Connect Biopharma Holdings Ltd - ADR Stock

Ladies and gentlemen, thank you for standing by. Welcome to the Connect Biopharma Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to David Szekeres, President of Connect Biopharma. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us. With me today from Connect are Barry Quart, Chief Executive Officer and Director; and Kimberly Manhard, Executive Vice President and Chief Development Officer. For those of you participating via conference call, the slides are made available via webcast can be accessed by going to the Investor Relations page of our website following the conclusion of today's call.

Before we begin, I would like to remind you that this call will contain forward-looking statements under applicable securities laws. These statements involve substantial risks and uncertainties and include statements concerning the top line results we are announcing today, the timing and content of additional data analysis and future data presentations, our anticipated regulatory strategy and interactions with the FDA and other health authorities, the design, initiation, timing and results of future clinical trials, our cash runway and anticipated use of capital and our future expectations, plans, prospects, corporate strategy and performance.

Actual results may differ materially from those indicated by these forward-looking statements due to various important factors, including those discussed in the Safe Harbor slide, the press releases issued by the company today and our filings with the SEC. Forward-looking statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update these statements.

Now I'll gladly turn the call over to Barry.

Thank you, David. Welcome, everyone. Thank you for joining us this morning. I would like to specifically thank Dr. Surya Bhatt for being on the call with us. Dr. Bhatt is Director of the University of Alabama at Birmingham, UAB Center for Lung Analytics and Imaging Research, and the lead author on both dupilumab Phase III COPD studies published in the New England Journal of Medicine.

We are very excited to have this opportunity to review with you the exciting results of the Seabreeze STAT COPD study. Overall, we achieved our primary objective and several important secondary objectives, demonstrating that rademikibart significantly reduces the number of patients returning to the hospital or emergency department for additional care in the month following an exacerbation. In fact, we achieved an 81% reduction in treatment failures, 85% reduction in new moderate-to-severe exacerbations and 100% reduction in ED visits and hospital admissions.

While the study did not achieve the secondary endpoint of Day 7 FEV1 improvement, we did see robust improvement in FEV1 at Week 4. As observed in the asthma study, rademikibart continues to be remarkably well tolerated. I won't spend a lot of time on the design of the study, but I do want to note that we use the same general design and similar entry criteria as the ABRA study out of the U.K., which studied benralizumab in asthma and COPD patients experiencing acute exacerbations.

Our study was also powered based on the ABRA study with an expected 45% treatment failure rate on placebo and a 50% reduction on active. Here is the schematic of patient flow. We screened 325 patients in order to enroll 159, 81 patients on placebo, 78 patients randomized to rademikibart. Here's the breakdown of baseline characteristics. There's a relatively high rate of current smokers, which likely resulted in lower FeNO than observed in the asthma trial. Similar to the asthma trial, enrollment in the COPD study went quickly in Eastern Europe, resulting in a high proportion of patients coming from Serbia and Georgia.

Different than the asthma trial, we achieved a higher treatment failure rate more commensurate with the rates we identified in our recent claims database study, although lower than observed in the ABRA study. Fortunately, our treatment effect size was much larger than we used for powering the study, resulting in a game-changing 81% reduction in the rate of treatment failures with rademikibart compared to placebo with a p-value of 0.0122. The majority of treatment failures observed with placebo resulted in either a hospital admission or an emergency department visit. The remainder were unscheduled medical visits or intensification of pharmacologic treatment.

With rademikibart treatment, there were 0 hospitalizations or emergency department visits for treatment failures and only 2 unscheduled medical visits. The 7 hospitalizations or ED visits on placebo versus 0 on rademikibart is also statistically significant with a p-value of 0.0137. Based on 2025 claims data, the reduction in hospital admissions and ED visits would have a huge economic benefit, which we will discuss later in the presentation. The Kaplan-Meier graph of treatment failure shows the separation beginning between the arms in 2 weeks and increasing through 4 weeks.

Within the patients experiencing a treatment failure, there were 7 exacerbations in the placebo group compared to 1 in the active arm for an 85% reduction, p equals 0.0301. Just for clarity, treatment failure is a broader category than new exacerbations as it includes patients whose treatment is intensified or they may go to an ED or hospital due to worsening of their index exacerbation. Although these latter patients are obviously very important, in this table, we are only looking at the exacerbation endpoint, which would be used in a chronic treatment study to obtain FDA approval for maintenance therapy.

Different than asthma patients, we see little difference in post-bronchodilator FEV1 improvement in the first week of treatment. Both groups improved approximately 120 mL. As a reminder, while we normally use pre-bronchodilator FEV1 change to isolate the effect of drug therapy, in the Seabreeze STAT studies, patients immediately get bronchodilator therapy as soon as entering the ED, and it would be unethical to withhold standard of care. Therefore, by default, we have to use post-bronchodilator assessments where patients received the bronchodilator immediately before spirometry, making it more difficult to see a difference between arms.

By week 4, however, we do see a clinically meaningful increase of 70 mLs in FEV1 with a single dose of rademikibart. Beneficial effects of a single dose is gone by 8 weeks. Of interest, we also evaluated use of rescue inhalers. We see a separation very quickly and a significant reduction with rademikibart in the need for rescue inhalers by week 2, which is maintained through week 7. Exacerbation of Chronic Pulmonary Disease Tool, or EXACT-PRO, is a validated patient-reported outcomes measure designed to assess the frequency and severity of exacerbations in patients with COPD. It consists of 23 items that capture symptoms and impacts on daily life.

EXACT-PRO has been an important secondary endpoint in the Phase III programs of numerous approved drugs, including OHTUVAYRE. Rademikibart significantly improved symptom scores by week 1 with important differences observed through week 4. The next 2 slides cover safety, which are entirely unremarkable with fewer AEs and SAEs on drug than placebo. Of particular note is the substantially lower rate of SAEs on rademikibart than observed with placebo.

Slide 15 breaks out the individual SAEs and adverse events of special interest. The most common SAE in the placebo group was exacerbations, confirming the previously noted significant reduction in exacerbations with rademikibart. There was one unrelated death of a patient randomized to rademikibart after 37 days in the study. Of note, there was also a death in a patient pre-randomization during screening in this population.

We recently engaged Komodo to generate a contemporary picture of the COPD market as it was in 2025 based on actual claims data. The results were remarkably positive for a product with rademikibart's profile with approximately 1.6 million ED visits in the U.S. for acute COPD exacerbations in T2-high patients in 2025. There is essentially 0 biologics penetration into this acute market and still very, very low penetration into chronic COPD market as well, leaving a massive untapped market. Approximately 1.6 million ED visits in 2025 by T2-high COPD patients flows into 3 buckets.

The slide provides a percentage of each bucket who returned within 30 days based on actual claims data and associated costs. From that, we can calculate the total cost for patients returning to the ED or hospital and how much can theoretically be saved by reducing returns. Different than asthma patients, the largest group of patients are those admitted to the hospital. These patients have the highest rate of returning to the ED or hospital within 30 days from the initial exacerbation and the highest cost of treatment. These patients would have the most benefit from rademikibart treatment.

The middle group are patients who are held in an intermediate unit where the patient can be observed to see if they are improving and can be discharged or admitted if they fail to improve sufficiently. They also have a high average cost for post-discharge treatment. The second largest bucket are patients who are treated and released. Even these patients, the rate of return within 30 days and the average cost per patient of almost $2,000 for the 30 days post-discharge, making them an important future target for rademikibart treatment.

The total cost of treating all of these patients for the 30 days after the index exacerbation was approximately $6 billion in 2025. We believe a large portion of these costs could be saved by early treatment with rademikibart based on our trial with 100% reduction in ED visits and hospital admissions for COPD within 30 days after randomization. We achieved an 81% reduction in treatment failures, 85% reduction in new moderate-to-severe exacerbations and 100% reduction in ED visits or hospital admissions. While the study did not achieve the secondary endpoint of FEV1 improvement, we did see robust improvement of FEV1 by week 4.

As observed in the asthma study, rademikibart continues to be remarkably well tolerated. Lastly, the potential commercial opportunity for rademikibart in COPD is far greater than previously appreciated based on recent claims data with an opportunity to keep patients out of the ED and hospital, reduce the need for steroids and reduce health care costs for these patients by billions of dollars.

With that, we are happy to entertain questions. Operator?

[Operator Instructions] First question in queue coming from the line of Olivia Saunders with Cantor Fitzgerald.

How are you thinking about the pivotal design from here for both acute asthma and also acute COPD? Just given the differences in FEV1 that you're seeing between the 2 indications? And what do you think actually makes the most sense for a registrational endpoint strategy? And does today's data around the 7-day FEV1 endpoint, does that change how you think about using FEV1 as a primary endpoint, either for asthma or COPD?

Thanks, Olivia. I appreciate the question. Certainly, it does not change our view in terms of FEV1 for an acute asthma program, which we have indicated previously is our #1 priority. It's a clear path in terms of our view of a registrational program utilizing FEV1. Asthma patients, as you know, have a much greater response to both bronchodilators and biologics than COPD patients and FEV1 is certainly a utilized regulatory endpoint. So we would still plan on going to FDA later this year to talk to them about a Phase III acute program in asthma utilizing FEV1.

COPD patients, much more challenging population to show FEV1 improvement. A lot of these patients are completely resistant to bronchodilators as well. And we're in a situation, as already noted, where we're maximizing bronchodilator treatment right before we give drug. So we're trying to see an improvement on top of that. And in this particular setting, obviously, FEV1 is not quite as useful as an endpoint in that first couple of weeks. We do have several different secondary endpoints where we do see substantial benefit and statistically significant endpoints. And obviously, overall, in the 1 month, a very significant improvement in treatment failure and exacerbations.

So we'll go with that information to the FDA and talk to them about the opportunity of using some of the other secondary endpoints that we have obtained data on in this trial as a potential endpoint. But we're also not going to completely give up on FEV1. As you know, OHTUVAYRE utilized area under the curve of FEV1 for their primary endpoint. Using area under the curve over the dosing interval would give us a very strong opportunity to show a statistically significant difference based on the 4-week data in this trial. So there's certainly an opportunity to have that discussion with the agency. And I'm sure that we'll have a very positive response from them based on the data we obtained. They acknowledged in our previous meeting that this was a clear unmet medical need, and I think we crushed the endpoint. So now it's a question of working out a resolution with them on what's the path forward.

Our next question coming from the line of Thomas Flaten with Lake Street Capital Markets.

Barry, with respect to the study enrollment from a geographic perspective, this was pretty similar to what we saw in the asthma study, maybe a little bit less Eastern European concentration. When you're planning for Phase III, how do you think about maybe trying to skew the enrolled population towards more of a U.S., Western Europe population? And do you think the data holds up on a read-through basis that you could achieve similar effect with a slightly different population?

Yes. Thanks, Thomas. I appreciate the question. We certainly learned a lot from the Phase II program in terms of regions to go again and regions possibly to avoid for Phase III. We also learned that in terms of how to enroll patients more quickly in the United States, it's really the large academic centers that are going to be the most prolific enrollers, but they take a lot longer to get on board. The contracting negotiations can take months and months. Fortunately, we've already spent that time now and have agreements with many academic centers.

So starting up Phase III, we already have in place agreements. So we're very confident that we'll have a much faster start in the U.S. than we did in the Phase II program and we'll add further academic centers going forward. So we'll certainly do everything we can to shift the curve in terms of where we enroll patients.

Got it. And then you've mentioned in prior conversations that from a prioritization and capital allocation perspective, you would lean towards asthma rather than COPD with your own money, if I can put it that way, and potentially partnering COPD. Can you just walk us through the logistical challenges of partnering out one indication versus both at the same time? I'm kind of trying to think that through from a longer-term commercial perspective as well.

Sure. I think just for greater clarity, when we talk about that we plan on moving forward with the asthma, the acute asthma program on our own dime, that obviously is a smaller, less expensive program than a COPD program. And so we would be looking for partnering, but it's not so much partnering separating out the 2 programs. It's just that we feel like we can get moving on our own quickly with asthma. While we're in discussions with potential partners, that always takes an indeterminate amount of time and then ultimately reach an agreement on a commercial partnership or another potential transaction that would allow the funds for COPD development to come out of somebody else's deeper pockets. But we wouldn't plan on separating the 2. We want a commercial entity that's going to focus on selling rademikibart in, hopefully, all territories outside of Greater China, where, as you know, we already have a partnership, but we'd like to see somebody selling it in all of those territories for both asthma and COPD.

Our next question coming from the line of Brandon Folkes with H.C. Wainwright.

Congrats on the data here. If we just look at the FEV1 challenges in COPD patients historically, right? And then we look at the statistical significant effect on treatment failure in the COPD population, take a step back to the asthma data, how much more confidence does today's data give you that you can actually reach the treatment failure endpoint in asthma in a Phase III trial just through whether it be trial size, powering enrichment or just a placebo arm closer to the historical claims data?

Yes. Thank you. Great question, Brandon. Look, I think hitting the endpoints here as strongly as we did gives us even greater comfort in terms of our ability to hit treatment failure, decrease in exacerbations in an asthma trial as well. We think that for the acute setting, FEV1 is still the fastest measurement that we can show benefit in. If the FDA came back and said, "Hey, we like -- we want to see treatment failure in 30 days." I don't think we have any concerns about doing that in asthma. As we talked about, we just missed it. And now with confirmation in COPD, when you have a higher background rate, we don't have any problem hitting it.

So we adequately powered the study if we had to do it in asthma. We learned which territories maybe we wouldn't go back to from the treatment failure perspective, and you have to wait for a scientific poster for that one. But we certainly learned how to increase the background rate just by where we enroll patients. So I don't think we have any concerns that we needed to hit that. But overall, between the 2 studies, I think that we have great confidence that from a perspective of a chronic study where exacerbation rate is the required endpoint generally that with the results we've seen so far that we feel extremely confident. And as I might point out, we saw a 65-ish percent reduction in exacerbations in the prior Phase II study in asthma that we feel very confident that we will crush that endpoint in a chronic study in either asthma or COPD. So that's an investment that certainly makes a great deal of sense down the road. Again, hoping somebody with deeper pockets is the one who's spending those dollars.

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

This is Andrew Kassin on for Julian Harrison. Congrats on these results. First, do you expect to have a consolidated set of interactions with the FDA for acute asthma and COPD? Or will they be separated for each indication?

We're still in the very early stages of making a decision on how best to present the information to the FDA. This is -- the COPD data is really hot off the press. And so we haven't made a firm decision yet in terms of will we go and ask some questions on both simultaneously or possibly have a short period in between so we can get their 100% mind share on each potential indication. So still working that out. Definitely we'll be happy to answer that over the course of the next few weeks as we will be submitting the meeting request here coming up soon. But good question, working with a lot of outside experts who are ex-FDA pulmonary division folks trying to make sure that we handle this as correctly as we can.

Got it. And then just on the potential size of each of the programs for acute COPD and asthma, what do you expect in terms of potential enrollment numbers? And yes, on the sizing there?

Sure. Again, the sizing is going to be based on the 2 main considerations whenever you're dealing with FDA, and that's how many patients we need to reach the statistically significant endpoint and then how many total patients do we need for safety. In the safety perspective, we have over 2,000 patients already treated with rademikibart, really a remarkably clean safety profile as noted. We have another Phase III asthma study coming out of our partner in China early next year, providing both efficacy and safety data. And so we'll have to negotiate with FDA how many more patients they'd like to see from the safety perspective.

From the efficacy perspective, if we are looking at for asthma, FEV1 endpoint, we'll probably do larger study than the Phase II, but not dramatically larger study in order to have a very well-powered study for FEV1. And from the perspective of COPD, again, once we come to an agreement on the endpoint for the acute indication, that's going to drive the patient number. So that's a little harder to project at this point.

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

This is Brian on for Tom. Congrats on the data. Just on the study of the IV formulation, as we look ahead towards engaging with regulators on a potential Phase III for the subcu, maybe can you just comment on the status of the IV study and whether you may be able to leverage any findings there for your ongoing discussions with the agency?

Yes. Thank you. Yes. So we didn't touch on it in today's presentation. The study that we just reported, both Seabreeze STAT studies, both asthma and COPD use subcutaneous administration. That's the administration that's been used in those over 2,000 patients historically. And so that's the discussion we'll go to the FDA with. But in parallel, we have recently begun moving forward an IV formulation, which would be ideally suited for treatment of patients in the ED and hospital gives us the opportunity for lower pricing in the hospital setting, very easy to administer and allows for drug levels to be achieved very quickly versus subcutaneous administration, which has about a 6-day Tmax.

So we expected to see and we did see in our small IV study, a much more rapid onset of effect. So we have ongoing Phase II looking at larger population of patients having both asthma and COPD exacerbations, utilizing the IV formulation. We'll continue to collect that information through this year, and then we go to the agency as soon as possible to talk about transitioning to that in the future or certainly adding that, I should say, to the ultimate package insert, giving the opportunity for ED setting using an IV in the outpatient clinic, urgent care setting using the subcu for treatment of an acute exacerbation. So really not locking ourselves into just hospital sales, but having the opportunity for acute treatment elsewhere. And so probably have enough data there late this year to be able to work out a plan for moving that forward.

Our next question coming from the line of Mazahir Alimohamed with Oppenheimer.

So kind of one on reimbursement. So if rademikibart is given to hospitalized patients, it may fall into the DRG bundled payment. So I guess on that like 3 pieces. So one, how are you thinking about pricing and access in that setting? Two, the new CMS's new technology add-on payment, which does pay hospitals for extra for qualifying new drugs. Would that be an avenue that could be pursued with rademikibart if approved? And then the third one is we're trying to just think about the ED visit. And if you come in and just got dosed in the ED visit and then discharged from the ED, could it be billed separately under Part B in that situation?

Sure. Thanks, Mazi. Appreciate it. So pricing is something that we've discussed previously when we first noted our work on the IV formulation. One of the opportunities with having an IV presentation, which is both a different route of administration as well as a different dose. We would have the complete flexibility to price that differently on a milligram basis. And that's one of the things that we find very appealing about it in the hospital setting where we understand that we're running up against a DRG ceiling in terms of how much the hospital is going to be willing to pay.

And with that IV formulation, we would be able to charge an amount that based on our interactions with payers and hospital pharmacy would be very comfortable under the DRG, but still be a very high profit item with normal pharmaceutical margins. So I think that the IV is really beautifully suited to allow the product to be used within the constraints of how much reimbursement there is, not have to deal with the new technology payments, which tend to be very problematic and certainly in the past, not utilized nearly as much as they should be just because the hospitals frequently didn't have the mechanism for going after those dollars and the pharmacy never saw them.

And so they were quite recalcitrant about using these very high-priced products. So pricing and reimbursement is something very keen in our mind and the goal is to have a product. And I will say that we have a group in China that's 100% dedicated to process improvement in terms of the manufacturing process for rademikibart and so to improve that to the point where cost of goods allows additional flexibility in terms of appropriate pricing in the population.

But -- and the last thing I'll point out is that the claims data certainly provide a very strong health economic argument for hospitals that with an appropriately priced product, it would be a no-brainer for them in terms of their potential cost savings of not having that patient return in 30 days where they don't get a second payment. And so to avoid that, I think, is going to be extremely attractive, and that's the feedback we've gotten from payers and hospitals. They totally understand how much this costs them and are certainly very open to bringing biologics into the hospital setting when they're appropriately priced and the health economics make sense.

And at this time, I'm showing no further questions in the Q&A queue. I will now turn the call back over to Mr. Barry Quart for any closing comments.

Thank you, operator. I appreciate everybody's participation today. Thank you for joining and look forward to keeping you updated in the future. Thank you very much.

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

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Connect Biopharma Conference Call.

[Operator Instructions]

Please be advised that today's conference may be recorded.

I would now like to hand the conference over to your first speaker, David Szekeres, President of Connect Biopharma. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining us. With me today from Connect are Barry Quart, Chief Executive Officer and Director; and Kimberly Manhard, Executive Vice President, Chief Development Officer. For those of you participating via conference call, the slides are made available via webcast and can be accessed by going to the Investor Relations page of our website following the conclusion of today's call.

Before we begin, I would like to remind you that this call will contain forward-looking statements under applicable securities laws. These statements involve substantial risks and uncertainties and include statements concerning the top line results we are announcing today, the timing and content of additional data analysis and future data presentations, our anticipated regulatory strategy, interactions with the FDA and other health authorities, the design, initiation, timing and results of future clinical trials, our cash runway and anticipated use of capital and our future expectations, plans, prospects, corporate strategy and performance.

Actual results may differ materially from those indicated by these forward-looking statements due to various important factors, including those discussed in the safe harbor slide, the press release issued by the company today and our filings with the SEC. Forward-looking statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update these statements.

Now I'll turn the call over to Barry.

Thank you, David. Welcome, everyone. Thank you for joining us this morning. We are very pleased to have this opportunity to review with you the results of the Seabreeze STAT asthma study. Overall, we achieved our objectives to demonstrate that rademikibart works quickly to improve airway function and that this improvement results in substantially fewer patients returning to the hospital emergency department or clinic for additional care in the month following the asthma attack. Unfortunately, the overall rate of treatment failure in the study was substantially lower than projected. So even with a larger effect size than projected, we still just missed statistical significance. Where the study did achieve statistical significance is in the equally important and more challenging key secondary endpoint of FEV1 improvement on day 7.

We see this endpoint is more challenging because patients are recovering from an acute exacerbation, a population almost never included in clinical trials, and they are receiving aggressive treatment for their acute exacerbation, including systemic steroids and bronchodilators, which result in a sizable increase in the placebo group. We're then asking rademikibart to improve airway function even further, and it does exactly that. The increase in FEV1 at day 7 with rademikibart is more than twice what is obtained with bronchodilators alone. I'll also note that benralizumab, which showed significant reduction in treatment failure in the ABRA study showed no benefit in FEV1 or other measures of respiratory function through 28 days. Improvement in FEV1 has also been used as a primary endpoint for the approval of OHTUVAYRE in COPD. So it is an established regulatory endpoint.

We believe that demonstration of rapid significant benefit in FEV1 provides a clear road map to Phase III, which we intend to confirm with the FDA later this year. Lastly, rademikibart continues to be remarkably well tolerated. I won't spend a lot of time on the design slide, but I will note that we use the same entry criteria for previous exacerbations in the prior year as the ABRA study. Here's the schematic of patient flow. We screened 323 patients in order to enroll 160 patients. Here's the breakdown of baseline characteristics. Of note, enrollment into the study went quickly in Eastern Europe, resulting in a high proportion of patients coming from Serbia and Georgia.

Although these countries and more specifically, the hospitals we use follow the same treatment guidelines as we do in the U.S., there may be other aspects of patient care that impacted the unexpectedly low rate of treatment failures observed in the study. Here are the results for the primary endpoint. You may recall that Study 206 was powered based on a 45% placebo treatment failure rate with approximately a 50% reduction observed for benralizumab in the ABRA study at 28 days. While the 66% reduction seen with rademikibart exceeded the target 50% reduction, there was just not sufficient events to reach statistical significance. In this study, the majority of events resulted in an unscheduled visit to the clinic or emergency department. Fortunately, no deaths or hospitalizations.

Within patients experiencing a treatment failure, there were 5 exacerbations in the placebo group compared to 2 in the active arm for a 60% reduction. Slide 8 clearly shows why treatment failure is not a useful endpoint for demonstrating an acute pharmacologic effect. Within the first week where we demonstrate a significant improvement in FEV1, which you'll see on the next slide, there are no treatment failures, probably because patients are covered by steroids for most or all of that week. Conversely, on Slide 9, we see that the airway improvement with rademikibart starts quickly and is almost at stat sig by day 3. By day 7, the benefit of a single dose of rademikibart has been fully achieved, and we see a plateau in FEV1 through day 28, providing additional support, I might add, for monthly dosing.

The beneficial effects of a single dose start to wane by 8 weeks, which we see as an ideal scenario for an acute to chronic development strategy. The next 2 slides cover safety, which were entirely unremarkable with fewer AEs and SAEs on drug than placebo. No episodes of hypereosinophilia were noted in the study.

Slide 11 just breaks out the individual SAEs, adverse events of special interest and treatment-emergent adverse events. Inclusions, clinically meaningful 66% reduction in treatment failure observed through day 28. Rapid, statistically significant and clinically meaningful increase in post-bronchodilator FEV1 compared to placebo observed at day 7 and maintained through day 28. Day 7 FEV1 improvement was a prespecified key secondary endpoint based on the FDA's desire to have an endpoint showing rapid benefit for a potential acute indication. As noted, we plan to propose FEV1 improvement at day 7 to FDA as a Phase III endpoint for the acute indication.

Based on our prior Phase IIb 24-week study showing a 63% decrease in annualized exacerbations in the T2 population and this study showing substantial benefit in exacerbations as well, we are perfectly situated to also move forward with a chronic maintenance program in asthma. Based on the very low rate of treatment failures in this study, it is reasonable to ask whether there is really a market for treatment of acute exacerbations. And our prior market research was somewhat dated. So we engaged Komodo to generate a much more contemporary picture of the market as it was in 2025 based on actual claims. The results are remarkably positive for a product with rademikibart's profile with approximately 1.6 million emergency department visits in the U.S. for acute asthma attacks in T2-high patients in 2025.

This is essentially -- there is essentially 0 biologic penetration into this acute market and there's still very low penetration into the chronic market as well with a very low 2.26% of all asthma patients that received a biologic -- asthma biologic in 2025, rising to 3.44% among the type 2 high subset, leaving a very large untapped market.

Slide 14 is just a snapshot of the massive Komodo database. And Slide 15 is the money slide. Approximately 1.6 million ED visits in 2025 with T2-high asthma patients flowing into 3 buckets. The largest is treat and release. These are patients who come in and treated in the ED and then released. There's an intermediate group in the middle, where patients can be observed to see if they are improving and then discharged or worsening and then admitted.

And finally, the patients going directly to a hospital bed from the ED under the admitted bucket. The slides provide the percentage of each bucket who return within 30 days based on actual claims data and the associated costs. From that, we can calculate the total cost for patients returning to the ED or the hospital and how much theoretically can be saved by reducing returns by 66%. Based on this model, giving patients in the middle and right buckets a drug that produces a reduction that we've observed would be highly cost effective and certainly, a large portion of the treat and release patients would also be very cost effective.

With that, we are happy to entertain any questions you have. Operator?

[Operator Instructions]

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

I've got a couple. In April, the DMC conducted an interim on treatment failure at 28 days for the trial and recommended no change in sample size after the first 50 patients were enrolled. Given that's about 1/3 of all patients enrolled in the study, would the DMC have picked up on the lack of exacerbation events and recommended an increase in sample size?

Yes, great question. Going back and looking at the sequence of events, what we actually find is that the first group of patients with treatment failures were all in the control group. So what they would have seen is a, well, low number, a very slanted towards placebo group of treatment failures. And so from the perspective of going to the full study, that would have resulted in potentially 10-ish patients on placebo, zero on drug, which certainly would have hit statistical significance. The other factor was that, that was not a futility analysis. And so we gave them specific instructions that if there was a benefit to increasing the sample size by 10%, 20% or 30% that they should identify that. If not, then the feedback should be no change. And so the feedback was, in fact, no change, which I think was not an unreasonable response from them based on the data that they had to look at.

Got it. And then my second question on FEV1, clearly, you're seeing a statistical significant effect on post-bronchodilator FEV1. FDA also, I think, looks at FEV1 trough. Have you measured FEV1 trough? And what did the data show versus placebo?

Well, so that's the challenging part of this type of study is that you're enrolling patients coming in for an acute exacerbation. And as soon as they walk into the emergency department, the first thing they're going to get is extensive bronchodilator therapy. So it's virtually impossible in those patients to get a pre-bronchodilator or what you call trough FEV1. So while you may remember the prior WW002 study where we presented data on FEV1, all of that data was pre-bronchodilator. So you get a trough, you give the drug and you're looking for a benefit. It's actually much easier to see a benefit when using that approach.

In this case, we didn't really have that option because patients are already on bronchodilator therapy. You can't withhold it. That would be inappropriate in this setting. And so we had to look at post-bronchodilator benefits of the drug. So you're giving max dose bronchodilator. And then on top of that, you're giving either placebo or drug and you're trying to see an additional benefit. And that's what we're showing here. So unfortunately, we don't have the luxury of looking at a change from pre-bronchodilator effects in these patients.

Our next question in queue coming from the line of Julian Harrison with BTIG.

I appreciate the update here. I have a few questions, and I think I'll just ask them all at once. First, can you talk about the extent of your alignment regarding the 7-day FEV1 endpoint being accepted by the FDA as a registrational endpoint in Phase III? Are there maybe any composite endpoint contingencies that you're also planning for?

Second, I'm curious about any comments you could share with regards to the baseline exacerbation rate in the COPD study? And what could that maybe mean for the primary endpoint in the COPD Seabreeze STAT study?

And then finally, I'm wondering if it's decided at this point whether you will be advancing an IV or subcutaneous formulation into Phase III. Can you maybe walk us through your updated thought process there?

Yes, certainly. Thank you. Great questions. So I think we were very clear after meeting with FDA and moving forward with the program that we had a great discussion with the division. They totally appreciated that this was a clear unmet need that this is a population of patients virtually almost always excluded from clinical trials with no new drugs or drug development in over 30 years. But because of that, they also were quite candid that they have never approved a drug for acute treatment. And so they could not give us at that meeting explicit guidance on, here's the endpoint, this is what we expect to see, et cetera.

So we moved forward with the study as designed because the treatment failure endpoint seemed quite attainable based on the ABRA study. It gave us contemporary expected rates of events where, in terms of FEV1, there is virtually no information in the literature on what to expect in a patient coming in with an acute exacerbation. How much change can you see? What would we expect to see in the control group, et cetera? So it was an opportunity to obtain all of that information in the current study. We do know the agency was very clear that they are looking for an acute benefit for an acute indication and that benefit seen out at 3, 4 weeks wouldn't be considered an appropriate endpoint for an acute indication.

And so we've always, as noted, we elevated based on our discussions, the FEV1 at 1 week to a key secondary endpoint. We've always been focused on demonstrating benefit in both the treatment failure as well as the key secondary endpoint of FEV1 improvement. So we anticipate the agency to certainly be positively inclined in terms of accepting this otherwise regulatory validated endpoint, whether or not day 7 is going to be the target for them, that's something that we'll determine when we meet with them. But we anticipate a certainly positive overall response. In terms of the COPD study, we are seeing more events in COPD and probably equally valuable, more of those events are resulting in hospitalizations and emergency department visits.

So I think we will have the opportunity hopefully to see stat sig as well as be able to really demonstrate the clinical benefit of reducing that endpoint as well as, obviously, we'll be looking at FEV1 in those patients. Although, again, that's a very challenging group because many of them don't respond to beta-agonists at all. So it should be a very informative data set.

Then in terms of your last question, we are currently doing a bridging study to obtain more data on use of IV rademikibart in the setting of an acute exacerbation. We intend to have that data fairly quickly, a small study and then be able to discuss that with the FDA when we meet with them at the end of the year. Certainly, we believe that the IV dose has the opportunity of much faster onset, even faster, obviously, than the subcu administration. And so has a really ideal profile for use in the emergency department.

But we're also looking at the option of potentially developing both IV and subcu for the acute population now seeing the magnitude of the opportunity. And we know that IV is not really suitable for urgent care. It's not really suitable for most clinics. And so you'd like to have a label that gives the optionality of using the IV or potentially using the subcu administration in a setting outside of the ED. So more to come on that.

Our next question in queue coming from the line of Olivia Saunders with Cantor Fitzgerald.

Barry, what's your expectation just around the risk that COPD may also be underpowered because of low event rates, just given the similar treatment failure assumptions and the endpoint definition? Any reason to think that we could be looking at a different outcome on the primary in a couple of weeks?

And then how does the low proportion of U.S. patients in Phase II actually read through to potentially enrolling patients in a pivotal study? I'd assume you would need a higher proportion and number of patients in the U.S. for the pivotal, but appreciate any thoughts you may have here.

Yes. No, excellent question. And I can't obviously give you any other color on COPD other than there are more events. Certainly, there is the risk that we will end up potentially not hitting stat sig, but my guess is we either will hit it or it will be much closer than we are in the 206 study. Unfortunately, I can't give you assurances and the overall rate certainly is still not up to the ABRA study event rate. And in terms of the enrollment, I think we've learned a great deal, and we will continue to drill into the data that we have obtained from patients and look at both individual study sites as well as countries and get a better sense for where we would want to go back for Phase III.

And it may mean that we avoid certain locations based on looking at both the event rate in terms of treatment failure, which, as noted, won't be a primary endpoint, but we'll also be looking at the benefit in terms of FEV1 and other issues across the different regions. We did find that while delayed in starting, Argentina looks like an excellent location as well to enroll patients. But certainly, we will continue to look for the ability to enroll more patients in the U.S. I think the key is going to be not only trying to enroll more people in the U.S., but making sure that we are going to regions where we see very comparable results in terms of what we see in the U.S. and that the medical care is as closely aligned as possible.

We don't always have Phase III studies that are majority patients in the U.S. You just have to make sure that those patients are as close as possible to what you would see in U.S. health care. But we'll certainly be working hard to try to open up more sites and get more patients in the U.S. population.

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

Just with respect to the path forward in asthma, assuming you kind of gain alignment here with FDA on FEV1 at day 7 as a primary endpoint, any early thoughts on study size and how long it might take to run that program? And then thinking about the COPD study, can you just talk a little bit about how much overlap there is in the study sites between the asthma and COPD studies? And is the balance of enrollment coming from basically the same regions in COPD as it was from asthma, that's predominantly Eastern European population?

Sure. So the last question, there's a great deal of overlap in the overall basic proportions of patients, I think, are very similar. The majority of patients are coming from Serbia and Georgia. And as noted, while we are seeing more events, we're still definitely not seeing the level of events up to the original projected 45% treatment failure from the ABRA study. And so -- and now I apologize, I've forgotten your first question.

Yes. Just in terms of the asthma Phase III plans, assuming you're able to gain alignment with FDA on FEV1 at day 7 as a primary, just help us think about how large that study would need to be? And I guess, any early thoughts on how long it would take to run that program?

Yes. Thank you. Yes, we haven't -- this data is really hot off the press, pushing hard to get it together for this release. And so we really have not had the opportunity to sit down and do the appropriate calculations. But just kind of off the top of my head, I will say that we would certainly be looking at a larger study in order to make sure that we had the usual highly powered Phase III study. I don't think it would be anything more than twice the size potentially, but we really have not done that calculation yet, and we really need to understand the data a little more and drill into it. But certainly, it would be a larger study, but not 5x.

And we'll obviously have that discussion with FDA. In terms of timing, I think we learned a great deal from the Phase II study, doing a trial that really few, if any, sponsors have ever done. We have a much better sense of how to get these patients enrolled and certainly where to go and where to not go.

And so I'll turn it over to Kimberly to give an assessment of the time line for conducting such a study.

Thank you, Barry. Yes, as mentioned, we plan to meet with the FDA later this year, and then we anticipate being able to start within about 3 to 4 months, if all goes well. The Phase III program, it will go in stages depending on the countries that we are selecting. And obviously, the size is -- dictates how long the study will be to enroll. Fortunately, these are short studies to conduct after you do enroll. But we anticipate we could have data within approximately 1.5 to 2, again, depending on when we're able to start.

Got it. That's super helpful. And maybe just one follow-up, if I could. Are you able to provide any additional updates on the status of rademikibart in China and some of the progress your partner has been making there?

Sure. Well, I think probably from a certain development perspective, we're eagerly awaiting the conclusion of their Phase III asthma study, which should conclude in the first quarter. All of those patients were fully enrolled last -- late last year. So it's just a question of waiting 52 weeks for the last patient to finish. And so we're very eager to see that results and certainly plan to use that as a supportive trial, obviously, with a positive outcome of a supportive Phase III study, reducing the amount of work that we have to do separately. On the approval front for atopic dermatitis, they were very anxious to get the new Phase III study results into their package insert so that they could launch with the best possible data.

Unfortunately, in China, there isn't a mechanism to submit new data while an application is being reviewed. So they had to officially withdraw it and then resubmit it earlier this year, which then reset the clock. Initially, we had the expectation that since the government health authority had already gone through virtually all of the package and had already inspected sites that this kind of resubmission would go more quickly. At this point, it looks like it's going to take the full normal duration. And so we'd probably be looking at an approval in the first quarter to April time frame next year. They can submit asthma even before they do get approval for atopic dermatitis, depending on the sequencing.

Our next question coming from the line of Edward Nash with Canaccord.

Just wanted to know if -- since obviously, you'll be -- you'll have both the STAT COPD and asthma in hand when you go to meet with the agency. If the Seabreeze STAT COPD trial meets the primary on acute exacerbations, would this change at all your planned path forward? I know it's a much more difficult patient population to treat, but just curious if that all would change kind of your direction of which of those indications you'd put first?

No. Obviously, we would be very pleased to have statistical significance in treatment failure, but it would definitely not change our view of what's the appropriate endpoint for acute indication. And I'm very confident it wouldn't change the FDA's view. Again, they were quite clear that they want to see an acute benefit. They couldn't give us guidance on exactly what endpoint and the magnitude that they want to see, but they were clear it had to be an acute benefit, not a benefit that they see as a typical chronic maintenance endpoint. And as shown in the treatment failure Kaplan-Meier, and pretty similar to what was seen in the ABRA study, there are not a lot of events in that first week or 2.

So even if we ultimately do see statistical significance, even if we had stat sig in this study, we wouldn't be going there with a treatment failure endpoint for Phase III acute. It just doesn't fit with the desire to see a rapid onset of effect.

Got it. And just -- based on just the FDA wanting to see an acute effect, but not necessarily specifying what that endpoint would be. We've obviously been talking to KOLs, as I'm sure you guys -- you're intel with doctors. What's been, I guess, top of mind for them on really being able to be competitive in the market? Is it having an effect on -- or a faster effect on FEV1 just as important as saying have an effect on acute exacerbations, which is a tool they currently don't have?

Yes. I think that the thing that resonates with clinicians is speed of onset of effect, which is very different than what the tools they have available. Something that has been evaluated in an acute setting. So recall that all of the biologics approved for asthma and COPD all have precautions not to use in a patient having an acute episode, not to be used for bronchospasm. And so number one, you want a differentiated product that's demonstrated a benefit in that setting. And the benefit that resonated in the original and subsequent market research was improvement in airway -- rapid improvement in airway function was the #1 item that we identified as the benefit of the product, and that's what clinicians found most attractive.

Now of course, they also want to see that flow through to fewer people coming back to see that. And that's certainly what we saw in this study and which we hope obviously to see in the COPD setting as well. We do see a robust reduction in treatment failure that, in this case, is well correlated to the improvement in airway function. So having certainly a significant improvement in airway function and at least a strong trend in terms of reducing patients returning to the ER is what's going to resonate the most.

[Operator Instructions]

Our next question in the queue coming from the line of Mazahir Alimohamed from Oppenheimer.

This is Michael Ahn on for Mazi. Just one quick question from us. Was there any difference in the duration of systemic steroid therapy across different study regions, particularly between Eastern European and U.S. sites that might explain the low placebo event rate? And given that COPD exacerbation patients generally have worse baseline lung function and higher readmission rates, would you expect that the disease profile to naturally produce a higher control arm event rate in the STAT COPD study?

Yes. So that's a really excellent question and one that we have definitely not had time to evaluate in terms of background therapy. Everybody was mandated to get a relatively high course of prednisone. However, we also can't impact on what the clinician believes is medically necessary. So we do know that there were some clinicians that tended to use longer duration prednisone out to 10 days in some patients that they felt required that longer treatment. And so you're absolutely correct. We will definitely be looking at that to see whether there were any clear differences by region or hospital in terms of that background therapy, and trying to understand the potential impact of that.

One thing we have noted is that while we used the same entry criteria for patients' previous exacerbations in the last 12 months before enrollment, you can see from the baseline demographics, we ended up with an average of about 1.6 exacerbations in the prior year, equally distributed between the 2 arms. But in the ABRA study, for example, it was more like 4 to 5 prior episodes. And so that really does identify a very unique, very, very high exacerbating group. So that also may have been why they saw such a high rate in the ABRA study. I think that from the Komodo data, we now see that the expected rate in kind of a typical real-world setting is more like 17% to 20%. And so certainly, that's a more realistic target. We didn't quite reach that either in 206.

And exactly, as you mentioned, we will certainly be drilling into the data to try to understand better how to potentially modify that. But to be honest, in the end, we don't see treatment failure as the appropriate Phase III endpoint for acute. And for chronic, obviously, annualized exacerbation rate is pretty much standard, and we already have a good picture on our ability to improve that, both from the prior Phase II study and definitely in terms of the first month of treatment from the current study.

Our next question coming from the line of Thomas Flaten with Lake Street Capital Markets.

Just I know we've kind of beaten this one to death. But with respect to the enrollment rates differing so drastically between Eastern Europe and the U.S., was there anything else? Were there timing differences? Were there competing studies? Was there anything else you could point to in terms of things you might have a handle on?

Well, I think that the -- those sites started around the same time or actually a little after some of the U.S. sites. So it wasn't that they got a jump on the U.S. participation. It's just that they started very -- once they got through regulatory approval, et cetera, they started rolling very, very quickly. And we see that as based on a couple of factors. Number one is the lack of availability of biologics. And so this is an enticing opportunity. And then the way that their medical system is set up with massively large hospitals, everybody is all in the same place. Patients come back to that location for all medical care and the pulmonologist's office is down from the emergency department.

And so they had a much easier time identifying those patients and getting them into the study. We continue to work with U.S. investigators trying to optimize the trial design and make sure that we can get as much participation in the U.S. as possible. We just don't have exactly that same kind of setup where you have easy access of pulmonologist PI to patients coming into the ER. It usually takes a little time for that patient to be identified. And then at that point, the question is how long can you wait before the event is kind of already waning and you're not going to be able to show as much benefit as you would in the real world where the patient is going to get the drug in the ER.

And so that's really part of the dilemma is can we speed up that process. And we're certainly experimenting with ways to do that in the current bridging trial, Study 209 that we have ongoing. We're pushing for a much faster turnaround of these patients, and we're using that to learn what we can do to improve enrollment activities.

Got it. And I know I'm jumping ahead a couple of steps here, but could you just map out for us what a potential Phase III would look like if you want to do subcu and IV? Would you consider having both of those in the same study? Or would there be some other mechanism for getting the label broadened to include both routes of administration?

It certainly would highly unlikely be in the same study. We generally think about doing 2 Phase III studies, although FDA has indicated that one Phase III might be acceptable. And so one could certainly look at a potential discussion with the agency around doing one IV study and one subcu study in order to get the broadest label, allowing patients to get acute treatment in an outpatient setting as well as in the ED. And so basically using the studies together to demonstrate acute benefit, just different routes of administration.

And I'm showing no further questions in the Q&A queue at this time. I will now turn the call back over to Mr. Barry Quart for any closing comments.

Thank you, operator, and thanks to everyone for joining the call today. We look forward to keeping you updated in the future. Thank you very much.

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

Ladies and gentlemen, thank you for standing by, and welcome to the Connect Biopharma Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to David Szekeres, President of Connect Biopharma. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us. With me today from Connect are Barry Quart, Chief Executive Officer and Director; and Kimberly Manhard, Executive Vice President and Chief Development Officer. For those of you participating via conference call, the slides are made available via webcast and can be accessed by going to the Investor Relations page of our website following the conclusion of today's call.

Before we begin, I would like to remind you that this call will contain forward-looking statements under applicable securities laws. These statements involve substantial risks and uncertainties and include statements concerning Connect's future expectations, plans, prospects, corporate strategy and performance, including with respect to research and development programs, clinical trial plans and results, regulatory strategy, timing and approvals, market research, assumptions and projections, cash runway and anticipated catalyst milestones.

Actual results may differ materially from those indicated by these forward-looking statements due to various important factors, including those discussed in the safe harbor slide, the press releases issued by the company today and our filings with the SEC. Forward-looking statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update these statements.

Now I'll turn the call over to Barry.

Thank you, David. Welcome, everyone, to the call. We are extremely excited to have this opportunity to provide 2 important updates on the development of rademikibart, a highly differentiated IL-4 receptor alpha monoclonal antibody designed by Connect. We will be reviewing this morning preliminary top line results from our IV clinical pharmacology study of rademikibart in asthma and COPD patients. And a Phase III atopic dermatitis results presented Saturday morning in a late-breaker session at the American Academy of Dermatology Conference. But before the data, I will quickly review the differences in biology that make rademikibart remarkably different from other drugs in the category and ideally suited to treat both acute exacerbations of asthma and COPD and chronic management of these diseases. After the presentation, we'll be happy to answer questions.

Next slide, please. So the biology of IL-4 receptor alpha obviously is very well known and an ideal target for multiple diseases. The components that make rademikibart unique and highly differentiated, first and foremost is the faster onset of the product, which was identified in a prior chronic asthma study. And we'll go through some of that data and identify for you really, what is the very intriguing biology behind that. We also see substantially greater responses in terms of FEV1 in asthma patients.

We've demonstrated in atopic dermatitis that the product works Q4 week. So as compared to dupilumab, a more convenient dosing option. And we had noticed early on a reduction in eosinophils versus the increase observed with dupilumab. That led us to understanding some of the significant biology differences of the products. Next slide. The differences stem from completely binding -- a different binding orientation of rademikibart versus dupilumab. We bind at a different epitope. The tightness of the binding is substantially greater than with dupilumab. And because of these differences, we see significant differences in internalization which results in significant differences in the observation in the clinic.

Go to the next slide. And so what we'll be talking about is differences in eosinophils, as I previously mentioned. We have information that was generated in human airway smooth muscle cells and human precision cut lung slice data.

Next slide. So initially, the differences between rademikibart and dupilumab were noted in the clinic with the observation of decreasing eosinophils in the chronic asthma study that was previously conducted. This was a surprising observation considering that dupilumab is well known to increase eosinophils, and in some case, quite substantially. And this is not just a lab observation, next slide. We see here hundreds of serious adverse event reports submitted to the FDA for dupilumab in asthma patients related specifically to increase eosinophils.

Next slide. So we spent significant time trying to understand this very different profile. And ultimately, we determined that the likely origin of this difference is substantially greater internalization of the rademikibart receptor complex. This substantially greater internalization results in greater turnover of eosinophils, which would certainly explain the decrease in eosinophils versus the increase. Because we have significantly enhanced internalization of the complex, we also would be removing receptors from the cell surface. And that may play a role in the fact that we see such excellent activity at Q4 weeks in AD where dupilumab was unable to demonstrate good activity Q4 weeks.

The other associated potential benefit of decreasing eosinophils is that I'll be showing you clinical data that demonstrates we see really no significant increase in conjunctivitis versus the 10% conjunctivitis seen with dupilumab in early 16-week studies and even higher rates over time. We consistently see low rates of conjunctivitis really not differentiated from placebo.

Next slide. And so we'll go now into some very intriguing data collected in preclinical models, specifically looking at airway function. Next slide. It's well understood that IL-13 and IL-4, but particularly IL-13 has direct effect on airway smooth muscle and has been shown to shift the dose response curve of beta agonists. Next slide. So we spent significant time looking at the biology of how beta agonists produce relaxation in human airway cells to see if that -- understanding that pathway would give us a clue as to the differences in biology.

Next slide. So the right panel here in the graphic. This is looking at human smooth muscle airway cells and specifically looking at phosphorylated HSP20 which is a marker of relaxation. It was downstream on the prior schematic. And you can see that in the cell culture addition of rademikibart significantly increased that marker relaxation, whether it be alone or in the presence of the inflammatory cytokines and a very different presentation than what was observed with dupilumab. To go further, we went into human precision-cut lung slice model. And here, we see the classic shift in the dose response curve of formoterol, a potent beta agonist, making that drug less effective in the presence of the inflammatory cytokines for bronchodilation. Next slide. When we add rademikibart, we see that we get an improvement in bronchodilation and move the curve back towards baseline.

But very interesting, next slide, when we add dupilumab to this experiment, we see no effect. So this is not simply binding to the receptor and blocking attachment of the inflammatory cytokines. This is through a secondary biology probably similar to what was seen in the human airway cell increasing phosphorylation of HSP20. Because this was such a surprising observation, next slide, we went to another lab that has a significant experience in doing precision-cut lung slice work. And they -- even larger number of samples was able to reproduce the observation where there was no effect of dupilumab on the reduction in the benefit of the bronchodilator, but a significant improvement with rademikibart.

Next slide. And so based on the rapid onset of FEV1 increases that were seen in the original chronic asthma study. Current development of rademikibart is focused on treatment of acute exacerbations in asthma and COPD. Ultimately, the goal would be to have both the acute and chronic indications, but we've put our current focus on demonstrating a benefit in the acute setting.

Next slide, I won't go through all of the details underlying asthma and COPD. But the most important focus of this discussion is the large numbers of patients going to the hospital for acute exacerbations, over 1 million ED visits for asthma patients, 1.3 million for COPD patients. Next slide. And that's really the tip of the iceberg because we see with that 1 million asthma patients going to emergency departments, there's even more patients going to urgent care or doctor's clinics to get treatment for the acute exacerbation.

Next slide, very similar numbers in Europe. This is clearly a global issue. Next slide. And again, the information on the speed of onset came from original Phase IIb chronic asthma study, a fairly straightforward design. Next slide shows the FEV1 improvements in that study. We -- because we collected information starting at 1 week, in the clinic, it really spurned our interest in how fast the drug was working because by 1 week, we already saw a very significant improvement in FEV1 almost 250 mL on average. And by drilling in further into [ homes ] spirometry, we found that the majority of this benefit was observed the morning after dose 2, so in less than 24 hours. We were seeing significant improvement in FEV1 much faster than what would be anticipated from a biologic.

Next slide, this just helps to put the significant improvement in FEV1 into perspective versus other biologics. As you can see on the far right, when we look kind of as close to apples-to-apples as we can across study, patients with greater than 300 eosinophils, we see certainly a -- what appears to be the greatest magnitude of improvement with rademikibart compared to other biologics, including dupilumab.

Next slide. And so with that information on the very rapid onset of effect from the chronic study, which was conducted with subcutaneous administration of rademikibart, we set out to initiate Phase II trials to see if we could demonstrate a benefit in patients having an acute exacerbation. And in parallel, we started to evaluate the opportunity to potentially use IV administration to speed up the onset even more. And so what we'll be sharing with you today and for the first time, as I mentioned, is preliminary top line results from the IV study.

Next slide. So the IV study, what we'll be talking about is Part A and Part B. Part A was healthy volunteers. We had very little information on IV dosing. So the first question is, can it be done safely and more quickly than the 30-minute infusion that was initially tested back in the initial development of rademikibart. And in that Part A section, we found that a 2-minute IV push was very well tolerated, no different than slower administration with similar PK and so we chose that to move forward into the patient component of the study where we were evaluating stable asthma patients and COPD patients to see whether or not the improvement in FEV1 could be accelerated. And this slide describes some of the entry criteria.

Next slide shows the baseline characteristics of the patients that were enrolled in the study. And I think that the most important observations here is a high percentage of smokers. So these are difficult patients to treat in general. Eosinophil lower limit was 200, in order to make sure that we were selecting patients with a T2 mediated disease. But we wanted to have as close to real-world data as we could. So we set that bar fairly low. And in fact, the majority of patients were 200 to 250. So right at that entry criteria even though the means are about 330.

And then finally, pheno, while we would love to have patients with greater than 25 pheno, in order to really preselect patients that will do very well on this mechanism because of the high proportion of smokers, Pheno in this case was really not predictive of how much airway inflammation patients had, smoking has been shown to decrease pheno. Next slide. So here, we have the top line preliminary results, looking at change from baseline in placebo-corrected FEV1. And you can see here that we have immediate effect at 15 minutes in terms of improvement in airway function. It bounces around some. This is a small study of 12 patients, 2 placebo, 10 active, but certainly by 3, 4 hours, we see a stable improvement in the 200, 250 range, which is, as you recall, from the chronic asthma study, what we achieved, at least in the clinic at 1 week and with home spirometry in a couple of days. Here, we're shifting that now to several hours. And certainly, by the end of first day, we are now in the 200 to 300 mL improvement territory and we continue to maintain that through 29 days.

All of these data points are pre bronchodilator. So bronchodilators were withheld for the first day in order to get the cleanest data of what rademikibart does on its own. And then you see 2 data points that were collected post-bronchodilator and fairly typical increases with the bronchodilator in asthma patients. So from our perspective, we were successful in demonstrating an acceleration of the FEV1 improvement by using IV administration, and that improvement was maintained through a 29-day follow-up in these patients.

Next slide. And so we had never treated a COPD patient with rademikibart, although in the prior Phase IIb asthma study there were patients that had characteristics similar to COPD patients. We pulled those patients out, and we see that this data predicted a robust improvement in FEV1 in these COPD-like patients. And as everybody, I'm sure, understands COPD patients generally respond less well to these drugs, improvements of less than 100 mL have been observed with most of the products developed for COPD, and we'll discuss that in a few slides. But if we go to the next slide, which is the actual results from the COPD patients treated with IV rademikibart, you see here a very robust improvement in FEV1 occurring within 15 to 30 minutes. And that improvement is generally maintained in that 300 mL, 400 mL range again with a fair amount of variability.

If one looks at the data from the dupilumab Phase III studies, where they had 400 to 500 patients in arm. You see very substantial error bars, spirometry itself is variable and among COPD patients, particularly highly variable. And so that's really the underlying reason for this bouncing around. But nonetheless, we see really remarkable improvement in FEV1 in these patients and the speed of onset is so rapid. We believe that this definitively identifies a second mechanism is occurring with rademikibart to improve airway function this quickly. And we believe that some of the preclinical data that was previously reviewed, is giving us at least an indicator of that differential pharmacology that's going on.

Next slide. So how do we put the improvements of 300 mL, 400 mL and greater into perspective for COPD patients. Well, we can take a look at the older agents in what's a clinically important improvement with those and you see it ranges from 45, 50 mL to 100, 164 mL for combination treatment with DUPIXENT. They have in their package inserts post-bronchodilator change from baseline placebo corrected at 2 weeks. We see about 10 mL to 80 mL difference at 2 weeks, which compares to almost 400 mL increase with rademikibart at day 15 post-bronchodilator. So very substantial difference observed again, in this small study.

OHTUVAYRE, very effective agent for COPD, produces peak improvement on day 1 of 152 mL to 157 mL. That compares to almost 600 mL peak improvement at 3 hours with rademikibart IV administration. And the drug OHTUVAYRE was actually approved based on AUC change 0 to 12 of FEV1 and that was in the order of about 87 mL to 94 mL in their 2 Phase III trials, where AUC 0 to 12 for rademikibart is on the order of 400 mL on day 1. And so to conclude the observations we see extremely robust improvement in FEV1 around 200 mL to 400 mL. And this is very significant compared to both the old line agents used in COPD patients as well as the newer products. And as we've been identifying for some time, treatment of acute exacerbation, our current target is a complete white space as the currently approved drugs, the biologics or OHTUVAYRE are all approved for chronic management. and have explicit warnings in their package insert to not be used to treat acute exacerbations or bronchospasm.

And so there are no biologics or innovative products approved for acute exacerbations. And in fact, they are all prohibited from being used. So this is an opportunity to have a completely differentiated indication. And we'll talk about the value of that in a minute. But first, the next slide is the safety observations of which as you can see, none to speak of in the small IV study. Next slide, just the highlights in addition to faster onset of airway improvement that we now have demonstrated with the IV administration. There's other additional benefits to us that accrue from using IV in the ER setting.

First of all, it's a lower dose bioavailability of rademikibart, from a subcu administration, it's about 50%. And so we can need a lower dose given IV, and we will likely evaluate an even lower dose going forward just to satisfy FDA requirements for appropriate dose evaluation. And by having an IV product with a different indication dose presentation. So for example, a hospital use only vial for IV administered product. It gives us the opportunity to price differently in the hospital setting versus the outpatient auto injector, have here an example of that pricing difference. Ours wouldn't be nearly this large but by being able to optimize the price in the hospital setting and in the outpatient setting results in the greatest commercial opportunity.

And so moving forward, we have 2 acute exacerbation studies ongoing, and the data from those will read out midyear, next slide, is the design of those 2 studies. They're basically identical aside from some modest differences because of the differences between asthma and COPD. Patients come in with an acute exacerbation. They receive standard of care which is steroid prednisone and beta agonist, bronchodilator. And then they're randomized to receive rademikibart or placebo. And then we follow them for the endpoint for 28 days and then another 4 weeks just for a safety assessment. And the goal here is to show a reduction in what we call treatment failure. And so these -- this endpoint is patients coming back to the emergency room back to the clinician looking for additional medical treatment, for example, another round of prednisone because they continue to get worse or they may get better briefly and then have another exacerbation during that 4-week period.

Now when we were designing this study initially, we had found through the literature and through claims database that look like around 50% of patients, what I find as a shocking number actually in the real world go back to the ER or to another point of care because they're continuing to get worse or they have another exacerbation in that 4-week period. And then about that same time, next slide, the ABRA study was published. This is an investigator-initiated trial out of the U.K., contemporary data on what happens in patients, both asthma and COPD having an exacerbation. And in their study, they found 45% of patients coming back to receive medical care during that 4-week period. So it gave us another piece of data in order to power the 2 Phase II studies that we just reviewed.

And so we've used this 45%, and we are looking for a 50% reduction, which based on the benralizumab curve, certainly looks like a very doable outcome considering the fact that benra had really no effect on the treatment failure for the first 2 weeks. It starts to separate after that. What that tells us is that benra is doing a very nice job of reducing new exacerbations, but had no real benefit for the index exacerbation, that acute setting in the first few weeks. With a product like ours that starts to work overnight with significant benefit accruing to patients in terms of airway improvement in that very short period, we anticipate seeing the active treatment curve much flatter than was seen here with benralizumab.

Again, top line results from the 2 Phase II studies anticipated midyear. Next slide. And so we've done extensive market research with the product, both clinicians and payers, et cetera. Very significant interest in using a biologic or any new tool to treat acute exacerbations. But the data that we presented in these market research studies I will tell you, was not as robust as the IV data that we just reviewed. And so we'll have to go back and do another round because the magnitude of the effect, particularly in COPD patients that we tested was nothing like what we're actually seeing in patients. And so even with the less exciting data, we found worldwide peak sales forecast of approximately $5 billion for acute and chronic indications in asthma and COPD.

Next slide. This just highlights the fact that there is significant interest in using rademikibart acutely and patients coming in with an exacerbation and then significant interest in using the product chronically, particularly in COPD, which is a less crowded space and where the recent approvals have not allowed enough time for dominant positions of any of the recently approved products. But what was really the most profound was the preference share of 75% in both asthma and COPD, where clinicians told us if a patient received the drug acutely and did well they would want to maintain that patient on the same drug to a very high proportion of clinicians. So we see that the acute indication, number one, changes the perception of the drug in the mind of the clinician. And number 2 is really a gateway to chronic administration because the patient starts on the product acutely before they see another biologic and then the clinicians have a very high preference to maintain the patient on the same drug.

Next slide. So that concludes the new data in the respiratory area. I'll now move to the late-breaking data in atopic dermatitis. This is a study that was sponsored by our partners in China, Simcere Pharmaceuticals, who has a right to develop rademikibart in Greater China for all indications. We received significant milestones and tiered royalties for their development and ultimately commercialization activities. And so we'll go into the data, next slide. The design of the RADIANT atopic dermatitis study, pretty classic design, 16-week blinded induction phase, and then patients are then put on long-term management out to 52 weeks.

Next slide, baseline characteristics, pretty classic for AD studies in terms of baseline disease. Next slide. Here, we get into the data, and we found this data to really be quite impressive in terms of the response rates, both at 16 weeks, but particularly at 52 weeks. This first slide is the classic endpoint of investigator global assessment. And here you see 87.1% responders at 52 weeks. Next slide is EASI-75. Again, a pretty standard endpoint for these trials. We've never seen a 96.6% response rate. And so this is, we believe, about as good as you can get for this endpoint and then provide even greater benefit to patients.

The next slide is EASI-90, so a 90% improvement in the EASI score with eczema area and severity index. Again, very high response seen in this endpoint. And then last but not least, pruritus improved substantially as well in this study. Next slide. And this was all done with very low side effects. You can see here, the left panel is the blinded placebo-controlled and the right is the longer-term follow-up. And probably the most important to highlight is the conjunctivitis, which is one of the most common side effects of dupilumab and many products in this category.

You can see here that in the blinded placebo phase, the conjunctivitis rate was really not differentiated from placebo. And while it goes up to a very small extent in the 52-week period, it's substantially lower than what's seen with other products. And I'll give you an example of that in the next slide or 2. Next slide. And so the conclusions from this data, obviously, rapid and sustained efficacy out to 52 weeks with a very high proportion of patients obtaining near maximal response. So great long-term benefit in this study with the 52-week data and a very clean safety profile with low rates of conjunctivitis.

If we go to the next slide, this is from our prior atopic dermatitis study. It just highlights 2 points. Number one is patients at 16 weeks in this study, we random -- rerandomized to either maintain Q2-week dosing or go to Q4 week dosing. You can see clearly, there's no loss of benefit by moving to Q4 week. In fact, if anything, it was slightly better in terms of the IGA endpoint. But more important, this also highlights that with rademikibart, you see excellent maintenance of responders. So these are patients responding, whether it be IGA or EASI-75. And so for example, EASI-75, you take the responders at 16 weeks, and you're looking to see how many continue to respond out at 52 weeks with almost 92% on Q4 week dosing.

In the 2 dupilumab solo trials, only 54% of patients with the IGA endpoint maintained response from 16 weeks to 52 weeks. So that's versus our 87%, substantially higher rate of patients maintaining that benefit over that period of time. And then as you saw from the graphics that there's a continual improvement in the proportion of responders. And so we're gaining new responders and we're not losing current responders, that's how we can get to that 90-plus percent response rate at 52 weeks. And similar observations were made in the current AD study, that data and data from the adolescents will be presented at upcoming scientific meetings.

And then the next slide, I couldn't help myself as you may be aware, a week ago, there was new information presented by Apogee on their long-acting agent in atopic dermatitis. And they presented a lot of comparative slides. So I took the same tack and present comparative data to what they observed at 52 weeks. This is looking at their Q3-month dosing, which was their best data. You can see at 52 weeks, we have 10% to 15% higher response rates across the 3 key measurements and a substantially lower rate of conjunctivitis. Next slide. And so just to put all of this information into perspective, in asthma and COPD, we have the difference in binding of rademikibart to the receptor results in enhanced internalization of that drug receptor complex, which then results in a clear difference in eosinophils observed with chronic administration where we see a reduction versus an increase with dupilumab.

We've also demonstrated a very unique mechanism of action in terms of directly increasing phosphorylation of HSP20, a marker of relaxation in the cells and in bronchodilation in the whole lung. And so we see -- and we've been able to reverse the negative effects of IL-4, IL-13 on the dose response curve of beta agonist in lung slice experiments, something that was not observed with dupilumab. We're in the process of testing other potentially competitive agents. The rapid onset that we see in subcutaneous administration of significant improvements overnight, we can successfully accelerate with IV dosing, with substantial increases as early as 15 minutes, ideally suited for emergency department setting. And we see larger increases in FEV1 than has previously been observed. And that's probably due to this ancillary pharmacology in addition to the IL-4 receptor alpha known pharmacology in terms of FEV1 improvements.

Atopic dermatitis, very high rates of response for all of the key endpoints. We see very high proportion of patients going on, maintaining efficacy through 52 weeks compared to specifically to the dupilumab Phase III studies. We see in the prior study, excellent efficacy Q4 weeks. And so Q4 week dosing is something that we would go forward with in asthma and COPD patients as well. And based on the information so far, from all of these trials, it appears that we have a substantially lower rate of conjunctivitis based on the data to date. Next slide, just to put everything into perspective, we also have very long exclusivity out into the early to mid-2040s. So plenty of time to benefit commercially.

And then on the financial slide next, we have cash, cash equivalents and short-term investments at the end of third quarter, last reporting period of $55 million, plus the proceeds from the raise that we announced this morning. We have cash that's expected to cover operations into second half of '27. Next slide. And so this is just a final summary of all the information that we've just reviewed. But most importantly, in terms of catalysts, most important catalysts coming forward is the completion and top line results of the 2 phase II acute asthma and COPD studies, which we're anticipating mid-year. There's also a pending new drug application in China for atopic dermatitis, which we're hopeful to see approved sometime between midyear and end of year.

And so with that, thank you for your attention and happy to take some questions.

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

This is Nat Charoensook on for Thomas Smith. Congrats on the data. So we have a couple of questions. So the first one, how do the IV results affect your strategy in future studies of rademikibart in acute asthma and COPD?

Yes. Great question. And so this is very fresh off the press data from that study. We're still -- need to -- there's still a few patients going on. We need to get the full data set and really delve into understanding the responders and making sure that we can move forward and identify the best patient population to respond. But we definitely are planning to switch to IV dosing, ultimately moving into Phase III for acute treatment with the IV. And so we'll be looking at whether there is a need to do any additional bridging work between the small IV study and moving forward early next year with the IV in the Phase III. So stay tuned. We'll -- once we have the full -- and analyze it will make a decision on, is there a need for additional work?

Got it. And briefly on the economics from Simcere partnership, so Connect remains eligible for about $110 million from milestone plus tier royalties. So which milestones are the nearest term and what an approval would unlock?

Yes, a great question. So we have not divulged the specific individual milestones. You're exactly right that there's still $110 million in milestones that is due to Connect from our partners Simcere, based on both development, regulatory and commercial endpoints. So we haven't given the explicit numbers but milestone for the first approval which, in this case, we would anticipate being AD. And then Simcere is also currently conducting a large chronic asthma study. And so early next year, we would hope to see excellent results from that study, and we anticipate that they would be filing for approval in asthma sometime later than that, and we would receive another significant milestone for an approval in asthma as well.

Got it. Congrats on the data.

Thank you.

The next question will come from Brandon Folkes with H.C. Wainright.

Congrats on the data. Maybe just 2 for me. So in Part B of the IV study, any color -- insight into the number of subjects which returned to the ER within 29 days? Granted these were stable patients but I think it would just be interesting to sort of see if there's any data there ahead of Seabreeze?

Yes. Excellent question. We will have to delve into that when once the last patient is completed and -- but definitely something that we'll be looking at. I'm currently unaware of any exacerbations in this small cohort of patients over the 28 days. But there may be something interesting in there. We'll certainly make that known if we find something interesting.

Okay. And then secondly, so on the asthma cohorts, why do you think FEV1 comes down until 90 minutes. Is that just given sort of the law of small numbers? How does that potentially compare to the subcu? Do you have any data there? And then I guess, going forward, would you expect similar curve to what we saw today between COPD or asthma, or would you expect as much to sort of look a little bit like or a lot more like COPD going forward? And then on that, if we do see that asthma curve like today, does that bring in any risk of symptoms or exacerbations between minute 15 and 90 in sick patients.

Thank you, Brandon. Good question. And we believe based on looking at the individual patients that this is just inherent variability of spirometry and in that early period, as you know, I mean we are collecting a very sizable number of tests over a short period of time. And so there's always a possibility of patients, asking them to do a baseline and they may do 6, 7 attempts and then 15 minutes later, another 6, 7 attempts and 15 minutes after that at 30 minutes.

And so amongst all of those assessments, there's a substantial amount of variability. We don't see that as a real observation in terms of something happening with the drug effect. I think the COPD patients for whatever reason, were more stable, actually, in general, than the asthma patients. But in both settings, we're talking about very small numbers. This was a small clinical pharmacology study. I don't think we want to read too much into an individual data point. And so no, we expect in larger scale studies to see more consistent results early on. And even if it did bounce around, it certainly should not have an impact on patients who are having an acute exacerbation, they're already there having an acute exacerbation. They're already on the standard of care in that very acute setting, certainly not going to have a negative impact on those patients.

Congrats again on the data.

Thank you. Good to talk with you.

And the next question will come from Thomas Flaten with Lake Street Capital Markets.

Barry, just a follow up on that last response. I mean what stood out to me with those 2 charts and asthma and COPD was the rapid or more rapid response into the marked bronchodilator response zone, the green zone in COPD versus asthma? I'm just assuming the answer is the same as you gave the last question that it's inherent variability in small number of patients, et cetera. But that's the one thing that stood out to me. Just curious to get your thoughts on that.

Yes. Well, it's an excellent observation. There's no question that the response in the COPD patients was much more robust than in the asthma patients in that first several hours and actually even beyond that. It's very intriguing in because we are still trying to understand the reasons why we see such rapid improvement in FEV1. Clearly, it is not a direct IL-4 effect because at least in cell culture and in lung slices, we don't see these kinds of effects with dupilumab. And so there's that ancillary pharmacology that we're really still trying to get our hands around.

Ultimately, I won't be surprised if that pharmacology has potentially greater impact on COPD because I'll point out that we had looked at the COPD like patients and found really remarkable increases in FEV1 in that subset of patients. And it was actually kind of too good to be true, given how resistant COPD patients tend to be. But remarkably, we actually duplicated almost exactly that same magnitude in the small study. So I feel that it is real. It's a real observation. We're going to spend some time drilling into it to figure out what is -- what's the underlying biology.

And then just kind of a 50,000-foot question. You got the Seabreeze studies ongoing. So acute seems to be -- acute exacerbation seemed to be the #1 priority. How are you thinking about allocating resources across chronic asthma, COPD and AD given this excellent data set that was presented over the weekend.

Yes. Thank you. I appreciate the question. So number one, we've been pretty clear that we personally at the Connect company not going to be expanding resources on atopic dermatitis at this juncture. We think that the drug has an opportunity to be best-in-class in atopic dermatitis, but it is not our current focus. And so we'll continue to focus on the respiratory side. In terms of the -- how we'll move forward, as I previously noted, our intent is to be in both acute and chronic. We put the chronic studies on pause while we generated the acute data. Once we have the acute data, we already have agreement with FDA on moving forward in chronic asthma into Phase III, based on the great Phase II data we generated. And so early next year, we would certainly look to initiating both acute and chronic Phase III studies.

And at that same juncture, we'll be likely getting the results from the Simcere Phase III asthma study. The great thing is, is that virtually everybody in the world uses GINA guidelines for treating asthma. And so that study from China, we believe should be acceptable for submission to FDA and acceptable as at least a supportive Phase III trial. And so based on the results of that, we'll certainly plan to move forward into both acute and chronic. But as we've also maintained our interest is finding a commercial partner for rest of world to help defray the cost of certainly not interested in going out and raising Phase III dollars for multiple acute studies and Phase III in chronic and -- chronic asthma and chronic COPD. So the goal is to be able to move forward early next year, but have somebody help pay for it.

The next question is going to come from Julian Harrison with BTIG.

Congratulations on these results. In your IV study, the FEV improvements, especially in COPD looked very high, like multiples higher compared to other treatment options. I understand there maybe was an expectation for faster efficacy with the IV formulation, maybe TMAX driven. But I was wondering if you're expecting such a large treatment effect from this early study. And if so, maybe any thoughts on what was driving that?

Yes. Thank you for the question. And so we had the data from the prior Phase IIb chronic study, where we pulled out the COPD-like patients and showed particularly in people with T2 mediated disease, 4, 5 plus 100 mL improvement, which I will say I thought was a wonderful observation but highly unlikely that we would be able to replicate because COPD patients tend to be much more resistant to pharmacologic intervention, there's more remodeling and other factors involved in their airway dysfunction. And so seeing almost identical results in this small IV study certainly gives me a greater expectation that we will, in fact, continue to see that kind of magnitude going forward.

We obviously won't know for sure until we do larger experiments. But being able to replicate that almost exactly certainly would indicate to me that, that is, in fact, a real observation and not just an artifact of very small numbers.

And in terms of your second question, we have every interest in trying to figure out exactly the underlying pharmacology. We haven't got there yet. We have tantalizing pieces of information that I showed you, but we have a lot of work ongoing, and we will figure that out and I look forward to being able to present that in the future.

Excellent. And a follow-up, if I may. It was also interesting to see the data showing rademikibart potentiates beta agonist. I understand that was also maybe an unexpected effect, but just wondering if there was a prevailing explanation there? Or is that kind of just left as an empiric observation for now?

Well, we know it's real. We know we're differentiated from at least dupilumab in that regard, and I expect probably from every other biologic that's used for asthma and COPD. It is clearly an off-target effect of the drug. We don't know if it's associated with this internalization or some other factor. And that's really our -- a significant focus in terms of the preclinical area of understanding exactly how it is doing that. We know it's doing it. We understand from the HSP20 data that is doing it downstream. We know that the cytokines block beta agonist activity upstream. So that all fits together, but the exact molecular basis for doing it is still unclear. But as I said, looking forward to presenting that in the future.

And I think we are out of time. So I thank everybody for joining the call today.

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

Hello. This is Craig Brelsford with RedChip Companies. Thank you for joining today's webinar with Connect Biopharma, which trades on the NASDAQ under the ticker symbol CNTB.

With us today, we have Barry Quart, who is the CEO. We will begin with a brief presentation in a moment and then we will answer your questions. Users may submit a question at any time, click the Q&A button at the bottom of the Zoom window.

Before we begin, please allow me to read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results along with other statements about the future expectations, beliefs, goals, plans or prospects expressed by management constitute forward-looking statements. Any statements that are not historical facts should also be considered forward-looking statements.

Of course, forward-looking statements involve risks and uncertainties.

I now turn this webinar over to Barry. Please go ahead.

Thank you, and thanks to everybody who's dialed in. Appreciate the opportunity to introduce to you the Connect 2.0 story that I'd like to think about it.

When I arrived at Connect a little over a year ago, this was a Chinese-based biotech company focused on monoclonal antibody technology. They had a lead program, Rademikibart, which is a next-generation DUPIXENT going after the same target IL-4 receptor alpha. And the mandates that I received from the Board was to determine the best approach for further development of Rademikibart and make the company more U.S.-centric.

On the latter, we've now moved the headquarters to San Diego. We've started to file 10-Ks and Qs. So you'll start to see the usual kind of communications to investors that you would expect from any other San Diego-based biotech.

We've started to significantly reduce the footprint in China and then most recently, we converted from trading ADRs on the NASDAQ to ordinary shares. And that's basically the last box that we were looking to check in terms of the U.S.-centric focus of the organization.

From the development perspective, after going through all of the data that's been generated on Rademikibart, it became very clear to me that the most appropriate approach was to move forward in terms of the respiratory targets of asthma and COPD and particularly looking at the opportunity to target acute treatment, patients having an active exacerbation Market research indicated that was a clear opportunity, no competition within the biologics.

In fact, the other biologics, including DUPIXENT expressly say in their label not to be used to treat an acute exacerbation with a forecast of approximately $5 billion for both asthma and COPD, going after the target of both acute and chronic treatment. This seems like an ideal opportunity for the drug and I'll give you some of the data why the drug meets all the requirements. So perfectly for treatment of both acute and chronic. This just looks at some of the key studies that have been conducted with Rademikibart. As you can see the completed studies on the bottom. We've looked at both treatment of chronic asthma as well as atopic dermatitis.

I should also add that we have licensed out the rights to Rademikibart for Greater China to a large pharmaceutical company in China, Simcere Pharmaceuticals. They paid us approximately $24 million in upfront and some regulatory milestones last year for the rights to further develop and commercialize Rademikibart in China. They -- in midyear filed NDA for atopic dermatitis. So we would be expecting hopefully approval for atopic dermatitis about midyear next year which would come with a significant additional milestones and tiered royalties going up to low double digits. They are also conducting a large chronic asthma study in China, and that should be completed, we hope sometime at the end of next year. We are focused on 2 acute studies, one in COPD, one in asthma, again, looking at patients having active exacerbations.

Just a snapshot of what the market opportunities look like, asthma, COPD, large numbers of patients in the U.S. And probably our greatest importance are the 1 million emergency department visits for acute asthma exacerbations and about 1.3 million emergency department business for COPD. But I'd like to point out that, that's just actually the tip of the iceberg. This is a breakdown of where patients go for treatment of an acute exacerbation. Obviously, a large percentage of patients have medication at home, which takes care of those mild exacerbations, but when they are more significant patients go to the doctor's clinic.

They go to urgent care, and then you have approximately 1 million asthma patients going to emergency department and then in the hundreds of thousands of patients being hospitalized. So you have a very large market opportunity for treatment of these patients, and they are being treated approximately the same way as they were 30 years ago. No real drug development progress has been made in terms of acute treatment. The same goes for Europe. Very similar numbers in terms of patients going to emergency rooms every year.

Now just a little bit about Rademikibart itself, again, targeting IL-4 receptor alpha similarly to DUPIXENT. But it has very different binding. And just to highlight also the importance of these targets. IL-4 and IL-13, which are blocked by rademikibart. It's well established that IL-13 is directly involved in terms of contraction of smooth muscle in the airway. So that bronchoconstriction can be significantly enhanced because of IL-13.

But another side effect of IL-13 is a shift in the efficacy curve of beta agonist. So one of the hallmarks of a patient having an acute exacerbation is they start getting tightness in their chest, difficulty breathing, that constriction of the airways. The patient then goes to use their rescue inhaler, albuterol, and it doesn't work and they use some more. It still doesn't work, and then they're on their way to the emergency room.

The fact is that inhaler is not working as it normally would may have a lot to do with excess IL-13, which is why we believe that targeting IL-4 and IL-13 is really ideal in terms of treatment of an acute exacerbation in patients who have T2-mediated asthma. This just highlights very different binding between rademikibart and dupilumab and we think that has a lot to do with our enhanced efficacy and a very different safety profile as well, which I'll present shortly.

So this is the design of the chronic asthma study that was completed a few years ago, pretty classic design, evaluated two different doses versus placebo. This is the primary endpoint to FEV1, the basically amount of air that you can expel out of your lungs in one second.

And you can see that at the very first clinic visit, which was at 1 week, we saw a really remarkable improvement in FEV1, almost 250 mils across the study and it was approximately the full benefit that one sees from the low dose was already accrued at 1 week.

So when I started going through the data, my question was, can we get any more granular than 1 week? And I found that patients had home spirometers that had not been fully evaluated. And looking at that data, I found that over 70% of the benefit at 1 week was already achieved the very next morning after a dose. So within hours of that dose, patients had very significant improvement in airway function. And that opened up the opportunity of considering the use of rademikibart for treatment of that acute episode.

And then just very kind of top line comparison of our data versus other drugs that are used for asthma. You can see on the very far right, we're trying to compare as close as we can apples-to-apples in terms of cross-study comparisons. You can see the airway improvement with rademikibart from Phase II versus what was seen with dupilumab.

And then with other mechanisms, clearly, the IL-4s improve airway function much better than the IL-5s with rademikibart improving it the most. But on the safety front, we see a very different profile, where on the left, you can see with dupilumab or DUPIXENT, you see an increase in eosinophils. Now this is in asthma patients from their Phase III program, and they saw this all the way through development for asthma that -- first of all, you're targeting patients that have high eosinophils to start with, that's the hallmark of identifying patients with T2-mediated asthma.

So that's your target population. Patients get dupilumab and their eosinophils go up and they stay up for, in this case, it's 6 months, although they start trending down after about 12 weeks.

Conversely, with rademikibart on the right, you see actually a continued decline in eosinophils over the course of the 24 weeks. So a very different profile and that relates also to the proportion of patients that get to excessive eosinophil levels. And that would be over 1,500 is where you would start to get concerned over 3,000, you would be quite concerned. And you can see with rademikibart, we actually reduce the portion of patients that go above 1,500 compared to placebo.

While on the right, dupilumab substantially increases the numbers of patients going above 1,500. And the numbers of patients going above 3,000, where we had no such patients, looking at people starting above 500. So these are patients starting very high. You've increased their eosinophils and you have the opportunity to get to very excessive levels. And this is not just a laboratory abnormality. Here are serious adverse events reported to the FDA database for dupilumab, specifically for asthma patients. And these are all eosinophilic serious adverse events. So they are related to that excessive eosinophil level, which we do not have.

Another comparison. Now looking at information that we collected in our atopic dermatitis study, 52-week study, demonstrating good tolerability and excellent efficacy with rademikibart. The other thing that we did was very similar to study done with dupilumab. After the 16-week induction period patients where they received the drug Q2 weeks. Patients were rerandomized to receive the drug either Q2 weeks or Q4 weeks.

You can see that we maintained efficacy, whether it's the investigator global assessment or the EASI-75 score. We have maintained a very high rate of efficacy over the 52 weeks. And that was essentially the same. In fact, it maybe slightly better with the Q4 week dosing interval. We're with dupilumab when they did the same thing. They found that the Q4 week dosing interval was not nearly as effective as the Q2-week dosing interval which is why dupilumab is a Q2-week drug.

And the other thing you can see across the drugs shown here. We had the highest rate of maintaining patients as responders for both of these very important endpoints. So we have very good continued activity in that atopic dermatitis study.

So if we -- just to summarize the clinical experience with rademikibart, very fast onset of effect in the asthma study amongst the greatest increases in FEV1 across the biologics. We reduce eosinophils versus increasing them as seen with dupilumab. So we significantly reduce the risk of serious adverse events associated with increased eosinophils with the 600-milligram loading dose, which has been used and now well over 1,000 patients.

We have excellent tolerability looking across both asthma and atopic dermatitis studies for chronic dosing, which is well tolerated. We will be looking at Q4 week dosing based on the good results in the AD program.

We have met with the FDA in an end of Phase II meeting for both asthma and atopic dermatitis, and we're given a go-ahead to move into Phase III but we put those on pause for now, while we were focused on conducting the 2 studies in acute treatment.

So here is the design of those 2 studies. One in asthma patients, one in COPD. These are 28-day end points, so very fast, relatively small numbers of patients for these kinds of trials because the expected failure rate in the control group is so high, it allows us to conduct relatively monetized trials.

These studies are ongoing. We're continuing to set up new sites around the world with the target of having data in the first half of next year. And much of the design of these studies is based around recently published data from the ABRA study in the U.K. This was an investigator-initiated trial out of the U.K., where they looked at using benralizumab in the same way that we are trying to use rademikibart for treatment of an acute exacerbation.

And here, you can see on the right in the time to treatment failure. So treatment failure is patient leaving the ER. And in this case, they followed the patients out for many more weeks. We're looking at just the 4-week time frame, and treatment failure would be patients who come back to the ER or go to another point of care because they are either continuing to get worse or having a new exacerbation.

And the two important findings for us from this trial was that, number one, the failure rate in the control group receiving standard of care is about 45%. So very high rate of patients coming back to the ER which I'll point out in the 4-week period, we're looking at -- the hospital doesn't get paid again. And if the patient comes back, so they have a vested interest in keeping that patient home.

And then also, as you can see, the separation with benralizumab didn't really start until about 3 weeks. So this is the kind of typical profile you would see with a biologic, taking days to weeks for it to work, where with rademikibart, we have data showing it starts to work in less than 24 hours.

And we have put together all the data necessary to move this program forward in terms of acute treatment as well as hopefully going for chronic development. Once we've completed the 2 acute studies. Market research indicated that having this acute indication was a clear differentiator versus both dupilumab as well as all the other biologics, which, as I mentioned, explicitly say that they are not to be used for treatment of acute exacerbations.

And this just highlights that market research data. You can see a very good preference share for using a drug acutely in naive patients with 40% to 45% on the top row. And then on the bottom, where a patient received the drug acutely 75% preference share for continuing that patient on rademikibart. So having this acute indication is a clear gateway to getting significant penetration in the chronic market, which is where the bulk of the revenue would come from.

We have a manufacturing process that's already been transferred to a U.S. contract manufacturer. They've made multiple batches successfully. We have a new high-yield cell line, which will be transferred starting late this year into next year. The goal is to use that material ultimately in Phase III. So that would be the commercial material going forward, which gives us a lot of flexibility to charge a lower price in the hospital setting versus the outpatient setting by having 2 distinct presentations. And we've already talked about the Phase II data that we've generated as well as our current plans.

We have long exclusivity running out to at least 2042. And then just highlighting some of the accomplishments so far this year.

In addition to the 2 Phase II studies that I presented to you, we also have a small pharmacology study ongoing, looking at the potential for IV use of rademikibart, where the goal is now to reduce the time to onset of a benefit from hours down to hopefully minutes. The goal is to have data from that study in early next year.

And then obviously, the -- we've already talked about the goal of completing the Phase II studies, having top line results first half of next year.

And then last but not least, we have a very strong cash position with $72 million in the bank as of the end of second quarter. And even with paying for the currently ongoing studies, we have cash into '27. And this just shows the cash balance and utilization, as I said, approximately $72 million at the end of second quarter.

And with that, that's the end of the official presentation. And I'm happy to take questions.

Thank you, Barry. Thank you very much. [Operator Instructions]. Barry, we have several questions already in the queue. Yes. Here we go with #1.

What outcomes in the current Phase II trials would be considered very encouraging to the industry?

Well, so we've powered the studies for a 50% reduction in patients having what we call treatment failure. In other words, coming back to the ER or to another point of care. We think there is an opportunity to do even better than that, but that's how we've powered the trials. And I think that achieving that goal would be in and of itself a very dramatic improvement over what we currently see in terms of how patients are being treated.

If you think about an asthma patient today going to the ER, spending 4, 6 hours, getting therapy there, walking out the door, going home. That almost half of those patients will either get worse or have another exacerbation in 4 weeks. We believe that there's a much better way in terms of how we're taking care of those patients.

Thanks, Barry. Can you provide any details on expected milestone payments in 2026?

Well, we haven't disclosed the full breakdown of milestones. What I can tell you is that there is approximately $110 million in milestones remaining in our agreement. And for '26, we are hopeful to see approval of rademikibart for atopic dermatitis that would bring with it a significant milestones. And then potentially the following year, if all goes well, a potential approval for asthma as well. And so between those 2 important milestones, it's quite possible we would be seeing approximately the same amount of milestone payments that we've received last year, but spread across those 2 years.

Barry, we are well aware that you addressed this issue a little while ago, but I think important points, can't hurt to repeat them. This person writes, considering the higher binding affinity of rademikibart with IL-4 and activity with IL-13, have you witnessed any safety issues or off-target concerns?

No. It's a great question. And obviously, all the safety data from our prior trials has been published, didn't go through it in the presentation, but the drug is very well tolerated. You do see typical kind of rates of injection site issues, almost always mild, very rarely, do patients discontinue due to adverse events with rademikibart. And in general, you see somewhat less conjunctivitis. But so far, the drug has really been very well tolerated.

And this person had a follow-up question to that, which is what might be the time line for maintenance indications? How much safety data might be necessary 1 year?

Yes. So another good question, and it does open up an opportunity for us that I did mention. And that is, as noted, our partners in China are just about now completing a 1-year atopic dermatitis study that the data from that, we anticipate to look stellar. And they're currently enrolling in a chronic asthma study, again, a 1-year study.

Because both atopic dermatitis and asthma are treated similarly in China as they are in the United States, we believe there is a high likelihood that we can provide the FDA with the required justifications for acceptance of foreign data such that we can use the atopic dermatitis Phase III and the asthma chronic treatment Phase III as one of 2 Phase III trials.

And so there's a significant opportunity to basically cut the cost of Phase III development in half for those indications, particularly asthma, where we're focused on, allowing us to ultimately just do one large Phase III trial.

We would need to do 2 Phase III studies for the acute indication but that's obviously a much shorter time line versus a 52-week chronic asthma study. And so the expected time lines, which I think was the underlying question, is we hope to have the acute data around midyear and meet with the FDA, get plan agreed to in terms of Phase III for acute and also their willingness to accept the Phase III chronic study. So we could be initiating potentially Phase III studies for acute treatment by late next year. And -- but we would not move forward with Phase III chronic studies until we have a commercial partner or hopefully, ultimately, an acquirer.

Thanks, Barry. Are you exploring any nondilutive funding?

Well, absolutely, as I already noted, we brought in significant dollars from our partnership with Simcere. We are discussing the potential regional partnerships with several other companies. And we'll continue to do so. But we're -- the full court press for commercial partnering is once we get the data from the 2 Phase II studies that are currently ongoing. I think that's when both the valuation of the company and also interest levels amongst potential partners will peak. And that would be the ideal time to get the ultimate in non-dilutive financing.

Are you aware of any competition for treatments that can help asthma and COPD patients in the emergency room setting?

We are not. As far as we know, particularly in terms of biologics. As far as we know, we're at in terms of studies going on in the ER.

[Operator Instructions]. In terms of the follow-up with your current patients in clinic, what intervals will be checked for efficacy, 1 month, 3 months?

Well, the study that we're currently doing is a 1-month endpoint. Patients are evaluated for improvement in lung function and symptomatology. Every day for the first several days, we anticipate seeing the benefit of the subcutaneous administration, starting within that 24-hour window that we saw in the previous study.

And then by day 3 or 4, it's basically pretty much maxed out based on the single dose that these patients will receive. So the total endpoint analysis is day 28. We do have a safety follow-up, another 4 weeks later. That's just because when you get a drug administered subcu, it sticks around for that period of time. So we want to just be conscientious and see the patient one more time to make sure there was no adverse events but the endpoint is 28 days.

Another question here about competition, Barry. Is it safe to assume that today, there is no real competitor to DUPIXENT, if true, how rare is that?

Yes. Well, let me put it this way. As far as we're aware, and we know from the point of view of biologics, there are currently no competitors approved for acute treatment of asthma or COPD. They all have a specific warning and precaution saying, do not use to treat an acute exacerbation of bronchospasm.

And none of our competitors are currently trying to get an indication for acute treatment to the best of our knowledge. It is very unusual to -- in the I&I space to find an indication that has millions of patients with really unsatisfied treatment where there are no competitors.

And I'll point out that many of the drugs that are coming behind us are focused on longer duration of dosing as their key attribute. So drugs that can be taken once every 3 months or even once every 6 months, which is great, but usual pharmacokinetic principles are that the onset rate and offset rates are essentially the same. So drugs that have a very slow offset tend to take longer to see the onset. And so it's very unlikely that a drug that has a long half-life that takes months in terms of the half-life operate that you'll see activity within hours. And so we think that this is a space that we can own, hopefully, by ourselves for a very long time.

Is the market of $3 billion to $5 billion, only inclusive of ER visits or is the actual market potentially much bigger?

Well, so the forecast of $3 billion to $5 billion was based on having both acute and chronic indications. Where the acute use of the product in the ER drove chronic utilization.

What it did not really focus on is the rest of that pie chart. So that model was based on the use in the ER, specifically. We're now in terms of our clinical trial work, focused on demonstrating that there's an opportunity to use the product in urgent care, in the doctor's office. Opening up the numbers of patients that could receive the drug acutely and then that should ultimately increase the chronic opportunity as well.

So we certainly like to look at that forecast as the base case with the upside opportunity of utilization acutely in a broader category of locations as well as when the drug gets recognized as highly effective, well tolerated then patients won't need to be treated acutely before it would be on the go-to list for the clinician when they want to start a patient chronically. And so there'll be a certain number of patients who kind of started acutely and then went to chronic and then other patients who just went directly to chronic.

Thank you very much for that, Barry. I'm not seeing any more questions in the queue. Give everyone just a half second here if they still would like to reach out to Barry Quart, the CEO of Connect Biopharma.

Okay, Barry. We'll just wrap it up right here. I'll let everyone know here that if you want more information on Connect Biopharma, you can reach us at 1800 RedChip or e-mail us at [email protected]. Please visit the information page created by RedChip for Connect. It's CNTBinfo.com. There, you can view and download the investor presentation and factsheet and sign up for news alerts on Connect Biopharma.

Watch Small Stocks, Big Money, RedChip's program featuring exciting small cap companies every Saturday night at 7:00 p.m. Eastern on Bloomberg USA.

And finally, join RedChip's next webinar with NDT Pharmaceuticals on Wednesday, November 5, at 4:15 p.m. U.S. Eastern registered for all [email protected]/events. Thanks again to our participants today, and thanks again, Barry.

Thank you.