Cabaletta Bio Inc Stock

All right. Hello, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Ulz, one of the biotech analysts here. And it's my pleasure to introduce the team from Cabaletta Bio. On the far left is Steven Nichtberger, he's the CEO. Next to him is Steve Gavel CCO; and then on my immediate left is David Chang, CMO. Just a reminder for today, it's a fireside chat, but if anyone in the audience has a question, please feel free to raise your hand, and we'll get your question looped into the discussion here. But before we get started, I just need to read a quick disclosure.

For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. And with that, Steven, David, Steve, thanks for sharing your time with us today. And maybe we can start with the first question here is, can you just talk about the approach to autologous CAR T cell therapy, specifically rese-cel and why it's so promising in autoimmune disease?

Yes. Thanks, Mike, for having us, and thanks for investing the time with us today. So listen, patients who have autoimmune disease simply want to get rid of their symptoms, get rid of their medicines and just be normal people. They don't want to have the patient label. And there's really only one category of treatment that has delivered on that promise to date despite a lot of people trying. And that category is the autologous CAR-T category of treatments. Within that category, rese-cel, we believe, is the only product that was designed specifically for patients with autoimmune disease.

And by that, I mean that it uses a standard 9-day manufacturing process. It is using a 4-1BB costim domain and is weight-based in its dosing, which we think is a unique constellation for any product being developed for these patients. And using the approach of a standard, well-characterized 9-day manufacturing process, weight-adjusted dosing with our product design, we've been able to deliver on the promise with differentiating safety. So the majority of the nearly 100 patients that we have now dosed are demonstrating -- the vast majority are demonstrating compelling clinical outcomes on the efficacy side, largely delivering on the aspiration of these patients.

And on safety, you'll hear more about it from our Chief Medical Officer. But there, we are differentiating in a highly meaningful way from the other autologous CAR T products. What that has allowed us to do is begin to use rese-cel for dosing patients in an outpatient setting. And from our Chief Commercial Officer, you'll hear a bit about why that is not only exciting, but really important. And it all is based upon the emerging differentiation on our safety profile.

And it also allows us to think about rese-cel as a portfolio and a product. And specifically, in the next 12 months, we'll have the initiation of our second pivotal program for scleroderma this time, added to the ongoing study in myositis for adult and juvenile patients. We're really excited about both of these programs. But in the near term, the myositis program has the promise and the potential of delivering not only a really transformative product for patients, adults and children, but for delivering a PRV, a priority review voucher for Cabaletta.

So we expect to report out in the second or third quarter next year, the middle of next year, something we've been saying for quite a long time, the clinical data from our pivotal myositis program and by the end of the year to file our initial BLA for rese-cel in adult and juvenile myositis. And then finally, on the innovation side, because we are safe enough with our side effect profile when added to a preconditioning regimen, it opened the door for us to evaluate rese-cel without preconditioning.

And here, it's only possible because you're killing so many more B cells when you don't use preconditioning. You have to be very safe with preconditioning to even begin to think about using your drug without preconditioning. That's true for other autologous products. That's true for allogeneic products, and that's true for in vivo products. If you don't have a very safe and clean profile in the preconditioned patient, there's no way that you're going to safely get to a great outcome in patients without preconditioning. So really excited about that program, its prospects, and we'll be revealing data as warranted over the coming months and years from that program. So really excited about the overall constellation that we're working on.

Yes. So a lot to cover there. But maybe, Steven, you touched on this some differentiation versus other CD19-targeted cell therapies in development and one that has started to come up more recently is Fate Therapeutics. So maybe just talk about some of the differentiation there or positioning.

I could take that one. And Fate Therapeutics is a company that's been developing a CAR-T-like therapy with their stem cell-like product. I think there's a limited amount of data that we're seeing from Fate, right? It presents at EULAR and only a handful of patients beyond 6 months' worth of data regarding their lupus patients they treated either with lupus nephritis or those without lupus nephritis. So I think it's too early to say whether that type of technology is something that would be of a challenge to Cabaletta, but I think we have to wait and see what the data is.

Yes. Makes sense. Steven, you also kind of touched on the profile, but maybe we can dig in a little bit the profile of rese-cel and characterize what you're seeing in terms of efficacy and why it's so promising. And then also on the safety side, which is obviously an important concern here, just given it's for an autoimmune indication.

Yes. So for overall efficacy, I think we've seen across the entire RESET programs, remarkable responses without continued use of immunomodulatory agents and on a low dose or off of steroids altogether. So these are patients who have severe refractory disease who are now stopping all their medications and replacing with a onetime dose of a weight-based rese-cel. And they're still getting remarkable responses. Responses very similar to what Schett has seen with its patients in Germany. And these are remarkable responses. Some are going to remission, some are going to major responses. And we would say, characterize them over 80%, 85% of our patients are achieving these types of endpoints off of therapy on a low dose of steroids. So I think from an efficacy perspective, we are replicating the type of data that has been seen by Erlangen University.

You talk about this idea of this immune reset and kind of what it means and how that sort of plays out.

Yes. I mean I think that's really the key here is that I know that we've talked about -- people talk about how long is the B-cell depleted or how long -- how high is your level of persistence or how long does it persist? The real key here is, is there a depth of B-cell depletion that is complete and deep enough that now you're resetting the immune system so that only naive or transitional B-cells are coming back and the pathogenic B-cells have now been fully eliminated, not just in the periphery, but also in the secondary lymphoid organ such that now you only have healthy naive or transitional B-cells that are repopulated and no longer causing the disease. So I think that's really key. And within our patient population, we've looked at our data from translational data confirming that, that's, in fact, what we're seeing is a reset of the immune system. You asked about safety. Did you want me to comment on that?

Yeah.

So obviously, the big elephant in the room that's been going around is regarding the IEC-HS. We can say that we have not seen.

Can you talk a little bit about more where that stand from case people.

So there were reports that were unearthed that Novartis had 3 deaths associated with its immune effector cell, HLH-like syndrome in their clinical program for autoimmunity. we don't have much more information other than that. This broke in August 31st. So we know that 3 deaths with this particular syndrome was reported in the Novartis program. We don't know which patient population, we don't know where. We don't know what the denominator is. We don't know the numerator, but that's what was reported. This paused their program, and they publicly said that they paused their program.

In addition, in that same report, BMS also indicated they had voluntarily paused their entire autoimmune program because of a transient hyperinflammatory event. And they've not fully disclosed what that is. There's some speculation of what it might be. But there are these two large companies that are now reporting safety events, which have caused them to pause their studies. So in light of that, we took a look at our program, and we said, have we seen any cases of IEC-HS -- we've now verbally indicated we've treated over -- dosed over 90 patients. We have not seen a single case of IEC-HS, unlike the three deaths that were reported with Novartis.

Secondly, we looked at the entirety of the safety of our program, which we hope to be able to present at ACR in November. And the totality shows that 94% of patients -- and this is so far what we presented at EULAR. We have not updated our numbers with the 90-plus patients. But the 62 patients that we reported at EULAR, 94% of them had no CRS or just a grade 1 CRS. And 97% of patients had no ICANS. So I think looking at the safety profile with regards to CRS and ICANS and IEC-HS.

We believe that we have a very favorable safety profile for autologous CD19 CAR T therapy.

Can you talk about some of the key differences that might explain why you're seeing something very different on the safety side?

Yes. So the main thing that we've noted, and we cannot conclusively say this is the reason, but we have a standard, well-characterized 9-day manufacturing process. So this is the same process that was used by Schett at Erlangen University. He also used a 9-day process. What we noted, and this is publicly available in the publications that BMS is using a 5- to 6-day reduced manufacturing process in terms of time.

And Novartis is using a 2-day process. When you use a shortened process, you produce CAR T cells are more stem like or actually more likely to induce pro-inflammatory cytokines when they engage with the target. So when you have CAR T cells that are inducing more pro-inflammatory cytokines, you are now putting patients at risk for higher events of inflammatory events such as CRS, ICANS and IES-HC. So knowing what we know, I think that us sticking with the standard 9-day process was a decision we made years ago because we knew that safety was paramount for patients. And now it looks in retrospect, it was a very good decision that we stuck with a standard process that allows for now patients to be able to treat it so far very safely.

It's interesting because in the Novartis discussions with at least one analyst based on their report, -- what the analyst was told as they reported it was that Novartis was on hold for all of the autoimmune uses of their fast -- I don't know what they call it, but their fast manufacturing for autoimmunity, but that the same decision has not been taken in oncology. And I think that's really important. And again, we don't know what we don't know. But based on what is known, the fast manufacturing seems to be the problem. David has described how fast manufactured cells reproduce much more aggressively or expand much more aggressively, not reproduce, expand much more aggressively and cause there to be a substantial increase in interferon gamma, which triggers macrophages to then secrete IL-6 and IL-8.

Those are the cytokines that cause the bad things to happen. It's bad enough that the cells are going to demonstrate a much more aggressive posture on pro-inflammatory interferon gamma secretion when they are used, when they engage with B cells. But they're doing it in the presence of an autoimmune macrophage. And it turns out something that we were very focused on years ago, and we remain focused on over time is that the macrophage of an autoimmune patient is far more hyperresponsive to interleukin 6 and interleukin 8 to cytokines than the macrophage in normal patients and presumably in oncology patients as well. And so it's 2 things happening here. One is faster manufactured products seem to be producing more interferon gamma. And by the way, we don't know whether the events reported by analysts about Novartis and Bristol products are -- we just don't know enough about it. But what we do know is what's published. And Novartis published a paper showing that Kymriah with 9-day manufacturing versus Kymriah with 2-day manufacturing, you dramatically increase the reproducibility of those cells and the interferon gamma secretion and the IL-6 and IL-8 secretion. So we know that's why they developed it.

For cancer, it's a perfect product. It's great. For autoimmunity, it's exactly what you don't want. you need a gentle profile. You need a profile that can tolerate the already activated condition that the macrophages are in, in an autoimmune patient. Rese-cel delivers on that promise, both with our translational data, which has been exhaustively presented as well as the clinical data, which equally will continue to be exhaustively presented.

And that's the reason why we feel encouraged about our own data is a linkage between the product design and development choices we've made, the patient situation with these activated immune system macrophages and the clinical data that shows that our safety profile is emerging to be one that seems like it might be very differentiated at the end of the day.

Yes. Makes a lot of sense. I guess just given the profile you've seen so far, where do you see it fitting into sort of the treatment paradigm? That's another question that comes up quite a bit.

Yes, it's really interesting. There are many pharmaceutical products that are being developed now for myositis, right? A couple of recent high-profile products.

I think there's a few things to pay attention to. One is the efficacy and how it's achieved. These products are being added on top of existing therapies and they're achieving, let's say, moderate TIS response as the modal response, the most common response of the patient. Let's look at the safety. In addition to the black box warning of some of the drugs indicating risks that go as far as death and as little as heart attacks and strokes, there's a black box warning associated with that. Let's look at the financial costs. They're pricing, in some cases, $300,000 to $500,000 per year. in order to add that drug to existing standard of care in order to get a moderate TIS response. Let's look at what we do.

Very hard to manufacture. There's no history of any success in autologous CAR T land for anybody investing in the space. We claim that we will have a far more efficient, lower cost of goods. We will be able to scale unlike anybody has scaled, and our safety data looks remarkably different from the history of CAR-T. So what's our efficacy?

Our efficacy is most of the patients reported by us with dermatomyositis have major TIS responses that look like a single infusion, whatever its cost will be, a single infusion provides a durable, reliable outcome off of all medicines. The market is going to have to figure out the labels that exist with the other products and the chronic therapy required at the cost and with the side effects versus a drug that is a onetime infusion with the cost, with the side effects and with the efficacy.

And honestly, as a patient, as a physician, I think there's a real choice that's going to have to be made, especially for payers. They're going to have to figure out which tools they want to push or pull back for use with patients and with payers and with providers. At the end of the day, we don't know where we're going to sit until we have our data. But I like our prospects based on our Phase I/II data.

Yes. Just maybe a follow-up question there. Just the question on durability, right? You single dose, very dramatic impact, safe and patients have been, I don't know, 1 year, 2 years, how far have your patients been out.

We've reported publicly 1.5, but we're now 2 years and so forth, yes. Where do you -- about 100 patients dose.

Yes. And where do you think that durability sort of needs to go? Like what's the threshold?

Yes. Yes. So I'll let Steve say a little bit more about the commercial durability what's required, but I do want to say that what Professor Schett has done in Germany, if you look now there's a body of evidence on rese-cel. We have replicated perhaps a bit better safety in some ways, but we have replicated that exciting experience that he reported. He's now on 4 and 5 years of durability.

Yes. So the -- we've done a lot of research in this area, as you can imagine. So there's a very clear 2-year threshold requirement from the private insurers. We'll be well beyond that once we launch. The one thing, though, I do want to say, we haven't really got into this, but it's very clear in this space. it's kind of been a quiet drug-related space compared to some of the places I've come from myeloma and things like that. What needs to change, and I think this is going to change is it's been an additive cost model up to now.

So you have standard of care, next thing comes along, they add to it, the next thing comes along, they add to it. And before you know, when you're looking at adding drugs that are $400,000 plus on an annual basis, all of a sudden, you get -- you cannot manage that class any longer for the private insurers. We're starting to hear that very clearly in the research we are having today where you could have a one and done. I can't stress that like loud enough where you are giving a single product and you are on off of all medications. That is a very, very much of a paradigm shifter in terms of the cost model for this space. But as you can imagine, insurers are very attracted by that because they're saying, wait a second, a lot of new drug launches coming here.

They seem very costly. -- in this case, you're basically shifting the old paradigm, so to speak, very rapidly. So we keep talking about this to see if you see a shift in terms of does private insurance. And by the way, private insurers for CAR-T is almost what you've never seen before.

The launches that I've been involved with are always Medicare populations, right? For private insurers, they are looking at managing this class possibly, but also can -- does the class shift in a sense where you're stepping through CAR-T therapy first as opposed to getting on to these additive additives indefinitely as maintenance therapy. So it's a lot of work to be done there, but I did want to point that out because it is a big shift not only clinically but also financially.

And I want to highlight all of this depends on our data. And we don't have our full body of data yet, right? But if and when we do have data that replicates our Phase I/II experience in myositis and scleroderma, I think there's going to be a lot of discussion about where the CAR-T product should fit.

Yes. That makes a lot of sense. And you're shifting things commercially potentially, but you're also shifting things with cell therapy without preconditioning. And Steven, you've kind of brought this up earlier. So maybe we can talk a little bit more about that. Why is that such an important development? And how could that really change things?

Yes. I'll turn it over to David after only saying that the most important thing we can do in the autologous CAR T space -- and remember, autologous CAR T is the only one that has delivered on the promise so far. Rese-cel looks like it stands alone and is emerging to be a differentiated safety profile, where all drugs in the category of autologous CAR T looks to be comparably effective. So the next step is how do we do even better.

And the market research teaches us that the #1 thing that they would like to see disappear in order to use it in even more of their population would be to get rid of the preconditioning. To do that, you have to be extremely safe with preconditioning. So David, do you want to talk a little bit about our path and our plans, what we've been doing?

Yes. So we've already reported on preliminary data or initial data in PC free, so preconditioning free in the pemphigus vulgaris population as well as the -- I think we reported on the first lupus patient that was treated. But all these patients -- all of them, but the limited number of patients we treated were dosed at the exact same dose that the entire RESET program is being treated, which is 1 million cells per kilogram. But the only thing that we did differently is to remove the fludarabine and cyclophosphamide.

And we're showing -- we had shown some pretty good initial responses, biological responses as well as clinical responses. But we feel that we're probably right at the threshold there. We need to go maybe a little bit higher to get more consistent response and more durable responses. So we are now exploring the second dose, the higher dose in the pemphigus vulgaris population, and we'll do the same thing in the lupus patient population as well.

And the EP3, obviously, there are advantages, right? One is at least perception of safety because you're not giving chemotherapeutic agents, which cause neutropenia, lymphopenia, et cetera. There's convenience for the patients. There's more compliance. And so all these are important. And I think for a certain patient population, the young patient population, especially the women of childbearing potential, where there's concerns about cyclophosphamide causing infertility, I think there's an advantage there. But also, I mean, really more than anything else, you reduce 3 days of inpatient or outpatient treatment for fludarabine and cyclophosphamide, which could be eliminated. So there's that factor.

I think this is certainly an area that a lot of people are very interested in hearing about. Every single investigator said this will be a game changer for us.

Yes. No, for sure. Can you talk a little bit about the dosing? You mentioned you're kind of at this threshold dose, you're going to go higher. How high have you gone in the past? Is there a risk around going higher? Or just how to think about it?

Yes. We haven't disclosed what dose we're going up to, but we looked at our data on the initial dose. And I think one thing we really value is patient safety. So we want to be cautious knowing what we know about safety issues that have now emerged.

So instead of rapidly going to a higher -- much higher dose, -- so typically, may go 3, 4, 5 fold higher, we may be looking at a dose level, not quite really much higher, but a little bit higher than what we're doing before. The risk is -- there's one risk here that we know is a potential risk is that if you don't get lymphodepleting chemotherapy, you don't reduce the B-cell load as much. So now your target B-cell antigen is higher than if you had actually given lymphodepletion.

So we know that, that is actually one of the factors that can increase the levels of activity of the CAR T cells and increase the potential cytokine levels. So that is a risk, and I think Steven had talked about this earlier that, that's why if you're not safe with lymphodepleting preconditioning, you probably don't want to explore this because you don't know. I mean on the flip side, you could say it could be safer because you don't cause the cytopenias, but also you're creating more space and allow your CAR T cells to work. So we don't know for sure until we do the dosing.

But we know that there is a potential risk.

There are competitor and industry implications to the data that we are generating. We have a really robust body of evidence with preconditioning across multiple different autoimmune diseases. And as we will publish in the coming months and years, it will be clear how each of them differentiates from the other. It will also be clear how consistent the rese-cel impact is across the portfolio of indications. Because you need to be very safe in a PC-free environment because of that increased B-cell population, I think it's first important to recognize that it will be difficult for any autologous product that doesn't have an outstanding profile of safety with preconditioning, one that is, we would argue, at least as good as rese-cel. It's going to be hard to try to get to an effective dose without preconditioning.

The second point I would make is no matter what modality of therapy you are developing, if you are doing it without preconditioning, you run the same risks. And that may partly explain why many of the in vivo transactions have centered on oncology, not on autoimmunity. The patients are different. The risks are real. The evidence comes from Novartis and Bristol-Myers but they can be deadly. And I think it is going to matter when scientists and physicians and investigators begin to think about evaluating advanced modalities in autoimmunity. I think the warning signal and the flare has now gone up that this is not the same as oncology. And I think over time, we will see what the data show. But we ourselves are being very cautious in our efforts to pursue higher doses without preconditioning.

Makes sense. I also wanted to touch on manufacturing. You brought this up earlier as well, but you're doing some innovation there.

So maybe talk us through that and when that might get rolled out or the current status.

Yes. So look, we've always had a multiple supplier mindset. Sure, it would be cheaper to have a single supplier and just use one and be done. It probably gets the job done, but you can't really reliably scale and you don't have redundancy that can cover you in case your supplier goes sideways. So we have always had a multiple supplier mindset. Our strategy has always been multiple suppliers. And by that, I mean we have Lonza as a standard partner supplier at launch, we expect. We expect that they will be joined by ElevateBio, another CDMO that has developed an excellent relationship with the company. And we're confident that those two can tolerate and can supply the first year, 1.5 years of our needs in the initial indications of myositis, adult and pediatric.

We also have announced that after launch, you can picture within a year after launch, we expect to have the scalability and the flexibility that can be afforded by a fully automated manufacturing platform, which is what Cellares uses. And so we have dosed a couple of patients with rese-cel manufactured in the fully automated Cellares system. And the results from those patients have been reported to be both the product and the translational data, the same as any other. In fact, every unit operation as well as the overall operation of manufacture of our product at Lonza and at Cellares has been identically comparable. They have passed the test of comparability that FDA would require. In fact, FDA allowed that Cellares is nothing more than another manufacturer for us.

The business questions around Cellares, as I think those who would be listening to our discussion today would be familiar. Bristol-Myers and Cellares have had their own sort of kerfuffle and that relationship has been terminated. after it was terminated before it was publicly announced, the folks at Cellares with whom we've had an exceptionally strong relationship for many years now, called us up, informed us and then flew out to see us to be sure that their reorganization was going to meet all of our needs. By the time they left, they had substantially changed their thinking on their reorganization, and they have now publicly implemented the reorganization that we believe is going to allow us to continue to not only remain highly confident in the data, which I do say we are confident in the data at this point. But -- and at this point being we were in the past, we remain equally confident in our data with them and in their ability to deliver for us.

Now like all young companies, they'll have to continue to finance over time, and we have to play the mitigation of risk game by having 2 other manufacturers who can more than sufficiently meet our needs. So we're really excited about both the profile of rese-cel with preconditioning in the near term, the myositis program, the scleroderma coming up and running in a pivotal program this year. The juvenile indication in dermatomyositis could earn us a PRV within the next 1.5 years, 2 years.

And that will be followed by a scleroderma indication where similar to the juvenile myositis, not only are there patients without acceptable therapies of any sort available, but there's an urgency to treat. If you're in third grade and you can't bend your fingers because your knuckles are not able to function and you can't type or you can't interact with a computer or whatever it is you need to do in fourth grade, your parents are going to be very frustrated. The parents are going to be pretty aggressive about getting you the best therapy as soon as possible. in scleroderma, I think there's a similar paradigm where the risk of death at 12 years for a 30- or 40-year-old typical diagnosed patient with scleroderma, the risk of being alive in 12 years from diagnosis is 50-50. The 50-50 shot that can make it to be 10 years, 12 years from there. And there's a real urgency as a result to treat there. So really excited about not only the clinical programs, but the commercial prospects that follow.

Okay. Great. Looks like we're just out of time. So Steven, Steve and David, thank you so much for your time. Really appreciate it.

Mike -- appreciate it.

Thank you.

Nice. So kind of going down that vein before we jump into the ULAR data. So for Resicel, it's an autologous 4-1BB CCART. And given the breadth of approach is being investigated in autoimmunity, how is resell differentiated from not just competitor autologous CAR-Ts, but also allogeneic and bispecific approaches? And sort of where does resist in the competitive landscape there?

Yes. Thanks for the question. So among autologous CAR-T, let's start there. Nature Biotechnology had a review of all of the data that's previously been presented. It's about 2 months ago. And in this paper, Restel looked to have a side effect profile, CRS risk, both the frequency and the magnitude, ICANs risk and overall safety profile, tolerability profile of resite looks like it will be second to none, in the autologous space, a very excellent tolerability and safety profile with the vast majority, 97% of patients now ICAMs of any sort. 94% of patients either no iCAMs, which is about 2/3 of them or if they have ICANS, it tends to be a fever and not much else.

So really excellent safety and tolerability profile, to start with. So among autologous products, we feel really good because they're all pretty much effective in comparable ways. And the difference in autoimmune disease is going to be safety. So that brings me to in vivo. And I think I'm going to very quickly comment on bispecifics. Far better than rituximab. They will replace many of the chemotherapeutic or other agents that are currently used in these diseases. There'll be better therapy for many, many patients, chronic therapy when added on to existing therapy, they'll be great for all those patients, terrific. For patients who no longer want to be patients, you want to reset and that's what we believe we can do reliably and well. In vivo, really interesting data presented recently, right?

Legend had some CD19 20 data that looks very promising for those patients that they treated and in the Colonia data, BCMA targeting in vivo car. Their data also looked very interesting. What neither of them has done yet is demonstrate safety over the long term, right? So any integrating product I think is -- I don't know if it's a nonstarter in autoimmune disease, but it's got a very high hurdle to prove safety, both in the short term and in the long term. And remember how safe resi cell is compared to whatever else you're looking at in the future, that's the bar for safety. The other thing that needs to be proven is durability, right? And durability of treatment effect, not the persistence of the cells.

So in the Legend data, they rightly highlighted, that the durability of the car persistence was 116 days. They still had CAR T cells. By 116 days, our patients are regaining their normal B-cell population. So it's just a fundamentally different approach. And over the next few years, we expect to launch Resac for myositis, for scleroderma for PC free containing regimens in other indications, and that will be the standard against which they will be judged in safety and in durability by the time these drugs first develop the right product for autoimmune then actually become developed for those diseases. We will have 4, 5, 6 years of durability data similar to the JAKs against the TNFs, you need to have durability data to compete, you need to have safety to compete.

So I think there's a very long road ahead for the in vivo autoimmune products, but it's thrilling what's happening in cancer. Yes. No, I totally agree. I think it's a very interesting innovation, but it does take a long time to kind of get these things optimized so for NVOCAR-T. Now jumping to the ULAR data. So last week, you shared several important updates that you are. So let's start with the data and myosin as this is your lead indication. So you showed that 5 out of 6 dermatomyositis patients in 3 out of 4 patients with anti-synthetase syndrome. Achieved immunomodulator for your remission at week 16. So could you frame this result in the context of read through to your ongoing pivotal reset inside of study?

Yes, I'm happy to do that, Mark. Thank you for the question. I think a nice place to start is patients when they're coming on this study are discontinuing all of their immunomodulatory medicines prior to infusion of a single weight-based dose resell. That's where we started. That's where we started in the Phase I/II study, and that's where the registrational study starts. Now the way we designed the study, the reworking and extension Phase I/II study, there is really quite a lot of overlap between the inclusion exclusion criteria and the patient population in the Phase I/II versus the registrational study. So with the data that you just quoted that we reported last week that you are 80% of those patients and 5 out of 6 dermatomyositis patients adults and the first tubenematomyositis patients, all were able to, at week 16, achieve either a moderate or a major TI response while discontinuing and remaining off all immunomodulators for the duration of the follow-up.

Now not only that, but in those patients who achieved the primary endpoint, they all maintain their response the latest follow-up, which we now are seeing in dermatomyositis as as long as 1.5 years. Now that's an opportunity to not only in our minds, achieve a positive registrational study where if you assume very conservative assumptions on the control group, we need 50% of patients to achieve the primary endpoint. But more importantly, maybe I can turn it over to Steve for this point, as we start to see the emerging durability of Resac, in dermatomyositis in particular, really shaping ourselves up to be favorable from a commercial and value perspective to generate the type of data that we need to have patients and the healthcare overall benefit. But Steve, maybe I'll turn it over to you from that.

Yes. Yes, it's an important piece, right? So Stephen talked about the Nature Biotech article. We're kind of clearing their first toxicity question around the program, best-in-class. It appears to now. The second thing is we just have to wait this out to see how long these patients continue to response. So now you're starting to see that, right, 1.5 years. Teresa while 1.5 years milestone is very important is in the private insurance side of the house, which is the overwhelming majority of payment for Resacel. This is obviously a very different patient population than the ones I've been involved with in cancer, which is extremely important, and we could talk about that on the side. But the fact that the commercial insurers have been very clear in terms of the milestone that they would like to be seen a minimal of 1 year, 1.5 years. and 2 years plus.

Obviously, they'd like to see multi multiyears, we all would. But in terms of that initial milestone, and this is the important part of this point that we've done the research around this because we knew going into ULAR what the data was -- we're going to be presenting. We did some research with payers as well as U.S. providers, hospitals. And what we did not present to them, which we will, because we're building it right now, economic impact models that drug-free represent for them in this patient population, it's significant. So it's very exciting now from a payment perspective, we're starting now clear that hurdle, that requirement under ability, and as we get closer to them and closer to our launch of the program, we'll be able to demonstrate the economic impact, which is obviously going to have a lot of interest for them anyway.

Got you, that makes a lot of sense. So on the line of durability, you guys mentioned that duality in dermatomyositis patients is 1.5 years. But in ACIS patients, durability was more variable. And I was wondering if there's any sort of mechanistic differences or disease ideology that could explain the result? And how you're thinking about treatment and responses for the asset?

Yes. Absolutely, Mark. Just a little bit of context of the way our registrational study is designed it's a 17-patient study, where the vast majority of the patients, 14 of them will be adult dermatomyositis, the remaining 3 antisynthetase syndrome patients. That's a reflection of the prevalence the U.S. where probably 80% to 85% of patients represent the adult dermatomyositis portion. So let's say, 60,000 patients in the U.S. roughly from a prevalence perspective, the remaining small piece of things represent the ASIS patients. I would say, in those 2 different subtypes, what we are seeing, to your point, is divergence in what the durability appears to be in the anti-synthetase syndrome patients. These patients have rapid responses deep responses. And at least in the Phase I/II data, most of them are achieving the primary endpoint.

However, somewhere between month 6 and onwards. And this is the case in our data and in the academic data also presented by cheat ULAR actually this past week. It seems at some point in that journey, there is an emergence of disease activity that requires immunomodulatory medicine help continue to control disease. Now a lot of times, these patients are significantly better off than when they originally started refractory to 3, 4, 5, 6 medication sometimes with severe active disease. However, what we are seeing is that the persistence of autoantibodies in many of these cases in this particular population may point to a CD19 negative subset of cells that may be responsible for continuing to drive some emergence of disease versus in dermatomyositis where it seems like when Rescal is able to do its job completely or transiently deplete the B-cell population, that is sufficient for maintaining those responses, at least in the patients we followed so far through latest follow-up and as long as 1.5 years as Steve referenced. So in ASUS, it seems like there is, from a physiologic perspective, a difference in the mechanism of disease, which may allow for rapid and deep responses early and some emergence or breakthrough of disease as we continue to follow. So it's still more to be learned, but that's -- those are some of the early findings.

Got you. And sort of kind of understanding that finding, are there particular indications where you think Resita could be best applicable given like you're saying, there are CD19 cells that are negative cells that are active in this particular subset.

It's -- so it's a really good question. It's exactly why we the studies across the portfolio the way we did. So each of our studies evaluate a single wave-based dose in cohort to patients in Phase I/II as we gather that data in that population. The ability to see how that data is and make decisions as a company based on that data to determine -- does this make sense to extend a registrational study, does it make sense evaluating -- does it make sense that this should not be an indication where CD19 CAR-T should be developed. We came up with that design kind of as a cross-functional team that is years go, so that we could efficiently develop resacell broadly across the portfolio.

And by using that same weight-based dose, extend the learnings in 1 indication across more but still able to make independent decisions across each based on the data that we get. And so a great example here is in our myositis registrational program, we are now prioritizing juvenile dermatomyositis in addition to adult termatomyositis because not only does the data seem to show that there's the opportunity durable responses to emerge. It also allows us to become potentially eligible for a priority review voucher. So those are learnings that we've been able to sort of obtain and apply into that study. directly that's been, I think, really beneficial for us.

Got you. Sort of along for the pivotal study design, you recently initiated the registrational study in most -- and if you can walk us through sort of the recent myocyte study design with any time lines for data, but also given the recent changes in commentary from the FDA, could you provide any color on your FDA interactions regarding study alignment and point selection and your overall confidence in the single-arm study design?

Yes. So a few highlights, and then I want to turn over to see for an important feature here in terms of why the design is important for commercial uptake. Motista which we'll plan to submit when we submit the myositis BLX. Importantly, in this study, is the opportunity to evaluate outpatient dosing. And with the safety profile that Steve and Steven talked about in terms of emerging for redose where in my sites, we've had no its observed whatsoever in the patients that have been treated to date setters either have no CRS or Phase 1 transient across the portfolio so far based on data reported at ULAR.

All of this has helped us enable the ability to enable outpatient dosing in the registration study and in the Phase I/II expansion cohorts actually, and maybe I can turn it over to Steve to talk about why outpatient dosing, there's no question from a patient and provider experience perspective can be really positive. But maybe, Steve, you can talk about what that means for the commercial opportunity and the reduction of burden on the health care system.

Yes. I mean normally side of care, you don't really -- there's not a lot of conversation around that with a lot of product launches. However, with cell therapies, in particular, it's been 1 of the biggest rate limiters for auto CAR-T therapies for cancer. And if you look at just the treated eligible patient population in cancer therapies, you see anywhere from be 20% to 25% of all eligible patients actually being treated One of the challenges -- the reason for that was that there was only so much inpatient capacity to treat these patients. So here you are basically look -- you're launching in the large patient populations, -- and the ecosystem cannot actually take those patients and treat them all as an inpatient administered product.

So 1 of the key strategies behind Rescal and the toxicity profile is what enables this to happen. -- is to safely treat these patients in the hospital outpatient setting first and eventually to transition into the full outpatient setting. And it's all predicated on this toxicity profile that was originally discussed by Steve and upfront is that you have now what appears to be the safest product in the class that's going to enable that to happen. So obviously, patients love being able to take it as an outpatient, right, of course, -- the hospitals love it because payment is much better for them. That's been also a rate limber for them, and the payers love this because now you're able to treat these patients and totally reduce total cost of inpatient admissions. And you're looking at taking from $1 million-plus patient administered in the inpatient setting and significantly reducing that cost point for a payer. So it's an exciting part of the launch, and it's a key focus for us as we move forward.

For sure. Yes, keeping hospital that's open, it is great for every Absolutely. Sort of what safety parameters are you monitoring? Or like what specific criteria are you tracking in the study to support an outpatient label? And what proportion of patients do you expect will be treated in the community outpatient setting upon RISA launch.

Yes. You take a piece, and I'll take doctors Sure. So from a safety profile or sort of parameters perspective, what are we looking at? It's really in the perifusion period, how being managed? And is this something that is suitable for the outpatient setting. Now 1 of the things that we've been able to leverage, and this is a thing for the guy on my right here, Steve, who led the effort at Legend with CARVICTY is there's all already a significant outpatient infrastructure developed in the oncology setting for CAR-T. And that's with the safety profile across the products that is substantially more significant, more severe CRS and ICANs where cell therapists are now accustomed to understanding what the protocol is to manage CRS, what the protocol is to manage iCAN. And already in the Karvy setting, nearly half of new outpatients were half of new patient starts were happening in the outpatient setting, resacell we're seeing with a significantly more favorable safety profile in terms of lower CRS frequency lower CRS severity.

The lower ICAN frequency in particular, a real opportunity to move much earlier in sort of the line of the -- not the line of therapy, but in terms of how rentacellcan sort of move early to launch in the outpatient. I think it's why we incorporated the option in our outpatient study to begin with. And maybe, Steve, you can walk through kind of how we see the transition to outpatient happening how quickly what that looks like.

Yes. That's a key point. We've talked about -- Room was talking about my old program with CAR VICT, -- it took about 3 years to get to that point of about 50% or so new starts in the clinic for these hospitals. -- the rate limiter again, that you start to run into is these patients are still extremely ill, these end stage and even mid-stage cancer patients that many of these programs are treating historically. The beauty that I keep coming back to is the beauty of this program. These folks are very -- they're ambulatory, they're younger and now and they're working class, right? So they want to continue to continue on with their lives. The adoption sequence in outpatient here that we're starting to see in the research that we're performing, based upon the profile that we have been demonstrating at ULAR, that data is way faster been the 3-year point that I referenced in terms of my old programs.

So you're going to -- like I said earlier, you're going to see a very rapid adoption on the back of the infrastructure that's been created with CarVICTY. Many of the sites are the same. And again, all the data that we're seeing that we are fielding right now is suggesting a rapid uptake there so fast that we are looking at how do we safely now move this to your point about really community practice. Community practice, there's -- it's limited right now. You see it a little bit. It's spotty with KarviCTI. So the proof of concept has been established in really sick patients, okay? Like I said, it's our intention to follow the model that we created before, but really start to open it up. You have to do it. In order to reclassify these CAR T therapies, to really treat the patient populations to the fulfill -- like the potential of them. You have to do that. It's the first time ever that a product like this has had a profile to enable you to actually get there.

So you touched on the inclusion of juvenile matomiositis patients and given you have rare pediatric disease designation for reticle in JM. How many get patients will the pivotal study enroll? And also, could you talk about the significance here for both review time lines and capital amusement.

So we were fortunate enough to actually have -- and I know 1 of your questions, Mark was talk about the FDA kind of discussion and how those are going. So I don't think we forgot it, but we can fold in this question. I think the nature of the RMAT designation that we received long ago in myositis leverage or provided has afforded us the opportunity to have frequent interactions with the agency really over the last several years now. And 1 of those interactions was actually a type B meeting back in April of 2025.

And there was the point where in those discussions with the agency, what was determined was that at the time of submission of the myositis BLA they encouraged us to submit the available pediatric data in the population on the basis that if the PK/PD looks similar in the pediatric population and the adult population then that may provide the grounds for potential inclusion of the pediatric data, pediatric indication into the adult into the overall myositis BLA. Now this is really only possible because unlike every other CAR-T player in the field, we are advancing a weight-based dosing, and that weight-based dosing regimen allows us to transition seamlessly into the pediatric population. That's why we opened up the study to tuberomyositis to begin with years ago. And so as we stand today, what our plans are, are to submit the available juvenile dermatomyositis data at the time of submission of the adult -- or myositis BLA overall.

And it's 1 of the reasons why we narrowed in our guidance into 227 for the BLA submission for myositis because we want to ensure that we have robust 16-week and 52-week outcome in that patient population to enable the maximum chance of inclusion of the pediatric indication into the initial BLA approval because that's what affords us the to have the priority review voucher. And what we can say from our early canvassing of the site in juvenile dermatomyositis is that the physician urgency to treat and the patient and advocacy strength with which they advocate for something like Rescal to provide immunomodulator free outcomes for their patients for kids who can go back to school, kids who can resume normal daily activities of life, is so strong that it was really a clear opportunity for us to be able to deliver for these patients in this population as a whole, an opportunity to get as a cell in the context of initial registrational study and an initial hopefully, initial approval.

And on the capital envision point. Let's say that -- on the capital confusion point pediatric color the those priority review vouchers, if you look in the last probably 3 months have 3 to 6 months have sold anywhere from, let's say, $180 million to $200 million on -- now this is multiple sales. I think for us as an emerging biotech company, why that's important is -- if we are able to obtain the priority review voucher at the time of approval, that's now immediate nondilutive capital that comes in and allows us to fund the business, to fund the launch in a way that's really differentiated because most companies don't have that -- and so when we think about doing all the things that can help Steve enable an excellent launch and when we can think about funding the business within myositis and within the broader portfolio, that type of capital infusion really can come in.

Yes, for sure that's really meaningful. So in the last few minutes, I know we have several 1 programs to touch on. So we're going to pivot to reset SSC -- so you additionally announced plans to initiate the single-arm registrational study in systemic sclerosis in the fourth quarter, and you showed strong data at EULAR demonstrating durable responses through week 36 for that indication. Could you walk us through the key findings at EULAR and the decision to pursue SSE as the second resell registrational study?

Absolutely. So FSC is 1 of the highest burden in terms of mortality and morbidity for autoimmune diseases that exist in the landscape. I think you summarized it even nicely actually in terms of what the key findings were. The 1 point I would add on is that in systemic sclerosis, what we saw pretty consistently is that the responses actually seem to increase in magnitude over time as patients remain off all their disease-specific medications. So the data we saw at week 12 versus the data we saw at week 24 versus the data we saw at week 36. And then even if you extend it out a little further to week 52, those responses seem to be increasing in magnitude over time.

And for us, that was an interesting finding consistent with the academic standard of care is with 52 week end points for the 2 approved drugs in the is, let's say, at week 36 on average or a median 7.5% improvement in FCC. And that can be hard to contextualize it just looks like numbers on a paper. But the 2 approved medications at week 52 in their registrational studies actually had FCC worsening in 1 at 52 weeks, and the other had FPC stabilization, which means from time 0 to week 52, there was either no change in FCC or the worsening was simply less than the worsening that you would have if you were not on that medication.

Again, in contrast with reside, what we're seeing is an improvement of 7.5% at week 36 across the patients that were identified and that type of really unprecedented data across the field in terms of CAR-T enabling these sorts of outcomes is really what guided us 1 of the main things that guided us to enable the registrational design that you just mentioned briefly. For us, it's a 25-patient single-arm study with a 52-week FPC based endpoint in patients with ILD. And we think based on the Phase I/II data that's emerged that really sets us up really favorably for what the registrational study could be, which we expect to initiate -- just to repeat, all of that is after you discontinue all of your immunomodulators. There's not, I think, enough light shed on the outcomes that we are discussing about resi cell in those 50-some-odd patients. They're all in patients who frankly are no longer patients. That has not taken any medicines anymore. The vast majority of patients are no longer on any medication.

And when we talk about other modalities or other categories of drug Remember, those are all on top of existing therapy with chronic administration of the new and probably very expensive therapy, right? So when you put it all together, the proposition for resi cell in autoimmune disease, I think, compares quite favorably on the safety and tolerability to frankly, any alternative modality any alternative therapeutic opportunity that you may have for these patients if they want to go off their medicines and they want to no longer be a patient.

This is the 1 way you can get there -- and if I tell you that the primary side effect of resi cell is safety related to a fever that occurs day 7 to day 12 in that range. And about 1/3 of the patients -- last time we saw in ICANS was about 14 or 15 months ago. Now we may have 1 tomorrow, and we'll have them from time to time. But the risk of ICANS is we've dosed 50 or 60 patients in that period of time. This is not autologous CAR T of the past when it comes to the safety profile or when it comes to the value proposition. And then the flip side that we're not talking about today, but is our ability to industrialize and automate manufacturing and lower the cost of goods to among the lowest in the industry at launch, it's just something nobody has ever seen before. So I think it takes diving in to really explore each of these in order to understand the value proposition that is risk so.

Yes. Another, I think, key value proposition and data you showed at EULAR was around the no preconditioning program. And so for those unfamiliar, maybe could you explain why eliminating preconditioning could be such a key value proposition for patients.

Yes, absolutely. So what we've established with radical with preconditioning to start with, and this is in the 50-plus patients that Stephen just referenced that we presented is an ability to reliably see an immune system reset. And we actually, in the transitional Posttrong Saturday, to find what the immune system reset was both from a B-cell depletion perspective and a B-cell repopulation. I know we don't have enough time to go into it, but it really is the poster we're looking into because those parameters are going to be key as we look forward to evaluate how other modalities do or don't achieve in set and for us guiding our own efforts in the PC free regimen. So what did we share in PC free in the first 2 patients with lupus who were treated with the lowest dose of resicell without preconditioning we saw in 1 of those patients, they achieved essentially the hallmark of immune system reset from a depletion perspective. And we saw another -- the second patient achieved a decrease in peripheral B-cell depletion.

And so overall, to us, what that demonstrated was similar to the patients that we reported in Pemphigus at that same lowest dose, we appear to be at a threshold dose where some patients respond -- some patients may respond, but not completely. And for us, with the safety profile offered up throughout this discussion, we believe really strongly that the opportunity to dose explore and find the optimal dose to achieve immune system reset and the subsequent clinical outcome for a sufficient number of patients to receive a PC free regimen is there in front of us, and we're already enrolling at the higher -- at the next higher dose cohort in both Tensigus and in lupus. So really encouraged by that data, really encouraged or the opportunity it can provide patients. And here, I do think it depends based on the indication of the disease.

In lupus, I think what we can say is that the urgency to remove preconditioning is at an order higher than it may be in some of the other indications because of the demographics of patients that are affected. So by that, I mean most patients with lupus that are enrolled in our studies and across the field are women of child-bearing potential. And when you can eliminate preconditioning from the regimen and ideally achieve similar sorts of outcomes, especially from a translational perspective, that then can lead to clinical outcomes that are similar. We now have the opportunity to differentiate ourselves from really every other player that's in the field of lupus and again, really excited for that.

Yes. Now likewise, I agree. I think the potential to get preconditioning is huge for the field sort of in the last couple of minutes, could you just remind us of your cash runway and sort of how you're thinking about cash burn in the context of pivotal study expansion, expanding their programs and also commercial build-out as you potentially get ready for the first resell launch?

Yes, sure. So after the -- for those who aren't familiar, we recently completed a $150 million financing, which included many of our current investors, a number of new large mutual sovereign wealth funds and Eli Lilly among the investors from a corporate perspective. with that cash in addition to the cash on hand, brought us to about $0.25 billion of cash. That will take us well into 2027, and we expect that we'll be able to have in 2020 the delivery of our pivotal data on myositis. We'll begin to see enrollment in scleroderma we are not committing to specific time lines for presenting the preconditioning free data, the PC free data in lupus or in any other indication, partly because we recognize that this is incredibly important information and we are clearly leading the field.

And frankly, from a competitive standpoint, we don't want to educate the world on what's going to work well in terms of dosing. The opportunity to break away from the field with regard to PC free is paramount. So the time line and nature of disclosure there is going to be more thoughtfully in created over time. That makes sense. I think that's a good place to end it.

Thank you so much to the team. Really appreciate your time. Thank you. Thank you Thanks, Mark. Appreciate it. Thanks, Great. Good.

Good afternoon. I am Sam Semenkow, senior biotech analyst here at Citi. And today, it's my pleasure to be hosting Cabaletta Bio for a fireside chat at Citi's Global Healthcare Conference. I'm joined today by President, CEO and Co-Founder, Steven Nichtberger; CMO, David Chang; and Chief Commercial Officer, Steve Gavel.

Steven, David and Steve, thank you so much for being here today.

Thanks.

So Steven, why don't you kick off the session for us with just a little bit of introduction to Cabaletta. I'm wondering, at a high level, the overall strategy, you have developing and commercializing rese-cel and then we'll dive in much further.

Excellent. So thanks, first of all, Sam, for having us here. Maybe a good place to start is at the beginning, right? When we brought rese-cel into the company, and prioritized its development, it was on the thought that what we had seen from Professor Schett in the academics was going to be -- really redefine the treatment of autoimmune diseases. We replicated the design of our product to really come as close as possible to the design of the product that was used in those academic studies. And we dosed in a weight adjusted manner to replicate those clinical data.

Fast forward from our IND filing in 2023 to now the end of '25, we have multiple diseases that have now fully enrolled and, in some cases, completed the Phase I/II portion of our development program, the RESET clinical trial program. Most recently at ACR, we presented data on patients who had been treated with the myositis -- RESET-Myositis trial, we had presented data on patients who had been treated with a single dose of rese-cel on a weight adjusted basis with preconditioning. And at 16 weeks after they were dosed, 4 out of the 4 patients who reached that endpoint in terms of follow-up had hit what is the aligned primary endpoint for our pivotal myositis program, which is on track to initiate enrollment imminently. That is very inspiring for us.

And we saw in the dermatomyositis, which is about 70% of the myositis population, we saw a really nice durable effect out even beyond a year at this point. So that data in myositis from ACR, combined with data from scleroderma patients where lung function is actually improving. The interstitial lung disease is actually improving for the first time ever, really groundbreaking data on top of the improvements in skin that seem to be relentlessly continuing with follow-up, combined with our lupus program and the early data there, again, really important achievement of Doris remission or objective renal response in all the patients that we're following. This combination of outcomes. And then finally, the pemphigus vulgaris study in which we took away the preconditioning. And we asked, can rese-cel by itself we thought at a higher dose, give us the same level of activity in an autoimmune population. And the answer to that question was presented just prior to the ACR meeting at another medical conference, and we saw profound acute activity.

Now it's a question of at the starting dose that we are using, do we have durability or as we hypothesize, will we need a higher dose without preconditioning to get a durable treatment effect. So we're moving that now into our lupus program, and we expect to be able to generate data in 2026. So to bring us up to date now where we are today, ACR was a defining moment for the field. For those who are there, you'll recognize immediately that CAR T in autoimmunity was the story of ACR this year. And the rheumatology community has really hit a tipping point where they all understand how important and how transformative this therapy can be and are starting to ask, how can I become involved. So that's all terrific, and it's a necessary next step as well as defining not only ourselves but Bristol and Novartis and the others in the field together have really defined. This is going to be a drug category that transforms health care. Many of the other categories of drugs that are going after CD19 have also presented data. And in summary, made it clear that they are not going to achieve the level of gold standard activity and safety that is now being presented by the category of drugs in the autologous CAR T space.

So as we go into '26, we're really excited to have initiation of the myositis pivotal trial, which has been aligned with FDA as recently as their review of our protocol a few months ago to have the alignment on scleroderma that we will have achieved or not. The lupus alignment that we will have achieved or not, all by the end of this year, which to us means by JPMorgan. And the pemphigus and lupus data without preconditioning in 2026, on top of that, the myasthenia gravis program and the clarity of alignment with FDA in the first half of the year, all of it transitioning into a commercial perspective, which we can't wait to share with the investment community and with others because autoimmune CAR T has a fundamentally different and fundamentally better financial profile for the company and for the institutions that would administer our therapy on an outpatient basis in a much healthier, younger population than we've seen in cancer, but I'll leave that for the discussion today.

That's an excellent intro, and there's a lot to dig in there. Thank you for that. I would argue though that ACR, that excitement has been building over several years. It's been wonderful to see that grow. But David, I want to maybe ask you to maybe elaborate on one of the points that Steven made, just about the safety profile of resize and how that just compares across the autologous CD19 CAR T field for autoimmune indications broadly. How do you guys stack up versus some of the other competitors?

Yes. So when we looked at our own data from the reset studies, we are seeing probably approximately 1/3 of the patient developing CRS, almost all of them grade 1 CRS, which actually compared to oncology, of course, is tremendously lower. Obviously, we can't comment on other CAR T therapies that are autologous, but we've looked at the data. And generally, those numbers do appear to be much higher than the 33% CRS rate. So I think one of the potential differentiating features that is beginning to emerge as the safety profile potentially related to dosing using weight-based dosing. And obviously, from a -- using the backbone of a 4-1BB costimulatory domain has certainly been working to our advantage as well.

Great. And I think that's a good segue to maybe ask Steve a question just about how that safety profile, and Steven alluded to it allows you to potentially do outpatient dosing. What does that look like in reality? Or how do you envision it?

Yes. Thank you for the question. Yes, it's a very important aspect of this. As Steven was talking about earlier, if you compare and contrast what's been going on historically, but prior CAR T therapies specifically around cancer, a number of hospitals have been actually trying to move some of their patients into the outpatient setting for a number of different reasons. One of the reasons are just -- there's only so much basically space within these hospitals, whether it be in the ICU or just regular beds to monitor these patients and/or staff to monitor these folks. So there's been a press to move folks just naturally out of the hospital just because of capacity concerns.

The second thing, which I think is a very important issue, and I think it's something that we should talk about is the payment aspect, right? So as Steven mentioned, autoimmune patients that we are going to be treating are much younger than historically what I've seen in other CAR T therapies that I've launched, where these folks are basically being insured through private insurers. That's a dramatic difference when you look historically back at prior CAR T therapies for the treatment of cancer, where roughly 80% -- 70% to 80% of all patients treated with CAR T were being treated in patient under the Medicare DRG system. And if you ask any administrator in the United States, they will tell you that, that was very problematic because in essence, what was happening for many of them is that aggregated payment model was insufficient given the price of the CAR T therapies as well as the other costs associated with inpatient stays. So that was a problem. One of the reasons why so many hospitals are looking to move outside the hospital.

The rate limiter was the toxicity profile, right? So even though those 2 drivers were in place, that was causing a lot of pressure within institutions and providers, and they knew the outlet was going to outpatient, but the tox profile was the rate limiter to do that. They were trying to do that back in the day with CD19s, and they were seeing very acute CRSs. And what was happening is they would administer these products to these patients that were so sick, they would spike an immediate fever within a day or 2, and they could not -- they couldn't fundamentally do that. I think where I'm going to go -- it's a roundabout way to answer your question, but I think it's an important one.

I think the CARVYKTI program was really the first proof of concept where because of CARVYKTI's delayed CRS, that now hospitals were successfully able to administer in a clinic in the hospital and then monitor patients that setting, and then get out of this DRG payment mechanism that was in place. So it was the first time they were able to do that. So hats off to my old team back at Legend and Janssen for assisting hospitals with that and educating folks on how to keep patients safe.

The interesting features I see with the rese-cel program as you see from a CRS perspective, a much -- first of all, a much lower CRS profile, much less patients actually getting CRS. And those patients that did get CRS was very moderate. So it's a very different-looking patient in terms of -- and maybe David could talk about from a biological perspective, why that is. But the fact of the matter is we do not see nearly the CRS and the onset ironically for this program is also delayed. We see a median onset about 7 days. So anyway, hopefully, that answers a large part of your question.

It does. And it's great to have you joining Cabaletta right now with this particular junction of the company's journey. And you mentioned your experience with CARVYKTI and facilitating that launch. I'm wondering, there's a lot of learnings from oncology that I think you can draw to autoimmune, but perhaps unique aspects. How are you going to help navigate it to make it a successful launch for Cabaletta?

Yes. We talked about outpatient being a very important component of it. What we haven't talked about, and again, this is, again, pressures within the systems for providers is you see really spiked out of spec rates. You see, unfortunately, these patients who have late-stage cancer with really poor T cells. And so that was very difficult for many manufacturers that properly make proper drug product within specification. And that led to delays in manufacturing. And unfortunately, many patients never were treated because their disease progressed. So we do not see that.

One of the things that caught my eye with this particular program is the lack of out-of-spec rates because I'm so used to seeing them. And you saw -- I think it was on 60 patients dosed and treated, we see about 1% or less -- for sure, less than 10%. So it's a very small number in terms of -- and it makes sense that it would be so low in a patient population like this. But in terms of -- I think your question in terms of other lessons learned, I mean, there are just some facts that is understood. What I didn't mention, though, is it gets back to the economics here is most manufacturers in that setting running out of spec, that out-of-spec drug product was manufactured. Unfortunately, there was a fair amount of cost incurred by the manufacturer, and that product was actually dosed off label. By definition, that is not something that the manufacturer could actually charge or bill for. So that's a really -- it's great for a patient. Don't get me wrong, it's an important piece. Patient needs that product.

But unfortunately, from the drug manufacturer with a lot about a spec, that's a lot of costs that you're incurring without any mechanism to recoup that. So I think that's an important piece.

Just to clarify, we've had one patient who was out of spec out of the 60-plus patients that we've manufactured dose for at this point from 3 different manufacturing facilities.

And David, maybe you can speak to that. That's just the healthier T cells that you are.

So we're looking at a patient population who have pretty healthy bone marrows and able to generate B and T cells that are generally healthy.

Right. And so all of that is like really good headwinds. And I wanted to mention that you've said to me that the myositis pivotal study is outpatient, which is really sort of going to help drive that as a potential future label -- potentially on label for myositis.

A couple of comments. The first, our pivotal program, we believe, is the only pivotal program where outpatient therapy is possible in regards to the design of the protocol and the implementation of the infusion. And that is something that FDA has reviewed as recently, as I said, in August, our actual protocol. It turns out outpatient therapy doesn't require that it be in the label. In fact, FDA has historically been silent on where you should administer therapy. The hospitals and the administrators determine -- the physicians determine where to administer therapy. When the patient is younger, when the patient is healthier, when there are no complications in 2/3 of the patients you treat, there's not even any CRS. In 95% of patients, if you have any CRS, it's Grade 1, there's a couple of patients that have had grade 2 on rese-cel. And in 95% of patients, you don't have any ICANS.

So you've got this really excellent safety profile. Maybe it's due to the fully human binder we use, maybe it's due to the 4-1BB, maybe it's due to the dosing regimen, which is the only company that we know of that is using the same dosing regimen as Schett, which is a weight-adjusted dosing. Whatever the reason the drug is really quite safe so far. And relative to both cancer and the peers that we have in the autologous CAR T autoimmune space. So that permits the outpatient therapy. It is not required in the clinical study that you treat outpatient, but it is our intention. If we don't have sufficient numbers of patients that the hospital has chosen to treat outpatient in the pivotal study, which is 14 patients as aligned with FDA on the design and so forth, we will go ahead and treat patients, outpatient in a separate protocol with the intention to publish that before we launch. So the data will be there to see that it's safe to administer the drug on an outpatient basis.

Right. Okay. That's very helpful. And then I mean, this incentivizes perhaps the utilization of rese-cel if you have such a high percentage of the population that could potentially be treated outpatient. Steve, could you just talk about capacity and how we would might be able to get a sufficient number of autoimmune patients dosed on a commercial cadence that would be advantageous for you. I'm wondering, is there an apheresis sort of bottleneck? Is there manufacturing bottlenecks? Is there anywhere in the chain that you can -- that might cause capacity constraints?

Yes. No, thank you. It's an important question because if you just do a postmortem, honestly, across all these CAR T drugs, the 2 common threads are payment around reimbursement, right, because the population that's being treated as an older population. And the second piece, as you hit on it is manufacturing, right? And unfortunately, I've been involved in a couple of programs that ran into that very issue, right? I think more have had that issue than have not. I think the one probably who has not at all of us who've launched has been the folks at Kite. I think they did a great job.

The -- and so one of the things -- and this is, again, something that was attractive to me given I've gone through some of that is the approach that Cabaletta is taking in terms of ensuring supply at when we launch. And one of the interesting things, and it's very problematic commercially, as you are turning on a market in phases because you have a limited supply to meet demand. That is not our intention here at all. We'll be launching through CDMOs. Lonza will be our first CDMO on deck. We will have another on deck at launch. Steven, feel free if you want to get into some of that. And downstream, and I'll let you maybe get into the Solaris play later.

But I think the -- it's a very important topic because we -- again, to your point about lessons learned, we do not want to be constrained at launch in terms of our supply. We will not be constrained. It's one of the things that what I was really interested in seeing is if you look again historically back at prior launches and turning on the market over time, which is very choppy, it's very problematic for patients, as you can imagine, is we'll be launching roughly 77 sites that's a large -- relatively speaking, a very large commercial footprint. We'll be leveraging the footprint that David and his team put in place, and we will be running full on. That's the intention here in terms of making sure the product is available at all those sites. I don't know if we'll have them all certified at day 1 because there's -- we'll probably, over time, be turning that on, for sure. But the intention is that we will not be short supplied.

So a couple of comments. Bottlenecks, there are now a lot of CAR T or cell therapy products in the marketplace. And all of those large and well-resourced companies are pushing to expand the number of apheresis sites to expand the number of inpatient beds to try and go outpatient with therapy. We just so happen to have a product that leverages everything that they have set up, right? If CARVYKTI, under Steve's leadership commercially from launch until the end of last year had not created the outpatient framework for treatment, we wouldn't be able to walk into this discussion talking about the probabilities being so high that outpatient therapy is going to be how rese-cel is largely administered we wouldn't have the wisdom to understand that it's even possible.

And frankly, we don't have the resources to create that infrastructure. But we do have both the wisdom, sitting to my right, and both intention and resources to go after utilizing the outpatient processes, protocols and infrastructure with a drug that rightfully has very high value in the marketplace, we believe, through displacement of routine annual therapies, each of which might cost $250,000 or $500,000 a year in a world where until now, CAR T therapy has been seen as a very expensive therapy. Why? Because it's $0.5 million plus the cost of administering and taking care of the inpatient and everything else.

But when we compare that in autoimmunity to the $440,000 drugs that are going to be launching in the next couple of years to the $250,000 a year IVIG cost, even if you're a large payer, that's the cost and others that are launching somewhere in that range, these are annual therapies. And if that's the context, the value of rese-cel to keep 85% of patients free of any further drug therapy after one infusion is a compelling value proposition that provides a real window of opportunity to create a financially sustainable CAR T infusion center, not one that is constantly losing financially with every patient treated on an inpatient basis. So the stars are aligned for the patients to really benefit. The doctors we see, and frankly, the doctors and the patients are seeing the results. We're seeing enrollment that is faster, frankly, than we want it to be, honestly, because I want to put these patients into our pivotal program, and we're continuing to enroll. We're not going to turn patients away because we have a position with the clinical sites that is really privileged.

The doctors know how to use our drug. They like to use it. The patients want it, and we're going to continue to use the product as they would like to use it. I don't think we're going to run into barriers to utilization through the apheresis limitations. I think that's okay for the moment. I do think a year or 2 after launch, with others coming into the market, that will be an issue. We have a program to get rid of the apheresis and replace it with whole blood. We purposely put that lower in the priority than eliminating lymphodepletion because in the 600 doctors we've interviewed, the message was very clear, efficacy, efficacy, efficacy is a top priority. It has to be durable, reliable and it has to be really complete. It has to make my patient into a nonpatient. That's number one.

Number two, it's got to be safe. Number three, if you can get rid of lymphodepletion, that's a real advantage. And then below that is everything else. And at the bottom of the everything else list is get rid of apheresis. So from our point of view -- and actually -- I'm sorry, even below that is turnaround time. What they care about more than turnaround time in autoimmunity is reliable delivery of the drug on the day you told me it was going to be here. And that's something that we can do very well. So there's a whole host of commercial opportunity discussions that we really are looking forward to having as we come into 2026 because the CAR T assumptions that have been really seared into the minds of all investors for the last decade simply are yesterday's CAR T. And as we look towards rese-cel's future with very straightforward and clear objective assessment of what the Excel spreadsheet looks like we are really thrilled with the opportunity that it can create for both patients, the providers, the payers and our investors.

Two, I think, important follow-ups from that, Steven. So first is, have you had any payer conversations just talking about what they would be willing to accept in broad terms, price-wise as an offset for the high cost of many of these drugs in addition to all the other health care costs? And then just 2 for David. The lymphodepletion piece, I mean, you're already doing work there, and I'd love to hear a little bit more of that. But the lymphodepletion piece, I think puts a lot of physicians that we talk to when we do our checks, they doubts it's a little bit of a holdup. And why I recognize the CRS is very safe how over time can you get physicians to -- or what is the severity that you need to have to really offset the benefit risk for lymphodepletion before you're able to potentially remove it?

So the question about lymphodepletion and patient reluctance, I think a key factor there is just a concern that they're getting a very aggressive chemotherapeutic agents, a cytoxin, and fludarabine. Some may have actually gotten cyclophosphamide, but maybe lower doses, but only for really bad severe cases. But for the patient population such as young women who are concerned about ovarian failure-related cyclophosphamide, which represents the lupus patient population quite well, that creates a hindrance, and there has been patients who have been reluctant to receive CAR T therapy because of the preconditioning regimen and many who have also asked for the ability to preserve the over for future, even though they're only getting a single dose of cyclophosphamide, I think the fear is real and that there is -- that is always a toxic reality.

So I think when we think about that, if we can get this to work, you overcome some of the barriers related to patient fear, not to mention physician fears as well rheumatologists who have never heard of fludarabine, except by the oncologists talking to them that these patients need to get that. So there's patient fear, there's physician fears, but there's also a convenience factor as well. And I think one thing that we didn't really talk about is if a patient has gotten preconditioning regimen and they get CRS grade 1 day 5, 7, 8, 10, they're neutropenic fever. They're all readmitted to the hospital, right, because you're concerned that they could have sepsis. So there's readmission concerns that drives up cost for these patients who have fludarabine cyclophosphamide as causing lymphopenia and neutropenia. Whereas if they did not get that, they're no longer neutropenic. They may have fever, that could be potentially managed as an outpatient.

Two other points in the no preconditioning program, we chose lupus because that is where young women, young men of childbearing age are most prominently positioned. And it is, we think, the most compelling value opportunity for patients if it can work in that population. Not to mention, it helps us leapfrog to the very front of the pack of 35 companies that have an IND cleared for the treatment of lupus right now with a cellular therapy. So that's, I think, the first point.

The second point I want to make is of the approximately 80 patients, I really -- we frankly don't track it as closely now because it matters less. And it continues to be a very rapid enrollment across the program. But of the 80 patients, I can think of 1 patient out of the 80 we've enrolled who said to their doctor, I'd prefer not to use preconditioning. I'm going to wait until it's available without preconditioning. All of the other 79, let's say, are, I would argue, not complaining about in 85% of those cases having complete resolution with durability so far. And in the 15% or so in our program and across the industry who don't have a complete response that is durable. I want to be clear, these are not failures. These are patients who are no longer on 3 to 5 medicines who have in almost every case, much more modest disease, and this is not just rese-cel data, this is everybody's data in autologous CAR T. The patients I would bet will be grateful that they met the drug, the CAR T, the autologous CAR T because they have more mild form of the disease they used to have.

Now we need more follow-up to see where they go and if they get worse, but it's perfectly reasonable to think that the B cells have been eliminated if it's dosed properly with a good drug, that the B cells are no longer causing short-lived antibody short with plasma cells to secrete antibodies but that instead the long-lived plasma cells, which have apparently less capacity to secrete those antibodies are causing some simmering disease. And that might be just a component of a curative, if you will, a functionally curative paradigm that autologous CAR T seems to be able to achieve. So there are complete responders who have durability. There are complete responders who don't have durability. There are partial responders who have durability and there are partial responders who don't. And then there's a very rare case of the nonresponder who actually doesn't improve single dose.

So thinking about it in now a more advanced way because they have a lot more data, we have hundreds of patients now dosed. I think, makes a big difference to how we think about the cost, if you will, of lymphodepletion and whether or not I want to incur that cost, if you will, knowing that on the other side of this, it's highly likely that I'm going to have a far better life without my disease than I used to have with it.

And part of that, I imagine, is going to be educational efforts as well as you're launching. And sort of to that point, Steve, maybe we could just talk about a little bit of the competition that might be coming from other modalities. I'm thinking bispecifics, I'm thinking maybe in vivo CAR T down the road. They're not your near-term problem, but like potentially. But how do you think about the value proposition here? And maybe you can pull for some of your learnings from the myeloma space as well?

Yes. It's funny. It's like a repeat for me in terms of bispecifics. When we are watching other CAR Ts for multi myeloma, we were getting a lot of questions from investors at the time, exactly the question that you're asking you right now in terms of bispecifics. At the end of the day, Jury is still out in this space, obviously, but one thing that's been very consistent in terms of the efficacy profile of CAR T therapy is very strong. And I would assume we'll see how the data looks, of course, but I think we're going to be bispecifics.

Honestly, my focus here being first out in myositis is ensuring that we have the best possible outcome for that patient as well as the provider. I think you kind of take care of what you can control. And like we've been talking about today is ensuring that the sites, those patients, everyone involved in this particular product has the best experience they could possibly have, not only with the product but also the service around the product and the delivery of it, to Steven's point, the predictability because that has been a big let down, quite frankly, in the past.

A lot of people have left CAR T with a really bad taste in their mouth because the experiences they had mostly around manufacturing. We will ensure that, that doesn't happen. We will -- I guess, there's a lot of great learnings of what not to do in this space. And I am -- I can't tell you how happy I am given the patient population that we're going to be managing right now as opposed to some late lines cancer patients where it was a very emotional for launches for everybody involved because of very rapid turnaround requirements, et cetera, et cetera, that we're fortunate not to have to be managing through with this particular launch.

And one question I get sometimes from investors is will you need a partner to actually achieve this? Or conversely, how do you compete against a large pharma competitor? Any thoughts because you're outlining a very good strategy. It sounds like you're going to go on your own, but I'd love to hear if that's accurate.

I'll start off and let Steve follow-up. So look, here we are at the end of 2025. We have more sites across the U.S. in the rese-cel program than any other company. We were told that we couldn't do that, that we couldn't possibly compete with large companies that there's no way, it's too expensive, it's too hard. There's no way it could happen. It has happened right? We have, as larger footprint in the U.S. as anybody large clinical footprint predicts commercial success. If there is a partnership that can form that can be valuable for the depth and breadth of our treatment of patients, valuable for the investors that have invested in our company, we're not going to hesitate to pursue that partnership.

But we also are thrilled truly thrilled at the opportunity to do something that no CAR T company has ever done, which is deliver really healthy profit margins even from the earliest days of commercialization because outpatient therapy can be reimbursed in full without a loss being incurred at the site just based on the Medicare approach to reimbursement. And most of our patients aren't even in that paradigm. They are commercial, unlike cancer. So we believe that we can price for the value that we deliver. I'm not going to opine on our price point, but I am going to say that when people tell us that CAR T at $500,000 is so expensive, it can't possibly be used in large numbers of autoimmune patients. I would ask that you take a look at the FcRn category, where price points are between $200,000 and $500,000 per year per patient for relative to CAR T, autologous CAR T data, modest treatment outcomes. And that has delivered billions of dollars of sales across many autoimmune indications.

Now imagine if at some reasonable price point relative to that, you never have to spend another dollar on drugs for that patient's disease. I think that's a compelling value proposition for everybody in the health care ecosystem, and we're going to find out very soon, right? So we'll file our BLA in '27. We'll launch either in '27 or '28. Our launch is being designed with Steve at the head. And I want to be clear, when I was looking for our commercial lead, I wanted the person who built the outpatient opportunity for CAR T. And when I spoke with references for Steve, at J&J, at Legend, I came to understand that Legend is the one who essentially launched and built the infrastructure that was required to make the CARVYKTI product a success. And it was a shared experience over the life cycle of that drug that made it as big as it is, but the idea that you could launch as a small company and do it really successfully, that's something that he's done before. So he is the perfect person to lead the effort at Cabaletta and we'll backfill him with many others who have done it before.

That ability to look at sites, which is what we're doing right now, looking at our 77 clinical sites, asking who among them routinely treats outpatients, who among them has a protocol that's very comfortable for their hospital, who among them has many myositis patients in their clinic and outpatient therapy as their opportunity. Good. Those are the first sites that we're going to launch in. So it's going to be a very focused effort with a very directed and purposeful intention to get high uptake early days from a focused group of centers and then go out from there over time. So we absolutely can do this. We can do it alone. We can do it in partnership, but we're going to do it profitably, and we're going to do it in a way that the manufacturing scalability for the first time ever in autologous CAR T experience, we could have the opportunity to scale at levels that nobody has seen before. Why is that?

We have a partnership with a company called Solaris. You'll be hearing a lot more about Solaris in 2026, I believe. Solaris is a company that we've partnered with over the past 2 or 3 years to come to the point where we are now imminently filing an IND will be the first company in the world to file an IND using the Solaris fully automated, fully closed manufacturing system for autologous CAR T. Let me say that again. No human hands need to touch the apheresis product after it's put into the cell shuttle. And the next time that the human hands are touching that product is when it's in a bag on its way from the machine to the patient. That will have a dramatic impact on the predictability of our cost of goods. It will have a dramatic impact on the scalability in a room that is no bigger than 2 clean rooms, I can have no people involved. I can have hundreds of product patient product batches run with efficiency that nobody has ever seen.

So I can imagine that Cabaletta can support scale that goes into the many, many thousands of patients independently with our only cost being the variable cost associated with a batch that we need to deliver to a patient. We don't have to build big factories. We don't have to have massive headcount. It's a very efficient fundamental frame shift from what recently honestly seems like it died, which is CAR T version 1.0, where everybody has abandoned that commercial model now. Those who are doing it are doing it as well as possible, generating as much as they can. But there's a new day for CAR T that is enabled by outpatient therapy and much more efficient cost and approach to manufacturing that could be fully automated, and we'll have our initial clinical data with the Solaris product in patients in the first half of next year. And that will help define our scalability. So I think we can compete alone or in partnership.

But most of all, we're going to deliver product to patients and give them the benefit of rese-cel, which is really the only reason we all are working at the company and why we keep pushing ahead in spite of the many doubts that we've faced for years.

Yes. I mean I don't know how you beat that. First of all, thanks for the comments. Appreciate that. The go-to-market model, it's not -- you don't necessarily need huge scale and huge reach when you launch CAR T drugs because, obviously, the majority of the infusions obviously, are in the inpatient setting. I'd say the majority, because you're seeing now outpatient -- pure outpatient CAR T given now. I saw an announcement earlier in a year where U.S. Oncology now is actually doing this type of work in their clinics, which is great for patients because that's giving you now full breadth and reach to get out.

So the proof of concept is now proven. So we intend to do this. And like you said, we could clearly do this on our own. I believe we should be doing that on our own, quite frankly because it's very doable because of the commercial footprint being what it is within our hospitals as well as what you really haven't talked about is that referring network into our hospitals, right? So that will be the build-out we'll be involved with. But when you do a couple of those together, this isn't some massive scale build-out. It's something that's very doable, Steve had mentioned, for a company of our size.

That's great to hear. So in the last 45 seconds or so, I mean, I could ask many more questions. This could be another 40 minutes. But I just want to give you an opportunity, perhaps, Steven, to share any closing remarks and anything that you haven't yet emphasize that you really want investors to understand.

Autologous CAR T as a category has proven itself to be safe for use in autoimmune patients, highly, durably, reliably, completely effective in a way that distinguishes it from every other category in terms of just a data assessment of what has come to market, what is available. That opportunity to begin curing patients commercially in a way that is both scalable and profitable, different from any historic CAR T autologous efforts is coming very quickly, right? So in 2027, we'll file the BLA, launch '27 or '28.

The opportunity to deliver that is going to rely on sufficient funding for the company to be able to bring it to patients. We are urging every investor that we have met with and there's a lot of them in the past few days because there's increasing interest based on the data and based on the emergence of our regulatory alignment. To build an Excel spreadsheet to actually look at the model and revisit the questions that caused you to never want to be involved in another autologous CAR T company. I think this is the moment to do that because early '26, we're going to see the ability to scale based on the data we generate with Solaris. We're going to see whether or not outpatient therapy is going to be a viable approach with autoimmune patients. And if those things are true, then the pricing and reimbursement model falls into place, and this becomes a compelling investment opportunity, in our opinion. Our job is to make sure we communicate what we intend to do and help investors understand what we expect to happen in the marketplace.

That's excellent. Well, thank you so much. This has been a wonderful conversation. Thank you for joining me, and great.

Thank you, Sam. Appreciate it.