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Hello, and welcome to the 2026 Quince Therapeutics Special Meeting of Stockholders. Please note that this meeting is being recorded, and a replay will be posted to the Investor Relations section of Quince's website. It is my pleasure to now turn the meeting over to Dirk Thye, the company's Chief Executive Officer, Chief Medical Officer, a member of the Board of Directors and Chair of the meeting. Dirk, the floor is yours.

Thank you, and good morning. It's a pleasure to welcome you to Quince's Special Meeting of Stockholders. Thank you for joining us today live via our Internet webcast. It's 11:00 a.m. Eastern, 8:00 a.m. Pacific and time to call to order the Special Meeting of Stockholders of Quince Therapeutics.

I'd like to introduce some members of our management team who are joining me on this virtual meeting today. Brendan Hannah, who is our Chief Operating Officer, Chief Business Officer, Chief Compliance Officer and Secretary, who is also acting as Secretary of this meeting; and John Militello, our Head of Finance. Also with us today is Dan Harris, representing BDO USA, our independent registered public accountant, and he's available to respond to appropriate questions. Lastly, also present is Brittany Wightman, representing Cooley, our outside corporate counsel; and Jordan Hirsch, representing Equiniti Transfer Agent Services acting as our Inspector of Elections.

We will now conduct the formal part of the meeting, which includes voting on the proposals to be considered. The polls are now open. If you have not already voted, you may do so by clicking on Vote My Shares tab at the top right of the screen. Voting procedures will be addressed in greater detail shortly.

The special meeting is being held in accordance with the company's bylaws and Delaware law. The items on the agenda for formal meeting are: number one, to approve the issuance of shares of our common stock upon conversion of our Series C preferred stock and exercise of the warrants and Orphai options, which will, a, will represent more than 20% of the shares of common stock outstanding pursuant to Nasdaq Listing Rule 5635(a) and (b), may, together with certain changes to management and our Board, result in the change of control of the company pursuant to Nasdaq Listing Rule 5635(b), the Conversion Proposal or Proposal #1.

Number two, to approve the issuance of shares of our common stock upon conversion of the PIPE preferred shares and upon exercise of the PIPE warrants pursuant to Nasdaq Listing Rule 5635(d), the Minimum Price Proposal or Proposal #2. Number three, to approve an amendment to our certificate of incorporation to increase the number of authorized shares of our common stock from 250 million to 275 million, the Authorized Share Proposal or Proposal #3.

Number four, to approve the 2026 Equity Incentive Plan, the 2026 Plan Proposal. Number five, to approve the 2026 Employee Stock Option purchase plan, the 2026 ESPP proposal. Number six, to approve the adjournment or postponement of the special meeting, if necessary, to continue to solicit votes for proposals #1, 2 and/or 3, the Adjournment Proposal.

After we vote on these matters, an announcement will be made regarding the preliminary results and the formal meeting will be adjourned. Will the Secretary please report at this time with respect to the mailing of the notice of the meeting?

I have proof by affidavit certifying that notice of this meeting was duly given and that notice of Special Meeting of Stockholders was mailed on or about August 26, 2026, to all stockholders of record at the close of business on August 24, 2026, the record date for the meeting.

Okay. We have appointed Jordan Hirsch, a representative of Equiniti Transfer Agent Services, to act as Inspector of Elections for this special meeting. The Inspector of Elections has signed an oath of office, which will be filed with the minutes of this meeting. Will the Secretary please report at this time with respect to the existence of a quorum?

The Inspector of Elections has advised me that we have a sufficient number of shares to constitute a quorum. Therefore, the meeting is duly constituted, and we may proceed with business.

I will now describe the voting procedures. Stockholders attending the meeting via Internet webcast may vote their shares in real time until the polls are closed. The votes cast today will be counted in the final tally along with the proxies previously received. The Inspector of Elections will provide the preliminary results of voting at the end of the meeting. If anyone has a question regarding voting procedures, please submit the question by clicking on the questions box on the right side of your screen, typing your question into the box and then clicking the submit button.

The polls for each matter to be voted on in this meeting are open. Any stockholder who hasn't voted or who wishes to change his or her vote may do so by clicking the Vote My Shares tab at the top right of your screen. Stockholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote do not need to take any further action.

We have 6 proposals from the company properly before the meeting. Detailed information concerning these proposals is in the proxy statement sent or made available to Quince stockholders. At this time, I'd like to ask whether there are any questions concerning the 6 proposals.

Dirk, I see no questions pertaining to the 6 proposals. Please proceed with the meeting.

At this point, the polls are about to close. If you have not yet voted, please do so immediately.

[Voting]

It is now 11:07 a.m. Eastern Time on October 6, 2026, and the polls for each matter to be voted on at this meeting are now closed. No additional online ballots, proxies or votes and no changes or revocations will be accepted. The proxies and online ballots will be tabulated by the Inspector of Elections. At this time, based upon preliminary information provided by the Inspector of Elections, I can report that all of the following proposals were approved. Number one, the Conversion Proposal; number two, the Minimum Price Proposal; number three, the Authorized Share Proposal; and number four, the 2026 Plan Proposal; number five, the 2026 ESPP Proposal.

Because there were sufficient votes to approve proposals 1, 2 and 3, the Adjournment Proposal was not presented to stockholders. These are the preliminary results of voting. The final results will be reported on our Current Report on Form 8-K to be filed with the SEC within 4 business days after the end of this meeting.

With that, the Special Meeting of Stockholders is now adjourned. Thank you for your attendance and for your continued support of Quince Therapeutics.

This concludes the meeting. You may now disconnect.

Good afternoon, and welcome to the Quince Therapeutics Virtual KOL event. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be available on the company website following the conclusion of the event.

I will now turn the call over to Dr. Brigette Roberts, Chief Corporate Affairs Officer and Board member at Quince Therapeutics. Please go ahead, Brigette.

Thank you, Wilson. So good afternoon, everyone, and thank you for joining Quince's KOL event. For those of you who are not yet familiar with this story -- let me turn to Slide 3, please. Our company is focused on a proprietary once-daily inhaled formulation of rapamycin called LAM-001 that we're studying across 3 pulmonary conditions. The first is PH in the setting of interstitial lung disease estimated to affect about 200,000 patients between the U.S. and Europe. Based on promising Phase IIa data that Dr. Paul Yu presented at ATS this year, we have moved forward into a Phase IIb study in PH-ILD with expected data in the first quarter of 2028.

The second indication is bronchiolitis obliterans syndrome post lung transplant estimated to affect about 30,000 patients between the U.S. and Europe by the early 2030s. And this is a very severe complication post-lung transplant. Unfortunately, the leading cause of death in the majority of patients. We are currently in an investigator-sponsored study being run at UCSF by Dr. Steve Hays, and that data is expected in the first quarter of 2027.

And then finally, we're also studying the drug in a third indication, sarcoidosis-associated pulmonary hypertension estimated to affect about 60,000 patients between the U.S. and Europe. Another very severe disease, complicating about 15% of patients with underlying pulmonary sarcoidosis. And we'll be starting a Phase II study toward the end of this year, with the readout expected approximately 2 years thereafter.

So next slide. The entire premise behind this drug was -- the goal is to try to find a safe and well-tolerated means of delivering rapamycin to patients' lungs in disease settings where the mTOR pathway was known to be truly implicated. And so what we created here is a product where we are delivering 1/20 of that standard oral dose, 100 micrograms is being delivered daily via this DPI, delivered directly to the pulmonary tissues. That is 1/20 of the typical oral dose. And because of that, what we are seeing in humans is a less than 1 nanogram per mL systemic level, which is less than 1/5 to 1/15 the systemic level seen with oral delivery. And thus far, that has translated into a very benign profile in patients. And importantly, at least so far in our initial studies, efficacy as well.

Next slide, please. Next slide. Sorry. So on that prior slide, it just highlighted our upcoming time lines for data sets. We -- as mentioned, we'll have that PH-ILD data in Q1 '28. We'll be delivering this BOS data in the first quarter of 2027 and that SAPH data toward the end of 2028.

So it's now my pleasure to introduce our 3 KOLs who are going to be presenting today. So for the PH-ILD discussion, we're joined by Dr. Aaron Waxman and Dr. Paul Yu. Dr. Waxman is the Director of Pulmonary Vascular Disease Program at the Brigham and Women's Hospital, and he is Professor of Medicine at Harvard Medical School. Notably, he's been the lead PI on numerous PH clinical studies, including the Phase II SPECTRA study for sotatercept and a Phase III INCREASE study for Tyvaso, which led to the first approved agent to treat patients with PH-ILD. He holds an MD from Yale University, a PhD and anatomy and neuroscience from Albany Medical College. He completed his residency in internal medicine at Yale and his fellowship in pulmonary and critical care medicine at Yale. And he's board-certified in pulmonary disease, critical care medicine and internal medicine. Dr. Waxman was the lead PI for our Phase IIa study of LAM that was just presented at ATS, and he's the lead investigator our ongoing Phase IIb study in PH-ILD.

Turning to Dr. Paul Yu. He is the Director of Cardiovascular Research Center at the Massachusetts General Hospital and an Associate Professor of Medicine at Harvard Medical School. He holds an MD from Duke University and a PhD in Immunology from Duke. He completed his residency in internal medicine at UCSF, a clinical and research fellowship in cardiovascular disease at MGH and a post-doctoral fellowship in cardiovascular biology with Dr. Kenneth Bloch at MGH. He's board-certified in cardiovascular medicine.

Dr. Yu has made a significant impact in pulmonary hypertension through his translational work, including the study of BMP and TGF-beta signaling and cardiovascular homeostasis, repair and disease. Among his many contributions to the field, his work helped to elucidate the vascular remodeling activity of sotatercept, the first agent approved for PAH with a disease-modifying mechanism of action.

So turning third to Dr. Steve Hays, who will be leading our BOS discussion. Dr. Hays is the Medical Director of the UCSF Advanced Lung Disease and Lung Transplant program and a Professor of Medicine at UCSF. He holds an MD from the University of Kansas and completed his residency there in internal medicine. He held -- he completed his fellowship in pulmonary and critical care medicine at UCSF and in lung transplant at Stanford University. Dr. Hays is board-certified in critical care medicine and pulmonary disease. His clinical focus is the treatment of advanced lung diseases, and his research focus includes lung transplant immunology and airway remodeling, chronic lung allograft dysfunction, infectious disease and transplant digital health. Dr. Hays is the principal investigator for the ongoing investigator-sponsored Phase II study of LAM-001 in BOS patients.

So before starting, just to note, we're going to be breaking today's presentation into 2 sessions. The first will be in PH-ILD. The second one will cover BOS. And at the end of each session, we'll be opening it up for a 10- to 15-minute Q&A. And questions will be taken in the order in which they are received.

So with that, I'll turn it over to Dr. Waxman and Dr. Yu to discuss pulmonary hypertension.

Okay. Thank you, Brigette, and hello, everyone. We can go to the next slide. So I always like to start out with a general statement of the problem and really just pointing out, which probably isn't that necessary anymore, that Group III PH is something we encounter increasingly as people recognize the disease state and now that we actually have a treatment for it.

I'd like to show these -- the histopathologic slides that are on the right of this slide. Just to illustrate, for so long, we, kind of, ignored the idea of PH in the setting of Group III disease and especially in Group III ILD. But these are all from patients with Group III, except one. And if I were to challenge someone to tell me which one is the PAH patient, I think you would have a hard time doing that. The point is that vascular remodeling is a big deal when it comes to advanced lung disease and something we shouldn't have ignored for the many years that we did.

Next slide, please. This is just a summary of the prevalence and epidemiology of the disease state. I actually think that we underestimate how much is out there. I think part of the problem has been that because we had no treatments until recently, people didn't get right heart cath. They didn't get a diagnosis and were pretty much ignored. But I think there's no question that when we do have pulmonary hypertension in the setting of interstitial lung disease, we see a significant decline in the pulmonary function itself.

And we can go to the next slide. This is, again, restating some of the prevalence of the disease and showing what happens as far as mortality when we add pulmonary hypertension on to interstitial lung disease. And generally, there's about a threefold increase in mortality once patients develop pulmonary hypertension. And it's always been, kind of, siloed into ILD clinics, but more and more as people recognize that pulmonary hypertension is a significant component, it's overlapping with the pulmonary vascular clinic. But in spite of that, I think there's still very significant delays in diagnosis. And as more treatments are coming to trial, I think we'll get better at finding the disease earlier in the disease process.

You can go to the next slide. So this is just the algorithm for diagnosis of PH-ILD because it is now putting 2 bad diseases into 1 patient. I think the things we start looking for and what we're preaching out to the audience of pulmonologists, cardiologists, rheumatologists, is that as patients start to become increasingly short of breath out of proportion to any changes in their pulmonary function or maybe their CT scan, it's time to start thinking about pulmonary hypertension. There are some subtle findings on other tests like EKG. Echo is still an important screen, but Echo becomes much less reliable when patients have advanced lung disease. So we start to look for other clues in the pulmonary function testing realm. If that DLCO, the diffusing capacity, which for those not familiar, is a measure of the surface area of the lung involved in gas exchange, as that starts to fall out of proportion to the forced vital capacity, that's the time to be thinking about pulmonary hypertension. Certainly, if the patients exercise tolerance is on the decline, but one function is not, then we start thinking about it. Echo still remains the important screening tool, but really a low bar to take a patient to right heart cath is key. And I think that is starting to change as treatments become available. But this is the general algorithm.

And no, you can go on to that next slide. So this is just looking at the track record, and I think this raises a couple of important questions. I think we know endothelin receptor antagonists have now got themselves a black box warning, which I think is unfortunate because it's probably related to clinical trial design, more than any harmful effect of the drug itself. But so far to date, trials have not shown any consistent benefit and do raise the question of harm. The data right now does not support their use in PH associated with ILD. If we think about the PDE5 inhibitors, sildenafil and tadalafil. Some studies have shown improved hemodynamics, some have shown some improved quality of life or preserved exercise capacity. But really, the functional benefits to date have been inconsistent. There is always concern that these drugs can worsen gas exchange in patients, especially with COPD, but also ILD.

The prostacyclins have been studied to some limited approach. They may improve some pulmonary hemodynamics and right heart function but have also been found to worsen ventilation perfusion matching and worsen hypoxemia. The inhaled prostacyclins are -- preferentially treat those well-ventilated lung regions. Although Iloprost, which is really not used in the U.S. much anymore, has shown mixed effects on exercise tolerance and oxygenation. And the recent PERFECT trial, which is PH-COPD, also raised some concerns with the drug. But I think that, too, gets to the importance of phenotyping our patients. Overall, the data suggests uncertain benefits of PH-specific therapies in Group III with no clear improvement in mortality or clinical worsening and need for larger long-term trials.

You can go to the next slide. I think there are a number of reasons as we analyze these, and it really comes down to phenotyping these patients properly. There's been biologic mismatch such as with the STEP-IPF and simtuzumab studies that really didn't look to engage the dominant driver of progressive fibrotic disease. So the clinical readouts remained poor in spite of what seemed good clinical rationale.

There are some harmful hemodynamic physiologic aspects, as I mentioned, with the ERAs and now also with riociguat, really suggested that systemic vasodilator strategies can worsen gas exchange and worsen outcomes in fibrotic lung disease, especially when the lung is trying, it's very best to redistribute to -- from poorly ventilated regions to better ventilated and make those better perfused. There's also some late heterogeneous populations. I think what PERFECT showed us is that patients with advanced PH-COPD have a higher comorbidity burden and that can erase the benefit of a pulmonary vasodilator. And one thing we also learned with the PERFECT trial is that patients who have a diffusing capacity that is too low, which was the real fundamental finding in that study, there just may not be enough vasculature to target.

And really, endpoint dilution has also been a big problem with a lot of these clinical trials. Most of the programs were judged by broad functional decline in diffuse fibrotic disease rather than by a vascular endpoint linked to any treatment mechanism.

And you can go to the next slide. And I think one of the big things that changed with INCREASE was the use of the inhaled route. treprostinil, by giving it as an inhaled drug, was delivered to those ventilated lung units, which were preserved and likely improved vascular tone while minimizing ventilation perfusion mismatch with what we saw with systemic vasodilators. Also, importantly, the right phenotype might have been, kind of, stumbled upon, if you will. Patients had established PH-ILD, and the treatment was targeting the pulmonary vascular problem rather than assuming an antifibrotic benefit alone, although as it turned out, there was also an antifibrotic component there.

And we also designed it around the right endpoint at the time where INCREASE showed a 31-meter placebo-corrected improvement in that 6-minute walk distance, also saw improvement in NT-proBNP and also fewer clinical worsening events. All of these would be consistent with a true vascular efficacy.

Next slide, please. So I think what we've learned from treprostinil and maybe from PDE5s is that we have 1 positive trial in this area in PH-ILD, a lot of cautionary history. I think the real clinical reality is that we're balancing symptom burden, oxygenation, RV function and uncertainty. I think INCREASE was a landmark trial, but it certainly did not solve PH-ILD. I think what it taught us was that treating the label helped some patients, but not all, and that it has allowed us to continue, I think, with a better approach overall.

We can go to the next. This is just showing you the recent data from the TETON studies, which were the subsequent studies after we did INCREASE where we saw a preservation of the FVC percent in ILD, suggesting that treprostinil truly does have an antifibrotic effect. I think importantly it, like all the other antifibrotics, simply slowed progression. They did not reverse anything. I think the 1 positive here is that treprostinil not only had a little better preservation than what's out there, but also was better tolerated.

Next slide. So I think the real rationale came down to the inhaled therapy. And treatment with systemic pulmonary vasodilate, as I've already suggested, often results in worsening VQ or ventilation perfusing imbalance, and that leads to worsening oxygenation and can certainly make patients feel worse. Using an inhaled targeted therapy really optimizes ventilation perfusion and allows for drug delivery where it's needed the most and may have the best efficacy. And I think inhaled approaches really are -- have the most potential for increased efficacy and decreased systemic side effects.

Next slide, please. So now, kind of, switching gears to the mTOR pathway, and this is some of the preclinical data. On the left of this slide is a paper that was published by Goncharov and colleagues. Looking at mTORC2 drives abnormal vascular smooth muscle growth and survival in PAH. This was a study looking at pulmonary artery smooth muscle cells that were obtained from patients with idiopathic pulmonary arterial hypertension. And this -- and also complemented by a study of chronic hypoxia in a rat model. The key findings here are that both mTOR 1 and 2 promoted proliferation, and mTOR 2 additionally supported glycolytic energy production and resistance to apoptosis. The treatment effects of an inhibitor where the dual mTOR 1/2 inhibitor or here, they used PP242, induced smooth muscle cell apoptosis and reverse pulmonary vascular remodeling in rats. And this study had supported a targeting the mTOR2 pathway to address vascular remodeling. Obviously, clinical efficacy was not evaluated in this study. The minimal -- sorry, minimal -- the middle panel is a paper by Houssaini et al. entitled The Rapamycin Suppresses Abnormal Smooth Muscle Proliferation in Experimental PH. In this study, oral rapamycin at 5-milligram per kilo per day was evaluated in the monocrotaline model of pulmonary hypertension. And they looked at both prevention and treatment in this study. The key findings were that reduced pulmonary arterial pressure, improved right ventricular hypertrophy and pulmonary vascular muscularization were all noted. The mechanistic findings, there was a normalized exaggerated smooth muscle cell growth associated with suppression of mTOR1 and mTOR2 signaling. Selective mTOR1 inhibition at low concentrations, though, was not sufficient. So I think that's also suggesting a limitation of systemic delivery. The implication here was that preclinical evidence for treating established pulmonary vascular disease with effects dependent on dose and pathway inhibition were the final findings.

And the last study on this slide on the right is by Kato et al. And looked at rapamycin enhancing endothelial autophagy and attenuation of severe experimental PH. Here, they use the Sugen/hypoxia model. Rats were given rapamycin at 5-milligram per kilogram via intraperitoneal injection. This was given 3x weekly over weeks 3 to 8, which allows for establishment of pulmonary hypertension after the treatment of the model.

The key findings here were that they saw reduced right ventricular systolic pressure and improved obstructive pulmonary vascular remodeling. This suggested that increased endothelial autophagy markers. The markers have reduced proliferation and increased apoptosis, accompanied by fewer endothelial cells with DNA damage, all a result of blocking the mTOR pathway. And this study, I think, also supports endothelial autophagy as a potential therapeutic target. And benefits remain preclinical in this study.

And we can go to the next slide, please. And this is the last preclinical study that I'll show. This is a study look -- by Yoshizaki et al. looking at rapamycin attenuating fibrosis into mouse models of systemic sclerosis. Here, rapamycin was given at 1.5 milligrams per kilo per day for 28 days. In these 2 models, one a skin tightening model, and the other, a bleomycin-induced model. The reduced hypodermal thickness and skin collagen content with the mTOR inhibition was about 38% in those skin tightening model mice. And then reduced skin and lung fibrosis in the bleomycin treated mice was also noted. They also saw that a lot of the pro-fibrotic cytokines and inflammatory infiltration was suppressed, as well as fibroblast migration and proliferation. And this study really also supports mTOR inhibition as an antifibrotic strategy. But again, this is all animal data, not human.

And we can go to the next slide, please. So I think to summarize, what I've shown you so far is to ask the question, why should inhaled sirolimus. I think, one, we have a lot of preclinical data that targeting the mTOR pathway makes sense mechanistically. And it's above and beyond any vasodilating approaches. mTOR is upstream of remodeling, and sirolimus can suppress proliferative inflammatory and pro fibrotic signaling, which is all relevant to the pulmonary vascular bed and pulmonary vascular smooth muscle and endothelial dysfunction as well as fibrotic mechanisms involving fibroblast activation and migration.

I think the compartment targeting matters. I think as we've seen with pulmonary vasodilators, it makes sense to target drug into the lung at the disease site, which -- so that inhaled delivery is really designed to maximize drug delivery to epithelial, interstitial and vascular elements of the disease while reducing systemic immunosuppression in any off-target toxicity. I think the potential also of differentiation from pure vasodilators, sirolimus can -- could modify the remodeling biology so that this could provide us with a second disease-modifying drug, potentially with even less side effect potential. I think the most defensible development path as you replicate the INCREASE playbook. By targeting PH-ILD patients, it preserves the inhaled lung selectivity, and we use the same endpoints of exercise tolerance, biomarkers, hemodynamics and disease progression.

And I'll hand it over to Paul at that point.

Thanks, Aaron, for presenting the rationale for our first study. I'm going to provide top line results from an open-label Phase IIa study of dry powdered inhaled or DPI formulation of rapamycin called LAM-001. This was tested with -- in Group I PAH and Group III PH ILD patients with the goal of enrolling 10 of either patient category. All of these patients were on maximal background therapy for pulmonary arterial hypertension or PH-ILD or antifibrotic therapy for ILD at the time of enrollment, and all of them had functional Class III disease.

This was an invasive cardiopulmonary exercise testing study with the primary endpoint of peak oxygen uptake or VO2 max at 24 weeks versus baseline as well as safety and tolerability endpoints. This -- the secondary endpoints included hemodynamics based on pulmonary vascular resistance. Also, exercise function and NT-proBNP was an exploratory endpoint.

Next slide, please. There were 5 Group I PAH patients and 5 PH-ILD patients enrolled in the study. The demographics were very similar to other contemporary PAH or PH-ILD trials. All Group I PAH patients were on stable regimens of 2 or more standard of care PAH drugs at the time of enrollment and throughout the study. And importantly, all the PH-ILD patients received treprostinil therapy in some form at baseline and also antifibrotic therapy, if appropriate, and this was consistent with maximal medical therapy.

Next slide. All of our patients who completed the study were seen to improve across several functional hemodynamic and biomarker endpoints. There were 4 early terminations that were not attributable to study drug, but due to unrelated hospitalizations and complications, including acute coronary syndrome in 1 subject and a classic vaping induced lung injury in another subject. So the 6 patients completing the protocol had improvements across most, if not all of the primary and secondary endpoints shown on the table on the left and by forest plot on the right. And what we saw was a highly consistent effect in directionality for each of the endpoint ,6-minute walk distance, VO2 max, percentage change of forced vital capacity, pulmonary vascular resistance, measured both under exercise loading conditions and under supine static conditions, as well as NT-proBNP. And these improvements were seen whether we looked at the population as a whole or with PAH or PH-ILD.

You can see that there was a median increase in 6-minute walk distance of 60.1 meters. That was true among the overall population in the PH-ILD group. And there was an improvement in VO2 max of 5% predicted among the overall group, slightly higher in the PH-ILD group. There was a reduction in the PH-ILD group in the pulmonary vascular resistance of 38.6% under exercise and minus 43.7% under supine conditions and approximately a 28% drop in NT-proBNP. The forced vital capacity improved across the whole cohort, 3.5% as a whole and 1% within the PH-ILD group. So with the caveat of this being a very small cohort, the magnitude of these changes compares favorably with other modern Phase II and Phase III studies in PAH and PH-ILD. These include the INCREASE study that Aaron just told you about, as well as PAH studies such as PULSAR and STELLAR for sotatercept.

Next slide, please. Okay. Consistent with those objective endpoints, the functional classes were also seen to improve, with 100% of completers improving from their baseline functional Class III to at least functional Class II by week 24. And in fact, 2 of the patients improved to functional Class I.

Next slide. In this trial, LAM-001 was well tolerated with few Grade I or II adverse events involving either cough, productive cough or gingivitis. There were no dose interruptions or discontinuations due to drug, and there were no drug-related serious adverse events.

So to summarize, this open-label study, LAM-001, demonstrated favorable tolerability improvement or stabilization in multiple cardiopulmonary exercise capacity, hemodynamic and functional status endpoints, suggesting physiologic benefit. And these provide our rationale for the new randomized control study, this Phase IIb study of LAM-001 in PH-ILD. This will involve 2 doses of LAM-001, the dose that was tested in the open label as well as a higher dose to explore whether there's greater efficacy. And the similar endpoints, except that the primary endpoint for this Phase IIb trial will be pulmonary vascular resistance.

So in looking at the therapeutic landscape, mTOR is known to be a master integrator of metabolic state, environmental stress, and lies at, sort of, the intersection of many growth factor, cytokine and hypoxic stress signals. And this results in the ability to influence a lot of downstream processes important to PAH and ILD, including cell growth, cell fate and metabolic adaptation. So while many of the other investigational approved drugs in this space can, in theory, affect these processes, including pulmonary arterial smooth muscle cell proliferation, fibrosis and inflammatory cell recruitment, mTOR lies really in a central position in many of these pathways. And by virtue of its long-standing clinical experience as an anti-vascular proliferative drug in cardiovascular indications as well as being an established immunosuppressive agent in transplant medicine, it has really a clinically known ability to target many of these drivers of obstructive vasculopathy and fibrosis in PAH and ILD. And so I think it makes a lot of sense based on both the mechanistic understanding of how mTOR inhibition works as well as the clinical track record of this particular agent and its potency.

With that, we can open this up to questions.

Thank you, Dr. Waxman and Dr. Yu. [Operator Instructions] So our first question comes from Mazi Alimohamed at Oppenheimer.

So as we think about the BOS trial -- and maybe this is one for Dr. Hays mostly. How are we thinking about the potential for advancement as we think about a Phase III and as we think about kind of -- as we think about investors, how should we think about the Phase II readout? And how should we think about that as it determines the potential registrational path forward for a Phase III? And what endpoints do you think would be most useful here and thinking through with the FDA as we align on a Phase III?

And that's specific to the BOS study? So I think...

Yes, specific to the BOS study.

Because I think Dr. Hays is going to be talking about the BOS data, and that would probably be a better time.

Oh, I see. Oh, I didn't realize -- okay. So then I can flip that for this one as we think about PH-ILD. So then maybe I'll switch to thinking about -- as the readout. So as we think about even the BOS readout coming up, as we digest that and we think about PH-ILD moving forward. And I think the 2 things that I was thinking about for the PH-ILD is, how should we think about target engagement and safety profile in the upcoming readout? And how does that de-risk or add risk to the possible future in PH-ILD?

I guess the issue of risk, are we talking about the potential adverse effects of the drug?

Yes. And how we should think about the safety profile as it relates to PH-ILD in that landscape?

I think as we've seen it and as Brigette pointed out in the very beginning, the dosing of this drug is orders of magnitude less than what we would do normally with this drug as a systemic drug. And at least our limited experience would suggest that it's extremely well tolerated. And the benefits that we're seeing, again, in small numbers but are impressive, especially in comparison to other drugs that are out there since not much else has worked in this target space. I mean, Paul, do you want to?

Yes. I think what we want to see in our Phase IIb RCT as continued evidence of that same really promising open-label experience. There's no substitute for an RCT, as we all have learned in this area. But I think with more patient exposure, especially in that population, we'll get an even stronger sense of the tolerability. We know that the approved medications are limited in their tolerability due to the frequency of cough. And hopefully, that advantage that we think might be present with this in terms of tolerability and lack of cough, which is specific to different agents even with the inhaled modality will bear out and that we'll hopefully see a similarly low frequency of adverse events, I think, afforded by that therapeutic index of having really good tissue delivery without exposing systemically our patients to this drug.

Our next question comes from Joe Schwartz at Leerink.

Great. Thanks for hosting this great event and taking my questions. One for Dr. Waxman and one for Dr. Yu. Dr. Waxman, you ran SPECTRA, and the LAM-001 Phase IIa used a similar open-label CPET design. So -- and I guess having seen how SPECTRA carried into controlled trials, how does this signal that you're seeing here compare at the same stage and -- for sotatercept? And what part of it do you expect to hold up under blinding?

I think great question, obviously comparing 2 different or very different populations of patients. I think the important things that we saw with these patients on LAM, the improvement in the VO2 max was really impressive. And that says that exercise tolerance is clearly improving on a physiologic basis purely because of the drug because these patients did not exercise and did not go into physical therapy or really have any other training exercises. And even though those numbers seem small, I think when you do a lot of exercise physiology, and this was actually a little bit better than what we saw with SPECTRA, that percentage improvement is impressive. I also think the 6-minute walk distance goes along with that. So I think I would probably characterize it -- and again, stressing that these are very different patient populations, pretty comparable positive findings that we saw with this approach.

And then if I could just ask Dr. Yu, given we saw the ILD patients improved a functional class in some cases, really early, I was just wondering based on the mechanism here, what could explain that speed? And how does it influence your view of how the drug works, be it through inflammation, blood vessel lining or right heart unloading? What do you think drove some of the impressive early responses we saw in functional class?

That's a great question. It always has surprised us when we looked at recent trials such as with sotatercept, how quickly we're starting to see symptomatic benefit with drugs that are trying to correct the situation, we think that developed over years, if not decades. And the answer might lie in sort of what is causing a lot of that chronic disease state physiology. We think -- we now know that sotatercept has probably some very early hemodynamic effects when people look very closely using a continuous invasive telemetry devices, and it seems like that possibility could exist here. We would have to look, but there may be more rapid improvements in symptoms and functional class due to acute effects on smooth muscle cell function is what I would predict. But I couldn't rule out anti-inflammatory effects. We expect that antifibrotic effects would probably take more time for the extracellular matrix to remodel and change. But my best bet is that there's a very potent effect on smooth muscle cell biology.

Our next question comes from Sam Slutsky at LifeSci Capital.

I guess as we think about PH-ILD and the potential future treatment approaches, how do you envision combo therapy advancing here? Do you see potential synergy with LAM-001 in inhaled treprostinil standard of care? And then just any thoughts on how Roivant's mosliciguat monthly could have an impact on development paths, if any?

Great question. And I think there's no question that combination therapy in this disease state will be standard of care. Just right now, we don't have that option. And I think that last slide that Paul showed really suggests some of the potential overlap and synergy that one could expect with combination therapy. I think importantly, mosliciguat even though the data was really good in regards to 6-minute walk and time to clinical worsening in NT-proBNP. It is a pure pulmonary vasodilator. It is not an antifibrotic. I think where one could envision combination therapy working really well and also, I think, really importantly, simplifying the patients' daily need for drug is a combination of this LAM-001 with something like TPIP, if it should get approved, or even treprostinil, even though it's 4 times a day. But sotatercept and the TGF-Beta signaling pathway could also make sense, but I'm not aware of anyone who's going to study that yet.

But one could really simplify our patient's care by adding something like treprostinil plus LAM-001. The other drugs in -- on that list, I think as pure pulmonary vasodilator, it's hard to say. Combination with nerandomilast could even be synergistic there as well.

And I would just add real quick to what Aaron said is that the combination therapy is the opportunity. And yes, a once-a-day therapy based on treprostinil, like the prodrug, TPIP, could be a great match for this agent, LAM-001. But we're in an era now where we have to demonstrate efficacy on top of inhaled treprostinil. And in this open-label experience and in our randomized controlled trial, I think we're going to make every effort to maintain that as we did in the open-label. So it's very hard to understand how mosliciguat being primarily a vasodilator would compound or build efficacy on top of that. If they're in the current trial, the rate of inhaled treprostinil was a bit lower, closer to 25%, I believe. So not only is it an opportunity, but it is a new high bar that I think all these drugs will have to meet.

Thank you for your question, Sam. Our next question comes from Olivia Saunders at Cantor. Olivia, you may be on mute. Okay. I'm going to take the next question. Please hold.

All right. Thank you for your questions. To our analysts and speakers, this is all we have time for this first Q&A session. But as a reminder, there will be a second Q&A session after Dr. Hays' presentation.

I will now turn it over to Dr. Hays. Please go ahead. Dr. Hays, you may be on mute.

Yes. Thanks, Wilson. Next slide, please. So today, I'm going to talk to you about the use of LAM-001 for a syndrome that many of you may not be familiar with, but it's one of the leading causes of death after transplant, and that's known as bronchiolitis obliterans syndrome. And it is -- it falls into a disease entity which we call chronic lung allograft dysfunction, that is what we used to refer to as chronic rejection. And bronchiolitis obliterans syndrome is the most common phenotype or endotype of that syndrome. It occurs in 50% of patients by 5 years. And it is -- while rare in the first year, it may affect 40% to 80% of people in the first 5 years and is the leading cause of death by 10 years. 90% of patients either have bronchiolitis obliterans syndrome or have died from their transplant.

And ultimately, this is the final common path of a dysregulated repair and fibrosis of the small airways, the bronchioles in the lung. And you can see by the histology here, the bronchial tube, which normally might look like this, then becomes fibrotic and essentially occluded by this fiber proliferative tissue. In this more cartoon illustration, you can also demonstrate this. So you could imagine this would cause severe airflow limitation in these patients.

Next slide. So how do we define BOS? Bronchiolitis obliterans syndrome, unfortunately, it's very difficult to diagnose by pathology. So it's a clinical diagnosis of exclusion. And it is identified when someone's lung function declines, and it's persistent over the course of 3 weeks. And by a lung function decline, specifically, I mean, the forced expiratory volume in 1 second. So the amount of air somewhat can blow out in 1 second. And when that's sustained over the course of 3 months by 20%, that's considered bronchiolitis obliterans syndrome if you've ruled out other reversible causes such as infections, acute rejection and that kind of thing.

So FEV1, which is the measurement of lung function, really is the primary surveillance tool. And it's important that we're measuring this on a regular basis because oftentimes in the early stages of bronchiolitis obliterans syndrome, patients are asymptomatic. They may not pick up on it. Unfortunately, it carries a very grim prognosis. 3 to 5 year is the median survival after the diagnosis of BOS. The clinical progression is variable. There are patients that progress relatively rapidly, whereas other patients may progress a bit more slowly or a medium term.

Next slide. Now there are a lot of risk factors. We don't completely understand the pathophysiology around what causes bronchiolitis obliterans syndrome, other than that we know it's an adherent healing response to a injury to the bronchial tubes. And the injury could be an alloimmune injury such as acute rejection or an antibody-mediated, but it also may be a more blunt or activation of the innate immune system, as which occurs during infections or gastroesophageal reflux disease with micro aspiration. So there's numerous risk factors for the development of this entity.

Next slide. Currently, we don't have any accepted FDA-cleared treatments for BOS, but we have many strategies which we try to employ with limited efficacy. One of the most common is to intensify immunosuppression by increasing corticosteroids and/or cell cycle inhibitors. That has not been shown to be effective in most patients. One entity I will point out is that there is a group of patients who develop bronchiolitis obliterans syndrome that is responsive to macrolide therapy. This is an entity known as neutrophil responsive airway disease. These patients do tend to improve with macrolide therapy at least initially, and they may, at some point in the future develop progression.

Treating chronic or recurrent infections is an important mainstream treatment. And then some treatments which have been shown to have some efficacy in some patients, but unfortunately, have not undergone rigorous trials include extracorporeal photopheresis, which is an interesting therapy. Quite arduous, similar to dialysis where patients' blood is removed exposed to psoralen, which makes the blood and the white blood cells sensitive to UV light. And that induces apoptosis of leukocytes and stimulates Treg production. And then finally, retransplantation is an option for some patients who have progressive BOS and respiratory failure.

Next slide. There is an evolving experimental landscape in bronchiolitis obliterans syndrome. Most of these therapies are still in Phase I and II, including LAM-001, which I'm going to talk to you a bit more about the design. But JAK inhibitors and ROCK2 inhibitors are also being trialed currently as a treatment. And most of the foundation of those trials comes out of hematopoietic stem cell transplant-related bronchiolitis obliterans, which has some similarities, but obviously, the underlying disease and causes is different.

In terms of Phase III, there is an -- ARINA trial, which is basically, like an antioxidant therapy that's nebulized. And liposomal cyclosporine A, which is again an inhaled therapy, which did not meet the primary endpoint. And then finally, as I mentioned, extracorporeal photopheresis is considered to be rescue therapy for BOS. It is not undergone rigorous double-blind placebo-controlled trials, and therefore, is not approved by CMS Medicare. And then antifibrotics are also used as salvage therapy. And there have been -- there are large European-based Phase III studies ongoing. However, I think initially, the readout is that these may not be shown to be effective.

Next slide. So what's the rationale for mTOR inhibition in BOS? Similar to what Dr. Waxman pointed out, there are multiple different pathways of potential efficacy in lung transplant recipients. Immunomodulation may be one where there's decreased proliferation of T-cells as well as increased regulation of Tregs. These drugs are also thought to be renal protective, so they allow us to reduce the amount of calcineurin inhibitor therapy to salvage kidney function. There are antiviral effects of mTOR inhibitors, including suppression of particularly herpes virus, namely CMV and antifibrotic effects, which I think we are capitalizing with the treatment in bronchiolitis obliterans syndrome where there's decreased fibroblast activation and decrease in extracellular matrix deposition.

But finally, anti-oncogenic effects. This is another use case in lung transplantation in patients who have unrelenting skin cancer. We use mTOR inhibitors to decrease the calcineurin inhibitor use, which is the most potent pro-cancer drug. And then there are cardioprotective effects in heart transplantation. For example mTORs are considered essential therapy for graft vasculopathy, which is the form of chronic rejection in heart transplant.

Next slide. So there are some both animal studies and some sort of preclinical studies that I'll review briefly, but there's really been no significant randomized double-blind placebo-controlled trial in lung transplantation with oral mTOR inhibitors. There is a biologic foundation, though, similar to in pulmonary hypertension. There have been some tracheal transplant models in mice. For example, this study exposed -- tracheal transplant is considered to be a sort of biologic correlate of bronchiolitis obliterans syndrome, but clearly, there's some differences in that, this occurs relatively rapidly after transplantation as opposed to in the actual human transplant. But exposure to rapamycin and mice that have had the tracheal transplant show 2 interesting findings: one, there is a marked reduction in the fibroblastic proliferation in the trachea in those patients who are treated with rapamycin comparable to those rats who had an isotransplant. The other finding that was interesting was that there was an upregulation by 28 days of both Treg and Breg and anti-inflammatory cytokines. So rapamycin and the tracheal transplant model appears to not only reduce the amount of fibroblastic proliferation in the airway, but also upregulate both Treg and Breg.

Next slide. In the humans, there is a couple -- are several case series, retrospective studies, these both coming out of Spain, this -- 1 of the graph on the left shows 57 patients who were treated with everolimus after the diagnosis of bronchiolitis obliterans syndrome. And you can see that the rate of decline pre-everolimus significantly reduced in the post-everolimus group. And the challenge of looking at these data, there is no control group. So there is, kind of, a natural sort of decrease in the rate of decline in bronchiolitis obliterans syndrome, but it's still a very impressive flattening of this curve. The challenge in both of these trials, the second trial being in rapamycin, a much smaller trial of 11 patients, which also showed a pretty dramatic decrease in the rate of decline of FEV1, the main challenge of both these trials is they had a very high rate of dropout, meaning about 30% to 35% of patients who were treated with oral everolimus and oral rapamycin ended up stopping it a median of 12 months after initiation due to side effects.

Next slide. And this has really been one of the big limitations in mTOR inhibitors, at least in lung transplantation, has been the incidence of side effects. This is why the inhaled preparation of sirolimus is so exciting to our field. But as we've already heard, oral ulcerations or mucositis, hyperlipidemia, specifically hypertriglyceridemia, some GI side effects and hematologic side effects such as leukopenia and thrombocytopenia are relatively common. The other side effect we oftentimes see in our patients is edema, peripheral edema lymphedema occurring in up to 12% of patients.

Next slide. So there are many potential advantages of using inhaled sirolimus in lung, similar to Dr. Waxman had described, they're really delivering the drug to the site of disease activity, which is the small airways of the lungs, and it provides this potent immunosuppressive and antifibrotic and antiproliferative effects by achieving these high concentrations in the lung without having high concentrations in the serum, which are associated with most of the side effects. It's easy to use as a once-a-day dry powder inhaler. And as I mentioned, it reduces the systemic exposure versus oral therapy, which we anticipate would lead to fewer systemic side effects, such as bone marrow suppression, nephrotoxicity, which includes proteinuria and the edema and GI side effects.

Next slide. So we've designed and are fully enrolled in a Phase II randomized placebo-controlled trial looking at 100 micrograms of LAM-001 versus placebo in a group of patients who have been diagnosed with bronchiolitis obliterans syndrome. The trial extends for 48 weeks, and the patients are able to transition over into an open label extension. We're including all-adult patients over the age of 18, who have newly diagnosed bronchiolitis obliterans syndrome, which is study defined as a persistent drop in lung function from baseline of greater than 15% to 50%.

The primary endpoint at 48 weeks is a change in the percent of FEV1 across the 48 weeks of the trial. We have numerous secondary endpoints, which include the absolute change in FEV1 at 48 weeks, as well as a change in the rate of progression in FEV1 at 48 weeks versus pre-enrollment. Progression-free survival, Level 1, which is basically a 10% drop in FEV1 after enrollment, is considered progression. And we have exploratory endpoints, which include some patient-reported outcomes and 6-minute walk distance, in addition to some biologic studies looking at UCSF CLAD gene signature profile as well as activation of the mTOR pathway. As I mentioned, the study is currently fully enrolled, and we're anticipating the final 48-week data collection in early December with readout of top line in the first quarter of 2027.

Next slide. So what we're hoping to find in this Phase II trial is that the safety and tolerability are equivalent to placebo. I think if we see that there's a 5% to 10% difference between the drug and placebo arms in the change in FEV1 over 48 weeks, that would be clinically meaningful, as well as a decrease in the slope of decline and a trend toward progression-free survival.

Next slide. And where do I see this following into the BOS therapeutic landscape? Well, as I mentioned at the very beginning, we currently have 0 FDA-cleared treatments for bronchiolitis obliterans syndrome in transplant. In fact, we've had no randomized placebo-controlled trials that have shown a therapy to be significantly beneficial. So I think this would become the standard of care for patients who have bronchiolitis obliterans syndrome in lung transplantation if this passes through our Phase II with significant top line and we get through Phase III.

And I think that's the last slide. I'm happy to open it up to questions.

Thank you, Dr. Hays. [Operator Instructions] So our first question comes from Olivia Saunders at Cantor.

Hopefully, you guys can hear me okay now. Dr. Hays, given that FEV1 trajectories in BOS patients can be pretty variable, what were the main things that you actually look for when you were selecting patients just to make sure that you enrolled patients with truly progressive disease? And then I've also got a quick follow-up on drug delivery.

Sure. Yes, this is tricky. I mean, I think that inherent in this disease and I think most diseases, there's quite a bit of heterogeneity in terms of disease progression. And because we are using this physiologic metric, we did want to make sure that we were enrolling patients that had evidence of new BOS with progression. And so we have a screening protocol at our institution where we're looking at every FEV1 that's generated by patients. And when patients enter into this point where they've had more than a 10% drop in FEV1, they appear on to our watchlist, so we can follow them more closely over the ensuing months. And when the patients do drop into the inclusion criteria, which means a persistent drop in FEV1 of greater than 15%, then we're able to screen those patients. So how we're ensuring that we're really identifying patients who we think would benefit are, one, we're really trying to identify those patients who have a new decline, so new BOS. We think that enrolling patients early gives us the best chance of making a meaningful impact. And then we're making sure that they have a sustained drop. So it's not a one-off drop, but they have to have repeated measurements that meet criteria that are at least 30 days apart. And so by the time they come in for screening and enrollment, they've had at least 3 FEV1 measurements that meet criteria. And that's the method that we've used. I think that there are other trial designs which include looking at the rate of decline as a potential inclusion criteria. And I think that's something that we may consider for larger trials. But for a single center trial where we have pretty good control over the patients that we're enrolling, our methods worked really well.

Okay. Very helpful. And then, yes, on the drug delivery question, BOS, obviously, a small airway disease. So what's your view on whether inhaled LAM-001 is actually getting into the affected bronchioles? And could that get more difficult as the disease progresses and the obstruction potentially gets worse?

Great question. I think that the preclinical data shows that the -- with both the -- and again, maybe Keith Fandrick would like to jump in on this. But I know that the preclinical data suggests that the design of the drug was that it would make it all the way to the alveolar spaces of the lung. I recognize that as the small airways do start to become more narrow, that might theoretically decrease the deposition of the drug in those airways. But again, I think we don't anticipate it necessarily being blocked from the small airways of the lung even in those patients who have some disruption, but it's certainly something that we'll learn over time. Keith, do you want to dive in any more detail about that?

Yes, I think you said it very well. Our drug has been well formulated in a classic DPI configuration or particle size, which is actually measured with an impacter, which kind of [indiscernible] the lung, clearly shows that the drug is deposited effectively everywhere where the lung will be aerated. And I think at the end of the day, it's going to be our efficacy study from these trials that are going to eventually gets the right place at the right amounts to perform and as expected.

Our next question comes from Gavin Clark-Gartner at Evercore.

Thanks for all the insights here. This is super helpful. So the 5 of 19 blinded FEV1 decliners is a really interesting data point here, especially since the study is on top of triplet background therapy and given what happened in Zambon's previous studies. So maybe you could help us contextualize that data point? And I guess more specifically, based on the patient selection criteria that you just walked through, how are you expecting the placebo arm to perform on FEV1 in this study?

Thanks, Gavin. So great question. I think you're referring to some safety data, looking at just ensuring that we had a sort of an expected number of patients who've had what we call progression. Progression was defined in the trial as a drop in FEV1 of 10% from the enrollment baseline. And in our pre-study planning, we looked at a cohort of patients with bronchiolitis obliterans syndrome over the course of 3 years at UCSF. And we showed that about 50% of patients have a 10% decline or what we would define as progression over the ensuing year following the diagnosis of bronchiolitis obliterans syndrome, and that kind of helped us power our study and also understand what to expect. And so I guess my -- we weren't surprised that we had a certain number of patients develop that endpoint of progression because it was -- it fell in line with what we were estimating from our preclinical data from our cohort.

That's helpful. And this may be a slightly more technical question, but for the patients that did have that over 10% FEV1 decline, was this based on multiple visits? Or was it just at a single point in time they had that drop?

Yes, good question. So for both enrollment as well as the diagnosis of the progression endpoint, they had to have repeated measures that met the criteria separated by 30 days. And so -- or [indiscernible] provided greater than 3 weeks, I'm sorry. And so typically, when patients have what we diagnose as progression, we bring them back at 3 weeks to document that they have continued progression. Then those patients are obviously offered other alternative treatments such as extracorporeal photopheresis that is also directed by the clinical team.

Great. And sorry, just last quick question. Have you said anything about the discontinuations or drop-off rates throughout the course of the study?

Have I done what?

Have you disclosed anything about the discontinuations or dropout rates on a blinded basis over the course of the study?

No, we have not published that. I think our -- I would say, in general, our data aligns pretty well with Dr. Waxman's and that we've had very high tolerability. Of course, we're still very -- we're still completely blinded with very limited dropout due to drug intolerance.

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

I'm stepping in for my colleague, Seema Sheoran. I guess, Dr. Hays, the magnitude of improvement in decline that you mentioned, how clinically relevant is that? It seems like with the heterogeneity of decline, that 5% to 10%, how meaningful is the 5% to 10% improvement in the rate of decline to your patients?

Good question. I think that it's sometimes easier to put this -- well, there's, I guess, a couple of answers to that question. One is that from a physiologic perspective, many -- I mean, many of these patients start off with an FEV1 of, say, 2 liters. So this is essentially a difference of 200 milliliters, which again, is well outside the expected change you'd see with day-to-day variability. I mean, it's considered a clinically significant difference. But the other factor is that it is this kind of 10% change that predicts whether someone is going to have a really poor prognosis after the diagnosis of bronchiolitis obliterans. By that, I mean, in population studies looking -- or registry studies looking at the progression of bronchiolitis obliterans syndrome, those patients that have had a 10% decline in FEV1 after diagnosis have a much poorer prognosis overall than those patients who did not meet that progression threshold. And so that's another reason why I think that from a clinical perspective that is meaningful.

Our next question comes from Mazi Alimohamed at Oppenheimer.

So I think one, again, around the heterogeneity of the disease. So with that, do you expect LAM-001 to only work in obstructive BOS? And then how early in the disease course does it need to be given to matter? And then maybe as a follow-up to that, as we think about steroid use, is this something that you would use kind of alongside existing systemic immunosuppression or something you think could be swapped in? And with that, I'm also kind of thinking with the calcineurin inhibitor and mTOR interactions, how could that complicate the use of concurrent therapies at the same time?

Okay. I should start writing these questions down. Okay. So I think the first question was with the heterogeneity, how important do I think that it's going to be to enroll these patients early. And I think we don't know for sure. I mean, again, this is a fairly small study. I mean, I think it's going to be a meaningful trial, but it's a fairly small trial. I think based on just prior experiences at other studies and even looking at potentially some subgroup or post hoc-analysis on some of the earlier trials, it does suggest that patients who are started on treatment and diagnosed and start on treatment early in the disease process have a much better likelihood of having a response. So we believe that. I think that as we gain more experience, and I'm sure as we develop our -- the Phase III and start enrolling in the Phase III trial, there is going to be the potential for increased -- some increased heterogeneity in the enrollment. And so we'll probably have some experience in how patients do who are enrolled later in their BOS journey. I certainly hope that this therapy would be available and be meaning -- make a meaningful difference in that group, too.

In terms of the other question, I do, at least at the time -- at the current time, we consider that this treatment would be an add-on treatment to the standard immunosuppression therapy that patients are on. In fact, it's a requirement of the trial that patients are on 3 drug immunosuppression prior to enrollment because we didn't want to introduce another potential variable that might impact outcomes. I think that, that will be the way we design the Phase III trial as well, I presume. Though I do think in the future, I could see this potentially replacing or allowing us to limit other maybe noneffective immunosuppression in the setting of BOS because of its both immunosuppressed -- local immunosuppressive effects as well as these antiproliferative effects.

Got it. And then I guess maybe for on the first question. So because of FEV1, what I guess I was getting at, is it something you think will only work in patients like obstructive [ BOS? ] Or can it be generalized?

I missed that part of your question. I actually don't have any reason to think it wouldn't necessarily be effective in the RAS phenotype or endotype. The restrictive allograft syndrome, which is a bit of -- it's a much more of a fibrotic disease that does impact both more the alveolar space and the sub-plural space. I think for the purposes of a clinical trial, I think we want to try to make the group as, I guess, homogeneous as possible. So I think as we move forward, it may be a different subgroup that we look at. Because I don't see a reason why it wouldn't necessarily be effective in that group, given it's kind of antifibrotic, antiproliferative effects which ultimately is some of the pathology around RAS.

Got it. And then last 1 for us is I think just the commercialization aspect of this, as we think about the patients, like how concentrated is the care of these patients across sites in the U.S.? And how do you think about that as you think about if this were to be approved in the future about how fast the uptick would be amongst the providers and transplant surgeons who are caring for these patients?

Yes. I mean, I think that -- I think similar to a lot of these orphan diseases, including PH-ILD, these patients do tend to be cared for by very specialized transplant centers. So there's a little more than 50 in the United States. And I think that in the end, does increase and speed the uptake of these treatments for these patients because it's a very focused and kind of well versed group of physicians who are specialized physicians who are taking care of these patients. So I think the uptake and the -- this distribution will be pretty rapid if these Phase III trials are positive.

Our next question comes from Sam Slutsky at LifeSci Capital.

Two for me. On concomitant medications, are they able to be changed after enrollment in the ongoing study in a way that could alter FEV1, independent of LAM-001? So that's the first question.

And then second, you touched on it a bit, but how is baseline FEV1 defined? Is it a single study visit, kind of an average of repeated measurements, et cetera? And how much variability could we expect between kind of a screening and baseline measurement?

Yes. So in terms of the con meds, we do not -- so patients have to -- they're required to be on 3 drug immunosuppression in enrollment. After enrollment, their medications can be adjusted by the clinical team. However, the -- essentially, the patients are not -- they're not as prescribed or given other types of, say, experimental treatments unless they have the defined progression, which is an FEV1 decline of 10% or greater. And that, again, is something that's a bit easier to do in an IIT that's at the center. We have a very engaged lung transplant pulmonologists who are in our group who then -- who understand the trial and the mechanisms of the trial. So we don't think that there's going to be any medications that interact with the primary outcomes of the trial. Just so you know, the 1 treatment that I think could potentially have the most impact would be the extracorporeal photopheresis, which again, in some patients, does seem to allow for some stabilization. And again, that treatment is not rolled out to patients unless they've hit the endpoint of progression of 10% decline.

In terms of the baseline FEV1, that's a standard calculation of the average of the 2 highest FEV1s after lung transplantation that are separated by greater than 3 weeks. And that's what's considered like a standard post-transplant baseline FEV1. I don't know if that's the baseline that you're speaking of or are you speaking about the enrollment baseline?

Enrollment baseline.

Okay, got it. So the enrollment baseline is the baseline at the enrollment visit. It's not the average of multiple measurements. And ultimately, we can expect anywhere from like a 1% to 3% variability in FEV1. Again, which is why we have the bar of a significant progression at 10%.

Thank you for your question, Sam. Our next question comes from Joe Schwartz at Leerink.

So I guess, Dr. Hays, how much weight do you put on the registry data showing better survival on sirolimus containing regimens? Obviously, those are retrospective analyses. But just knowing what you know about the patients that are captured in those different data sets relative to those that you're enrolling now, how much weight do you put on those studies?

Yes. Yes. Good question. I mean, I think there's been a couple of registry studies that have shown if we're looking at all the different immunosuppressive regimens, patients who are on an mTOR-based immunosuppressive regimen tend to have the best long-term outcomes. And I think that in terms of how much weight they put on those, I mean, they're more like hypothesis generating. I mean, I think they should definitely make everyone interested in knowing more about why this signal might be there. I would say that there are some challenges in over interpreting that data because certainly, patients do have certain kinds of medical complications such as cardiac issues or lipid issues or things like that may not do well in mTOR, and so there may be a patient selection bias there. But having been in this field for 25 years, and our center has been fairly avid users of mTOR inhibitors for specific reasons, which include renal sparing, cancer sparing and graft sparing causes, I do think that there may be something to that registry data, and that is why we're diving into this.

Makes sense. And then given the trial includes bronchoscopy with BAL, I was just wondering, what are you hoping to see there, what you'll be looking for there?

Yes, a couple of exploratory things. UCSF has developed a kind of an epithelial cell gene profile, which has been validated to be -- to demonstrate patients who are high risk for progression of CLAD. And so we're looking at that gene profile and seeing whether or not that is valid in this trial and/or if there's any other signals that could be interesting using that brushing sample. And then we're also in the BAL sample, we're looking for evidence that there is inhibition of the mTOR pathway as well as looking at sirolimus levels in the alveolar space. So that's not really been measured or identified yet in clinical trials is how -- what concentration of sirolimus is in the alveolar space at 3 months post dosing. So those are kind of some of the general scientific questions that we're answering.

Thank you for your questions, Joe. Our next question comes from Jon Wolleben at Citizens.

Thanks for the session today and taking the questions. Wondering if you could recall how long it took to enroll the trial and the primary reasons for folks screening out of it? And then looking ahead, what would you expect or hope from FDA in terms of a regulatory endpoint here? It seems like given the severity of disease, that outcomes may not take too long to accrue. But what would you hope and what do you expect from FDA in terms of a registrational endpoint?

Yes. Good question. So in terms of the speed of enrollment, we -- we estimated, just based on our patient population, our experience enrolling in [ BOSTON ], we would be able to enroll about 1 patient per month. And we were pretty close to that target with this particular trial, again, enrolling 20 patients over the course of, I think, around maybe 30 months. The -- there were a couple of reasons for the delay that were more logistical than based on the design of the trial or the patient population. In terms of those patients that screen out, we do have -- I would say that for patients who underwent screening, I don't have this number exact, but my estimation is around 3/4 of patients passed the screen to enrollment by 1/4 that screened out ended up usually not meeting criteria from an FEV1 perspective. Their FEV1 either didn't continue to progress or didn't make the screening -- the enrollment criteria. There are a few other esoteric reasons, but that was the main cause or the main reason patients screened out.

In terms of like the -- what I hope for -- hope to see, I'm not sure -- I mean, I think that this is still something that's being developed within the lung transplant community or what of the most meaningful outcome metrics. I would say that we are kind of right on target with these current outcome metrics that we're looking at, which are primarily lung function-based, so either a stabilization or a decrease in the progression of lung function decline in the patients who are treated. I think it's going to be probably the primary endpoint that the FDA is going to be looking at. Obviously, other endpoints, which include patient-reported outcomes and possibly an outcome metric related to functional status could be something that we would want to incorporate into the phase -- what we have incorporated in the Phase II that incorporated into the Phase III. But I think the primary outcome metric is going to be physiologic and related to FEV1 decline.

And 1 more, if I may. What would an untreated annual FEV1 decline look like in this enrolled population?

Yes, good question. I think that -- again, we know that 50% of patients -- in our hands, 50% of patients have a 10% decline, which is again, a clinically significant decline over the first year. If we put that into real numbers, that would be an average of around 200 to 300 milliliters of lung function over the course of the year. And so again, between 0.25 and 0.5 liter of loss of lung function.

Thank you for your questions, Jon. Our final question comes from Albert Lowe at Craig-Hallum.

I was wondering -- going around stabilization, do you know if any of the patients in those studies of oral mTOR inhibitors have shown any improvement in FEV1? And how often have you observed patients improve in FEV1? And how surprising would this be in this ongoing study?

Good question. I can't say that I have that in these larger kind of more retrospective studies, I don't have like the individual patient FEV1 data to know if there were patients in those groups that had improvement of their FEV1. I think that -- I think most lung cancer pulmonologists may be surprised if there were an increase in FEV1 in the trial, just because I think in most diseases that involve fibrosis, which this disease does, we haven't seen an agent that has been able to reverse fibrosis, per se. I think there may be other potential -- just, like, I think we can say in pulmonary hypertension, there may be some remodeling that occurs that may be directly related to mTOR inhibitors. That is certainly -- there's certainly potential for that. So I'm, of course, hoping the patients have an improvement in lung function, but it's not something that we initially expected or would expect based on the design of the trial. So I think we're going to, I think, know more, hopefully in the next few months or whether that is at all feasible. I would say that -- the other thing I would note is that when we look at the -- when we look at the pathology of patients with bronchiolitis obliterans, it isn't -- I guess what I would say is that there's a potential that there may be some not just fibrosis, but inflammation edema swelling of the airways that are contributing to the lung function decline. And certainly, that has the potential to get better with certain types of treatment. So it's not completely out of the question.

Thank you, Albert, and to all of our analysts for your questions. I will now turn the call over to Brigette for closing remarks.

Yes. So I just wanted to thank everybody for joining today and spending the past 1.5 hours with us. And importantly, I want to thank our KOLs for all the time they've dedicated on this call and frankly, throughout the year. It's really, really helping to move LAM-001 forward.

Thanks, Wilson.

Hello, and welcome to the 2026 Quince Therapeutics Annual Meeting of Stockholders. Please note that this meeting is being recorded, and a replay will be posted to the Investor Relations section of Quince's website.

It is my pleasure to now turn the over to Dirk Thye, the company's Chief Executive Officer, Chief Medical Officer, a member of the Board of Directors and Chair of the meeting. Dirk, the floor is yours.

Thank you, and good morning. It's a pleasure to welcome you to Quince Annual Meeting of Stockholders. Thank you for joining us today live via our Internet webcast. It is 10:00 a.m. Pacific and time to call to order this Annual Meeting of Stockholders of Quince Therapeutics.

I'd like to introduce several members of our management team who are joining me on this virtual meeting today. Brigette Roberts, MD, Chief Corporate Affairs Officer of Quince and former CEO of Orphai Therapeutics; Brendan Hannah, our Chief Operating Officer, Chief Business Officer, Chief Compliance Officer and Secretary, who is also acting as Secretary of the meeting today; and Sandy Leng, our Controller, Executive Director of Finance and Accounting.

We also have members of our Board of Directors present today. Also with us today is Dan Harris, representing BDO of USA, our independent registered public accountants, and he is available to respond to appropriate questions. Lastly, also present is Dan Lyman, representing Dorsey & Whitney, our outside corporate counsel; and Jordan Hirsch, representing Equiniti Transfer Agent Services, who is acting as our Inspector of Elections.

We will now conduct the formal part of the meeting, which includes voting on the proposals to be considered. The polls are now open. If you have not already voted, you may do so by clicking on the Vote My Shares tab at the top-right of the screen. Voting procedures will be addressed in greater detail shortly. The annual meeting is being held in accordance with the company's bylaws and Delaware law.

The items on the agenda for the formal meeting are: number one, elect the Board of Directors Class I nominee, June Bray for director to serve until the 2029 Annual Meeting of Stockholders and until her successor is duly elected and qualified; number two, approved amendment to our ended and restated certificate of incorporation to effect a reverse stock split of our outstanding shares of common stock by a ratio ranging from 1:10 to 1:100 with the exact ratio to be set within that range at the discretion of our Board of Directors without further approval or authorization of our stockholders.

Number three, ratify the selection of BDO USA as the independent registered public accounting firm of the company for the fiscal year ending December 31, 2026. Number four, on an advisory basis, the compensation of the company's named executive officers as disclosed in the proxy statement. Number five, approve the adjournment or postponement of the annual meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in favor of the foregoing proposals. And number six, transact any other business as may properly come before the annual meeting or any adjournment or postponement at the annual meeting. After we vote on these matters, an announcement will be made regarding the preliminary results, and the formal meeting will be adjourned.

Will the Secretary please report at this time with respect to the mailing of the notice of the meeting?

I approve by affidavit certifying that notice of this meeting was duly given and that the notice of Annual Meeting of Stockholders was mailed on or about April 30, 2026, to all stockholders of record at the close of business on April 23, 2026, the record date for the meeting.

Thank you. We have appointed Jordan Hirsch, a representative of Equiniti Transfer Agent Services, to act as Inspector of Elections for this annual meeting. The Inspector of Elections has signed an oath of office, which will be filed with the minutes of this meeting. Will the Secretary please report at this time with respect to the existence of a quorum?

The Inspector of Elections has advised me that we have a sufficient number of shares to constitute a quorum. Therefore, the meeting is duly constituted, and we may proceed with business.

Okay. Thank you. I will now describe the voting procedures. Stockholders attending the meeting via Internet webcast may vote their shares in real time until the polls are closed. The votes cast today will be counted in the final tally along with the proxies previously received. Inspector of Elections will provide the preliminary results of voting at the end of the meeting.

If anyone has a question regarding voting procedures, please submit the question by clicking on the questions box at the right side of your screen, typing your question into the text box and then clicking the submit button. The polls for each matter to be voted on at this meeting are open. Any stockholder who hasn't voted or wishes to change his or her vote may do so by clicking the Vote My Shares tab at the top right of your screen. Stockholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote do not need to take any further action.

Okay. The proposals. We have 5 proposals from the company properly before the meeting. Detailed information concerning these proposals in the proxy is in the proxy statement sent or made available to Quince stockholders. At this time, I'd like to ask whether there are any questions concerning those 5 proposals.

Dirk, I see no questions pertaining to the 5 proposals, please proceed with the meeting.

Okay. At this point, the polls are about to close. If you have not yet voted, please do so immediately.

[Voting]

It is now 10:06 on June 11, 2026, and the polls for each matter to be voted on at this meeting are now closed. No additional online ballots, proxies or votes and no changes or revocations will be accepted. The proxies and online ballots will be tabulated by the Inspector of Elections. At this time, based on preliminary information provided by the Inspector of Elections, I can report that June Bray has been elected as Class I director to serve until our 2029 Annual Meeting of Stockholders and until her successor is duly elected and qualified.

The amendment to Quince's amended and restated certificate of incorporation to effect a reverse stock split of all of our outstanding shares of common by a ratio ranging from 1 for 1:10 to 1:100 with the exact ratio to be set within that range at the discretion of our Board of Directors without further approval or authorization of our stockholders has been approved.

The selection of BDO USA as our independent auditor for the fiscal year ending December 31, 2026, has been ratified. Approve on an advisory basis, the compensation of the company's named executive officers as disclosed in the proxy statement; approve the adjournment or postponement of the annual meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in favor of the foregoing proposals and transact any other business as may properly come before the annual meeting or any adjournment or postponement of the annual meeting.

These are the results -- these are the preliminary results of voting. The final results will be reported on our current report on Form 8-K to be filed with the SEC within 4 business days after the end of this meeting. And with that, the Annual Meeting of the Stockholders is adjourned. Thank you for your attendance and your continued support of Quince Therapeutics.

Thank you for your participation in today's meeting. This concludes the program. You may now disconnect.

Good morning, and welcome to the acquisition of OrphAI Therapeutics by Quince Therapeutics Webcast and Conference Call. [Operator Instructions] Please be advised that this audio presentation is being recorded. I would now like to turn the call over to Corey Davis of LifeSci Advisors. Please proceed.

Good morning, everyone, and thank you for joining us. Two press releases went out this morning, which are also available on our website. A replay of this webcast, along with the presentation materials will also be available on the company's website following today's call. Before we begin, I'd like to remind everyone that statements made during this conference call and the accompanying presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include, but are not limited to, statements regarding the anticipated benefits of the transaction and financing, the expected closing of the private placement and the anticipated use of proceeds there from, company's strategic plans, anticipated clinical development activities, ongoing clinical trials, planned regulatory interactions, expected milestones and data readouts, expected IP protections, projected cash runway and the potential therapeutic and commercial opportunity of the company's pipeline.

These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Additional information concerning these risks and uncertainties are contained in the company's filings with the Securities and Exchange Commission, including our press releases issued this morning and our Form 8-K filed with the SEC announcing the transaction and our most recent quarterly report on Form 10-Q which are available at sec.gov or on our website.

The company undertakes no obligation to update any forward-looking statements, except as required by law. This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the matters subject to stockholder vote in connection with the transaction, the company will file a proxy statement with the SEC. Investors and security holders are urged to read the proxy statement and other relevant materials filed with the SEC carefully and in their entirety when they become available because they will contain important information about the transactions and the related stockholder vote matters.

Investors and security holders may obtain free copies of these documents when available and other documents filed with the SEC by the company through sec.gov or on our website. Free copies of these documents, when available, may be obtained from the company directly if requested. During today's call, we will review the rationale for the transaction, provide an overview of our pipeline and development strategy, discuss the concurrent financing and outline expected upcoming milestones and operational priorities.

Joining me on the call today are Dirk Thye, who will discuss the details of the transaction; Brigette Roberts, the company's Chief Corporate Affairs Officer and the former CEO of OrphAI, who will explain the strategic rationale and vision for the company and provide an overview of the pipeline, clinical development plans and anticipated milestones; and Dr. Paul Yu, Director of the Cardiovascular Research Center at Massachusetts General Hospital and Associate Professor of Medicine at Harvard Medical School, where he holds the Charles and Elizabeth Sanders Endowed Chair, who will review the recent Phase IIa data with LAM-001 presented at the ATS meeting.

And with that, I'll turn the call over to Dirk, CEO of Quince Therapeutics.

Greetings, Quince stockholders, and thank you for joining the call to announce the acquisition of OrphAI. After an exhaustive search of the competitive landscape for acquisitions to maximize stockholder value and with the help of LifeSci Capital as our financial adviser, we selected OrphAI. We believe the acquisition of OrphAI represents the best possible outcome for our stockholders, and you're about to hear about the scientific programs and pipeline we acquired and our strategic plan for the future.

This acquisition was structured as a stock-for-stock merger, whereby all of OrphAI's outstanding equity interests were exchanged for a combination of shares of Quince's common stock and shares of a newly created Series C nonvoting convertible preferred stock. The acquisition closed on May 18, 2026. With the acquisition of OrphAI, Quince entered into a definitive agreement for the sale of Series C nonvoting convertible preferred stock and warrants in a private placement to a group of accredited investors from leading health care-focused institutional investors.

The private placement is expected to result in upfront gross proceeds to Quince of approximately $115 million before deducting placement agent and other offering expenses and up to an additional approximately $72 million in gross proceeds upon exercise of accompanying warrants. The private placement is expected to close on May 21, 2026. Subject to approval of Quince's pre-acquisition stockholders, each share of Series C nonvoting convertible preferred stock will automatically convert into 1,000 shares of common stock, subject to certain beneficial ownership limitations set by each holder.

No stockholder approval was or will be required for the closing of the transactions under applicable law or NASDAQ listing standards. However, stockholder approval for, among other things, the conversion of the Series C nonvoting convertible preferred stock into common stock will be sought during a meeting of stockholders expected to be held later this year. As a result of the acquisition, Quince's pre-acquisition equity holders will own in the aggregate approximately 17.8% and OrphAI's pre-acquisition equity holders will own in the aggregate approximately 82.2% of the post-acquisition company before the private placement transaction. And approximately 6.9% and 31.9%, respectively, after the private placement transaction.

And the private placement investors will own in the aggregate approximately 61.2% of the post-acquisition company. And in each case, calculated on a fully diluted as converted to common basis and without giving effect to any beneficial ownership limitations using the treasury stock method and based on the implied equity values of Quince and OrphAI.

Quince expects to use the proceeds from the private placement primarily to advance LAM-001, including initiation of a Phase IIb trial in pulmonary hypertension associated with interstitial lung disease with data anticipated in 2028, and delivery of Phase II data in bronchiolitis obliterans syndrome post lung transplant in the first quarter of 2027. And Phase II data in sarcoidosis associated with pulmonary hypertension in late 2028. We note that this description of the transaction is not complete. We refer our stockholders to our filings with the SEC, which incorporate by reference the material agreements in connection with the acquisition and the private placement.

With that, I will turn the call over to Brigette to provide the strategic rationale and vision for the company, an overview of the pipeline, clinical development plans and anticipated milestones.

Thank you, Dirk. So turning to Slide 5. We believe this acquisition offers a unique opportunity to build a leading clinical stage biotechnology company centered around LAM-001, a novel [ once-off ], once-daily inhaled formulation of rapamycin with potential applicability across multiple pulmonary indications. The first indication is pulmonary hypertension associated with interstitial lung disease or PH-ILD, which affects approximately 200,000 patients across the U.S. and Europe. Approved therapies in PH-ILD are largely focused on vasodilation rather than addressing the underlying disease biology.

LAM-001 is designed to target and help reverse the pulmonary arterial smooth muscle cell hyperproliferation, inflammation and fibrotic vascular remodeling underlying the disease state. Just yesterday, at the American Thoracic Society, OrphAI presented encouraging Phase IIa data of LAM-001 in pulmonary hypertension, demonstrating clinically meaningful improvements when added to standard of care, thus supporting our plans to initiate a Phase IIb trial in the middle of 2026.

The second indication is bronchiolitis obliterans syndrome or BOS, which is a severe complication of and the leading cause of death post lung transplantation, which is estimated to affect approximately 28,000 patients across the U.S. and Europe. Median survival is only 2.5 years, and there are no approved medications for this condition today. A placebo-controlled investigator-sponsored Phase II study in BOS is ongoing with top line data anticipated in the first quarter of 2027.

And finally, we intend to advance the program into sarcoidosis associated pulmonary hypertension or SAPH, which affects an estimated 60,000 patients across the U.S. and Europe and which similar to BOS, currently has no approved therapies. The planned Phase II study is expected to initiate late in 2026 and is supported by prior proof-of-concept clinical efficacy data generated in pulmonary hypertension patients.

Importantly, we believe the LAM-001 program benefits from our ability to leverage the highly efficient 505(b)(2) regulatory pathway. Additionally, LAM-001 offers a strong intellectual property estate with expected protection extending into the mid-2040s. The program has received orphan drug designation in both the U.S. and Europe across multiple indications, and we have received supportive regulatory feedback through prior pre-IND and end of Phase II interactions with the FDA. Overall, we believe this portfolio offers a compelling combination of validated biology, significant unmet medical need, regulatory advantages and multiple near- and midterm clinical catalysts.

So turning to the development time line, beginning with PH-ILD. As mentioned, following the encouraging Phase II data just presented at ATS, we plan to initiate a Phase IIb study in the middle of this year with top line data expected in the first quarter of 2028. In bronchiolitis obliterans syndrome post lung transplant, the ongoing Phase II investigator-initiated trial is expected to generate top line data in the first quarter of 2027. And finally, in SAPH, we expect to initiate a Phase II study in late 2026 with top line data anticipated in the fourth quarter of 2028.

Turning now to Slide 7. Why not oral rapamycin? First, when delivered by mouth, like any medication, oral rapamycin distributes throughout the body systemically. And unfortunately, with rapamycin, this systemic exposure is associated with a number of side effects highlighted on this slide that have precluded its broad adoption in pulmonary diseases. Additionally, the systemic toxicity can limit achievable dosing, thus preventing sufficient drug exposure directly within lung tissue, which can be particularly important in pulmonary diseases where localized target engagement may be critical for efficacy.

And finally, oral rapamycin has demonstrated low and highly variable bioavailability, which often necessitates therapeutic drug monitoring and dose adjustments, creating additional burden for both physicians and patients. Collectively, we believe these limitations have constrained the use of oral rapamycin in pulmonary diseases despite evidence supporting the importance of the mTOR pathway in disease biology.

So turning to Slide 8. We believe LAM-001 has the potential to address many of these key limitations. First, our inhaled delivery is designed to maximize exposure locally at the site of disease in the lungs while minimizing systemic exposure and concomitant toxicity. And second, our proprietary rapamycin formulation possesses physical chemical properties that we believe are ideal for pulmonary delivery, supporting the potential for improved tissue penetration in the lungs and thus therapeutic activity across multiple pulmonary indications.

These properties combined have allowed us to dose LAM-001 at just 100 micrograms daily directly to the lungs. This is 20-fold lower than the standard 2-milligram daily oral dose. As seen in the graph on the right side of the slide from our Phase I/II study in LAM patients, this 100-microgram dose has been observed to translate into steady-state systemic exposure below 1 nanogram per ml, which is 1/5 to 1/15 the 5 to 15 nanogram per ml systemic levels typically observed with the standard 2-milligram oral rapamycin dose.

Importantly, as well, animals treated with the equivalent of that single 100-microgram human dose achieved lung concentrations resulting in greater than 90% inhibition of the mTOR target out to 24 hours. Collectively, we believe these data support the potential for reduced systemic toxicity along with clinically relevant lung exposure.

So with that, I'll ask Dr. Yu to present the latest data from our Phase II study evaluating LAM-001 in pulmonary hypertension. By way of introduction, Dr. Yu is Director of the Cardiovascular Research Center at Massachusetts General Hospital and Associate Professor of Medicine at Harvard Medical School, where he holds the Charles and Elizabeth Sanders Endowed Chair. A physician scientist trained in immunology and cardiovascular medicine, his research focuses on BMP and TGF-beta signaling in cardiovascular homeostasis, repair and disease. His work spans pulmonary vascular disease, cardiovascular rheumatology and rare disorders such as fibrodysplasia ossificans progressiva.

Dr. Yu has translated several scientific discoveries into therapeutics, including contributions to sotatercept for pulmonary arterial hypertension and the clinical repositioning of sarcatinib for FOP. He has published over 120 peer-reviewed studies and has been elected to the American Society for Clinical Investigation.

Thank you, Dr. Roberts. To preface the Phase IIa trial results, I'd first like to highlight the unmet need in pulmonary hypertension associated with interstitial lung disease or PH-ILD. This is a major cause of Group III pulmonary hypertension associated with lung disease, and the pathophysiology is similar to other types of pulmonary hypertension in that pulmonary arterial smooth muscle cell proliferation, fibrosis and endothelial dysfunction lead to progressive narrowing and loss of vessels. The prognosis for this condition is worse than for pulmonary arterial hypertension or interstitial lung disease alone with just 1/4 of patients surviving 5 years after diagnosis.

There are currently 2 approved drugs for this condition that are inhaled forms of treprostinil, and there are an estimated 86,000 and 120,000 patients in the U.S. and the EU, respectively. LAM-001 or rapamycin DPI is uniquely suited to targeting PH-ILD pathology as it inhibits mTOR signaling, which is a master regulator of signaling pathways governing smooth muscle cell proliferation, fibrosis and inflammation and is a key integrator of hypoxic stress.

Inhibiting mTOR with LAM-001 has the potential to improve disease by arresting or reversing the obstructive vasculopathy. There is evidence of markedly upregulated signaling both upstream and downstream of mTOR in the distal arteries and distal arterial smooth muscle cells of patients with idiopathic PAH, shown in the left 2 panels, which correspond with smooth muscle cell proliferation, survival and metabolic stress. On the right panels, we see that rapamycin is shown to prevent or treat experimental pulmonary hypertension and vascular remodeling shown here in the monocrotaline model in rats.

For the treatment of PH-ILD, in addition to the 2 approved treprostinil inhaled formulations, there are several other programs at various stages of development, spanning preclinical to Phase III. Several of these programs target the prostanoid pathway by inhaled delivery, others target the ROCK1 and 2 and the soluble guanylate cyclase pathways. Among these, LAM-001 is relatively unique in its antiproliferative and antifibrotic mechanisms of action.

The Phase IIa trial of LAM-001 was designed to capture changes in cardiopulmonary function in Group 1 PAH and Group III PH disease via invasive cardiopulmonary exercise testing, or CPET. This was an open-label study of adults with functional Class III disease on background therapy. The primary endpoint was peak oxygen uptake or VO2 max as well as safety and tolerability. Secondary endpoints included PVR or pulmonary vascular resistance, the 6-minute walk distance and WHO functional class with an exploratory endpoint of NT-proBNP.

The enrolled patients in this trial were comparable in age and demographics to recent trials in PAH and pulmonary hypertension, including the STELLAR trial and the INCREASE trial. Of note, all PAH patients were on stable and maximal therapies, in most cases, triple vasodilator therapy. And all of PH-ILD patients were on maximal therapies, including background treprostinil therapy. 10 patients were enrolled and 6 patients completed the trial. All of the discontinuations were unrelated to the study drug.

For the primary and secondary endpoints, we saw very promising signals of efficacy in both the overall evaluable population that completed the protocol as well as the subset of PH-ILD patients. A mean improvement of 81.3 meters in the overall cohort or 67.4 meters in the PH-ILD subset was seen in the 6-minute walk distance. The VO2 max was also seen to improve. The pulmonary vascular resistance decreased by 25% to 35% under exercise conditions and 28% to 33% under static conditions. NT-proBNP decreased by nearly 30%. When we examined forced vital capacity as a percentage of predicted, we saw a 4.8% increase among the overall cohort and a 1.8% increase among the PH-ILD subgroup.

All of the evaluable patients in the study improved to functional Class II by week 24, starting from Class III at enrollment. Many improved as early as 12 weeks and 2 patients improved to functional Class I. For comparison, in the sotatercept Phase III study, 29% of patients improved functional class at 24 weeks. In this study, there were drug-related adverse events, including Grade 1 productive cough, cough and gingivitis. Overall, LAM-001 was well tolerated, and there were no dose interruptions due to AEs. There were no discontinuations due to drug, and there were no SAEs related to drug.

To summarize, in our Phase II study, we saw compelling evidence of clinical activity, notably with a 67-meter improvement in 6-minute walk distance among PH-ILD patients comparing favorably with existing therapies in recent trials. This benefit was seen on top of standard of care in heavily pretreated populations and there were consistent signals of patient benefit seen across multiple measures. The tolerability was favorable, again, with no dose interruptions, discontinuations or SAEs related to drug.

Thank you, Dr. Yu. So turning to Slide 21. We are outlining the design of the Phase IIb study of LAM-001 in pulmonary hypertension associated with interstitial lung disease or PH-ILD. The study is expected to enroll approximately 75 patients across an estimated 40 clinical sites and is designed as a randomized, double-blind, placebo-controlled multicenter trial evaluating LAM-001 as an add-on therapy on top of stable background therapy.

Patients will be randomized 1:1:1 to receive either 100 micrograms once daily of LAM-001, 200 micrograms once daily of LAM-001 or placebo over a 24-week blinded treatment period, followed by a 12-month open-label extension phase. The trial is expected to enroll adult PH-ILD patients with WHO functional Class II or III disease who remain symptomatic despite stable background therapy, which may include background treprostinil similar to our Phase IIa study.

Importantly, these are patients with significant unmet medical need and limited treatment options beyond vasodilatory approaches available today. The primary endpoint of the study is change in pulmonary vascular resistance, or PVR, which we believe represents an important hemodynamic measure of disease activity in this population and is an accepted endpoint for Phase II studies in pulmonary hypertension. Secondary endpoints include change in 6-minute walk distance, time to clinical worsening, incidence of clinical worsening events as well as safety and tolerability assessments.

The study will also evaluate a number of exploratory endpoints, including change in WHO functional class, NT-proBNP, forced vital capacity and patient-reported outcomes using the K-BILD questionnaire. Overall, we believe this study is designed to comprehensively evaluate both the hemodynamic and functional impact of LAM-001 in a patient population with substantial unmet need.

So let's turn now to bronchiolitis obliterans syndrome or BOS. BOS is the leading cause of death post lung transplantation. Unlike pulmonary hypertension, this disease is centered around the airways, not the pulmonary arteries. As seen in the picture on the right, it is characterized by a progressive infiltration of inflammatory and fibrotic cells that occlude the small airways, resulting in substantial airway obstruction and irreversible decline in lung function and ultimately graft failure.

The number of lung transplants continues to grow, approaching nearly 4,000 lung transplants annually in the United States today, translating into an estimated addressable BOS patient population of approximately 17,000 patients in the United States and 11,000 patients in Europe. There are currently no FDA-approved therapies for this disease, and the program has received orphan drug designation in both the United States and Europe.

Turning now to Slide 24. The median survival post lung transplantation is 6.2 years. And unfortunately, over the course of 10 years, 94% of lung transplant patients will develop BOS. BOS is the #1 leading cause of death post lung transplant. And once BOS has taken hold in the setting of a lung transplant, the median survival is just 2.5 years.

Turning to Slide 25. The key measure for BOS diagnosis, progression and prognosis is FEV1. BOS is diagnosed when a patient's FEV1 has declined to 80% or less of baseline levels with baseline being defined as FEV1 levels post lung transplant. And progression of disease or BOS grade is then measured by further sequential declines in FEV1, as shown in the box on the far left of this slide. And importantly, studies have shown that each 1% decline in FEV1 is associated with a 3.4% increase in mortality. And in a recent survey that we conducted across 48 clinicians treating BOS patients, FEV1 decline was highlighted as the single most important criteria for escalating BOS therapy.

Turning to the next slide. Before embarking on our BOS program, as we did with our PH program, we searched for off-label proof-of-concept data with the oral form of the medication. And we found a small study that had been conducted in the early 2000s in 11 patients with progressive BOS. In this study, as seen in the graph on the right side of the slide, prior to rapamycin dosing as is typical in this disease process, FEV1 declined over the course of 12 months. However, over 12 months of subsequent rapamycin treatment, FEV1 demonstrated stability or even improvement in 8 of 11 patients.

Given this supportive proof-of-concept data with oral rapamycin, combined with the mechanistic rationale, a randomized double-blind, placebo-controlled investigator-sponsored study was initiated at UCSF under Dr. Steven Hays, evaluating LAM-001 in 19 double lung transplant patients with newly diagnosed BOS. In this study, patients were randomized 1:1 to receive either LAM-001 100 micrograms QD or placebo over a 48-week blinded treatment period, followed by an open-label extension phase. The primary endpoint is the percent change from baseline in FEV1 at that 48-week time point.

Overall, this is a small study and has been designed as a safety and signal-seeking study to evaluate the potential for LAM-001 in this underserved patient population. Enrollment for the study was completed in January 2026 and an interim safety review conducted in February 2026 showed that 5 of 19 patients enrolled demonstrated a 10% or greater decline in FEV1 versus study baseline. Dosing continued as planned following that interim safety review and top line data are currently anticipated in the first quarter of 2027.

Turning now to Slide 29. We believe we have established a broad and multifaceted intellectual property strategy designed to support long-term exclusivity across the inhaled rapamycin platform. The portfolio includes claims protection across drug substance, drug product and method of treatment, including composition claims related to particle size, formulation, delivery and dosing as well as treatment claims in pulmonary hypertension and chronic lung diseases.

The company currently has 9 issued U.S. patents with expected exclusivity extending into 2035, alongside pending patent applications that, if granted, are expected to extend protection into 2047. Importantly, the portfolio is further strengthened by orphan drug exclusivity in both the U.S. and Europe across multiple indications. And finally, we have secured exclusivity with the device manufacturer for the use of rapamycin in the RSO1 dry powder inhaler device we have been using in our clinical trials and plan to use for our commercial launch, if approved. Overall, we believe this layered IP strategy provides meaningful protection for the platform.

Turning now to Slide 30. We believe we are well capitalized, having raised $115 million in upfront gross proceeds in an oversubscribed private placement that is expected to close on May 21, 2026. Based on the current operating plan, we expect our cash runway to extend through the end of the fourth quarter of 2028, which should allow us to deliver on the multiple anticipated clinical readouts highlighted on the following slide.

Turning to that slide. As noted, OrphAI just yesterday presented Phase IIa pulmonary hypertension data in an oral presentation at the American Thoracic Society Conference. Looking ahead, anticipated milestones include top line Phase II data from our BOS program in the first quarter of 2027, followed by Phase II PH-ILD data expected in the first quarter of 2028. We also expect top line Phase II data from the SAPH program in the fourth quarter of 2028. Overall, we believe these milestones should provide multiple opportunities for clinical and operational value inflection across the platform.

In summary, the company's mission is to transform the lives of patients facing serious underserved diseases. The clinical data we shared today represents an important step in advancing this mission. And our acquisition of OrphAI, along with the concurrent pipe financing provide us with the resources to further advance our goals. We hope you share our excitement as we move forward to the next set of milestones. Thank you for your time today.

Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.