Precision BioSciences, Inc. Stock

Good morning, and welcome to the Precision BioSciences Investor Update. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the company's website following the event.

I will now turn the call over to Naresh Tanna, CFO of Precision BioSciences. Please go ahead.

Good morning, everyone, and welcome to the Precision BioSciences AASLD 2026 Investor Update live from The Liver Meeting in Denver, Colorado. Thank you all for joining today.

Next slide, please. During this morning's call, we may make forward-looking statements. I would invite you to review our 10-Q, which was published last week on November 3. The 10-Q includes risk factors that could cause actual results to differ from any forward-looking statements made today.

Next slide, please. I'm joined today by Michael Amoroso, President and Chief Executive Officer; and Dr. Cassie Gorsuch, our Chief Scientific Officer. We're also honored to be joined by 2 leading hepatology infectious disease experts.

Next slide, please. Dr. Mark Sulkowski is Professor of Medicine and Director of the Division of Infectious Diseases at Johns Hopkins Bayview Medical Center. And Dr. MF Yuen is Chair Professor in the Division of Gastroenterology and Hepatology at the University of Hong Kong. All of today's speakers will be available during the Q&A portion.

Without further ado, I'll hand the call over to Michael.

Thank you, Naresh. Welcome to everybody, and welcome to our investor community. Thank you for being with us. We're very excited on the back of presenting our late-breaking oral presentation yesterday on Sunday. Today, I'm joined by my esteemed colleagues, we will walk you through that data, what that data means and what that looks like for patients and for Precision going forward.

Next slide, please. Viral Cure. This will be a very important concept that we discussed throughout the day, the eradication and elimination with PBGENE-HBV of cccDNA, undetectable HBV DNA off of therapy.

Next slide, please. The problem for the last 50-plus years in development of chronic hepatitis B is we have never been able to get at the replicating viral source, cccDNA until now. PBGENE-HBV is a lipid nanoparticle gene editing delivery system that targets the cccDNA, the viral source of replication and infectious particles and eliminates that source. As you could see on your right-hand side, we've had breakthroughs through decades of drug development.

But most and all drug development is truly focused on downstream RNA transcripts and proteins coming from the virus. The hope was that we would suppress these transcripts and proteins and allow the patient's immune system to eradicate the cccDNA on its own. Unfortunately, to date, that has been a long journey and an unattainable task. We hope now with the advent of a direct targeting cccDNA elimination agent like PBGENE-HBV, we can change the outcomes for patients going forward permanently.

Next slide. When we last met, the end of May at EASL, Precision and the team came out and told you Phase I data, the first gene editor, the first targeting of cccDNA and elimination ever in chronic hepatitis B. We told you about 100% treatment effect in 16 patients across 38 administrations. We told you about the advent of a key blood biomarker for intervening with therapy, for knowing when to stop your nucleoside analog. We talked about the advent of the pgRNA blood biomarker. And in 6 patients, everyone treated with PBGENE-HBV had 100% undetectable pgRNA post treatment. We told you we were going to watch the durability. Permanence is critical for elimination.

Next, we showed you the first evidence of cccDNA direct targeting and elimination by PBGENE-HBV through the gold standard molecular biopsies, tissue of the liver, log reductions of cccDNA, not viral proteins downstream. And most importantly, we started to characterize the safety of PBGENE-HBV in patients with chronic hepatitis B across 4 different dose levels, 0.2, 0.4, 0.65 and 0.8 with a focus going forward on the 0.4 and 0.65 doses.

The team told you we wanted to enroll more patients with the enriched blood biomarker of pgRNA. We wanted to get more experience in the 0.4 and 0.65 dose. We must see the critical durability of over 6 months after PBGENE-HBV. Remember, pgRNA is the proxy for HBV DNA, the FDA endpoint off therapy. And we wanted to further look at our safety characterization and profile of these 2 different dose levels. I'm very proud of this team, and I'm proud today to be able to tell you Precision has done just that. 25 patients, 59 administrations with a go-forward plan to move success in Phase I to move to Phase II at a 0.4 milligrams per kilogram dose.

Next slide. The data behind the late-breaking oral presentation that MF Yuen had presented yesterday and a wonderful job, MF. Thank you very much. First, reproducible liver biopsies. We showed you the first proof at EASL, and now we show you another patient at 0.4 mg per kg, the go-forward dose with 1.5 log reduction, 35-fold decrease in cccDNA at the liver.

Next, the pgRNA enriched population, those with the blood biomarker indicative of cccDNA in the liver. pgRNA, now 11 patients. Green is good, 100% undetectable. And when you go undetectable with pgRNA after PBGENE-HBV treatment, patients stay undetectable. Not 1 patient has come back. They stay green, as you can see in the swimmer's plot.

Next, the toughest-to-treat population. Physicians asked, how would PBGENE do when the disease burden is greatest, the 20% of chronic hepatitis B, the early infected HBV e positive. This is a population with 2 to 3 logs more wild-type cccDNA in their liver. PBGENE-HBV is potent at 0.4 milligrams per kilogram, the go-forward dose and with 1 dose was able to eradicate 99% of pgRNA, starting in a patient with 5,600 copies per milliliter. And after the second dose, as you can see by your purple arrow, completely undetectable and the patient has stayed undetectable.

So whether you have the blood biomarker or whether you don't, if you have lower disease or in the highest disease burden, PBGENE-HBV continues to have a treatment effect in all patients, heterogeneous disease, but a homogeneous impact and is continuing to eliminate pgRNA, the HBV DNA biomarker when on a nucleoside analog in all patients.

Next, Mark, I'd love to get into a little bit, Mark Sulkowski. Dr. Mark Sulkowski, can you please tell us a little bit what you think this data could mean for the field? What are you hearing amongst your peers in Denver?

Thanks, Michael. I'd like to just take a step back on this particular slide, the e-antigen positive and think about people with hepatitis B, generally affected at birth, initially very high levels of infection. So when we talk about e-antigen positive patient, we're talking about a tremendous amount of cccDNA in the liver and the biomarkers as depicted here, pgRNA is quite high.

The natural history and treatment with NUCs over decades, you may see reductions in this biomarker as they shift into the e-antigen negative state. I think for me, one of the most remarkable things here is that with a single dose of PBGENE, that occurred in days and weeks, not decades. So I think there's been a lot of excitement at The Liver Meeting about advances in HBV therapeutics and PBGENE is part of that discussion.

Thank you, Mark. Look forward to continuing our conversation today.

Next, please. And as discussed, today marks an important chapter for patients, for Precision BioSciences and the team, and we want to thank all the patients and our investigators. Today, we declare success in Phase I, and the company is moving forward rapidly to Phase II, where we will test for cure rates off drug therapy.

Now I'm going to turn it over to Cassie to tell you the evidence behind the late-breaking oral presentation and why we have such confidence to move forward into testing cures in the Phase II setting. Cassie?

Thank you, Michael, and thank you all very much for joining us this morning. It's really my pleasure and privilege to be able to share on behalf of the Precision team, our patients and our investigators, the exciting data coming out of the ELIMINATE-B study. So I'm going to start with a little bit of disease background to help set the stage for this novel approach.

The viral life cycle for hepatitis B is shown here. cccDNA in the liver is the full viral genome that gives rise to pgRNA, which is the precursor to HBV DNA. So cccDNA makes pgRNA, makes HBV DNA. And this HBV DNA can circulate back to the liver, repopulate the cccDNA pool, and this is the viral life cycle for hepatitis B.

Now as a field, we've known for a long time that cccDNA is really the ideal therapeutic target, but we've never had a drug that could directly target and eliminate cccDNA. We've also agreed that cccDNA elimination in the liver is a path towards a true viral cure for hepatitis B. And cccDNA elimination in our view, is really the only path towards a true viral cure for patients.

So the patients on the ELIMINATE-B study are on standard of care nucleoside analogs. And I want to point out where NUCs work. So they prevent the conversion of pgRNA into HBV DNA. So while patients are on NUCs, HBV DNA is suppressed and not measurable in the blood. However, the precursor to HBV DNA, pgRNA is detectable in some patients, and pgRNA is only produced from cccDNA in the liver. Of course, evaluating cccDNA in the liver requires biopsies, which we are excited to be able to share with you today, but isn't practical for every patient in a clinical setting. However, pgRNA in circulation is a great biomarker because it is specific to cccDNA and is the precursor to HBV DNA.

So PBGENE-HBV is an ARCUS nuclease encoded by an mRNA and encapsidated in a lipid nanoparticle. It's delivered to the liver and targets and eliminates cccDNA. And when you eliminate cccDNA, you prevent the production of downstream markers, including the biomarker, pgRNA, and the regulatory endpoint, the HBV DNA in blood.

And so the goal for this program for PBGENE-HBV for our approach at Precision for hepatitis B is to eliminate cccDNA in the liver, measure that by undetectable pgRNA as the biomarker and after a finite course of treatment, stop nucleoside analogs and look for maintenance of HBV DNA suppression. So the endpoint is, as Michael mentioned, aligned with FDA guidance already of undetectable HBV DNA off treatment.

And here, you can see a snapshot from the guidance document from FDA indicating 2 potential paths for approvable endpoints. The first one you'll notice is undetectable HBV DNA off treatment irrespective of S-antigen levels. And the second one is functional cure, as we are all aware of undetectable HBV DNA and S-antigen loss. And you'll see as we progress to the Phase II study design that we will be testing for both of these endpoints in the context of our Phase II study.

So now let's jump into the ELIMINATE-B data. Starting first with patient baseline characteristics. You can see here a real-world representation of chronic hepatitis B patients. Our ELIMINATE-B study is enrolling in multiple geographies across the globe, including on 3 different continents, really with the goal of capturing a real-world population of hepatitis B patients.

We have evaluated doses between 0.2 and 0.8 milligrams per kilogram. As Michael mentioned, we now have 59 administrations in 25 patients across these 4 dose levels. And I'm excited today to share with you the data that demonstrates the safety and efficacy of 0.4 milligrams per kilogram as our go-forward dose for our Phase II study. And as you can see, over half of our clinical experience is at this dose level. So 13 participants, 30 administrations have been dosed at 0.4.

Okay. So starting first with that primary biomarker, pgRNA. It is the biomarker for cccDNA elimination in the liver. Since our EASL update, where we had [ 6 patients ] with undetectable pgRNA after treatment with PBGENE-HBV, we have now doubled up the number of participants on the ELIMINATE-B study with detectable pgRNA at baseline. So the way to read this graph is that the gray part of the bar indicates that pgRNA is detectable in the blood. When the bar goes green is when a participant achieved undetectable pgRNA in the blood and the black diamonds are doses of PBGENE.

What you can see is 11 of 12 patients now have undetectable pgRNA after treatment. With that remaining patient, 95% reduced from baseline and continuing to decline as of the data cutoff. So we expect that this patient is on their way to undetectable like everyone else in this group.

I also want to point out that all 6 of these initial patients, this was the EASL cohort. All of these patients, we've continued to follow with approximately monthly blood draws, continuing evaluation and all of these patients have remained pgRNA undetectable in the blood, demonstrating the durability of this effect. So when you go green, you stay green, elimination of cccDNA in the liver leads to undetectable levels of pgRNA in the blood, and that effect is durable.

The other thing I want to point out in this pgRNA data is if we subset the patients that have been treated at the lowest dose to achieve pgRNA loss, the 0.4 milligrams per kilogram, all of them have achieved undetectable pgRNA. And this is 6 of the 12 patients that we had on the previous slide. And this really demonstrates that 0.4 milligrams per kilogram consistently drives cccDNA elimination, resulting in pgRNA loss in the blood, very consistent effect.

And importantly, one of these patients is our first e-antigen positive patient that we dosed on study. So why do we care about e-antigen positive patients? As Mark nicely illustrated earlier, e-antigen positive patients are a very important population because they have 2 to 3 log higher cccDNA burden in their liver, more infected hepatocytes, more pgRNA. This is historically a difficult-to-treat patient population. And you can see that visually depicted here, e-antigen positives, more cccDNA, more infected hepatocytes in the liver, more pgRNA in the blood compared to e-antigen negative patients.

We went into this population for a few reasons. One, we wanted to understand the potential dose effect. I showed you that in the e-antigen negative patients, we achieved pgRNA loss at 0.4, 0.65 and 0.8. We thought in this population with more cccDNA in the liver that we may be able to differentiate doses with a higher dynamic range. The second is, of course, this is an important population because historically, they have been harder to treat less positive outcomes with existing therapies.

We were really pleased to see that in that first e-antigen positive patient that we dosed on study, this patient was dosed at 0.4 milligrams per kilogram. You can see after their first dose indicated in the pink dotted line to the left, a very rapid and dramatic reduction in pgRNA levels all the way down to undetectable right around the time of their second dose.

And this patient is really notable because this patient started with 3.7 log or almost 6,000 copies of pgRNA in the blood, 2 to 3 logs higher than what we see in a typical e-antigen negative patient. So this was very convincing data for us that 0.4 milligrams per kilogram can drive potent biodistribution and potent cccDNA effect in the liver.

Now I'd like to spend a few moments talking about liver biopsy data. Of course, liver biopsies are optional in the ELIMINATE-B study, so not every participant consents to optional liver biopsies. But I do have 2 patients now at our 0.4 mg per kg go-forward dose level to share liver biopsy data with you on.

So starting first with patient 5. This patient had a baseline biopsy prior to any of their doses of PBGENE and then a second biopsy after dose 2. What we can look at in these liver biopsies is the fraction of cccDNA transcripts in these 2 longitudinal biopsies. And what you can see is in that second biopsy, a 10-fold or 1 log decrease in the amount of cccDNA transcripts compared to that first biopsy, demonstrating mechanism of action. PBGENE-HBV targets and eliminates cccDNA and does so very potently at 0.4.

We have reproduced this biopsy data now in a second patient, patient 6. This patient had their first liver biopsy after their third dose as well as a follow-on biopsy after an additional dose. And here, we can see a 35-fold or 1.5 log decrease in cccDNA-derived transcripts. So reproducible consistent effect of cccDNA elimination in the liver at 0.4 milligrams per kilogram and importantly, proof of mechanism for PBGENE.

Now I'll spend a few moments talking about S-antigen. So S-antigen is an important secondary biomarker for PBGENE-HBV. Let me explain why we think of it as a secondary biomarker. I told you before, pgRNA is specific to cccDNA, only comes from cccDNA. S-antigen can come from both cccDNA, the replication competent source as well as integrated HBV DNA, which is not replication competent.

When PBGENE-HBV eliminates cccDNA, we expect to see an associated S-antigen decline, but potentially not an entire loss of S-antigen. So it's secondary to pgRNA because it is not specific to cccDNA. In patients that have been dosed on study, you can see a very consistent S-antigen effect after treatment with PBGENE. So here, you're looking at maximal S-antigen decline from baseline across all evaluable patients, 24 of the patients.

What I'll point out is that substantial S-antigen declines have been observed independent of baseline characteristics, such as pgRNA positive at baseline or baseline S-antigen levels. So very consistent activity of PBGENE-HBV across all of these participants.

The other notable piece of data here is when we look at the effect of dose, we compare 0.4, 0.65 and 0.8. All of these doses gave us durable S-antigen declines as well as pgRNA loss, as I showed you on the swimmer plot. And consistent with what we saw on the swimmer plot, 0.4 milligrams per kilogram is sufficient to drive maximal S-antigen declines as well. So really no added benefit in doses above 0.4 milligrams per kilogram, demonstrating 0.4 is a sufficient maximally efficacious dose.

Now I'd like to spend a few minutes talking about the safety profile for PBGENE-HBV. I'm going to share with you on the safety data, 59 administrations, 25 evaluable patients. Of course, as a Phase I study, safety was the primary endpoint and no dose-limiting toxicities have been observed. The most common adverse events that we see in this program are consistent with known lipid nanoparticle effects. So infusion-related reactions that occur on the day of dosing and typically resolve within a few hours.

Also consistent with known LNP effects, we see transient reversible transaminase lab abnormalities after the infusion. It's important to note that all of these transaminase lab abnormalities have been asymptomatic. We've seen no changes in bilirubin associated with any of those lab abnormalities and of course, no cases of Hy's Law.

Today, I'll focus on safety at the 0.4 and 0.65 milligrams per kilogram dose levels as those were the doses that we had continued exploring as of the middle of the year. We previously shared data on safety at other dose levels and had not continued dosing outside of 0.4 and 0.65.

So here, you're looking at the number of patients with adverse events that were either related to PBGENE-HBV or potentially related to PBGENE. Now one important piece of context is towards the beginning of this year, we noticed that with repeat infusions, there was an inflammatory response associated with the lipid nanoparticle. We made some modifications to our infusion protocol to help address that inflammatory response.

Those included extending the infusion duration from 2 hours to 5 hours, increasing the amount of steroids that patients were receiving on the day of dosing from 10 milligrams to 20 milligrams dexamethasone split between 2 doses as well as a prophylactic saline infusion. And so that whenever you see on the slide, current infusion protocol, those are the changes that we made that will be implemented into our current infusion protocol.

Now at the 0.4 milligrams per kilogram, 8 of the 13 patients have been dosed with that current protocol, and they are indicated in the purple box to the top right. What you can see is that this protocol continues to be effective for ameliorating grade 3 hypotension at the 0.4 mg per kg dose level. So no Grade 3 hypotension at the go-forward dose with the current infusion protocol.

There was one delayed transaminase lab abnormality in 1 participant on that third administration, and it's detailed in the second bullet on the slide. So an overall moderate increase with ALT at 306 and AST at 278. No intervention was required for this transaminase lab abnormality, no changes in bilirubin, no cases of Hy's Law.

Now one thing I want to point out, in the context of our ELIMINATE-B Phase I study, we have been using the DAIDS AE grading system. It's very common in the context of lipid nanoparticles to utilize a different grading system called CTCAE. That grading system is used for lipid nanoparticles because it includes a grading scale for infusion-related reactions, which, as I told you, are a common side effect with LNPs. We will plan to use the CTCAE grading system for our Phase II study.

So we have evaluated the context of the safety events in our Phase I study under CTCAE, and that's shown here. What you can see is that none of the hypotension that had been observed on study under the CTCAE guidance is considered Grade 3. This indicates that while these were hypotensive events that were managed with saline under DAIDS, the saline reactive use illustrates it as a Grade 3 hypotensive event. That is not the case for the CTCAE grading scale. So overall, the 0.4 milligrams per kilogram with the current infusion protocol demonstrates a favorable safety profile for our Phase II study.

And in summary, we've generated a robust safety and efficacy data set, particularly at the 0.4 milligrams per kilogram dose level that we're very excited about. And I'd like to invite Dr. MF Yuen, our investigator at our Hong Kong site, to please provide his perspective on the data and the meaningfulness of this data set.

I would like to thank the Precision BioSciences team for the dedication of these studies and also our investigators. We can now say with high confidence that PBGENE-HBV directly attacks cccDNA, the root cause of the hepatitis B infection. The evidence is compelling. Liver biopsies show a deep reduction in cccDNA transcripts, and we observed a 100% reduction in the pregenomic RNA in e-antigen positive patients.

This loss of pregenomic RNA has been prolonged and also sustained, which further strengthens our conviction that the effect is real and durable. Based on these results, I'm very confident and eager to advance the additional studies already planned. PBGENE-HBV has a potential to transform the treatment paradigm for chronic hepatitis B infection and to meaningfully improve patients' lives.

Thank you, Dr. Yuen, and thank you for presenting the data for the late-breaker abstract that we submitted for The Liver Meeting. Really exciting to see this data on the main stage at The Liver Meeting, and thank you for your continued support for the program.

I'd like to talk about what's next for PBGENE. Here, we're going to share the details of our Phase II study design. So here, you can see that we plan to test PBGENE-HBV in our Phase II study in 2 contexts: one as a monotherapy. And hopefully, on the basis of the data that we just shared with you, you can see why we are so excited about the potential of a finite course of treatment of PBGENE-HBV to achieve a monotherapy viral cure for patients measured by undetectable HBV DNA off therapy.

In addition to this viral cure monotherapy arm, we are also including a sequential treatment regimen with PBGENE-HBV treatment first, followed by an antisense oligonucleotide treatment. And in this arm of the study, we'll be looking to stop NUCs and measure for functional cure, defined by undetectable HBV DNA and S-antigen off treatment.

So let's talk a little bit more about the rationale for that second arm. When you look at the state of chronic hepatitis B treatment today, we mentioned functional cure, undetectable S-antigen and HBV DNA off treatment. With the recent approval of Hibsago from GSK or bepirovirsen, you can see the functional cure rate demonstrated 19% in the Phase III studies. On the viral cure side, we think of this as a true viral cure with cccDNA elimination in the liver, which based on this novel mechanism, first-time cccDNA elimination hasn't been demonstrated before. And so really, we think of PBGENE-HBV as the potential to enable the viral cure for PBGENE -- for hepatitis B patients.

So the rationale for the potential combination, I'd like to spend a few minutes thinking about how we think about PBGENE-HBV prior to that ASO arm.

Next slide, please. When you look at the Phase III, we're jumping around a little bit. When you look at the Phase III bepi data, you can see that bepi was most effective in patients with lower viral burden in the liver. So the e-antigen positive patients that were enrolled in the Phase III study achieved only an 8% functional cure rate. And if you look at the S-antigen stratification from the paper, you can see that the lower the S-antigen, the more effective bepi was indicating lower viral burden can correlate with improved functional cure rates.

We have demonstrated the potential synergy of PBGENE-HBV plus bepi in a transgenic mouse model. So we used this transgenic mouse model to test the potential for PBGENE-HBV treatment first, followed by an antisense oligonucleotide. So the way that we did this is we treated mice with a finite course of an ASO alone, as shown in orange bars as well as mice treated with PBGENE-HBV first, followed by that antisense oligonucleotide for a period of time. We followed these mice for 4 weeks after that treatment and measured HBV DNA and S-antigen, the 2 endpoints for functional cure.

What you can see is in the combination arm when PBGENE-HBV preceded the ASO, we have a deeper and more durable decline in both HBV DNA and S-antigen demonstrating the synergy of combining these 2 modalities.

So here is a more detailed view at how the Phase II study design works. Patients will come in on nucleoside analogs. In both arms, they will first receive 3 doses of PBGENE-HBV at 0.4 milligrams per kilogram on a Q8-week schedule. In the monotherapy arm, we will look for undetectable pgRNA, durable undetectable pgRNA as the guiding principle for stopping nucleoside analogs. And of course, we'll stop NUCs and look for undetectable HBV DNA off therapy. In the combination arm, after the 3 doses of PBGENE-HBV, patients will receive an antisense oligonucleotide, look for undetectable HBV, pgRNA as well as S-antigen with the goal of measuring functional cure off therapy.

As you can see, really robust data now for the ELIMINATE-B study, very exciting time as we progress this program to our Phase II study. I'd also like to spend a few minutes talking about our second clinical program now, our FUNCTION-DMD study. This study is now testing PBGENE-DMD for Duchenne muscular dystrophy. The approach for PBGENE-DMD is demonstrated here. It utilizes the same ARCUS technology as our PBGENE-HBV program, but in this case, utilizes an AAV for delivery of those ARCUS nucleases to muscle.

So a single AAV encoding 2 ARCUS nucleases. Those ARCUS nucleases are designed to cut and excise exons 45 to 55 of the dystrophin gene. When this region of the dystrophin gene is removed, it restores the reading frame, allowing for the production of a functional dystrophin protein. And this approach is applicable to up to 60% of patients with DMD because the majority of DMD patients have pathogenic mutations in this hotspot region of the dystrophin gene.

We've demonstrated a robust preclinical data package showing that PBGENE-DMD can restore dystrophin protein across important muscle groups like the heart and the calf. What we know from natural history data is that as little as about 5% of this near full-length functional dystrophin protein is sufficient to correlate with therapeutic benefit in DMD patients. And here on the right, you can see data from a preclinical humanized DMD mouse model showing the ability of PBGENE-DMD to well exceed that 5% dystrophin expression threshold, achieving up to nearly 15% dystrophin in the heart and about 20% to 25% in the calf. And importantly, as you can see here, that dystrophin protein grows over time from 3 months to 9 months on the basis of editing satellite stem cells and expressing a very stable near full-length dystrophin protein.

So PBGENE-DMD is currently being tested in the Phase I/II FUNCTION-DMD study, and the design is illustrated here. We are enrolling boys with mutations in that hotspot region, ages 2 to 7. I'm excited to share with you that we've successfully dosed patient 1 on this study, and I'll share a safety update on patient 1 here in just a moment. We've also enrolled patient #2, and we currently have patient #3 in screening, which puts us on track for completing our goal for the program of enrolling this Part 1 safety cohort of the FUNCTION-DMD study by the end of the year.

So I'm very happy to be able to share that PBGENE-DMD was well tolerated in patient 1, who was successfully dosed at Arkansas Children's Hospital in August of 2026. No serious adverse events and no adverse events of special interest have been observed in this participant. And this is notable because it's an AAV therapy in Duchenne muscular dystrophy kids where challenges with AAV tolerability have been observed in the context of other studies. So importantly, no evidence of TMA, myocarditis or acute liver injury in this first initial participant. We reviewed this data with our independent DSMB, and they identified no safety concerns as well as endorsed the decision to continue dosing patients #2 and 3 to complete Part 1 of this study.

So as I mentioned, we are on track to meet the goal of 3 patients enrolled in this study by the end of the year. And we look forward to additional safety data as well as biopsy data. As a reminder, we are taking muscle biopsies from these participants at baseline 12 weeks and 12 months post dosing. And so we will look to be able to share that biopsy data as well as additional safety data in 2027 and continue to Part 2 of this study.

With that, I'd like to hand it back over to Michael Amoroso.

Thank you, Cassie. Thank you, MF, and thank you, Mark, for the wonderful presentation.

Next slide, please. So you may have recently seen that Precision was able to extend their financing runway into quarter 4, 2029 and very importantly, through the key late-stage clinical inflection points of a global Phase II PBGENE-HBV study that we're calling ELIMINATE-B2. That, again, will test PBGENE-HBV for viral cure as a monotherapy, and it will also test in the combination with bepirovirsen in combination for functional cure as well as for viral cure.

The funding also extends our ability to continue to operate on program 2. As we say at Precision, we love both of our children, and we're very excited for patients with DMD of what this could possibly mean to take back near full-length dystrophin. Cassie, showed you that Phase I/II will complete in 2027, but we are now fully funded to take our pivotal through '28 and '29. So very meaningful clinical inflection points for patients first, for shareholders next, global Phase II as well as a full pivotal for DMD. Precision brought in $125 million in proceeds. We did a raise here in the last couple of days announced last Thursday. And again, we thank our new partners as well as pre-existing partners as we couldn't do the science without you. So thank you so much. And again, patients is our key focus here.

Next slide, please. How these inflection points layer for the next 12 months, critical next 12 months for Precision. If you look first at the global Phase II for PBGENE-HBV, our ELIMINATE-B2 trial, we've already had a team out in -- this will be a global trial. We've had a team out in Asia onboarding sites as well as in the U.S. and Europe. We will be doing global accrual of an open label in the first half of next year. And what that will yield is some results already from the monotherapy and the combo arm that we'll be able to update into the second half of next year, some initial data there.

Study will complete in '28. However, in an open-label nature, Precision will be able to communicate at key data points along the way starting in the second half of next year. In addition and in parallel, Cassie told you about the very, very critical data coming out of DMD. First, we're on track to finish our Part 1 safety data this year with the data coming out in Q1 of next. That will unlock our ability to treat patients safely in DMD concurrently. And our 3-month first look at biopsy data, dystrophin expression from a near full-length dystrophin gene, not a synthetic gene, taking back the body's native dystrophin will be in that April, May time frame, Q2 as well as the base case for dystrophin expression and functional improvement. It's not about dystrophin without functional improvement will be in Q4 of '27. So you see a data-rich catalyst year ahead of us for the next 4 quarters, enabled by our partners, our current and our new investment partners, and we thank them very much.

Next slide. Now I want to open up to Q&A, and we're going to spend time to get to all of your questions. We are excited about the data. We know we've already seen some questions coming in of new paradigm. I'll preface some of the things that have come in on the line. I think Cassie showed a slide that's so important on slide 13, if you guys can go there as I open up to Q&A, if someone could queue slide 13.

I'm going to remind everybody, we've known cccDNA is the problem and the only source of replicating virus. That has to be the target to eliminate, not suppress, not silence, extinguish this virus, to stop viral integrations, to stop the ability for patients to progress unfortunately to hepatocellular carcinoma. To date, hepatocellular carcinoma rates are still going up. The target is cccDNA. The biomarker, while Cassie told you, while on the nucleoside analog, a direct measure of cccDNA in the liver is pgRNA in the blood. Now not all patients have this biomarker. In fact, it's the patients that have more disease, they're tougher to treat. But remember what pgRNA is. It is not the FDA endpoint. It is the surrogate proxy for HBV DNA, which is the endpoint by the FDA when you're on the NUC.

1 molecule of pgRNA is necessary in order to make 1 molecule of HBV DNA. So pgRNA is so important while you're still on the NUC to have them undetectable, stay durably undetectable, stop the NUC and then the FDA endpoint, of course, is off therapy HBV DNA in the blood. I just saw some of the questions coming in already. I wanted to remind everybody because I realize most therapy has targeted suppression of downstream biomarkers, ones we also look at such as S-antigen. These are nonspecific to cccDNA. This math equation, as we call it, is the key for PBGENE-HBV.

With that, I'm going to open up to Q&A and the questions coming in. Thank you.

[Operator Instructions] The first question comes from Maury Raycroft at Jefferies.

Great. Congrats on the update and showing the data at AASLD. I'm wondering for the Phase I, will you explore stopping NUCs for any of these patients? And then for the Phase II viral cure plan, what more can you say about the criteria that you're going to use to stop NUCs in the Phase II?

Yes. So I'll take the first part, and then I'll open it up to Cassie, and then our key physicians who are going to help us execute the trial on the execution of Phase II.

So Maury, Phase I, remember, we've got about 25 patients now team. That's about half of them had more disease in the liver, right, including the pgRNA enriched e positive we just showed you. Those are the folks that have pgRNA in the blood, Maury. You're right, we did just pass in our first half the EASL cohort, the vital 6-month and a day off therapy time point to know that ethically and safely, it would be potential an ability to stop NUCs in the Phase I.

The one thing we wanted to make sure the community heard, it's really important to test cure rates at 1 single dose really with some stats and power, looking at a treatment effect. We all get excited to stop in onesie, twosies, Maury, and we will look to do that with the Phase I investigators. We don't have a set plan just yet. The second half of the swimmer's plot will get past the 6-month mark toward the end of Q1 of '27.

But remember, that was all different dose levels. So we'll work with each investigator. I think there's an excitement to stop the patients that didn't have pgRNA in the blood because you could argue maybe those are the easiest to eliminate. They have less cccDNA in the liver, therefore, not the pgRNA blood biomarker. That's why Cassie showed you S-antigen as a secondary marker, Maury, because that shows a treatment effect in all 24, right? About half the population has the pgRNA enriched. Everyone has gone undetectable. 1 patient is just about there, almost everybody, 95%, we think they'll get there on the next blood marker. That was the data cutoff.

So when we get to the end of Q1 next year, everyone will be past that important 6 months and a day off therapy. And I think we will with the investigators look to stop NUCs in those patients. But remember, there are very different doses. Some of those patients had doses at 0.8, 0.65. So we've got to take that data with a grain of salt. I'm as anxious as you to see it. We haven't stopped anybody yet.

But what was most critical is we had to pick a safe go-forward dose, 0.4, and we got to put it in a powered environment where we're really looking at a treatment size effect. So we will do both of those things in parallel at some point, but we haven't promised exactly when that will be. I think it's important for you to think, Maury, 6 months off PBGENE, continue to stay undetectable happens at the end of Q1 '27. And I think we can look case by case with the investigators.

With that, I'll ask MF and Mark to comment on anything around the Phase I, if they want when the question comes up. But I'm going to take the second half of the question. I'll start with Cassie on the Phase II design and kind of what we're thinking for the stop NUC criteria. And I'll ask MF and Mark to please weigh in, please.

Thank you, Michael. This is a very great question. For the Phase I study, we -- originally, we didn't even have a plan to stop patients NUCs even though they have a pregenomic RNA undetectability because the Phase I study was designed to look at the safety and also I mean the dose, efficacious dose of PBGENE-HBV.

But then with the data evolving, we actually saw so many patients with pregenomic RNA undetectability, and we are now at the phase where we are going to discuss with Precision BioSciences individually for our patients, whether it will be good to stop the nucleoside analogs. But that, with this -- I mean, will be designed very soon and up to all the patients, I mean, discussion and also the investigator discretion whether we would, I mean, stop NUCs for patients, as Michael already said, at least, I mean, 6 months after the last dose with persistent pregenomic RNA undetectability.

Thank you, MF. Yes, Maury, I just caution the investor community. Again, we haven't stopped yet, guys. I'm not hedging it anyway. We want to look at the treatment effect at a dose. We will do what's right for each patient, no doubt about it. We think they're definitely qualify. You're seeing 100% treatment effect. But whether we go 6 for 6, 3 for 6, or 0 for 6, I think you got to caution yourself to think about a treatment effect with stats behind it.

And testing cures is a Phase II setting activity. And that's what we're moving feverishly to do now. And like I said, Maury, you're going to have open-label data rolling out in the second half of next year. Cassie, do you want to maybe speak about both arms in the Phase II, Mark? I know you guys have been so critical in designing it and kind of what the thought process is and where you would stop NUCs in those arms.

Sure. I can start, and then I'll ask Dr. Sulkowski to weigh in as well, provide his thoughts.

So as you can tell, pgRNA really is our guiding biomarker here for cccDNA elimination because we know that the 2 are linked, that cccDNA in the liver correlates with pgRNA levels in the blood. And so when you see that pgRNA loss and that durable loss, that indicates that PBGENE-HBV has dramatically eliminated the cccDNA pool in the liver.

And we think that, that, what we know from published literature that pgRNA levels in the blood are a positive predictor for successfully stopping NUCs. That's been demonstrated across a number of studies now. And so in that viral cure arm, that will be a guiding principle looking for pgRNA undetectable -- durably undetectable in patients to consider stopping NUCs.

And as we talked about on S-antigen, we do expect to see durable S-antigen declines in participants indicative of treatment effect. When you eliminate cccDNA, whatever S was coming from cccDNA also gets eliminated. And so a durable stable decline in S-antigen is also indicative of PBGENE-HBV effect in the liver. And so those are really the indicators that we will be looking for, for patients to consider stopping NUCs.

Got it. That's really helpful. Maybe one other question just on the Phase II, I want to clarify, will all of those patients have elevated pgRNA at baseline? Or if they don't, can you talk about more about how you're going to assess efficacy in the patients who don't have the elevated pgRNA? I guess could those patients get enriched in the functional cure arm?

Cassie, why don't you start with that? And Mark, why don't you weigh in a little bit? Maybe you could take through kind of the variation of the 2 types of patients you see in the e negative group with and without the biomarker. Maybe we can help a little bit how you would do that.

But the short answer, Maury, is we take all comers, the same way we did in our Phase I. PBGENE works regardless of how large or small your disease burden is. You're just asking a really good question about how do you make that intervention decision to stop the NUC is slightly different depending on the biomarker they have.

Cassie, maybe you could walk through that. And Mark, please give some color?

Sure. So yes, just to be very clear, Maury, we will accept patients who have detectable pgRNA at baseline and those who have undetectable pgRNA at baseline. I want to point back to the biopsy data that we've shared that patient 5 had undetectable pgRNA at baseline coming into the study, and we can still see through liver biopsy, a potent effect of cccDNA elimination suggesting that we have likely improved that participant's chances of successfully stopping NUCs because of the removal of the cccDNA pool in the liver.

Now I mentioned earlier that S-antigen is an important secondary biomarker. This is where S-antigen can be really valuable. We do see sustained reductions in S-antigen across participants at 0.4 and higher dose levels. And so we know that there is treatment effect based on the biopsy data as well as the S-antigen data even when pgRNA is undetectable.

And as Michael mentioned earlier, those patients who come in with undetectable pgRNA are patients who may actually be in a position already better position to stop NUCs. We think PBGENE-HBV further improves their success rate. We will bear that out in the Phase II data, of course. But we know pgRNA in the blood is reflective of cccDNA levels in the liver. So those patients likely have lower cccDNA levels, fewer infected hepatocytes, but can still benefit from treatment with PBGENE.

And then, Mark, if you could please provide your thoughts.

Well, thanks, Cassie. The way I think about this is you're trying to eliminate hepatitis B in the liver. So cccDNA is hepatitis B in the liver. And it's a continuum, e-antigen positive. There's a very large number of hepatocytes harboring transcriptionally active cccDNA. And as you move along the continuum to e-antigen negative, you've got those with pgRNA positive. They have more cccDNA that's been active transcribed. Then you move again to e-antigen negative with a negative pgRNA, they have less.

So in a sense, if you can get someone to go from pgRNA positive to negative, you address the harder-to-treat population, and we are addressing cccDNA that's still on those pgRNA negatives at that safe and effective dose of 0.4.

The next question comes from Moritz Reiterer at Guggenheim.

This is Moritz on for Debjit. First of all, congrats on the great updates on both of your programs.

I have a couple of questions on the HBV side. Firstly, just perhaps a little bit more color around sort of the meaning of undetectable pgRNA. What's the lower detection limit of that assay?

And then secondly, when it comes to your amended infusion protocol, you've not seen any Grade 3 events at 0.4 mgs per kg anymore. Do you believe you've sort of fully addressed this issue? Are you taking this exact infusion protocol into Phase II?

Yes. I'll start with the second half, and I'm going to go to Cassie in a minute. First and foremost, we feel really good about the -- it's been 2 years guys, we feel really good about the predictability, the ability to manage and really understand deeply because of people like MF, who's our biggest enroller of what repeat LNP administrations really mean. Guys, this is the first time the world has really had representative doses of mRNA being repeat dosed for cumulative editing and elimination, okay?

And what we learned here along the way was you can have on your subsequent doses at higher dose levels, Cassie talked about that inflammatory response. That's during the day of the infusion. And you just want to make sure you don't have big transient drops in blood pressure. We really did figure out what that looks like. This is a known thing with LNPs where you, that first hour and the timing and the rate in which you infuse matters. So elongating that time, taking the day of infusion from the 10 mgs of dex to 20, and then pushing saline before. I think Cassie showed you, DAIDS doesn't have a criteria for infusion-related reaction like a hypotensive event. So that's when if you push saline, that was counted as a Grade 3 event because it counts as an intervention.

If you look at CTCAE, we're not rescoring anything, guys. We're just trying to give you a flavor going forward. If you look at CTCAE, that really is an LNP across disease states. You'll see there was nothing higher than Grade 2. The intervention of saline unplanned would just allow somebody that's sitting in the hospital that counts under the DAIDS criteria.

So I think we feel really good that we understood the cytokine mechanism of hypertension -- hypotension and that we really do have a formula going forward where we're not seeing it anymore as well as we feel really good about liver health. I mean we've never tipped bilirubin once in this trial, have never had a synthetic liver function issue. So I think we really feel good about our characterization of the safety profile, our understanding how to mitigate and how to dose and the go forward.

With that, I'll ask Cassie to speak to the assay we use. And Cassie, if we could talk about specificity and sensitivity because I know this question comes up a lot, but it is the best gold standard for pgRNA assay out there. Cassie?

Sure. So we are using the Roche pgRNA assay for measuring blood pgRNA levels. And we selected that assay for a couple of reasons. One, it has -- based on the design of the assay, it's very specific for cccDNA-derived transcripts. We know that using that 3-prime polyadenylation signal that those transcripts can only come from cccDNA, which is really our goal in this assay is to monitor the cccDNA pool in the liver using this blood biomarker. So that was really essential as we evaluated different RNA assays.

To the question around the limit of detection. So I want to first say limit of quantitation for this method is 10 copies per ml. The limit of detection, which is what we're using to categorize patients as positive or negative is 5 copies per ml. So it's a very sensitive method. One of the -- as far as I know, the most sensitive method that is there in the commercial setting for pgRNA or HBV RNA methods. So a very robust method and we -- and that specificity and sensitivity, both of those components are important for this method.

Cassie, could you just speak to a moment about we think of all the assays we looked at, some of them can pick up RNA transcripts that are not pgRNA and why we thought Roche was really specific to just pgRNA?

Yes. I think just reiterating the use of the assay, the way that the Roche assay is designed, it picks up a polyadenylation signal that's only present in cccDNA. Other methods use different regions of viral transcripts for detection that may not have that same specificity as we see with that Roche assay. So that selectivity of cccDNA specific transcripts was essential in selection of this method.

The next question comes from Luis Santos at H.C. Wainwright.

This is Luis in for Patrick. Congratulations on the progress. I'm thinking what -- about the groundbreaking data on the first patient who was HB e-antigen positive. I was wondering if there's anything you can learn about the characteristics, the baseline characteristics of that patient to inform how the Phase II can be designed? And also along that line for choosing the enrollment of patients for Phase II, can you tell us how you're thinking about which patients should be eligible for bepi and when?

Yes. Mark and MF, I'm going to go to you both, please, if you could. If you could talk maybe about the significance of the e positive. Mark, maybe you could give a little color of the swimmers plot when they're e negative, maybe what the copies are around the range of pgRNA versus the e positive, and maybe the confidence that this gives you to look at all comers here in the Phase II.

Mark and MF, I'll ask you guys to comment on that, please.

Sure, Mike. I'll start off with that. As I've talked about, the e-antigen positive patients simply have more cccDNA that's being actively transcribed, that's reflected in the blood by levels that are higher of pgRNA. So that individual was near 6,000. When we look at the e-antigen negative state, there's less actively transcribed targets or cccDNA and the pgRNA levels are lower.

So in terms of trying to find the right dose, which is really the critical part of Phase I study, we can look at a number of markers in the e-antigen negative people, both the blood markers of pgRNA as well as the liver biopsies that provided great confidence that the 0.4 milligram was effective at eliminating cccDNA.

But then when you take it to a population with a much higher level of cccDNA and pgRNA and that same 0.4 milligram per kilogram dose in a single dose produces that dramatic decline, it's confidence in that dose level that's having a biologically relevant effect on cccDNA. So I think it's a critically important population because of the fact they've got more replication.

[indiscernible] line by line. Thank you. Mark, MF, is there anything you would add about as we think about Phase II enrolling those lower or higher disease burden, we've obviously seen therapies work different with lower and higher disease burden. Your confidence on the totality of this data to really look at all comers, please.

Thank you. In fact, that particular patient we presented was recruited in my center. So why we did that is because we really want to know this, I mean, PBGENE-HBV would work in patients with high viral activities, and it seems to be the case. And for your information, we know that e positive patients is really difficult to treat.

Back in the day on nucleoside analogs, we know that even you give nucleoside analogs, very potent nucleoside analogs, we can't achieve 100% of DNA negativity in e positive patients. So it means that, I mean, using -- in this case, we use I mean the PBGENE-HBV, we didn't see any difference between high -- I mean, patients with high viral activities and patients with low viral activities.

It tells us more that regardless of what activities level you are having for patients -- in patients, we can still use this PBGENE-HBV to treat the patients. And for coming studies, we are open for all patients, e positive and e negative. This is exactly the reason why we are so confident and we want to -- I mean, recruit both patients to this particular trial.

And for your information, okay, the disease of hepatitis B, I mean the outcome of hepatitis B really depends on how long you have been, I mean, under a very high viremic phase. So for e positive patients, I would say, okay, if the drug is effective, then if we can treat them at the early phase, and that will be more rewarding, relatively -- I mean, comparatively rewarding for patients with e negative.

But then we have a lot of -- I mean, populations having e negative phase -- I mean, e negative disease. So this study is clever in the design that we cover all the needs for our patients. So that's why we are very excited to see that the study -- I mean, that's not just for e positive or just for e negative.

Yes. Thank you, MF. Thank you, Mark. So Luis, I'll give a little more color here on the Phase II design, which we're rapidly enrolling and literally designing as we go. But we need to get patients to test cure rates, viral cure rates, right? When I say that, we mean HBV DNA, the gold standard, HBV DNA undetectable regardless of other biomarkers.

In the monotherapy arm, we'll be taking all comers. Just like in our Phase I, there was no cap on S-antigen levels, pgRNA levels, e positives, e negatives, even people that didn't have the biomarker. So you'll have a finite course of therapy. And I think here, you can expect to see e negatives and e positives. We'll be able to stratify. Remember, team, this is an open-label Phase IIa. This will inform very important what we do in later-stage trials for pivotal approvals and/or confirmatory approvals.

So the reality here is you'll be looking at all comers with a finite course of PBGENE that will include e negatives and e positives. I think, Luis, when you -- to your question, on the bepi arm, you're really testing does an RNA trans is an ASO, does an RNA transcript kind of binder suppressor, does that help if there is a cell or a percent or 0.5% left of cccDNA, can that bind any of those RNA transcripts left behind from the cccDNA and take the viral cure rate higher?

Similarly, when PBGENE-HBV eradicates and eliminates all cccDNA, the pgRNA, the S source from that, does that allow bepi to really focus on some of the integrants a little more in the cells. And remember, a lot of the bepi patients didn't stop their NUCs, and they ended up at level below 100. If we're cutting the disease burden and lowering the disease burden, Luis, at inception before you start, we think that makes the hurdle of the ASO lower.

And frankly, we know that there's an immune component as we've seen from the data. And we think eradicating and suppressing downstream viral biomarkers like S, but also most importantly, eliminating the actual virus, cccDNA, what will the 1 plus 1 equals 3 or 33 effect be of PBGENE-HBV followed by bepi. So in the combo arm, you're going to see an enrolled population very similar to B-Well 1 and 2. So you can look at the combo therapy and how it compares to the monotherapy. Hopefully, that gives you more color of each arm.

That was very helpful. I was wondering if I could follow-up on that. How -- so I don't know if you disclosed this, but if the patients on monotherapy bounce back, how long do you have to wait before you give them bepi?

Yes. So again, this is a prespecified design. This has nothing to do with bouncing back, Luis. You get your PBGENE for a finite course. And after your third administration, you will start and dose bepi the same way B-Well 1 and 2 did, but you're going to start with a much lower hurdle of virus.

Where bepi performed best, if you could take me to the slide that shows the B-Well 1 and 2 data, I'm going to get you a slide number in a minute, operator.

63.

63, please. Slide 63, if you would. What you'll see here, Luis, when the slide comes up, the e positive, we know has the most burden of disease. We use the less than 1,000, I'm looking for the slide with the e positive and e negative. Either way, the patients in the B-Well 1 and 2 trial, who did best were those who were not the e positive with the greatest burden of disease. They were the people with S antigen with less than 1,000, indicative of a lower burden of disease.

So Luis, there is no waiting for a relapse. You're not stopping the NUC in the combo arm until you give 3 administrations of PBGENE, lower the viral burden, then you treat with 6 months of bepi just like B-Well, and then you will stop your NUC.

This was the slide I was referring to. Thank you, operator, Slide 37. You'll see that bepirovirsen worked best in patients with a lower viral load at inception. And we believe that at a minimum -- at a minimum, we know PBGENE is cutting out cccDNA, the viral load, the viral load that matters, the replicating viral load, more than 99% in confirmed biopsies. That's why we're so excited.

For decades, we have suppressed, we have silenced downstream proteins, S of the virus, RNA transcripts of the virus, which is the DNA level, we have never extinguished or eliminated. Now we give these patients a chance of cure. These patients, Mark and MF, I'll ask you guys to comment. The #1 thing I've learned from my KOLs here, they're asking to be off therapy for life. They want cure.

Mark, MF, any comments on that?

Well, I can certainly jump in. I think it's -- the Phase II, if you go back to that, it's a really elegant design. And what I mean by that is you've got a monotherapy arm that's going to attack cccDNA and providing 1 pathway to NUC-free no medication for patients living with hepatitis B.

The second arm, which does PBGENE to cut the cccDNA followed by bepi really provides an additional pathway forward, both for the potential for higher rates of viral cure, but also to remove that integrated S-antigen through bepi's effect primarily through the immune system as well as through its ASO function.

So really 2 shots, if you will, to take a patient with chronic hepatitis B on long-term NUCs to a cure state in which antiviral therapy in the form of daily NUCs is not needed.

Maybe I can supplement my daily practice from what patients really want because number 1, patients who saw us -- we decided to ask them or ask to start antiviral, the first [indiscernible] they know that should I need to take it long-term or lifetime even. So this is a quick -- I mean, I would say obstacle for patients to consider to take on the therapy.

So that's why, I mean, when I started this particular trial, you can see that we actually recruited quite a lot in a single center with first gene therapy. The reason is very simple. The patients really want to take off therapy. So that's why this is a great need, and we now see the results. And we are -- I mean, we are hopeful that this therapy can actually take off a lot of patients from nucleoside analogs where they really don't want to take for life.

Thank you, MF. Thank you so much. Operator, next question please.

Yes. The next question comes from Catherine Novack at JonesTrading.

My first question is for Dr. Sulkowski and Dr. Yuen. Can you discuss long-term outcome difference in patients, whether they achieve functional or viral cure? If let's say, viral cure looks similar to functional cure rates in Phase II, how do you think about choosing one or the other? And then from an access standpoint, do you think payers are willing to attempt multiple curative regimens for HBV patients?

Yes, Mark, I've seen you do a lot on this. I would love to -- obviously, the viral cure rate is 0, Catherine. We've not -- so Mark, I'd love for you to talk about the context of functional cure and a bit of a fragile endpoint and what's happening with HCC rates today and your thought on some of the differences with viral, please? And then, MF, feel free to chime in.

Yes. Let me jump into that. So the biggest threat to people with hepatitis B is the potential for hepatocellular carcinoma. So if we look at studies of both natural history of hepatitis B, that is treatment without NUCs and then treatment with NUCs, you see that the biomarker of DNA is a strong predictor of future risk. So viral replication drives, if you will, cancer risk in the future and NUCs suppress it, but it's incomplete.

Then when you look at other biomarkers, S-antigen is a biomarker as well. But both biomarkers in the blood have depicted the higher they are, the greater risk of cancer over time. And of course, MF has done a lot of that work. So I'm going to turn it over to MF to talk further about the studies that he's conducted in Hong Kong.

Thank you very much, Mark. In fact, this is a very -- I mean, clinical question. We know that patients who have -- functional cure they are expected to have a lower risk -- significantly lower risk of developing liver cancer and cirrhosis. And that obviously will improve the outcome for the patients. Even patients who cannot achieve a loss of surface antigen, we somehow can lower the surface antigen, it has been shown scientifically with strong evidence that patients who have relatively low surface antigen level, then the outcome is still better than patients who are having high surface antigen.

And we have shown in this particular study, I mean, these patients, although at this stage, we don't see surface antigen loss in this particular study. We know that these patients have at least on average, 40% to 50% reduction of the surface antigen and which is a -- I mean, sustained in this particular study. So we know that, okay, these patients is now having a lower risk of HCC. And we -- we really want to strive better to have a well control to take off the patient from nucleoside analog to have a functional cure to take a patient from nucleoside analog. So these are the things that we're really hoping for and that I think will have a high chance of getting there with PBGENE-HBV.

Yes, Catherine, to be fair, there's some different global regions here. So I'll take the payer question. First of all, it's early. It's incredibly exciting that it's Phase I, and we're showing really an elimination of a virus that will compare to suppression and what that really means over time for late-stage liver outcomes. Look, Catherine, we know the greatest influx. There's a lot of thin data of what happens if an integrant sticks around for years and years and years. Does S or X lead to deleterious go-forward condition, cancer risk.

Data is thin at best, but we do know the following that when a patient is in their early infected state like that e positive patient, and that fire hoses on of replicating virus, which is where the fragments go into the integrated host genome. We know that number of frequencies, place you get those integrations, near or not near an oncogene leads to cancer risks. We know that shutting down viral replication, we think, is going to have a profound impact on late-stage liver disease.

And the payers accordingly, look, the payers today are paying very good, we've had a 3% functional cure rate for 50 years. Great step forward with bepi. We're excited for patients. Now we're at 19%. We still got 81% of patients that we can't leave behind, but bepi is being reimbursed well on a suppression endpoint of functional cure.

And I think an elimination or an extinguish of the actual DNA source of replicating virus and what that could mean for late-stage liver disease outcomes, which are still not going down fast enough. That's for sure. It depends on what data you look at. But some show rates going up and not going down fast enough, there'll always be a value-based medicine decision to be made. And I think payers are going to have shown they'll support that for patients.

So very early Phase I to talk a bit about payers, but I don't think you should worry about a viral cure, true elimination versus a functional cure. We know that functional cure is beneficial for patients and reimbursed today.

Great. And then I guess just one more for the Precision team. Just speak, I guess, to the relative ability of PBGENE-HBV to target integrated viral DNA versus cccDNA. How is that borne out in patients versus what you see preclinically?

Yes. I'm going to ask Cassie to jump in and really take you through that. But remember, PBGENE-HBV is the cccDNA drug. We knock down, but we don't eliminate integrations. And we're okay with that. We don't think integrations have any deleterious go-forward effect anywhere near the world of what the actual source of DNA is. So the liver will turn over. We know that. And it gets rid of those fragments that are integrated, remember, Catherine, they cannot make viral replication competent disease.

Cassie, can you weigh in a little bit and maybe tie that to our mechanism?

Sure. So what we've seen preclinically and now is supported in the clinical biopsy data is that when that ARCUS nuclease cuts cccDNA, the predominant outcome is the elimination of that cccDNA molecule. And so the double-strand break leads to degradation, loss of that cccDNA. And obviously, when you eliminate cccDNA, you eliminate anything that was previously being produced from that molecule. So any of the viral antigens, pgRNA, S-antigen, all goes with it when you eliminate cccDNA.

There's a secondary mechanism that can occur in both cccDNA as well as integrated DNA, and that's indels, insertions of single base nucleotides into that DNA sequence. We know that those indels inactivate cccDNA because of where the target site sits in the cccDNA. So they also render cccDNA replication incompetent. So there's 2 editing outcomes on cccDNA [indiscernible] happens the 90% of the time and then the indel outcome, which is the minority outcome, still effective for replication and competency.

On integrated DNA, the editing outcome indels, we can see that, that happens in the liver biopsy data. However, what we know, as Michael said, that, that editing of integrated DNA reduces S-antigen, but doesn't completely shut off S-antigen expression from integrants, which is why we see reductions, stable decline in S-antigen in our patients.

The next question comes from Kostas Biliouris at OpCo.

Congrats on the multiple great updates here. Two questions from us on HBV and one on DMD because I hope it's not overlooked today, DMD.

So on HBV, the first question is there is a patient who was treated with a fourth dose about 35 months after the third dose. I wonder what was the decision behind the timing of the fourth dose? And all the while the patient was pgRNA negative?

Second question on the mice data, you showed what happens when we have ASO treatment only and when we have combo of gene editing and ASO. I wonder what happens when you dose the mice with only gene editing. Do you have this data and what do they look like?

Yes. Of course. So I'll have Cassie address that in a minute. And Cassie, you'll have to explain that. Kostas, that's arm 1 of the trial. If you have viral cure, there's no reason for a combo. That's correct. If you have 100% viral cure rate, there'll be no reason for a bepi combo. And if the truth is somewhere between 0 and 100% on a viral cure, which is probably where we'll be, that's where the combo could help some patients. I'll ask Cassie to touch that.

Let me first talk about one of MF's patients, and I'll let him weigh in, in a moment, we're getting on time. But remember, we dosed 1 patient 4x at 0.4. That was in the early days, Cohort 2, true Phase I dose finding. We didn't know 0.4, Kostas, would be the dose yet. It was actually MF's patient. I'll have him weigh in, in a minute, but he is my lead PI and investigator. And one of the things MF and I wanted to answer was safety, safety.

We didn't know that everyone was going to go pgRNA undetectable at 2 admins. If you look at that swimmers plot close, be careful folks when you do because it looks like, for example, patient 6 goes undetectable at the third diamond. But really, that's the blood biomarker draw before you dose them. No one has ever needed more than 2 admins, Kostas. We'll give 3 in our study to be safe and make sure we got all the disease.

But MF and I at the time were saying, what does fourth admin look like for safety if we ever need to give a fourth admin, if there is somebody who's still pgRNA detectable. We also had a patient who still had some S-antigen. So even though we treated beyond the biomarker, to be fair, MF at the time, we didn't know pgRNA was definitely our holy grail only biomarker. So we treated beyond the biomarker.

I don't think we saw an additional benefit on the integrated S because we've eliminated the cccDNA S. And really important, MF does an incredible job and his patient was willing to give us a biopsy on another treatment. And that really factored into our decision too, of course, safety for the patient, but really moving science forward for all patients. MF, how did I do on that patient 6? Did I miss any of our rationale behind it? Let me...

You mentioned that completely correct. That particular patient is very motivated. When I talked to him, actually, whether he wants to try another dose, he said, yes, because I mean, we understand this is a very early phase study. We -- I mean, at this stage, we are looking something from hindsight, right? So we have the pgRNA ready for these patients. We know the surface antigen.

So now I mean, we know that with all this, I mean, data, we are now settling in 3 doses in the Phase II. And -- but the important for that particular patient is even we didn't see any pregenomic RNA level in the blood. We didn't see the surface antigen further drop by the fourth dose, but we see an additional 1.5 log reduction of the cccDNA. So we are now balancing the number of doses versus the effect on the patients. So we come up with the conclusion of using 3 doses in the Phase II study.

Thank you, MF. Cassie, on the combo question and the mouse data, I think this is profound that you almost have to -- Cassie hit from the standpoint that if you eradicate all C, sure, that won't be -- you won't have a transgenic mouse model that works. But maybe go from there, Cassie, on why you have to leave some targets, if you will, by underdosing the PBGENE in the mouse. Go ahead.

Yes. Great question, Kostas. So in that transgenic mouse model, we've actually done 2 different dose levels of PBGENE-HBV. At a higher dose level of PBGENE-HBV, we can eliminate the detectable pgRNA. We have sustained S-antigen reduction. And in that model, we've previously shared this data actually a couple of years ago. It's not this data. Sorry, I don't want to get confused.

That's okay. But you can leave this slide on. We don't have the other data she's talking about in the deck. Go ahead, Cassie.

In this same mouse model, we have given a sufficient dose of PBGENE-HBV to drive undetectable HBV DNA off NUCs. So we have demonstrated by proof of principle that you can achieve that viral cure endpoint in this transgenic mouse at a sufficient PBGENE-HBV dose. Now in this study, whenever we wanted to look for synergy with bepi, we dosed at a lower dose level of PBGENE-HBV because we knew that we could get that viral cure. To Michael's point, if you're achieving 100% viral cure, you don't need a combination.

The point here is to look for synergy, so you dose at a lower dose level so that the 2 can demonstrate added benefit. So in this particular dose, this was a 0.1 milligram per kilogram single dose of PBGENE-HBV prior to the finite course of the ASO here. So hopefully, that clarifies your question. We can see viral cure in this mouse model with an appropriate PBGENE dose and with a lower dose level, we can see synergy between the 2.

So Kostas, you really have to stack the deck against yourself here to do the design. If there is a worst-case scenario and any pgRNA via cccDNA is left behind, you now see through this model, 1 plus 1 could equal not 3, hopefully 27. That's the idea. But the goal here is that you would eradicate to your point, Kostas, in many, many patients, and this would be a moot point.

And maybe one on DMD.

Yes. Go ahead. We love DMD. We appreciate you saying don't forget about our other child. We love that update, too. Thanks, Kostas.

Exactly. I'm not sure you love both trials, children the same. But my question is the following. So in ELEVIDYS and REGENXBIO data, we saw that at 12 weeks, the percentage of microdystrophin varies across different ages. Obviously, different approaches across the board. But I was wondering how old is the patient that you have dosed, whether you can disclose that? And how old are the other patients that you are planning to dose with this first dose?

Kostas, I'm going to go to my -- to the DMD expert here in a moment, and that's Cassie and really my boss most days. But I want to -- I'm not going to let the conversation go until I make one critical point upfront. We're rooting for patients. So we're never rooting against any therapies out there. And God knows DMD, there's great room for improvement needed.

But I want to be careful when you compare a synthetic dystrophin that we know is lit biomarkers, but unfortunately, it hasn't translated to the functional improvements we need versus -- and I'll have Cassie weigh in a minute here, you even look at the Dyne data, 2.5% of something real, true body native dystrophin really made a meaningful impact.

So Cassie, can we talk a little bit about the 3-month mark, maybe what you should and shouldn't expect from function due to steroids and just make sure we're talking about what we're measuring near full length, please, Cassie.

Yes, sure. Thank you for the question, Kostas. So first, I'll take your question about the age range we're enrolling. We haven't given particulars on the exact age of the first participant dosed in the study, but I'll draw your attention to 2- to 7-year olds is the inclusion criteria here. And that's consistent with what we see across many of the microdystrophin studies.

But I want to draw an important difference. One is that the 4- to 7-year olds, I'll say, that's typically when you start to get diagnosed with DMD, you start to see functional decline is around that 4 to 5 age. And so many kids are diagnosed at that point. We think that's an important population for our study because correlating the dystrophin expression with functional benefits is more straightforward in that population. There's been more historical experience in DMD studies around that age range.

However, for a gene editing approach, which ours obviously is, that younger population is really important. If you think about it, if you could intervene into that disease course earlier and prevent muscle loss over time early in that -- those 2- to 4-year-olds, that could be really meaningful for longer-term outcomes. It may come with some challenges on measuring the functional benefit, but we've incorporated some novel endpoints like the Sysnav wearable devices to look at across that age range, the ability for PBGENE-HBV to impact function.

And so we're very confident with the age range we're enrolling. We do think that there's benefit in going in younger, but we know that many of these kids are diagnosed and start to show decline in that 4- to 5-year age range. So I think it's a comprehensive approach to treat this population. That's kind of the rationale for how we thought about it.

Now too, as we think about the muscle biopsy data, obviously, 3 months is our first look at dystrophin protein expression. These kids do go on steroids as part of the dosing premedication regimen, either steroids for the first time or an increased dose of steroids if they've previously been on steroids. That may impact the ability to interpret the functional data, the early functional data.

I think we will look at the later biopsy data, the 12-month biopsy data, the ability to correlate that dystrophin protein expression with functional benefit at that time frame. And that will be really important as we think about what's next, 3-month biopsy data, but of course, 12-month biopsy data and functional benefit.

Thank you, Kostas. And of course, that's PBGENE-DMD. That being said, we're really excited about that program. Kostas, I appreciate you calling me on it. We do love both of our children. Of course, we're looking at a bigger data set coming off of yesterday MF presentation.

I want to do a few things here as we close up. I want to thank our patients globally. Without them, there is no data to possibly move this field forward in both disease states. I want to thank the leadership of our principal investigator, MF Yuen. I want to thank Mark Sulkowski, who's been working with the team for the last 2 years and really took Precision to an expert level here in the infectious disease therapeutic area.

I want to thank our investors. I want to thank our partners who have been with us who were willing with us to get to the next late-stage inflection point. And I want to welcome and thank our new partners who have come in. We're really excited about that. We think we have a great -- a group of really great fundamental investors who want to see good things happen through data for patients. And those are the kind of partners we want to do high science, high integrity science here at Precision.

So I want to thank my team for the execution and all of your attention today. Thank you to our sell-side analysts, and we wish everybody well. We'll talk again soon. Thank you.

This concludes today's call. You may disconnect your line.

Good morning, and welcome to the Precision BioSciences Investor Update. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Precision BioSciences website following the conclusion of the event.

I would now like to turn the call over to Naresh Tanna, Chief of Staff and Head of Investor Relations at Precision BioSciences. Please go ahead, Naresh.

Thanks, Tara. Good morning, and welcome to the Precision BioSciences EASL 2026 Investor Update. Today, we will be sharing new and late breaking updates from our PBG and HBV program and ELIMINATE-B trial.

During our call today, we may make forward-looking statements. You can review the Risk Factors section in our financial disclosures, including in our latest 10-Q for the factors that could cause our actual results to differ materially from any forward-looking statements we make today.

Without further ado, I would like to introduce Michael Amoroso, President and CEO of Precision BioSciences.

Thank you, Naresh, and welcome team. Welcome to our investor community. We're very excited to be here with you. We've got half the team across the pond at EASL, on-site is a palpable excitement. And again, it's my pleasure. Maybe the most proud day I've had so far of a series of proud days of my time at Precision. Thanks for being with us this morning.

First, I am accompanied by a world-renowned team here. MF Yuen is really our principal investigator. He's got the most clinical experience. We thought it's super important to come to you credibly with the people doing the work, right? So MF really needs no introduction. And it would probably take me a half hour to do all of your titles MF. But he is the Division Head of Gastroenterology and Hepatology at the Li Shu Fan Medical Foundation out of Hong Kong, and we're really, really blessed and excited to have MF with us.

Dr. Sulkowski, who probably fields more phone calls than he'd like to me on a regular basis, but again, needs no introduction, but our Division Head of Infectious Disease at John Hopkins, special adviser to myself, to team at Precision, who has really made incredible impact of overseeing clinical development and making sure we're making the right steps for patients.

And Cassie Gorsuch joins us in voice and video and in spirit, really excited to first share data today of Cassie has added to the family, right? So Cassie is now out on maternity. She is really the lifeblood behind the program, the gene editing, the first dream of gene editing, a viral genome and eliminating a virus really is Cassie, and she's with us not only on video and voice today. She'll be presenting the data, which she taped before she went out, but she's added a beautiful baby boy to the family.

So we're happy to have this team with us. And we'll open this team up for a full panel to answer Q&A and answer all the sell-side questions at the conclusion of the presentation.

So today's title. Are we at a turning point? We believe we are. We believe we're at the precipice. We're excited about that. A lifetime of viral suppression, living on therapy, -- continuing to question, what is the percentage we're knocking down late-stage outcome issues like liver disease, cirrhosis and hepatocellular carcinoma to biomarker-guided viral cure. We've known some real key quotes here, some even interesting sell-side analyst reports as the data and posters have been out since about 2:30 in the morning on the Eastern Standard Time in the U.S.

Dr. Dusheiko, amazing partner also on our safety committee. From 2023, true cure for HBV requires eradication degradation of cccDNA. In fact, the FDA guidance the FDA guidance talks about HBV DNA viral destruction, and the confusion of biomarkers like S and how good a predictor they are for cure.

And then we've seen some palpable excitement today. First clinical evidence of reservoir elimination emerges in HBV. So again, we're excited to be with you this morning and share the data. First, and no fault to our wonderful physicians, but 50 years plus of drug development in chronic hepatitis B, we've never been able to target the direct viral source.

cccDNA is the factory that produces infectious virus, HBV DNA. All drug development to date has really had the ability to target downstream from the viral source. And frankly, that's led to a functional cure rate of about 3% and just not good enough for patients. As discussed, cccDNA has really evaded us to date, evaded us as an industry. We have not been able to have direct targeting and elimination of the viral replication source.

For this presentation, it's vital for all of our sell-side analysts to understand cccDNA, the factory, the only source that makes infectious replicating virus HBV DNA. PBGENE-HBV is the only program designed to permanently eliminate, target and eradicate cccDNA at the viral source. In fact, the FDA guidance from 2022 has been very clear on what the gold standard is for curing hepatitis B. You see multiple endpoint pathways, but at the center of all the gold standard is destruction, eradication and loss of HBV DNA, the common therapeutic goal necessary for viral cure.

Now let's revisit quickly here for our teams out there, exactly the design behind PBGENE-HBV. What was it designed to do before I turn it over to the team to tell you what PBGENE-HBV is doing in patients and for patients. First and foremost, PBGENE-HBV is an LNP drug developed packaging mRNA that's encoded to deliver ARCUS directly to target cccDNA. Our binding site is conserved in 90 -- across 96% of the hepatitis genotypes to make sure we're leaving no patients behind. But this visual here at the bottom, which we call the math equation a bit, if we eradicate and eliminate cccDNA, we, therefore, will eliminate pgRNA, the only source precursor necessary for making replicating virus HBV DNA. We'll revisit the math equation as we call it, several times throughout the presentation. But the primary design of PBGN-HBV was to directly target and eliminate cccDNA.

In addition, you know that, obviously, hepatitis B targets and makes viral integrations into the host genome. Obviously, these are non-replication competent. These are fragments of virus. But we also designed PBGENE and HBV at inception to target the transcript level, the RNA level downstream from S-antigen and disrupt the ability to express S. And you might say, Michael, why? If we know the only replication source, if they tell me cccDNA is the most important path to cure, why were we also targeting the integrated disease?

And for years, we've talked about any expression of S really suppressing the patient's immune system to try to turn that immune system on against the virus. So of course, anything that's knocking down viral transcripts is a good thing. I will remind everybody, we have done a great job in clinical development of knocking down, masking and suppressing S without getting the viral core and source of HBV DNA. And to date, that has not led to an immune system eradicating this virus. Please keep that in mind as the team takes you through the data today and the proof sources.

Now with no further ado, some highlights of what my team is going to take you through. First, late-breaking data. We now know not in preclinical animal models, but in human beings, PBGN-HBV directly targets and eliminates cccDNA, potentially the path to viral cure. This is our primary antiviral mechanism now proven in human beings through biopsies. We've been able to show a potent cccDNA effect, targeting cccDNA, knocking down and eliminating cccDNA tenfold, 1 log reduction from baseline. We've also been able to show and the team will take you through that cumulative edits, number of administrations of PBG and HBV have been additive in continuing to inactivate and eliminate cccDNA.

This is the spoiler alert for today's data, mechanistic human proof in biopsies that we are eradicating and eliminating cccDNA. Obviously, eradication of HBV DNA aligns with eradication -- I'm sorry, eradication of cccDNA aligns with eradication of HBV DNA, which aligns with the 2022 FDA guidance. The approvable endpoint, we'll talk about a lot of biomarkers today and the specificity for the source of cccDNA, the linkage, but the endpoint for FDA approval for patients is destruction of HBV DNA. We need a good biomarker. We cannot get biopsies in every single patient. It's difficult for clinical utility.

What is the biomarker for PBGENE-HBV? Today, we have that answer for you. PgRNA is the appropriate blood biomarker, directly comes from cccDNA and is the necessary precursor for the packaging and production of HBV DNA replication. Frankly stated, you cannot make HBV DNA without the precursor of pgRNA and pgRNA only comes from the viral source, the factory, as we call it, cccDNA. In today's data, you'll see 100% of our patients who had detectable pgRNA at baseline are undetectable post-treatment with PBGENE-HBV.

In fact, we have liver biopsies that will support the eradication of pgRNA at the liver in tissue as well as in blood biomarkers. And again, we must have the appropriate biomarker for clinical utility that links to our mechanism. Elimination and inactivation of cccDNA is synonymous with pgRNA eradication in the blood. I've been told the picture is worth a thousand words. Today, I'm really excited to show you one of the highlights from our presentation. 6 out of our 15 patients, about 40%, had pgRNA detectable at baseline. Remember, these are e-negative patients, about 80% of all patients at any given time with chronic hepatitis B.

This is very similar with what you see in the community. About 40% of patients will be detectable at baseline. Every patient, every patient that had a pgRNA in the blood at baseline has had eradication of their blood biomarker post treatment with PBGENE-HBV.

You'll see here depicted in the picture the diamonds, which show a number of administrations. And this is something we're still working through and watching the durability, durable responses. Once they've gone undetectable, all of these patients have stayed undetectable. We'll talk to you more about that throughout the data. But you'll see across a different number of dose administrations when the patients move from detectable in the gray to undetectable in the green. So we take a step back and we say, are we at the precipice of the foundation of treatment going forward, direct targeting of cccDNA, viral cure, not functional cure.

Now I know SADI and hepatitis C is a different virus. It doesn't integrate into the host genome. It's at the RNA level versus the DNA level. But I think it was an important parallel to show to say directly targeting the virus is the only path to sterilizing and complete cure, the best chance of lack of relapse. And today, we now have evidence that PBGENE-HBV is directly targeting the virus at the DNA level.

Finally, before the team takes you through the data, I want to walk you through the standards of what we hold ourselves on PBGENE-HBV. The product was designed to directly target and destroy cccDNA. We think we're going to show you some pretty magnificent proof of that today. It must have permanence. The mechanism for patients must be a finite treatment and what we eliminate stays gone, not masking, not suppressing, eliminating. So this virus can never come back, eliminating and inactivating, knocking out the pole function, and the team will walk you through that.

The MOA ideally would have a viral precursor in the blood because we cannot get biopsies longitudinally in every patient. And the viral biomarker in the blood must be specific to the sole source of cccDNA. That biomarker is pgRNA, and the team is going to continue to take you through that data today. We must have a well-characterized, understood and predictable, manageable safety profile. Remember, this is the first time prospectively in liver disease, anybody has taken representative doses packaging mRNA and repeat dosed for cumulative editing effects. There are some definite safety learnings we've had. And the great news is we really feel like our translational team has understood them, and we've been able to learn through Phase I and put them in effect for the benefit of patients.

And last, we leave no patient behind. We talked about the conservation of our target site. But the idea here is this is regardless of viral load. This is regardless of protein load. 15% to 50% of hepatocytes are infected with a contagious variant, cccDNA. We've got great evidence of full biodistribution across the perfused liver, and we're able to cut out all the virus we see as we accumulate administrations.

So that being said, I'm now going to turn it over to Cassie, who has prerecorded a presentation, and I think you'll enjoy it. Thank you.

Thank you, Michael, and thank you all for joining us today. It's really my pleasure to be able to share some really exciting data coming out of our ELIMINATE-B study, really demonstrating for the first time ever the ability to eliminate cccDNA through treatment with PBG and HBV. Before we get into the data, I'd like to take a couple of moments just to review some of the basic disease biology underlying chronic hepatitis B. When hepatitis B infects the liver, it really establishes 2 viral DNA sources, cccDNA and integrated HBV DNA.

And cccDNA is the full viral genome, full-length viral genome. It is the only source of new infectious particles. And we call those infectious particles HBV DNA. It does this by producing a precursor to HBV DNA that we call pgRNA. And cccDNA is really the only source of these new infectious particles and the persistence of cccDNA is what drives chronic hepatitis B infection. We've known for a long time as a field that targeting cccDNA is really the ideal therapeutic strategy to cure hepatitis B.

Integrated DNA is also present in infected hepatocytes. However, integrated DNA is not full length. So it's fragments of the viral genome, but not full-length viral genome. Integrated DNA does not produce new infectious particles. It can't produce HBV DNA. However, it does produce S antigen. So S-antigen can come from both cccDNA and integrated DNA, which really makes it a challenging tool for understanding or characterizing the cccDNA pool in the liver.

In fact, in the vast majority of chronic hepatitis B patients, those who are e-antigen negative patients, which account for about 80% of the population, S-antigen is primarily produced from integrated DNA, which really limits its ability in the context of PPG and HBV of characterizing the mechanism of effect on cccDNA. So what this really means, if we summarize all of this, it's because we've had -- we've lacked the tools, the field has lacked the tools to directly target cccDNA therapeutically, we've been focused as a field on really the role of S-antigen as a therapeutic target as well as a biomarker.

But S-antigen comes from integrated DNA and cccDNA, but only cccDNA can create new infectious particles. And so in our view, we've really gotten things kind of mixed up, and it's time to go back to the basics. So what do we know? Hepatitis B is a viral infection in the liver. The reason people persist long term with chronic HBV infection is because of cccDNA. And so the ideal therapeutic goal would be cccDNA targeting and elimination of cccDNA.

And again, because we haven't had a tool that could actually do that, we've been focused on other strategies like S-antigen targeting to try to cure hepatitis B, but it hasn't worked. But I think it's time to refocus on what we know for a long time has been the real problem behind hepatitis B and that's cccDNA. And I'm really excited to share some data with you today demonstrating that now we have a tool. We have a therapeutic approach that directly targets and eliminates cccDNA.

So let's talk about PBGENE-HBV and how it does this? How does it actually work on cccDNA? PBGENE-HBV is a lipid nanoparticle that encodes an ARCUS nuclease. It contains an mRNA that encodes an ARCUS nuclease. This ARCUS nuclease was designed to directly target cccDNA. And what we have found is that the predominant outcome of targeting cccDNA is actually elimination of that viral genome. We demonstrated that preclinically through a lot of data we've previously shared. And today, I'm going to share with you clinical data, the first evidence in humans of cccDNA elimination. When you eliminate the cccDNA viral genome, you also eliminate the production of pgRNA.

We'll talk through that today as well. And pgRNA is the precursor to HBV DNA. And as Michael indicated in his section, HBV DNA eradication is really the goal of FDA-approved endpoints. Loss of HBV DNA is necessary for a finite treatment cure for hepatitis B. And so PBGENE-HBV, what we have found is that this primary mechanism of eliminating cccDNA can drive undetectable pgRNA in all patients who are detectable at baseline. And I'll show you literature support that pgRNA is a positive predictive indicator for sustained loss of HBV DNA and viral cure. By eliminating cccDNA because it can produce S-antigen, we also expect to see corresponding reductions in S-antigen as a result of viral DNA targeting elimination of cccDNA.

So Michael mentioned earlier that there are really 2 mechanisms by which PBG-HBV can act. When you think about the effect on cccDNA, the primary mechanism and the predominant outcome that we've observed both preclinically and now clinically through biopsy data is elimination. This means that after cutting cccDNA, the cccDNA viral genome is eliminated from the cell. The secondary mechanism for PBGENE-HBV is through inactivating indels. This means that after an ARCUS nuclease cuts the cccDNA, there is an indel that forms in the DNA sequence. And both of these editing outcomes, both elimination and inactivating edits, both of them result in replication incompetence.

So cccDNA can no longer create new infectious particles. So now really the question becomes how do you demonstrate the effect of PBGENE-HBV on cccDNA in the liver utilizing available clinical markers. Of course, as a scientist, I would love to have liver biopsies on all patients in our study, but that may not be the most clinically feasible approach. We talked earlier about S-antigen, the role of S-antigen. And while it is a useful marker for characterizing the effect on cccDNA directionally, it's not specific to cccDNA as much of S-antigen actually comes from integrated HBV DNA.

So while we use S-antigen directionally to support activity and effect on cccDNA, it's not the most specific marker. PgRNA, however, is a specific marker as it is only produced from cccDNA. So pgRNA sits directly between cccDNA. It only comes from cccDNA, and it is the only precursor to HBV DNA. However, patients who are on NUCs are undetectable on HBV DNA. So you can't utilize that as a marker for evaluating the effect of PBGENE-HBV. Therefore, really for a direct targeting cccDNA mechanism that PBGENE has, pgRNA is the specific blood biomarker for measuring the effect on cccDNA in the liver after treatment with PBG-HBV. And pgRNA has actually been pretty well established as a positive predictive indicator of successful NUC withdrawal.

So you can see here in patients who have detectable pgRNA when they stop therapy, only 3% of those patients go on to achieve cure. So pgRNA presence is associated with unsuccessful stoppage of NUCs. In patients who have undetectable pgRNA when they stop therapy, that probability of cure increases about tenfold up to 30%. And so because pgRNA is a specific indicator of the amount of cccDNA in the liver or the viral load in the liver, it is a very strong indicator of the potential success when stopping NUCs.

And this is true across numerous studies, as you can see indicated here on the slide, thousands of patients. And in fact, pgRNA actually outperforms other biomarkers like S-antigen in predicting both safe and effective NUC withdraw. And so we will utilize pgRNA because it makes sense for the mechanism of action for PBGENE-HBV and because it's been strongly demonstrated to support a positive potential cure outcome when stopping NUCs as indicated in the literature.

Okay. So now let's get into the ELIMINATE-B study and some of the data coming out. First, just to highlight where are we from a dosing perspective. As you can see, we have enrolled patients into 5 different cohorts, cohorts 1 through 5 indicated here, evaluating both the effect of different dose levels of PBGENE-HBV from 0.2 milligrams per kilogram up to 0.8 milligrams per kilogram as well as the dosing interval, looking at the effect of both every 8-week dosing and every 4-week dosing. To date, we have dosed 38 administrations across 16 different patients in these 5 cohorts. And this is the data update that we'll share today from these 38 doses across 16 different patients.

I'd like to start with the efficacy data. And this is, as I mentioned before, really exciting, just a really important moment for PBGENE-HBV and in our view, the hepatitis B field as this is the data that demonstrates the ability for the first time ever to target cccDNA specifically. So we've collected multiple orthogonal data sets to support the ability of PBGENE-HBV to directly target cccDNA. These include liver biopsies from multiple patients, confirming the ability for cccDNA elimination after treatment with PBGENE-HBV.

We'll also utilize pgRNA as a blood biomarker to characterize the potent effect on cccDNA in the liver. And S-antigen, while it's not specific to cccDNA, continues to be a useful marker for characterizing the activity as you'd expect cccDNA elimination to result in directional declines in S-antigen. In the liver biopsy data, we've demonstrated a tenfold reduction or 1 log reduction in cccDNA transcripts in patients evaluating pretreatment to posttreatment, really supporting that elimination of cccDNA mechanism. On pgRNA, we have had 100% of patients who had detectable pgRNA at baseline go to undetectable after treatment with PBGENE-HBV, demonstrating that potent effect on cccDNA.

And finally, looking at the S-antigen data, I'll show you that in 100% of patients that we've treated, we see substantial S-antigen declines, and this is highly supportive of the ability to target and eliminate cccDNA. So let's start with the liver biopsy data. We have had 2 patients, both in Cohort 2 dosed at 0.4 milligrams per kilogram on the every 8-week schedule who have consented to liver biopsies. In the Part 1 of the study we are in right now, liver biopsies are optional. And so we were very excited to have both of these patients consent to biopsies.

In patient 5, we have a pretreatment biopsy collected prior to any administrations of PBGENE-HBV as well as a post-treatment biopsy that was collected after dose 2. In patient 6, we have a post-treatment only. So no pretreatment biopsy for this patient, but we had a post-treatment biopsy, and this one was collected after 3 doses. And as a reminder, both of these patients had the same dose level, same dosing schedule. And so having 1 patient after 2 doses and another patient after 3 doses can allow us to look at the effect of cumulative repeat administrations.

The analysis that I'm going to talk through today is a transcript sequencing method. So this is a long-read transcript sequencing method. And we utilize this approach because it allows us to identify if the transcripts are derived from cccDNA or integrated DNA, which is obviously important as you think about the goal of targeting cccDNA. And it allows us to compare, as I mentioned, the effect after 2 doses versus 3 doses in these patients.

So looking first at data from patient 5. This is our patient who had a pretreatment and posttreatment. That post-treatment was after their second PBG-HBV administration. When we look at the abundance of cccDNA transcripts comparing their pretreatment to their post-treatment, what we can see is a tenfold or 1 log reduction in the amount of cccDNA transcripts. This demonstrates the ability of PBGENE-HBV to potently eliminate cccDNA, resulting in loss of viral transcripts.

In this post-treatment biopsy sample, we see less than 1% of transcripts are derived from cccDNA. When we look a little bit closer at this remaining cccDNA transcripts, what we can look for is that secondary mechanism I mentioned earlier, the inactivating indels. What we find is that in the remaining cccDNA transcripts, 23% of those transcripts have been inactivated through edits of PBGENE-HBV at the target site. And when we compare this inactivation, the secondary mechanism through indels from patient 5 who received their post-treatment biopsy after 2 doses to patient 6 who received that post-treatment biopsy after 3 administrations, we see this increases to 80%, and this is really supportive of the ability to accumulate edits through repeat administrations and really supports potentially considering administrations even beyond 3 and the potential ability to continue to increase the inactivation of cccDNA through subsequent administrations of PBGENE-HBV.

Looking a little bit closer at this secondary mechanism. I want to spend a couple of minutes here because this is a really exciting data set that came out of our biopsy analysis. When we selected the ARCUS target site for PBGENE-HBV, we did so very intentionally in a region of the cccDNA that is highly conserved across all genotypes and that sits in a part of the viral genome in the polymerase gene, as you can see here in green, that is essential for polymerase function. Why we did that is that if we had this secondary mechanism of indels of editing the viral DNA versus eliminating the viral DNA, we predicted that this could inactivate the polymerase protein. And what we have found now is that through this secondary mechanism, the cccDNA inactivating indels is that the types of indels that we create at our ARCUS target site in cccDNA, all of them inactivate the function of polymerase.

Polymerase is absolutely essential for viral replication. It is also essential for packaging pgRNA. So when you look at the schematic in the bottom, what we see is that when we inactivate cccDNA through indels and we turn off the polymerase protein function, that, that will shut down the ability to package pgRNA and will also shut down then the ability of pgRNA to create new HBV DNA. And so what we know now is that both our primary mechanism of eliminating cccDNA and our secondary mechanism of inactivating cccDNA through indels in our clinical data demonstrates complete viral inactivation and no ability of viral replication for any remaining cccDNA that's been edited through indels or through elimination.

Okay. So now let's talk about the effect on pgRNA. I mentioned pgRNA is a specific marker for cccDNA and is really indicative of the amount of cccDNA in the liver. When we look at our patients who were detectable in pgRNA at baseline, you can see those patients are listed here. Not all e-antigen negative patients are positive for pgRNA, but we have 6 patients who had detectable pgRNA at baseline. You can see after treatment with PBGENE-HBV, all of these patients have now achieved undetectable pgRNA through their course of treatment.

What's really interesting here is you can see this occurred across 4 different cohorts, which indicates there are multiple paths using PBGENE-HBV dosing, multiple different regimens that allow us to take a patient from detectable pgRNA to undetectable. And those occurred at dose levels between 0.4 milligrams per kilogram up to 0.8 milligrams per kilogram on different dosing schedules. and different patients achieved undetectable pgRNA at different time points during their dosing, whether that was after a single administration or repeat administrations. And this was really exciting to see because it offers us different types of flexibility as we think about how to optimally dose PBGENE-HBV to drive undetectable pgRNA, resulting in hopefully sustained loss of HBV DNA once we stop nuts in patients.

One really interesting point in these pgRNA patients is that patient 6 was one of our patients who was detectable at baseline in blood pgRNA was also one of our biopsy patients. And as you can see here, the gray and green bar indicate their blood pgRNA levels. So they were detectable at baseline, went to undetectable during their course of treatment. Their post-treatment biopsy was actually taken there at about 20 weeks after their first administration. This was a time when they became pgRNA undetectable in the blood. And when we look at the transcript sequencing data from the liver biopsy, we actually found undetectable pgRNA in this patient in the liver as well. And so this was a really nice correlation of undetectable pgRNA in the liver as well as undetectable pgRNA in the blood, which really further supports the ability of using blood pgRNA as an indicator of the effect of PBGENE-HBV in the liver.

Now I'd like to turn to talking about S-antigen and the effect of S-antigen after treatment with PBGENE-HBV. As I mentioned earlier, with S-antigen, while it's not specific to cccDNA, we would expect to see durable reductions in S-antigen after treatment with PBGENE-HBV as an effect of elimination of cccDNA. When we look across all of our evaluable patients on study from Cohort 1 through Cohort 5, you can see every patient we've treated to date demonstrates a substantial S-antigen decline during their course of treatment.

And this is really exciting because it indicates that PBGENE-HBV can be effective across a really diverse patient population. These patients have different baseline S-antigen levels. They come from different geographies around the world. They are likely different genotypes. We designed PBGENE-HBV to be active across genotypes, across S-antigen levels and across geographies. And that's demonstrated here that, that's effective because of the substantial decline in S-antigen that we see across all of these patients.

Now when we think about how do we utilize S-antigen in the context of an overall marker strategy for characterizing the effect of PBGENE-HBV, we can layer that into using pgRNA as well as S-antigen. As I mentioned, pgRNA is specific to cccDNA. S-antigen is less specific, but you would still expect directional declines in S-antigen to correlate with reductions or loss in pgRNA. And in fact, that is what we see. In pgRNA, are 6 patients who were detectable at baseline, 100% of them have gone to now undetectable pgRNA. And the duration of this response ranges based on when these patients were treated from 1 to greater than now 6 months of ongoing data.

On the S-antigen side, as I mentioned and just showed you, all patients that we've treated so far on study have demonstrated a substantial decline in S-antigen indicative of broad activity of PBGENE-HBV. And the duration of this response in S-antigen ranges from about 1.5 months to greater than 1 year based on when patients were enrolled and dosed on the study. And so really, all of these biomarkers, each of these biomarkers support the ability of PBGENE-HBV to target cccDNA through 2 mechanisms: one, elimination; and two, inactivating indels. And as we think about the permanence of gene editing, this is really the promise of a gene editing approach is that once you target cccDNA that the effect can be permanent, long-lasting.

If we go back to patient 1, first patient on study that was dosed, what you can see is this patient, we've been monitoring for more than a year now. And we see this sustained substantial S-antigen decline continue out past a year now in this patient. And this is expected, exciting to see, but expected because the effect of gene editing should be permanent removal a permanent elimination of cccDNA in the liver, resulting in long-term suppression, long-term reductions in S-antigen and other markers. And so this continues to support the potential for PBGENE-HBV to really provide this long-lasting effect going directly at the root source of the viral genome.

So just to summarize the efficacy data, I mentioned I am really excited about where this program is today, demonstrating for the first time ever the ability to target for elimination cccDNA. This is the first clinical evidence that a therapy can target and eliminate cccDNA as a direct-acting antiviral. We've demonstrated in patient 5, that 1 log reduction in cccDNA transcripts, and that was after only 2 administrations of PBGENE-HBV at 0.4 milligrams per kilogram. Of the less than 1% of cccDNA transcripts that remain in that patient, we can also see evidence of that secondary mechanism, the inactivating indels. And we've demonstrated through analysis of our biopsy data that the inactivation through indels, it shuts down the function of pole, preventing any sort of potential for viral replication.

And then finally, through that biopsy data in patient 5 and patient 6, we see cumulative editing is possible. So repeat administrations of PBGENE-HBV continue to increase the antiviral effect observed in the liver. We've identified pgRNA as the appropriate biomarker for the PBGENE-HBV mechanism of action. PgRNA is specific to cccDNA, and it is the only precursor to HBV DNA. We've demonstrated in all patients, 100% of patients who had detectable pgRNA at baseline, they are all now undetectable in blood pgRNA, demonstrating a potent effect of PBGENE-HBV on cccDNA. And we've found through the literature sources that the association of pgRNA, the undetectable pgRNA in the blood is associated with potential success in stopping NUCs. It increases the success rate about tenfold. And that loss of pgRNA in the blood in patient 6 was also correlated with loss of pgRNA in the liver through biopsies.

And then finally, S-antigen, 100% of our patients that have been dosed on study have demonstrated a substantial S-antigen decline. And this really supports the goal of PBGENE-HBV, which was to be broadly applicable across this giant patient population across geographies, across genotypes, across baseline S-antigen levels. We are seeing that across our patients that have been dosed so far. And the sustained S-antigen decline in patient 1, first patient on study continues to support the permanence of PBGENE-HBV mechanism of editing viral DNA results in long-term viral suppression. And so together, it's really these multiple orthogonal data sets that continue to support the development of PBGENE-HBV and continue to demonstrate the ability of PBGENE-HBV to go directly at the viral source, resulting in long-term outcomes for patients.

Now I'd like to turn to the safety evaluation from our ELIMINATE-B study. Starting first with really just a summary of what we've observed so far on the study. I mentioned earlier, we have administered 38 doses across 16 patients in 5 cohorts. And so really, since our last update in November of last year, we've really deepened our clinical trial experience and our experience dosing PBGENE-HBV across patients. We've seen no dose-limiting toxicities on this study thus far. The most common adverse events that we've observed have been infusion-related reactions that are consistent with known LNP effects.

The onset and resolution of these infusion-related reactions is typically within 24 hours of the infusion. While we've observed transient and reversible ALT and AST lab abnormalities, they were asymptomatic and they were not associated with any changes in bilirubin and therefore, no Hy's law in any patient at any dose level has been observed thus far. We have seen grade 3 hypotension, and we've mentioned this in November. We've seen this as we've dose escalated with PBGENE-HBV. In one patient in our highest dose cohort, which was the 0.8 milligram per kilogram dose level, that patient experienced 2 serious adverse events after their second LNP administration. We'll talk in more detail about these SAEs in just a moment.

One of them was mechanistically linked with hypotension. And through deep characterization of our clinical data, we have now characterized the etiology of the hypotension, and we've implemented some fairly straightforward mitigation parameters that have helped ameliorate the clinically significant decrease in blood pressure. And I'll show you the effect of those new mitigations in just a couple of moments. And so really, our experience continues to deepen as we've continued to dose PBGENE-HBV. We've learned a lot. We've implemented some new things that we're really excited about.

So looking a little bit deeper now at the safety profile of PBGENE-HBV. Here, you're looking at grade 3 or greater adverse events that were observed across these different cohorts. As I mentioned, we've seen no dose-limiting toxicities and no liver-related serious adverse events. We have seen Grade 4 ALT and AST lab abnormalities. These were transient and asymptomatic, as I mentioned. They were not considered clinically significant and were not associated with changes in bilirubin. No Hy's law criteria have been met in any patient at any dose level. We do have a flare committee that reviews these ALT-AST lab abnormalities as they arise.

These are hepatology experts, and they've viewed all of these ALT-AST data and determined that none of them were considered dose-limiting. The LNP-related ALTST elevations have been transient and occurred within the expected time frame after the LNP infusion. So typically occurring within about a week of the LNP infusion and quickly back down into baseline levels. Grade 3 hypotension that has been observed as we've dose escalated did not require any sort of vasopressors and generally resolved with saline infusion either prophylactically or reactively to the hypotension.

The one patient in Cohort 3, as I mentioned before, did experience 2 serious adverse events after their second LNP administration. One was a Grade 2 myocardial ischemia that was characterized by a mild troponin elevation and an EKG finding on the day of the infusion. This event was deemed mechanistically linked to the acute hypotension that was also observed in this patient and was considered treatment related. This patient was discharged 48 hours after the infusion following a normal CT angiogram A follow-up echocardiogram demonstrated that there was no heart structural damage and normal function within the heart, so no persistent damage within this patient.

This patient also experienced an intracerebral hemorrhage that occurred 30 days after dosing. The timing of this is notable because the expected LNP exposure window is really about within the first 2 weeks, all of the components have largely been cleared. So this was well beyond the expected exposure of LNP. This patient importantly is ambulatory, is home and is stable, is doing well. There was no clear pathophysiologic mechanism that's been attributable to PBGENE-HBV with this event. This patient did have a history of atherosclerosis and had initiated aspirin therapy 4 weeks prior to the intracerebral hemorrhage. Because this event occurred in the context of this clinical study, it is considered possibly related to PBGENE-HBV.

I mentioned that hypotension was really one of the more common adverse events that we've observed on study and was mechanistically linked to one of the SAEs. And so we, as a team at Precision really wanted to understand what is the underlying effect driving the persistence or the characterization of the hypotension, the cause of the hypotension. What we found through deep translational work was that this was really an LNP-mediated inflammatory response. What we observed was in the very acute time frame after LNP infusion, we saw rapid onset activation of complement cascade and cytokine elevations. These typically resolved within about 24 hours, so very acute increase in cytokine elevations right after LNP dosing.

We have implemented a number of prophylactic measures and slower infusion rates since characterizing this LNP inflammatory response. So you can see our initial prophylaxis and infusion rate in blue and then the current prophylaxis. And these were fairly straightforward mitigation strategies, but really mechanistically driven by our understanding of what was driving the hypotension.

So largely, what changed here is an increase in the amount of steroids. So we're already giving a dose of steroids on the day before and the day of the infusion, and we increased the overall dose of those steroids. We also slowed the LNP infusion rate from 2 hours in our initial infusion rate to now 5 hours in our current dosing strategy. And this has been a very successful implementation of these mitigation strategies, as you can see here. So now we are looking at the tolerability or safety of PBGENE-HBV in doses that have been given since the new safety mitigations were implemented. This is data across 5 patients and 7 administrations. So about 20% of overall doses in the ELIMINATE-B study have now been given.

All of the future doses will occur under these new mitigations. What you can see is we've had no occurrence of grade 3 hypotension since implementing these new strategies. Interestingly, we do have ALT-AST lab abnormality in Cohort 4 that occurred -- what's really notable about this is that this is a delayed AST elevation. This didn't occur in the same acute time frame of LNP-related ALT/AST elevations that we had seen previously. This one actually occurred a couple of weeks after the infusion. And what was really interesting is that this ALT elevation was also associated with a delayed reduction in S-antigen in this patient. And so we're seeing as ALT/AST elevations go up, we see this decline in S-antigen. And we're hypothesizing that this may be indicative of an efficacy-related immune ALT flare. And these types of effects have been observed in the context of other HBV therapies where reductions in S-antigen can lead to an immune-related ALT/AST elevation.

And so the team is continuing to generate data to more thoroughly characterize this effect, but it appears it could be potentially related to an immune or antiviral effect. So now I'd like to summarize both the efficacy data and the safety data that we've observed from our ELIMINATE-B study thus far. As I mentioned, we now have, for the first time ever, demonstrated the ability of a therapeutic agent to directly target cccDNA for elimination. This really set up the primary mechanism for PBGENE-HBV targeting cccDNA and eliminating cccDNA. And this has been supported by multiple orthogonal data sets, including liver biopsies, blood pgRNA marker and S-antigen data.

The liver biopsy data demonstrated a 1 log reduction in cccDNA transcripts, and that was after only 2 doses of PBGENE-HBV at 0.4 milligrams per kilogram. In all patients that were detectable for pgRNA, blood pgRNA at baseline, all of them have gone to undetectable after treatment with PBGENE-HBV. And we know that pgRNA presence is associated with lower cure rates. So getting rid of pgRNA is also associated with better cure rates. So we're really excited about identifying that pgRNA is really the best marker for indicating the effect of PBGENE-HBV mechanism in the liver.

And S-antigen declines, while not specific to cccDNA, are supportive of that same mechanism. So durable S-antigen declines have been observed in all of our pgRNA lost patients -- and these are -- we've seen S-antigen declines consistently across all of our patients who've been dosed on study, indicating broad activity of PBGENE-HBV. We've also really dug in on the safety of PBGENE-HBV, have really deepened our clinical trial experience through now 38 doses administered, and we're able to really build a mechanistic understanding of the mechanism impacting repeat LNP administrations.

We've implemented these targeted and simple mitigations in order to resolve the occurrence of hypotension-related adverse events. And today, about 20% of doses on study have been given under these new mitigations, demonstrating really an improved tolerability of PBGENE-HBV using this new mitigation approach, and we'll continue to dose patients under that new and improved mitigation strategy. No Grade 3 or Grade 4 LNP-related adverse events have been observed since we've implemented that -- those mitigations.

And finally, I think really excited based on the biopsy data, the pgRNA data, the S-antigen data, it appears that multiple dose levels or dosing schedules are options as we think about moving this study into the expansion phase of the trial under these new safety mitigations. So we're seeing loss of pgRNA across multiple different dosing paradigms, which really gives us a lot of flexibility as we think about next steps for clinical development.

With that, I am happy to hand it over to both Dr. Sulkowski and Michael to talk about next steps for the ELIMINATE-B study.

Well, great. Thank you, Cassie, for that unbelievably clear presentation of some really interesting translational science. And really, what I want to talk about is how that translational science leads us to the next steps for PBGENE-HBV. So what we're doing here, and I think Cassie has demonstrated that as she shared the liver biopsy data is really transforming the natural history of chronic hepatitis B by targeting cccDNA.

So where does that take us? Well, certainly, you've seen the data for the current cohorts of Cohort 4, 0.4 milligram per kilogram and Cohort 5, 0.65 and certainly continuing to dose patients with these regimens to expand upon the clinical experience while enrolling patients at new sites in Europe, in France and Romania is critically important to the program. In addition, the goal is to increase the size and strength of the translational science.

We discussed how the liver biopsy data as we looked at cccDNA really informed the role of pgRNA as a biomarker. And we want to build on that with additional biopsies to support this and really to establish the foundation of PBGENE-HBV as a potential cure. So the logical step is really to stop the NUCs. Recall that this is an e-antigen negative cohort of individuals fully suppressed on nucleoside nucleotide analog therapy. Therefore, the DNA in the blood is undetectable.

The goal to test whether viral cure has been achieved is to stop NUCs. And we are developing a framework around how we will stop NUCs, working with really some of the most knowledgeable and skilled hepatitis B clinicians around the world. Our initial thinking, as Cassie outlined, is that the loss of pgRNA for greater than 6 months is an excellent marker for when we have eliminated ccc. We also, of course, want to see normal liver enzymes and sustained reductions in hepatitis B surface antigen. Keep in mind that the reduction we're seeing that Cassie outlined is due to the elimination of cccDNA not integrated.

So the goal is to evaluate current patients who have achieved loss. We talked about the 6 individuals who entered with pgRNA in the blood have been edited by PBGENE and now have no evidence of PBGENE in the blood. These are the initial candidates for *NUC. We'll then learn from that data and take these into the other individuals who were negative at entry into the PBGENE editing process, and we'll test in that group. So this is an important next step for the program that we're currently laying the foundations and discussing the framework. And the next logical step is really to expand.

The goal, as you recall, of the Phase I was really to determine the optimal dosing schedule, and there's been tremendous progress towards that goal to move to Phase II. More work to do as outlined as we continue to dose patients at 0.4 and 0.65.

In addition, I'm quite excited about the idea of understanding how PBGENE-HBV will work in different patient populations. And a real critical one is e-antigen positive patients. These patients are at a different stage of the natural history of chronic hepatitis B. They're earlier. They generally have more cccDNA in the blood and -- I'm sorry, in the liver and pgRNA is generally positive. So we'll learn more as we move into this cohort and continue to assess how PBGENE could serve as a potential viral cure as a monotherapy or perhaps in combination with other regimens for HBV.

So with that, I'll turn it over to Michael to walk us through the next steps of the program and where we go from here.

Thank you, Mark. So for our investors, our current investors, our future investors, our sell side, what have we talked about today? The evidence from lifelong suppression toward what we hope believe is a huge first step in biomarker-guided viral cure. The data today, number one, elimination of cccDNA confirmed in human model, obviously aligned with the eradication of HBV DNA and FDA guidance. Destruction in our secondary. Remember, elimination is about 90% of the editing outcome when we - PBGENE-HBV targets cccDNA. But in the secondary mechanism, when we make it indel, we now know for sure from our biopsy data that we have inactivated polymerase function.

Any mutated/replicated virus cannot make HBV DNA. Simply stated, when PBGENE-HBV targets and connects with cccDNA, we eradicate and virally destruct its capability. PgRNA, a practical and appropriate biomarker in the blood. Remember, these patients are controlled on NUCs. So HBV DNA, while it would be a good blood biomarker, that's already suppressed. That will ultimately be the FDA endpoint. We need something upstream from the nucleoside analog that directly measures PBGENE-HBV's mechanism on cccDNA. That is pgRNA in the blood.

The e-negative patients, as Mark alluded to, it's about 40% of the population. Does that mean we don't work in the 60? Of course, not. It's an obvious -- that's where you look at secondary biomarker like S-antigen reductions, and we have just as good reductions in those patients. It's just not only specific to cccDNA. But of course, the pgRNA enrich is an obvious place to start when we're tracking and making this new, if you will, pioneer guidance for how you stop NUCs with a gene editor like PBGENE-HBV that eliminates and directly targets cccDNA.

The pgRNA loss is very reassuring when we see it in 100% of patients, and it stays gone, which it should. PBGENE-HBV is a viral elimination mechanism. What we cut stays gone. And we've seen that with all viral biomarkers in the blood to date, pgRNA and longer S-antigen. What we cut stays gone. And finally, a clear therapeutic window. We see 4 different dose levels 4 different dose levels that are the optionality for going forward.

What are we watching in those dose levels? We're watching differences in the frequencies, differences in the new safety mitigations that we've learned, I think, in grade of how to avoid LNP complement cascade and some early cytokine elevations, but also is the difference in durability of these viral markers. That's why we haven't stopped the NUC tomorrow and just we're excited to do so. We want to see is there any differences.

You can obviously look at the higher dose level where you seem to have some of your grade 3 events that we clearly understand and have been able to mitigate around and think about do you not even need that dose level. But remember, those dose levels are before we understood the cascade and the cytokine levels. So today, we're not revisiting 0.8 at the moment, but we, of course, could in the future. Right now, there's a greater focus on the 0.4 and the 0.65 because we think we have the therapeutic window we need.

That being said, for our investors, next step catalyst for you to think about with precision as I open it up to the Q&A for today's ELIMINATE-B data. Obviously, today, I would argue our watershed moment so far to date, where we've now shown you 38 doses delivered across 16 patients in 5 cohorts, proven viral elimination, proven viral blood marker and important understanding and characterization of the safety profile and how to proceed forward. This year, we will come back to you with additional data we continue to accrue in the current cohorts and the framework for stopping NUCs toward the end of the year.

Equally as exciting, and of course, I didn't talk about it today in the context of our new data that wouldn't be appropriate. We're on the precipice of starting in the clinic for function DMD, PBGENE-DMD, a novel approach of editing the exon 45 to 55 mutation, the hotspot region in children with DMD. Really, really excited about the preclinical models and what we've shown there and excited to go into the clinic and start and show that data in humans as we've done today with ELIMINATE-B with PBGENE-HBV.

That being said, I'm going to open this up for Q&A, but I'm first going to say, MF, no one's had this in their hands more than you. You've treated more patients than anyone else. What do you think of your experience, today's data? Please give us some of your thoughts to kick us off to the Q&A today. Thank you.

Okay. Thank you very much. I'm truly honored to be here today and to share in the excitement surrounding this highly promising agents. In fact, for the more than 30 years, I have worked in the field of hepatitis B. And throughout that time, one truth has remained clear. If we are serious about curing the disease, we must confront the cccDNA. And today, for the first time, we are seeing real evidence that this may be possible. PBGENE molecules represent a historical events. The first therapy to directly target the HBV genome and demonstrate reduction in cccDNA.

We have signals that this effect can accumulate and endure over time. This is not simply progress. This is a breakthrough to me. It gives us a clear glimpse of what one seems out of touch, the possibility of eliminating cccDNA and fundamentally changing the future of hepatitis B treatment. I'm profoundly encouraged by these results and deeply confident that the continued development of this HBV gene targeting program could bring us closer than ever to the ultimate goal, total elimination of cccDNA.

Thank you, MF. Appreciate your perspective. With that, I look forward to hearing all the thoughts and sell-side analyst questions or investor questions coming in. So please let's open it up, Tara, to the phone lines.

[Operator Instructions] So our first question comes from Debjit Chattopadhyay at Guggenheim.

Congrats on the, maybe I can use the word, groundbreaking data. So a question for the panelists here. I know, Mark, you talked about sort of a 6-month follow-up before we can sort of either start tapering NUCs or stopping NUCs. What would be the follow-up you think would be required to start using the word of functional cure?

Yes, happy to. Thank you for that question. It's really about -- you're really focused on the notion of stopping NUCs and then following biomarkers to determine cure. And I'll do a couple of things. First of all, I would frame it as a viral cure. The virus is cccDNA, and that's what we're eliminating. So the 6 months I alluded to really stems from FDA guidance in which they talk about 24 weeks off of a NUC to determine that what you've seen is an effect of the intervention, in this case, PBGENE.

So by following pgRNA in the blood for 24 weeks, we'll have determined that, that is a durable effect meeting the criteria. And then by stopping NUCs, we can then assess the ultimate marker HBV DNA in that time point. And I would conclude if that remains not detected in the blood that we have achieved a viral cure. But happy to expand on that and happy for MF's perspective as well.

Anything you want to add?

Thank you. I mean the 24 weeks is actually I mean, arbitrarily defined observation period, where we are more confident in saying that this therapy actually maintained after stopping. So this is a very, I mean, standard and expected duration where we will just observe for 24 weeks and then we stop. And that will be associated with a high confidence that this therapy actually can -- at least, I mean, functional cure, I mean, disease. And now we are hoping not only functional cure. We really want to eradicate the wood of the infection, the cccDNA.

Yes. So Debjit, if I could just add a comment, as you might imagine, I thought a bit about this. But what MF and Mark forgot about infectious disease, I haven't learned yet. But I think it's fair to say right now, team, the pgRNA because you're controlled on the NUC, as Mark said, I want to make sure we don't miss this. The pgRNA is really your proxy upstream for HBV DNA being gone. So I think that's where the 6-month durability before we stop being very ethical, careful for these patients is in our minds. But remember here, team, once you withdraw the NUC, our mechanism is not suppression.

We've got proof of permanence and elimination. Once you withdraw the NUC on anything, if you didn't complete the job and the lids off the pot, you see HBV DNA tick back very quickly, within a month, within a couple of weeks, 2, 3, 4 weeks. So I think when you know this mechanism and we stop the NUC with pgRNA as the obvious blood marker because we don't have longitudinal biopsies in everybody. Of course, those are important in our dialogues with the FDA, taking them through the thought process of what our path forward will be. But think of pgRNA, if you will, in the past as kind of the S-antigen marker of being willing to stop. And by a month after, if HBV DNA doesn't come back, I think it makes a lot of sense with our mechanism.

Sure. I'm sure regulators who we haven't talked to yet, will want to see an HBV DNA sustained period of 6 months. But again, pgRNA is really meant to be that proxy upstream from the nucleoside analog. Great question. These are the things we're being really thoughtful as we reshape the framework on a new technology with a new target.

And if I could follow up with another one. With respect to the inactivating indel, you went from roughly 23% to 80% from dose 2 to dose 3. When you think about the hepatocyte turnover, roughly 200 to 300 days, how are you thinking about the timing of the fourth dose or if you need a subsequent dose beyond the fourth dose?

Yes, Debjit, excellent question. So I'm going to make a comment, and then I'll ask MF and Mark to kind of chime in from the gene editing side. So remember, team, what we showed here, 90% of our edits from our biopsies confirmed. It was about similar in the NHP models, but 90% was an elimination mechanism. So Debjit, now you had less than 1% of the cccDNA transcripts left. What you showed is if you cut again, of what was left, the less than 1%, you were able to get additive benefit of elimination because remember, you wouldn't show the elimination in the pie chart, it's gone. But then the secondary mechanism, the 10% of the time was the 23%.

So you're showing you're getting really closer to 0-0 and you say, look, if you leave anything in the liver, could that be problematic? -- billion-dollar question. But I'll remind everybody here that patients today who are in functional cures or even beyond a long functional cure time frame, the minority, these folks will have cccDNA transcripts in their liver, if you biopsy them at a very, very low level, even though they're not expressing HBV DNA. So really, really important here to understand that 90% is the elimination mechanism. We know when we inactivate that pole function is lost and gone. And we can continue to cut DGIT.

We now know this. This was really important from the safety standpoint. Remember, no one is trying to give subsequent LNP representative doses before. Getting that cytokine cascade under control and understanding it was huge for what you just brought up, Debjit, to say, do I need to give a fourth cut or not? And that's kind of what we're assessing right now. Remember, last point here. When I show you the 646 pgRNA Chevron, if you will, where people go to undetectable green, different patients got there at different dose administrations.

One of the things we're trying to understand right now, Debjit, there's no heterogeneity when it comes to full S-antigen reductions, sustained reductions, pgRNA loss, but some people got there sooner than others. Is that based on how many hepatocytes are infected? So Debjit, these are some of the things we're trying to find out and figure out now in our go-forward path. But I think what I want you to hear at least today, why we decided to come out and talk to you today with this data is it's not if, it's when.

Our next question comes from Maury Raycroft at Jefferies.

On the great data. Maybe to start off, for the next data update by year-end, it sounds like you'll have the framework in place for stopping NUCs. Do you expect to have a few patient examples for these pgRNA patients who have stopped NUCs? I guess you already -- and I'm also wondering, have you already stopped or will you stop NUCs on some of these 6 patients to help validate your NUC stopping framework?

Yes. Maury, I'll answer the first part, and I'll open it up to any other comments from our panel. We have not stopped the NUCs yet. We're at that period of observation that we've shown. You remember, we've got 4 dose levels optionality. Yes, the higher dose level had some more of the AEs. But remember, that was not under the current safety protocol. Whether we have to go there or not, as we've said, 0.4 and 0.65 look really good. Right now, we're not revisiting 0.8 at this moment. But I'll remind everybody, nobody had problems with 0.8 on the first administration, Maury.

So there's really 4 dose levels that are open here. We're looking to look -- remember, biopsy data, gold standard, primary biomarker, pgRNA. We're looking and showing you that different durability. We've got some people coming up on 6 months right now, the longer the earlier treated, some are a little earlier in that journey. But we're also managing S-antigen reduction and seeing that, that stays durable because that's a really important secondary biomarker because cccDNA is 1 of the 2 sources that express S.

Frankly, it's the more important source because I would argue that S coming from integrated disease, the damage is already done. The insertions occur, the chances of cancer and those numbers have happened. That's where Mark talked about, are we going to bring this earlier in the spectrum of disease to even E positives, so we don't allow the integrations to happen. So I won't promise you, Maury, exactly where we'll be on how many patients have stopped NUCs by the end of the year because we really want to -- we don't want to rush this. We want to get this framework being new right. We want to make sure there's no difference in durability of the different doses and schedules and that we have a really clear picture before we stop. Mark, MF, anything you guys would want to add or subtract from that, please?

Go ahead, MF.

Yes. I think this is very reasonable. I mean when we look at others, I mean, RNA ability and then we may think about whether we should -- is the time to stop the NUCs for our patients. And it has been shown that, I mean, even some patients who have RNA negative, then we may see some relapse. But the fact is most of the patients in our experience where we can stop with RNA being very low or untenable, they actually stay at that particular -- I mean at the same status. So I mean, I'm very positive where when we have a persistent RNA negative in the patients after being treated with this molecule, then they will have a high chance of getting remission after stopping loos. It's a matter of time. And I understand this is -- we are all under -- we can't say restriction. We are all under the regulation or the design of the study. Then I remain very hopeful to see we will have success in stopping patients who had PNA enable in the future.

Thanks, MF. Mark, anything you want to add?

Yes. I just want to add to that. I want to Amet comment because these are patients that he's treated at his center in Hong Kong. And there is a human being a research participant at the other end of this. And I think as Michael outlined and as Cassie outlined, the translational science in forming next steps is critically important and making sure that we've dotted eyes crossed our Ts as we take this critical step to test for viral cure, I think, is critically important.

All helpful. And I guess is there any precedent or information that provides a road map for running a pivotal study in an enriched population of pgRNA EG antigen positive patients. Is this your plan? Or -- and then what could time lines look like to make this decision?

Yes. Maury, I think the plan right now -- I mean, look, you're always taking steps ahead, I get it. I want to be clear here. Do we think we have a better effect on the pgRNA detectable at baseline? No. We just have a clear blood biomarker to start. I'll remind you, the S reductions coming from cccDNA elimination is 15 for 15 wasn't the evaluable. Those -- the other 9 patients don't look any less effective on S. It's just that S alone comes from integrated in C. So it can't be a perfect biomarker in the blood for cccDNA elimination. But Maury, sure, the pgRNA enriched is obviously a smart place where you'd feel comfortable you have the most data of where you're going to stop.

What a pivotal would look like? I won't speculate here, but I will go back to something Debjit said. The endpoint for us, again, we're not creating a new endpoint. It's HBV DNA. That's what the FDA has asked for since day 1. With all due respect, the field had moved S-antigen up as a predictive marker of that because we've -- because cccDNA eradication, therefore, HBV DNA eradication has evaded us, okay? The reality here is functional cure exists because we don't have something better. We're not looking to stop for 6 months in a day. If this mechanism continues to hold true, this is permanent.

You're seeing cccDNA in humans at less than 1% and going down with the cumulative edits. So Maury, I won't speculate, but you're always very smart and thoughtful. A pgRNA enriched population is definitely an obvious place to stop the NUC to begin. What does the BLA path look like? We'll talk about, but there's a reason we're collecting these biopsies in combination with these biomarkers. But make no mistake about it, we don't need to pave a new endpoint with the FDA. In fact, we're giving the FDA what they've been asking for forever, HBV DNA destruction.

Yes. Okay. That's helpful. And last quick question, and then I'll hop back in the queue. For the S-antigen reductions, you're showing the max levels of reductions. But can you say if all of those patients are showing that they continue to decrease S-antigen over time? Or are you seeing any patients rebound for several blood?

Yes. I think if I was to sum up the 15, and I'll ask MF and Mark to comment on this. I think you're seeing a durable, stable reduction. We've had a couple of patients at outliers that continue to erode and you go, hunt, is the immune system doing something since you're pushing the -- not the S, the cccDNA level down, therefore the S. Maybe, but I think stability is how I would call those 15. They're not popping back up. They're not drastically popping back down. They're saying stable. Mark, MF, is that a fair depiction of the data?

I'll jump in because I've spent a lot of time thinking about that in the context of what we've talked about and what we're seeing in the liver biopsy specimens. And it's important to remember that S-antigen in the blood is a messy biomarker. And it's because there are multiple sources, integrated as well as cccDNA. And the way I've thought about it is we're eliminating cccDNA and seeing a proportional decrease in the blood based on the amount that was produced by ccc. So what happens to that produced by integrated, I do expect it to decline over time, but I think that's not a direct effect of PBGENE-HBV.

Yes, that's a great point. To Deb's point before about liver turnover. Obviously, PBGENE-HBV also targets integrated and upsets the regulatory component to express S, but frankly, it's not vital to our mission. We like reducing the S. To Mark's point, the body will do that over time. We need to make sure no more integrations happen. That's the purpose of our drug. By the way, we're going to stick around and answer everybody's questions. This is a big monumental data set for us. So please feel free. I'm not going to evade your question here. We're going to get to you. Okay, Tara. So Maury, thank you.

[Operator Instructions] Our next question comes from Patrick Trucchio at H.C. Wainwright.

Congrats on the data. My first question is, I'm wondering what level of formal alignment you have with the FDA on pgRNA as the upstream blood biomarker for cccDNA elimination. And what specific data set would be required for pgRNA loss to support dose selection in Phase II development?

Yes. So Patrick, let me hit that directly on. First of all, Patrick, let me give you your flowers because you were one of the first believers of eliminating cccDNA. So I do want to state that publicly, and I pulled your sell-side quoting today. So congratulations to you. Hopefully, we're making you look pretty smart today. From there, please, I'm so glad you asked the question. The FDA alignment exists. The endpoint for the treatment of chronic hepatitis B is HBV DNA.

Remember, I showed you the slides of -- I think it was Slide 2 or 3 in the presentation. That's the commonality and the gold standard to the FDA. To date, people have targeted S to decide in their trial designs when to stop nucleoside analog to measure the endpoint agreed upon by the FDA, HBV DNA. Our biomarker is direct to our mechanism. So no, we haven't talked to the FDA yet. But Patrick, the obvious answer is clinical data. The biopsy data we have of direct targeting of cccDNA, the fact that only -- and I use the word only pgRNA is specific to our mechanism.

Remember, when you eliminate cccDNA, things that are unique, MF had asked this question and brought this up early on and he taught me about it. Things that are unique, viral transcripts that are unique to cccDNA, pgRNA, core antigen. But -- so those are all gone when you eliminate, Patrick. But in the minority of the time when we inactivate and make it replication and competent, it's mutated and it could express S. It could express core, but it can never express the precursor for making HBV DNA pgRNA. So of course, our biopsy and our clinical results of efficacy markers in the blood and safety will be the package that we talk to the FDA about our go forward on. But Patrick, I want to make sure we're clear here. We're not paving a path forward for FDA endpoints. That's clear.

It's HBV DNA and viral destruction. In fact, there's multiple pathways in the guidance regardless of S levels because the FDA gets it. It's just a unique biomarker for your product. And Patrick, the answer is you bring in the mechanism and the proof. And we'll have that conversation with the FDA as we move forward to Phase II.

Yes. That's helpful. And then can you just clarify the biopsy methodology when you described that tenfold or 1 log reduction in cccDNA derived transcripts and then also less than 1% of transcripts remained, what exactly was being measured and normalized? And then separately, how are you now prioritizing the go-forward regimen across 0.4 milligram kilogram, 0.65 mg per kg and potentially 0.8 mg per kg? And what specific efficacy and safety criteria will determine the regimen for expansion?

Yes. So Patrick, I'll take the second part of the question first, and I'm going to open it up to the panel after I answer the gene editing portion of the question. First and foremost, we really like our safety profile after the 20% of trial doses that have been given, 7 of 38 right now. We needed to get around -- we weren't having a problem with first dose. We were having problems with subsequent doses that had a complement cascade activated C3, C4, C5 proteins, Patrick, in the first couple of minutes after LNP is introduced to the blood. And frankly, cytokines, IL-6, IL-1 beta. We needed to make sure now we were also a program that was a bit aggressive in a 2-hour window we were dosing.

Most programs with delivering LNPs at much lower doses and not subsequent have never done an infusion rate in that time. We elongated the infusion rate and there's less time per minute. In fact, we brought some real experts on LNPs into the safety committee who helped us with that. We took the steroid from 10 to 20. So what Cassie showed you in the post-mitigation AE table, we don't want to see grade 3 hypertension or higher. We don't want to see it. Lab abnormalities about LFTs, frankly, guys, we're cutting hepatocytes.

Debjit and I spent a lot of time talking about this in the early days. There's no magic number for me. Remember, this is the DAS criteria, very different than some of the other companies used. Grade 3 is 5x, Grade 4 is 10x. The bottom line is it's a transient -- Mark has talked to me about this forever. It's a transient about a week elevation in an ALT/AST. It has had 0 implications of bilirubin. That's what we watch like hawks, no highs law, no even suggestion of synthetic liver problems. So -- and we put the best ALT flare committee in the world together analyzing this. And there's really been no trepidation there. So I think you want to see a safety profile that persists of what we've showed you post mitigation.

I will ask the panel to speak to that here. Let me open it up to MF and Mark to comment on that. Then I'll go back to the gene editing question.

I think I mean, the safety profile is actually quite okay after we actually amend some -- I mean, infusion protocol because obviously, what I observed right now by dosing several -- I mean many patients in that center is actually a reactive, I mean, phenomenon to the LNP, where we actually can correct quite successfully by using medications and also, I mean, prehydration. And that is totally, I mean, I would say, controllable for patients receiving this kind of therapy.

You know what, Emily, I'm going to queue Emily right now. Even though you've taught me well, Emily, our Head of Translational, I'm not going to take your flowers here to talk about the incredible biopsy work you've done. And why don't you address the first part of Patrick's question, please?

Thank you. I'm using the room audio here, so I hope you can hear me.

We can hear you great.

Yes. When we were thinking about the correct methodology to examine our biopsies, we wanted the most information dense methodology we could to allow us to look at both transcript level to reflect our primary mechanism and the edits that we see in both cccDNA and integrated HBV DNA. And so we used a long-read RNA sequencing that is able to differentiate the viral transcripts and whether they originate from the cccDNA and have a viral polyA sequence or whether they originate from the integrated HBV DNA and have a human polyA sequence.

But this is really one of the very few methodologies that can differentiate S-antigen from integrins versus cccDNA, and it can also tell us whether we've edited those transcripts from these different sources. So this is how we're able to pull out the cccDNA transcripts that have the viral poly A and see that those were decreased by log and how we were able to understand that in those cccDNA transcripts, the fraction that was edited was up to 80%.

Thank you, Emily. So I want to give Emily some incredible credit in the fast time. Mark used the word complete before. And Emily and team did incredible fast, I call it, fast feedback loop work translationally to understand the complement cascade, the cytokines to help us figure out exactly how we were going to go at subsequent administrations as we increase dose. So Emily, congratulations to you and your team. You play a huge role in today's data. Thank you. Back to the Tara, back to the questions.

Great. Yes. So our next question comes from Catherine Novack at JonesTrading.

I wanted to ask why some patients have undetectable pgRNA at baseline? And is spontaneous reduction in pgRNA something that is observed in HBV patients?

Yes. I'm going to put this one over to Mark here in a moment. I will tell you, the e-negative patients, if you remember Cassie's early slide, she talks about everybody goes through the continuum here, team. You start off as an e-positive, right, where most of your transcripts and virus are coming from that cccDNA and starting to get integrated. You want to stop that integration period so that you don't have higher risk of cancer, okay?

The reality here is when you settle in and everybody unfortunately does settle into this disease until we have a cure, you have most of your expression coming, like S antigen from your integrated disease. So pgRNA is lesser of a load of the viral mix versus integrated at that point. And the thought process is that pgRNA in the blood, we know they all have it in the liver. Remember, patient 5 in the biopsy had no detectable pgRNA in the baseline blood, but we did show the eradication in the biopsy. So it's just the detectability of how much there is. The thought is the 40% that are detectable in the blood have a little bit more prominence of cccDNA. But I'm going to go to my teacher here, Mark, to add or correct me.

Well, I'm happy to add that, but I think, Michael, you've been learning. That is a nice explanation of the natural history of chronic hepatitis B. And I do want to put in the context of the natural history when you look at hepatitis B and follow people over their lifespan, we are seeing people at different stages, antigen negative. And I think that pgRNA in the blood is a measure of that progression along the natural history. And of course, MF has done much of the seminal work in defining that natural history around -- in patients with chronic hepatitis B. So I'm going to turn it over to him for comments on what we're seeing.

Thank you, Mark. In fact, we have done a lot of study on -- I mean, looking into the pgRNA, the role of pgRNA in assessing patients in chronic hepatitis B status. And in fact, we understand, I mean, the e-antigen negative patients, they have a high negativity rate in terms of the pgRNA. But then when we look at the biopsy, they actually, you can see that it's a matter of a detection limit where we can measure. Obviously, we will measure I mean, at a high positive rate in the positive patients. But I mean some patients, I mean, somehow the circulating pgRNA is not detectable. But I mean, I can guarantee you -- I mean we can guarantee to you where even these patients with undetectable pgRNA in the blood, we can measure it in the liver. And this is for sure.

Okay. And then I guess on the updated safety regimen, looking forward, do you think it would be possible to study PBGENE-HBV in subpopulations of interest to the FDA, such as those with cirrhosis or decompensated liver disease or pediatrics?

Yes, Catherine, I think all things have to be on the table. We're going to be very, very deliberate and evidence-based in how we follow this. And of course, right now, I think you're starting in trying not to let the liver get more sick, if you will, right? But I think at some point in time, once we have our first path forward and our second, you're talking about things that make a lot of sense in the life cycle management plan. I don't think and I'll ask MF and Mark to talk about this. I don't think -- remember, we have acute hypertensive events we had to deal with really early on. I don't think we've seen a knock on wood. We haven't seen any liver AEs. I think that only increases our confidence in possibly testing in the future with somebody who maybe has a little bit more of a decompensated liver. But MF, Mark, don't let me go too up script here. I'm speculating, but I think we've kind of liked the liver profile so far, please.

I think, I mean, studying -- I mean, in the broader population is, I mean, obviously indicated. The good thing for studying this drug, particularly in pediatrics or young adult is of most important to me because they are at the relatively early stage of the disease that this drug actually can have a higher chance of success. So for sure, this is -- I mean, I highly recommend to think about it. And for compensated liver disease, I don't know, but decompensated liver disease, I don't know. But I mean, whether we can alter the -- I mean, the natural history of these patients as far as the hepatitis B is concerned, we need to, I mean, understand better not until we have a good data for adults or even pediatrics before we should move on studying compensated liver disease patients.

Completely agree. And I think what you're hearing MF say is let's stop the damage from being done.

Great. Thank you, Catherine. So we're going to go back to Debjit at Guggenheim for his follow-up question. So please go ahead, Debjit.

You know what, I'll follow up with the company directly. I appreciate the call.

You got it, Debjit. Please proceed.

Great. Yes. Thank you, Michael. So I'll now turn it over to Naresh, who will read some of the questions that we received over the webcast.

Sure. Thank you, Tara. So one question for the team here. Following the mitigation strategies that were implemented, did the IRRs get reduced or go down?

Yes, sure. MF, happy to have you speak to that. I will just quickly say in scouring the data, the answer is yes. I mean you've seen some lesser fevers. You've seen some lesser achiness. The idea of lessening that complement cascade, it really carries in the cytokines. It really carries across the board. But MF, anything you noticed about the 20% of patients who have been treated with the new mitigations, the longer infusion period and the increased steroid that you would talk about on the day of infusion?

I mean that is definitely. I mean we only increased the duration, I think, from 2 hours to 4 hours or to both. 5 hours, then I mean, decreased all the I mean, reaction quite a bit. And the patients -- I mean some patients still have low-grade fever and they don't have the -- I mean, bad hypertension that we observed so far. So this is definitely helping in terms of changing the protocol associated with a lesser adverse event during the infusion. And I mean, I want to emphasize that this is likely due to the LNP rather than the drug itself. But this is -- I mean, people know, I mean, this is universal. I mean the LNP is associated with all this, but we did a lot of, I mean, amendment in terms of the infusion protocol. And it's now shown to be successful. in mitigating the side effects or the clinical profile of a patient while particularly on the day when they receive the infusion.

All right. Next question, if we go back to pgRNA. Michael, you did mention that the 6 patients who were detectable at pgRNA at baseline. Do you have a rough estimate on approximately what the levels are for these pgRNA -- for these patients who are pgRNA detectable when controlled on NUCs?

Yes. I think it's important. No one may be the analytics guru of the world, but we do use the Roche assay. I think the detectability on the sensitivity side is really excellent. You can detect a level of sensitivity less than 10 -- so -- and there's no upper limit. So it's across the gamut depending on the cccDNA load. So what I want you to take about the undetectable to detectable is we've got an incredibly sensitive tool that knows if the patient has pgRNA expressing in the blood at baseline and will track longitudinally post treatment when they stop expressing and stay durably non-expressed, if you will.

Great. And just to double-click on that point, for those patients who had pgRNA loss, what was the average time or duration to induce the loss?

Yes. So Mark and MF, you guys can comment, too. But if you look at the bar graph slide, and I'm looking at it right now as I turn my head, I think you see some patients get there as early as first administration, some as second and some up to the third. So we're talking about 6 for 6 here, but this is some of the things I think we're studying in the durability of the different dose levels. Does anything change? Not that we would think it would. Again, the mechanism is permanent when you're eliminating. But it's been across the board in the 6.

MF, Mark, any other way you guys would interpret the 6 for 6 results. Some people got detectable -- undetectable rather sooner than later. I think it supports cumulative editing. But Mark, MF, let me know if you want to share anything there.

I don't have any additional information -- I mean, comments, but I think please I mean, be reminded that they are receiving different doses, right? So it matters in a way that some patients may have the loss of PGM RNA earlier than the others. But I mean, even they are receiving the same doses. sometimes, I mean, hepatitis B, we don't understand fully. And some patients respond very quickly, some patients -- I mean, doesn't. And the thing is we have shown definitely that using this regimen, the pgRNA can be reduced to an level, at least in the blood. So that is the effect we see. Obviously, bigger study, we need to look at the time of untenability of PGM whether it will affect the -- for example, the long term, I mean, weight of remission, and that is another story.

Yes. And I'll remind our sell-side group and our investors today, patient 6 with pgRNA detectable in the blood and a post-treatment biopsy both showed nondetectability of blood and nondetectability of molecular tissue after treatment of PBGENE-HBV. So that's very reassuring. Mark, is there anything you would add there?

The only thing I would add, I think it's a very interesting comment is time to pgRNA negativity is certainly one of the variables that we'll look at. I mentioned earlier that the goal of Phase I is to determine the optimal dose and dose interval number of doses, et cetera, to get to Phase II. And I think it's an interesting comment because that's one of the things we can look at among many other factors that we'll be evaluating, but great question.

All right, Mark. I think that's a perfect place to -- I see the questions are drying up. Hopefully, the data continues to speak for itself. I want to thank MF for his leadership, Mark for his leadership and most importantly, all of our investigators and our patients who have boldly really embarked upon this journey of viral cure with us. So I want to thank our investors, our sell-side analysts for the very thought time, the very thoughtful questions today. I know we'll have some one-on-one follow-ups, but I hope you're as excited as we are. Thanks again, and thank you, Tara, for moderating.

Good morning, everyone. My name is Gil Blum, and I'm a senior biotech analyst here at Needham & Company, and welcome for joining our second day of the Needham Healthcare Conference. It is a pleasure to have with me today, Precision Bioscience's team, Alex Kelly, the Chief Financial Officer; and Cassie Gorsuch, the Chief Science Officer.

And with that, Alex, feel free to start your presentation.

Great. Thanks very much. Good to be here, Gil, and thank you to the Needham team for inviting us to present at the conference. So Cassie, if you can advance the next slide. Quickly, just as Gil introduced, I'm the CFO at Precision, and Cassie Gorsuch is our Chief Scientific Officer.

Next slide. Before I begin, I would just remind you that some of the statements that Cassie and I make this morning might be considered forward-looking statements. As a result, you should refer to our 10-K, which was filed in March, for any forward-looking statements that you should be aware of.

So with that, next slide. So what is Precision Biosciences? Precision Biosciences was founded as a spin-off from Duke in 2006. So we're celebrating our 20th birthday this year. Our Co-Founders, Jeff Smith and others developed the ARCUS gene editing platform, and that has been the source of our company, and we are dedicated to improving the lives of patients through our in vivo gene editing platform. So as I mentioned, this is proprietary to Precision Biosciences. Our Co-Founder, Jeff Smith, is also our Chief Research Officer. And our team has now 20 years of experience of using this ARCUS gene editing tool and using protein engineering to create the ability to edit in a variety of different tissues for a variety of different diseases.

As you can see, we have a large intellectual property estate with this ARCUS platform with more than 75 patents issued to date for ARCUS. And unlike other gene editing tools, ARCUS is derived from a homing endonuclease, I-CreI, which is found in green algae. And we believe that has several advantages, but it's also derive green algae to drive high efficiency gene editing.

Next slide, please. Okay. Our in vivo platform, right now, we're focused on 2 programs that are in vivo gene editing. The first one is for hepatitis B, PBGENE-HBV. We are engaged right now about a year into our ELIMINATE-B trial, which is a Phase I/II trial studying patients with chronic hepatitis B. This is an important disease area and one that we're very excited about. We presented data last November, and we expect to present additional data in 2026.

The second program is also wholly owned. That is for PBGENE-DMD for Duchenne muscular dystrophy, a very important disease area with a high unmet need. Even though there are existing treatments that have come into the market in the last few years, there is still a very significant need for patients for a treatment that provides a long-lasting and functional benefit.

Now through our history, we've also had a number of partnerships that are relevant. The first is with iECURE. That is in vivo gene editing also. So it's using ARCUS gene editing to treat a disease called OTC deficiency. And OTC deficiency when it occurs in neonates in its severe form can be very, very life-limiting. Unfortunately, 3/4 of the children who have severe OTC deficiency when they're born, they don't make it past their first birthday. So having a treatment for these children is critically important.

iECURE, our partner, announced last year that they had achieved a complete clinical response in the first patient treated with ECUR-506, and that is the drug that uses ARCUS gene editing. This is a gene insertion program. So it's from a technical standpoint, much more challenging than what other gene editing tools can deliver.

I've also listed here 2 other programs, which date back to our CAR T programs, which we previously had in development at Precision Biosciences, but we have outsourced them or out-licensed them to Imugene in the case of oncology and TG Therapeutics in the case of autoimmune disease. Both of those companies continue to make very good progress with those programs. And as a result, we have generated milestone payments to Precision Biosciences for those programs. And that's helping us fund the ELIMINATE-B trial as well as the function DMD trial.

Next slide. Okay. Just real quick talking about the need in these 2 populations with hepatitis B and Duchenne muscular dystrophy. Both of them are multibillion-dollar product opportunities because they're addressing large unmet needs. In the case of hepatitis B, there are more than 300 million people around the world with chronic hepatitis B infections. And in the U.S. alone, there are about 2.5 million patients who have chronic hepatitis B. So market opportunity is very large there, and the need is high because the standard of care currently does not deliver a high degree of functional cures in many patients. In fact, it's single-digit percentage of patients can get to what's called a functional cure in this disease. So that's our first drug.

The next drug is, as I mentioned, PBGENE-DMD. The prevalence here in the U.S., we're looking at 300,000 to 400,000 patients globally, and about 15,000 is the prevalence in the U.S. And each year, about 550 boys are born with Duchenne muscular dystrophy in the U.S. So a very important need. Our product, PBGENE-DMD, addresses up to 60% of the patients who are -- who have Duchenne muscular dystrophy.

Next slide, please. With that, why don't I hand it over to Cassie, and she can walk you through these 2 programs in a lot more detail. Cassie?

Thanks, Alex. I want to touch first on really the platform that Precision was built on, our ARCUS gene editing technology. As Alex mentioned, we have a proprietary gene editing technology at Precision that our scientific founders, including Jeff Smith, developed. And there are a couple of really important differentiators that make this a really attractive gene editor for therapeutic applications, and I've highlighted those differentiators here. The first is the cut. Really what we mean is the way in which ARCUS nucleases cut the DNA. It's a 4-base pair 3 prime overhang, which allows us to take advantage of homology-directed repair, which is really inaccessible with other types of gene editors in nondividing cells. And we think it's really this particular feature of ARCUS nucleases that have led to the success that Alex described in the OTC deficiency program through our partners at iECURE.

The next differentiator is the size. ARCUS nucleases are very small, about 1,000 bases of coding sequence. And the small size matters when you think about gene editing from a delivery perspective, having a small protein allows you to deliver both by LNPs to the liver, like we do for our hepatitis B program, but as well as through AAV delivery for ex liver tissues like we are in our Duchenne program. And ARCUS nucleases are actually so small, we can put 2 ARCUS nucleases in a single vector like we are in our DMD program, and I'll show you that in a moment.

The last differentiator is the simplicity, what we call simplicity. What we mean by that is that ARCUS is a single component gene editor. So it's one protein that we engineer to recognize a DNA target site and cut that site. So one protein that needs to be delivered. There's no guide RNA involved. It's the protein itself that actually interacts with the DNA and cuts the DNA. This really streamlines efficiency and gives us a lot more flexibility in the types of technical edits that we can take on.

So it's really through these differentiated features that we think make ARCUS a really excellent therapeutic gene editor. So let's take a couple of minutes to talk about our first wholly owned in vivo gene editing program for chronic hepatitis B. There's been significant investment in the hepatitis B space over the last couple of decades from a clinical development perspective. And really, I think when you look at what have we learned as a field, I think it's summarized in this slide. Where the field has really been focused from a therapeutics perspective is targeting components of the viral life cycle downstream of the root source of the infection.

When hepatitis B virus infects hepatocytes in the liver, it establishes a viral DNA reservoir in the liver called cccDNA. This cccDNA is what gives rise to new infectious particles and cccDNA persists forever in chronically infected patients. However, we've never actually been able to therapeutically target cccDNA itself. Instead, the vast majority of clinical development has been focused in these purple circles in these downstream components, whether it's blocking RNA from becoming DNA like nucleoside analogs do or ASOs and siRNAs focused on S-antigen reduction. We've been focused on downstream components of the viral life cycle, never actually focused on targeting the root source of the infection.

And what we've learned is that even when you combine a number of these different antivirals or immune modulators targeting these downstream components, functional cure is rarely ever achieved. Today, standard of care, as Alex mentioned, nucleoside analogs achieve functional cure of 1% to 3%, which means patients are left taking medication their entire life and remain at risk for serious liver complications like cancer or cirrhosis.

We've designed PBGENE-HBV to actually go at the root source of hepatitis B for the first time ever. So PBGENE-HBV is a lipid nanoparticle that contains an mRNA encoding an ARCUS nuclease. That ARCUS nuclease has been designed to cut and eliminate cccDNA and cut and inactivate integrated HBV DNA. And by targeting the viral source with our ARCUS platform, we can then shut down production of downstream antigens, including the production of new infectious virions. So by eliminating and targeting cccDNA directly, now we can look at shutting down at the viral source, the viral infection. And so PBGENE-HBV is actually uniquely positioned within the therapeutic landscape to achieve a complete cure by actually eliminating the viral source, thereby preventing the potential for viral relapse downstream and hopefully addressing those long-term liver complications I mentioned earlier like cirrhosis and hepatocellular carcinoma.

We're testing PBGENE-HBV in a Phase I study called ELIMINATE-B, and the study design is illustrated here on the slide. There's a Part 1 and Part 2 of this study. Part 1 is really dose finding. What we are looking for in Part 1 is the optimal dosing regimen that allows us to stop NUCs and demonstrate functional cure or cure in these patients, the ability to maintain viral suppression off all treatment. What we've conducted so far and presented data on for this program in November at the liver meeting was data from our first 3 cohorts, Cohorts 1, 2 and 3. And as you can see here, these cohorts were designed to test ascending dose levels of PBGENE-HBV. Each participant in this study is enrolled that is e-antigen negative patients who are on standard of care treatment, so controlled with nucleoside analogs during their treatment course with PBGENE-HBV.

Each patient receives 3 dose administrations of PBGENE-HBV spaced 8 weeks apart and at ascending dose levels from Cohort 1 to Cohort 3 at 0.2 mg/kg to 0.8 mg/kg also and started enrolling Cohorts 4 and 5, which look at a shorter interval of 4 weeks. And we have the potential to look at administrations beyond 3 as well. So really, the goal of this Part 1 of this study is to identify the optimal dosing regimen that allows us to achieve viral suppression after we've taken patients off therapy.

With that optimal dosing regimen in hand, then we can move into Part 2 dose expansion where we'll test that dosing regimen in a larger number of patients. Importantly, in Part 2, we will also be collecting paired liver biopsies from each participant in this study. In Part 1, we are collecting optional biopsies from patients, and I'm excited to share a little bit of that information today. But in Part 2, we'll really build out our biopsy data set. And the goal of this study, as I mentioned, is really to demonstrate the ability to provide a finite course of treatment with PBGENE-HBV that results in a sustained viral suppression off all therapy.

So looking first at some of the data coming out of the study. Here, we're looking at the tolerability profile for PBGENE-HBV. What we found through these first 3 dosing cohorts is that PBGENE-HBV has been well tolerated with repeat dosing. And I should mention that as of the data cut, we've enrolled patients in all 3 cohorts. We completed dosing, all 3 administrations in all 3 patients in Cohorts 1 and 2. And the data are interim data from Cohort 3, where we have all 3 patients receiving their first administration and one patient also had received their second administration as of the data cut.

Across all of these 22 doses administered, we've seen no dose-limiting toxicities. The types of adverse events that we have observed are consistent with LNP IV infused products, primarily infusion-related reactions that occurred on the day of dosing and resolved quickly within about 12 hours after dosing. These include things like chills, fever, headache. We have also observed transient transaminase elevations. You can see here a Grade 2, Grade 3 ALT, AST, respectively. Those occurred on the same dose in the same participant and resolved within about a week after that administration. So they occurred very proximal to the infusion and were not associated with any clinical symptoms or bilirubin changes.

The last thing to note on this slide is we have observed a couple of cases of hypotension as we've increased the dose. These have been manageable with reactive saline which is -- because it was reactive in this case, it was considered a Grade 3 adverse event. Since observing these types of events, we have implemented infusion parameters like prophylactic saline that have really helped control some of the hypotension events we've seen. So overall, the adverse event profile has been as we would expect with an LNP type drug. They've been predictable, manageable and overall good tolerability.

Now shifting to efficacy. I'm going to summarize here the efficacy data. As we've increased dose level between Cohort 1 and Cohort 3, we did see dose-dependent durable S-antigen declines. So in Cohort 1, we saw activity in all 3 patients, which was very exciting. Even at our lowest dose level, all 3 participants showed substantial S-antigen declines during the course of treatment, indicating PBGENE-HBV is active even at our lowest dose level. One of the 3 participants in this cohort has actually sustained about a 50% S-antigen decline. The other 2 patients returned near baseline levels. And this really told us that for the first time in this 1 of 3 patients that gene editing could lead to durable S-antigen declines in a permanent mechanism as you'd expect with gene editing.

What we conclude from these other 2 patients was that we didn't achieve enough viral reduction of that reservoir in the liver to sustain the reduction. And so we look to improve upon that by increasing the dose level. In Cohort 2, again, we saw activity in all 3 patients. And now we also see durability of the response in all 3 patients with all 3 patients showing substantial S-antigen decline from baseline. Cohort 3, as I mentioned, is interim data, but all 3 patients in this cohort were also achieving an indication of activity by substantial S-antigen declines. And at the data cut, everything was -- all patients had achieved durable S-antigen declines, and we're continuing to follow these patients through the rest of their course of treatment.

I mentioned that we are also collecting optional biopsies in Part 1 of this study. We are really excited to have a participant in Cohort 2, our 0.4 milligram per kilogram dose cohort, who agreed to a baseline and post-treatment biopsy. This biopsy -- in the biopsy, we were able to demonstrate for the first time ever proof of gene editing against a viral DNA target. And so when we looked at the DNA sequence, the viral DNA sequence in this participant after 2 dose administrations, we could see the formation of PBGENE-HBV-mediated mutations in the DNA sequence or indels. This demonstrates that the S-antigen declines that we were observing in circulation were the results of the direct mechanism of PBGENE-HBV mutating viral DNA in the liver. This patient did go on to receive their third administration and saw a further S-antigen decline, suggesting the ability to accumulate viral DNA gene editing clinically just like we observed preclinically. So this is a really exciting proof of principle, proof of mechanism for PBGENE-HBV utilizing biopsy data and correlating that to serum biomarkers like S-antigen.

So where we are today with this study is that we are continuing in Part 1 of this Phase I study through dose optimization. I mentioned earlier, we've opened Cohorts 4 and 5 and started dosing patients in these cohorts. These cohorts are designed to look at the lever of time between administrations and the effect of that lever. And so shortening from an 8-week interval to now a 4-week interval, we'll continue to evaluate both the safety and efficacy in these additional cohorts. And again, the goal really is in Part 1 to define that optimal dosing regimen to achieve viral suppression and then move quickly into Part 2 dose expansion.

So now I'd like to take a couple of minutes to introduce our PBGENE-DMD program. As many people are familiar, Duchenne muscular dystrophy is a really devastating neuromuscular -- progressive neuromuscular disorder. Kids who are born with DMD typically are normal developing for a couple of years where they learn to walk, they learn to run. I've heard from parents, this referred to as sort of the golden years with a kid with DMD where there's really not obvious signs of the underlying disease. However, around 4, 5, 6 years of age, these kids start to demonstrate muscle weakness that becomes progressively worse with time. Ultimately, these kids lose the ability to walk and are wheelchair bound. And ultimately, all of them will die from this disease, either from cardiac failure or respiratory failure.

The unfortunate truth is we really haven't changed the prognosis, this disease course despite clinical development, and really haven't been able to achieve meaningful clinical benefit for these patients. So the unmet need persists.

When you look at the tissue level, what causes DMD is the loss of a protein called dystrophin. And dystrophin is an essential protein in muscle. It allows for healthy muscle to recover from damage. It serves as a shock absorber within muscles. And so you can see on the left, an image of what a healthy muscle would look like where dystrophin is present. And on the right, when dystrophin is absent, you start to get muscle wasting, deposition of fibrosis and fat versus myofibers. And this is what's really leading to the loss of muscle function in these kids. And so it really is because of genetic mutations in the dystrophin gene that results in the loss of dystrophin protein that lead to DMD.

So at Precision, when we sought out to develop PBGENE-DMD, we looked at the therapeutic landscape and wanted to improve upon the existing therapies. And our goal was really -- is indicated here. This was the North Star for us. We wanted the product, PBGENE-DMD, to be applicable to most patients with DMD. This is a challenge for therapies like exon skippers that are very limited in the number of patients that can actually be addressed. We wanted to be able to improve muscle function over time. The way to change the long-term prognosis of this disease is to be able to provide a long-term durable muscle function improvement. And that has not been achieved therapeutically either with exon skippers or with microdystrophins today. We're excited about some of the preclinical data that we have in mice demonstrating the ability to provide long-term durable benefit as well as actually seeing increased muscle function over time.

The reason that we think we are able to provide this differentiated long-term durable benefit is because the protein that's produced as a result of PBGENE-DMD gene editing is a near full-length dystrophin protein. This near full-length dystrophin protein is a much fuller protein than what you see with the microdystrophins, which are severely truncated forms, and the protein made by PBGENE-DMD has known function in humans because it occurs in a subset of Becker muscular dystrophy patients who have overall good prognosis. So we know that the protein works in humans, which was a big unknown with the microdystrophins.

And then finally, thinking about from a patient perspective, access and ability to receive this type of drug, we wanted it to be a single administration therapy to really reduce the burden on patients of going through a therapy like this. And so this is really what we sought to achieve with PBGENE-DMD. And in our view, achieving this type of product profile would really demonstrate a significant advantage over the existing therapies in the DMD space.

I mentioned just a moment ago that the protein that's made by PBGENE-DMD is a near full-length dystrophin protein, and that's really illustrated here on the slide. The top is the full-length dystrophin, healthy dystrophin that is made as a result of a healthy dystrophin gene. Under that is the dystrophin protein that's made by PBGENE-DMD gene editing. You can see it retains 80% of the full-length dystrophin and achieves all of these different functional domains. So these different color-coded boxes illustrate different functional components of the protein, different binding domains of the protein and the protein made by PBGENE-DMD retains all of these different functional domains.

The microdystrophins, a couple of them are shown here. What you can see is that they're severely truncated, about 30% to 34% of the full-length dystrophin. And even going back to some of the initial papers that first described these microdystrophins, we've known for a long time that these shortened truncated versions do not function as well as a fuller length dystrophin protein. So they are compromised in their functional capabilities. And based on natural history studies, we expect that as little as about 5% of the functional dystrophin protein, the near full-length dystrophin protein made by PBGENE-DMD could provide therapeutic benefit in DMD patients. And so on the low end, that's really our therapeutic target would be about 5% dystrophin protein expression.

We know that this protein that's made by PBGENE-DMD is functional in humans because it occurs in a subset of humans within the population. These humans are Becker muscular dystrophy patients who have the exact same genotype that will be made as a result of PBGENE-DMD editing. So what you're looking at on this slide is the clinical presentation of Duchenne patients on the left that we just talked through and these Becker patients with this exact same mutation and the exact same protein that's made by PBGENE-DMD. These Becker patients can live into their 60s or 70s. Many of them are mildly symptomatic or even asymptomatic and ambulatory their entire life. They demonstrate normal respiratory function with some myocardial involvement, but often manageable with medications.

And so as you can see, this clinical presentation is a significant improvement over the clinical presentation of a Duchenne patient. And we think this is really proof of principle that the protein that's made by PBGENE-DMD can be meaningfully functional in humans because of this clinical presentation in these Becker patients.

We've generated a whole host of preclinical data to support this DMD program. I'm going to talk through a couple of components that we think are really exciting as we head into the clinical stages of this program. So what you're looking at here are -- is mouse data from our preclinical package. We utilized a DMD diseased mouse and treated these mice with PBGENE-DMD single administration, followed them out to 9 months. We collected a cohort of mice at 3 months as well as 9 months and evaluated how much dystrophin protein could be visualized after treatment with PBGENE-DMD. Here, you can see across heart, calf and quad, a significant improvement in the amount of dystrophin protein. So here, we see up to about 25% in the skeletal muscle of dystrophin protein after treatment with PBGENE-DMD.

And what's really exciting is consistently across these tissues, we see an increase between 3 months and 9 months in the amount of dystrophin protein. And we think this is likely due to 2 reasons. One, the fact that this is a near full-length dystrophin protein. We know that it's a very stable protein and can accumulate over time. And we've demonstrated preclinically that we can target satellite cells, which are the stem cells in skeletal muscle that give rise to new myocytes and new myofibers. And so we are very excited about this increase in dystrophin protein expression across all of these different tissues and significantly above that 5% threshold, more in the 20%, 25% dystrophin protein expression here.

We've also correlated that dystrophin protein expression with significant improvements in force output or functional capability in these muscles. And so what you're looking at here is a force measurement readout or functional assessment in these mice. The light gray bars on the left demonstrate that these mice, these DMD mice have a deficit in the ability to exert force compared to healthy animals, which are the bars just to the right in the dark gray. Those are healthy individual mice, demonstrating that the diseased mice does have a functional deficit. When you treat with PBGENE-DMD, you can see at these 2 different dose levels, the ability to increase force output from 3 to 6 months and maintain that force output out to 9 months. So long-term durable benefit. And the ability to achieve near healthy levels of force output, significant improvement over the DMD disease untreated mice. So a really nice correlation of both the biomarker of dystrophin and the functional outcome here now in the force measurement.

I'm excited to share that we recently received IND clearance for this program from U.S. FDA. And so we are currently underway of activating sites and getting our clinical study up and running with the goal of dosing our first patient on this study in this quarter before the middle of the year. The way the study is designed, it's a Phase I/II study and the primary endpoints are really around safety, so characterizing the safety and tolerability of PBGENE-DMD. We will also be looking at dystrophin protein expression through biopsies collected at baseline and at 12 weeks and 52 weeks post treatment. And using these muscle biopsies, we'll be able to look at the expression of dystrophin protein after treatment with PBGENE-DMD. And the goal is really then to demonstrate biologic proof-of-concept, biologic activity through the dystrophin biomarker and then correlate that with exploratory endpoints, including a number of different functional outcomes. We are enrolling kids aged 2 to 7. And so we have age-appropriate functional and developmental assessments incorporated into our exploratory endpoints with the goal of correlating that biomarker with functional benefit.

This is the overall trial schema. As is typical with AAV-based therapies, there will be a staggering between dosing of the initial patients on the study. And so between patients 1 and 2 and 2 and 3, we expect about an 8-week interval in terms of the staggering between dosing. We're enrolling boys who have mutations in exons between -- and capture between exons 45 and 55. That's the region that PBGENE-DMD actually targets. And so it would be applicable to patients with mutations in this region. We will be utilizing a comprehensive immunosuppression regimen to really promote the safety and tolerability of PBGENE-DMD dosing. Once we've got the initial data collected from these first 3 patients, we will be able to then looking at that data, utilizing that data, move into the Part 2 expansion cohort where there will be fewer restrictions around dosing interval between patients. And really, our goal, as I mentioned, is first patient dosed in the first half of this year with the ability then to share initial safety and biomarker data on multiple patients by the end of 2026.

We're working with really world-class clinical sites across the U.S., and we really prioritize utilizing these very well-known sites, the DMD sites that have experience with both treating Duchenne muscular dystrophy patients as well as with AAV gene therapy to really ensure the highest probability of success for the study, both with physicians who have experience in both of those 2 key areas. We're really -- it's really been a pleasure getting to know a number of these physicians and getting to work with them, and we're looking forward to partnering with them as we move this function DMD study into the clinical phase.

The ability to provide long-term durable functional improvement in muscle is really the North Star for us and our goal. And so we're excited to continue to push this program forward and really achieve that milestone of first patient dosed.

Now I'll hand it over to Alex for some concluding remarks.

Great. Why don't you just go forward to the next slide, and I'll hand it over to Gil. So just real quick, we've got a lot of exciting things going on at Precision Biosciences, starting with our PBGENE-HBV program. We call it the ELIMINATE-B clinical trial and also with the function DMD trial that Cassie just talked about for PBGENE-DMD. We're going to have data events for these programs throughout 2026. And in the case of HBV and the DMD program, as Cassie walked you through, we'll expect that first data set coming by the end of 2026. So we've got a good cash runway right now. We have $137 million at the end of the year, and we expect that, that cash runway will carry us through 2028. We'll see all these data points that we're talking about here in '26, but also we'll have data events in '27 and beyond.

So with that, let me hand it over to Gil.

Thank you, Alex. Thanks for the presentation, and maybe a couple of quick questions. First of all, on the HBV program, just for us to better understand, do you need to completely eliminate all viral DNA in order to basically get rid of the underlying disease? Will it -- like even if a little bit is less, would it build up over time?

Yes. I think that's a fair question we get a lot. And I think it is the -- that's the billion-dollar question. And the answer is actually, we've never had a therapy that can even ask or answer the question. This is the first time because we're going at viral source. So I think, to me, our goal is to eliminate as much viral DNA as possible. I would love to say we're going to achieve all viral DNA elimination. I think in the absence of achieving complete viral elimination, there is actually some clinical data that supports the potential to achieve cure without clearing 100% of the cccDNA.

And that data I would point to would be the stop NUC studies where we took HBV e-antigen negative patients who are on long-term NUC therapy like our patients. And the intervention was really just stopping their therapy and then monitoring them. And what we found was in patients who have relatively low S-antigen levels, those patients about 30% to 40% of the time went on to achieve cure. We know those patients still have cccDNA because NUCs don't clear cccDNA. And so what that tells us is there is a level of viral infection that can be low enough where if that -- if you take them off therapy, you can achieve a cure. And so I think what one potential for PBGENE-HBV would be to reduce the viral load in the liver to sufficient levels that allows for the individual to maintain viral suppression through immune control of their infection. I think there's clinical data to support that it's feasible, particularly in the e-antigen negative NUC-treated patients.

And a question on the DMD space, which we do cover. The challenge has primarily been the delivery. I mean it's a little hard to define whether there's a huge difference between different transcripts. I buy the argument that longer is better, but that's very hard to prove out. Long way to ask, what AAV are you guys using? And I mean, you mentioned immune suppression, but how feasible is this? I mean you're already going at 1 to the 14. Can you dose escalate? Is that even possible?

Yes, I didn't mention that when we went through our clinical study, but our plan is not dose escalation. So when we selected the 1e14 dose level, we selected it based on preclinical data with the goal of providing both a safe dose and what we think can be maximally efficacious in patients. And so we're not planning to dose escalate on this study.

We're using AAV9. We selected that capsid because we demonstrated the ability for that capsid to achieve satellite cell editing, which we didn't observe with all of the capsids that we tested. And so I think when you think about a gene editing approach, I agree delivery has been part of the problem. I will also say, I think we've seen decent microdystrophin protein expression that has not correlated with functional benefit. And I would point to the construct designs in that case of where we're seeing differences. I do think the truncated microdystrophin we've known through publications for a long time is not nearly as functional.

And so I do think delivery is part of the challenge. I think we've demonstrated preclinically the ability to achieve both substantial dystrophin protein expression, and I didn't have a chance to talk through it, but also up to 85% dystrophin positive expressing cells within the tissues. So we're seeing good distribution at the cellular level within tissues and at the tissue level across the organism. And so I think really the differentiated approach of gene editing versus a gene therapy. Obviously, we need to generate the clinical data, but I think there's a lot of reason to believe that the approach will be differentiated in a number of different ways beyond just delivery.

Right. That is very interesting. So we're at time. Thank you again for attending today.

Thank you very much, Gil.

Thank you very much.

Good morning, and welcome to the Precision BioSciences Investor Update. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Precision BioSciences website following the conclusion of the event.

I'd now like to turn the call over to Naresh Tanna, Chief of Staff and Head of Investor Relations at Precision BioSciences. Please go ahead, Naresh.

Thank you. Welcome to Precision BioSciences PBGENE-DMD Investor Update. I'm Naresh Tanna, Head of Investor Relations, and I'm joined by my fellow members of Precision's management team, including Alex Kelly, Chief Financial Officer; and Dr. Cassie Gorsuch, Chief Scientific Officer. We are also joined by our co-presenters and esteemed members of the key opinion leader community, including Pat Furlong, Founder of Parent Project Muscular Dystrophy, also known as PPMD, a leading DMD advocacy organization.

We're also joined by Dr. Veerapandiyan, a leading DMD investigator and pediatric neurologists from Arkansas Children's Hospital.

Next slide, please. Before we begin, I'd like to remind everyone that our remarks today may contain forward-looking statements. These statements are based on current expectations, and actual results could differ materially. Please refer to our latest 10-K and 10-Q filings for a detailed discussion of those risk factors.

Next slide, please. Without further ado, I'd like to hand it off to Alex Kelly, CFO.

Thank you very much, Naresh, and thank you again to everybody for joining our call this morning. We can go to the next slide and just cover a little bit of an intro to Precision BioSciences for those who may not be familiar with the company. Our company was founded in 2006 as a spinout from Duke University.

Our co-founders, including Jeff Smith, who's our Chief Research Officer, developed a novel platform called ARCUS, which is designed with the goal of treating and curing difficult-to-treat diseases with high unmet need, including rare genetic diseases such as Duchenne Muscular Dystrophy.

Our platform is proprietary. We own more than 75 patents that cover the ARCUS and in vivo gene editing. And as I mentioned earlier, it's wholly owned from Precision BioSciences. There is a number of different gene editing tools that are available. Many people know CRISPR. ARCUS is not CRISPR. CRISPR is derived from bacterial sources, whereas ARCUS is derived from a homing endonuclease I-CreI, which is found in green algae.

So it has some -- a lot of features that help differentiate ARCUS from other gene editing tools, including its size, the way that it cuts and its simplicity. Those are the 3 differentiating characteristics of ARCUS. But ultimately, it's all about helping patients and improving function.

Next slide, please. One of the things that we've seen and demonstrated over the last 15 to 20 months is that ARCUS as a platform works. ARCUS works in a variety of settings. We've seen this demonstrated from our partners in vivo gene editing, such as iECURE. And iECURE is using an ARCUS nuclease developed by Precision BioSciences for a gene insertion program for neonatal OTC deficiency, a rare disease that unfortunately has very dire consequences for the infants who are born with this disease.

iECURE has been in the clinic for more than a year. And in that time, they've demonstrated that they have a complete clinical response in the very first patient who was treated with ECUR-506. ECUR also expects to give further updates on their programs in the first half in 2026.

Next, we saw proof that ARCUS works in ex vivo gene editing. We saw this demonstrated in the cancer setting by Imugene, who is partnering with us and taking azer-cel forward for oncology. We've also seen very good progress made by TG Therapeutics using azer-cel for autoimmune diseases such as multiple sclerosis.

Both of those trials are ongoing right now, and we look forward to seeing more results from both of those. We've also demonstrated on our own that PBGENE-HBV for chronic hepatitis B works for its desired goal as well. PBGENE-HBV is being studied in the ELIMINATE-B Trial, which is studying in chronic hepatitis B.

You may know that chronic hepatitis B is a very large disease. It affects some 300 million people around the world. So -- and it also over the course of 20 to 30 years, often results in serious liver complications such as cirrhosis and/or liver cancer.

So with our PBGENE-HBV program, we've been in the clinic for a little over a year now. We've treated 13 patients so far across 5 cohorts, and we've administered 30 -- more than 30 doses of PBGENE-HBV. So we have additional clinical data expected this year. I think that I would direct investors to look at the major medical conferences that are focused on hepatitis B.

And the first opportunity for a major conference is probably the EASL conference coming up at the end of May. So we'll be giving more and further updates on the ELIMINATE-B program at that conference. The focus for today's call is on PBGENE-DMD, which is our gene editing, in vivo gene editing program focused on Duchenne Muscular Dystrophy.

Our Phase I/II clinical trial is called the FUNCTION-DMD trial because our goal with this trial, it's all about improving function over time in the children who suffer from DMD. We currently have an IND accepted by the FDA, and we are undergoing site activation right now. We have tried to do things as expeditiously as we can.

We've already started work with the institutional review boards with the hope of activating sites for this trial as soon as possible. And then the important thing is we want to get to patients soon. Our goal is to enroll 3 to 5 patients in the FUNCTION-DMD trial in 2026 and have a readout for multiple patients by the end of 2026.

So with that is like the background, let me hand the call over to Cassie Gorsuch.

Thank you, Alex, and thank you all for joining us this morning to talk about our FUNCTION-DMD study. Next slide, please. I'm really excited to spend some time with you all discussing our FUNCTION-DMD study today. This study will be evaluating PBGENE-DMD, which is, as Alex mentioned, our ARCUS gene editing approach for Duchenne Muscular Dystrophy.

PBGENE-DMD is designed to excise a hotspot region of the dystrophin gene that is often mutated and causes Duchenne Muscular Dystrophy in up to 60% of the DMD patients. And our goal is by gene editing at the DNA level to be able to permanently and safely restore muscle function for kids living with DMD and significantly improve the lives of families affected by this really devastating disorder.

Next slide, please. So when we set out to develop PBGENE-DMD, we really looked to improve upon the limitations that exist in the treatment landscape today. Those can be broadly categorized in really 2 buckets: microdystrophin approaches, a number of which are in clinical study today and exon skippers, which are also in clinical studies as well as some approved products.

In our view, both of these approaches, while they have progressed the field in Duchenne muscular dystrophy, still present limitations for patients, whether it is limited functional benefit from a very truncated microdystrophin or the need to continually repeat dose with small efficacy observed in many of the exon-skipping trials, we really sought to improve upon these and provide a differentiated option for patients living with DMD. So for PBGENE-DMD, an ideal therapy, what we sought to achieve was that we could be broadly applicable to patients. This is a challenge for exon skippers where really only a subset of the population are amenable to a single exon skip, making those approaches limited in the patients that they can reach.

So PBGENE-DMD has been designed to excise this hotspot region, allowing for potentially up to 60% of patients to be eligible for this type of an approach. Of course, we've designed this program and the clinical study with safety top of mind. We'll spend a lot of time talking about that particular component of this today.

We've been able to demonstrate in preclinical models that we can improve muscle function over time, actually seeing gains in muscle force output in a DMD mouse model. And so we look to translate that as we now move into our clinical study.

Because DMD affects a number of different muscle types, including skeletal muscle, cardiac muscle and diaphragm, we aim to be able to design PBGENE-DMD with the ability to reach all of the affected muscles efficiently to be able to really provide meaningful therapeutic benefit for patients. With the gene editing approach, we see the potential for long-term durable benefit. And this is evidenced again in a DMD mouse model where we see improvement in function, improvement in dystrophin protein expression over time, the ability to reach the vast majority of cells within these tissues up to 85% of cells in skeletal muscle and really driven by the fact that we can edit within satellite cells, the stem cell population and satellite cells.

And we believe that this could lead to long-term durable benefit for patients. Of course, we will be using an AAV administration approach. This represents a onetime administration and our goal after that onetime administration is to provide that durable functional improvement over time. And in our view, this type of product profile really advances the therapeutic options for patients, which is really at the end of the day, the goal for Precision.

Next slide, please. So today, we're going to share with you the reasons that we are excited as we stand at this really important milestone entering our clinical study for PBGENE-DMD. We're honored to be joined by Pat Furlong, as Alex mentioned, and she's really been a huge force in the DMD community who worked tirelessly on behalf of patients and families.

And she'll share with you today that we're not home yet. There's more work to be done on behalf of DMD patients. The unmet need persists, and we need to continue investing in new therapeutic options. I'll walk through why we think ARCUS is the right platform for Duchenne muscular dystrophy. In our view, applying the right gene editing tool in the right therapeutic application is what can really make the difference.

And we believe ARCUS is the right gene editor for DMD. I'll walk through some of the robust preclinical data that we've generated to support this important milestone as we move into the clinic. And then I'll hand it over to Dr. Panda to tell you a little bit more about our clinical trial, how we designed this with patients top of mind with safety top of mind. And we're really privileged to be working with world-class DMD clinical sites with investigators who are highly experienced in both Duchenne muscular dystrophy and in AAV gene therapy.

Next slide, please. In addition to the immense opportunity to potentially impact the outcome of patients living with Duchenne muscular dystrophy, there is also an immense opportunity on the global market. As you can see, Duchenne muscular dystrophy affects about 20,000 births every year globally and over 500 in the U.S. alone.

Up to 60% of these patients, we expect will have mutations in the hotspot region of the Duchenne muscular dystrophy gene and the DMD gene between exons 45 and 55, making them potentially eligible for our function DMD study. The commercial potential in DMD is also supported by strong patient and advocacy voices who continue to reiterate the need for novel modalities like PBGENE-DMD.

Next slide, please. And now it's my pleasure to hand things over to Pat Furlong, President and Founder of Project Parent Project Muscular Dystrophy, PPMD. Thank you for joining us, Pat.

Thank you. And I apologize for being on mute. Thank you, Cassie, and thank you for inviting me to today's meeting. I'm happy to discuss Duchenne muscular dystrophy.

Next slide, please. I wanted to talk to you a little bit about the progression and natural history of Duchenne muscular dystrophy. I'll start with my own experience. A long ago, more than 30 years, I had 2 boys that were diagnosed with Duchenne muscular dystrophy. Having no family history, I found that I was also a carrier. My mother was not a carrier.

So this was a new mutation that happens about 30% of the time. So we're never going to see Duchenne that would be nonexistent in our world.

The natural history of Duchenne is that these babies are looking quite normal at birth. They sometimes are delayed in their milestones, but they do walk and over time, about the age of 12 to 13, they will lose the ability to walk. That follows in terms of progression that by the time they're 15 or 16, they are unable to lift their hands to their mouth.

And the mean my sons were here were teenagers. They died at 15 and 17. It was very interesting to me when my little son said to me he wanted to buy something very expensive, and I said no. And he said, pretend it's my midlife crisis. And indeed, it was because he would only live a few more years following that.

But today, it is not the [ Duchenne ] history while different in that the -- we've pushed things to the right. The mean age of loss of ambulation is in the early teens. Still by the age of 16 or 17, young men with Duchenne cannot lift their hands to their mouth. So they require full-time care by someone to achieve all the activities of daily living.

You can imagine the good news is the mean age of death is now in the 30s, but the type of care required to help these young men throughout their lifetime is an extraordinary burden for their families.

Next slide, please. When my sons were diagnosed, their genetic testing was not available, not widely available. In fact, the only thing that was known is a gene and a protein product. My sons were diagnosed by a biopsy in which they saw tissue that looked really terrible actually.

On biopsy, the cells were irregular in shape, and there was infiltration of fat and fibrous tissue. This is the same that we see today, and we can predict by the degree of fat that invades the tissue, what the predicted outcome of this young man. In fact, we can predict by the time this young man's tissue looks like what you're seeing on the right, the ability to move and the ability to walk will soon be unavailable to this young man.

So we still see this lack of dystrophin in this fatty infiltration of muscle that removes all muscle, not just skeletal muscle, but cardiac muscle has infiltration of fiber and fat as well as smooth muscle and the diaphragm. So by the time these children are teenagers, not only can they not walk and not lift their arms to their mouth, they also need help with breathing.

So most of the time, by the time their early teens, they are on BiPAP ventilation at night, to assist the diaphragm and removing carbon dioxide, which is really another burden in terms of this individual who has to sleep with a mask on to help them breathe.

Next slide, please. And back to the progression. We are happy in this world of Duchenne today that we have 8 therapies that are currently approved, but none of them halt progression. Parents and family members need really sophisticated treatments that are going to halt progression. This is what we're looking for. Replacement or expression of dystrophin is the highest need of these families.

We recognize that gene therapy offers a microdystrophin and that antisense Oligonucleotides are useful to some degree in our population. But the burden of those antisense are weekly infusions or monthly infusions that create extra burden for these children who not only have to have the burden of IV infusions frequently, but also are having difficulty because the smooth muscle in the veins makes really delivering any infusion some difficult, especially over time.

So we come back to this really highly unmet need. The patients and families want and need dystrophin expression. They are looking for better therapies that will halt progression. And we believe that we're looking at one opportunity now that could very well do that.

Thank you so much. Back to you, Cassie.

Thank you, Pat, for sharing your personal story and your perspective on where the field really stands today. So now I'd like to jump into telling you all a little bit more about PBGENE-DMD.

Next slide, please. As we've mentioned, PBGENE-DMD was designed to provide durable functional improvement for a broad population of people living with DMD. So the way PBGENE-DMD works is it's an AAV Vvector, one Vector that encodes 2 ARCUS nucleases.

And this is where we take advantage of the small size of ARCUS nucleases. They're encoded by about 1,000 bases of sequence, and we can comfortably fit both ARCUS nucleases into a single AAV viral genome. The ARCUS nucleases have been designed to recognize target sites surrounding exons 45 to 55 in the introns of the Duchenne gene -- the dystrophin gene.

These ARCUS nucleases, we designed them to be compatible with each other. When they cut DNA, they leave a 4 base pair overhang or a sticky end, and those overhangs have been designed to religate efficiently with high fidelity, allowing for excision of this hotspot region of the Duchenne gene between 45 and 55.

By removing this hotspot region of the dystrophin gene, you can restore the reading frame, allowing slicing from exons 44 to 56, resulting in a near full-length dystrophin protein expression. And as I mentioned, up to 60% of patients have pathogenic mutations in this region.

Next slide, please. We've designed PBGENE-DMD really with these principles in mind, just to reiterate, broadly applicable to DMD patients, the ability to improve muscle function over time, the ability to provide a long-term durable benefit and really that function being derived from a near full-length dystrophin protein.

And I'll tell you in a second that this protein is actually present in nature. It occurs in a subset of Becker Muscular Dystrophy patients. So it has known function in humans. And finally, a single administration, as Pat mentioned, really improving upon the burden that patients currently face with exon skippers.

And so together, in our view, these attributes of PBGENE-DMD position it to really be a potentially best-in-class therapeutic option for people living with Duchenne muscular dystrophy.

Next slide, please. When we talk about the dystrophin protein production that's made after administration of a therapeutic, the type of dystrophin really matters. At the top on this slide, you can see the full-length dystrophin protein. It's a very large protein. It's actually encoded by the largest gene in your body, and it contains a number of important functional domains. You can see those color coded here.

What dystrophin does in the muscle is it binds with a number of different proteins, providing integrity and stability to muscle tissue. And so the fuller length, the bigger the protein, really the better it can interact with those binding partners and provide stability within the muscle.

The protein that's made by PBGENE-DMD gene editing is shown in the middle. You can see this protein retains 80% of the full length wild-type dystrophin protein, representing a near full-length dystrophin. This is really in contrast to the microdystrophin approaches, and these are truncated versions of the dystrophin protein. And they're truncated because the need here is to fit within an AAV genome, a packaging capacity of an AAV genome.

And so they are much, much smaller than the full-length dystrophin protein, about 30% to 34% of full-length dystrophin. And we've known actually for a long time that these truncated dystrophins do not have the same type of functional capabilities as a fuller length dystrophin protein.

However, as I mentioned, the design was necessary to fit into the AAV vector. And so we've really sort of changed the approach here using an AAV to deliver ARCUS nucleases that allow us to edit at the DNA level, resulting in this near full-length dystrophin protein rather than delivering a microdystrophin within the AAV vector.

Next slide, please. I mentioned that the protein that's made by PBGENE-DMD has known function in humans, and that's really what's indicated here on this slide. On the left, this is the clinical presentation of a young man living with Duchenne muscular dystrophy. I think we've heard very clearly from Pat, this is a progressive disorder that unfortunately results in early death and loss of ambulation along the way. It's a very devastating progression for these boys with DMD.

On the right is a Becker muscular dystrophy patient who has this exact genotype, deletion of exons between 45 and 55. And so these boys, these patients express the protein that will be made by PBGENE-DMD. And we know that this protein works because their clinical presentation looks quite different than that of DMD kids who have out of frame mutations.

These Becker muscular dystrophy patients can live into their 60s or 70s. Many of them are mildly symptomatic or even potentially asymptomatic. They have normal muscle function ambulation for most of their life. Some of them do have cardiac involvement. Oftentimes, it's manageable with cardiac medications. And so what this tells us is this is proof of principle that the protein that's made by PBGENE-DMD has known function in humans. And so oftentimes, we say this is really the best test, the best animal model when you think about can this therapeutic approach be successful. We've already derisked the fact that the protein itself that is made has good function in humans.

We go to the next slide. So next then, we really think about what's the therapeutic goal as we think about this protein, how much protein could be beneficial for patients. And I want to highlight a study here showing that there's pretty big differences with even small amounts, about 5% or even less of dystrophin protein produced in terms of ambulation and survival.

And so what you're looking at are a couple of graphs that were pulled from this natural history study. Group A are individuals with no dystrophin expression. Group B are individuals with up to 5% dystrophin expression and Group C are individuals with more than 5% dystrophin expression. And you can see on these plots that these individuals who express any amount up to 5% dystrophin protein have significant improvements or significant duration in ambulation and better survival overall. And so this really supports a lower end threshold of about 5% expression of a near full-length dystrophin protein will be clinically beneficial for patients living with Duchenne muscular dystrophy. So on the lower end, we think as little as 5%, of course, more will be more in the context of providing dystrophin expression for DMD kids.

Next slide, please. One important difference as we think about the PBGENE-DMD approach as it relates to microdystrophin gene therapies is the use of the AAV in the context of the mechanism. So microdystrophin gene therapies, in this case, the microdystrophin protein itself is expressed from the AAV transgene.

What this means is that you have to have persistence of the AAV transgene in order to express that microdystrophin protein and have therapeutic effect. So as we know, in a progressive muscle wasting disorder, muscle cells will turn over and the AAV transgene can be lost over time.

And this will unfortunately correlate with loss of therapeutic benefit for patients treated with microdystrophin gene therapies. In the context of a gene editing approach like PBGENE-DMD, the effect is independent of the persistence of the AAV transgene. And this is because the AAV transgene or the AAV genome in this case, contains the editing machinery, the ARCUS nucleases, which can edit the DNA, correct at the DNA level and provide durable dystrophin expression even if the AAV is diluted over time.

And so this really comes down to the use of the AAV in the overall mechanism, both use AAV, but for really different purposes. And we expect that this mechanism of gene editing at the DNA level could lead to long-term therapeutic benefit.

Next slide, please. So now that we've covered really the approach and the science behind it, I'd like to spend some time talking about the preclinical data that we've generated to support the program.

Next slide, please. We won't have time to go through all of the data that was generated to support PBGENE-DMD. But summarized here is a capture of much of the safety and efficacy data, starting first on the safety side. I mentioned earlier that ARCUS nucleases have a number of advantages that we think make it an excellent choice for therapeutic gene editing for DMD.

This comes down to the cut, the 4-based pair overhang that allows for high-efficiency, high-frequency gene excision gene repair to allow for predictable outcomes after gene editing. We've conducted a long-term DMD mouse study in both DMD diseased animals as well as healthy animals and found that PBGENE-DMD has been well tolerated in both healthy and disease animals for greater than 9 months.

In these long-term durability studies in the disease animals, we were able to actually visualize improvements within the muscle pathology, the muscle histology after treatment with PBGENE-DMD. And of course, when thinking about a gene editing approach, specificity of the nucleases is very important, characterizing and understanding the effects of editing at the DNA level that could have long-term safety implications is essential. And at Precision, we take a very comprehensive, robust approach to characterizing the specificity and safety of our nucleases I'm happy to share that our nucleases utilized in this study showed no off-target editing in a non-human primate genome that conserved off-target sites, and we'll talk a little bit more about that.

And in human cells showed no effect on endogenous gene expression. On the efficacy side, we've generated, as I've mentioned, long-term mouse data in a DMD disease mouse model out to 9 months. And what we found in that mouse model was the ability of PBGENE-DMD to increase dystrophin protein over time, increase the number of dystrophin-positive myofibers over time and both of those molecular markers in the tissue led to improvements in force output in these DMD mice.

And so it was really important to us at Precision to demonstrate that at the molecular level, we could correlate that with significant functional improvements in this DMD disease mouse model.

We've demonstrated the ability to edit satellite stem cells in the context of this DMD disease mouse model. And I'm going to share some new data today demonstrating that when we compare AAV transduction levels or the amount of AAV that gets to tissues between mice and non-human primates, we can see equivalent or even better levels of AAV transduction in non-human primates, suggesting that now as we look to translate our mouse data to human clinical data, we've demonstrated that it holds through primates.

I think that's a really important step as we move into our clinical study.

Next slide, please. So really to summarize the findings of the preclinical data, what we've demonstrated is that we can restore dystrophin protein in tissues across skeletal muscle, cardiac muscle and diaphragm and that this ability to increase dystrophin protein over time can help reestablish structural integrity of muscle fibers within these mice.

By improving the stability and integrity of muscle fibers, we can actually visualize that through muscle integrity biomarkers, both at the histology level and the tissue as well as in blood biomarkers like CK improvements after treatment with PBGENE-DMD. And by improving the muscle at the molecular level, at the tissue level, we've also demonstrated that, that correlates with increased force output, increased functional benefit in these mice to near wild-type levels comparing to healthy mice.

And so restoring this near full-length dystrophin protein at the DNA level and addressing the underlying root cause of muscle degeneration in DMD has led to improvements in muscle function, restored muscle function in mice.

Next slide, please. So that was really a summary of some of the preclinical data. I'd like to touch on what we view as some of the most impactful data as we think about bridging now to our human study.

Next slide, please. These are the functional data from the long-term mouse study that I've been discussing. On the left in the light gray bars are untreated disease DMD mice. And you can see we've normalized at each of these time frames 3, 6 and 9 months for force output in the muscle. In the darker gray, these are untreated healthy mice. And so this is really demonstrating the loss of force output in the disease animals compared to healthy mice.

You can see a significant difference at each of these time points in healthy animals versus disease animals. On the right are PBGENE-DMD treated groups. The first group in the darker blue is a A1 A14 dosed cohort -- and the lighter blue on the right is a 3x 10 to the 13 viral genomes per kilogram group, the slightly lower dose.

You can see at both of these dose levels, we achieved significant improvements in the ability of these mice to exert force after treatment with PBGENE-DMD. As I mentioned, this force output actually grows over time similar to the healthy animals, but similar levels observed between these 2 dose levels in terms of skeletal muscle function.

Go to the next slide, please. Now as we think of translating that effect from mice into non-human primates, unfortunately, we do not have a DMD nonhuman primate model. And so many of the efficacy endpoints like dystrophin protein expression or force output are not measurable in non-human primates.

What we can look at is AAV transduction or how much AAV gets to these tissues. We know that the first important step of the mechanism for PBGENE-DMD is being able to get the AAV where it needs to go in order to express the ARCUS nucleases and edit at the DNA level.

And so what you're looking at here is across skeletal muscle diaphragm and heart. The green bars are the non-human primate AAV transduction levels and the gray bars represent AAV transduction levels in mice. Each of these normalized to 100% to be able to compare to the non-human primate.

What you can see is across all of these important and essential tissues, muscle groups, we see as good or potentially even better AAV biodistribution in the non-human primate samples compared to the mouse samples. And so this suggests that the effect that we've seen in mice can be translated to non-human primates based on the fact that we can get the AAV there in equivalent or even better quantities. And this really supports as we see it, the ability to translate the data from the DMD mouse model as we move into our human study.

Next slide, please. We've also conducted a number of nonclinical studies, both on safety and efficacy to really help inform selection of our clinical dose. So I want to walk through the data that we've really utilized to support a 1x 10 to the 14 viral genomes per kilogram dose for PBGENE-DMD for the clinical study.

On the safety side, we've evaluated PBGENE-DMD and GLP studies in both that DMD disease mouse model as well as in non-human primates. We observed at this dose level, no adverse safety findings at the completion of these 2 GLP studies, again, in a DMD mouse model and in healthy non-human primates. We looked at conserved potential off-target sites.

I mentioned earlier, specificity for a gene editing approach is essential to be able to robustly characterize. One of the ways in which we did this was to look at off-target sites that were identified as potential off-target sites for human, look at them in the context of the non-human primate genome.

We looked at their sides in the context of our GLP study and found no off-target entity at any of these potential off-target sites above background, suggesting at therapeutically relevant doses, we did not observe off-target editing for PBGeneDMD at these conserved off-target sites.

On the efficacy side, I mentioned earlier and I demonstrated through our force output data, we see similar levels of dystrophin protein expression and functional improvements in skeletal muscle in the DMD disease mouse model at both a 3e13 dose and a 1e14 dose.

So very similar levels of efficacy in the skeletal muscle. In the heart, we also demonstrated the ability to achieve dystrophin protein expression and percent positive dystrophin fibers at similar levels between these 2 dose levels. Where we really start to see differentiation between these 2 dose levels is in the diaphragm. In the diaphragm, we see dose-dependent increases in both dystrophin protein expression as well as percent positive dystrophin myofibers. And we know that the diaphragm is an essential tissue for long-term prognosis for these kids.

These kids with DMD die from cardiac or respiratory failure. And so the ability to reach the diaphragm we view as really important when selecting this clinical dose. And because you can only dose an AAV one time, it is imperative that you select a dose that can be both safe and efficacious.

And so for these reasons, considering both our safety evaluation and our efficacy evaluations, we have selected 1x 10 to the 14 viral genomes per kilogram of PBGENE-DMD for a clinical dose with the goal of providing both a safe and efficacious dose for these patients.

Next slide, please. When we think about safety, one of the most important considerations is the ability to manufacture high-quality AAV. So I want to spend a couple of minutes talking about the work that we've done at Precision to produce appropriately high-quality AAV for our clinical study.

Next slide, please. In any manufacturing process to produce AAV, both full capsids and empty capsids are present within a batch of AAV. What this means is that the viral capsid proteins are present. In some of those capsids, the full AAV viral genome is also present. We call that a full capsid.

And in sometimes a viral genome is not present. We call those an empty capsid. And in the manufacturing process of AAV, you get both. What's important is that you maximize the ratio of full capsids compared to empty capsids. And so for illustrative purposes on the right here, you can see up 90% when we talk about a 90% full capsid batch, what does that look like?

That means 90% of the AAV capsids contain the full-length AAV genome, 10% contain truncated or empty capsids. That's in contrast here illustratively to a 50% full capsid batch where there is much more empty capsids present than full capsids. What we've learned as an AAV field over the last several years is that this full capsid ratio really matters for the overall tolerability and efficacy of AAV products, maximizing full capsid ratios is really essential for delivering a safe and efficacious AAV gene therapy, whether that's used in the context of a microdystrophin or in the context of a gene editor.

I'm really proud of the work that we've done in our CMC team at Precision to be able to produce clinical trial material that has 90% full capsids to date.

On the next slide, please. So why does this matter? When you think about how AAVs are dosed, they're dosed on how many full capsids are present in the batch. So we measure the full capsids, we set the titer based on that, and that's what is dosed based on your clinical dose.

So those empty capsids, while they aren't considered in the dose calculation, they do come along with dosing AAVs. And so you can see when the empty capsid ratio is 50% compared to 90 -- I'm sorry, the full capsid ratio is 50% compared to a 90%. The total capsid dose really changes. In the context of PBGENE-DMD with a 90% full capsid ratio, you're looking at a capsid dose of just slightly above what your viral genome dose is versus a 50% full would have a lot more empty capsids, a much higher capsid dose, which could lead to poor tolerability clinically.

So I'm really excited that at Precision, we've developed a very robust manufacturing process for making high-quality AAV. And in our view, that's really essential for delivering both a safe and efficacious product for patients.

Next slide, please. So with that, it's my privilege really to hand it off to Dr. Panda, who is the Director of the Comprehensive Neuromuscular Program at Arkansas Children's Hospital and really a leading physician neuromuscular, pediatric neurologist in this field. So thank you, Dr. Panda, so much for joining us.

Thank you, Cassie. Thank you, everyone, and good morning. Next slide, please. So before we get into FUNCTION-DMD study, I just want to kind of set some expectations. As we all know about DMD, Pat beautifully talked about the unmet needs with some personal touch. I also want to kind of set expectations in terms of when these individuals with DMD enter clinical trials.

Sometimes there are clinical signs and symptoms that comes with DMD that can complicate interpretation of clinical data. So many of these individuals experience falls, gait issues, toe walking. They're all part of natural history of Duchenne.

Some of them can also have behavioral problems, speech delays, cognitive issues, et cetera. And then if you look at the lab values in biomarkers in the serum, as we all know, creatine kinase is highly elevated. And also liver enzymes like AST and ALT are also elevated because it's also coming from the muscle, not just specific to liver.

And then they're also on background steroids, which can cause some side effects as well. So it is important to keep these things in mind when we evaluate and interpret clinical trial data to understand the efficacy and safety of the investigational products. It's applicable for any clinical trial that we do as an investigator.

Next slide, please. All right. Now let's jump into FUNCTION-DMD study. This is a Phase I/II study evaluating the safety of PBGENE-DMD. As we discussed before, the dose is 1e14 vector genomes per kilogram, and the study will enroll ambulatory boys with DMD aged 2 to 7 years with pathogenic variants contained within exons 45 through 55.

There's Part 1 that evaluate an initial safety cohort of 3 participants with approximately 8 weeks gap in between each one. Once the data is available from these initial 3 participants, then they would be expanded for more enrolling up to 15 total participants between this Part 1 and Part 2.

Next slide, please. As discussed before, the selected dose here is 1e14 vector genomes per kilogram, which is a dose that is lower than most of the microdystrophin studies that are either currently ongoing or previously in development, including about 30% lower than this currently approved product.

Next slide. All right the primary endpoint for this Phase I/II studies of course, is a Phase I/II it's safety, but there's also a number of secondary and exploratory endpoints that have been incorporated to evaluate both safety and efficacy of PBGENE-DMD. And the first one is the dystrophin protein expression, which will be evaluated in muscle biopsies taken at weeks 12 and 52 post dosing.

There's all a number of age-appropriate functional and developmental endpoints that will be collected with the goal of trying to correlate these functional measures with the dystrophin expression if possible. Now this study has been designed with a clear clinical and regulatory path to approval with the potential to utilize an FDA accelerated approval pathway with biomarker endpoints, particularly in the light of unmet need that Pat spoke to earlier.

Next slide, please. Here, kind of looking into the key inclusion criteria as shown here, about ages 2 to 7 with DMD mutations contained within exon 45 and 55. Of course, there are baseline more assessments, the criteria that they're dependent on the age of the participant and the screening, and they should be able to complete that.

They should be on corticosteroids at study entry, have to be on stable dose for at least 12 weeks prior to dosing, again, standard for most of the clinical trials in this space. Now of course, in accordance with the guidance from FDA, all patients must be -- or all participants must be willing to participate in the long-term follow-up study.

Also to highlight here, participants who are on exon-skipping therapies are able to enroll into the study after a 6-month washout period. And of course, who have previously received any AAV-based therapy will not be eligible for this study.

Next slide. As a Phase I safety is a top priority for the study. And for that reason, a comprehensive immunosuodulation regimen will be utilized in this study, close to the proximity of PBGENE-DMD administration. And of course, this immunomodulator regimen has been developed in consultation with many DMD physicians as well as other experts who have tons of experience at AAV-based clinical trials as well as therapies.

And again, potentially to mitigate known AAV-related side effects. Of course, Eculizumab will be employed to mitigate the complement activation. Everyone will also be on Steroids on top of their standard of care steroids to prevent systemic inflammation as well as Sirolimus.

Now there will be frequent monitoring to help identify and mitigate any complications that may arise after the infusion as well. Now together, this safety monitoring plan as well as the immune modulation regimen has been designed with patient safety at the forefront.

Next slide. Now I think Cassie had already mentioned there are a few sites that will be enrolling soon. And of course, this is being conducted at a world-class site. The sites have extensive experience in both treating patients and individuals with DMD as well as participating in clinical trials and utilizing AAV-based gene therapies.

And these sites have demonstrated high-quality care as evidenced by affiliation with PPMD, MDA as well as their consistent publications and other research that's been happening in these sites. With that, I will pass this on to Alex for closing remarks.

Thank you.

Thanks, Dr. Panda, appreciate it. Next slide, please. So thank you very much for the introduction and overview of the FUNCTION-DMD trial. Just to highlight some of the upcoming events and some recent progress. As mentioned, we had IND approval in early Q1 2026.

The IRB process and site activation process is underway now. We've been trying to do all that we can to expedite that so that we can start dosing patients as soon as possible. We do expect to have data from multiple patients anticipated by year-end 2026, targeting 3 to 5 patients for enrollment this year.

And in that data update towards the end of the year, we'll definitely have a chance to see safety data. We'll also see early efficacy data that we're going to assess by percentage of near full-length dystrophin. That's the functional dystrophin that we're creating with our gene edit, and we're going to be looking at muscle biopsies at 12 weeks.

We'll also be looking at other functional assessments with wearables and other tools that we have available to assess the patients. You know that we have -- as I mentioned at the beginning, we have some updates coming throughout the year on the PBGENE-HBV program, including updates on Cohorts 3, 4 and 5 as well as progress towards getting patients to where we can discontinue nucleoside analogs and begin Part 2 of the trial.

We also have a cash runway that's through 2028 with $137 million at year-end. We believe that, that is enough cash runway to carry us through a lot of clinical milestones for both of these programs. And in the case of the PBGENE-DMD program, assuming that we have success and good interactions with FDA, we could be in a pivotal trial in this 2028 period.

So with that, we're happy to open up the call to questions. And I'll turn it over to Tara to see if there are any questions on the line.

Great. Thanks Alex. [Operator Instructions] So our first question comes from Maury Raycroft at Jefferies.

Maybe just starting off with a few clarification questions. For the functional assessments, if you can talk more about what functional assessments you're going to be looking at in the time course for when you're going to be doing those assessments? And then will you be using a natural history study comparator for context for that?

Okay. Great. Thanks very much, Maury. I really appreciate the question. We've been studying this field and doing a lot of work and having many discussions with investigators and KOLs throughout the U.S., also with people like Pat Furlong and others who are in the patient and parent community, trying to understand the endpoints better.

Look, I think while we are the first gene editing approach to target Duchenne muscular dystrophy, we're not the first drug that's gone through the regulatory and clinical pathway. So we've definitely learned a lot in that experience.

We've learned a lot, as Dr. Panda talked about in terms of things that we're doing in the IMR side for safety, but we've also learned a lot about the efficacy side. So maybe I'll ask Cassie to start on the efficacy functional assessments we're doing, and then I'll ask Dr. Panda to chime in as well.

Of course, yes. Thank you for the question, Maury. So in terms of endpoints to speak to efficacy, we do plan to utilize biopsy data as sort of the first indicator of proof of mechanism. And so we will be collecting biopsies from patients at 3 months and 12 months post treatment. And as we saw in our preclinical data, we expect that perhaps the dystrophin protein expression will actually increase over time, really given the stability of the protein that's being produced as well as the potential contribution from satellite cells.

And so as we think about efficacy data, I think that the dystrophin protein expression is probably represents the earliest types of efficacy data that we may start to see from this study. We, of course, anticipate correlating the biomarker data with functional improvements. And so those functional improvements, there's a whole host, a very comprehensive list of functional assessments that patients will be completing while they're on study.

As Dr. Panda mentioned, our inclusion criteria span patients from ages 2 to 7. And as you can imagine, the functional abilities of boys within those ranges is quite different as they grow and age and continue to develop. And so what we've done in our protocol is included age-appropriate assessments depending on the age of the patient at dosing and enrollment.

So there are functional endpoints that are going to be more appropriate in the younger population, such as the Bayleys assessment. We also are very interested in following the Stride Velocity data very closely as that field continues to develop or that test continues to develop more clinical experience.

And then as you get into the older ages, the 4- to 7-year-olds, time tests, those may be available to some degree in some of the younger patients that time test as well as North Star Ambulatory and a number of different functional assessments that are age appropriate. And so I think we will continue to collect those functional endpoints and look to correlate them with biomarker data.

And in this Phase I/II study, we're taking a pretty comprehensive approach with the goal of utilizing these early patients as part of an accelerated approval path later and really better defining what the efficacy endpoints will be as we continue to progress in the study.

And so I think we've really taken a comprehensive approach built on the experience, as Alex mentioned, of the clinical studies that have come before us and of course, working with really experienced investigators like Dr. Panda to really understand what's feasible in this population.

Dr. Panda. Okay, please.

Thank you. I think that we actually listed some of the assessments some of the slides, NSAA time to stand as well as some -- the Stride Velocity and a couple of in the younger boys. To kind of answer the natural history, I know there's no plans as of now yet, but I do think the field is moving towards comparing the from a efficacy standpoint with proper control natural history samples, which is I think, which is totally acceptable in this rare disease population rather than getting into a placebo arm or anything like that. But of course, that's a discussion later on with the regulators. But I think as a community, we are accepting natural history comparisons.

Got it. That's all really helpful. Maybe one other question just on -- there's a lot of discussion right now on accelerated approval path. What are your latest thoughts on that and what you need to show relative to other companies pursuing a microdystrophin-based approach?

Yes. Great. It's a good question, Maury, in terms of accelerated pathways. Obviously, this is an evolving landscape. And we have had very good discussions with FDA, good feedback from them all the way back from our pre-IND meeting throughout the IND process. And we look forward to continuing that discussion with them as we generate data.

So we anticipate, as I said, having data from multiple patients by the end of this year. And then as we collect more data, probably if we get more than 5 patients, 5 to 10, 12 patients, that will be a time for us to go back to the FDA and talk about the data that we have to show them the biopsy data, the functional endpoints that we're measuring as well as the safety and get a lot more direct feedback from them about what is the trial design going forward from a pivotal standpoint. Cassie, I don't know if you have anything you'd like to add to that?

Yes. I would just reiterate that we think with a well-designed study that's particularly in a population like this, where you heard from Pat and from Dr. Panda that the unmet need is immense in DMD. And so I think in our view, the accelerated approval pathway will be available with a robust data set.

So correlating that biomarker data with functional improvement is top of mind for us. We expect to be able to do that to demonstrate that dystrophin protein expression, this near full-length dystrophin protein expression correlates with functional improvements for patients. And with that demonstration in hand, I think that represents really a meaningful therapeutic approach for DMD patients and that we look forward to continuing to work with FDA as well as the community, the DMD community to bring this therapy to patients.

Yes. So our next question comes from Ry Forseth at Guggenheim.

This is Ry from Debjit's team. Maybe we could start off, could you give us some insight into the algorithm that led the team to the comprehensive IMR being implemented? And to what extent was this a function of the 10^14 vg per kilogram dose versus a lower dose, something like 1.3x10^13?

Yes. Great. Thanks very much for the question, Ry. Look, we've done a lot of research here and a lot of work with investigators in choosing the dose. We know that from talking to families and from clinicians that really we need to go into this trial with a dose that's effective and safe. I think that it's a challenge if patients and their families are not convinced that this is their best shot to get to a functional benefit from treatment since we are using AAV, it does really impact the choices that they can make in the future as well. So that was very much front and center in our mind in choosing the dose. And I think it was well informed by the data that Cassie and our team have generated on the preclinical models.

Cassie, let me let you talk to some of that data, please.

Of course, yes. So I think, as Alex mentioned, really taking the feedback that we've heard from physicians in the space as well as the patient and family advocacy groups, selecting our best foot forward dose was something we really prioritized. We believe the 1e14 dose level represents that for the reasons I outlined, really driven by the ability to get better distribution, better dystrophin expression in the diaphragm, knowing that, that's an essential tissue for kids with DMD. And so that really led to the decision on the dose. In terms of the IMR regimen, I think, again, you only have one opportunity to dose an AAV in these kids, and you want to make that experience efficacious, as we just talked about, but also safe. And so what we've seen from others who've gone before us is a shift from a less aggressive immunosuppression regimen to a more comprehensive immunosuppression regimen really to provide the ability to have a safe dosing of the product.

And so I think we viewed that not necessarily as an effect of the dose selection, but just as a principle of deliver a safe AAV dose. And so it was really working with experienced clinicians who utilized these types of immunomodulation therapies before like Dr. Panda to design the immunosuppression regimen in a way that balanced the risks of immunosuppression as well as the risks of AAV gene therapy, really with the goal of safety top of mind.

And again, maybe I'll ask Dr. Panda, if you could please speak to your experience with immunomodulation regimens in the context of AAV dosing.

Sure. I think from an AAV dosing standpoint, the safety is the priority, right? I think the regimen that we're using here is more comprehensive sort of attacking all different immune responses, different types of immune responses that you could expect with any of the AAV-based dosing, like eculizumab for complement, sirolimus for what we call T cell-mediated immunity. And with all of these we have seen these come up with this AAV, right, complement activation or what we call TMA or kidney issues with that or liver injury, the T cell that responds. So I think overall, we discussed a lot in the field is, again, moving towards this comprehensive immunosuppressive regimen to sort of attack all of these different components of immune system to hopefully prevent these side effects. And we have experience using all of these in different clinical trials as well as in the clinical settings with AAV-based therapies.

Thanks, Dr. Panda. Pat, do you want to comment at all on this? I mean, from the parent perspective about dose selection?

Sure. Thank you for the question. I think for parents who have participated in gene therapy studies with the dose escalation, it does feel like if we're getting to a higher dose that this -- joining a study with a lower dose doesn't feel that you're doing the best or the right trial, as parents often describe it. Having a low dose first does not feel like you're going to achieve the same result if a company wants to go to a higher dose. So I think achieving a single dose in a trial is really important.

In terms of the IMR regimen, we, as parents are very aware of acute liver injury that we've seen in gene therapy studies and toxicities. And I think having the use of eculizumab and sirolimus as has been demonstrated in other studies and in other diseases gives us really the satisfaction that we're doing our very best to keep these children safe. So I think this is exactly the right approach to go forward with PBGENE.

Can I add one more thing towards the -- again, the 2 different doses? I know we had a lot of discussions at the beginning. I do agree with Pat because we've had experience in the past with -- and even enrolling participants into the study, if you have 2 different doses, it automatically sets the mindset of low versus high dose. And it is not fair for someone to go to this "low dose" and what if that doesn't work or that what if it is less efficacious than the second dose level and it just takes up the opportunity. And I think I appreciate you guys and actually after all the discussions, taking one dose that would be to test in the trial.

And I think for these young boys, I mean, they know that muscle is lost and muscle can -- once lost can't be recovered. So the idea is you need to get to the dose that you think is going to be therapeutic and deliver the best possible option. This is a really difficult heartbreaking disease to watch is progression and giving a low dose does not give the confidence to patients and families that you are achieving the best possible outcome for this child.

Thank you, Pat. Thank you, Dr. Panda. Ry, do you have any other questions?

Yes. That was really insightful. Thank you all for your input there. Maybe 2 preclinical questions. Is there a minimal threshold of satellite cell editing you anticipate you'd need for long-term durability? And does that picture change as you go across different muscle types?

Okay. Great. Why don't I hand this over to Cassie.

Sure. Yes. Thanks for the question, Ry. I think it's a good question, and it's a challenging question to answer exactly what is that threshold of necessary satellite cell editing. What we're encouraged by in our preclinical data is that we are seeing increased dystrophin protein expression and increase in the number of dystrophin-positive myofibers over time and that, that has correlated with an increase in functional outcome. And so I think most importantly, when you think about how do you provide clinical benefit for these patients is thinking about kind of the end goal. The end goal here is to provide meaningful functional improvement. And we've demonstrated that at the level of editing we're achieving across these tissues, we can achieve increases in dystrophin protein, and we can achieve increases in force output.

And so I think that's really the most important question here is, are you getting sufficient enough biodistribution to drive that necessary amount of protein, necessary number of cells expressing the protein and functional benefit. And so that's how I think about it is that you really start with the end goal in mind and focus on that functional improvement as the primary driver of how you think about setting that dose.

And maybe just one last question, if I may. Given that your dystrophin construct results from a cut between exon 44 and 45, do you retain alpha dystrophin and nNOS binding? And sort of what's your position on the importance of recruiting that factor in your construct?

Yes. So we have looked at a number of different binding partners for the dystrophin protein preclinically. We do anticipate based on both published data and preclinical data that we will be able to recruit nNOS and have functional signaling through that. And that really speaks to, I think, the importance of the near full-length dystrophin protein. We know that the binding partners that form that complex, all of which have important functions for muscle integrity and muscle strength. And so that really, I think, supports the differentiation as you think about this near full-length dystrophin protein that you can retain a number of those important binding domains, important binding partners to really provide better function from that dystrophin protein. So I think it's a great question, and it is something that we've looked at and has been published with this 45/55 internal exon deletion that a number of those protein binding partners are still present.

Yes. So our next question comes from Catherine Novack at Jones Trading.

Just curious about the heterogeneity of this patient population. I mean we know that baseline dystrophin phenotype vary depending on which exon is effective. So is baseline dystrophin expression part of the inclusion/exclusion criteria? Or do you anticipate that it would be fairly similar for patients with mutations in exons 45 to 55?

Cass, why don't I let you take that one?

Sure. So we will be taking baseline biopsies to assess baseline dystrophin protein expression in each individual patient. And to your point, I think we view that as important baseline data to understand the potential therapeutic benefit after dosing PBGENE-DMD. There may be some heterogeneity within patients or across patients with how much baseline dystrophin is produced. However, I think when you look across all patients, not just patients with mutations in this region, there is more variability with mutations in other parts of the dystrophin gene where internal skipping can occur. And so I expect we won't see a whole lot of variation compared to the larger patient segment within these patients who have mutations between exons 45 and 55 at baseline, but it is something we'll be measuring and assessing.

Dr. Panda from a clinical perspective, what you -- what have you seen in this regard?

Yes. I agree with Cassie. I think almost majority of them would have -- especially with the mutations within this region would have the dystrophin expression of less than 3% or so that we typically see in the DMD population. Of course, the only thing we have to be careful about is we are not including any in-frame deletions that would kind of predict a milder or Becker phenotype.

Got it. And then just thinking about how we should be interpreting the 12-week dystrophin data when we see initial post-treatment biopsies. Should we be thinking about this more in terms of a fold improvement over baseline? Or is there a threshold that you anticipate just given that you are seeing increasing dystrophin expression over time and 12 weeks really be the starting point, how should we be thinking about interpreting the initial readout?

Yes. I think the way that I think about it is that we -- as we've outlined through some of the published literature, we think as little as about 5% from a threshold perspective, about 5% of this near full-length dystrophin protein could be clinically beneficial for patients. And so as we think about sort of the North Star for what we hope to achieve, I think that's really kind of starts to set the lower limit. I think we're seeing some exciting data from some of the more recent exon skipping therapies, including Dyne, where they've correlated about 2.5% dystrophin protein expression, again, of a near full-length dystrophin with functional benefit.

And so to me, as we think about how do we assess that 3-month biopsy data, there's a couple of really important considerations. First is there will be a temptation to compare to microdystrophin gene therapies. And I think that, that's really an apples versus Volkswagen's comparison, if you will, because the proteins are just so different, as we've outlined here, a much different protein with known differences in terms of function, known differences in terms of their ability to provide stability within the muscle. And so I think it's important that when we think about what does success look like for PBGENE-DMD, we assess that on the mechanism of PBGENE-DMD. And I think that's really where that 5% threshold. Of course, what we've seen preclinically associated with function is closer to 20%, 25% dystrophin protein expression in mice.

And so I think more dystrophin will be better in this context. But I think of it from what do we know about the threshold that could lead to clinical benefit. And as we compare to more appropriate clinical data coming out of clinical studies like exon skippers, where the protein is more similar to the protein being made by PBGENE-DMD, that's how I start to think about how to assess that 3-month biopsy data. Of course, we're collecting the 12-month biopsy data, hoping to recapitulate what we've seen in preclinical models where that dystrophin expression grows over time, potentially contributing to improved function over time as well. So I think that's really how we think of what success could look like in that 3-month biopsy sample.

Got it. And just to clarify, these thresholds, is that citing muscle content unadjusted dystrophin? I know it's been common for exon skippers to be reporting adjusted and unadjusted numbers.

Yes. The natural history paper that's cited there is not a muscle content adjusted number.

Our next question comes from Patrick Trucchio at H.C. Wainwright.

Just a couple of follow-up questions from us. The first is just given the recent AAV safety events in DMD, what gives you confidence specifically that your approach can deliver a differentiated safety profile? And I guess related, how meaningful is the greater than 90% full capsid ratio in reducing toxicity versus some of these peer programs?

Great. Thanks for the question, Patrick. Look, I think that you touched on part of why we have a lot of confidence in the safety of the program, that is the product itself. is high quality and has a high capsid fill ratio. I think also look at -- we've done the work in terms of nonhuman primate studies to demonstrate safety. We've got experience with this ARCUS platform, ample experience in terms of specificity and safety as well that have been generated over time. And I think that really adds to our confidence in the safety of the program.

Let me let Cassie address your other question.

Yes. I think when I think about how PBGENE and DMD is different than microdystrophins, one of the important points, as we mentioned earlier, is that the effect of PBGENE-DMD, if you get to the cell, you edit at the DNA level, that edit can persist beyond the presence of the AAV genome. And that's not true in the context of gene therapies, whether microdystrophins or other gene therapies, the AAV genome must persist in order for the transgene to be expressed in order for there to be therapeutic benefit.

And so when you think about it from a mechanistic perspective, that can really drive how you think about dosing these. As Dr. Panda pointed out, many of the gene therapy trials in the DMD space have utilized doses that exceed the 1e14 viral genomes per kilogram dose level. And that's really where a number of these unfortunate toxicities have arisen. And so I think in our view, utilizing the mechanism of gene editing by employing a gene editing mechanism, you can actually potentially dose the AAV lower because you don't need to stack AAV genomes long term. You need to get to the cell, you need to edit the cell, but you don't need to stack up AAV genomes to try to persist long term.

And so that's really, I think, an important consideration when you think about how does AAV dose drive -- how does it work in combination with the mechanism of the drug and how does it contribute to the overall safety profile. In terms of the fill capsid ratio, this is something that I think the field has really come to understand better that it's really the presence of capsids that can drive a number of the immune responses that Dr. Panda talked about earlier. and that if you have a lower fill capsid ratio, you will have more capsids present. And so a 1e14 dose at a 50% full is actually a 2e14 capsid dose, which is twice as much. And that's a meaningful difference in terms of the AAV dose. And so I think we know that the manufacturing process and the ability to produce full capsids at high frequency can really help control the overall tolerability. I think that's starting to be better understood in the field. There's a number of newer publications around that. And so I think that is a really important point as we think about planning for safety on this study. Dr. Panda, I invite you to share your experience as well on the clinical side.

Thank you. I was going to add, from a pure clinician perspective, right, we do -- Cassie touched on the manufacturing process. We talked about immunosuppression. All of the measures that we put in place to -- from a safety standpoint, that doesn't negate the fact that the safety is going to be clean. You're not going to have any side effects at all. I think we need to sort of set our expectations. Some side effects can still happen on top of all of this. We have seen this with other clinical trials, the AAV-based programs. I think it is extremely important to set the expectations upfront. I am still expecting -- it is still expected or I don't want to say normal to have some side effects related to AAV or anything. So I think it's important that we set the expectations upfront with the families. So not going into the program saying that you're not going to see anything -- any side effects.

Yes. Pat, can you maybe comment on patients and parents and their awareness of safety and adverse events from AAV and how they generally think about them?

Sure. Thanks, Alex. I think we've learned a lot over time. PPMD has conducted studies in terms of benefit risk of these patients. And the first prior to the initiation of studies, there was a high tolerance for risk, assuming that there would be no side effects. Over time, we learned that there needs to be greater safety. And I think using sirolimus as well as eculizumab has really helped us understand the need for safety and immune suppression. But I think the other side of this is what we've learned is that in an older nonambulatory population, there may be some additional fragility and maybe a high viral load causes increased fragility. So we are very well aware of dosing of these viruses and also the capsid and the empty capsid risk.

So I think we've learned a lot over time, and we're very enthusiastic again, remaining enthusiastic about this opportunity and also a lower dose. So I think that we're well informed, well appreciate the need for safety and very committed to this space. So I do think we are an informed group and recognize the opportunity -- the challenges of AAV gene therapy, but also the opportunity at lower doses to treat the entire population.

Just a couple of follow-up questions on the function DMD program. So I'm wondering what would trigger expansion to Part 2? Is this purely safety or a combination of safety and dystrophin threshold? And is that 5% expression that we discussed earlier that we should be looking for here? And how should we be thinking about scaling dystrophin expression as patients grow and muscle mass increases over time?

Yes. Thanks, Patrick. So look, I think the goal is to definitely have safety. That's the primary endpoint in this trial is on safety. The main efficacy endpoint we're looking at is the dystrophin expression at 3 months. And then obviously, the other efficacy measures that we've talked about. I think that will all create a package that will take us forward for an FDA discussion, which could lead to the expansion phase of the trial. But I think we're very optimistic that we've got the right dose and the right IMR regimen to support the safety and to allow PBGENE-DMD to do its work to create that functional improvement over time. Cassie, anything to add there?

Yes. I'll just -- I'll note that in the preclinical data, we utilized juvenile mice to try to anticipate that growth in muscle mass over time and to represent the pediatric population, the correct age population that we anticipated for our clinical study. And even in that context of dosing juvenile mice, we do see that dystrophin protein expression and percent positive dystrophin cells grow over time. And so I think we've designed the preclinical package to try to anticipate the clinical study and minimize the gap that exists always between preclinical and the clinical study. And so I think we've designed that with that particular component in mind.

Okay. Great. Thank you, Cassie. Tara, do we have any other questions on the call?

I believe that's it for analysts. I'll turn it over to Naresh to read any questions that came over the webcast.

Thank you, Tara.

Thank you, Tara. We have a few questions that have come in through text. The first one for Dr. Panda. What type of patients do you see in your clinic? Are they coming from the U.S. region locally? Or are you also seeing international patients that are enrolling in studies and coming for treatment?

Sure. So I follow more than 120, 130 patients with DMD, and they come from -- mostly from Arkansas, but we have patients from all over the country and also international patients that come and see us in the clinic as well as enroll in the clinical trials. Like I was telling before, we have families coming from India, Chile, Mexico, Poland, Australia, Middle Eastern countries, several international patients as well as from all over the country here, too.

Next question here is maybe for Alex. Could you comment on Precision's partnering strategy for PBGENE-DMD as it develops from Phase I through pivotal? How does the company think about it?

Yes. Great. Thank you for the question. Look, I think that we're very, very optimistic about this program. This is a program that Precision can fully execute on its own. Obviously, the Phase I trial is getting ready to kick off, and so we can execute this part of the trial. But thanks to the equity raise that we did in November, we now have the cash to also see this program through additional development, including getting into the pivotal trial for PBGENE and DMD. So we are well resourced for this. It's also the size of the disease that Precision Biosciences can manage on our own. And look, I can't speak to what the future will say in terms of how many other people might come to us with an interest in partnering for this program, but Precision has the ability to take this program forward to pivotal trial.

Naresh, any other questions?

That's about it. Thank you.

Great. So maybe in closing, I just want to reiterate a couple of the points that were my take-homes in this call. Number one, time is function in the children who have DMD with longer time, they lose function over time. And as Pat pointed out, there are no currently available therapies that halt the progression of DMD. So it's a really important opportunity. And I think that with PBGENE-DMD, we have the right approach, and that is an excision approach that addresses mutations between exon 45 and 55. That's the hotspot region. We believe, as you've heard from Cassie and from Dr. Panda, we have the right dose. We have the right IMR regimen to ensure safety as well. And we also have the right clinical partners and KOLs and investigators such as Dr. Panda as well as patient advocacy groups like Pat Furlong to help us manage this trial forward.

And we look forward to having more data. We hope you share our enthusiasm for this program based on all that you've heard today and the fact that we have the opportunity to really help children living with Duchenne muscular dystrophy with PBGENE and DMD.

Thank you all very much for your time to Dr. Panda and to Pat, thank you very much for graciously spending the last 90 minutes with us. We really appreciate your input and look forward to working with you in the future. Thank you all.

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Precision BioSciences AASLD update call. [Operator Instructions]

It is now my pleasure to turn the call over to Naresh Tanna, Head of Investor Relations. The floor is yours.

Thank you, Tina. Good morning, everyone, and welcome to the Precision BioSciences 2025 AASLD business update. I am joined by Michael Amoroso, our President and Chief Executive Officer; Alex Kelly, our Chief Financial Officer; Dr. Cassie Gorsuch, our Chief Scientific Officer; and we're happy to welcome Dr. Mark Sulkowski, Professor of Medicine at the Johns Hopkins University School of Medicine and renowned expert in hepatic and infectious diseases, who is also serving as our Head Clinical Development Adviser.

For today's presentation, you'll have the opportunity to go through the slides as the speakers mention the slide number. On Slide 2, you will find our forward-looking statements that we may make during today's presentation.

Without further ado, I would like to hand off the call to our CEO, Michael Amoroso, who will begin the business update on Slide #3. Michael?

Thank you, Naresh and team. Welcome to our investment community today. It's wonderful to be with you on the back of AASLD, where we just showed some of our late-breaking data at the end of the day yesterday. My name is Michael Amoroso, and I'm the Chief Executive Officer and I have the privilege to lead this team.

On Slide 2, you will see ARCUS, no longer just a vision, no longer just a preclinical platform, but a platform that is the underlying backbone of Precision BioSciences and one that is now delivering in the clinic. First, you'll see our partnered programs, ECUR-506 for the dire disease of OTC deficiency. I'll remind the investment community the first patient treated this year on a gene insertion program, proof of gene insertion with ARCUS through our partner at ECUR, Joe Truitt and team. And the first patient is now over 1.5 years old in a complete response. Joe continues to give business updates of more patients being treated, and he'll tell you more about that end of the year and early into next year. But we look forward next year to hopefully talking about a BLA path for these children in dire need with OTC deficiency.

Imugene. Imugene, our partner with the Azer-cel product for cancer, is now meeting with the FDA November of this year to discuss a pivotal path forward. More than 100 patients treated now, many long-term durable responders, Imugene believes they have the go-forward combination and dose for Azer-cel. Again, examples of ARCUS, the platform now delivering in the clinic. And the focus of most of today's time with you, our own wholly owned organic program for chronic hepatitis B, PBGENE-HBV in the ELIMINATE-B trial. Data that was freshly presented at the end of day yesterday at the AASLD Clinic by Dr. M-F Yuen.

Next slide, please. Precision is focused on our two wholly owned organic development programs, PBGENE-HBV in the ELIMINATE-B trial, which Dr. Mark Sulkowski and Cassie Gorsuch will take you through today. And obviously, the PBGENE-DMD program that we went wholly owned on in 2024, and we will be starting in the clinic with that program in Q1 of 2026. This is the dual focus of Precision BioSciences, an in-the-clinic stage company delivering results for patients.

You may also note that yesterday, we announced a public offering where Precision brought in $75 million. The reason for doing so on the back of the incredible data was to secure our cash and operational runway for patients, our investigators, our employees to deliver all the way through Phase II HBV, the ELIMINATE-B trial is getting to a point where we think we're going to the expansion phase shortly. That will run right into Phase B -- I'm sorry, Phase II, about 100 and 150 patients and those proceeds will also fund us all the way through DMD, pivotal to BLA submission. That is the purpose for yesterday's raise to take us through 2028.

Now I will turn it over to Dr. Mark Sulkowski and Dr. Cassie Gorsuch to take you through the wonderful data presented yesterday by M-F Yuen. Dr. Sulkowski, Mark, please?

Great. Thank you, Michael. Let's go to Slide 4, and Slide 4 describes the very exciting oral presentation delivered at this year's Liver Meeting by M-F Yuen. M-F is one of the leading international experts on chronic hepatitis B infection and leading many of the trials in this therapeutic space, including the clinical trial of PBGENE-HBV. We will take you through the data that M-F submitted to the audience yesterday at about 5:30 p.m., excellent presentation that was well received by the folks sitting in the room.

Let's go to Slide 5 and talk about some of the background and really the need for a novel approach in the patients with chronic hepatitis B, really targeting cccDNA.

So on Slide 6, we're really at a point, a really pivotal point in the quest for hepatitis B cure. There have been a number of modalities that have been in clinical trials. And we've learned a number of things in the last 10 years in trying to develop curative therapy. And the first one is that simply targeting hepatitis B s-antigen, that is lowering s-antigen, is insufficient to deliver cure. And really, the group of individuals working in this disease and the patients need a different approach, and that is to target the virus itself, cccDNA.

So M-F presented the findings from PBGENE-HBV. This is the first and only clinical stage trial of gene editing. He presented the 3 cohorts, demonstrating safety, tolerability and a dose-dependent antiviral effect. Of course, we'll talk through that in a few minutes. But first, on Slide 7, I want to talk through the large unmet need for patients with hepatitis B and really kind of understand how we got there.

And on Slide 8, we're going to get into some biology of hepatitis B. And this is a complicated virus. This is something that many of my patients ask, why can't we have a cure like we did for hepatitis C? And the answer really lies in how this virus establishes chronic infection. The virus enters the liver cell depicted here, into the nucleus depicted in blue and establishes a mini fortress or minichromosome known as cccDNA. This is the replication template for hep B. And what you can see coming off this in the figure is pregenomic RNA that is then translated and packaged into new virions released into the bloodstream. We can measure that as DNA.

In addition, the virus integrates into the human DNA. And this is not a full virus. This is a particle of the virus that can produce s-antigen. So s-antigen of the blood comes both from ccc as well as integrated, but virus DNA only comes from ccc. That is the -- really heart of the infection.

So let's go to Slide 9. When we look at where modalities have been used to treat hepatitis B work, we've been using nucleoside, nucleotide analogs since 1998 and is really the only approved modality we have. Nucleoside analogs work at blocking the reverse transcription from RNA to DNA. As you can see on the figure at the letter A, this is a late stage of the viral life cycle. So they can block DNA but have very little impact on cccDNA. Thus, it's not surprising that over time, while these can control the DNA, they really don't cure hepatitis B at high rates.

As some of the other steps blocking translation, this is really where ASOs and small interfering RNAs work. They block the production of viral proteins. But again, at a relatively late step. In addition, on C on the figure, there are immunotherapies that are really trying to work to establish immune -- control the infection.

But if we go to Slide 10, this is really how PBGENE differs. This ARCUS gene editing approach targets really the virus itself, targeting cccDNA to stop transcriptional activity targeting integrated DNA. And when this happens, we will see the lack of production of RNA and all of the downstream effects, including viral DNA and s-antigen, will be removed.

And the last point I want to make before handing off to Cassie is that this could lead to a complete cure. We talk about functional cure, which means there's residual cccDNA. But effective editing of cccDNA could lead to the removal of this infectious particle.

So with that, let me turn it over to Cassie to talk you through the ELIMINATE-B clinical trial.

Thank you, Mark. So on Slide 11, I'm excited to share with you the data that was shared at the AASLD Liver Meeting describing the data coming out of our ELIMINATE-B study.

Moving on to Slide 12. This slide depicts the study design. It's a Phase I Part 1, Part 2 study. We're currently in Part 1, which is our multiple ascending dose escalation. The study is enrolling e-antigen negative patients enrolled on NUCs, which account for about 80% to 85% of the chronic hep-B patient pool. Each cohort has three patients enrolled into it, and each patient receives three dose administrations.

We've completed dosing in cohort 1 at 0.2 milligrams per kilogram and cohort 2 at 0.4 milligrams per kilogram. And we've initiated dosing in cohort 3 with all three patients receiving their first administration and our sentinel subjects receiving their second administration as well, and this cohort was dosed at 0.8 milligrams per kilogram.

The goal of this Part 1 study is to identify a dosing regimen that allows us to stop NUCs and demonstrate cure. Once we have that dosing paradigm identified, then we can move into Part 2 dose expansion. And we're excited to share with you today that we feel the data coming out of cohort 3 represents a near-term path towards stopping NUCs, testing for cure and then moving into Part 2 dose expansion.

Slide 13 shows the safety profile for PBGENE-HBV. To date, we've dosed 9 patients shown here across 22 dose administrations. Importantly, no dose-limiting toxicities have been observed across the 22 doses provided. On the table, our patients who've experienced treatment-related adverse events. The adverse events that have been observed in the ELIMINATE-B study have been predictable and consistent with LNP-related infusion reactions. The infusion reactions occur right after the infusion and generally resolve within about 12 hours.

I want to note on the ALT/AST represented on this table. Those happened in the exact same patient within cohort 3 on the same dose administration. These data were reviewed by an independent ALT flare committee that had been assembled prior to the study start. These are made up of world-renowned hepatologists, comfortable with reviewing liver function data. They reviewed these data and deemed them not dose limiting. So this participant is eligible to receive their subsequent and planned dose administration.

One final note on this slide is the hypotension, which has been observed in some patients. This occurs after the infusion and has been responsive to normal IV infusion saline. Because the investigators administered saline to help resolve the hypotension, this is what constituted it as a grade 3 adverse event. So overall, the safety profile for PBGENE-HBV has been manageable across global sites and was consistent with expectations for LNP-based therapies.

On Slide 14, we'll dig in a little bit more on the liver function test data. On the left, you can see ALT. In the middle is AST. And on the right is the bilirubin graph. What you're looking at are means for each of the three individuals within each cohort. As you can see and as was expected after LNP administration, we see transient elevations in ALT and AST. These were not associated with any changes in bilirubin, demonstrating no evidence of Hy's law.

On the bilirubin graph, the green line -- I want to comment on that briefly. This is cohort 1, our lowest dose cohort. It is being pulled up in the average because there was one patient in that group that had a diagnosis of Gilbert’s syndrome, so had elevated bilirubin levels at baseline and throughout the study. That's why that line is a little bit higher than the other two cohorts. But as you can see, no treatment-related changes in bilirubin. The transaminase elevations have been transient and resolved quickly without any changes in bilirubin, no evidence of liver dysfunction.

On Slide 15, to summarize the safety profile that we've observed so far with PBGENE-HBV, PBGENE-HBV has been well tolerated across all three cohorts with repeat administrations. This is important because this is the first time a gene editor has been repeat administered in this fashion in a clinical study, so establishing the safety profile of that dosing paradigm was paramount. The adverse events that have been observed have been predictable, manageable and quickly resolved across our global sites.

Transaminase elevations were transient, not associated with changes in bilirubin and resolved without intervention. We have seen minor fluctuations in platelets directly after the infusion that have resolved quickly back into the normal range and have not been associated with any symptoms. So to summarize, PBGENE-HBV safety profile has been well managed across all sites.

Moving now on to Slide 16. We're going to get into the antiviral data. We're really excited to share with you the dose-related antiviral activity that we're seeing across our cohorts.

So on Slide 17, starting with cohort 1. This was the 0.2 milligram per kilogram dose level. And based on nonhuman primate data, this dose level wasn't expected to be our best therapeutic dose going forward but was chosen to establish safety for this first-in-human study. What we're excited to observe was that activity was seen in all three participants within this cohort with each of them showing substantial reductions in s-antigen.

Patient 1, which is the thicker green line on this plot has been reported previously and now with extended follow-up. What you can see is this patient continues to sustain a 50% reduction in s-antigen, now 9 months after that first dose administration. The other two patients in this cohort show a different trend where they see downward declines in s-antigen, steep declines in s-antigen after each dose administration. However, they also observed an increase in s-antigen after each dose.

What this tells us is that PBGENE-HBV is clearly active in the liver, eliminating viral DNA. However, the persistent DNA in the liver has upregulated the transcription of new s-antigen transcripts and then protein. And so this was what we sought to overcome as we moved into the higher cohorts was to drive deeper reductions in the viral reservoirs in the liver, thus providing more durable responses in patients.

On Slide 18, we're looking at the data from cohort 2 now, at 0.4 milligrams per kilogram. And we are excited to see a different trend in this cohort. What you can see is, again, clear activity in all three participants dosed and now durable responses in three of three patients in this cohort with all showing sustained s-antigen decline from baseline.

One interesting feature about these curves is that we see this decline in s-antigen directly after dosing and then a muted increase in the s-antigen where it does not return all the way to baseline but settles in with some reduction from baseline. This allows us to continue to see deeper s-antigen reductions with subsequent dose administrations. However, we have not, at this dose level, completely blunted the ability of the remaining viral DNA to transcriptionally increase that s-antigen production.

So moving into cohort 3 then at the 0.8 milligrams per kilogram. This is where now you can start to see the ability to overcome the transcriptional upregulation. In patient 7, you see a nice decline in s-antigen from baseline after their first administration and then that decline is held until the second dose administration where the decline further progresses. So this tells us now that at this higher dose level, we are able to sustain this effect likely due to the ability to remove more viral DNA or cccDNA within the liver. And patients 8, 9, while early, are showing promising trends similar to patient 7.

On Slide 20, now we can compare across all three cohorts and these now have calculated trend lines that you can see really demonstrate dose-dependent antiviral effects and dose-dependent increases in durability as we've increased the dose from 0.2 milligrams per kilogram to 0.8 milligrams per kilogram.

On Slide 21, we'll dive a little bit deeper into Cohort 3. And so now we're looking at absolute s-antigen levels for all three patients in Cohort 3. One thing to mention across all of our cohorts outside of even just cohort 3 is we did enroll patients with varied s-antigen levels across the study, all the way up to 12,000 IU per ml and we've seen good activity independent of baseline s-antigen.

Here in this cohort, you can see each of these patients has exhibited a substantial decline in s-antigen from baseline, all achieving relatively low levels of s-antigen at their most recent blood draw. Of course, our goal is to continue to provide these patients their planned subsequent dose administrations, with the goal of achieving undetectable s-antigen.

What's been interesting in the field of hep-B is this emerging benchmark around 100 IUs per ml with s-antigen. And where this benchmark comes from is from stop NUCs studies that have demonstrated that in HBV e-antigen-negative patients on NUCs like our patient population, patients who have less than 100 IU per ml do well with stopping NUC and achieving cure. So this tells us that all of these patients are approaching a threshold where we could consider stopping NUCs with or without s-antigen detectable with the goal of achieving cure.

Now on Slide 22, really to summarize what we've seen so far with PBGENE-HBV in the ELIMINATE-B study. On the left, you can see the orange line indicates the goal of this study to drive deeper s-antigen reductions by planned subsequent dose administrations. And the blue line is patient 7, which is our sentinel subject in cohort 3, and you can see now this trend line is starting to follow the goal as we set out within this study.

So PBGENE-HBV is the first mechanism targeting cccDNA elimination that is currently being tested in humans. And this s-antigen reduction can only be driven by the elimination of cccDNA or inactivation of viral DNA in the liver. This is really the first time targeting this type of mechanism in chronic hep-B patients. PBGENE-HBV has been well tolerated with a manageable safety profile and has shown dose-dependent activity as we've increased the dose with improved durability. And as we see it, cohort 3 represents a near-term path towards stopping NUCs, testing for cure and then moving into the Part 2 expansion phase of the study.

On Slide 23, I have one more piece of exciting data to share with you from this study, and this is very hot off the press data, this biopsy data from our first participant in Part 1, who's agreed to pre-treatment and post-treatment paired liver biopsies.

Let's talk through the biopsy data on Slide 24. I want to start with revisiting a piece of data from our preclinical package. When we cut viral DNA, cccDNA, in the liver across models in our preclinical package, what we found is there are two editing outcomes. One is elimination of the viral DNA sequence. The other is indel formation or small mutations in the viral sequence that render it inactive. So indeled or mutated viral DNA can no longer replicate and can no longer express s-antigen. Both of these represent productive editing outcomes.

Based on preclinical data, we know that the elimination outcome represents a larger fraction of editing outcome, about 60% based on this nonhuman primate preclinical data shown on the slide, and indels represent about 30% of the editing outcome in the nonhuman primate model.

Now on the right-hand side of the slide is the clinical biopsy data. The first data coming out of this clinical biopsy analysis is the indel fraction of editing. What we found was after two administrations at 0.4 milligrams per kilogram, we observed 28% editing in the remaining viral DNA fraction. Now we expect that the majority of the editing outcome has resulted in elimination consistent with preclinical data, we are still working on evaluating the elimination fraction of this clinical biopsy sample and that data is pending. However, this data represents the very first proof of mechanism that PBGENE-HBV is doing exactly what it was intended to do in the liver of humans, edit viral DNA and that editing viral DNA is resulting in s-antigen reduction.

On Slide 25, we can now correlate the biopsy data from the liver with the serum data in the s-antigen. So this biopsy was taken in patient 5 in cohort 2. As I mentioned, that post-dose biopsy was taken after two administrations of PBGENE-HBV. You can see at the time of biopsy, we observed a 44% decline in s-antigen from baseline in this patient. And since that biopsy time point, this patient has received their third administration of PBGENE-HBV now resulting in a 67% s-antigen decline. And so this indicates further gene editing in the liver of this individual has occurred with dose three, which is consistent with cumulative editing observed in the preclinical data.

On Slide 26, we'll talk about next steps. The next steps for the ELIMINATE-B program are to complete dosing in cohort 3. As I mentioned, each of the individuals in this cohort are now showing low s-antigen levels and all of them have additional administrations to go. The patient 7 still has their third administration, patients 8 and 9 have their second and third administration, and we expect to continue to observe cumulative s-antigen declines after repeat administration. Dosing for this cohort is expected to complete in Q1 of 2026.

Assuming these patients achieve a scenario where we are comfortable stopping NUCs, that would be the plan, to stop NUCs and test for a cure. In order to stop NUCs, the protocol requires two sustained s-antigen measurements about 4 weeks apart. And there are a few other clinical markers, including HBV RNA and core-related antigen that we can use to inform that stopping NUCs criteria, that stopping NUC decision. We're encouraged by the data in cohort 3 that we will achieve the ability to stop NUCs and test for cure in these participants.

Once we've identified a dosing regimen, potentially 0.8 milligrams per kilogram with three administrations, we will move that dosing paradigm or regimen into our Part 2 expansion phase of the ELIMINATE-B study. In this part of the study, we plan to enroll up to 45 individuals between Part 1 and Part 2 and plan to take paired liver biopsies in these participants. Our clinical operations team is planning for success and is looking for site expansion options today to allow for rapid enrollment in this Part 2 expansion.

In parallel to completing Cohort 3, testing for NUCs instead -- stopping NUCs and testing for cure, we also have an additional cohort looking at dosing optimization. In this cohort, we will be evaluating the 0.4 milligrams per kilogram dose at 4-week dosing intervals. Given the cumulative effects we're observing in Cohort 2, we think this may also represent a path towards potentially stopping NUCs and testing for cure.

So beyond the Part 2 expansion, what does success for ELIMINATE-B look like? On Slide 27, I want to comment quickly on an FDA guidance document that outlines the approvable efficacy end points. On this slide, you'll see the functional cure definition as the second bullet in this guidance document, which is sustained suppression of HBV DNA and s-antigen off-treatment for at least 6 months.

There is another path that is rarely talked about because it hasn't made sense for the mechanisms that have come before. This path is sustained suppression of HBV DNA off-treatment for at least 6 months. You'll notice there's no mention of s-antigen in this definition. This path really exists for therapies like PBGENE-HBV, which eliminate viral DNA within the liver and cccDNA. In this scenario, the s-antigen would only be able to be expressed from integrated HBV DNA in order to sustain this kind of an effect. And we think that this is a possible path forward for PBGENE-HBV as well as the functional cure definition. So as we see it, there are multiple paths forward for success.

On Slide 28, I want to spend a couple of minutes talking about our second wholly owned program, PBGENE-DMD. This is the first gene editing approach for the majority of patients living with Duchenne muscular dystrophy.

On Slide 29, this really outlines why we are developing PBGENE-DMD. PBGENE-DMD has been designed to address the limitations that exist in the Duchenne community based on their current therapy options, whether they're microdystrophin or exon skippers. In our view, an ideal therapy improves upon the treatment options that currently exist, including providing long-term durable benefit and having applicability to a broad patient population.

On Slide 30, this outlines the mechanism of action for PBGENE-DMD. The PBGENE-DMD is an AAV vector. It does not encode a microdystrophin. In this case, the AAV contains two ARCUS nucleases. These ARCUS nucleases have been designed to cut target sites in the introns surrounding exon 45 and 55. Once the ARCUS nucleases create the cut, this region of the dystrophin gene between exons 45 and 55 is excised, removed from the gene.

We're targeting this region for a couple of reasons. One is up to 60% of patients have pathogenic mutations in this hotspot region in the dystrophin gene. So this therapeutic approach allows for broad applicability. The second reason for targeting this region of the dystrophin gene is that we know that the resulting protein that is produced is functional because it occurs in humans that occurs in a subset of Becker muscular dystrophy patients.

On Slide 31, you can see the clinical presentation of a Duchenne patient on the left. I think we're all familiar with how devastating that disease presentation is. And on the right is indicated the Becker muscular dystrophy patient who has the same genotype as will be created by PBGENE-DMD, this Del45-55 Becker patient. We know from the literature that these patients have a pretty good prognosis. They live into their 60s or 70s. Many of them are mildly symptomatic or even asymptomatic with normal muscle function and ambulation throughout their life.

So our goal is to be able to treat a Duchenne patient and provide a protein that is similar or exactly the same actually as what is produced in this Becker muscular dystrophy patient. And it is expected based on literature that as little as 5% expression of this near full-length protein that is created after treatment with PBGENE-DMD would be therapeutically beneficial for patients living with Duchenne.

On Slide 32, I want to revisit some preclinical data in a DMD mouse model. What we've done is we've administered PBGENE-DMD onetime to the DMD mice at either 3e13 or 1e14 viral genomes per kilogram. And we took this study out to 9 months, which represents a long-term mouse study. And we evaluated in these various tissues, heart, calf and quad, shown on the slide, we evaluated 4% dystrophin protein expression.

I'm happy to share that in each of these tissues, we exceeded that 5% threshold, reaching up to almost 25% dystrophin protein. And this was consistent across both dose levels, indicating that with PBGENE-DMD and a gene-editing approach, you may not need the same high-dose AAV as has been observed with microdystrophin.

Now the dystrophin protein levels also resulted in functional improvements in this mouse, which is illustrated on Slide 33. What we did is we measured the ability of these mice to exert force from their muscles. We measured this at 3, 6 and 9 months.

On the graph in the gray, the light gray, you're looking at, this is the untreated disease model. You can see compared to the darker gray next to it, these DMD mice have deficient force output compared to healthy mice. In PBGENE-DMD treated mice, again at either 1e14 or 3e13, you can see a significant improvement in the force output compared to the untreated DMD mice near levels observed in healthy mice that express full-length dystrophin.

And so these data really give us a lot of confidence that we can achieve necessary levels of dystrophin protein expression after a single administration with PBGENE-DMD. And then that protein that's known to have function in humans is able to restore long-term muscle function in a DMD mouse model.

On Slide 34, this is an outline of the planned clinical study. The next steps for this program are to file an IND by end of this year, and the team is working diligently and is on track for that goal. We plan to start the clinical study in early '26. The goal is outlined here. The Phase I/II study will be a single-dose level design, no dose escalation plans. We plan to enroll between 5 and 8 ambulatory patients across multiple clinical trial sites in 2026.

And based on the regulatory path that has been paid by the microdystrophins, we expect this study to progress quickly with 10 to 15 patients worth of data needed for a pivotal discussion with FDA and between 35 and 40 patients needed from the pivotal study to support BLA filing, which is planned in 2028. So we're very excited about this novel and differentiated approach and its ability to provide long-term durable functional improvement for kids living with Duchenne muscular dystrophy.

With that, I'll hand it back to Alex Kelly for our last slide.

Let's go to Slide 34 (sic) [ Slide 35 ], please. And thank you, Cassie, for the thorough update on ELIMINATE-B, but also showcasing the work that's going on right now to support the DMD IND filing later this year.

So I'd like to just wrap things up by, number one, talking about our relentless focus on these two programs, HBV, DMD. We are executing with both of them. HBV has been less than a year that we've been in the clinic. We've already completed dosing patients at least one time in each of the three first cohorts of this or the first three cohorts. We've already generated antiviral activity been demonstrated at every single cohort. And we've also shown the very good safety profile of ARCUS when administered with LNP after three administrations at these rising doses.

So near-term next steps Cassie outlined is to continue following the data and administer the remaining doses in cohort 3 and get to a place where we can stop NUCs, test for a cure and then ultimately expand into Part 2. But ultimately, the goal is a Phase II program that would be finished up in 2028.

DMD, great progress by the team. The team is running hard and fast to get the IND filing in by the end of the year. We'll expect to dose the first patient in the early part of 2026 and probably have data from three to five patients by the end of 2026. That is really important for us because it sets up a potential pivotal pathway to expand the trial further into ultimately file a BLA in 2028.

So going back to the raise that was conducted yesterday. Really great to see the participation and support from our top current shareholders and excited about the participation from new, high-quality, long-term focused investors who want to support the ARCUS pathway through 2028.

I think it's very important that we secured the funding at this point in time because now our team can focus on execution, knowing that we have the resources to take these programs all the way through not their Phase I data inflection points, which we're excited about, but also to give them plenty of runway to get to their Phase II or their BLA inflection points, depending on the program.

So I think that you -- over time, you've hopefully seen that Precision BioSciences are very good stewards of the capital that's deployed to us from our shareholders. We currently execute these programs as well as support programs going on at iECURE with 1/3 of the people of our gene editing peer group and at 1/4 of the OpEx. And we hope that you see every dollar invested in Precision BioSciences is deployed to things that generate meaningful data end points, and these two clinical programs are the future of our company.

So with that, I'd be happy to open up the call for Q&A.

[Operator Instructions] Our first question comes from the line of Soumit Roy with JonesTrading.

Congratulations on the great data. It's good to see no cumulative AE, but cumulative efficacy with a higher dose. If you could give us a bit of understanding on the average baseline in the real-world population, the s-antigen. And what are you thinking of if the baseline is in thousands going up to 10,000, would you reduce the dosing interval, increase dosing to another higher dose cohort or dose based on the baseline s-antigen level?

Yes. I think I'll start off with that one, and then I'll ask Dr. Sulkowski to kind of qualify what I'm saying as he sees more patients in the clinic than I do. That's for sure. Soumit, good to hear your voice. Thank you so much for the thoughtful question.

I'm glad you asked the question. Guys, I think it's really important we reset our mind to understand you're looking at a nascent approach for the first time ever. I've heard a lot over the years of HBV, you can't win in that disease. Well, I'd argue we've put a lot of the same approaches. We try to blunt s-antigen downstream and turn the immune system on to eradicate the replicating virus factory, cccDNA. And frankly, that hasn't worked.

Our goal here, guys, I understand this is a disease where we look S. It's the obvious serum marker in blood, it's a lot more -- it's a lot easier to get than biopsies. S-antigen in an e-negative patient, e-negatives are about 80%, show that everybody will start a positive and unfortunately graduate to an e-negative. Just because you have more -- less S-antigen in an e-negative does not mean you have more disease, about 15% to 50% of all hepatocytes in an e-negative patient, who's been infected for years, are infected. About 15% to 50% the literature supports. You probably have 5 to 10 virions in the literature in each hepatocyte, cccDNA.

Your expression, as you know, comes from -- of S, comes from cccDNA or integrated disease. And not everybody expresses exactly the same. So it doesn't mean if you have more hepatocytes infected, for example, you have greater burden of disease with S. Now knowing what our mechanism is, cut out that 15% to 50% of viral reservoirs. The result of that will be the correct path of reducing and eliminating, getting S to undetectable transcript level.

If you look in the real world, and we call this very importantly, a real-world study globally, where in Moldova, New Zealand, Hong Kong, U.S., this was made to really bring in the e-negative patient who walks in the door of Dr. Sulkowski, Dr. Yuen and others every day. There's no upper limit of S-antigen, but if you're controlled on NUCs, if I just use the U.S. data for a moment, about 300,000 patients in the U.S., more than 90% of patients are on S level at baseline less than 3,000 and about 70% are less than 1,000.

So we got the question of, hey, you're looking great in cohort 3, you're close to stopping NUCs. Are those less sick patients? They are not. That represents 70% of the people who walk into Mark and others' clinic in the U.S. every day. If you look at Asia, M-F's practice, over 90%, I think somewhere in the range of 95% to 98% have an S level at baseline less than 3,000 and about 75%, 78% or less than 1,000.

So again, if you look at our one outlier patient who was over 10,000, 11,000, 12,000, the hepatologist had first thought, are we sure that an e-negative? Could that be an e-positive? And the thought process was we confirmed it and maybe someone who just came out of e-positive disease and has settled into becoming an e-negative. Remember, when they first get the disease, that's when you see the higher S levels. But the goal here, we may cut out one or two logs. And if you start under 1,000 [indiscernible] you may not have to cut out logs. The idea here is eradicate -- with this mechanism, eradicate S and all viral transcripts by eliminating the viral reservoirs, the 15% to 50%, permanently.

Therefore, when you stop it to the finite course, NUCs, HBV DNA won't come back. And obviously, if you cut out the -- eliminated the cccDNA and inactivated the i-DNA or the integrated that cannot replicate, they'll also show as a result, no S-antigen. I hope that helps clear up. These are very much real-world patients. Over 70% around the world walk in the door of the clinic, less than 1,000 and more than 90% are less than 3,000.

Mark, is there anything you would add or subtract there? And please feel free to correct me if my -- if I'm wrong.

Yes. Thanks, Michael. No, I think you described it quite well. In the clinical practice, certainly in the United States, where I'm based, this does represent a large share of the patients we see, antigen negative, controlled on NUCs with relatively low hepatitis B surface-antigen levels. So I do anticipate that this is something that will be applicable to the majority of people that we see.

The other point to make is that when I talk to patients, and I talk to every person I see with chronic hepatitis B, we talk about curative treatments. This is really something that is exciting on their radar. So looking forward to getting to clinic this week, coming back from the liver meeting, to further discuss.

This is incredibly helpful. And one quick follow-up. Could you please speak to the 5x ALT, AST level you have, which is higher for these patient population compared -- to trigger Hy's Law. And any enrollment change or monitoring you're thinking of seeing safety concern from your peers like restricting on the baseline bilirubin level, liver pathology, liver obstruction. Anything that you want to be more careful about.

Yes, Soumit. I'm going to have Mark comment on that in one moment. I will say this, when you deliver an LNP and if you compare LNPs and all of you guys do, and I understand that, from the preclinical work where you had healthy monkeys, patients with different baseline diseases, of course, we have patients of liver disease. The liver LFTs are an obsession of ours to make sure our patients are safe. I think you'll see our transaminases compare very favorably across any LNP. As long as transient, really, your top hepatologists -- we have a liver flare committee, I'll let Mark talk about it. We're not greatly concerned. In fact, I would sign up for it to keep the same safety profile we have going forward.

But I'm going to ask Mark to maybe define a little more layman, Hy's Law and the transient nature. And maybe, Mark, you can speak about the baseline of our patients that cirrhotic in their FibroScan scores, for example. Thanks, Mark. I'll turn it to you.

Sure. Thanks, Michael. I think it is important to note that the patient population did not have cirrhosis using very conventional staging modalities like FibroScan. So the other point to make is that in clinical practice as well as in any kind of treatment with medications, including drug development, one of the real key things that we look at is ALT and AST elevations, we think of those as measures of hepatocellular injury. So this is clearly an important thing to monitor.

But the critical element is what is happening with liver function. And here, we're talking about things like total bilirubin and PT-INR. There was a -- and Hy's Law refers to an observation made by very famous hepatologist, Hy Zimmerman, who said that the combination of hepatocellular injury with AST, ALT elevation and an increase in bilirubin is something that should raise concern both in clinical practice as well as in the development of a therapeutic.

So the critical point here is that the -- when the ALT flare committee and the investigators reviewed this particular research participant, they did not see any evidence of a change in bilirubin. So this did not meet the Hy's Law definition and did not raise concern that might lead to not dosing further. So I'm happy to -- I'll stop there and happy to take any clarifying questions.

Soumit, just to round out the last piece of your question. I think we've learned a lot about the manageable around the globe. You're talking about a therapy that has a low-dose steroid the day before and the day of, an antihistamine. We're using Tylenol around the globe, things that are really accessible to people. We're learning more about making sure they're hydrated at baseline. So we're doing some orthostatic blood pressures.

But right now, from a liver intervention standpoint, we feel really good, as you said, that there's nothing cumulative going on. We know we're going to see a transient uptick in LNP delivery. We know you'll see a transient -- a small nadir in our platelets. We haven't dropped below 100,000 level there, so nothing clinically significant. We think that's the reality of managing LNPs. Think about, Alnylam has been delivering it for years.

So right now, yes, we have learned a lot about the management as we've gone through, and we're implementing those things like orthostatic blood pressures and hydration at baseline. But right now, nothing different for the liver. We feel really good about where the totality of liver health has been.

Congratulations again on a very clean data.

Our next question is from the line of Maury Raycroft with Jefferies.

This is Farzin on for Maury. Congrats on the progress. Nice to see the evidence of biopsy confirmed on-target editing, but are you also assessing any off-target editing? And bigger picture, what fraction and distribution of the cccDNA and integrated DNA editing are required for seeing the sustained off-target control?

Farzin, I appreciate the question. I'm going to turn it over to Cassie. I love that you ask the off-target question because we're really proud of Precision, that we do an incredible amount on our pre-IND work of what I call integrating genomic integrity. Maybe Cassie can walk you through that. And then, Cassie, I love Farzin's question, what's the perfect amount of gene editing in the patient to get us to 0? So I'm going to turn those to you, Cassie. Thanks, Farzin, for the question.

Yes. Thanks, Farzin. We are also really excited about this first proof of mechanism of editing viral DNA in the liver. I think it may represent first gene editing biopsy data across studies -- across any clinical study. So I think it's really notable. We're excited to have our investigators working with us towards that goal.

So your first question about the clinical biopsy data and how much editing do you need. So the data that we have today demonstrates the indel fraction, which we expect to be the minority outcome. We're working on quantitating the elimination fraction from that biopsy sample as well. And we'll need both pieces of that in order to understand the totality of editing observed with two administrations of 0.4 milligrams per kilogram. So I think it's premature at this point to say how much total editing has been observed.

To your question of how much editing do you need to achieve? It's the billion-dollar question, I think. Because this is a novel modality, I think we will be the people that get to answer that question clinically how much viral DNA editing do you need to achieve cure. Our goal is 100%. And preclinically, we achieved 99% with two administrations at primates. That data set was really influential for the design of our clinical study, allowing for three dose administrations.

And so I think we're optimistic that our LNP has great biodistribution within the liver as we've increased the dose. And we've obviously shown the ability to edit more viral DNA, resulting in persistent declines in s-antigen. I think we'll continue to gather the data to definitively answer the question of how much editing do you need to achieve cure. We're optimistic we can get there.

So the question about off-target editing. We do an extensive evaluation of this preclinically. We use genome-wide unbiased orthogonal assays really to evaluate the specificity of the nuclease. The specificity of the nuclease used in PBGENE-HBV is very good at therapeutically relevant doses. We can detect no off-target editing, no increases in translocations or integrations as a result of editing viral DNA and no interruption of normal gene expression of the human genome. And so we feel very good about the specificity of this nuclease going into this clinical study.

Cassie, thank you. Farzin. I think the one thing I want to point you to in cohort 3, we're hoping that's the cohort. When you think of that stop NUC data, Mark has said this well, 10 years ago, cutting and eliminating virus with gene editing was a fantasy. When you think of stop NUC data, which came out way before the modality of gene editing, the idea of getting under 100, which is not the goal for all those out there. It's to get undetectable. That makes it easy to know we've got it all gone.

But I think the point is a lot of those patients had eliminated their cccDNA. And when you stopped, you knew that some slow -- low levels of S that was being expressed steady and stable over time was from integrins. And remember, the really important point here, integrated S cannot hurt the patient going forward. It cannot make replicating virus. CccDNA is the culprit that does that.

So Farzin, I suspect there'll be a different level of editing based on that 15% to 50% hepatocytes infected needed. That will be heterogeneity question for the individual. But I'll remind you to Cassie's point, in the nonhuman primate work that she did with the surrogate virus that was brilliant, with two doses, we were able to cut 99% of all hepatocytes. And Cassie over infected those hepatocytes with about 100 virions of virus versus the 5 to 10 you see in chronic hepatitis B patients.

So I just share those final points. Again, that's never a perfect model because primates don't [indiscernible] but that is the billion-dollar question and answer we're hoping to provide here, Farzin.

Our next question comes from the line of Patrick Trucchio with H.C. Wainwright.

Congrats on this data. I just wanted to asked about the paired biopsy findings and see if you could elaborate a bit more on how these findings validate ARCUS' mechanism of action. And what additional molecular analysis, for example, pgRNA, cccDNA quantifications are underway to strengthen that evidence?

And then also, can you elaborate a bit more on the viral DNA editing pattern observed? Specifically, this relative contribution of DNA elimination versus inactivation through indel? How does that correlate with HB surface antigen decline?

Yes. So Patrick, I'm going to turn this over to Cassie here in a moment. The answer is yes, on some of the biomarkers we're using because that is how you delineate S coming from pgRNA, for example, you spoke about is going to be very important to us as that's something that is really clearly associated with the regulatory path that Cassie showed you on HBV DNA, which equals cccDNA. It can only come from cccDNA. And therefore, pgRNA is only specific of that pathway.

But Cassie, let me turn it over to you of where we're at right now and maybe qualifying the biopsy data you showed so far, hot off the press, as you said, and maybe what's to come and why we want to delineate some of those things to understand where transcript is coming from.

Yes. Thank you, Patrick, for the question and good to hear from you. So I think if we revisit Slide 24, which is the biopsy data, what we are observing here, this is our first cut of data from the biopsy and we expect there's more to come to your point. So what we see in the biopsy data is it's a paired biopsy. So we took one prior to dosing and we took one after the second administration at 0.4 milligrams per kilogram. And so in that first sample prior to treatment, we see no evidence of mutations within the target region of the ARCUS nuclease in the viral DNA.

What we see after the two doses of PBGENE-HBV is 28% mutations now introduced by ARCUS. So they're consistent with what you expect to see after ARCUS double-strand break and mutations in that DNA sequence. We are still working, as you mentioned, on the elimination fraction of editing. And consistently across preclinical data, we see that, that's the majority editing outcome.

And so I expect that, that 28% editing that we've observed so far is in the remaining viral DNA. You can't sequence DNA, obviously, that's not there. And so in that DNA sequence that's been eliminated, I expect that to add to the total amount of viral DNA editing.

At that biopsy time point, we saw a 44% reduction in s-antigen. Preclinically, those have trended pretty well of mutations or inactivation total editing and s-antigen decline. And so I expect we're going to see with the elimination data when it's available, an increase in the overall amount of editing in that biopsy sample.

We are also looking at some more sophisticated methods in the biopsy samples to come that will help us identify the source of s-antigen as either cccDNA or integrated DNA, which to Michael's point, we think will be really valuable as we think about that alternative path forward with the FDA guidance suggesting that if there is detectable s-antigen, it's being produced from integrins only.

So more to come on biopsy data, but this really demonstrates proof of mechanism that PBGENE-HBV is doing exactly what we expected it to do and that it is through inactivating and potentially eliminating virus that we're seeing s-antigen declines for the first time ever.

Yes, it's really interesting. Just it's the first ever clinical biopsy evidence of gene editing in HBV. It's very interesting.

We -- Patrick, we think it might be the first clinical biopsy evidence of gene editing in the liver. You can correct me if I'm wrong about that. I know you will.

And Patrick, the other thing is I just want to make sure I state for all your peers. I know you're very close to this story. When Cassie mentions the word mutation, that is an inactivation of replicating virus. A mutation or an elimination still results in deeming that virus inactive or eliminated that it can no longer replicate and harm the patient going forward.

That's helpful. And I did want to ask about just the dose escalation and safety. The [ short ] compound has now been administered safely across doses up to 0.8 milligram per kilogram. So I'm wondering what this tells you about the emerging therapeutic window and the ceiling for safe exposure.

Yes. I'm going to open this up to Mark and Cassie in a moment. The first thing I want to say is we've been saying since the preclinical data that all LNPs aren't the same, and the quality of mRNA is really important. And you'll remember, Cassie spent almost 2 years optimizing. I joke because I used to say, is it ready yet. But she would tell me the quality and the length really matters, Michael. And I'm very proud of the team for that because this matters for the therapeutic index, specifically safety in patients. If you can't give this drug repeatedly, you can't get to viral elimination and cure.

So the most important piece of data we're showing you, this AASLD, I hope everyone understands, we all jump to the antiviral curves, it's the ability to repeat dose without cumulative tox. If you cannot give the drug, you cannot win and cure the virus.

From there, I will ask Mark or Cassie, if they have any thoughts -- other thoughts on your question, Patrick.

Mark, do you want to start?

Sure. I don't know if there's too much to add to Michael's comments, but I think the real key is simply to follow the data that we've seen regarding safety and tolerability in making decisions. And thus far, both the DMC and the ALT flare committee have been quite satisfied.

Thanks, Mark. Cassie, is there anything -- yes, go ahead, Cassie.

Maybe I'll just add. I think I'm really excited about the data we're seeing in cohort 3. I think that this 0.8 milligram per kilogram dose, with the repeat administration still to come, represents a path forward for PBGENE-HBV in potentially stopping NUCs and achieving cure. So I'm very interested in continuing to follow that data.

I think we had an investigators meeting over the weekend at The Liver Meeting, and I think you could -- there was palpable excitement in the room over the data and where this program is headed. So I think there's -- as Mark said, we need to continue following the data. He spoke to the safety data, and I think I'll speak to the efficacy data that I think it's always going to be a balance of what are you observing on the efficacy side as well as the safety side in the decision to continue dose escalating. I think we're seeing very good antiviral activity.

Right. Great. Congrats again.

Our final question comes from the line of Ry Forseth with Guggenheim.

Congratulations on the development progress. Two questions from us. Number one, could you tell us more about the rationale for potentially exploring the 4-week dosing interval? Is this mainly to leverage kinetics to drive down s-antigen and/or develop a drug that has a more convenient profile for the patients?

Yes. So Ry, I'll start with that one, and then I'll open it up to my smarter and more talented colleagues, Mark and Cassie. But first and foremost, I think it's very important to look at what we've seen from cohort 1, 2 and 3.

Cohort 1, a dose that was very low, less than we put in primates, the 0.2. The thing that jumped out the most for us in that cohort is the permanence of mechanism when you cut and eliminate, Ry. And you'll see, you remember two of the three patients, everyone had a response, an antiviral response. The two of the three kind of rebounded in that 14 to 28-day interval.

And when you dig into the why, remember what you're doing with more dose in gene editing. This is not an AUC of a small molecule. You're biodistributing to more of the 15% or 50% of hepatocytes that are infected with more dose. And you're putting, if you will, I give this visual, more ARCUS scissors within a sick infected cell, cutting during your PK window. The PK window for an LNP is about 3 days and ARCUS is about -- a half-life of about a day, 1.5 days. So the work is done in that first 4 or 5 days.

So as you looked at cohort 2, Ry, you see that you started to now blunt the rebound, the upregulation of the virus that was still there. And in cohort 3, patient 7 and why -- just to qualify Cassie's comment it's so exciting, the first time between the 2-week nadir and day 56, remember, there's 8 weeks between that you don't see upregulation of virus because you've eliminated and cut out enough virus at that dose. That's why we're excited about that dose and why we're approaching that 100 level, while again, the goal is undetectable, we know what a 100 means in this disease. A lot of times we're getting to an eradication of cccDNA.

Now the reason for the frequency of our dosing interval. Mark said it is great. There's dose, there's frequency, time in between. We started at 8 weeks in between administrations before we had ever had human data to make sure we had the safest profile. What that was based on, just so you all know, 2 weeks is kind of the period when LNPs settle in, you get those transient spikes. But there have been some data with other mechanisms, not gene editing, from our hepatologists saying, you could have a late efficacy flare up to 6 weeks. We don't see that with this modality. So we wanted to be really safe first -- before first human data, Ry, and make sure we had about 8 weeks in between. That was a bit of empiricism.

So now when you look at the 22 doses, we really understand [indiscernible] profile. We're not seeing those late liver flares. So let's go back to cohort 2 for a minute. Every patient there was a responder, but everyone was a durable responder at 0.4. They're sitting somewhere -- after three administrations of 50% to 70% of their baseline S is eliminated. Now that's not all the way home. You can't stop your NUC yet. But you now know with no late liver flare, what happens if you cut those remaining reservoirs 4 weeks apart? What if you cut a fourth and fifth time? Could that be a dose, at half the dose that takes you to stop NUCs?

That's the idea of the levers we're still playing with. 0.8 in cohort 3 is our go-forward right now because it's safe. There's no cumulative tox. And of course, we're getting really close on those IUs per ml on S. But we are still looking in parallel. And we can go to expansion with 0.8 and still look in parallel with Part 1 of the study, what happens if we take a little bit of a lower dose and shorten it to 4 weeks apart? Now that we know from our safety profile, we can. I hope that makes sense, Ry.

It does. So maybe for a second question. For Part 2 site expansion, is there any geographic preference for onboarding sites? And also looking forward to pulling NUCs, when we think about discontinuation of nucleotide or nucleosides, just to be clear, what is your definition for s-antigen protein undetectable levels on a sustained basis?

Yes. Good question. I'm going to turn it over here to my colleagues in a moment. As far as globally, we want to be globally. We want to recruit -- we look at a Phase II, an expansion is going to go up to 45 patients, right? And then we're going to just roll right into the Phase II as long as we're at a therapeutic index, whether we could stop NUCs, we find the right dosing schedule. So think about a Phase II of 100 to 150 patients.

We really since day 1, we're committed to a global approach. This is a global disease. We started in sites that didn't have low regulatory hurdles. We started in sites that had large amounts of chronic hepatitis B and where the infectious disease experts have lived in drug development around the world. People like M-F Yuen. People like Ed Gane, right? So we wanted to be in those sites.

So we're still opening more sites here in the U.S. We've got a site ready to go in the U.K. and regulatory approvals. We're looking at France and other countries because we really want to be able to run, once we're out of the dose phasing, if you will. And then I'll open it up to Mark or Cassie for the second half of the question, if there's any other thoughts, please. Go ahead, Cassie.

One thing I wanted to add is in terms of the global nature of the study is that when we selected a target site for the ARCUS nuclease that's used in PBGENE-HBV, it was selected with a geography in mind and genotype in mind. And so the target site is well conserved across genotypes, which is important in order to be relevant across geographies, across Asian populations, European populations. And so really, I think as we think about site expansion and we think about the data already coming out of this ELIMINATE-B study, you can really start to appreciate that PBGENE-HBV is designed to be globally applicable.

On the point about stopping NUCs, I would say, on Slide 26, there's a little bit of an outline of how we're thinking about this. You would want to see two measurements in s-antigen at least 4 weeks apart to have confidence that the level of s-antigen that this individual is at is sustained.

And there are other markers that won't always be present, actually most often will not be present in e-antigen negative patients, and those are HBV RNA and core-related antigen. Those are markers that are directly relevant for cccDNA. They indicate cccDNA transcriptional activity. And if those are undetectable in a patient that has been detectable at baseline, then you have a lot of confidence that even if there is some detectable s-antigen, that it's being produced by integrins and not cccDNA.

So I think there are a couple of different pieces of data that can be used to inform the stop-NUC decision. And it is going to be a requirement that they have a sustained low level or undetectable level of s-antigen in order to stop that NUC.

Maybe I'll turn it to Mark to see if he has any additional clinical perspective to share on the decision for stopping NUCs.

Yes, Mark, maybe you can hit the washout period of the NUC, too. Because we talked so much about paired biopsies, and that's all part of the expansion but there's also a more practical way to do things that you described so well. Could you maybe talk and educate about the washout period of a NUC too, please?

Yes. Great. And thanks, Cassie. You described the literature quite well on this. And there is an extensive research into this stopping-NUC criteria. And what Cassie outlined, less than 100 IU per ml for s-antigen, negative RNA, negative correlated antigen is a strong predictor of success in stopping NUCs. So this was actually discussed in a number of the HBV-related sessions at the recent Liver Meeting.

So the other point that Michael makes is that when we see people use stop NUCs, if cccDNA is present and replication-competent, and it will start to produce transcriptional activity and DNA can be found in the blood really within 4 to 8 weeks. So the definition of cure is at 6 months. But patients we monitor very closely when stopping NUCs because the DNA can emerge much more quickly.

Thank you. Any other questions on the line?

We have no further questions at this time.

Well, I'd like to take a moment to thank our investment community for joining us today. Our current partners and new partners who have joined us on the Precision mission, the team who has been working tirelessly and most important, our investigators and patients who are making it happen at our site. So thank you to all. We're really excited about this progress. And we're going to continue our pursuit of eradicating chronic hepatitis B and really changing the paradigm and the quality of life for patients with Duchenne muscular dystrophy.

So look forward to speaking to you all soon at the next quarterly. And please, everybody, have a wonderful day. Thank you.

This concludes today's conference call. You may now disconnect.