVIO patients, et cetera?

Yes. Good questions, Min. Yes, I think I can handle all of those. So in terms of the refractory population here, so in this -- in Part A, we did not allow anyone who had failed the mechanism that they would be getting. So there's no ENTYVIO failures in this group. I believe the mechanisms that had been failed among our refractory patients were TNF, S1P and JAK were the 3 that we saw in this cohort.

In terms of Part B, how the study works, this is true randomization. So there's no kind of ability to restrict who goes on to which arm in the trial. We do have an overall cap on the number of individuals who failed ENTYVIO as well as who failed the p19 inhibitors given that we have both alpha 4 beta 7 and the p19 in this study, and we really don't want to bias the results against either those monotherapies or the combinations that include those components. And we think this is a much better setup relative to prior combination studies where individuals have been -- have failed one of the mechanisms that were included in the combo, and I think that's likely to lead to a lower efficacy result.

In terms of the randomization scheme, it's a 2-part randomization where patients first randomized to one of the arms of the study, kind of each of the monotherapies or one of the combo arms and then they're randomized between the active arm or placebo.

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

Congrats on the really stellar data here. Just with respect to the 002 and 003 cohorts that completed enrollment, did you comment at all on the patients that you enrolled into those cohorts and how they compare to 001? Like should we expect similar baseline disease severity, prior treatment experience relative to the 001 cohort?

Or are there other considerations from a regional site perspective that would impact that? And then can you also just talk about your expectations for the 002 and 003 monotherapy cohorts and whether those have changed at all given the stellar results from 001 this morning?

Thanks, Tom. So for 002 and 003, so these molecules were added to the trial about 3 and 6 months after 001 started. And so the geographic breakdown will be -- will shift a little bit as more countries and sites were added to the trial. By the time we get to and are fully enrolling in Part B, we're going to have 30-plus countries and between 200 and 300 sites going in this trial.

So it's really just an expanding base that will look like a big global even Phase 3 like study when we're in Part B. So we'll see a bit of that shift from 01 to 02 and 03. In terms of expectations for the data, I don't think they change with this 001 results today. For TL1A in particular, we've seen 3 first-generation TL1A antibodies report induction data. I think they all show comparable placebo-adjusted efficacy, which to me suggests that, that's the high end or the kind of the plateau of the dose exposure response there and that those 3 drugs have saturated the target.

And though we think our molecule has improvements in potency, half-life immunogenicity and others relative to the first-generation products, I think it's likely saturated in the induction setting. And so I'm not sure there's better to be had in that period. I'm not sure that's true as we get into maintenance for TL1A, but we won't see those maintenance data for this update at midyear.

On IL-23, the answer is similar, I think, particularly for risankizumab. Just at the dose level that they dose in the ulcerative colitis population, it's kind of a very high level of dosing, and we see kind of the dose and exposure response there look relatively flat. And so again, we think it's quite unlikely that we see a differentiation on induction efficacy with 003 compared to risankizumab. So that's why we really expect comparable for each of those. But even before this readout, we thought if we were comparable for all 3 of these mechanisms that our combinations would still stand apart because we're the only ones with optimized versions of these 3 great mechanisms.

Now that we see that 001 may be differentiated within that class, I think the likelihood of seeing efficacy between these mechanisms that leads to something that is hard for others to match, I think, is much higher.

Our next question comes from the line of Debanjana Chatterjee with Jones Trading.

Congrats on the data. So I mean, just looking at the breakdown of the -- I mean, biologic experience, I mean, advanced therapy experience and naive patients, the subpopulations actually look pretty similar here. Just could you remind us what is going to be the proportion of treatment experienced patients in the randomized portion?

And in case that's higher, do you -- how do you expect the overall efficacy trend, which direction should it go if there's a larger proportion of treatment-experienced patients?

Yes. Thanks, Debanjana. So in this study, yes, we were a little surprised to see these be as similar as they were between the naive and experienced populations here. Certainly, a strong result compared to what you normally see, which is that the efficacy drops off in the refractory population. And whether that's just small numbers or whether that is due to having kind of the higher exposures of 001 here that actually captures remissions in folks that have failed something else is yet to be seen, but I think certainly encouraging.

In terms of Part B, there, we will be closer. We're going to be aiming for a 50-50 split between the naive and refractory population, and we'll kind of cap that enrollment to ensure that we're not above 60% of either. So between 40% and 60% of naive and refractory is the target for Part B. And I think given that we didn't see a meaningful result difference between those 2 populations, I don't expect that much of a shift actually as we get to that population.

Our next question comes from the line of David Nierengarten with Wedbush.

I just had one -- maybe it's a little bit less important, but it's similar on the background or experienced therapy patients in the future, given this looks like -- or it's Vedo like and typically Vedo is used sooner with the treatment experienced patients, kind of how do you -- do you expect a lot of patients who have skipped Vedo and gone straight to [indiscernible] or a different biologic agent? I'm just kind of curious what the -- what you expect the makeup of the treatment experienced patients to be in the next study.

It's a good question. Maybe, Deanna, do you want to start commenting in terms of what you think the most likely first and second-line use will be when we get to Part B?

Sure. As you mentioned, in some countries, vedolizumab could be first line, but in others, not. So we expect in the advanced therapy exposed population to have patients who failed anti-TNF or Guselkumab or S1P or others. And as Cameron mentioned, in Part B, we will allow a certain number of subjects who have failed vedolizumab.

Yes. I'll just say, I think we're debating what proportion to include of individuals who failed vedolizumab in the p19 because on one hand, we think it may make the results of 001 monotherapy or the components that contain 001 could bias the results against it.

However, we're also somewhat interested in understanding whether both the high dose of 001 could capture remission in folks that have failed that class previously or perhaps even more interestingly, whether combinations, including a mechanism can again capture remission in folks that have failed monotherapies in the past, which is basically exactly how combinations are used in the real world today in terms of folks that have failed many things and then end up trying combinations.

So I think we're taking the balance here of capping that number to avoid the bias, but we'll at least have a few that we can start to generate some hypotheses about whether these combos can capture remission in those patients.

Our next question comes from the line of Julian Harrison with BTIG..

Let me add my congratulations to these data and all the recent progress. I have 3 questions, and I'll just list them one by one. First, do you expect to see a higher therapeutic index with 001 versus vedo in Crohn's as well? How translatable do you view these results to that opportunity?

Second, my understanding is that even vedo is dosed well beyond most conventional PK parameters. So if you could talk about what you think is driving the exposure response relationship here in ulcerative colitis, that would be very helpful as well.

And then finally, I'm curious to what extent you think the results from DUET have relevance to your overall strategy at this point? Do you maybe view that as less of a swing factor at this point regarding the perception combination regimens in IBD?

Yes. All good questions. Thanks, Julian. The first one on Crohn's. So in terms of the data supporting the idea that higher exposures of vedolizumab could lead to better efficacy. Those data are stronger in ulcerative colitis than Crohn's, though I think it's hard for us to understand why it would necessarily be the case that you wouldn't see the same type of relationship in UC and Crohn's.

I think the challenge with Crohn's is that the endpoints that are used in trials in Crohn's are a bit noisier than the ones in ulcerative colitis. And so it may be the case that you're just not picking up this exposure or dose response in Crohn's as we did in UC.

We do expect to advance whatever products win from the SKYLINE study here to both Crohn's and ulcerative colitis. And so I think in the long run, we will see whether this translates into Crohn's as well.

Two, the mechanism by which we're seeing greater efficacy, I think, is one of the most interesting in the space. As you may know, vedolizumab saturates the pharmacodynamic measure in terms of receptor occupancy at very low concentrations, much lower than where either they or we are dosing. And yet they see a strong exposure response.

And when we test at higher exposures, it seems that we might be seeing greater efficacy as well. And so that it's kind of an interesting question in terms of why that's the case. I think one challenge with the pharmacodynamic measure here is that you're measuring receptor occupancy of alpha 4 beta 7 on T cells in the circulation.

But many great researchers have shown that T cells are not the only cell type that are driving alpha 4 beta 7 activity. And so it may be the case that kind of measuring it only on the surface of T cells is not sufficient to measure all the activity of vedolizumab. I think there's also some interesting work suggesting that alpha 4 beta 7 might need to be active in the local tissue itself, which there, you may need higher concentrations. And I think we do know that at the commercial levels of vedolizumab, they may not be saturating the alpha 4 beta 7 in the local tissue as well.

So I think the short answer is we are not exactly sure the mechanism by which, by which greater exposure leads to greater efficacy, but we thought it was worth testing based on the data from vedolizumab in the Phase 3 and real-world data.

And then lastly, on your DUET question, I think we and everyone, I think, still remain very interested in seeing those results as kind of one of the largest randomized combo studies in the space. And I think we'll see that now in a couple of weeks at DDW here. I think we'll see both the ulcerative colitis and Crohn's presentations there, which we're certainly excited to see.

However, I think our -- how much a swing factor that is, is probably a lot lower now given that we know that JNJ is advancing that combination to Phase 3. We see Royalty Pharma supporting that with a large investment as well. So I think it's pretty clear that, that result is certainly at least good enough and maybe very encouraging to justify a large return on investment for the big pivotal studies for that combination.

And we've always thought that the combos that we have here and the trial design that we have here are likely to outperform that, most obviously by replacing the Golimumab component, which is not one of the best TNFs in the space and replacing it with something like 001 here, the alpha 4 class, which has beaten TNF head-to-head or replacing it the TNF with anti-TL1A, which we also think is a superior mechanism though it hasn't yet been studied head-to-head. So hopefully, that covered all 3 of your questions. Thanks, Julian.

Our next question coming from the line of Paul Choi with Goldman Sachs.

Let me add my congratulations as well. Just with regard to the subcu, can you maybe remind us how you're thinking about the sort of quartile of coverage on the PK side relative to the IV version?

And then if during the maintenance portion, you will be allowing or testing the subcu version?

And my second question is, just given some of the rapidity we've seen on some of the endpoints here in Part A of the study for 001, can you maybe comment on sort of the quality of life or any other patient measures or patient feedback that you may have received at this point and just how that compares to the existing version of ENTYVIO.

Yes. Thanks, Paul. So first, in terms of the subcutaneous format. So to be clear, what we're doing in this trial is we do 2 IV loads at week 0 and week 4, and then we transition to quarterly subcutaneous dosing.

For Phase 3, I think we have some optionality. Of course, kind of we could maintain what we're doing with the IV load followed by subcu switch and most products on the market in IBD today have that format in terms of high drug load via IV followed by the subcu maintenance. However, given the dosing levels here, it's certainly possible for us to use an all subcutaneous induction format as well.

That's either with our monotherapies or our combinations. And so that's something that we'll be looking at as we transition to Phase 3, whether we want to kind of make that switch if we think it's valuable enough commercially to have all subcutaneous induction versus the great results we've seen here with the IV that is certainly very derisked.

Two, in terms of the quality of life improvements, I think we showed some of them today, but maybe I'll let Deanna comment on kind of any either anecdotes she's heard or anything else beyond the data that we showed regarding the improvements in rectal bleeding stool frequency that she's heard in conversations with investigators.

Sure. To address the question, I believe you were asking about formal quality of life questionnaires, we decided to defer the Phase 3 to collect quality of life questionnaire answers just to reduce patients and site burden in the complexity of the study. As you can imagine, this is a very large Phase 3 study, and we have many sites across many countries throughout the world.

In terms of the patient-reported outcomes that you saw today with rectal bleeding and stool frequency, many patients reported reductions in those very quickly after the first dose. And what I've heard from site visits is that some patients felt better much earlier and actually started even to exercise when they haven't been able to exercise for many years. So from what we've heard anecdotally, patients have had improvement in their quiet life.

Thanks, Deanna. And of course, this is just our top line release of these data. We, of course, measured many other endpoints from kind of softer endpoints like clinical response as well as deeper measures such as [ heme or hemH ]. And I think as we get into medical meetings in the upcoming quarters here, we'll continue to share those data, which I think look impressive at all levels.

Our next question coming from the line of Samantha Semenkow with Citi.

This is Ben on for Sam. I have 2. The first one, in the treatment-experienced patients, were there any difference in efficacy in patients that failed TNF versus JAK inhibitors versus S1P?

And then the second question we have is, when do you expect to report maintenance data? 9-ish months would be around early 2027. Is that tracking with the company's expectations?

Yes. Great question. And the second one, yes, the maintenance data point is about 9 months afterwards. So I think that's realistic for these. Again, whether we do them one at a time or altogether, we haven't committed to yet, but that's approximately when we'll have those data.

In terms of responses by the individual mechanisms that were missed, I think we're getting to N-of-1 and 2 for kind of those individual mechanisms that have been missed. So I don't know each of them, but I think you kind of can look at the totality and know that we had a number of good responses in that group. But I think it's -- on some of them, it will be 1 of 1 and others, it will be 0 of 1. So I'm not sure it's worth commenting on kind of those individual N-of-1 examples.

Our next question coming from the line of Yanan Zhu with Wells Fargo.

On the great data. So I was wondering how do you think this induction data will translate or carry over into the maintenance dose? Maybe 2 subcomponents of that. Do you think vedolizumab left anything on the table in terms of exposure in the longer-term maintenance dosing phase?

And maybe another component of that is, are you -- are we even looking at your second dose's efficacy given where the efficacy is measured? And in that, I mean, could we see even better efficacy during the more immediate term after the second dose?

And then if I may, just wanted to also clarify for the complete remission data, I guess the ENTYVIO comparison was based on total male score. Could you talk about -- if that's the case, could you talk about how we compare remission based on modified versus total score, understanding you have more objective measures. So -- but just want to get that box checked.

Yes. Thanks, Yan. Maybe Deanna, I'll have you comment -- answer that last question, but I'll take the first one first. So in terms of the transition from induction to maintenance and how we expect efficacy to translate here, First, the data that we have from vedolizumab is that the exposure response that we showed and cited from both the pivotal studies as well as the real world is really strongest in the induction setting.

Once we look at the maintenance data, either on a Ctrough or AUC basis, there's much less -- a much weaker relationship between exposures and responses and remissions in the maintenance setting. So we thought the opportunity here was really what we're seeing today, which is that could we get faster efficacy at Week 12 by having more drug on board.

In terms of how we think that translates as we move on here, I mean, I think when we show the time course data, it does look clear that we're probably not at maximum efficacy as in these patients are continuing to get better at Week 12. And I think we're comparing against the VARSITY and other results that look at week 14. And I think that's an advantage in some ways to those trials that I expect we would continue to see some improvement as we got out a couple more weeks. And maybe some distance into maintenance, you would continue to see deepening of the response remission rates in our trial.

At some level, though, you eventually get into the standard in IBD, which is that patients lose responses and remissions over time, and that's why this ends up being such a cycling market. But I'm not sure we're quite there in terms of peak efficacy at week 12 yet.

And then in terms of the -- comparing the remission scoring method, I think we're using kind of the very standard pivotal definition for clinical remission. But Deanna, maybe I'll let you kind of comment on exactly how we're measuring it.

Sure. As you mentioned, Cameron, by the FDA guidance that was published in 2022, the clinical remission definition should be based on modified Mayo score. So that's what we use for our top line data. And so we don't have the total Mayo score defined remission rate for top line, but we can calculate that later.

But as you know from other studies from previous publications that the 2 often are in relatively similar range. So we don't expect the difference in definition to change the results much.

Our next question coming from the line of David Hoang with Deutsche Bank.

Congrats on the data. So maybe first, just a question on -- I was wondering if you had a sense if the community of physicians is comfortable with long-term chronic combo therapies. I'm just thinking back to VEGA, which I believe had combo induction therapy, but then actually switched patients to mono for maintenance therapy. And then secondly, in terms of getting into -- as you get into Phase 3, how do you think that design will go? Do you think you would need to do a bactorial type design to show the contribution of the components? Or would some of the Phase 2 Part B data help there and maybe allow for a more streamlined Phase 3?

Yes. Thanks. Both important questions. In terms of combination use, I think the [ VEGO ] was really the first randomized advanced therapy combination in this space. And I think it was a rational approach for JNJ to use the combination for induction and then drop to a monotherapy.

However, that's not really what we see in the real world when combinations, and they do get used pretty regularly as physicians can find a way to get multiple drugs on their patients. And there, we really don't see that physicians achieve remission and then drop off one of the products.

They typically stay, and this is not just for combos, but monos as well, which is that if you can get a patient into remission on a therapy, they stay on that therapy until they lose it because, again, this is incredibly costly disease to the patients, to the health systems as well. And so kind of maintaining remission is paramount.

And so I think if combination products come out and they're priced like a single drug and their efficacy is superior and their safety doesn't leave any meaningful downsides, I'm not sure what the argument would be to actually remove somebody from that drug. It's just -- it's a superior product on all properties, and I suspect patients will stay on that as long as they can.

And when they switch, I expect that they would switch to something that tries to be as close as they can in efficacy while incorporating other mechanisms, which is why we think kind of multiple combos may be the winning portfolio in the long run. In terms of pivotal design, of course, we're thinking about that on the back of the Part B data here. This SKYLINE study is designed to show contribution of components. Of course, we're using a shared placebo group as well as the individual monotherapy components of each of the pairwise combos.

And so the goal here is to show that the monotherapies beat placebo. I think we feel pretty comfortable, at least with this first one now that that's likely to be the case and then the combos would beat the monotherapy components.

I think if we did that in this trial, I'm not sure that -- and I actually don't think we would have to do contribution of components again in Phase 3. We may actually get an earlier read on that as we see kind of the JNJ Phase 3 design here in the upcoming months based on whatever they see from the DUET studies, which we'll see even sooner.

We have one last question coming from the line of Brandon Frith with Wolfe Research.

This is [ Brandon ] on for Andy. Aside from partial Mayo score, can you comment in more detail regarding the onset of responses through Week 12 on the other efficacy measures?

I know that you said patients continue to improve through Week 12, but are patients -- are there a bigger group of patients responding more quickly upfront? Or and is there a meaningful tail that continue to improve over time?

Yes. It's a good question. And I don't think we've seen or at least I have not seen time course on all of our endpoints to know if we're kind of capturing them any sooner. And of course, you are limited by the number of endoscopies and histology measures you can have really at Week 0 and Week 12 because you can't subject patients to more than that in the study.

So we don't get multiple data points along the way in terms of endoscopy and histology. I think in general, we're very encouraged by seeing the rapid pace of symptom improvement, which is what you can measure on a couple of week basis. Though maybe I'll let Deanna, if you have anything to add in terms of other measures that we saw move quickly that surprised you or were encouraging.

Thanks. As this is top line data, we wanted to have the data that you saw here, but we will definitely have additional data sets coming in, which will have more granular details about the improvement in symptoms over the first few weeks. So you may see that in upcoming congresses.

And there are no further questions in the queue at this time. I'll now turn the call back over to Cameron for any closing comments.

All right. Well, thank you, everyone, for joining this morning. We think this is a great start in terms of our IBD development portfolio. We think 001 data is excellent as on its own and stands as potentially an attractive monotherapy, one of the most exciting in the space, but also an incredibly strong foundation from which to build our combinations.

I think this is the first of our 6 catalysts in 2026. And so we look forward to catching up with everybody in the upcoming months, a number of times. So thank you, and have a great day.

This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Good morning, everyone. Thanks for joining us here at the Leerink Partners Global Healthcare Conference. My name is Tom Smith. I'm one of the senior biotech analysts here at Leerink. And it's my pleasure to introduce our next company, Spyre Therapeutics and their management team led by CEO, Cameron Turtle; and CMO, Sheldon Sloan. Gentlemen, thanks for joining us.

Thanks for having us.

And this is one of our top picks for 2026. We think this company is really best positioned to capitalize on the emergence of combination therapies in inflammatory bowel disease. And we also see the potential for TL1A to be a potential game changer in rheumatology indications. Spyre is interrogating both of those theses intensively, and we're going to get a lot of data here over the next 9 months. We have 6 Phase II readouts this year. So a lot of data catalysts coming. And we think we're going to start to see that thesis prove out.

Cameron, why don't you kick us off with -- I know I just gave a little bit of a background, but maybe like a little bit of an overview for those in the audience who are a little bit less familiar with the story?

Yes, you did it well. But I think the short version here is that we're looking to create indication-leading products across the large autoimmune disease markets. And we started this by making what we hoped would be optimized or kind of best-in-class versions of proven biologics across alpha-4 beta-7, TL1A and IL-23. And then we're exploring them in 2 large Phase II studies that are going to start reading out this year. So on the IBD side, we're testing these antibodies initially as monotherapies, and we'll show those data beginning next quarter. And then that study progresses to test the monotherapies against their combinations as well.

So it ends up being 6 different active arms, the 3 monotherapies and their pair-wise comparisons against placebo. We think that really is the future of IBD, and we think, pretty uniquely, combinations are really dictated by whatever the weakest component of your combo is. And I think we're unique in that. Our portfolio doesn't have kind of weak components. They're all of these optimized antibodies, and I think that's likely to lead to best-in-class combinations.

And then as you mentioned, I think beyond IBD, I think we and everyone else who's interested and invested in TL1A believes that this is -- has the potential to be a pipeline-in-a-product, like we've seen in other I&I markets. And TL1A so far has looked not just TNF-like but actually TNF-better in IBD, and I think we're excited to test that potential outside. So we'll have the 3 placebo-controlled readouts from our SKYWAY trial later this year. We may actually see as many as 4 TL1A readouts from the other TL1A owners this year as well, which I think will really, I think, over the course of this year, tell us how valuable this molecule is overall. And within that space, we think we have an improved next-generation TL1A antibody to capture that opportunity.

So I think it enters really a pivotal transformational year and a bit for this company as we begin to read out these Phase II studies and see kind of how many indication-leading products we have to advance.

Got it. I think when some people think about like the Spyre portfolio, people -- they're familiar with the half-life extension, YTE mutation, but it's not as simple as that, right? Like maybe just describe some of the optimization work that you've done around each one of these antibodies, and why you think they're, I guess, best suited for use in combination?

Yes. So I think it starts with which mechanisms you pick, first of all, actually for -- interestingly, the same things that drive why something might be good for half-life extension also lead to why they might be good combination agents, and that is safety first, which is that when you're extending the half-life of an antibody, the thing you're most concerned about is avoiding any adverse effects that, of course, would last longer if you had an extended antibody. And then for combinations, same thing. You're looking for targets where you can potentially get additive efficacy without seeing additive safety concerns. And we think the best bet for that is, 2 safe things together is probably most likely to lead to a safe combination.

And so that's where we started with alpha-4 beta-7, I think it's fair to say, is the kind of the cleanest target in IBD overall. We also think its mechanism is pretty unique in that it's a gut selective, blocking the trafficking of immune cells into the gut. I think it's quite likely that, a, that's going to be well tolerated in a combination and also likely to be additive on top of other mechanisms. I think we've even seen data from Takeda and others in the last few months showing that you get additive efficacy of alpha-4 beta-7 even on top of JAKs, which -- those suppress quite a few different things. And so if alpha-4 beta-7 is additive on top of that, I think it's quite likely to be additive on top of TL1A and IL-23. So anyway, that's kind of why we like alpha-4 as a backbone here.

And then combining with TL1A and IL-23, these are also 2 mechanisms that don't yet have any known on-target safety concerns. So we're not both extending the duration of these antibodies and then combining them together. We think, together, these things make the most sense in terms of -- both in terms of long-acting antibodies, but then also for combinations. And we've shown kind of getting into the clinic, we've done individual tox for each of these molecules, acute and chronic tox, and we've done combination tox for all of our combinations at this point and seen no adverse effects at any level for any of the molecules or combinations. And I think that's the best place you can be at this point.

Yes. So obviously, you're trying to optimize in a sense for dosing interval and less frequent dosing, but I guess what are your expectations on some of the other aspects of combination development? So depth of response or rapidity, like onset of action? How should we think about, I guess, like a clinically meaningful benefit over what's available via monotherapy?

I think the shortest answer is we don't know yet actually in terms of where you'll see the biggest differentiations for combinations versus the monotherapies. I think from the data we've seen to date, it tends to be true that the harder the endpoint to reach, the more combinations outperform the constituent monotherapies and certainly placebo. So if we look at the VEGA study, as an example, the first randomized data set that we've actually seen in IBD combos, they had a benefit certainly on clinical response. It wasn't significant, but it was still a large benefit compared to the monotherapy components. But when you looked at clinical remission, there you saw kind of a pretty striking statistically significant delta between the monotherapies and combinations.

And in IBD, what's nice is we actually have kind of a number of different thresholds of measures to look at, starting from kind of response and then remission, and we have kind of mucosal healing and other things that are pretty difficult to reach as monotherapies. It wouldn't surprise me if as we kind of get more and more data for combinations, that's actually where you see the largest gaps between the combinations and the monotherapies.

Yes. Got it. I wanted to ask about a data set, I think investors have been focused on patiently, perhaps impatiently waiting for, and that's J&J's DUET data set. What are your expectations, I guess, around that data set? Maybe help kind of parse some of the J&J messaging? And then how does their strategy, I guess, inform what you guys are doing with your combos?

Yes. So maybe just a background for folks who haven't followed the space is that the J&J combination is combining SIMPONI or golimumab plus TREMFYA or guselkumab. And I referenced the VEGA data set, which I think is what really kicked off this field and seeing this huge benefit in a naive population. And then they followed it up with these 2 large DUET studies. Looking at the same combination, but now in a population that's refractory to prior biologics.

And I think what's challenging about that setup is that golimumab, in particular, obviously, that's a TNF molecule. And I would say it's not one of the leading TNF molecules, but it's in that class. And if you look at the refractory patient population in IBD where they ran a study in psoriatic arthritis as well, both of that refractory population will have failed -- most likely will have failed a TNF molecule. And so you're looking at a TNF combo in a population that has failed mostly infliximab or adalimumab. And that's a pretty tricky setup in terms of where you're going to see a meaningful benefit.

And I think so for the last few quarters, I would say we've heard some caution around this data set as this might read through as negative to combos overall. I've always challenged that kind of for this reason. But I think in the last few months, we've heard J&J actually kind of changed their messaging here a little bit and say, "Look, we think this is going to be the treatment of choice going forward. This is a future blockbuster." I think it's quite clear that they're advancing this to Phase IIIs as well. And I think all those weaknesses are still true in terms of the trial and the combination overall. And so if that worked, I think it's quite likely that if you replace a kind of not optimal TNF with an optimized alpha-4 beta-7 or an optimized TL1A, I think that's very likely to be a better combination. And then our trial design, of course, is also not looking at a trial population where everyone has failed one of our components. I also think that's likely to be a benefit to us as well.

So overall, I think we generally are standing on the shoulders of J&J and the efforts they had here. I do think that it's -- I agree with them that that's going to be a winning product and likely a blockbuster in this space. I still think that our combinations are likely to be quite a bit better and our trial design as well.

Yes. So yes, let's get into trial design and how you're actually interrogating this thesis. And you have the SKYLINE study. Maybe just walk us through the Part A sort of monotherapy cohorts versus Part B and what investors, I guess, can and can't conclude from results from the open label that we're going to get starting this year?

Sure. So this is a platform trial. So basically, we're testing 6 different therapies in the same population, ulcerative colitis patients. And we're testing all our 3 antibodies as monotherapy and in combinations, as Cameron already stated. We're actually testing the monotherapies in Part A open label. So basically, open label started last year. And the first one to go into the study was the first one available after Phase I, which was the alpha-4 beta-7. It was followed by the anti-TL1A and now the anti-IL-23.

So what we're doing is we're enrolling this open-label trial. There's about a morphic size open-label study in 35, 40 patients per arm. And once we finish our open label, we will -- screening, we will immediately go into -- seamlessly go into Part B. Part B is the placebo-controlled study, which looks at 3 monotherapies versus each of the combinations versus placebo. So it's a shared placebo. So it's a very efficient trial. At the end of the day, we're using about 40% less patients, very ethical and good use of resources.

And the beauty of having the run-in or the Part A, not only we get validation that the mechanisms which we think -- we know work in these diseases, we just basically prove that but also get sites up and running. The hardest part of clinical trials, obviously, is getting sites activated. This is a global trial, over 35 countries, over 300 sites. So it's a lot of heavy lifting operationally. And it takes time for getting all these sites up and running. Not only are investigators super thrilled about having an open-label study with half-life extended antibodies and mechanisms that we think we know work, but also it gets them familiar with the protocol and gets them a little more enthusiastic getting their sites up and running.

So when we flip the switch to enroll Part B, we have many more sites activated and we can accelerate the enrollment in Part B. So Part B is looking at, again, the 3 monotherapies versus the combinations, but we hope to prove there in the monotherapy arm is dose ranging. We're doing a high and low dose. And obviously, we want to look at -- see what is the best combination therapy out of the 3 we're testing, could be more than 1. We also want to solve for contribution of components in this trial.

So I think that's kind of the setup of the trial. We're, again, looking forward to reporting the inductions first and then obviously, the maintenance. First 3 readouts will be this year, actually starting second quarter for monotherapy and then next year for the placebo-controlled double-blind portion.

Yes. So data right around the corner. And just building on that, like help us think about expectations for the SPY001 monotherapy cohort. Is VARSITY the right comp? I guess help us understand to the extent you have visibility into the patients that have been enrolled, are there important differences that we should be considering? Or like how should we think about that bar for success in the first monotherapy readout?

Yes. So I think -- I mean, none of these are first-in-class molecules. So we generally know how the mechanisms work across each of these and kind of what to expect across the primary and secondary endpoints. And I think we've actually just put those data up in our slides so that everyone says, okay, here's a reasonable set of comparable measures for each of these.

In terms of kind of what we would hope to see. I think across the 3 mechanisms, there's different levels of places that we actually could see differentiation. I think on the IL-23 case, we think that those drugs have really been tested at the highest end of the dose response and exposure response curves. And so I'm not sure there's greater efficacy to be had there. For TL1A, I would probably say the same thing. In the induction setting, we've seen 3 different data sets for 3 different TL1As, and the placebo-adjusted efficacy, I think, looks quite similar. Maybe not in maintenance. So I think there might be a possibility to improve in the maintenance setting.

But for alpha-4 is one that we are testing to see whether it's possible to get greater efficacy than vedolizumab has in the induction setting. I think we've seen publications both from the pivotal studies as well as in the real world that higher exposures of the drug lead to greater responses. And so that's something we're testing. We're aiming to put the majority, if not all of the patients, in our cohort, into the fourth quartile of exposure from what you see with vedolizumab, to see if we can get better efficacy.

I guess one thing that I would comment on and maybe ask Sheldon to add to as well is I think we are using a set of pretty objective endpoints in this as well. So though it is an open-label setting, I think these are not endpoints that you can kind of fake your way to a different kind of response rate than you would get in a blinded placebo-controlled setting.

So I don't know if you want to comment on the endpoint, Sheldon?

Yes. So the primary endpoint for Part A is RHI, the Robarts Histology Index, the change from baseline. And VARSITY had, I think, a fairly good -- I get a good sense of the benchmarking with VARSITY as to vedo, how they responded with that endpoint. It correlates fairly well RHI to remission, so to the clinical outcomes. And besides the RHI, we're looking at another objective endpoint from blinded reading is the endoscopy score. So I think that, between the RHI and endoscopy, we have 2 very objective endpoints.

The readers of either the histology or the endoscopy do not know what arm the patients are in or what part of the study they're in, whether they're in induction or baseline at 12 weeks or baseline. So it really is as objective as you can have it, not only for the open-label arm, but I think for any study.

Got it. You've described it, I think, quite well as a seamless study design. There are like pretty obvious efficiencies that come with that. But I guess one of the other considerations, like is there any way to incorporate learnings from Part A into this placebo-controlled Part B portion of the study?

So never say never. But since we are doing this seamlessly, we're actually going to be -- we still have patients in the study, even before we -- that we'll be starting Part B before we have all the data from Part A, let's put it that way. So is there anything we could do in a mid-course correction if we find something really, really different, unexpected? Maybe, but probably unlikely.

Got it. Okay. Of the combinations that you're considering, I guess, maybe walk us through how you think of like highest probability of success of them being synergistic? And is that based on what we've seen maybe in some real-world combination use? Or is it based on sort of preclinical data that you've generated?

Yes. Maybe I'll start here, which is that I think there's good evidence for all 3 of these. So we've looked at both human genetic evidence. So there's variants that mimic each of these mechanisms, and we see that they have additive effects in terms of causing this disease. And so theoretically, you would see the opposite in terms of therapeutically, also of animal models showing additive benefit of all 3 of these combinations together. So I think the evidence is quite strong for all 3.

I think there's plenty of interest in speculating about which mechanisms will work best synergistically or additively. I personally think that the integrin is a very good combination component in terms of -- it is very orthogonal to the anti-cytokine mechanisms in terms of blocking immune cell trafficking to the gut. I also think in terms of a disease that is a gut-predominant disease, having a combination where you're getting dual suppression in the gut with single suppression everywhere else, I think that is quite likely to provide an excellent risk-benefit ratio for these patients.

That said, I think in terms of the likelihood that TL1A plus IL-23 looks pretty similar to TNF and IL-23, but maybe better given that TL1A looks superior to TNF. I think the read-through from the J&J combo to our TL1A, IL-23 combo is perhaps the strongest. So anyways, I like all 3 of the children, but I think we'll see, and that's why we're running the trial.

Yes, makes sense. I want to talk about, again, coming back to like the SKYLINE design and execution. One of the issues historically within some of these UC studies has been elevated placebo response. I think we've seen some contemporary studies that have shown you actually an ability to have a quite low placebo response, Abivax is one that comes to mind. Maybe you could just walk us through, I guess, what -- it's obviously not a factor for Part A open label, but as we think about Part B and generating data out of the platform study, like how are we managing for placebo response?

Yes. At my level, the management, was hire the folks that have run the best studies most recently. And so I think that was both Sheldon as the Abivax study that you mentioned in terms of having a very low placebo rate. And then also the Prometheus team as well. And so Deanna leads the SKYLINE study here, and both of those studies had incredibly low placebo rates. Frankly, despite enrolling patients even in geographies where I think folks would typically ascribe the reason for why you see high placebo rates, I'm not sure that's necessarily the case if you have the right team running a bit.

But maybe, Sheldon, if you want to comment on some of the things we're doing to help minimize...

Sure. So we -- I think there's 2 parts of that. One is you can institutionalize in the protocol, things that can help minimize placebo. So in our study, we're really looking for patients with disease -- active disease, and we've actually put a threshold of inflammation for inclusion as well as rectal bleeding. So I think that will, for the first part, take care of a little bit of the noise that you see sometimes in IBD patients who may have a little bit of IBS overlay.

I think secondly, which is maybe more important than anything is attention to details at sites. As Cameron already mentioned, we have a team that has executed trials previously. And a lot of that has to do with site engagement and instructing or getting the sites to the point of understanding what are the right patients and how to fill out the diaries. We've instituted some things from other playbooks from previous sponsors. We have a field force, MSL force. But on top of that, even the staff, myself and Deanna go out to the sites to visit investigators to, just again, make sure that they understand our protocol, the advantages of the study and get them excited. So I think site engagement is a big part of it, besides the protocol elements.

Right. Okay. Maybe help us think about from a regulatory and clinical perspective, the contribution of parts aspect to this. And I guess, clinically, like how do you think about the clinically meaningful bar for improvement over monotherapy? I think, like, investors tend to talk about maybe like 10 percentage points on something like clinical remission, but how do you guys think about it?

Yes. I think -- I mean, we actually have a pretty good precedent in IBD in terms of what is clinically meaningful in terms of differentiation. And I would point to, I mean, we have 3, I would say, strong head-to-head trials that led to dramatic changes in practice. Initially the VARSITY study of Entyvio beating HUMIRA and then the 2 p19 inhibitors beating STELARA. And all of those deltas, whether you look in UC or you look in Crohn's, the deltas were around 10% on clinical remission. In some cases, a little lower. In some cases, a little higher. But I think overall, those led to massive practice changes with about a 10 percentage difference because it's a clinically meaningful difference. And this is a disease that is top down, meaning physicians want to use the best drug first because there are consequences of IBD that are irreversible and extremely costly to the patient, to their caregivers and even to the health systems.

And so I suspect kind of the future IBD treatment paradigm will continue to be a top-down paradigm in terms of using the best drugs first. And I suspect that will be combos. Even if it takes a little while to prove it in terms of getting the studies done and advancing to that early line setting, I think that is what -- where the demand will be for the most effective agents.

That makes sense. Can you talk about, I guess, how you're thinking about pursuing Crohn's? Like to me, like starting in UC makes all the sense, but where does Crohn's fall on the broader development path for Spyre?

Sure. So our goal for the SKYLINE study is to take [indiscernible] UC Phase III. But once we decide that, once we start our Phase III program in UC, we intend to start a Crohn's program Phase III as well with the same combination for a couple of reasons. First of all, all 3 of our antibodies have demonstrated efficacy in Crohn's disease. So we anticipate a combination of those would also work very well in Crohn's, and we'll also see that validated in the DUET study. But secondly, we want to merge our databases. So you need a certain number of patients to get your drug approved. So by merging the databases, we have efficiency of having 2 studies and the safety database from both of them.

So I think the other, I would say, gives us confidence that we would -- we can go to Phase III, is that this has been done many times before, where there's been one IBD study demonstrated efficacy in Phase II going to Phase III and then the other study was started in Phase III without a Phase II.

That makes sense. I want to switch gears to rheumatology, and you're running the SKYWAY basket study for TL1A in multiple rheumatic diseases. Can you just talk a little bit about -- you've alluded to this a bit, Cameron, but like scientific rationale for going after the diseases that you've chosen here and maybe a little bit more around study design, like are we going after advanced therapy naive patients, experienced patients? Like what are we going to learn from these initial cohorts towards the end of the year?

Yes. In terms of rationale for this, we spent a couple of years picking as soon as we had the Phase I data, where should we go with what we thought was a best-in-class TL1A. And I think we really -- the indications that rose to the top and obviously, why we picked them for the SKYWAY study was based on indications where you really had all the evidence you could expect preclinically. So one, there's human genetic evidence in all 3 of these indications. There's human tissue evidence in that TL1A levels, and its receptor levels correlate with disease severity, and they go up early. And then causal information we have from animal studies where in animals that both have psoriasis or arthritis, you can actually give them TL1A itself, and it makes the disease worse or you can give them TL1A antibodies, and it makes the disease better. So it's really kind of the totality of what you can have in terms of proof of concept before you go into the clinic.

And then mechanistically, we also like TL1A in particular, in RA, kind of the TNF and TL1A overlap looks like a Venn diagram in terms of the pathways that they hit. But the one area that's specific to TL1A is its impact on fibroblast and in RA. The fibroblast-like synoviocytes are kind of a cell type that is known to drive RA, and they express DR3, and they express it more in this disease state. And we think that means this could be an indication where TL1A is even better than TNF from an efficacy perspective.

And then maybe lastly, not beyond the science here, we also saw these indications as interestingly lighter pipelines in terms of competitive development in the space despite the size of these markets. Cumulatively, almost a $30 billion market. Still substantial branded opportunities in the space as well. And if the TL1A behaves the way we hope it could, which is that 2 to 4 shots a year would be the most convenient product in these spaces. So far, TL1A doesn't have any safety effects that would lead to the black box warnings that you see for every product in RA, except one. And then so if we see efficacy that's in the range or better than the existing classes, we think this is a big opportunity from a revenue perspective.

Yes, that makes sense. And in these initial proof-of-concept cohorts, are we angling more towards advanced therapy naive patients or experienced patients? Like, what's the patient population across each of these?

For all 3, we're aiming for a mix, about a 50-50 mix of kind of naive patients versus failures of advanced biologics. These are first-in-class proof-of-concept studies. And so the goal is to see kind of a relatively broad kind of exploration of the efficacy here. Of course, we'll actually see some of our competitors testing similar populations or some selecting more of the others. So we'll get to learn from what everybody else is testing as well.

Yes. And then how do you think about sort of bar for success, go/no-go decisions across each 3?

Yes. So I alluded to it a little bit previously is that I think in terms of an attractive commercial product profile, you need to be differentiated on at least one, if not more, of 1 of the 3 parameters I mentioned: safety, convenience and efficacy. I think it's quite likely that we have it on 2 of the 3 just by molecule design. So certainly, on convenience, so far on TL1A safety, it looks good. So really, the last thing we're looking for is that efficacy is really at least as good as the existing classes or kind of in that range. If you're in that case where you're better, better and even similar on efficacy, that's probably the first branded product chosen.

I don't think we're suggesting like we may be in IBD, that it's a possibility to come really early in the treatment paradigm. You probably do need to step through a biosimilar or 2, yet I still think that's a large commercial market given that this is a disease area where you cycle through multiple products and do not stay in remission for the long term on a single product.

Yes. That makes sense. You mentioned TL1A having an impact here on the fibroblast synoviocytes. I'm just curious, within SKYWAY, have you incorporated any kind of like unique PD or imaging analyses that may be able to allow you to tease out like a differential effect relative to some of the other therapies?

I would say our substudies are very similar to the other previous substudies in these spaces, not looking for anything particularly distinct about kind of TL1A's activity. I would actually probably point you to not our trials in terms of where we might see better evidence of TL1A's antifibrotic effects specifically. And I think in particular, the SSc-ILD and MASH studies that we may see as early as this year, those are kind of -- you really are heavily relying on a strong antifibrotic effects, to have efficacy in those disease areas, which we would love to see as well in terms of the opportunity in antifibrosis would be a great option for us, but I think it's great to see somebody else running those POC studies.

Yes. Agreed. You called out, I think, maybe up to 4 sort of rheumatology readouts outside of Spyre that could come this year. Is there any one that you're particularly focused on or excited about that we should be tuned into?

Well, these are -- so the 4 are SSc-ILD, atopic dermatitis, NASH and HS. I mean these are, for the most part, very large markets in the long run. I think we have differing views in terms of probability of success across each of them. But my view of probability of success will change a lot depending on what we see from those Phase II studies.

So then we'll -- really, once we see the product profiles for what you can get with TL1A efficacy in those indications, I think when we sub in the idea that we have 2 to 4 shots a year of a molecule in those spaces, I think we could imagine the kind of the Phase III costs, and the commercial opportunity would look attractive in those areas as well. So I think there's a range of probability of success, but let's see the data and then -- before making a guess.

Yes, makes sense. Just in the last 30 seconds or so that we have, you just recently hired Chief Commercial Officer. Can you just talk a little bit about the rationale for bringing her on board now? And I guess, how you envision her helping, I don't know, incorporate some feedback into like future trial designs?

Yes. We're super excited to have Kate join us from Amgen in the last couple of months here. I think, really, you might have kind of hear the big questions that are coming for the next 1.5 years for us, which is that we'll have 6 readouts this year, the combination readouts next year. We're looking at ulcerative colitis, Crohn's, these rheumatology indications plus the other 4 indications where TL1A is being studied. It is a pretty substantial commercial opportunity that's in front of us.

And I think our main goal and commercial strategy is looking at those indications. And once we know the profile of our products in these Phase II studies, saying, "Okay, what is the revenue potential in each of those?" We, of course, know what it would take to run a Phase III in them and really look across the board and say, "Where is the ROI be highest for us to go pursue on the back of these Phase II studies."

So that really is our primary effort. Of course, we'll do the physician and patient research. But I think even most importantly in kind of today's market is understanding how the payers are going to react to these new products in each of these spaces as well, how we think about pricing, what line of access and reimbursement we can expect. And that's something that I think Kate is going to be leading for us.

That's great. All right. Well, unfortunately, we're up against time, but I want to thank the Spyre team for joining us and a ton of data coming this year. Obviously, an exciting story to stay tuned. Thank you, Cameron. Thank you, Sheldon.

Thanks, Tom.

Tyler Van Buren here, senior biotech analyst at TD Cowen. Thank you very much for joining TD Cowen's 46th Annual Healthcare Conference. Saving the best for last year with the final company slot of the day. Very excited to have a hybrid presentation and fireside chat with Spyre Therapeutics. It's my pleasure to introduce Cameron Turtle, CEO of Spyre as well as Joshua Friedman, Senior Vice President of Clinical Development. Cam and Josh, thank you very much for joining me. Cam, I'll hand it over to you.

All right. Thank you, Tyler, and thanks for hosting what has always been a great conference. Before we start, just quick disclosures here. I'll make some forward-looking statements. These are subject to the normal risks and uncertainties for a biotech company. Overall, our goal with Spyre is to deliver what we hope to be indication-leading products across autoimmune diseases where we still see substantial unmet need on the market today.

On the inflammatory bowel disease side, we're starting initially with monotherapies against what we see as the best biologic targets in this space. This is Alpha-4-beta-7, the same target as ENTYVIO, TL1A, where we've seen 3 very successful proof-of-concept studies and IL-23, the same target as risankizumab or Skyrizi. We think that our antibodies here have engineered for improved properties relative to first-generation molecules, which we think are exciting in and of themselves as a step forward in the field to substantially improve convenience and potentially improve efficacy over first-generation monotherapies.

But -- and we think these could be actually the leading products on the market today in inflammatory bowel disease. However, we don't think that the future of IBD looks very much like the standard of care today. In particular, we, and I think everyone who's very serious about the future of IBD is investing in combination therapies. And the premise here is relatively straightforward that this is a heterogeneous disease. It's a multifactorial disease where numerous pathways are involved in driving the pathogenesis of IBD, and it's very likely that blocking more than one pathway is going to lead to additive efficacy.

Simply put, we think that having the best components is likely to lead to the best combinations, and we have engineered the optimized versions of each of these monotherapies and are combining them in pairwise combinations. Outside of IBD, we've expanded the strategy to explore rheumatic disease as well. I think we and others who have invested in TL1A believe this product has a pipeline in a product potential where we could see that it has efficacy in a range of autoimmune diseases. And we've been moving quickly here, and we actually have the potential to be first and best-in-class in this basket of rheumatic diseases in RA, psoriatic arthritis and axial spondyloarthritis.

Across the 2 of these programs that we're running, one in the Skyline study in inflammatory bowel disease and second in the SKYWAY study in rheumatic disease, we plan to deliver 6 Phase II proof-of-concept readouts this year on the IBD side beginning next quarter. And then towards the fourth quarter of the year, we expect to read out all 4 proof-of-concept readout -- all 3 proof-of-concept readouts in a placebo-controlled setting.

To go just a brief background on these molecules themselves. Over the last 1.5 years or so, we've shown in Phase I studies that these molecules roughly have the properties that we expect. So against each of these targets, we believe these molecules have the same or improved potency compared to the first-generation molecules. And then in Phase I studies, we showed that each of them has more than 3x the half-life of the first-generation molecules. And we've engineered each of them as well as the co-formulations of each of these at high concentrations at 200 mg per ml and the ability to inject these in 2 ml auto-injectors, which provides an incredible convenience profile for patients looking at 2 to 4 doses per year, which is a major step forward relative to existing products on the market today.

So overall, what we're trying to achieve here on the inflammatory bowel disease side. Here, we're showing the standard of care today in terms of dosing on a monthly cadence with efficacy that certainly leads quite a bit to be desired. We expect our monotherapies to move this out to the right here in terms of dosing on a 2 to 4x a year basis, potentially with improved efficacy or in a similar range as the existing products, whereas our combinations, we expect to be potentially adjusting the treatment paradigm completely.

This is a disease where physicians are looking for top-down therapy, meaning the best product comes first. And we think that these combinations have the potential to be that product and dramatically change how this disease treated. On the rheumatic disease side, we see a similar situation that despite numerous product classes approved across these 3 indications we're testing, most of them are still delivered on a pretty inconvenient basis, and most patients don't get into long-term remission with any of the existing therapies.

We expect TL1A to be an important addition to this market as well with the potential to deliver a far more convenient product profile than what's on the market today. So digging into the inflammatory bowel disease strategy in a bit more detail. This is a summary of the existing approved classes in IBD. And I think the Y-axis here makes it clear why we see the unmet need despite a huge amount of progress in this field, we still see what the physicians refer to as a therapeutic ceiling in this space. On a placebo-adjusted basis, we don't get above about 25% clinical remission with any individual mechanism, which leads to patients having to cycle through many mechanisms, often losing response or remission to the drugs that they're on and suffering what can be very serious consequences of this disease, which can include surgeries, hospitalizations, as serious as having parts of the GI tract removed and having to live with serious consequences for the rest of their lives.

The potential for combinations to break this therapeutic ceiling was shown most obviously in the VEGA trial that J&J released just a couple of years ago, where they combined the only 2 drugs that they have, golimumab, an anti-TNF agent with guselkumab, an anti-23 agent. And what they saw is remarkable, really a doubling of effect size in these frontline patients, a 47% clinical remission rate that is dramatically beyond what has been seen previously. Despite kind of this excellent result, we think it's quite unlikely that this is the combination that will dominate this field for the long run.

In particular, we think that replacing an anti-TNF therapy, particularly golimumab with either an optimized Alpha-4-beta-7 or an optimized anti-IL-23 is likely to be a superior combination.

This is based on the fact that in these indications, we've seen head-to-head superiority of Alpha-4-beta-7 against TNF. In fact, this is kind of a TNF that has been shown to be kind of more efficacious than the golimumab agent. And vedolizumab, anti-integrated anti-alpha-4 agent was shown to be head-to-head superior on efficacy in the VARSITY study, and it also had a superior safety profile.

In addition, we've seen 3 Phase II TL1A studies, so they weren't conducted head-to-head against TNF. I think any reasonable cross-trial comparison of the results for the anti-TL1A mechanisms would suggest that this is a superior agent in terms of both efficacy and safety relative to TNF. So with our combos here, we're replacing kind of the TNF component with something that has been shown to be superior or is likely superior, and we think it is quite likely that our combinations will deliver a superior result in that combination that's already been shown.

So how we're advancing this is in what we believe is a very efficient Phase II approach, where we're testing all of these agents, both as monotherapies and in combinations in a single platform study. The advantage here is that we get to activate sites once and geographies once and continue to add additional agents to the study. In addition, we don't have to enroll 6 different placebo arms to investigate each of our agents and can use the placebo as comparator for each of our arms as well as our monotherapies as comparisons for our combinations.

So this study has been ongoing since the middle of last year. We finished enrolling the Alpha-4-beta-7 cohorts and are making great progress on the other 2 monotherapy cohorts enrolling well ahead of schedule. We expect to start reading out these data next quarter, initially from this Part A portion, we'll be looking initially at objective measures, including a change in histology index, change in endoscopy scores as well, as well as more standard endpoints that we'll use as primary endpoints in Phase II and beyond, such as clinical remission. As soon as we finish screening for Part A of the study in the open-label monotherapy cohort, we'll immediately pivot into Part B. So by the time we read out these Part A cohorts, we'll have already been enrolling the Part B cohorts for a number of months. So with that, I'm going to pause here and turn it over to Dr. Friedman, who will walk through our strategy in rheumatic disease.

Thanks, Cameron. So let's take a look at rheumatic disease. Similar slide to what Cameron showed earlier for IBD, demonstrating the unmet medical need in this space. As you can see, the unmet medical need comprises both a high prevalence with over 3 million patients across these 3 rheumatic diseases in the United States alone. And again, a ceiling on efficacy across these mechanisms. And we call it a ceiling. But of course, if the ceiling in this room were down here, we'd all be quite uncomfortable.

And unfortunately, that's how the patients find themselves. And they're also not ideal in terms of dosing frequency with dosing frequencies monthly, every 2 weeks, every week, which we think we can do better for our patients. And there are also safety concerns. If you look, for example, at the drugs available for RA, all but one of them has a black box warning. And so what happens when you put all this together is that patients end up cycling through drugs either because they didn't hit the efficacy they needed at the outset or they had some efficacy and then they lost it over time because the drugs aren't durable enough.

So there's definitely room to improve on this for our patients. So we recognize that there's potential for this mechanism, of course, in IBD, and we've already mentioned rheumatic disease, but actually, there's a potential for a range of diseases. And I think that this potential for a portfolio and a product is what drove the very high valuation M&A for this target in the recent years. And there's good scientific basis for a lot of them, but we prioritize rheumatic disease after IBD.

So some of the evidence driving that decision for us begins with the most basic thing of all, which is, is the target elevated in the disease. And we're just showing you a little bit of the data on that front, which showing elevated gene expression in the blood for TL1A across all 3 of those rheumatic diseases. But there's also translational data showing that the protein is elevated in synovial fluid, which is closer to where the site of action is for the disease. And so it's quite clear that this molecule is present at the scene of the crime for the diseases. But it doesn't establish causality.

But there's evidence there as well because at the genetic level, we know that there are variants in the TL1A gene that are associated with increased risk across these diseases. And so that's a strong clue pointing towards efficacy. And there's also preclinical models, which is one of the only things you can do short of a clinical trial to establish efficacy. And we and others have found that blocking TL1A can prevent or ameliorate both arthritis and psoriasis in animal models. And finally, one other piece of evidence that we sort of intimated, which is that there's already proof of concept in inflammatory bowel disease. And that we know shares mechanisms at the level of cell types like Th1 and Th17 cells and molecular pathways as demonstrated by the mechanisms of action that work across those 2 diseases.

So plenty of reason to believe that this is an effective mechanism in these diseases. So this is how we're going to test that hypothesis. We have -- again, we're taking advantage of an efficient trial design, in this case, a basket trial with 1 drug, 3 diseases, and we get efficiencies from using the same sites, same contracts across all 3. There are 3 independent substudies with the key inclusion and endpoints as shown here with 2 dose levels in RA, the high dose level in the other 2 indications. Each one is enrolling independently and well, and each one can read out on its own or they can read out together just depending on the timing. With that, I'll turn it back to Cameron.

And I'll just do the last slide from here. I don't have to stand up again. So in short, I think it will be a very interesting next 18 months for the company here. We'll start by reading out those monotherapies in IBD starting next quarter, finish the year by reading out the placebo-controlled readouts in rheumatic disease. And then as we turn the calendar into '27, you should expect maintenance data from each of those studies as well on the order of 9 to 12 months after each of the induction data sets.

And then, of course, the placebo-controlled Part B portion of the Skyline study, where we'll see monotherapies against the combinations against placebo in ulcerative colitis. So altogether, we think it's an incredibly transformational next 2 years for the company, and we're very well funded to undertake this effort with about $750 million on the balance sheet as of the last quarter, more than enough to fund all of this and a year beyond each of these readouts. So I think that's it for the presentation portion, and we'll turn it over to Q&A.

Great. Thanks very much for the presentations, Cam and Josh. Pretty exciting catalyst calendar on that last slide. We'll start with the Phase II Skyway UC study, of course, naturally. So Spyre-1 monotherapy cohort, again, complete enrollment, first data readout expected next quarter. I guess 2 follow shortly thereafter, maybe Q2 depending on enrollment. And then definitely not 3, but 3 will come at some point after 2, clearly. So just, I guess, for all 3 of these readouts, we're kind of should set expectations similar for all 3 readouts to some extent, right? And what is the expectation in terms of monotherapy efficacy based upon the patients you enrolled and I guess, safety as well?

Yes, sure. So none of these are first-in-class molecules. We're all kind of -- we have first-generation molecules against each of these. And I think a fair initial assumption is that each of our molecules will behave like the first-generation molecules in terms of safety and efficacy with the primary differentiation being the dosing interval that we talked about.

I think that's a reasonable base case. I think there is a potential upside with a few of these mechanisms that there might have been underdosing with some of these mechanisms. So in particular, the ones that I would highlight, I think on Alpha-4-beta-7, we've seen that. So in terms of the vedolizumab data in both the GEMINI studies and in the real world, we see that patients that have higher drug exposures tend to have higher rates of [indiscernible] and so with our high doses in the Skyline study, we are testing that.

We are testing whether a higher exposure against each of these targets could lead to greater efficacy. I also think that might be possible as well with the TL1A class, particularly in the maintenance setting, where I think we've seen both dose responses and even some sponsors choose to increase their dosing frequency as they went from Phase II to Phase III, suggesting that full efficacy might not have been captured in the maintenance setting for TL1A. So that's really, I think, the bar for all 3 of these mechanisms is really behaving like the first-generation products. We think it's -- we think the difference in efficacy that we're likely to get with this dosing is likely smaller than what we expect to see when we dose these together as formation.

Great. And is the goal really quarterly? Or are you thinking about potentially going beyond that in terms of duration? And will we be able to answer that question with these monotherapy readouts potentially?

Yes. So I think the maintenance data really is intended to answer that question. So we are testing both a quarterly dosing interval as well as a twice annual dosing interval in this trial. So we will see not with the induction data that we plan to report this year, but as we get into the maintenance readouts next year, certainly, the low doses that are looking at that longer twice annual dosing interval will examine whether we can dose this that infrequently.

So moving to the combos. So DUET data at DDW in May, potentially, hopefully, I guess, how confident are you that we will get the data then? And how should we think about expectations for remission rates in this readout, especially given the patients that they enrolled?

Yes. So I think I'm done guessing at when will see the DUET data at this point. I think we were originally supposed to see it in the middle of last year, and that kind of has continually been postponed. But the 1 year from them having the data is in the middle of May of this year. So on that time frame, we will see it posted if it's not announced beforehand.

But there is a big gastroenterology conference in early May in Chicago at the DDW conference, and so that would be a very logical place for it to be announced. In terms of what we're expecting, I think there's been maybe some controversy around this trial for the last few quarters because they've had these data and they haven't been announcing it.

In some ways, I think that controversy has somewhat been relieved over the last couple of months as J&J has made it clear that they're advancing that combination to Phase III. They're calling it the future treatment of choice for refractory patients in IBD and a future blockbuster. So they're the only ones that have seen the data in the refractory setting. But if they're excited about advancing it particularly in that setting, I think we largely know that, that worked. I think it bodes very well for the combination approach overall if the J&J combination worked.

And what I mean by that is, as I mentioned in the prepared remarks, that this combination that includes golimumab which as much as that's a great agent, it is not the best of the TNF agents in terms of commercial use or in terms of the efficacy data that's been generated in IBD with that molecule.

And the design of the DUET study is that every patient in that study is a refractory patient, meaning they failed an existing biologic. And in most of the world, the first or second-line agent is going to be an anti-TNF therapy, and it's likely to be infliximab or adalimumab, which, in fact, have better data than golimumab. And so if a combination using a TNF component works in a population that has failed a more effective TNF component, I think the setup that we have where not only are we replacing the TNF with a component that is superior in Alpha-4-beta-7 or TL1A, but then we're also testing our combinations in a population that have not failed our components for the most part. I think that setup is -- bodes well. And I think it's quite likely that if the J&J product was a success, I think ours are set up for even more success.

What do you think is the minimum increase in remission rate in this refractory population that KOLs would like to see to gain further confidence that is, I guess, supporting what J&J has been saying over the last few months?

So I think we actually have a pretty good set of precedents in IBD for what it takes to shift the treatment paradigm. And we have, I would say, 3 head-to-head trials over the last few years that have led to the biggest mega blockbusters in this space. So we referenced one of them, ENTYVIO beating HUMIRA.

That was actually just under 10 percentage points of clinical remission and has led to ENTYVIO being a $6-plus billion drug today, kind of high single-digit peak is the expectation there and a similar delta that was observed for the 2 p19s that showed superiority over STELARA, Skyrizi and TREMFYA with now both AbbVie and J&J guiding to those products being high single-digit billions of sales in IBD.

So I think this 10 percentage points of clinical remission delta for products over the existing standard of care is clinically meaningful. And if those products don't have a safety downside, and I think if they're priced like a single drug, which is my expectation for these combinations, I think they will be used first. It is a superior product, and I expect that treatment paradigm to shift rapidly to those products that have a better profile.

And we'll get the DUET data, hopefully, again, eventually. You mentioned the VEGA data. Are there any other historical combination data sets that really give you confidence in the combination approach?

Yes. I mean, certainly, the VEGA study was the foundation for us. But I think that there's more evidence. I mean, although it's outside of IBD, the AFFINITY study is also quite meaningful to our minds. That was in PSA, also from J&J. Same combination of anti-TNF and anti-IL-23. But in this case, it was in a refractory population.

In fact, 100% of the population was already TNF refractory. And yet when they added golimumab on top of anti-IL-23 guselkumab, they found numerically improved -- numerically pretty significant improvement across most of their endpoints. So that gives us the first clue to what we might see in a more refractory population, including an [ ID ]. In addition to that, there's a pretty good substantial body of evidence of case reports from gastroenterologists who are struggling with their most refractory patients.

They try combos and then they report them. In fact, there even reports collating all of those reports. And in those cases, they're seeing greater efficacy and not much of a safety signal. And then even most recently, at the ECHO conference just last month, there's Takeda-sponsored study where Alpha-4-beta-7, ENTYVIO was combined with a JAK inhibitor. And in that case, again, it's rather surprising because JAK inhibitors are themselves combinations, right, because that pathway -- that -- those mediators are responsible for multiple cytokine signaling, including IL-23, and they saw an improvement in efficacy when they added Alpha-4-beta-7 on top of a JAK inhibitor. So we feel that, that bodes well for our combinations in IBD.

Maybe generally, I think the idea that an integrin will be combined well with cytokines, I think, is well supported by the evidence as well as just kind of basic mechanistic rationale, which is that the integrin mechanism is blocking immune cell trafficking to the gut specifically, whereas the cytokines are global immune suppressants.

And in terms of the benefit risk ratio for an IBD patient where they have an overactive immune system in the gut specifically, kind of getting dual suppression in the gut specifically, but only single suppression globally, I think, is a very compelling approach in terms of blockading this.

So it's why I frankly think kind of some of our early readouts here in terms of showing that our Alpha-4-beta-7 is at least as effective as vedolizumab and the long-acting version of it, I do think it is meaningful in terms of making that a great combination component going forward.

And you shared a range of preclinical data across various combination models at conferences over the last year. Are there any key learnings from the preclinical data or data sets that you think are worth highlighting before we get into all these readouts coming up over the next 18 months?

Yes. I mean I'm glad you mentioned that. We've shared publicly preclinical models testing all of our combinations in rodent models. And across the board, the combinations have been better than either of the monotherapies alone. I think -- not just I think we know when we speak to KOLs in this area about what combinations they would prefer, well, I'd say a plurality recommend Alpha-4-beta-7 combined with anti-IL-23. Partly that's just their level of comfort with it -- with those mechanisms. But of course, they're comfortable with them because they're so safe.

And so I think that's quite plausible. But from our standpoint, we also see the appeal of potential boost in efficacy with TL1A, as Cameron described, from admittedly cross-trial comparisons. And so we can envision a scenario where a combination of anti-Alpha-4-beta-7 plus anti-TL1A might be really the best in -- especially in UC, where we already know Alpha-4-beta-7 is superior to anti-TNF.

And it may be the combination of anti-TL1A and anti-IL-23 is best in Crohn's disease where we know IL-23 MOA is quite effective.

And with the combination readouts expected next year, could you tell us where we might get the first readout next year? And also what expectations for those readouts should be in terms of remission rates as well?

Yes. So in general, the Part B of the study shares comparator groups in terms of the monotherapies and the placebo. So it will be one readout actually. So it will be 6 different active arms against placebo simultaneously. So far, we've just said 2027 in terms of the guidance as we switch from Part A to Part B enrollment shortly and start progressing along those enrollments. I think later in the year, we'll have a better sense of when exactly in '27, we'll get that full readout, but we expect them all -- we know all of them are going to come together.

In terms of what we are hoping to see or expecting to see, as we alluded to earlier, I think the main goal here is can any of our combos deliver a set of efficacy that is superior to the other combinations in development maybe a little bit less concerned about the specific deltas between our monotherapies. I think that we likely have the best components, and I think the best components are likely to lead to the best combinations.

I think in the long run, what will be compared is the label of a combination product on the market against the other labels of products on the market, not necessarily how much did that combination beat its individual components. I don't think that will be relevant in the long run.

Got it. And you are in a more unique position than any other company, right, with all 3 targets, right, optimized monotherapies against the 3 targets, A4beta7, TL1A and IL-23. And you're going to be able to test all those combos and pick the best one.

But you've got the slide showing A4beta7 is better, TL1A is better than TNF. Talk about greater exposure, greater efficacy with both of those targets. Integrin multiplied by cytokines, frontline agent is Alpha-4-beta-7 right, the clear frontline agent of choice. So it feels like you're saying A4beta7, TL1A might be the best combination. I have to ask about that or...

I don't think we know, right? If we knew we wouldn't be running the study, we did. I think what's important about combinations is that the property and the profile of your combo is dictated by the weakest component in the combination and I think what's unique about the Spyre portfolio is that there isn't really a weak link in this portfolio.

All of these agents are long-acting. They're engineered for high concentration co-formulations with each other. They were designed for this from the outset. I think when you compare the profiles of our combinations versus the combinations that even the leaders in the field have, we've talked a lot about the J&J combination. But when we look at the other leaders in the field as well, they are not dosing them together on the same interval. They are not the best versions of each of these mechanisms.

And I think in some cases, it's hard to envision actually how they become single products that can be delivered as a single injection and priced as a single product as well. I think it is harder to do this than is appreciated. And I think our combinations are likely the 3 best in development. And I think we'll see that in the next 1.5 years as we start to read out the results from the Skyline study.

How do you see the IBD treatment landscape playing out over the long term, right? I guess in some very mild patients, maybe monotherapy is enough to have a tremendous response. But based upon what we anticipate with the combinations, most -- you would think most patients would want to get a well-tolerated combo upfront.

And do you go from a combo to a mono or you go from a combo to another combo? And therefore, do you move 2 or all 3 combos into Phase III?

Yes. I think the broad trend in IBD is top-down therapy is the theme, which means patients should get on the best agent first because there are irreversible consequences of having a flare of IBD. You can have surgeries and hospitalizations that you just do not get back to where you were if you let patients get out of remission and so what that's led to is much more rapid advanced therapy uptake, pulling those earlier into the treatment paradigm. And I expect that if you have well-tolerated combinations that provide additive efficacy and you price them so that you can gain relatively early line access, I do think that is where these products are going to be used.

In terms of what gets used afterwards, I think it's a very interesting dynamic. I think it's quite unlikely that you will want to use a component of a combination if somebody has failed that combination. I think it is much more like that you will be cycling through different combinations as patients are kind of hopefully staying in remission for longer on combos than they have on monotherapies.

But I think it's unlikely that you're going to want to switch to a component of that combination as a monotherapy if you fail the combo. So we think that is likely the way that this field evolves and that it's going to be an efficacy-driven market, and I think that's what we're aiming for here.

All right. Let's move to Skyway, RD and [ Rhum ]. Obviously, Q4 could be a massively value-creating readout for you all, I would argue more so than maybe even the monotherapy data. But can you just briefly state the bar for efficacy there with those readouts that you hope to see? You've got a great slide in the deck, but maybe just voice it over for folks. And do you think there's a higher probability of success in RA, PsA or axSpA? Or do you think they're all quite closely related?

First, can you take the second? So in terms of the -- I mean, we're looking kind of across the target profile, target product profile here, which is convenience first because it's easier because it's well defined, which is that we're testing 2 to 4 shots a year in all of these markets, that would be the best convenience profile on the market.

In terms of the safety profile, second, as Josh mentioned, every product, except ORENCIA and RA has a black box warning. So far in 3 maintenance data sets for TL1A, we have not seen safety signals that would justify that as well. So really, kind of the unanswered question that we're interested in here is efficacy, of course, and we'll see those on a placebo-adjusted basis at the end of the year.

We think if you're better on convenience, better on safety and comparable on efficacy, that's the winning branded product in this space. So when we show kind of the existing levels of efficacy for the therapies in this space, we think that TL1A has to land in that range to be an attractive commercial product. Of course, I think there's some reasons to believe it could be better than some of the agents out there in terms of the effects on both Th1, Th17 cells as well as fibroblast and fibroblast-like synoviocytes, but I don't think it has to be. I think it could be in the range of efficacy, and it would be just fine. Maybe in terms of probability? I'll let Josh.

I'm not going to give a probability. Obviously, we have reason to believe, as I touched on, across all 3 diseases based on translational data, the genetics and preclinical models in inflammatory arthritis and psoriasis. And if I had to say anything, as Cameron touched on, that might tip the scales.

I think that, that is an important concept that we know that TL1A binds to its receptor on fibroblast-like synoviocytes and activates them. And we know that fibroblast-like synoviocytes are really important drivers of both inflammation and joint damage in these diseases.

And so I think given that the evidence for the role of FLS is probably strongest in RA, that might tip the scale towards RA. But frankly, we have strong reason to believe in efficacy across all 3 of them.

Yes. And you guys obviously didn't develop the first TL1A. It might be the best, right, or they might be the best based on the properties that we've seen. But how did you guys get in the lead here? And can you talk about the competitive landscape and what you're seeing in terms of others that are perhaps trying to [indiscernible]?

Maybe I'll start here, which is that -- I mean, I think as soon as we started here, we thought that TL1A has a pipeline and the product potential, and we looked at what's the minimum time to get to Phase II proof of concept for each of these things. As soon as we were done in Phase I, we were ready to launch this Phase II trial. Frankly, we were a little bit surprised to be in the lead because we thought the evidence here was very strong.

I think it's been nice to see kind of the other strategic in the space follow us into these indications as well. I think without the convenience advantage, they still like the kind of the risk profile of advancing in those Phase II studies. So I think that's been well validating. So how we got there, it's a bit surprising to be in the lead, but I think first-in-class, especially if you're best-in-class is usually a great place to be.

Great.

Yes. I mean I agree. And I think that it's great for us to be leading in first-in-class in the rheumatic diseases. And of course, other companies are looking at some of the other indications. And in that case, we're happy to follow, which we can do if they've established proof of concept in there.

We're up on time here. But in closing, I'll ask you both what aspect of the Spyre story do you believe is most underappreciated by investors right now?

Yes. I think kind of sum of the parts is always difficult for development stage biotechs in terms of -- I think it's pretty easy to get excited about different aspects of our portfolio in terms of I think we have the best combinations in development in IBD.

I think these rheumatic disease readouts are very interesting as well. I think it's tricky for people to give credit for everything all at once and recognize what that value is ahead of the readouts. I think as we start to deliver them, I think that value is very likely to accrue. The other challenge, I think, is kind of the appreciation for what these combinations would likely do in IBD.

I think we sometimes see folks talking about them as $1 billion, $2 billion, $3 billion a year drugs. I don't think that's actually likely in terms of the dominant products in IBD don't do low single-digit billions.

They do high single-digit billions. And I think we have the 3 best ones in development. They may not all turn out to be 1, 2 and 3 in the end, but even 1 or 2 of them in that range would be a major value inflection from where we're trading today.

Indeed. Wonderful. Thank you so much for your time, Kim and Josh. Appreciate it.

Thank you.

Thanks, everyone, for joining.