Moonlake Immunotherapeutics Stock

Good morning, good afternoon to all of those attending this MoonLake webcast. My name is Jorge Santos da Silva. I'm CEO and Chairman of the company. And I am accompanied here today by my co-founder and Chief Scientific Officer, Kristian Reich, and by our Chief Financial Officer, Matthias Bodenstedt.

In today's session, we're really going to focus on HS, our main indication in dermatology. We will start off with a brief introduction just to make sure that everybody is in the same page, but also to make sure that the key messages are delivered early on as they are very strong and important for the company and for sonelokimab. We will then spend some time and Kristian will take us through that. Looking at the final data of what is arguably the largest program in HS today. I remind everybody that this program is composed of 4 trials that will be important for the registration of the product, starting with a comparative trial, MIRA, where we compared ourselves to the standard of care Humira and placebos, the 2 large VELA studies, where we tested our main dose versus placebo over time.

And of course, a trial that is very dear to us, the VELA-TEEN trial, a trial that covered also adolescents first also in HS. Once we've been able to look at all this data together, I will take it back to recap how we're going to follow our label strategy and our BLA submission following all the conversations we've had with the FDA. And now in possession of the full data set.

Matthias will then take us through a very important part of the story, which starts looking into what happens next, which is really thinking about how we are planning to commercialize the product and where we are in this process. I will then take over at the end for some closing remarks. And we will, of course, as always, open for a Q&A session. For those that are less familiar with our story, I just want to make sure we spend a couple of minutes telling you a little bit about the company and a little bit about our assets. So MoonLake is a company that is now 5 years old. The company was founded focusing on a single asset, sonelokimab, which we always felt was a very, very interesting molecule that really needed to be developed for patients.

As it inhibits IL-17A & F, very critical axis of inflammation in many, many diseases, but also because it's the opportunity to introduce a very exciting new technology in terms of therapies for patients, the nanobodies, these very small molecules that retain many of the characteristics of antibodies, but have several advantages that I'll go over.

The company went public in Nasdaq in '22. And obviously, since then, we've been able to raise a lot of money to develop all the indications that we're pushing for as we develop sonelokimab as really a pipeline in a product. In fact, we've now completed the Phase III results in HS. That's what we are also discussing today. Many of you know we're in Phase III for rheumatology indication with psoriatic arthritis, and we have other indications that we are developing. Very importantly, the company is transitioning to its next phase of growth as we plan to submit BLA for approval towards the end of Q3 this year for a launch next year. That's a little bit about MoonLake. Again, for those less familiar, I just want to spend a couple of seconds here talking about the molecule and reminding all those that are more familiar, how important it is to introduce new technologies into therapies for patients.

As many of you know, the nanobodies take advantage of something that nature created, which is a heavy-chain-only antibodies, the antibodies that have a far less complex variable region, if you allow me to say that versus human antibodies, and the ability to take this less complex variable region allows us to really target important modules in medicine, but do so with very, very small domains, these VHHs.

The other interesting element about these elements is that you can actually put several of these VHHs together, which is the case for sonelokimab, as you can see on the right side of the page. And we are able to target different elements that are important for therapy while maintaining a very small size of the molecule. In the case of sonelokimab, this means that we are able to target IL-17A, IL-17F, 2 very important MOAs in inflammation and also target other elements in the case of sonelokimab able to target albumin, which allows the molecule not only to be a little bit more stable over time, but to travel to sites of inflammation. And all of this is possible while maintaining a very small size. Just to give you an idea, sonelokimab is about 1/3 of the size of a normal monoclonal antibody. So very exciting technology, very exciting MOA.

MoonLake, as I said at the beginning, is now approaching registration. The company really focused the development of sonelokimab along 2 therapeutical areas, as you can see here on the page. We focused on dermatology and on rheumatology. The reason for this is we see vast opportunities to change the lives of patients, huge unmet needs, but obviously also interesting opportunities in terms of market size. And to achieve that, we started developing different indications along these 2 therapeutical areas. And as you can see there on the top, the first 2 lines hidradenitis suppurativa now completed Phase III, now moving on to registration. That's where we will spend a lot of time today. We'll also include in this discussion, the second line that you see here, which is the progress that we have done with adolescent patients suffering from HS, also this will be part of the registration.

Today, we will not talk too much about the other indications that we're developing. I will touch base on PSA at the end because, as you can see there, that's also a Phase III that is ongoing, and we are approaching the primary end point on one of these trials, but I'll touch base on that at the end. Today, really, the focus is data wise on the top 2 lines in HS. And the interesting thing is as we've been developing these indications for Phase II to Phase III, now to registration, I think there's one trend that I think is quite apparent. And that is that sonelokimab is a drug that really has a leading profile in any of these indications. I won't go through the details that you see on this page, but as you can see here, when you look at key primary end points at different phases of clinical development.

If you look at the endpoints that we actually target, which tend to elevate from previous trials done before us, what you really see is a level of efficacy that really shows a leading profile across all indications. And all of this together with a safety profile that we believe creates a very unique benefit ratio for patients, but also a very convenient drug. Oftentimes, biologics need a lot of injections, very regular injections, painful injections. And not only we have efficacy and safety, but we also do this in what we think is a very convenient dosing for patients across these indications, once again taking opportunities that are presented by nanobodies when it comes to formulation. So a very, very good profile. As you know, 2026, as all the other years before, that have been catalyst rich for our company. As you can see here in the greyed out part to the left, all the things that we've already put out this year, which include a lot of new data and presentation at scientific congresses as keynote presentations.

And then you can see to the right side of the page, all the things that are still to come this year. And as you see there in the sliver in the middle, today, we really focused on the Phase III readout of the 52-week readout for VELA as it completes the HS package. You will also see that after that comes IZAR-1 on rheumatology. Again, I'll come to that at the end of the session. If there is one slide that we would like you all to retain, this is probably the next slide and the key message that comes here is we truly believe that SLK is on schedule to be a potential best-in-class drug in HS, probably a best-in-disease drug for this important indication. And not only we believe that, but the facts are really starting to stack up to support that.

For example, in terms of efficacy, what you will see today is that the drug really leads across several elements of efficacy. And I remind everybody that all of these have been elevated from previous trials, very well-known fact that before and still drugs are developed in Phase III with HiSCR50, a 50% improvement in the disease as primary endpoint. We've elevated that for HiSCR75. And we do so across many scores of efficacy and across many time points.

Just some facts here to already start sharing light on what the data you're going to see. You can see that on our primary endpoint, HiSCR75 after 1 year, 67% of the patients have reached HiSCR75, 67% of the patients, which is obviously -- it's almost 70% of the patients here, a very interesting score.

And by the way, for those that are a little bit younger, this is a very easy number to remember, it's a 6 and a 7, 6-7, you cannot forget this number. But very interestingly, also 1/3 of the patients reach not only HiSCR75, but HiSCR100. And 1 in every 4 patients reaches what we call inflammatory remission that is there is no abscesses, no nodules, no draining tunnels. This is a target that I don't think was even in people's minds a couple of years back. And we believe that there is now a very good path for us to not only show good long-term data but to have a very good delta to placebo in our label at the primary endpoint of week 16. So really, the card of efficacy, I think, is being played very strongly here.

Together with this comes what we believe is an advantageous benefit ratio, very rapid onset of response. But with the safety profile at week 16, that looks very, very promising, with no SIB, no liver signals, no IBD and other advantages, not only versus placebo, but obviously versus competitors. And as you will see a very consistent safety profile long term, which we believe very important for prescribers. We also believe that SLK will now have a broader label in HS. As you know, we've -- and as I've mentioned, we've -- we're the first company to do a dedicated clinical trial in adolescent patients with VELA-TEEN. It was the first molecule being tested here. And I'm very happy to report that we have great efficacy, for example, about 1 in every 2 patients reaches HiSCR100 at 6 months in this trial with no new safety signals for this population that obviously is very important for us. So a broader label on top of efficacy and safety, but also on top of that, improved convenience.

As you know, we have a very, very convenient induction protocol with very few injections. Our injections are very fast compared to competitors. And on top of all of this, and I think this is really important also for dermatologists, also for KOLs really starting to move the boundary here with a very unique mode of action. The way we inhibit IL-17A&F is unique even versus the only other competitor that does that, but also a new technology that opens other opportunities for patients and physicians. So if you actually take one message, take this message no matter where you look, the profile of SLK really seems to indicate a potential best-in-class drug. So that sets it up for the introduction now.

I will pass it over to Kristian to really take us through the final HS data package. Kristian?

Thank you very much, Jorge. And also a very warm welcome on my side. I was just looking at your slide, founded in 2021, and now we sit here and I have the pleasure to present indeed what will be the final data that will constitute the core of what we would submit in our BLA. I remind you, just going back to the disease. And I remember when some years ago, we talked about this is very frequent, the prevalence, maybe as high as psoriasis. I think many people had question marks and these question marks in my eyes have completely disappeared. Now we see an increased awareness. We see that patient organizations are getting more active. Companies are getting more active. The dermatologists are getting more active. And we can already really see that this prevalence and the data that we can analyze approaches this 2% mark that we were always talking about.

Matthias will chat about the fact that this awareness already leads to 300,000 patients being newly diagnosed in the U.S. every year. That's actually higher than the number of -- sadly higher than the number of patients that are newly started on the biologics. So there remains a high unmet need in this important chronic inflammatory skin condition.

You know that I'm a dermatologist. So I've really seen many of these patients. This disease is unfortunately characterized by the fact that not adequately controlled inflammatory lesions progress to irreversible tissue damage that is kind of unique to this disease compared to other chronic inflammatory skin conditions. You have this formation of draining tunnels, you have the formation of scars. So what does this mean? We should be highly motivated to control the inflammation as early and as good as possible with an eye on having a positive influence of the course of the disease and Jorge already talked about the adolescent trial.

I think this was a big motivation for us to actually go into juvenile patients with HS. It is a disease that has different phenotypes, you have inflammatory lesions like nodules and abscesses, you have draining tunnels. You have these irreversible lesions, the tunnels, the scars. I will come back to this when it comes to how do we actually measure the disease and what are also some potential limitations. What is shocking to me and I think to everyone working and interested in this field is that it still takes up to 7, in some cases, 10 years before the diagnosis is properly made. So that is the delay between the first onset of disease signs and the proper diagnosis. And of course, we really need to be better than this. If we want to not miss this window of opportunity that we will hopefully have with better and better drugs anti-inflammatory drugs, in the future, we also need to be better in making the diagnosis early on.

Last but not least, there are now a few modern drugs approved, but what we hear when we talk to patient organizations that those patients with significant moderate-to-severe HS, many of them have already cycled through the disease so the disease treatments that currently exist. So every company will say there's an unmet need. We believe there is really an unmet therapeutic need in HS still. So it's a pleasure for us to present the data from the studies and I will talk about our Phase III program in a second to present the data to you that will hopefully lead to the approval of a new and potentially, I think, best-in-class, maybe best in disease drug in this important skin condition.

What was our Phase III, 2 identical trials called VELA-1 and VELA-2. We put this Phase III program on top of a pivotal like Phase II study. Again, I will come back to this. And we did our dose finding work in Phase II. So in Phase III, we could clearly test our best dose, the 120-milligram versus placebo. And then as you see here, primary endpoint at week 16 or placebo patients being rolled over to get active drug. And as everybody else, you submit in your BLA, what we call the parental trial data, and that is 1 year. That is what we will talk about today.

But I also remind you, these are chronic diseases. These patients will not only get hopefully these drugs for half a year or year but for many more years. And we have an open-label extension program that runs an additional 2 years on top of the 1-year parental trial. And already to whet your mouth, this will also include our adolescent patients. So we will be able to see over 1, 2, 3 years, how well adolescent patients are doing on sonelokimab. Jorge already talked about the fact that we wanted to use our clinical development program to also elevate outcomes. We wanted to understand how good is the drug in bringing patients to HiSCR75. We looked at HiSCR50 as well in order to allow comparisons to other drugs. And just to start talking a little bit about limitations. HiSCR, as you know, measures the reduction of 2 inflammatory phenotypes, the nodules and the abscesses, it does not measure the reduction of draining tunnels. This is why we decided to add another lesion count, if you will, into our program, the IHS4, which actually quantifies the decrease of all 3 types of inflammatory phenotypes in HS.

Very importantly, we really do think that HS is a lot more than counting lesions. When we talk to dermatologists, my own experience, when we talk to patients, the patient organizations, we get the uniform answer that what really drives the disease, what matters, what constitutes the disease burden is not so much counting lesions, it is the pain. It is the odor is that you have to change your dressings that you cannot lead a normal life. You cannot do your sporting activities. You have problems with social interactions. This is why, for us, it was very important to include patient-reported outcomes that measure this real disease burden into our Phase III program. And you see a very conservative read on pain and then the HiSQOL, a health-related quality of life instrument specifically validated to measure impairment in HS. So it's a disease-specific health-related quality of life instrument.

And then we also put in the DLQI, a generic instrument that measures impact on quality of life across skin diseases, just to have a validation of the findings. These are 2 large studies. Actually, I think this is the Phase III program that has exposed more patients to the dose that seek approval for than any other Phase III program, and that is driven also by this very straightforward design. You know the results. This is the findings at the primary endpoint. This is the week 16 findings. I think we were very happy to see across what we call pivotal like trials so adequate well-controlled studies. That is what you see here. And very happy that across all 3 trials, MIRA with more than 230 patients, VELA-1, VELA-2 with more than 440 patients. In each of these studies, we saw a consistent high response to sonelokimab. And you see the numbers here, these are the HiSCR75 responses. We also saw consistent placebo response with the exception of VELA-2. And of course, you know this -- this was the inconsistency.

I personally, after many discussions with leaders in the field, we have done so many additional analysis, as you would guess, we see a very high quality, very high validity of our clinical trials. And I speculate here. But I think that the way the HiSCR is constructed, it is -- it will be subject to some impact of placebo maybe driven by nodules, may be driven by other factors. And we would not be surprised if we see more and more studies in the future where you have these outliers in the placebo response.

But an outlier in placebo is not an outlier in the response to active drug. This was very consistent, by the way, very consistent not only when it comes to lesion counts, but even more consistent when it comes to these important PROs that I was talking about like pain and HiSCR and others. I said it more than 500 patients exposed to the dose we seek approval for and a very simple measure, I think a first look into how safe and tolerable the drug is, is the dropout rate. And now let's talk about the 1-year data. Let's start to talk about the end of the parental trial. We see across our 1-year study, we see a dropout rate as low as 26%. HS patients are complicated patients. They are sick patients. They have many comorbidities. Many patients have many other significant medical conditions. Many are on many other drugs, and I think dropout rate over a 1-year period of 26%, speaks to a favorable safety profile and a good tolerability of the drug.

As I said, we are interested to collect more long-term data. We really want to show the world because this is a chronic disease. How good is our drug not only after 1 year, but after 2 and after 3 years on our approved dose. So for me, I'm delighted to see that almost 90% of the patients we enrolled in the study at baseline actually roll over to this open-label extension period. So there will be very interesting long-term data to come that should be very informative about how good is the potential of this drug to really do what this drug should do in a chronic disease, and that is delivering safe, long-term control. Of course, this is the slide that we have printed out as a poster and now every MoonLake employee has hang it on the wall. This is putting together the drugs that are in Phase III or are approved in HS and that have finished their parental trials, right? So this is what this slide looks at. These are the parental trial data of bimekizumab, of secukinumab, of povorcitinib and of us.

You see the color codes, we present the first 16 weeks. All the studies had week 16 as their primary endpoint. We present the first 16-week data using the method that was selected to measure the primary end point. And then uniformly, beyond week 16, we show the data as observed. So I think it is an apples-to-apples comparison as you can do it. You can see the very fast pickup of the response HiSCR75 with sonelokimab, you can see the great response in the long run and actually numerically producing the highest number, I think, that we have so far seen in a Phase III program of this time. And seeing that 70%, 7 out of 10 patients after 1 year achieve HiSCR75 response, I think is very good news of 4 patients, 4 KOLs and for the world. And you can see that there are really differences between these drugs.

And I think it was important for us to get confidence that our drug has this potential to be the leading drug in the disease. Importantly, if you have a placebo wrinkle, allow me to call it like this, at one time point in one end point in one of your studies, is there something wrong with your placebo patients. Or is your drug actually providing irrespective of what the placebo response was a similar amount of benefit. And that is what you see here. This is why we decided to bring this slide. You see that the placebo patients that cross over to sonelokimab irrespective if they come from VELA-1 or VELA-2, they achieve the same benefit. And they achieve it fast. Within 4 weeks, they actually catch up to the response curve of the patients that started with sonelokimab at baseline.

And for those of you and I know there will be some that will analyze and every time point, I can tell you it's amazing to see how similar the response after 36 weeks of exposure to SLK is because this is what we show you here. If you compare this to the response you see in the -- after 36 weeks of exposure to those patients that get to the drug from the beginning, it's identical, right? So I think this is not only a very strong validation of the findings in VELA-1 and VELA-2, but it's actually confirming this response that I already showed you for the active arms before and also confirming that there is nothing wrong with the drug and nothing wrong with the placebo arms and that these placebo patients that we saw have an identical response to each other and to the patients that receive drug from the beginning.

Now let me do this now a little bit as a prescriber, right? Allow me to do an exercise with you. Now imagine you are a doctor that is interested in treating patients with HS and you have these several drugs now and you have a patient sitting in front of you that you consider a candidate for an IL-17 inhibitor. What you probably do in your mind is that you create these scorecards, when you look at all these outcomes, the lesion counts, we discussed this, the lesion counts that include measuring the decrease of draining tunnels, including these important PROs, you create the scorecard in your mind because you want to understand which is the drug that gives my patients the highest chance to respond, which is the leading drug.

I think you will understand that all prescribers do this exercise. Whether there is a formal meta-analysis or not, that's what you need to do as a prescriber, and we try to do this. We try to do this year in the best possible way using the data that is available. And we used here the data from BE HEARD because we consider the IL-17A & F antibody as the so far best drug in HS.

You see by the color code here, if you do the scorecard approach, I think you cannot escape the notice that sonelokimab really has the potential to be a leading drug, I think not only best-in-class, but actually best in disease if you consider that bimekizumab is leading the pack as we speak. I think what you also see here, and that's a little bit a different exercise. We always compare responses and we look at the percentage points. But this is, of course, a little bit of an artificial analysis. When you want to answer the question, how many more patients benefit from using drug A versus using drug B., and this is the kind of analysis payers are interested in. This is the kind of analysis you do when you do a health technology assessment.

So we allowed ourselves to put this column in to answer these questions how many more patients would benefit from SLK, and we show you the percentages here. And for many of the important outcomes, you see that the differences reaches a double-digit percent number. And we just put one here, this IHS4-100 which is very important for us because, as Jorge said, we think it indicates inflammatory remission and really cooling the fire, if you allow me to use this metaphor that HS is to really put this fire out, and you see that 10% more patients benefit from SLK when you look at this inflammatory remission compared to the existing IL-17A & F inhibiting antibody.

So I think the scorecard looks very promising when we go through all these different efficacy endpoints. And you saw that this includes the PROs. This includes pain. This includes HiSCR, the things that we believe may matter even more for patients than the lesion counts. You would do something similar with safety, and I know that is rarely done, right? So I present these 2 slides now, the week 16 and then the 1-year data also as an attempt to reflect the scorecard exercise that prescribers will do. And as you are very aware, we tend to look at certain safety events of special interest. We tend to look at liver. We tend to look at IBD, we tend to look at suicidality, other things you see reflected here. And again, this slide is an attempt to do an apples-to-apples comparison as much as possible.

And we think not only at week 16, but importantly, also at the 1-year mark, the end of the parental trial mark, you can't escape again, the notice that sonelokimab combines this high efficacy data that I was showing you with a very favorable safety profile. And I think this is what matters for patients. Of course, it also matters for prescribers. It matters for dermatologists. So we think it was important to put this side-by-side. So extremely promising efficacy and safety data from the 1-year parental trial data for sonelokimab.

Jorge talked about the adolescent patients. And again, allow me to be a little bit emotional. Of course, you can always say, yes, we need to change the course of the disease and we need to treat inflammation in HS early on. But then you need to do a study to show that your drug is able of doing this. So we decided to use sonelokimab in a trial with adolescent patients from 12 years on with HS. Of course, an important first outcome of the study is, is the PK, is the drug when you dose these adolescent patients, is it behaving identical to adults? Because if this would be the case, then you can assume that all the data that you generate for adults are somehow transferable to the adolescent patient population. And I apologize for the complexity of the graph here, but what you should compare is the green and the blue. And this is showing you in green the PK data we observed in adults and in blue, the PK data we observed in this study and adolescents. And I think you can clearly see the drug behaves the same.

By the way, the drug behaves very well. You see that this confidence interval are very narrow. And again, you see no difference between these adolescent patients from 12 years on and the adults. Of course, this is an important formal hurdle to jump over, and this was the primary reason we did the study. But of course, we look at efficacy. And you see the efficacy here. In the dark blue bars, you see the efficacy obtained in adolescent patients. And for reference, with the white dots we put in the numbers we saw in adults. So great response in adolescent patients. These patients could be enrolled with not yet having a tunnel. So we really enrolled the patients to put this question to the test, can this drug potentially positively influence the disease course.

And I think when you look at these numbers, at week 16, 80% having a response if you use HiSCR50 to define response. But more importantly, at week 16 and then at week 24, 60% to almost 70% of the patients achieving HiSCR75 and high numbers achieving HiSCR100. You know what this also tells me, and we have seen this in other chronic inflammatory diseases, the longer you wait to treat, the lower will be your response.

In my own words, if you save your best drug for last, your last drug is no longer the best. This data is showing you this, right? It shows you that if you use sonelokimab early on in adolescent patients, you have a better chance to control the disease and will be super interesting to see the long-term data. How are these patients developing over years under treatment with sonelokimab? The safety profile in adolescents, very clean. Many would perceive adolescent patients as a potentially more vulnerable patient population. So it's important to see that the safety profile is as clean as we saw it in adults. And last but not least, coming back to one other practical consideration, right? That is rarely talked about, but when you sit there in the practice and you give the first auto injector or you train patients to give the auto-injector, you will realize that it does matter.

We think we have a very convenient way of administering sonelokimab. We have a very well used and established auto injector. We have a very low injection volume, and this auto-injector will inject the volume in a few seconds. We achieve our maintenance dose already after 5 injections by week 8. And from then on, we have what we think is this very convenient once per month, 1 ml, a few second injection.

And let me say one last thing. We see that, oh, yes, but why not every 8 and every 12 and every 6 months, and this is my very personal view now. I think these very sick patients with HS, I think you run the risk that you lose compliance and adherence. I want to see my HS patient once per month. I do not see a convenience benefit knowing that I spent 3 seconds here per month to give my drug, I don't see a convenience benefit to go to longer intervals, I more see a risk that you lose the adherence. And you can already see this in the clinical trial. So taking this all together, and I hope you see the excitement level, the whole team is super excited to put all this data now together in the BLA.

I hand over to Jorge to share with you what is then their BLA strategy. Thank you.

Thanks, Kristian. So how does this all now play into what we've already been discussing with the market, with KOLs, with patient associations, the foundations, et cetera, with regards to what to expect from our BLA strategy and essentially from our label. Obviously, everything in a label matters. But as we discuss sonelokimab, its strengths. And basically, from a scorecard perspective, that Kristian mentioned, how does it compare to others? There's essentially in our mind, 3 sections that are particularly important as they will black and white reveal the value and the official value of that drug when it comes to the market. And that's obviously Section 14, where you see all the data around efficacy, which trials were considered, what are end points that we can actually talk about in the market with physicians and patients and also 2 sections that in our mind relate to safety, Section 5 warnings and precautions, which we know can be limiting for some drugs. And obviously, the Section 2. How do you actually dose this when you give it to a patient.

So if we take a focus on these 3 sections, we believe that the competitor data here leaves a lot of space for SLK to compete as the leading drug and especially after you saw the data that you've seen in this slide here, we collate Sections 14, 5 and 2 from the 2 competitors, one in IL-17A only inhibitor, secukinumab and perhaps more importantly, the only other competitor when it comes to the MOA of IL-17A & F, bimekizumab. And I want to call your attention to this to some of the elements here. To illustrate this concept of space being left for us to add something more, and then I'll tell you what that more is. On top, you see the Section 14 for both drugs. As you can see, obviously, there's no delta to placebos in labels. There's also no p-values. But as you can see, the numbers that bimekizumab presented for their primary endpoint, HiSCR50 are quite competitive, but we believe that on HiSCR75, as you saw before, there is some value left on the table, if you will. And obviously, HiSCR75 is not the primary endpoint of the bimekizumab trials.

Also, if you look at the secukinumab side, you, of course, see a lot of potential, but you also see that oftentimes, even if you don't meet statistical significance even from primary endpoints, some doses are approved like that. So as many people try to see what will happen to the VELA-2 data, et cetera, you don't need to look around into many other diseases and many other parts. There is a great example in HS, and that is illustrated right there with Cosentyx. So plenty of space in our mind to play here for efficacy. And obviously, Section 5 and Section 2 of the other drugs, we believe also give some opportunities, especially bimekizumab.

As you know, some warnings and precautions there related to safety items where we think we can present an advantage in front of regulators, in front of prescribers and in front of patients. So quite some space. So what does it mean when we look at these sections, especially the Section 14 efficacy, which I know is of interest to many of you watching, how do we build this label now that we have all this data and now that we've had the unique opportunity to have quite a few interactions between primary endpoint and now with the FDA.

So we believe that as our base scenario, what we're going to discuss first with the FDA, we can have a label. We believe that we can have a label that has exactly the same dimensions as bimekizumab, HiSCR50 and HiSCR75 with a big difference again that HiSCR75 in our case comes first because it is the primary end point. And we believe, as we've explained and as Kristian has already explained several times, that the 2 trials that will be considered here, as per guidance already received and discussed with the FDA, is that there are 2 trials that will be used to establish substantial evidence of effectiveness or efficacy. And that's VELA-1 and MIRA. And obviously, if you look at the numbers from both trials, that presents in our mind a very advantageous profile for the Section 14 table.

We believe that our Section 14 should also be able to benefit from the pain scores, the HiSQOLs. And importantly, as we said, the IHS4 efficacy scores, we believe in a base scenario, these will be presented in narrative points so that the text that comes below the table. And as we have said before, we don't think that VELA-2 will be included as a trial in the table, they will more likely be included in narrative points in Section 14 but also it can also be included as a trial in the table.

As you see, it doesn't affect at all the label. It continues to be a leading table. Just as a comparison so that you understand when I'm saying a leading table, what are we comparing to. We're obviously comparing to our main IL-17A & F monoclonal competitor. And as you can see by the numbers, just looking at HiSCR75 and HiSCR50 obviously advantageous numbers for us. Also, if you want to calculate a delta to placebo, and I would like to call your attention to the fact that our competitor does not have HiSQOL or IHS4 data in their Section 14, neither on the table nor on the narratives. And the narrative is very in our mind, general comment on pain because obviously, pain did not reach statistical significance in both of the trials of that drug.

So we believe that the proposed base case for our label as follows the discussion and the several discussions we've had with the FDA in the last few months really has a chance to show a level that is much more complete, much more interesting when it comes to prescribers and patients. With, by the way, as delta-to-placebo primary end point that goes back to expectations that were in the market last year. Now we believe that there is an upside case here, where, as you can see, instead of pain HiSCR IHS4 being included in as narratives, we might even have the opportunity to have a longer table with even more endpoints with numbers right there in the table as an upside case, as you can see here.

Obviously, this will present even more differentiation to our competitor. We don't believe that this is necessary, but this is something we will want to discuss and push for, especially because we believe that, as Kristian said, these patient reported outcomes really need to also take center stage. HiSCR is an important measure, you're counting lesions. It's definitely important from a regulatory perspective. But when it comes to everyday life to prescribers that are perhaps less familiar with the disease, these PROs is what really changes behavior. So we're obviously very happy to have them on narratives, but if we can put them on the table, we are going to try for that.

But our base case, as you see that we will -- that we believe that we will have a label on Section 14 that is just better than other competitors. I'm not going to go through the details for Sections 5 and 2, you can read this. This document will be made available to all of you. But there are several elements here, as you can see from the plethora of ticks in this page, where we believe we have an advantage over competitors. One interesting element to consider here as we think about our strategy is because we have this adolescent data, that opens the potential for a priority review for our whole BLA, including adults. Priority review from the FDA is a very strict set of criteria that clinical data needs to meet to justify the regulator spending the extra time, the extra resources to review this faster because it's important for the market.

We believe that the data that you've seen is clearly pointing to our drug and our clinical data meeting this criteria. And obviously, we believe that -- and we've discussed this with the FDA that we are eligible for VELA-2 review. We've agreed that, that will go with our submission in September.

I want to make clear that this is not our base case. Our base case is that we follow the normal BLA procedure. We understand that oftentimes, the FDA is limited in the resources it has to dedicate to these extra processes. So we don't want to consider that a guarantee by any means. So we consider this an upside case, but still a potential for our drug. What does that mean in terms of time line before we go to the commercialization section. Again, I won't go through all the details. I want to make sure that you all have it in writing for your perusal. Just call your attention to the blue boxes. The first blue box there on the left, this is when we, of course, expect the submission. We've been very clear with you on that no later than the end of Q3. And then as you can see on the upper part is the standard BLA process.

Therefore, we would expect to have the drug approved right there at the border between Q3 and Q4 next year so that we launched then. That is our base plan. Below, you also see the blue square that talks about the priority review. If we were to be granted priority review, this would accelerate the launch of the drug by 3 to 4 months. Again, an upside case, but obviously something quite interesting for us to -- and a challenge also for us to deliver on this.

So hopefully, this is clear. You've seen the whole data. You've seen what matters in the label. You've heard us talking many times about the several interactions with the FDA, the clarity that we've put on our press releases around how this label will look like. You see now how it can be advantageous. So as we go to market, either later in '27 or earlier in '27, we go to win. But to win, we need a winning commercial approach and to discuss that, I will pass it over to you, Matthias.

Thank you, Jorge. It's my pleasure now to walk you through some of the commercial considerations and tell you a little bit more where we stand with respect to preparing for the commercial launch of sonelokimab. I think 4 years ago, when we started talking about the opportunity in HS and talking about that this is a $10 billion-plus market, most of the people were looking at us and probably not really believing what we said. You see it here on this page, we are no longer alone. I think you hear it from us, $10 billion to $15 billion market opportunity. You also hear it from our competitors and the other companies that commercialize in HS. You see it from the various research analysts that also independently assess the market opportunity. I think consensus is really now there that this is a very large opportunity.

But we also keep looking at claims data. Market research is nice, but I think claims data shows you the truth, and that's where we truly see right now 2.9 million patients in the U.S. right now are already diagnosed and treated in some sort of form for HS. So that's almost 3 million patients right now. Kristian talked about it earlier. We also see a substantial growth year-over-year, about 300,000 new patients being added to that. Commercially, also very attractive is the very high price in HS that is linked to the dosing in HS. Most of the drugs are given double the dose that they are given in psoriasis. So here you see the approved list price of bimekizumab in HS, which is well over $200,000. So even if you look at the gross to net, this is a net price opportunity that stays healthy above $100,000.

Now the shocking thing in this indication is that still only 3% of patients are treated with a biologic. That's also what you see illustrated here on this page. 3% of the patients are treated with a biologic. So this is by no means a market where you have clearly established incumbent that the game is already decided because you have like some other big pharma companies in the market know. This is a very nascent market, where I think our objective and the objective of all other pharma companies as well as the HS communities is really to make sure that we treat these patients adequately.

To elevate this 3% that you right now see in HS to numbers that are more similar to what you see in more mature inflammation markets, like psoriasis, like atopic dermatitis, like in axSpA, like psoriatic arthritis, where you see numbers of around 15%. Those are very much feasible and also required think again that HS is a disease where you have irreversible tissue damage where you have scar formation that even with the best drug, you don't -- are not able to remove these tunnels. You're not able to remove these scars. For that, you need surgery.

So we need to treat early on. I think it's our objective and the objective of other companies to increase the treatment rate here with advanced therapies. Now on the right-hand side of this page, you also see that HS is for various other reasons, a very attractive market for a biotech like us. First of all, the number of treatment options are very limited. It's not a market where you have 10, 15 available options. But right now, you only have a couple of approved therapies. We looked at the data and you see that they leave a lot of white space. I talked about irreversible tissue damage. And that's also one of the reasons why this market is not as closely managed by the payers. You see lots of medical exceptions that are actually approved by the PBMs, by the payers.

You also see that the treatments that are in the market actually have very limited efficacy and have partially some issues with tolerability or safety or durability. So lots of opportunity for a company like ours to actually get into the market and successfully commercialize this drug. And actually, it's a trend that you see overall, even beyond HS, you see more and more biotechs actually launching drugs themselves and actually do it very, very successfully when comparing to analyst consensus.

Now what do prescribers look like. Look for -- Kristian already talked about it and in the market research that we have been conducting. When asking dermatologists, what are the attributes that are most important when selecting an HS drug. No surprise, people look for efficacy and for safety. But if you look at it a little bit more closely, you see that actually, it's not one of the dimensions that truly stands out. It's a lot of factors that matter. And on efficacy, it's not only a lesion count, it's the quality of life. It's the pain reduction. It's all these aspects and all these aspects that we talked about when we talked about the potential label for sonelokimab that truly matter for the prescribers. We even went one step further. We looked, we conducted a conjoint analysis with actually 250 prescribers, 250 dermatologists that actively treat HS, and we did not ask them what matters to you.

We actually presented them with potential attributes of a drug. We presented some profiles of drugs that are currently approved and the profile of sonelokimab with some variations on the label and try to understand now which drugs would you choose given the differences that you see on the label? Do you get a claim for quality of life in the label? Does it make a difference, whether you have a higher or lower HiSCR75, et cetera. And I think most importantly, we see that the prescribers are very excited about the profile that sonelokimab brings to the table.

We see a very high willingness to prescribe and you see it in the bottom also independently confirmed by research analysts from some of the banks that cover us. I think also very important and very interesting for us was to see the importance when it comes to the label. And when you see the advantage that you can potentially get from having data on quality of life, data on pain, fewer safety warnings, those are areas that actually make a very big difference when it comes to prescribing behavior in the market. Where do we stand with the preparation of the commercialization of sonelokimab in the U.S. You see it here on this page, we have now incorporated the U.S. entity in the beginning of April.

Our distribution operation setup is well advanced with respect to state licensing, with respect to selection of a third-party logistics company, selection of specialty pharmacy set up, serialization, we have produced the first commercial batches. We are starting to stockpile sonelokimab so that we have the supply that is needed for a very successful launch of this drug. Obviously, we've done a lot of work on the strategic positioning, go-to-market model pricing considerations.

We've also further strengthened our collaboration network. We have very good partnerships with the leading KOLs in the field. We have a very strong partnership with the HS organizations that are very active in this market. And we've also started the first discussions with payers and PBMs and are very excited about the traction that we have on that side, very high excitement from their side about our product and also some opportunities for us as an innovative biotech not only innovate in the way we bring like we generate data and show some very innovative drugs, but also thinking of new approaches, collaborations with payers, with PBMs to actually disrupt this market. Also worked on the brand identity. Lots of more work left for us, very clear, but there is also a couple of key milestones ahead for this year. We're in the process of selecting or identifying the location for our U.S. headquarters more to be announced soon. We're also in the process of appointing the U.S. leadership for MoonLake.

The commercial team will obviously expand very heavily, including expansion of a field force where we actually plan to have a field on the ground as of the beginning of next year. We'll continue to work with the payers, with the PBMs to build partnerships there. And obviously, importantly, we will also work on continued manufacturing of sonelokimab to ensure that our supply is sufficient to meet the demand that we expect for this product. Last but not least, you see it on the bottom of the page. We have a very strong and healthy balance sheet. We have runway as is until the end of 2027. So covering the expected approval of sonelokimab. And on top of that, we do have the collaboration with Hercules Capital through which we have access to up to $400 million more in additional funding and additional non-dilutive funds. So we're in a very strong position from a balance sheet from a capital perspective and actually very much looking forward to now preparing for what we believe will be a blockbuster launch.

With that, handing over back to Jorge for some closing remarks.

Thank you, Matthias. As we're coming here up on the hour, I want to make sure we round it off with some closing remarks, but also follow on my initial promise to shed a little bit of light in terms of what we expect for the IZAR-1 readout. But again, still keeping the focus in HS, I want to just take us back one step and look at what have we shown you when it comes to patients and prescribers. And I really believe that we here have the potential to be the best-in-class drug, possibly the best in disease drug in HS as we're proposing what I would call a well-aligned label with the regulator in the United States, the FDA, excellent position in terms of efficacy, real potential for a safety profile that really presents an alternative to patients.

And as Matthias mentioned, something that really sways the decision when it comes to prescription and something that is very, very convenient and therefore, helps the patients to get patients to treatment. But as Kristian also mentioned, keeping that close relationship about discussing the disease not about how you actually inject your drug. So from a prescriber perspective, as a closing remark, clear indication for a leading label supported by all the information that we've shared around our FDA interactions. If you actually see it from a payer perspective, as you started hearing from Matthias, obviously, a very critical element in driving the commercial success of this product because the market is so unstructured, very important to talk about the value of those drugs for payers. And I think the data that we've shown you, not only the label, which obviously payers will very, very carefully peruse in their decisions to support the drug when it's given to patients.

But as you see on the left side, that element that Kristian introduced when looking at the scorecards because the payers will also do the scorecards of the drugs and compare, what is that percentage of patients that I get further in treatment, be it in efficacy, be it in patient-reported outcomes versus a competitor drug. And here, as you can see, I think we can have a conversation with payers where we say, for example, at a similar cost, our drugs just delivers 2-digit advantages when it comes to patients that reach certain objectives. So also from a payer perspective, which as you know, will be a major focus of our commercial model, I think this data and this overall program of HS really delivers something that is very, very competitive. Starting to look forward and continuing to go along the time line in 2026.

Next up, rheumatology. We start now moving into the readouts of our dermatology programs in Phase III. Obviously, we read axSpA Phase II earlier in the year. And the first one is IZAR-1. I remind everybody that's our bionaive study where we compare different doses of sonelokimab with placebo. Our largest trial ever, and that will read in about a month's time. What should you expect from this readout, we prepared a summary so that you know what's coming. Very important, remind everybody that IZAR-1 is a trial with 3 arms that run the whole year, placebo, 60-milligram SLK with induction, 60-milligram SLK without induction. IZAR-2, another 4 arms also running for a year. So obviously, as you read on the primary endpoint, we're able to share some information. But obviously, we have to be careful not to unduly unblind the study and obviously follow the mark of the letter of the FDA on what can be disclosed or not.

What will be disclosed is presented on the right side of the page. We believe that this is probably one of the most broad detailings of a primary endpoint in PSA. You should expect within Q3 a press release, the press release will say what any other press release says in PSA. Did we meet the primary end point? Or did we not meet the primary endpoint. But we -- as I said, we will go beyond that. We will be disclosing the absolute responses for sonelokimab in the main dose, which is the 60-milligram with induction, as you -- as we all know from the ARGO Phase II, we will be showing you the absolute responses for all endpoints. Well, of course, stating whether we meet or did not meet. This will allow us to not only talk about meeting overall but it will start giving you a sense of what kind of response can be achieved in a purely bionaive population with sonelokimab. This will keep with the blinding approach that we agreed with the FDA. And we'll give you a very good sense of where we were in line with ARGO and what's the effect in these patients.

We believe that anything that aligns with ARGO will be a clear success for IZAR-1. And obviously, why are we so focused here on the absolute responses of sonelokimab? Because obviously, in PSA, as you know, this is what matters much more for prescribers here. The delta-to-placebo element is less important. We know investors will want to look for this information. But as we all know, there's no real placebos in PSA patients are treated with many different drugs throughout trials in our trial and any other.

So we truly believe that the absolute responses and the breadth of data that we will present will provide a unique view on the primary endpoint on IZAR-1 and will allow many people to do comparisons already at this time point. So we're very excited about it. Watch this space for a press release in the near future. Hopefully, that was a very informative and robust session as we always do. A great story on HS. We're really excited as a company and obviously more to come in other parts of our clinical programs.

So we will stop here and open now for the Q&A session.

So we have a couple of questions here related to the VELA-TEEN study. One of the questions here from Rami Katkhuda, LifeSci Capital. The adolescent HS data appear very strong despite the small sample size. How much of this benefit do you attribute to earlier-stage disease? And do you expect the VELA-TEEN data on the label as well? Maybe Kristian, do you want to take this?

Yes. Happy to take it. And Rami, good point. I think what you suspect here is true. We get -- we treat these patients, these juvenile patients at an earlier stage of their disease. They are probably less recalcitrant. They have seen less therapies. They are more in the inflammatory stage of their disease. And I remind you that we allowed patients in the study that did not yet have a tunnel, which in my eyes is completely meaningful, but you don't want to wait until the irreversible situation -- destruction has occurred. So we see a better response, but this better response is not an artifact, it is really driven by the fact that you catch -- you start treating the disease at an earlier more inflammatory stage of the disease.

And since we all use anti-inflammatory drugs, it makes a lot of sense, and we talked a little bit about the potential to do some disease modification. That would be the goal. And I shared with you that all these patients that we enrolled in the adolescent trial will have a chance to participate in the OLE. So hopefully, even from our own relatively small study, we'll get a first evidence if this is indeed possible.

Let me remind you, this is more than just saying I modeled from some other juvenile indications and therefore, my drug can be used from 12 years on. This is actually generating data in patients from 12 years on. So we want to get, hopefully, more in the label than just you can use the drug moderate to severe from 12 years on, but actually be able to talk about the pediatric population. There's the Section 8 used in specific populations. There is 8.4, which is your pediatric population. So in the label, there is room to talk about it. And of course, we will try -- these are exactly the areas we want to make sure that people understand this is data coming from a real trial -- successful trial in patients with adolescent HS.

All right. Then we have a few questions here on the commercialization part. One of them here from Prakhar Agrawal from Cantor. Why are access dynamics in HS different than in other I&I indications like psoriasis?

Maybe I'll take this one. So I think first of all, in psoriasis, we have over 15 approved treatments right now. In HS, it's 3. Also, if you look at the outcomes in psoriasis, you have quite a few good treatments that bring patients to a PASI100 response. So full skin clearance, we are far away from these response levels in HS. So arguably, the unmet need is a lot higher in HS. Also, if you look at the disease, you have to understand that in HS, you have a lot higher cost of care for the payers. Patients undergo surgeries, they visit the ER, they take opioids. So it's a very costly disease also for the payers.

And then also, you do have really some irreversible tissue damage here. In psoriasis or in atopic dermatitis, if you treat a patient, even if they've had many, many years, the disease, you can get that to clear skin. In HS, the tunnels that have already formed as per the point that Kristian just made about the VELA-TEEN data, once they have formed, you will not get them away without surgery. Same for the scarred tissue. You can treat the inflammation, but you have irreversible tissue damage. That's also why it's I would say interesting and makes sense for payers to actually be more open for innovation in a disease like HS where you have a costly care where you have a true unmet need, where you have irreversible tissue damage.

Now the next question here on the commercial side. This one is from Tom Smith from Leerink. Can you comment on some of the precommercialization steps that you're taking in anticipation of potential approval? I believe this one I've already covered earlier, but then also another question here, how are you thinking about manufacturing capacity for sonelokimab and current drug supply. Jorge, do you want to comment on this?

Yes, I am happy to do that, Matthias. Thank you, Thomas, for the question. Perhaps I actually take the opportunity to underline a few of those elements on the pre-commercialization. I mean, Matthias was very clear on that list, Thomas. And I think that reflects how much work has been going on. Obviously, a lot of focus on the company regarding, of course, approval VELA data, et cetera. But we never stopped working on the commercialization setup. I would even describe the fact that I think we've already finished the first phase of pre-commercialization, as Matthias described, and now we're really moving to the next phase, hiring the team and preparing all steps, including supply and I think very importantly, all the elements around access that Matthias already mentioned in the previous question, in answer to Prakhar's question. And I think that's really the focus.

Now obviously, as you raised, Thomas, we need to make sure that we have drug supply in place. Here, I would like to add that in terms of absolute capacity to supply the market, and that includes the U.S. and other regions our current supply chain is ready to take us to year, 3 or 4 -- year 3 or 4 of our market, right? So some might ask how is that possible in earlier stage biotech. I think here, you were fortunate to inherit, if I may call it like that already a very advanced supply chain when we licensed the drug from our partners at Merck and that allows us to be already ready to go all the way to those years into the market. Obviously, this is a tried and tested supply chain, Thomas. We've treated thousands of patients across both sides of the ocean. So we know it works. And as we said, following the BLA approval and the approval of our sites, we will be ready to go in terms of capacity likely to year, 3 or 4 of market. That doesn't mean that we will stop developing our supply chain right now.

We're also looking into other opportunities, namely second sourcing, et cetera, that will allow us to go into further years of the market, but also continuously manage the risk of supply chain. So Thomas, I would describe it as a tried and tested supply chain, lots of capacity FDA inspected partners throughout. So I think we're very ready, but we'll continue adding to our supply chain as part of our pre-commercialization steps.

All right. Next, we have a couple of questions here on the safety side of things. One here from Phil Nadeau from TD Cowen. Can you discuss your confidence that you won't get a warning for suicidal ideation? I thought there was no signal in your trials, it is our understanding that the FDA often defaults to class labeling for rare adverse events. Have you discussed the SIV warning with the FDA? And similar questions we received from other analysts also related to the liver warning. Kristian?

Yes. Happy to address this. Very clearly, what we will end up having in our label remains a review issue with the FDA. They need to look at the totality of the data. If you look at the warning and precaution section in the IL-17A & F antibody, you see some things like be careful with TB. We will likely also get it, although the National Psoriasis Foundation has recently talked about this. There's no evidence that the MOA increases the risk of TB. We have all excluded patients with active IBD from our trials and that may lead to some words like use this with care in patients with IBD. And then there are other areas. And again, I use the example of the IL-17A & F safety, specifically the warning piece, as an example, there is a liver warning, there is a suicidality warning.

And what we can say is when we look at our data, we do not seem to have not only no signal, but we also don't seem to have the data that we speculate led to the warning in the label that I was just talking about. So our ingoing assumption is that there are areas to differentiate and as specifically we mentioned, the liver warning and the suicidality warning, and there will be areas where I agree with your suggestion that you may be very similar.

Next question here, again, on the label from Yun Zhong from Wedbush. Have you received confirmation from the FDA on whether VELA-2 data will be used for efficacy evaluation in addition to supporting SLK's safety. Jorge?

Happy to take one of the liver questions here. So Yun, we have received confirmation from the FDA that we will use MIRA and VELA-1 as part of the substantive -- establishment of substantial evidence for effectiveness associated with Section 14 of the label. VELA-2 will be considered beyond safety. There is a matter of review, whether it's more advantageous for us and prescribers to include VELA-2 in the table or only in the narratives that will be discussed. But when you ask what have we received confirmation for, that's the use of 2 adequate well-established trials that's MIRA and VELA-1.

Another one here on the label or on the BLA submission. This one again is from Tom Smith from Leerink. First, on the BLA submission expected by the end of September. Can you comment on some of the final gating factors or steps the company needs to take before delivering the submission package with respect to the regulatory path in HS and past discussions with the agency, understanding that you don't plan to meet with them again before submission? But can you talk about the importance of the patient reported outcome benefits you are seeing here in terms of demonstrating SEE in the eyes of the regulators?

So that's actually, a few questions in here. First and foremost, yes, we are planning to submit the BLA at the end of September. I think the gatekeeping items here are finalizing the submission, clinical study report finalizing the submission also getting everything submission ready on the VELA-TEEN side. Typically, big pharma companies, based on my experience, takes 6 to 9 months after completion of the parental trial. As you can see, we are presenting the data today -- fresh off the press. And in about 3 months' time, we plan to submit the BLA. So we're already trying to do this a lot faster. Now do we cut some corners here. No, absolutely not, but we've already been preparing very well for the submission.

After the readout in September, we already had a 16 weeks data and all the documents were already drafted now need to be finalized for the submission at the end of September. It's also correct that we will not meet with the FDA again on the HS side, the pre-BLA meetings that we've had at the beginning of April, at the beginning of May on the clinical side and on the CMC side, were the last interactions that we've had with the FDA before the submission.

Everything was very clear in these meetings. We received very clear guidance. So now it's up to us to execute and submit the filing in the end of September. Finally, your question on the patient reported outcome benefits. Yes, very important. We've had explicit discussions with the FDA already last year about how do you -- yes, if you want to have claims on quality of life, what are the instruments that you should use, reminding you again that we are the only company that actually has the HiSQOL, the HS specific quality of life instrument in the hierarchy as a key secondary end point, and therefore, we're also aiming to get a label claim on quality of life into the label. And we think that will be a very important differentiator versus other therapies.

Whether or not that is a crucial part in demonstrating substantial evidence for effectiveness. I think here, as Jorge said, as Kristian said, the FDA looks at everything certainly doesn't harm. But I doubt that at this point, people really have serious doubts that this drug is not efficacious. So certainly, will be considered. We're planning to get it on to the label, and we think it will be a very important differentiator.

Now another one. Here, again, on the label, I think we covered it, but one now moving to IZAR. This one is from Kaveri Pohlman from Clear Street. To what extent do the results presented today, increase confidence in the upcoming psoriatic arthritis readout? Kristian?

Yes. No, happy to take this. If you take a step back and you just ask yourself in how many indications have you now seen promising clinical data, but also mechanistic data with your IL-17A & F inhibiting nanobody sonelokimab, there's great data in psoriasis. There is great data in palmoplantar pustulosis, second dermatology indication. We are about to read out in psoriatic arthritis. We have shared with you data in axial spondyloarthritis. So I think the number of -- and of course, the great data in HS. So does it increase the confidence that you go to various, what I would call type 3 diseases, so diseases where we know that the IL-17 pathway is probably center stage. Does it increase the confidence that if you go from indication to indication type treatment, you see great responses to your drug?

Absolutely, yes. Ultimately, the data will hopefully confirm this. I want to also share with you or remind you that we do studies with imaging in both PSA and axSpA, and this imaging is intended to generate more evidence on the question, do you get any advantage from your molecule? Is rheumatology another disease area where you potentially benefit from your drug being small, albumin binding, probably reaching at the enthesis, for example, better than other drugs.

And it's also taking these imaging results into consideration. We already shared with you the PET imaging and the MRI imaging in axSpA. As I said, we will get more innovative imaging, PET imaging in psoriatic arthritis. But if I look at the totality, the clinical data, this imaging data, the biomarker data didn't even talk about this in the peripheral blood, in the tissue, yes, our confidence is very high. But of course, ultimately, the clinical data has to show this. IZAR-1 is the largest Phase III we have conducted so far. It's 1,000 patients. As you know, there is a -- this is the bionaive patient population in PsA. We will look in addition to the classical readouts, we will look into radiographic progression, some more complicated end points. So we are sitting on the edge of our chair as you will do, but I think the confidence level is very high.

Perfect. Then we have another question here from Ram Selvaraju from H.C. Wainwright. How has the reaction from strategics and collaborators been to the 52-week VELA data, in particular, has the longer-term evidence supporting sonelokimab and HS led to any notable change in the way SLK is perceived in this indication particularly versus bimekizumab. Jorge?

I'm happy to take that, and Ram, thank you, thank you for the question. I think even the way you framed the question is absolutely spot on. I think if we reflect on how all the KOLs and some of the biggest prescribers in the U.S. have been looking at this data as it was presented at 40 weeks, obviously, at AAD, but also for those that are familiar with the data that was presented to you today, I think it continues to really mount in terms of the excitement around SLK. Sometimes we even have heard from investors that they were almost surprised by how positive the future prescribers of the drugs are versus their own perceptions, and I think this excitement around the community, be it KOLs, be it large prescribers, be it folks in the U.S., be it folks in Europe, be it patients foundations, associations, I think that excitement is really growing.

And I think the reasons for that are, hopefully, were laid out clearly today for everybody, which is this concept that Kristian mentioned around the scorecard. That's what patients, that's what physicians will do. And I think that long-term evidence, which is what really matters in dealing with the disease. Obviously, physicians are far more interested in what happens at 1 year mark, at 2 year marks, et cetera, rather than what happens at 3 months or 4 months? Because obviously, this is a chronic disease that needs to be managed over time. I think this evidence just continues to drive that change. I think that also when you add to this the fact that the drug seems to have a benefit ratio that is perhaps a little bit easier to manage, probably a lower barrier of acceptance when it comes to how easy it is or how much easier it is in our view to be administered into dose.

And obviously, the fact that this is a drug that has a very high likelihood of having a label for the very, very first time approved for 12 years on based on the data. So I think the reaction has been extremely positive. Matthias also mentioned it. Several investment banks out there have made their analysis. People assuming that our market penetration will be around 20% to 30%. Matthias mentioned about -- mentioned to all of you, all the work that we have done in terms of conjoint analysis, et cetera, to really detect with a basic label for us, what would that mean? And we end up basically in the same place about 1/4 of the market.

But also, as Matthias mentioned, the upside opportunity there is if various little things that we discussed today around the label actually come to be, some of which Kristian has just described in some of the answers to the question. So I think we're starting from a high potential position in terms of market share, obviously, a very -- a market with very few competitors, lots of opportunity. But also, I think, Ram, a true opportunity now more than ever to really become perhaps the best-in-class and best-in-disease drug in HS.

Thank you, Jorge. I'm afraid we're at the end of the allocated time before markets open. Thank you all for joining. We hope that you enjoyed this webcast and the presentation of the new data. As always, you will find the presentation document available on our IR website and a replay of this webcast will also be made available today. Once again, thank you for joining. Have a good day.

Good morning, good afternoon. Thank you so much for joining our Investor Day today, MoonLake Immunotherapeutics. My name is Matthias Bodenstedt, I'm the CFO of the company. And I'm sitting here on the right, Dr. Jorge Santos da Silva, our Chief Executive Officer; and Professor Kristian Reich, our Chief Scientific Officer.

Together, we are very excited to walk you through a number of updates about the company. I will start with a very brief introduction, then Kristian will present our Phase II data from the [Audio Gap] S-OLARIS study in axial spondyloarthritis. After that, Jorge will provide an update on the hidradenitis suppurativa front. He will, on the one hand, summarize the feedback of our regulatory interactions with the FDA, but he will also provide an interim read of the long-term data from our VELA program. The 52-week data from our VELA studies in adult HS patients, but also an interim read from the VELA-TEEN study in adolescent HS patients. After that, we will provide also a brief update on the PPP program, on the PsA program and on the financials of the company. At the end of this session, we will open up for Q&A.

Please take note of our disclaimers. Another word upfront. A replay of this session will be made available on our IR website, and you will also find the presentation document uploaded there. [Operator Instructions]

Now before we get to the main content of this session, very brief recap for those that are more new to the story of MoonLake. Who are we? We're a company that was founded in 2021 in Switzerland, and we are focused on the development and eventual commercialization of a molecule that is called sonelokimab, or SLK, as we call it. It's a tri-specific IL-17A and IL-17F inhibiting Nanobody, and it addresses multiple very large indications in inflammation.

We are public on NASDAQ, went public in April 2022, and are well funded with a balance sheet that supports the ongoing studies, provides cash runway into the second half of 2027. And on top of that, we have access to a debt facility providing additional funding of up to $400 million. We will talk a little bit more about this towards the end of the session.

We have now conducted with our molecule sonelokimab Phase II and Phase III studies in 5 large indications across dermatology and rheumatology. Also here, we will provide more details during the session. We're planning to submit the BLA for SLK in the second half of this year within a potential first approval in the U.S. in the second half of next year.

Now what is SLK? You can see it here. SLK is a Nanobody, and a Nanobody is the variable region of a heavy-chain-only antibody. You see it depicted here on the left-hand side. You know the traditional antibodies, then you have heavy-chain-only antibodies, and the Nanobody is the variable reaching the VHH of a heavy-chain-only antibody.

Sonelokimab, 3 of these VHH is covalently linked with the one that you see on the right-hand side, the ones depicted in dark blue, we bind to IL-17A and IL-17F. And then in the middle, you see also a third VHH with which we bind to human albumin. This is meant to extend the half-life, but there is also a lot of evidence that supports that this albumin binding helps us to accumulate the drug at sites of inflammation.

Now this whole construct that you see on the right-hand side together is only 40 kD. So a lot smaller than the traditional antibodies that are around 140, 150 kilodalton. We are also unique in a way that we are not only a Nanobody instead of an antibody that -- but also in a way that we inhibit all 3 IL-17A and IL-17F containing dimers with the same affinity. This whole construct that we have is administered subcutaneously for commercial through an auto-injector with a monthly dosing of 1 ml.

What does that translate to? When we look at our clinical study data, we see a leading profile now across multiple indications, not 1 or 2, but really, as I said earlier, we have now tested this drug across 5 indications across dermatology and rheumatology. On the dermatology side, you see HS, PPP and PsO psoriasis. On the rheumatology side, psoriatic arthritis and axSpA. And across all of these indications, you see a leading profile. Those are very large indications. You see our estimates in terms of market size in U.S. dollars here. And you see here the response rates that are really the leading ones or among the leading ones across all of these indications.

Not only do we show leading response rates, but also in our other trials, we aim to elevate the response to care for the patients by introducing novel elements, for example, in [ HSS ], we've been the very first company in the very first trial to use HiSCR75 as a primary endpoint. We've been the first company, to our knowledge, that uses the hidradenitis suppurativa specific quality of life instrument, this HiSCR, in the hierarchy. That's a key secondary endpoint.

Other examples here, you will hear Kristian talk a lot about it today, for example, on the axSpA side. We will conducted our study with a lot of imaging, PET imaging, MRI imaging and Kristian will share more on this a little bit later.

Psoriatic arthritis, we emphasize a lot of the very deep responses with ACR70 is something that you typically do not see reported by our competitors because we believe that sonelokimab has the opportunity to truly elevate care for patients in need. You also see here in the bottom that we believe that sonelokimab provides a leading benefit risk profile. Overall, we think that the safety profile looks very good. And in particular, we do see no signals of events of interest that you see with other IL-17A and F inhibitors or with other MoAs that are relevant in these diseases.

Last but not least, we believe that our pathology, the administration of the drug, is very convenient. I mentioned it before, the Nanobody allows us to administer sonelokimab in 1 ml only, even in these indications where we use a higher dose, 1 ml only, and in maintenance, one shot every 4 weeks. And typically also, a shorter induction period than what we see with other drugs.

Today, we will talk about primarily the data on the right-hand side, the axSpA data, the S-OLARIS program that we've been running. And on the left-hand side, as I mentioned earlier, we will also talk about the HS program with the new data read of the interim data of the 52 weeks in VELA and the interim data from the VELA-TEEN study, the adolescent HS study.

Now before I hand over to Kristian, here is a little summary of our catalyst calendar this year. I will not get into any detail here. Jorge will cover it a little bit later, but enough to be said here, we have a lot of data reads this year. And very importantly, this is also the year where we expect to submit our BLA with the U.S. Food and Drug Administration. And then also 60 days later, the acceptance of this BLA.

Now with that, over to you Kristian.

Thank you, Matthias. A very warm welcome also from my side. Excited to speak to you today about our second rheumatology indication after psoriatic arthritis, the results from our S-OLARIS trial, a small trial, but I think a diamond that really shines with regard to many outcomes, and I'm very happy to walk you through this.

To give you a little bit of orientation, if you look into the bucket of the so-called seronegative spondyloarthritis, you see 2 main diseases. One is psoriatic arthritis, where we think we have already shown very exciting data, especially when you look at these high levels of response, the minimal disease activity or MDA, the combination of ACR70 plus PASI100, what Matthias was talking about. This is the second biggest diagnosis in this bucket, the axial spondyloarthritis disease.

You have it non-radiographic and radiographic. Many would think that these are 2 ends of the spectrum, that this is a disease that starts without ossification, but if not treated well. And this important, progresses to irreversible ossification. And with irreversible ossification comes irreversible limitations in your mobility. So I think it's an important dimension of the disease that you somehow therapeutically stop the ossification. I will come to this as I move you through the slides.

You see that the prevalence is as high as psoriatic arthritis, around 1%. You see -- as you see it with all I&I indications, that physicians and patients are more aware, you see more patients being diagnosed with this disease, axSpA every year, approximately 120,000 net patients newly diagnosed in the U.S., if you look into the claims database.

If you compare to PsA, you also see some important differences. One is, there's a lower use of biologics. You see here that although there is a 12% increase in the use of biologics per year in patients with a diagnosis of axSpA, you see that we still talk about below 15%, which is a lot higher in PsA. And even if you assume a very conservative growth rate of the use of biologics in axSpA, you see that by 2038, you get to a very healthy market size of $10 billion to $15 billion.

So what is -- what did we do to address this? And what is different in axSpA compared to psoriatic arthritis. As I said, small study, but really a diamond. Why? Because in this trial, we not only apply the typical clinical outcomes like ASAS40, a score that primarily looks into function and symptoms. It's a patient questionnaire, if you will, but also using ASDAS-CRP, a score that many KLs would think is becoming the more important because it starts to look into the depth of inflammation and disease control, but then really taking it beyond.

Doing MRI to measure inflammation in the affected bone, doing PET imaging, innovative PET imaging that allows us to measure what sits in the core of axSpA, which is ossification. So using an imaging technique that shows you where do you have increased osteoblast activity in patients. And what is your treatment doing with this. And then last but not least, really looking at biomarkers and objective outcome to validate the findings. And again, I will walk you through this. The trial went on for 12 weeks. We know that we have a fast-acting drug. We already saw this in psoriatic arthritis, and I will present you the data from this 12-week period.

As I said, if you look into PsA, what are the difference? A, there's a less -- there are less drugs available. Just to give you one example, the IL-23s that work in psoriasis that work in psoriatic arthritis, they do not work in axSpA. So this whole MoA goes. You basically are down to TNF 17 and more recently, the Janus kinase inhibitors.

If you look into this clinical score that is used in many trials, and I should say the more modern trials, the ASAS40 originally, the TNF, they only used ASAS20 as the primary endpoint. Now we use ASAS40, but again, this is a score that looks into function and symptoms. Patients are asked, you see placebo responses. And you see that approximately 50% plus/minus using the available therapies of patients achieved this ASAS40 response, so at least 40% reduction in these patient-related -- questions related to function and symptoms.

If you look at the ASDAS clinically important improvement, I will not go through the details here, but let's say, these are patients that have a meaningful improvement of their inflammatory activity of the disease control as per ASDAS-CRP. You see that the highest numbers are achieved with a more powerful 17 inhibitors. And Jorge, you talked about 60%.

Companies are becoming aware that these clinical outcomes have limitations, that they do not really allow you to address the question, what is the therapy doing with the main disease pathway diversification, and we see that the first drugs try to generate data on this using PET imaging. And this was, of course, a focus of our study, and I will show you the data as we move along.

So ASAS40 responders. This study was an open-label study. You see that very rapidly, we see a high percentage of patients treated with sonelokimab achieving an ASAS40 response. For reference, we have been putting data that competitors were able to achieve in there with this gray bar, you see that the numbers are really high numbers. Now you could say, yes. But the numbers from the competitors, they partially come from placebo-controlled trials.

So we also give you here, there are open-label results achieved after every patient in their trials switched from placebo controlled to only drug. So this would be the week 16 number, the week 52 number. This is the open label non-placebo-controlled parts of that trial. And even if you take a very unconservative view, you look at the as-observed data, you see that the numbers generated with sonelokimab early on, remain very impressive numbers when it comes to ASAS40, with more than 80% of patients already achieving this by week 8 and then maintaining by week 12. So that is the traditional outcome. This is function symptoms.

Let's do the next step, inflammation control, disease control using the ASDAS-CRP. And again, surprisingly, I have to say high numbers already achieved early on at week 4. These are patients that achieved an absolute disease stage axSpA of inactive or [indiscernible] disease. This is what the KOLs like because similar to the MDA concept in PsA, this will be the treat to target, which the ASAS40 is not really. We see again that 80% of the patient achieved this high level of this deep in control of the inflammation.

If you look at the relative improvement using the same score, so asking the question, what percentage of patients achieved a clinically important improvement, clinically meaningful improvement. You see a picture that's not too dissimilar from what I showed you with ASAS40 and that 80% plus of the patients early on achieved this high level of response, compare it to what you see with the competitors. And I should point out that what is not shown here in the graph, but what you can see in the clinical trials, if you again look at the 1-year plus open-label part of competitor trials, you see numbers that go to 60%. So these early numbers of 80% plus still make sonelokimab look extremely good when it comes to the comparison to other trials.

These were the clinical outcomes and the outcomes with related to inflammation control. Now I will build the story step by step. Let's now use MRI as a first objective measure of what is going on with the inflammation in the sacroiliac joints, which are the main area that are affected by the disease. And this SPARCC score, SPARCC MRI score is the established objective quantitative, semi-quantitative measure of bone inflammation in axSpA, primarily looking at bone marrow edema.

And I have to say, again, a surprisingly high reduction already at week 12. Just to give you one number, if you look at all the competitor trials, you would say anything above an absolute reduction of minus 8 or minus 10 would be best-in-class. And the highest number is still being seen with regard to this score delivered by the anti-TNFs. Here, we clearly go over. So more than 80% reduction of the absolute SPARCC MRI score, and 90% of the patients achieving a reduction in the MRI measurement of bone inflammation.

As I told you, we really want to use the Nanobody molecule, especially in rheumatology, to move away from symptom only driven scores to scores that attack the core of the diseases, MDA in psoriatic arthritis, really showing that we stop radiographic progression in PsA, and you know that our Phase III study is in full swing as we speak.

To really measure ossification in axSpA, you can apply a so-called 18F-NaF PET imaging. This will show you the regions where you have an increased osteoblast activity. It will show you the region where really inpatients increased ossification is going on as we speak. You see here 2 things. You see an example on the right-hand side. Everything that is highlighted in yellow means there is ossification -- exaggerated ossification going on before treatment, and you can really see that already within 12 weeks, SLK cools these areas of, it stops increased osteoblast activity. It takes away the risk of increased ossification. And we would allow ourselves to call this disease modification.

We don't have really a good treat to target in axSpA. We don't have the concept of disease modification in axSpA, yet we have it in PsA. We want to use the Nanobody technology to really show disease modification axSpA, and we think this is an important step. You see on the right-hand side, if you look at this from all patients, you really measure this. We can see already within 12 weeks; overall patients were all sacroiliac joint quadrants evaluated. We can see a more than 40% reduction of osteoblast activity.

Now I told you that we did extensive biomarker work. We did this in the peripheral blood, and we did this in the tissue. Today, I will share with you, as a first piece, the peripheral blood data. And I have to say, as a scientist and physician, this data was truly unexpected and amazing. We did this nonsupervised. We just asked the question; do we find markers in the peripheral blood that correlate with the individual clinical response? Really showing that it's our therapy that drives these changes in the biomarkers.

And the biomarkers that we found, you see the names here depicted on the y-axis, they all sit at the heart of ossification. These are markers that are known to reflect increased osteoblast activity. They are known to link inflammation with angiogenesis and increased mesenchymal activity and ossification and ultimately APCS is probably the best marker to reflect overall control of this whole process.

This quartet of markers that I show you here. What you see on the x-axis is the degree of correlation of the reduction of these markers with treatment to SLK, measured as the individual clinical response to treatment with SLK. You see very high correlation levels, 0.5, 0.8. This reduction of this quartet indicates to us that SLK really treats structural damage.

You see now this is a completely different level to just measuring function and pain. If you look at the combination, the package that I showed you, MRI, structural damage, PET imaging to really show control of ossification and then completed by biomarkers. We think that this validates the clinical findings, a lot more than any placebo control could have done it. You may see a placebo response in a patient questionnaire. You will not see a placebo response in structural damage, PET imaging of these biomarkers. This is why we designed the study in the way we designed it.

Safety profile, not much to say, other than we continue to see a very clean safety profile, especially in rheumatology, I should say. We know that even the candida signal shown here is very low. It's all very much in line compared to what we saw in our other seronegative spondyloarthropathy indication psoriatic arthritis, and we continue to see a potential to differentiate on the safety side from competitors.

So to summarize, I hope you see my excitement, as I said, a diamond study that really links clinical outcomes in a degree that we have not seen with competitors, but really validate these findings by what we think is the next level of what this therapy should do, and that is control, structural damage, become a disease-modifying drug in axSpA, prevent ossification and irreversible restriction of mobility.

Jorge, is there any news in HS regulatory?

Thank you so much, Kristian, also from my side, to all of those joining the session today, good morning, good afternoon, good evening. It's a pleasure to be here, again, reporting on some really exciting data. And again, thank you, Kristian, for that. We know that the S-OLARIS data was something that many of the stakeholders, many of the communities, including the Street, we're looking forward to, and we think the data is really, really very strong.

Obviously, the other question that is very dear to many of you watching today is the trajectory and the path for HS, especially the BLA submission and how will that result in a label that might be competitive and leading to reflect all the data that we see with SLK across different indications.

So what we're going to do today in this section is really discuss with you how we are building the BLA, and therefore, the label that will result -- that will eventually drive our commercial approach. And we are certain that conversations like those today will continue to bring clarity on, a, how narrow and clear the path is now that we've had the opportunity to discuss with the regulator on what happens next and the regulator has given us the guidance on what to do next. But also how that very clear and very narrow path can actually result in a label that we believe is going to be extremely competitive.

So I will start by reviewing the FDA feedback that we got in December and January. I will then really step by step take you through how this very, very focused guidance results in scenarios for our label that we think are very advantageous for us. And then I will take also the opportunity to show you how, as of today, the long-term data looks like in VELA. I will also show you a bit of VELA-TEEN, and I will just finish off with the time line of the regulatory steps on HS, which you will see will make a lot of sense versus the catalyst flow that Matthias started with.

So let's start with what we heard from the FDA. One thing that I would like to highlight, especially to all the investors in the Street, is really starting on the left side. I just want to remind everybody that, obviously, the interactions and the Type -- especially the Type B interaction that we have with the FDA following the VELA primary endpoint readout is obviously not just a meeting. It's very important that everybody bears in mind that, of course, there was a lot of preparation. There was a briefing book that was created. This briefing book had literally hundreds of pages, including detailed analysis of what happened in VELA, including VELA-2.

So obviously, it's very important to assume that both the team here and both the regulator are very aware of a lot of detail that perhaps the Street or -- for sure, the Street is not aware of, but that goes into the context of these conversations. And of course, again, a lot of those analysis, including a lot of VELA-2, including VELA-2 placebo analysis.

And obviously, as we've informed the market, all the richness in the guidance that came out of this discussion and the analysis of this briefing book is already fully in our hands since we announced it on January 8. So that's an important context element that I think is very important for people to bear in mind.

And then what you see on the right side of the page, is what results from the guidance. For those of you that have been closer to us. Sorry, you remember there was a lot of questions late last year, will this all be sufficient? And I think it's very clear to us now that for the bar of having 2 proper well-controlled trials to submit and support the BLA, we obviously have that with VELA-1, VELA-2 and with MIRA. And I'll come to MIRA in a second. And so no additional clinical trials are required.

So if you hear some analysts asking, is it submittable? Can we put this forward to the FDA for approvability? The answer is very clear. We have enough material to submit a BLA, to establish something that I think is always important for us to bring to you in terms of the wording and what it means to establish what we call and what the FDA calls substantial evidence of effectiveness, SEE for short. And if you allow me the more colloquial language, this means establishing efficacy. But in the regulatory language, you refer to it as substantial evidence of effectiveness, SEE, and you'll see this through the presentation. So no additional trials are required to establish SEE.

Second, very important guidance. VELA-1 and MIRA, VELA-1 and MIRA are to be submitted to establish efficacy, to establish SEE and to support safety as part of the BLA and as part of our request for approval. Very clearly, VELA-2 is to be submitted to support safety, i.e., we do not need more trials also to create the safety database. The question of whether VELA-2 will be used for SEE for efficacy is an open question to discuss with the FDA. And as I take you through the label, you will realize that the impact on our label is either neutral or actually positive, but I will come to this. But again, very clearly, VELA-1 and MIRA to support efficacy and safety, VELA-2 to support safety, VELA-2 participation in establishing efficacy, to be discussed.

What I think is also very important in these cases is what was clearly excluded by the regulator. First, because, again, it narrows the path. I've referred to this path as a very narrow, very clear path. So it's important that people exclude things so that the path is narrow. But it also tells you that there's a very clear specific guidance that is being given to us, not some general statements. And those exclusions are as you see there on the fifth and the sixth bullet point. So supporting the BLA with one trial using some of the recent ideas and guidance that is being given by the FDA is to be excluded from our process. And that's simply because we have 3 well-controlled trials. So no point in focusing in one trial, and of course, we can submit 3. So very clear guidance, don't go down this path.

And obviously, some suggestion and some clarity that VELA-1 and VELA-2 alone could create a question around SEE, again, because we have to discuss whether VELA-2 is included or not. So really, the scenario in which we submit and establish substantial evidence of effectiveness without MIRA is also to be excluded. So again, this gives us a very, very narrow path to operate.

Also, to clarify another very important element in that penultimate bullet point there. To clarify to investors in the Street. When we talk about submitting VELA-1 and MIRA and VELA-2, this does not mean that the whole BLA does not include all the data that we've generated clinically, preclinically, any data associated with SLK and HS, of course, will be submitted as part of the BLA.

When we talk about this trial or that trial to establish SEE efficacy, this is a pure BLA label element. It doesn't mean that we don't submit the whole package. It doesn't mean that VELA-2 is not there in full. It just means that certain pieces of data, together with the regulator, are used to establish certain elements of the label.

And the last bullet point here is, of course, coming out of this FDA, a feedback, what is very clear is that we are completely back on track when it comes to time line. We are now about to start the more technical meetings associated with the BLA submission. We intend to submit the BLA towards the end of Q3. And obviously, we intend to hopefully get it accepted within 60 days after that submission. But what's important also for the Street is that the time lines are as they were already last year. So hopefully, that brings yet again a bit of clarity about what the BLA process is, what we've gotten in terms of guidance and what we plan to do next.

Now another question that comes is, why does MIRA matter? We understand that this, for some investors and certainly for some analysts, create some confusion. And we thought that putting side-by-side what has been happening in HS among the various Phase IIs can shed a little bit of light on this. So on the left side of the page, you see what we've done. You see MIRA, you see VELA. And one of the things that you see with MIRA is that if you compare it with our right side of the page, where other IL-17s have done some work before they started their Phase III, you see a very, very different story.

What you can see with MIRA is that we have a large clinical trial, very similar in design to what we actually ended up doing in Phase III, and it's an adequate and well-controlled trial. It's controlled with placebo. It's also controlled with the standard of care. And what you see is a very high number of patients, 234 at the end of the day. And a study that in its completion, actually took 6 months. So what you can see on the right side of the page is obviously, as I said, a very, very different picture. Either the doses were not really tested, or the number of patients were lower or we use different statistical artificial methods to analyze the placebo or we didn't even do much, if I may say like this.

So when you think of MIRA from a regulatory perspective, and you put it in the context of VELA-1 and 2, what you have here is what we have tried to transmit several times, and it comes out in the regulatory guidance in the sense that we have 3 well controlled and adequate trials for submission. And that's very different from what's happening in other -- with other drugs out there.

Now I can think of 1 or 2 analysts that are going to say, well, but this is a Phase II. Phase IIs don't go into the label. That is just wrong. That is just wrong. If you search, you will see that there are many indications, there are many drugs that have been approved with Phase III and Phase II packages, including in immunology. So we have 3 well-controlled trials. We've got very clear guidance. You see the structure of MIRA. You see the consistency that follows from MIRA to Phase III. So it's very important for us that the Street and some analysts understand that MIRA is a perfectly plausible trial to make a BLA with, but also to try to establish that substantial evidence of effectiveness and safety, specifically in the label.

Now what does it all mean? What are we going to submit in terms of BLA, so that it drives the label that we're expecting to drive? These 2 very quick charts. We just put a picture here of any label that any of you watching the session today can go into the Internet and download and see this is what a label looks like, and this is what allows us to do some things commercially.

I think here we have the secukinumab example just to keep it in the family of molecules. And of course, in the label, you have several sections. We're highlighting 3 sections here. And why do we highlight this? Because as you start thinking how does the drug establish the information that can be shared with patients and physicians to drive a commercial strategy, to differentiate itself from others, okay?

And those 3 sections that we're calling out here are Section 14. That's where all the work in establishing that substantial evidence of effectiveness, the efficacy, comes to fruition. You have tables with numbers; you have sentences that tell you this is how efficacy is driving for these drugs. So that's a really important element to think about and to compare ourselves when we're building the label for the BLA submission, but also for all of you out there to make those comparisons.

And there are 2 other sections that I think are important. Section 5, this is where you have all your warnings and precaution. So where -- if you allow me my language, where all the things that you find on safety really come to bear, where rubber hits the road when it comes to safety. And also Section 2, which reflects the dosing scheme that the patients will follow. And obviously, here, if there's anything about how you administer this drug, this obviously creates a potential for differentiation. So I would say, consult the labels, think about the labels and specifically look at these 3 sections because we believe that's where a lot of this efficacy safety conversation really comes to bear and gets written black and white.

For those that -- that will check this document later, for your convenience, we included the elements here for 2 of the drugs that are competitive to us. I would just call quickly your attention because this is now important for the next part. For the pictures of the Section 14 of bimekizumab and secukinumab. You will see that in Section 14, the secukinumab table only contains HiSCR50, which was their primary end point, including a number that was not significant and didn't meet, just for everybody out there to remember this.

And as you can see, more to the left, you see the bimekizumab label, which has HiSCR50, which is the primary end point of bimekizumab as well, and it also starts including HiSCR75. And you always see the absolute response, the placebo, and you never see p-values, you see a confidence interval and a statement on significance. But that's really the tables on Section 14 for a label with the FDA that are out there for our competitors. And then, of course, some important statements in Section 5 and Section 2.

So with this view of what really matters in the section, we thought, let's put on the screen what we believe is the structure of the BLA and the label there we are going to have to put forward based on the very narrow guidance that we got. And that's illustrated here. And let me take you through what we believe is the base scenario for Section 14.

So what we expect to see here is something very similar to what we see in other drugs and for reference on the right side of the page, we always have here the IL-17A and F monoclonal antibody, so that you have a sense of reference. First and foremost, of course, there are no trial names. You just have HS trial 1, HS trial 2 or 3 or 4 depending on the trials that you have. And that's what we expect to have when it comes to efficacy data for Section 14, we expect HS trial 1 and HS trial 2 to be reflected, and we expect trial 1 to be VELA-1 and trial 2 to be MIRA.

And what you see in this very base scenario is that we assume that we get a table that looks exactly, in terms of its structure, exactly like we have seen for the IL-17A and F monoclonal. You see HiSCR50 in the second line because it's a secondary endpoint. In our case, HiSCR75 in the first line because that's our primary endpoint. And those are the numbers. Those are the numbers that we have seen in our clinical trials corresponding to the absolute response of HiSCR75 and HiSCR50. And for your convenience, although this is not part of labels, we have the delta to placebo, which we know is very important for the Street.

And as you can see in this base scenario where we used the 2 trials that we were guided to include, the label looks very, very competitive. As you see on the right hand of the page for the IL-17A and F monoclonal, apart from the table, you also have some statements. And for example, that drug is a state on the improvement of the worst skin pain, which is also a metric that is really, really very important for physicians, perhaps even more sometimes than HiSCR. And there's statement about it. There's no numbers. Obviously, this particular metric did not meet stat sig in one of the trials or for one of the doses. But the statements are still there, even when you don't meet statistical significance.

What you do not see with that monoclonal antibody is statements on IHS4 or HiSCR because those were not tested. Those were not tested. And as you can see, back to our label here, we believe that our Pain, our HiSCR, our IHS4, all these very important endpoints that we had, we believe they -- in our base scenario, they will not be in the table, but there will be text to reflect that these were important metrics and therefore, can be used commercially. So in the simplest base scenario, you can see that the guidance that we're obtaining gives us the very, very clear opportunity to have a very competitive label when it comes to HS.

Now we believe there's a slight upside case, as we call it, wherein we are actually able to even spell out all the numbers, make it a bigger table that includes metrics like Pain, HiSCR, IHS4. And why are we so keen on these metrics? Because these are the metrics that we know really drive the decision of prescription when a physician has a patient in front of her or him in practice. So we would like to try to have this in the table, so that we can always refer to these numbers if they're not in the text. So that's what we call an upside case in which we can start evolving the table of Section 14 for HS drugs as we move forward, but also where we really bring the numbers for the physicians because we know how important they are, much more than perhaps HiSCR is.

So these are really the scenarios we can operate in the guidance. And then you ask me, so what about VELA-2? What do we do with VELA-2? If it's in safety fine, but what happens with efficacy? So we believe that this is another element that we could add to the label. We're probably not going to do it proactively. But as we said, this is a discussion that the FDA said we will have to take decisions based on a third trial VELA-2.

If VELA-2 would be included, the data would be either on the table or which we think it's more likely if it gets included reference to in the text. But even if the data of VELA-2 is there, you can see that the absolute responses, as you saw us presenting the data in September, the absolute responses are similar to VELA-1. And even if you consider a 9% or 10% delta to placebo, which again is more of a metric for the Street and for prescribers, you see that we continue to have a very, very competitive label that, in my mind, looks numerically higher than any of the competitors.

So very, very clear path, very, very narrow path. Hopefully, through this step-by-step exercise, we've showed you that how it gets built, what we believe is the base scenario. But as you can see, there's not a lot -- there's not a lot of flexibility that we believe we can get from this guidance in terms of how we structure the BLA. And therefore, we believe that Section 14 of the label we're going to propose can be really a leading profile versus many of our competitors.

So we hope that brings a little bit of clarity on the efficacy side. I'm very going to -- very briefly going to talk about the other 2 sections. As I mentioned before, we have a Section 5 on warnings and precautions. We have a section 2 on dosage administration. We will, of course, this document is available, but let me just tell you that when it comes to warnings and precautions, especially as we see them applied to IL-17A and F monoclonal antibodies, suicidal ideation, infections, tuberculosis, liver, IBD, we did not detect those signals in VELA during our controlled phase. So obviously, we think that there's a real opportunity here to differentiate. And we're, of course, going to submit in that direction.

And also, when you look at dosage administration for an IL-17A or for an IL-17F as depicted in the page, as we've said many times, our drug requires a lot less injections for that induction period. Our drug has a much shorter induction period. And in general, you're injecting very little volume.

There's another element that we know is important for the Street and for many of the stakeholders out there, which is not necessarily reflected on any of these sections in the labels of our competitors. But as we know, there are some questions around the usage of IL-17A and F monoclonal antibodies in terms of when -- especially when you uptitrate causing eczema, dermatitis, et cetera.

Again, as we've said in September, we don't really see a lot of signal in this area. And I would like to remind you, that because of our dosage, we're always injecting far less number of molecules into every patient to produce a similar or better result as you just saw on the label. So obviously, this is what we believe can drive some of the differentiation in Section 5 on warnings and precautions, but we also believe that this particular dosage, our Nanobody, the way it binds, the way it responds, the very few number of molecules we actually inject, will also drive additional differentiation in other elements such as some elements of safety.

So I know I went step by step. I know I repeated myself a couple of times, but hopefully, this tells you exactly how narrow and clear our path is and how our label can look like and what is the slight variations that could be there and how they do not really impact us in terms of differentiation, especially versus our main competitor.

Now obviously, let me shift gears to the long-term data so that you also see what's going on in the real world, while we're hypothesizing and writing all these papers for the regulator. Obviously, the long-term data will be a key supporter of the submission, and I would argue that our long-term data is looking quite good.

A couple of things that I want to call your attention to. We are comparing ourselves here with 2 other commercialized drugs. We're comparing ourselves to the level of HiSCR75 response, which was a secondary endpoint for these drugs that they've reached at the end of their respective parental trials that support their BLA submission.

And a couple of things that you can see that I think are important are: a, our long-term response at the end of the year, at the end of the parental trial for both VELA-1 and VELA-2 is quite high, especially compared to the values that were reached by other drugs at the end of their year parental trial. That's one element that, of course, I would call attention to.

But I would also call attention to the end numbers here at the bottom. The numbers that you're seeing for sonelokimab, 104 patients for VELA-1, 123 patients for VELA-2. If you look at it, it's already the number of patients or above the number of patients that our competitors reached in their full parental trial. So the results that we're seeing are actually quite interesting and quite significant because, of course, they already correspond to numbers of patients that are similar to our competitors.

It also tells you and something else around the sheer size of each of these trials, for example, VELA-1, in that we're still kind of halfway through reaching the end of the parental trials because in our dose arms, the number of patients has doubled that of our competitors. So when people start wondering, is VELA-1 enough to submit something? Always bear in mind that one of our dose arms is worth 2 of the dose arms in 2 trials from our competitors. That's an important point for folks to remember. We're obviously very happy with the direction of travel here with HiSCR data, HiSCR75, obviously.

Just very briefly, because again, we always try to balance these 2 signs. HiSCR is interesting from a regulatory approval perspective and obviously, for the Street, but this is really the stuff that we think gives traction when it comes to commercial. Do the patients feel a lot less pain and do they see improval in quality of life. And as you can see, the long-term data continues to look extremely promising for both arms of SLK and also the transition from placebo when it comes to VELA-1 and VELA-2.

And there's one particular thing that I would like to call you because this is -- it's really -- we feel quite impressive. If you look at the middle panel on the quality of life, you see that not only we have a very, very strong response, but that response continues improving over time into the 1-year mark. This, I would argue, is not usual to see in quality-of-life improvement. You typically see a first response and then it sort of stays stable if everything is good. Here, we're really seeing a continuous improvement over time, which is very, very exciting to see, and I'm pretty sure physicians and patients will find very exciting as well.

A brief note on VELA-TEEN. As you know, this is an open-label trial that we've been updating you all on as we go. The results continue to look extremely promising. If anything, the overall response, for example, in HiSCR75, is really showing a lot of promise. Even HiSCR100 even at 6 months is already on the 1/3 mark. And if anything, HiSCR looks probably even better than we've seen with MIRA and with VELA. So this is extremely exciting because you know how important it is that we start addressing the disease very early on in its onset, which is, at the end of the day, is adolescents.

A quick update on the safety. Nothing to report. It looks clean as it does and as it has on the VELA-TEEN trial. Again, for details you can consult the deck that we share. And I'm just going to wrap up this part. I'm not going to go through the details, but I want to make sure that we hit on a few points. We have regulatory clarity. The guidance is quite complete and it's very narrow. It doesn't allow us or any analyst or any investor to create all these very wide scenarios. We know what we need to establish SEE and safety. I think you're seeing all the data is suggesting that numerically, we're going to have very, very exciting numbers also on efficacy and also on HiSCR.

You see our attempt to continue including all the metrics that truly matter for patients that, I think, is going to be one of the biggest differentiations. And very importantly, I would say that we're back on track. We know exactly what we have to do. There's not a lot of things that we can change. So I would argue that the risk profile of SLK being approved in HS is no different than that of a drug that has completed all its packages and it's going through a BLA process. Obviously, BLA processes have a risk element to it, but I would say that there's no big difference between us and any other strong biotech product out there.

I'm just going to tell you that, obviously, on the right side, you see all the detailed steps that we're going to be following leading to what Matthias mentioned at the beginning is that submission at the end Q3. But of course, this page will be available to you for perusal and for further questions. So hopefully, that clarified a few things regarding HS. Hopefully, it clearly establishes the excitement that we have here.

And with that, I would move us to additional guidance and reporting on other indications and on financials. And I think the next is PPP, Kristian.

It sure is. Thank you, Jorge. Yes. I'll make this brief. We've talked about this before. As a dermatologist, we talked a lot about the Street. You talked about the Street, Jorge. As a dermatologist, a little bit frustrating for me that, obviously, some analysts, the Street still do not understand that there is a psoriasis of the palms and soles, which is called palmoplantar psoriasis, and then there is PPP, right? It's a different disease. As reflected in the ICD coding, psoriasis being L40.0 and PPP being L40.3.

For PPP, palmoplantar pustulosis, there is no drug approved, neither in Europe nor in the U.S. As a devastating condition, you see the clinical pictures on top. Yes, they are also red. They have some scales, but the clinically leading phenotype is that of pustules. You see this in the histological picture. It's a healthy market. We can see that out of desperation, biologics are already being used in increasing numbers, and I should say, out of desperation because most of the biologics that work in psoriasis do not work in PPP. This is why it's so important that we really do our -- do SLK development in PPP.

As you've heard before, we have very exciting data from another small diamond study. We have been moving towards objective parameters to really validate a clinical response to make sure that we understand what is SLK really doing in a disease. And similar to what I showed you for axial spondyloarthritis, the biomarker data, the clinical outcomes in PPP were really overwhelming in a sense that we are progressing now. We could show that the SLK not only controls the clinical outcomes, it actually controls all these molecular markers, again, that are established to define the core disease process in PPP. Very interesting molecular pattern being observed, early normalization of this pattern together with the clinical response.

We even went as far to subject the photos that were taken from these patients to an AI-based [indiscernible] verification. But I have to say the investigators did a really good job and the objective assessment of the photos validated more or less what you see here, which is that 40% plus of the patients achieved very high levels of response. Palmoplantar PGA of 001 being clear or almost clear disease is seen in more than 40% of the patients, very nicely correlating with 40% plus of the patients achieving at least 75% reduction if you use the palmoplantar PASI. For reference, on the right-hand side, you see how this compares to what competitors were able to show. And by the way, these gray bars include placebo and nonplacebo-controlled trials. So I think this is a fair comparison.

So a lot of excitement in PPP, no drug approved. For the first time, we see biomarker validation of a Phase II program in this indication. This opens the door for a more rapid development towards approval. We have already shared with the world that we received Fast Track designation. I think this reflects that the FDA sees this is a disease where that is terrible and where there's no drug currently approved. We will have many interactions with the FDA. Our current thinking is that we want to create a very exciting Phase III program. We want to do -- we want to make use of the very fast onset of response that we seem to have, probably even faster than what we saw in HS. So with a 12-week induction period using every other week dosing and then actually testing our standard monthly maintenance versus a Q 2-week.

You can ask me why? Because we have evidence that PPP is a tough nut to crack. And although we have this super strong drug that penetrates deep into the epidermis, has this molecular support, we want to leave nothing on the table. We want to make sure that we really exploit the dosing options that we have and maybe even include a direct up titration of patients that achieved no disease control with a Q 4-week maintenance. So making progress using the outcomes we had from our diamond Phase II and progressing towards Phase III as fast as possible.

Psoriatic arthritis...

Yes, maybe I'll do the quick update here on PsA. Just a couple of pages in terms of guidance here. Guidance number one, it's important that folks reflect on what you see in this page. Psoriatic arthritis obviously, has been around for a while. There are several drugs approved. But I think sometimes there's a bit of misconception that because several drugs are approved, this is a mature market where new drugs cannot be launched, or where new drugs will have a very hard time succeeding.

I think what you see in this picture is really a bit of an evolution of the drugs that were introduced for PsA. We know the market has the potential to be about -- also about $10 billion to $15 billion in size. These immunology markets tend to have a very similar size to each other. And what you see is you can actually launch several drugs into this space, and they will all be commercially successful. So I think that's important that sonelokimab also it's given its value in terms of its potential just being part of a market where several drugs continue to succeed as they launch. And as you can see, any class of this drug it is actually quite successful. I mean the commercial opportunity in any of these classes is very, very large.

And as you can see, that's the second point that I would want to make here, not only that the market is big and can accommodate several drugs, including ours, but also that you have really seen this progression. ACR20 was the endpoint for the first drugs approved, then came ACR50. Then we started, of course, bringing some of the PsA PASI, some of the effect on the skin also because with ACR, I remind everybody, we're measuring joint improvements for a disease that is not even PsA. This is originally rheumatoid arthritis score.

Then you started getting into the IL-17s that started marrying to some extent, ACR50 responses together with PASI because, of course, you not only need to improve the joint, you also need to improve the skin. In fact, you need to improve those 2 things and many, many more things. And that's why we position ourselves and we position IL-17A/F really as the next-generation drug, where you're not only trying to achieve an ACR, but really elevating that ACR well above 50, trying to reach PASI of full clearance, but all together in the same patient and really moving to scores like MDA, which is really what you're trying to achieve as a physician and where you really start thinking that you're really controlling the disease.

I want to establish a parallel here between PsA and what Kristian discussed for axSpA. In many ways, with these very basic scores, we're just seeing if the symptoms are improving to some extent, right? And I think it's time that we understand that these diseases require us to improve the symptoms a lot more. But also that we really start modifying the disease, controlling the disease, going to that MDA, going to that very high ACR with PASI. And that's why we believe that, yes, the market is large, but there is so much head space in terms of what you can achieve.

If you're only improving 40% to 50% of the patients on a 50% improvement of just the symptoms, aren't we missing a big opportunity? I think we are, and that's why I believe that IL-17A/F and sonelokimab in particular, have such potential here, and that's why I and we would not subscribe to the thesis that this market has many drugs there. Therefore, it's done.

As you know, we've started a while back our Phase -- our very large Phase III program with IZAR. Remind everybody that IZAR-1 is a bio-naive trial in myo-naive patients with radiographic in PsA. And then we have an IZAR-2, which is a trial that is conducted in patients that are bioexperienced and where I think very interestingly, we use a standard of care reference arm in what today is the highest prescribed drug in PsA as we see it, which is risankizumab. IZAR-1 has recruited. We're done there. IZAR-2 is recruiting, and we'll read out IZAR-1 now in the cusp between Q2 and Q3 of 2026. And IZAR-2 will come later in the year.

I want to make sure that I share with you what you should expect to see for IZAR-1 and eventually for IZAR-2, but of course, first for IZAR-1 between Q2 and Q3. Obviously, here, as with any other reporting of our primary endpoints, we try to be very transparent with everyone, with the Street and share it as quickly as possible. Obviously, we have to find regulatory guidance as we always do. Considering the structure of the arms, we obviously have to always make sure that we are reading the primary endpoint, but also not risking any unblinding. And this is, of course, a disclaimer that I have to make every time we talk about disclosures of primary endpoints.

So what you should see in that press release and probably in a session such as this immediately after, you should see statements around us meeting or not meeting the statistical significance, both for the primary endpoint and the secondary endpoints in the hierarchy. And then we plan to share with the world, SLK response levels for primary and secondary endpoints for both 60-milligram and 120-milligram depending on the drug. So this should give you a sense of what we expect to show you, especially for IZAR-1, which is coming in a couple of months' time. That's what you should expect to see. And obviously, in terms of response, you have our ARGO data in terms of the drug response versus others. And that should give you enough reference of what the competitors and ourselves have achieved and expect to achieve.

And then I think we will wrap up with finance and then open for questions.

Absolutely. Thank you, Jorge, thank you, Kristian, for walking us through some exciting data updates and also some -- yes, very exciting label scenarios, I believe.

Now from a cash position, we ended up December 31, 2025, with $394 million on the balance sheet that covers cash, cash equivalents and short-term marketable debt securities. As you see on the page, that also included the $75 million offering that we made in November. With this cash that we have on the balance sheet, we expect to have runway into the second half of 2027. And what you also see here on the page is that as a subsequent event, last Friday, we amended the Hercules facility. We drew down another $25 million in debt, nondilutive funds, and we retain access to up to $400 million in additional non-dilutive funds to support future cash needs of the company.

In terms of OpEx, you see it here on the page, Q4 OpEx were $65 million. You see a small decrease on the R&D side from $60 million in the prior quarter now to $56 million, reflecting that we are now past the peak of R&D expense, VELA-1 and VELA-2 are concluding very soon. The later study in PPP has been completed. Now S-OLARIS has also been completed. Yes, we're expecting to initiate the PPP Phase III study in the middle of this year. But in terms of overall size, we expect the Phase III study in PPP to be substantially smaller than the VELA program.

On the G&A side, you can see also a reduction in the fourth quarter from $10.8 million to $9.2 million. That reflects some efficiency measures that we've implemented in the company in the end of last year. Now there will be some increases in 2026 as we ramp up for pre-commercial activities. But overall, we expect no material changes on the OpEx side.

As I said before, we are very excited that we have amended our loan facility with Hercules Capital. Hercules Capital has proven to be a very reliable and supportive partner of the company. Reminder, we drew down at the closing of the facility in March last year, $75 million in debt. And on top of that, we had $425 million being available through a variety of milestones. Given the VELA readout last year, some of these milestones, the technical definition could no longer be met. Now we revised these milestones also to reflect revised needs and timing in terms of cash needs for the company and now -- are now very happy that we drew down another $25 million, not that we need it right now. But obviously, there's also some incentive for Hercules to earn some interest on it.

But overall, we are very excited that we retain access to the full up to $400 million in additional funding capital that will not only help us with the future development of sonelokimab, but will then, therefore, and primarily also contribute to the commercial readiness to the preparation of the commercial activities. You see on the right-hand side, in terms of cash interest rate, it's 8.45%, and we retain full flexibility. So there's no obligation for us to draw down any future tranches, but we believe it's actually a very attractive cost of capital. So it's something that we will very well consider depending on the market conditions.

With that some closing remarks, before we can open...

I will just quickly wrap here, Matthias, to allow maximum time for questions. I just want to sort of take a step back.

Today, you saw S-OLARIS. And as you saw in the page, we will, of course, engage with the regulators now to think how do we move that the axSpA forward. Obviously, what comes after today, and it comes quick, is a lot of interactions regarding the derm side and with the FDA. Several pre-BLA meetings in April and May, which are technical meetings that happen in any process, but it's great to see them happening. It means that we're moving the ball forward.

VELA-TEEN readouts, meetings with the same division of the FDA around other elements. Obviously, the Fast Track designation for PPP allows us to continue the interactions on the derm side. And then as we started getting to summer, some pretty big readouts, Phase III readouts, 52-week data on VELA. Obviously, quite exciting to see the results as they stand, and very shortly thereafter, starting to read the Phase IIIs on the room side.

Then during the summer, we expect more news in PPP. And obviously, we expect to be extremely busy and not on holiday while we're preparing the BLA submission. And that should lead us into fall and early winter where we obviously expect the HS BLA acceptance of the BLA and obviously then sort of moving into the IZAR-2 and additional readings such as P-OLARIS, so that we finish the year with more readouts.

But if you just take a step back and look at this map, you realize how busy it's going to be, how many catalysts there are, how many inflection points there are and really how MoonLake is going well beyond derm and establishing itself as a room player, but also really moving into the commercialization stages in the latest part of this year.

So maybe I would leave it there, Matthias, and open for questions.

Yes. I mean certainly, we have many viewers and also quite a few questions. So trying to go through it quickly, and apologies that we cannot address all questions.

But starting in terms of order of presentation. So with the S-OLARIS data, we have a question here from Tom Smith, Leerink.

Hi, team. Congrats on the strong axSpA data. Can you elaborate on the patient baseline characteristics in the study? How many were radiographic versus nonradiographic? Were there TNF or JAK experienced patients in the study more broadly? How does the study compared to other studies in axSpA?

Kristian?

Yes, very happy to take this. So it was a mixture of radiographic and non-radiographic patients, both almost equally sized, so a healthy proportion of each of these variants of axSpA. When it comes to disease duration previous therapy, comparable in general to what others have been doing. So I think the baseline characteristics are similar to what others have been studying, making -- adding to the validity of what I tried to show.

When you look at the outcomes, Matthias, and just to quickly reflect on this, I hope I could really make this point clear. Yes, it's a small study. Yes, it's open label, but it has elements that really validate the findings. And when I showed the clinical outcomes that are always subject to placebo responses because again, you ask patients how much pain or morning stiffness do you have? Of course, there is a placebo response. There will be no placebo response with imaging or with biomarker control.

But you remember, whenever I showed you these clinical outcomes, and I tried to put it in perspective to what competitors were able to show, we added their long-term data. Why did we do this? Because after the primary endpoint, there is no placebo controlled. So we tried to be as fair as possible and even giving you the often as observed long-term nonplacebo-controlled outcomes from competitors from similar trials.

So I would say -- and again, it's not a direct apples-to-apples. But if you look at the baseline characteristics, if you look at the way we try to present these outcomes, if you believe in the validation of the clinical outcomes by MRI, by PET, by biomarkers, you have to walk away from this thinking this is really fantastic data, very exciting data in axSpA. For me, it shows again that the Nanobody story is very alive and that we obviously can use the Nanobody to move from symptom score, which we want to hit, and we want to hit them on a high level, but really to what we call several times now preventing structural damage, entering disease modification because that for me is the next step in I&I. So this is how I would see the axSpA data, small but beautiful, Matthias.

Perfect. I have another question here from Julian Harrison, BTIG.

This is the highest 12-week ASAS40 response rate ever reported in a clinical trial. How much do you expect SLK's small size and albumin binding domain contributed to this?

Yes. I mean we can only speculate. And allow me to become a little bit passionate. When we all started MoonLake, I think we really started it because we wanted to create an antibody 2.0 scenario. We really hope that we could use the Nanobody to elevate all the fantastic things that monoclonal antibodies were able to do. And of course, one of these characteristics is because it has a smaller site, because it has the albumin binding, because we know it has the potential to enrich at sites of inflammation, particularly when this inflammation sits at complicated to reach sites.

And I would think that, a, the room studies show that this might really be the case. We showed the MBA data. You reminded us of the ACR70 plus PASI100 data in PsA. I showed you the ASDAS-CRP data. But let me say that you can say, yes, but doesn't the HS data show you that it's not true in the results? I don't think so because the HiSCR not the score that really reflects what a molecule can do when it travels deep. Let's look at the abscess 100, the draining tunnel 100, the IHS4 100 data over time. This is what will tell the story about Nanobodies and deep tissue penetration in HS. I think, Jorge, you began to share the long-term data. The long-term data list looks extremely good. So I'm not giving up on the Nanobody story in HS at all.

Perfect. Then one last question on the S-OLARIS study. And maybe, Jorge, for you because multiple analysts are asking, for example, Phil Nadeau from Cowen. Congrats on the data. Can you talk a bit more about next steps in axSpA? Does MLTX expect to conduct a Phase III program? When could a Phase III program begin and complete?

Other analysts also asked, is there a need for a Phase II? What about the impact of recent FDA guidance on single pivotal studies? So maybe very briefly, our thoughts on the next steps in axSpA?

So I'm going to be a little bit more guarded than Kristian was in his previous answers.

To fill in to all the analysts out there that are asking the question. So obviously, with this data, very much our intention to continue progressing sonelokimab in axSpA. I think the results are so exciting, and it could mean so much to patients and physicians that I think that answer is obvious. So obviously, we are now finalizing all the data, preparing all the reports, all the books that we will need to put together to engage with the regulators, and we will follow the standard process in terms of finalizing this Phase II and start discussing Phase III designs, right?

Obviously, much road to travel still. We just finished the trial. We are already starting to think about those designs, but obviously, that's going to be between us and the regulators for the time being, but very much our intention to progress it forward. As by the way, I take the opportunity. We always have the intention to continue building this portfolio because we know how many indications could be positively impacted by sonelokimab.

Regarding the discussion that essentially started last summer and now came a bit more to fruition with the recent New England Journal of Medicine article signed by obviously those that run the FDA, obviously, very exciting for the industry. I think very timely. I think it's important that we start doing ever more trials that really use the resources, the time of the patients, the physicians for the biggest impact that we can have.

So yes, obviously, we will be considering this, also considering how much we feel there is such a need in axSpA. We obviously -- that will, of course, play into our calculation. So what I cannot tell you is exactly when we start, when we end, what is the design? How does it compare to be bime or to any other drugs? Obviously, that will keep very close to our chest. But yes, we will take the trends. Yes, we will, as always, listen to what the FDA is guiding us to do. And yes, of course, we're very interested in axSpA as we are in many other indications.

Perfect. Then the next question, let's move over to the HS section. So we have a question here from Brian Abrahams, RBC. Given that MIRA was a large, well-controlled trial done with a similar approach to the VELA Phase IIIs, is your expectation that the clinical efficacy data from MIRA would be incorporated into a future SLK label, similar to the VELA-1 data? Has FDA given you any indications around this? Or should we think about the Phase II MIRA data as providing support for the overall efficacy of the drug and the legitimacy of the VELA data, but that the specific results would not be described in the label to the same extent as VELA-1.

So I mean, I'm happy to answer that, and then you can add Kristian. I mean, obviously, I don't know when the question was asked, but I think I answered it quite emphatically, right?

So Brian, absolutely, yes, we expect the MIRA data as other Phase IIs have been included for many other products, to be put there in parallel. As we put on the screen, HS trial 2, that data to be right there parallel to VELA-1. VELA-2, whether data is there or not, as I said, this is a matter for conversation and discussion that will not impact the fact that our label will be extremely advantageous. But yes, we expect MIRA to be there, as we painted on the screen. And obviously, yes, we got guidance that this is the path to go forward. As I also reviewed when I started my section on HS with recapping what -- the guidance that we've gotten.

And to Brian and others, this is really why I keep saying that the path is so narrow. We have been told what we can use where, what has more chances versus not so many chances and what we really require a conversation, which is -- and the only thing that requires that conversation in terms of uncertainty, big uncertainty is really whether VELA-2 is part of that table or not, right? So absolutely, MIRA is expected to be there.

I don't know, Kristian, if you want to add more.

Just 2 quick things. So I think you -- we allowed ourselves today to lay out what our view of a potential label is. It's clear to you that label discussions come with the FDA late in the review process of the BLA. But as you heard Jorge saying, we think our interpretation of the FDA feedback very clearly is that we have a left border and we have a right border and what is in between is what you heard today.

What I want to emphasize again is nothing of this is new. When I just look in I&I, if you look at the label of ruxolitinib topical in AD or tapinarof topical in psoriasis or risankizumab and upadacitinib in IBD, the label table, this famous efficacy table that you talked about includes Phase II and Phase III. That has been seen multiple times before.

Number two, if you look at the label table for Cosentyx in HS, and Jorge, you briefly mentioned this, one of the 2 studies didn't meet the primary endpoint, right? And you see all these end points there and then you have an asterisk for those that are statistically significant and then one endpoint does not have this asterisk. So what we tried to share with you today, which is our interpretation of the discussions we will have in a year's time, is that we either have VELA-1 or MIRA or we have all 3, both of which I think would be very good for us because we can include fantastic data.

And I'll remind you that the VELA-2 sonelokimab data is on spot and on par with what we saw with sonelokimab in VELA-1. So nothing of this is new. I think you summarized it very nicely in saying, do we have a risk? Of course, we have a risk. Everyone has a risk, right? And we will submit the BLA and the BLA will be reviewed. But is our risk fundamentally different from any other company at this stage? We don't think so.

Wonderful. And one short question that I'm happy to address directly. Yun Zhong from Wedbush. Is your plan still to include data from VELA-TEEN into the BLA submission for HS in the second half of 2026 to support the broad label?

The answer is yes, studies running in parallel, and we are planning to seek approval for adult and adolescent HS or HS patients 12 years older, which we also believe is a possible strong differentiator. We talk a lot about the efficacy levels, the benefit risk profile, the convenience, but let's not forget that most of the patients in HS start to develop first symptoms in their teenager years. And that currently, we do not have any drug that has been approved based on a dedicated study in adolescents.

Humira, yes, they have approval based on data that they've generated in other indications, but we see very, very high levels of hesitation of prescribers, of parents of patients to use a TNF inhibitor in the adolescent population. So we believe this will provide a potential additional differentiator of sonelokimab in the market.

Just allow me to add one shocking number that we recently saw when we analyzed the claims data, it's 1% of patients with moderate to severe HS adolescents that get a biologic 1%. And knowing that these are probably the only drugs that can prevent the progression to irreversible tissue destruction, we really, really need to do better in adolescent HS. So we will try as hard as possible.

One more question on HS. It's from Prakhar Agrawal from Cantor. Can you comment on safety for HS 52-week and whether it is looking similar or differentiated versus bimekizumab? Specifically, were there any signals of SIB, what about liver enzyme elevations, dermatitis cases, et cetera?

Yes. So I'm happy to start here. Obviously, this is data that's under evaluation. I think Jorge, you shared the 1-year efficacy data, and you could see that just about half of the patients have yet made it to this late time point. So I will be very careful in reporting on the safety. All I would say is that so far, earlier statements that we made, that we do not see signals for liver, for example, we do not see signals for SIB in our data, that holds true. We will work on this closely together with the FDA, how do we present the safety data, how we analyze this. But so far, our earlier statements do not change.

And I see some more questions. One here from Kaveri Pohlman from Clear Street, can you provide an update on your commercialization and manufacturing efforts for HS? What initiatives have you undertaken? Is there anything further needed before advancing?

Do you want me to start?

Sure.

So I mean the manufacturing part, I can quickly take out. We've shared a bit about this. I'll share today. Where we produce our drug substance, which is an FDA-approved manufacturer that also serves other pharma's and other folks doing Nanobodies. We have commercial capacity up to year 4 or 5 of commercialization. So we're well into the volume that we will require over the next years.

I think important, Kaveri also on the drug product side and then all the distribution, this is already also at commercial level into year 4 or 5. That's something that we wanted to make sure we tested during all these trials. And I mean, we've been providing these drugs for thousands and thousands of patients by now. So all of that is there. All of that is very mature FDA-approved partners, but -- and obviously, we'll continue exploring opportunities to second source and manage the U.S. and other regions differently, but all in good time.

So I would say that that's a clear checkbox there. Commercial is obviously not yet a checkbox. We have been working very hard on this. And of course, we've done a lot of pricing, payer work, organizational structure work, sales structures, commercial strategy, et cetera. But obviously, now it's -- all of this is starting to come to fruition. So I would say, Kaveri, that you should look at Q3, Q4 as the time of the year that we are really starting doing those bigger appointments in terms of those that will leave the U.S. structure and then help us establish that commercial structure that will then start towards the end of '27, hopefully, with the commercialization of the assets.

In our experience, we're well in time. We know exactly the folks that we want to hire. Obviously, now in the summer starts the big push, which was always the plan already last year. And I would say that we have -- the way I think about it simply, maybe my CFO will tell me that that's not the right way. But the simple way is we -- as you saw -- as you heard, we have $400 million in cash. That allows us to run the company, make all these appointments, drive our clinical trials, et cetera. We then also have this pool of $400 million that is available to us to spend and activate as we get closer to market, therefore, lower risk and also already with the contribution of revenues. And I think with these funds, we're more than equipped to set up the machine that, as I said, Kaveri, we want to really start with people on the ground as of this summer.

Perfect. And then one last question I have here again from Brian Abrahams, RBC. What are your latest thoughts on how you would position SLK commercially? How might you price versus bime? Where are you with the development of the commercial subcu injector?

And I'm happy to take this one. I mean, starting maybe with the subcu injector, this one, we have run all the necessary studies in terms of human factor studies. Pharma PK study to demonstrate bioequivalence. And in fact, the autoinjector is being used in our open-label extension study on the HS program. So patients right now are using the autoinjector. Feedback is very good, very positive. So we expect to go to market with the autoinjector as an approved device for the administration of sonelokimab.

Pricing versus bime and commercial positioning. I mean this goes a little bit hand-in-hand because what we see how the market is evolving and what all our payer research shows is indeed that we will probably look with a more maturing market at first line that's more leaning toward biosimilars. So you see some payers that start to insist on an adalimumab biosimilar being used in the first-line setting.

With Cosentyx, at some point also going biosimilar, we would expect similar things to happen so that you have some payers that in the first line will insist on first a biosimilar adalimumab or secukinumab being prescribed thereafter from everything we see. And here, it's pretty much open playing field. So we expect to be on par when it comes to pricing and when it comes to formulary access with bimekizumab, we do not believe that there is any real incentive for any of the companies that develop innovative medicines to compete with biosimilar prices. So we believe we will be in a very good position.

We also think it's actually a very good thing that the biosimilars are there and further help grow the market. I mean one question that I also saw here coming in is like what will you be doing to support the HS market expansion? We think that the biosimilar entrants is actually a very important ingredient, that patients get access to treatment, get a first biologic. And obviously, with the treatments that we anticipate to be used in the first-line, TNF inhibitors have not shown any durable efficacy and even in their own clinical studies, but also certainly in the real world data, we do see very, very high dropout rates, discontinuation, the KOL support this as well that you do not have durable efficacy with adalimumab.

And with Cosentyx, secukinumab, yes, you do have durable, but you do have efficacy that's more on the lower end, so leaving ample room for patients and clinicians to step up to a more efficacious and certainly more efficacious IL-17A/F inhibitor, especially when it comes with a favorable benefit risk profile.

I think we're at the end of time. Apologies for not having been able to answer all the questions, but we hope that we covered a large variety of this. So thank you very much for joining us here. We hope that you share our excitement for this data update and the future, the catalysts that will come this year. Thank you so much. Have a good day.

Thank you. Have a nice day.

Welcome, everyone. Good morning, good afternoon. Thank you for joining today's webcast. My name is Matthias Bodenstedt, I'm the Chief Financial Officer of MoonLake Immunotherapeutics. As usual, I'm joined here by our Co-Founder and CSO, Kristian Reich; our Co-Founder and CEO, Jorge da Silva. We are also honored to be joined today by Professor Alexa Kimball, a leading [indiscernible] in HS. We will go through the data and then look forward to the thoughts and reflections of Professor Kimball on the VELA data that we will be presenting today. In the end of the session, as usual, we will open up for Q&A.

Please take note of our disclaimer on the forward-looking statements. [Operator Instructions]. The presentation document and the replay of this presentation will be made available on our IR website on moonlaketx.com. With that, I'm handing over to Jorge.

Thank you, Matthias. Also from my side, welcome all. Good morning, good afternoon, depending on where you are. Thank you for making the time to join our presentation today.

I'll start very briefly with a quick summary of the points that we're going to be hitting in the call today, most of which obviously has been covered in the press release that was sent out yesterday.

The main messages are that obviously, the VELA-1 and VELA-2 trials formed the VELA program, which, as you know, has been testing sonelokimab in adults with moderate to severe HS to a primary endpoint readout at week 16. Importantly, from a regulatory perspective, and obviously, for all of us, the combined VELA program demonstrated clinically meaningful and obviously, significant improvements across all primary and secondary endpoints at week 16 using, of course, prespecified strategies with the regulators with a very, very low p-value.

Obviously, as you know, there are two big differences between VELA-1 and VELA-2. VELA-1 met all primary and secondary endpoints, as you saw the delta to placebo at week 16 between sonelokimab and placebo for HiSCR75 reached a delta of 17%. We fully understand that for the street, maybe the expectations were a little bit higher. Obviously, ours were too. But obviously, a 17% delta in our minds is very much in line with what is needed. And as you know, for us, there's many other elements about HS that matter more than a delta to placebo. VELA-2, as you know, hit an issue. We had a higher-than-expected placebo arm. It's meant that we needed to dig deep into our statistical analysis plan as agreed with the regulators to really understand the significance of the primary endpoint at week 16. And from the perspective of the company, we feel that the trial has all the merit to proceed in clinical development. I want to make clear that the company does not agree with the statement that the trial failed, but it does require us to do a bit more investigation with the regulator.

Very, very importantly for us, because obviously, we're doing this because we believe that more drugs and more solutions are necessary for these patients, VELA-1 and VELA-2 demonstrated very strong responses across endpoints that really matter to us, not just HiSCR75 or HiSCR50, but very importantly, pain scores, quality of life, which really matter to patients and we continue to see a very favorable safety profile. Obviously, the convenient subcutaneous scheme continues to be an advantage that we think is important for physicians and patients.

As I told you already, the VELA trial will progress. We will now seek advice from the regulators and continue the process. And obviously, we're continuing to drive several other catalysts in other indications.

I want to quickly remind you of the design of the VELA trial, just to make sure that we're all on the same page. On the left side of Page 5, you see the common design between VELA-1 and VELA-2. We ended up with a total of 838 patients across the two trials. And on the right side, I want to remind everyone of the hierarchy of endpoints and why some of these things matter.

Number one, you obviously see in the dark pink color, the endpoints that relates to lesion counts and in the lighter color, the patient-reported outcomes. As you know, in agreement with the regulators, we use HiSCR75 as the primary endpoint first time in a Phase III. And we would also like to call your attention to the pain response and to the high score, which were specific requests from the regulator to include here because they reveal something that is very, very important in clinical practice. So obviously, there's a hierarchy, but there's a lot of richness in the endpoints that were chose.

No news on VELA disposition and many of you have seen disposition charts for sonelokimab across many trials. It's the usual story. The patients tend to stay in great numbers as we progress through the clinical trial into the endpoints and beyond. The other element that obviously, we need to cover upfront, but it's also [indiscernible] no new slide is that the patient characteristics are very well balanced across the trials.

As you remember, it was very important for us that both VELA-1 and VELA-2 had very close set of patient characteristics that tells you a lot about the validity of the trial and as you can see, the differences are minimal. I think very importantly, it's very well aligned with our Phase II program, MIRA, which, as you all know, is very important also from a regulatory perspective. But also all the small differences of a few percentage points that you see between placebos and those or between the two trials, VELA-1 and VELA-2, in our mind are all relatively small and definitely within the range of what we've seen for other Phase III programs.

Now because of the VELA-2 placebo, I'm pretty sure lots of people are using a magnifying glass to try to see these numbers, try to see if something is happening that we have not been able to detect. But what I can tell you is that there's no smoking gun, if you allow me to use that expression in any of this to reveal anything regarding the placebo and the patient characteristics are exactly as we wanted.

Before I hand over to Kristian and to the data, allow me to show a little bit of a deep dive into our statistical analysis plan with the regulators. Now I know this is unusual for many of you. This is always something that happens in the background. You don't see it, you don't need to see all this detail. But to understand the valid data and to understand what happens next in terms of our regulatory path, we feel that it is important to spend a couple of minutes here.

What you see here is two strategies, the composite strategy and the treatment policy strategy. These are different strategies to analyze our data. They apply to the whole population that we intended to treat. They both use multiple imputations to analyze missing data. There's a little bit of a difference on how you impute the responders. However, what is really important to remember here is that both of these strategies are must-see strategies by both the FDA and EMA for any scenario for any I&I drug.

I want to be very clear about this because: A, this is not an optional set of strategies that we use; B, is not something that MoonLake decided to use just to make the results look better. This is something that is required by both regulators. Why are they required? To test robustness. So essentially, what you need to do is that you need to use your primary strategy, which in our case is the composite strategy to evaluate the significance of those endpoints and then you need to test the robustness of that significance. And you need to see concordance between the two strategies. If there is no concordance, if the p-value analysis is different, which is the case for our VELA-2, then you need to discuss all this data with the regulator to see how you progress forward looking at the data.

And this is where the absolute numbers of response, for example, in a drug like sonelokimab, the safety, the concordance between primary endpoints and secondary endpoints, the concordance between trials, this is when it all becomes important, right? It is rare that we need to go to this level of detail, either trials fail or they don't fail.

But there's a series of trials where the p-value is just at the border line and this type of analysis is necessary. But again, not something that MoonLake decided to use, but something that is specifically discussed with the regulators at all times. So I hope that she had some clarity of why you're seeing different strategies here and why it's important that you know about them. And I think this is a good time to pass on to you, Kristian, to go through the data.

Yes. Thank you very much, Jorge. On the first slide, I want to show you the kinetics of our primary endpoint, HiSCR75. We show you this using both of the methods that Jorge has just explained. You see in the upper panel always our primary analysis strategy, so-called composite strategy. The lower panel, you see the treatment policy. We show you this for VELA-1 and for VELA-2 and for the combined VELA program.

First of all, I want to highlight this again, both methods are very conservative valid methods. There's not a first class and the second class. If you look at the VELA analysis, you immediately see that the results generated by applying these two methods are actually very similar. You see that in VELA-1, whatever method you use, you see a high statistical significant delta between active sonelokimab and placebo. If you look at the delta at week 12. at week 16, which is, of course, the primary endpoint, you see that the numbers are actually identical.

So in VELA-1, very robust study, primary endpoint met with whatever strategy with high p-values below 0.001. What you see in VELA-2, and Jorge already discussed this, that at the primary endpoint, applying the composite strategy, our primary analysis strategy, you see a borderline p-value of 0.053.

For those that are familiar, you know that this is driven by a single patient. This is a scenario where your second method becomes relevant and you need to, I think, also show to the world. This is why we decided to do this, show the results with the second method. And as you can see and probably highlighting how border line this finding really is using the treatment policy, you see a statistical difference also in HiSCR75 at week 16 with VELA-2, and this is where we will seek clarity with regulatory authorities on what this means.

We also see, of course, in the combined program that primary endpoint is met with high statistical significance, very similar to VELA-1. I want to take a step back and highlight some other findings that you see on this slide. Number one, if you look at the blue curves, so the efficacy obtained during treatment with sonelokimab, the lines between VELA-1 and VELA-2 are almost identical. So very clearly, this is not an issue with [indiscernible], this is an issue with placebo. And when you take a closer look at VELA-2, you actually see it's an issue mostly at week 16. You see that the delta to placebo in VELA-2 at week 12 is 17 percentage points. You see that it narrows at week 16.

You also see a double whammy, if you will, a double hit. You not only see this dramatic increase, unexpected increase to a number we have never seen before in the Phase III trial, 25% at week 16, but you also see that the response to sonelokimab is actually coming a little bit down. I think both phenomena together explain the borderline significance.

I think what arises from this is the immediate question, well, what's going on then with sonelokimab treatment? What if you treat longer, do these patients gain more response? Or does this little drop between week 12 and week 16 and VELA-2 indicate that the response has kind of expired. And you see the answer to this question on this slide. And there's a couple of important things here.

Number one, there's really a very fast onset of response. HiSCR75 is already significantly different between sonelokimab and placebo from week 4 on. HiSCR50 actually from week 2 on. So as we saw in other indications, a very fast onset of response.

Secondly, you see again that the curves for VELA-1 and VELA-2, if you look at the blue curves, the sonelokimab arms are almost identical with the exception of this dip in VELA-2 at week 16.

What you can clearly see is that if you continue treatment and not every patient in our trial has yet achieved the week 20 and week 24 endpoint, but you see the numbers below the X-axis, the vast majority of patients have. So I think this is a valid analysis to share with you. You see that the response continues to go up. And I think this 50% HiSCR75 response at week 24 is remarkable, thinking about a 50% HiSCR50 response that has been a wishful outcome for other drugs in HS.

The second and really important thing you see on this slide is that this high placebo response does not stop the patients in VELA-2 to get exactly the same benefit from treatment to sonelokimab after the switching compared to the patients in VELA-1. Actually, within 4 weeks in VELA-1, the patients show an increased HiSCR75 response of 13 percentage points. It's almost identical 14 percentage points in VELA-2. So whatever your starting point from a placebo response perspective was, you gain the same benefit from the switch to sonelokimab and within 4 weeks, the patients coming from placebo basically have the same response in the patients that started on sonelokimab at baseline.

What does this indicate? I think it clearly indicates and it could be different. We could have the same placebo response across both trials and have a wobble and/or active response. I think that would be a far worse outcome. But what we clearly see here is very valid, very similar responses across both trials on sonelokimab. And the placebo, if you allow me to use this nontechnical word, the placebo wobble pretty much exclusively in one study, one time point, one outcome, which is the lesion count.

You can see this again reflected here on this slide. The gray horizontal bar in the background is the range where we saw HiSCR75 placebo responses in Phase III trials in HSV4. A range between 13% and 18%, you see that in VELA-1, our placebo response at week 16 was on the high end, 17.5%, but within the historical range, if you will, you clearly see the outlier here is this unexpected high placebo response at week 16 in VELA-2.

However, what you also clearly see, and you think this is -- what in the end characterizes sonelokimab in this trial probably best is that the drug really delivers on the HiSCR75 responses, whatever method you use and whatever trial VELA-1 or VELA-2 you look at.

For fairness of comparison, only we had HiSCR75 as the primary endpoint, all the other trials you see on the right-hand side had HiSCR50 as the primary endpoint. So then let's look at the HiSCR50 response and you see the same type of analysis. We will not go into details. You see in pink the responses in VELA-1 and VELA-2 to sonelokimab. And again, I would say that not only are the responses also with regard to HiSCR50 identical, but I would also think that the active drug, sonelokimab really delivers not only on HiSCR75, but also on the HiSCR50 response.

Now counting lesions in hidradenitis suppurativa is obviously a complicated business. I'm looking forward to what Professor Alexa Kimball has to say about this. This is not the first time the HS community is discussing placebo responses. So I think these three important patient-reported outcomes we have as key secondary endpoints, I look at them as a very important validation of what's really going on in the trial because if you have a reduction of pain, if your quality of life dramatically changes, I would think it's very rare to see this on placebo and not on active. And this is exactly what we see. You see here the pain reduction. I remind you, we use the FDA recommended somewhat more conservative pain reduction, which is not 2, but 3 points or more on a worst pain numerical rating scale. You see a very clear separation between sonelokimab and placebo, again, similar in both trials. And for this pain outcome, the delta between VELA-1 and VELA-2 is very similar and you see the statistical analysis yourself.

If I would have to choose from all the outcomes we present, I would probably think that this is the most relevant for patients. If you're not familiar with the hidradenitis suppurativa quality of life score, this is a tool HS specific quality of life tool that was validated in the U.S., validated in Europe that includes 17 questions covering four domains that really ask patients about all the different aspects of the disease burden in profession, in relationship, in sport, symptoms like pain, everything is included in here.

It's very interesting for me to see that on the 280 patients that received placebo in our study, uniformly between VELA-1 and VELA-2, the patients said, I see very little improvement in the HiSCR. My disease continues to bother me. From the 560 patients that received sonelokimab across VELA-1 and VELA-2, you see a very similar and highly statistically significant difference. Now patients say, I'm no longer bothered that much by my disease. I can do sport again, I can go to work again, I can have a relationship. So this is probably a pretty fair view on what's happening in the study.

I should also say that these reductions of HiSCR are actually higher than what we saw in MIRA, our Phase II trial, and they also seem to be higher than what currently available treatments for HS are able to demonstrate. Our third key secondary PRO outcome was the DLQI. We show here the patients. This is a more-broader tool that looks into quality of life in association with dermatological diseases. Overall, it's not HS specific. You see the percentage of patients that achieved a meaningful improvement of the DLQI. For me, this is very reassuring on top of the HS specific that I just showed you that indeed quality of life dramatically improves. You see the same delta to placebo across VELA-1 and VELA-2, around 20%. This is very much in-line with what we saw in MIRA. And again, I would think it indicates a potential advantage over what other drugs available for HS were able to show when it comes to DLQI.

This is a complicated table, and by no means I will take you through this table. But just to share very transparently, all data I was talking about in the last minute as analyzed with both the methods that you are now familiar with. So you see on the left-hand side, our primary endpoint in both. You see all the key secondary endpoints. You see in the upper part of the table, the analysis done with our primary analysis strategy, the composite. You see on the lower part of the table, all analysis done with the treatment policy. There's just a few things I want to highlight here.

First of all, if you look at the p values in VELA-1, I would think this is one of the most robust -- when the just robust -- if I just look at the statistic analysis, Phase IIIs ever done in HS when I look at the p values. You see the problem, if you will, at week 16 in HiSCR75, but it's interesting to see that even in VELA-2, when you look at all key secondary endpoints, nominal p values were achieved. If you use the treatment policy in VELA-2, all primary all key secondary endpoints met statistical significance, and I already talked about the VELA combined finding.

Just so that you know why we presented it this way in the press release and why we, as a responsible managers in MoonLake are convinced that the study by no means shows that sonelokimab does not work in HS, which we think it does show that it works in HS.

And looking at the patient-reported outcomes, we even see a potential for a competitive advantage. Super important is the safety. I'm a dermatologist myself, but I will say that dermatologists are probably not the bravest physicians in the world. They want -- they need chronic treatment for their patients. They want safe treatments. They want a safe long-term control. The safety profile is shown here for the combined VELA-1 and VELA 2 study. Actually, the very favorable safety profile that we saw before, no new safety signals. To me, there is evidence in here for an even differentiated safety profile in the sense that some of the warnings we see with competitors, suicidality, hepatic. In our analysis, we saw no evidence for a reason to get a similar warning. So we would think that the safety profile is actually very favorable safety profile.

I want to remind you that all of this is achieved with a dosing scheme. And again, coming back to something that is not so much in a Lancet publication or in the presentation to investors, but what really matters for patients and physicians in the doctor's office. And that is how convenient is this? How long does an injection take? How much needles do I need to get before I go to a maintenance scheme?

We have 1 milliliter of 120-milligram SLK. It's injected in a few seconds. We need 4 injections for the induction -- from then on, it's the monthly maintenance scheme. We always thought that this is a little competitive convenience that we already have in our pocket and of course, these days.

Thank you, Kristian, for walking us through the VELA week 16 results. Now as introduced earlier, we are very honored to have Alexa Kimball -- Professor Alexa Kimball join us here today to discuss the results with us. Now, you see her disclosures on the screen. Professor Kimball is one of the leading KOLs in hidradenitis suppurativa. Probably she doesn't need any introduction because all the audience will be familiar with her.

Again, thank you so much for joining us here today. And I would say, a very, very simple question to you. We would be very, very keen on hearing your thoughts, your reflections on the VELA data that Kristian just presented.

So thank you so much for having me here this morning. And what I'm going to try to do, having been working in this area now for 15 years more is give you a little bit of context of what we expect to see in HS studies, how this data fits into that context, what the regulatory precedent has been a bit from some of the other studies because of some of the common occurrences that are a little unusual that we see in these studies.

So as I said, I've been thinking about HS for about 15 years. And I have been along with MoonLake for their entire journey as well. And it -- we have evolved incredibly, right? So back in 2009, when a group of people, including myself sat down to think about HS assessments and how we could actually get drugs through regulatory approval because we saw that there was a signal when using TNF inhibition that we thought was worth pursuing. We knew it was going to move forward.

And remember at that time, we didn't even think HS was a common disease, but we thought there was value in patients to figuring out a regulatory pathway. And it was that process that ultimately led us to the HiSCR or the HiSCR50, which is not a perfect measure by any means, but has proved a valuable addition and has been the basis of all the regulatory approvals to date in terms of efficacy assessments by clinicians.

Now, very important in development of the HiSCR50, which is a 50% improvement in nodules and abscesses without a conversion [indiscernible] is that we created that system to correspond to the PROs. So the inflection point that we took at 50% was related to both the efficacy that can be achieved, but also where we saw meaningful differences for patients on our array of PROs.

[indiscernible] was not available at that time, but we were using things like a DLQI and a pain measurement. And I say this is important because as you look at the totality of all the data presented, you would want those to be internally convergent, and I'll talk about that in a bit. But clearly, in this study, as you heard, they are.

Now flash forward 15 years, and we are starting to move people to HiSCR75. And that is a tremendous goal. And hopefully, one day, we will see HiSCR90s and HiSCR100s, just as we've seen in other fields. But as we'll talk about, that evolution does create some other trade-offs as you think about the design of all of these studies. So as you have seen, I have been involved in almost all of the Phase II programs for HS and all of the Phase III programs.

And I've learned, of course, as have we all along the way about some unusual things that happen in HS studies. And I will also just reference I have conducted over 150 studies in every disease from acne to cutaneous T-cell lymphoma. And there are something in HS that happen that are unusual in most things. The first is that assessing lesions is difficult, and that's why we knew it was hard. Why is that? It's because some of these areas are deep underneath the skin, they can't be seen. They have to be palpated. They are in regions of the body that are hard to access in a way that is consistent. And so it is challenging to do clinical assessments.

And again, we evolved to a set of metrics that help us to assess them, but it will always be somewhat challenging. And despite having looked at every alternative available, there is no more straightforward way to do the assessments, I think, than the way that we were doing good. Other things that we've seen from across the study portfolios are that treatment arms can perform differently even when as you see, there are not large differences in the demographics.

And what's interesting about that is we've seen that in some programs where the loading doses with 2 different arms are the same, and yet you can see the arm performing differently very early in those programs as well. Again, often, there is not a smoking run means it's not just one factor or another. It may be a combination of factors. It may be a combination of patients, it may be a combination of studies.

It is absolutely true that HS patients can both worsen and improve spontaneously in pretty dramatic ways. And that leads to a lot of underlying variability in our assessments and in the studies. So -- and it's also true, you can see in some of these cases that other biomarkers for these patients improved as well. So they are truly improving during the course of the disease. And that's why when we are using 12- to 16-week endpoints, it can be very hard to interpret in the studies what is happening with these patients.

And I will also say in every program to date that we've seen, continued therapy does lead to continued improvement for patients. I expect you will see this in this program as we go on further. And that's because actually 12 to 16 weeks is very important in the course. We use it because that's really the longest period of time that we can manage a placebo group. But really in the clinical setting, I am looking for improvement over a 20 to -- 24- to 48-week period of time, and that's what I tell patients as well.

Other unusual things we see in HS studies are sometimes lower doses are outperforming higher doses. Again, that probably has to do with some underlying variability in how the patients are doing, what their underlying characteristics are and other factors that, again, as an aggregate probably have an impact. But on an individual basis, we've not been able to get them.

And then I think the HiSCR75, as you see in this program has creates another nuance, which is although it is clearly where we want to be from an efficacy standpoint because fewer patients make it to a HiSCR75, variability in just a few patients can change the dataset in a way that maybe at the HiSCR we don't see. So all of these are trade-offs in study design that we have to manage and have proven a little bit unpredictable on the margin in all of the programs.

And certainly, we have seen in other large Phase III programs that some of the key endpoints were not met even though the bulk of the endpoints were. And again, this has to do with some of the underlying variability out in the process. So I'll kind of conclude in my lessons learned by talking for just a second about a term that I coined that you heard this morning, which is the data model. And this is, again, I have never seen in other programs, but happens in HS, which is that 10th ultimate endpoint, the 12-week endpoint in this case and others is actually not as strong as the 16-week.

And again, this has been repeated across some studies. This placebo model as it were that you see here, I've seen less frequently, but really had major impact in the statistical analysis of that final one. But factors that seem to lead to do that while the treatment group are, again, related probably to some of these more so convergence of demographics and other risk factors that lead to different outcomes. And again, we have seen uniformly patients continue to improve with further treatment, but this is a model that we do see at week 16 in some of the earlier studies.

So lots of lessons learned here, and I hope you can take away that the variability that we sometimes see in some of these endpoints is a common occurrence in these studies, and we have not been able to completely mitigate that even as we have tried to refine our design and refine our metrics over time. It is just how this disease presents itself.

In terms of this set of data, it is very clear, right, that IL-17A and F inhibition is an effective mechanism of action for HS. You see this across the programs. This medication is no different in terms of having proven and established role efficacy in this area. And I think as you look at the collection of this data, it is highly convergent. This was a well-conducted study. You can see that the PROs and the efficacy metrics line up.

You can see that the endpoints in terms of the treatment group are almost identical in terms of their achievement. And you can also see that the treatment, the placebo arms as they shift to treatment have highly predictable responses as well. And you can see that the PROs are lining up with all of these measures as well. So the internal consistency in this study is exactly what you would like to see for a study like this -- and I also want to point out that the pain data in particular, is excellent, and this has been, in particular, an endpoint that has been hard for some other programs to move and it's been one of the least reliable in some. So again, a lot of convergence to the data that we see.

I'll also add that the safety data in, again, this early phase of the trial is very strong. The things that I look for as an investigator and a clinician, in particular, to all the usual things are the IBD rates, dermatitis rates and immune-rates. And this profile is very compelling as we bring this forward. No surprises and within the spectrum of what we'd like to see and in some cases, below that, particularly, again, or in this study with 0 IBD cases that have been looked.

So in conclusion, it's clear that there will need to be regulatory conversation about this data given how the primary endpoints were designed. But the convergence in totality of the data demonstrate that it was well conducted and that there is compelling aggregate data that demonstrates that this drug is working in the high efficacy range of the therapies that we have to date available.

I will also say that the unmet need for HS patients still remains acute. You can see that as many programs are in the field for HS, and they are enrolling rapidly and successfully because there are a lot of patients out there still looking for both current treatment options and better treatment options going forward. There are programs sprouting up across the United States at almost every academic medical center and in the community with an emphasis on HS and those programs are filling up almost immediately.

And we're seeing large cohorts being prescribed from multiple centers, which again demonstrates how much unmet need there is there in terms of the patient population that is [indiscernible]. So I am -- I was very much looking forward to starting the study for my clinical trials patients here, and I'm very much looking forward to having this medication available for patients in the future. I think, again, the totality of this data demonstrates a clinical meaningful impact and value to our patients with HS who deserve the best treatments that we can provide them. Thank you.

Thank you for Professor Kimball for your reflections on the dataset. Now I know that you had other appointments to attend to. So once again, thank you very much. With that, let me hand over for the last bit to our CEO Jorge da Silva, again.

So, great to have Professor Kimball as one of the key researchers in the field and in our trial. Hopefully, that was informative for those listening to this webcast. Before we go to Q&A, I want to get to a few clear points around what happens next. As you can imagine, I've been reading some of the reports that have been coming out since yesterday night, and I seem to hear that there's a clarity of -- a lack of clarity of path, and I have to confess that I could not disagree more.

I think it's unclear what exactly the path will be, what are the adjustments that we will need to make, if any, but the path is very, very clear. We believe, and I think you've heard some of that color that the HS package that we have with sonelokimab has good chances of being approvable based on all the data and this -- again, this correlation of data and what it means around a single data point for a single element that changes in one trial. And therefore, we will be seeking to confirm that registration path with the appropriate regulators. Now you'll be asking, okay, but what does this mean? What are you going to discuss? What do you think the outcomes may be?

I think it's very unlikely that this is seen as a failed study and as a failed program. That's what the company believes at this point, having consulted with several folks internally and externally. We could imagine paths in which VELA-1 becomes the leading registrational trial and VELA-2 together with MIRA, which as I mentioned already today, is part of this whole game, if you allow me this expression, will then support VELA-1 as registrational.

It could be that it's VELA-1 and VELA-2 as originally predicted. We just obviously have to understand and describe that significance around that primary endpoint. It could also be that the FDA requires us to do a little bit more work. All of these are possible outcomes. We believe that we have a very strong set of arguments here. And again, you heard other people in this call saying that today. So we're feeling confident.

But the path is very clear. We are preparing those books. We are looking to engage with the regulators in short order. There should be no lack of clarity around what happens next. And hopefully, within the next quarter, we'll be able to come back with a good plan. What I think is also true, and I want to make this, and I want to underline this point is that this company continues to believe that SLK has a differentiated profile in HS, matching others in efficacy and obviously showing an impact on pain and quality of life and safety and convenience that we believe will really drive the acceptance of this medication with patients and physicians that, as you heard, sorely needed.

And obviously, we had an issue with one trial and endpoint in HS. But that doesn't mean that the drug cannot perform extremely well or better than others in other indications that we're also running, PPP, axSpA, PsA, et cetera, right? So I think it's also important to remember that this is one trial, and we have excellent data also in other indications.

We believe that it's very important, as you heard also from Professor Kimball, that this data is discussed and out there. So we will wait no further and make sure that the data is presented in a scientific conference as soon as possible. And that means we will be in Nashville at the end of October to present the valid data as soon as possible so that you can all continue to see all data in all transparency and for the Street and investors to have an opportunity to engage directly with KOLs and those that will participate in the approval process and in the prescription to create your own perspective around what this data really means.

So with that, we'll move us to Q&A. Maybe Matthias, you can check the many questions that are out there, and you can direct a bit traffic. I think we'll take 5, 10 minutes for this.

Absolutely. And we did receive quite a few questions. So let me try to group them a little bit. There's a few questions here that continue talking about the placebo. One of them here specifically asked, have you identified any particular reason of why the placebo response is so high? Maybe Kristian, you want to address this one?

Yes. Short answer, no. You've heard from Professor Alexa Kimball, it's not the first time that the HS community has observed such a phenomenon. And although many have tried, I think there's no clarity what really drives this phenomenon yet. Very clearly, the quality, the operational execution, the validity of our trial is flawless. We have looked into every corner. There's no site, no country issue sites that have participated in mirror or not. There's no smoking done, if you allow me to use these words.

Of course, we have started to do the analysis. Are these patients somehow different? Do they have a different baseline characteristics? Is there anything different with regard to the phenotype, the smoking status. So far, we have not identified any difference between those placebo responders and others. But it's clearly an issue that we will continue to investigate and discuss with regulatory authorities.

Thanks, Kristian. I see another couple of questions here, specifically asking about the path to approval, the path to VELA. May I call out 2 questions here. One of them very general. Can you elaborate more on the path to approval? What makes you so confident that the VELA studies are approvable? And yes, one other question from an analyst here is asking specifically regarding is there any precedent from other studies that were in similar situations that support our level of confidence. Jorge?

Absolutely. I don't think I need to elaborate much more on the path and why we're confident that the studies are approvable. I think, again, you heard an external person clearly stating this drug is in the high efficacy range and has all these things going forward. So I think the concordance of all of this, the quality of what we have done, I think, gives us all that confidence.

On the path to approval, obviously, I haven't specifically said it, but I can obviously state it that, of course, we are looking for an interaction with the regulator to get clarity as soon as possible. Ideally, we would get that in the next month or so. Obviously, these things sometimes take a little bit of time. It might be closer to Christmas, but anything within the 1- to 3-month range, I think we're there.

So hopefully, that brings a little bit more clarity, but I think we've said it before. Now very, very interesting question on the examples, case examples from before. There are several, but I will call one because I think it's the most helpful here. I would like to remind everybody in this webcast that one of the drugs approved for HS, Secukinumab for its approved dose actually did not meet statistical significance in one of its Phase III HS trials in the SUNSHINE trial. So here, you have a clear example of the drug that, if you will, has performed even worse in the sense that it just didn't meet significance in any of the analysis and obviously, still seen as an overall package as an important package and obviously something that has been extremely helpful for patients in the market and obviously has performed very well for the company that markets that product.

So I think quite a bit of confidence, case examples in our own indication. So I think we're feeling very confident here. Obviously, a lot of work to do. Very, very clear that it didn't create the result that the Street was expecting. We understand all of that. But we are here to develop sonelokimab for the long run.

Perfect. And I do see a few questions here asking aside from the path to approval, how confident are you that you can compete against existing therapies, mainly called out bimekizumab. Also some questions here for Professor Kimball, but I think she addressed them already in the call, but maybe the company's view, our view on ability to compete in the market.

Again, Matthias, I hope the people watching the webcast don't get bored, but I will go back to the statements from Professor Kimball. You heard it. Sonelokimab is a drug that operates on the high efficacy range with a lot of great things going for it. I invite all investors, the Street, anybody that is watching this webcast to do their homework in terms of where other competitors, and I'm not going to name any specific competitor, but how those competitors have fared along all the lesion scores, but also all the pain scores, all the quality of life scores, the safety, the convenience. And I think we truly believe that the data is strong enough for us to compete.

By the way, as of now, we don't necessarily see a very large impact in terms of time in the VELA process. So if you're thinking, well, you could compete, but you're going to come 20 years later. Obviously, we don't believe that to be the case. So I think the data is very strong. And I want to underline one more thing, Matthias, if you allow me, which is we're talking about HS. We're talking about HS. We also have to talk about PPP. We also have to talk about PsA. We also have to talk about axSpA. We also have to talk about indications. It's not like all of a sudden, the drug doesn't work, which obviously, as you see from the data is far from the truth. So I think a lot to go for. Obviously, a setback, a disappointment in terms of what was expected by the Street, but I insist not a case for us to stop believing in not at all. Any time for more questions? One more?

I see a couple of questions here that probably I'm best suited to answer because they ask about the capital and the cash position of the company, also specifically calling out our debt facility with Hercules. So maybe providing a quick response on this one.

So based on the VELA results, we're not planning to draw the next tranche from the Hercules facility. But importantly, we are by no means with our back against the wall. The last reported cash that you've seen in our 10-Q was $425 million. And as we've seen in the past and as you will continue seeing in the future, we operate very efficiently with a comparably very low cash burn compared to other companies at our stage. So we believe we are by no means with the back against the wall.

Now let me be clear, the situation certainly presents some challenges to the company. We have lived through similar challenges in the past. And this management team and certainly myself as CFO, will make sure that we continue to be very prudent with our capital allocation.

I think with this, we have covered all big things here. Once again, I would say thank you very much for joining us here today to hear our presentation of the VELA week 16 data. We hope it was helpful to also have Professor Kimball share her view and her reflection on the data results with you. Once again, thank you from my side.

Thank you.

Thank you. Have a great day.