Q1 2021 Evelo Biosciences Inc Earnings Call

Good morning, and welcome to the Vela Biosciences conference call to discuss the first quarter 2021 financial results and business highlights at the time all participants are in a listen only mode.

Operator: Good morning, and welcome to Avelo Biosciences' conference call to discuss the first quarter 2021 financial results and business highlights. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open up the call for your questions. Please be advised that this call is being recorded at the company's request. At this time, I'd like to turn the call over to Jessica Cotrone of Avelo. Please proceed.

Following the floor of my remarks, we will open up the call for your questions. Please be advised that this call is being recorded at the company's of quest.

At this time I'd like to turn the call over to Jessica the child of the Belo. Please proceed.

Thank you. This morning, we issued a press release that outlines the topics we plan to discuss today the sort of in the release is available at www dot of Velo bio dot com under the Investor chat today on our call. We have Simba Gill Chief Executive Officer, Mark Bodmer, President of the R&D and Chief Scientific Officer, and Jonathan Zhang Chief.

Jessica Cotrone: Thank you. This morning we issued a press release that outlines the topics we plan to discuss today. This release is available at www.avelobio.com under the investors tab. On today's call, we have Simba Gill, Chief Executive Officer, Mark Bodmer, President of R&D and Chief Scientific Officer, and Jonathan Zung, Chief Development Officer.

Development Officer before we begin I would like to remind everyone that statements made during this conference call that do not relate to matters of historical facts.

Jessica Cotrone: Before we begin, I would like to remind everyone that statements made during this conference call that do not relate to matters of historical fact, including statements about our objectives and anticipated clinical milestones, the impact of our product candidates, and the timing of the results of our clinical studies should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act.

Statements about our objectives and anticipated clinical milestones and the impact of our product candidates and the timing and results of our clinical studies should be considered forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 and such.

Forward looking statements are intended to be subject to the safe Harbor protection provided by the Reform Act.

Jessica Cotrone: Actual results could differ materially from those indicated by the forward-looking statements due to the impact of many factors. Participants are directed to the risk factors set forth in Avelo's quarterly report on Form 10-Q for the three months ended March 31st, 2021 and the company's other filings with the Securities and Exchange Commission. Any forward-looking statements made today speak only to Avelo's operations as of today, and Avelo disclaims any duty to provide updates to its forward-looking statements even if subsequent events cause the company's views to change. It is now my pleasure to pass the call over to Simba. Thank you, Jessica.

Actual results could differ materially from those indicated by the forward looking statements due to the impact of many factors participants are directed to the risk factors set forth and the valor quarterly report on form 10-Q for the three months ended March 31, 2021 and the company's other filings with the Securities and Exchange Commission and he forward looking.

Statements made today speak only to a balance of operations as of today and.

<unk> disclaims any duty to provide updates to its forward looking statements. Even if subsequent events cause the company's views to change. It is now my pleasure to pass the call over to send the.

Thank you Jessica good morning, everyone and thanks for joining.

Simba Gill: Thank you, Jester. Good morning, everyone, and thanks for joining us. 2021 is a pivotal year, and we've begun the year with continued strong execution. Together with our partners, we have successfully progressed our research and clinical plans despite the COVID-19 pandemic. And because of this, we remain on track to deliver multiple clinical readouts across psoriasis, atopic dermatitis, and COVID-19 over the next few months. We also continue to advance our extracellular fecal product candidates in oncology and inflammatory disease.

2021 is if I told you of course.

And we've begun the year with continued strong execution.

Together with our partners, we have successfully progressed, our research and clinical plans. Despite the COVID-19 pandemic and because of this we remain on track because the live up multiple clinical readouts across the branches atopic dermatitis and COVID-19 and over the next few months.

We also continue to advance of extra.

Extracellular vesical product candidates in oncology and inflammatory disease.

Mark and team and research and development continue to explore and hubs and extends the applications of syntax space medicines and he will give you an overall view of our drug platform and a moment.

Simba Gill: Mark's team in research and development continues to explore, enhance, and extend the applications of syntax-based methods, and he will give you an overall view of our drug platform in a moment. We have expanded Avello's leadership, appointing Lucas Scarbo as Chief Financial Officer, who starts with us on June 1st, and Julie McHugh to our Board of Directors, effective immediately.

We have expanded the develop leadership of pointing Lucas Scavo as Chief Financial Officer, Lucas starts with US on June the first and Julie Mchugh two of board of directors effective immediately.

Both Luca and Julie has deep and successful track record and building global organizations and commercializing blockbuster products across a wide array of indications.

Simba Gill: Both Luca and Julie have deep and successful track records in building global organizations and commercializing blockbuster products across a wide array of indications. We also announced a strategic collaboration with Abdul Latif Jameel Health to develop and commercialize EDP 1815 in the Middle East, Turkey, and Africa. The collaboration combines Abello's leadership in biotech innovation and Jameel's regional presence, reputation, and expertise with the goal of accelerating the delivery of effective affordable medicines to people in these high-growth markets.

We also announced the strategic collaboration with up to one of the teamster meal health to develop and commercialize ETP 18, 15, and the Middle East, Turkey and Africa, but the.

Collaboration combines the values leadership, and biotech innovation and upsell of the teacher meals regional presence reputation and expertise with the goal of accelerating the delivery of effective affordable medicines to people and these high growth market.

And we look forward, we continue to make strong progress and executing on our clinical strategy and plans and Jonathan will tell you more of that this later and the cool.

Simba Gill: As we look forward, we continue to make strong progress in executing on our clinical strategy and plans, and Jonathan will tell you more about this later in the course. With that, I will pass the call over to you.

With that I will pass the call over at the mall.

Thank you Simba.

Mark Bodmer: Thank you, Simba. Over the last 18 months, a series of clinical and preclinical results have advanced our understanding of the small intestinal axis syntax. Building Avella's platform and portfolio started five years ago with a vision and strategy that have remained constant. We proposed a way to make a new type of medicines that are both innovative and affordable, and that are convenient to take orally and are safe and well tolerated. This profile is quite different from other innovative medicines.

Over the last 18 months, a series of clinical and preclinical results from advanced on understanding of the small intestinal axis syntax Bill.

Building and that was platform and portfolio of them started five years ago with the vision and strategy, which has remained constant.

We propose the way to make a new type of medicines, but I thought of it.

Innovative and affordable.

And sort of convenient to take orally and all safe and well tolerated.

First of all of it is quite different to other innovative medicines the.

Mark Bodmer: The science enabling this is a novel way to control inflammation from within the gut with gut-restricted drugs that have effects throughout the body. The key to understanding our medicines is to look at the gut and the profound control exerted by the gut's connections throughout the body. The question was how to make effective medicines to take advantage of this biology. We realized that single microbes could be selected from the gut that behave like conventional drugs with desirable therapeutic effects. We can now also select extracellular vesicles for the same purpose.

The science of enabling this is a novel way to control the inflammation from within the gut got the.

Strict of drugs that have effects throughout the body.

The key to understanding all of medicines is to look at the cost of the profound control exerted by the guts of connections throughout the body.

Western was how to make the effective medicines and take advantage of this biology.

We realized the single microbes could be selected from the court, but the.

Hey, black conventional drugs with desirable therapeutic effects.

We can now also select extra cellular vehicles for the same purpose.

Mark Bodmer: In preclinical studies, product candidates have properties and a profile that is differentiated from current types of drugs, hence the claim that they have transformational potential to benefit the health and lives of so many people. 3 Paradigms were challenged to make this new type of medicine. Firstly, immunology, which says that there is a control system for systemic immunity centered in the gut. This is not widely appreciated or understood.

The clinical studies product candidates have properties and the profile that is differentiated from current types of drugs and hence the claim that they have transformational potential benefit and the health of the lives of so many people.

Three current times with challenged to make this new type of medicine.

Firstly immunology that type.

As of control system for systemic community centered in the gut.

And is not widely appreciated or understood.

Mark Bodmer: Second, pharmacology. This control system can be targeted to make medicines that act at a distance from within the gut without entering the body. Thirdly, the microbiome, that there is an alternative way to think about making medicines based on the microbiome by selecting elements of the microbiota that can have direct pharmacological effects and work in non-live, non-colonizing forms. The ultimate expression of this are the discoveries about the pharmacology of extracellular vesicles.

Second the pharmacology that this control system can be targeted to make medicines of axa the distance from within the guidance without entering the body.

Thirdly, the microbiome.

But there was an alternative way to think about making medicines based on the microbiome by selecting elements of the Microbiota, which can help direct pharmacological effect and work and non life non colonizing force.

And the ultimate expression of this of the discoveries about the pharmacology of extra studies the vehicles.

These are three big claims to make sure all supported by.

Mark Bodmer: These are three big claims to make, which are all supported by data that you've seen emerging piece by piece, initially preclinical, and now clinical. Now, let's recap the clinical picture of EDP1815. Five studies have shown anti-inflammatory effects with EDP-1815. Two cohorts of people with psoriasis, a cohort with atopic dermatitis, and two groups of human volunteers in an experimental inflammation model. Each of these alone was a small study.

By data that you've seen emerging piece by piece initially preclinical and then clinical.

Let's recap the clinical picture of Edp 18 16.

Five studies have shown anti inflammatory effects with ETP 18, 15, two cohorts of people with psoriasis of cobalt with atopic dermatitis, two groups of human volunteers and and <unk>.

Part of mental inflammation model.

Each of these alone with the small study.

Mark Bodmer: Collectively, they show a consistency of effect, proof that a non-live single strain of bacteria can actively distance itself from within the gut to control systemic inflammation. The three paradigms in immunology, pharmacology, and the microbiome have been effectively challenged. The range of clinical information that's been studied, Th1, Th2, and Th17 pathways, supports the Goldilocks effect, the so-called broad resolution of inflammation without overt immunosuppression. And around 300 patients have taken EDP1815 for between 4 and 16 weeks for several diseases, including hospitalized patients with COVID-19.

Secondly, they show a consistency of the effect proof that adult lives single strain of bacteria can act of the distance from within the gut to control of systemic inflammation, the three paradigms and immunology pharmacology and the microbiome had been effectively challenged.

The range of clinical information that's been study th one th two and th 17 pathways supports the goldilocks effect, so called broad resolution of the inflammation without Oprah immuno suppression.

And the round 300 patients have taken Edp 18, 15 flow between four and six to eight weeks and several of diseases, including hospitalized patients with COVID-19.

Mark Bodmer: ADP-1815 is a unique asset in the pharma world. It has an increasing probability of success to become a major medicine. A year ago, it seemed a possible outcome. The data now suggests that it's a likely one. Two more things are worth reflecting on.

And <unk> continues to be well tolerated.

The ph and 15 is a unique asset and the pharma world It.

It has and increasing probability of success at the carbon nature medicine, a year ago. The seen the possible outcome. The data now suggests and it'll likely one.

Two more things of worth reflecting on.

Mark Bodmer: First, a reminder of the extensive range of preclinical data. EDP-1815 has been compared with the best standard of care drugs in mouse models of all three major forms of inflammation, where it has been shown to have clinical activity, Th1, Th2, and Th17. In every case, EDP-1815 and other emerging drug candidates in our pipeline are comparable to, for instance, tofacitinib, fingolimod, and dexamethasone. These are amongst the most potent small-molecule anti-inflammatories, all of which are effective but dose-limited by toxicity, which does not appear to be an issue for EDP-1815. It's hard to see any of these classes of drugs being used routinely across the full spectrum of inflammatory disease severity.

As a reminder of the extensive range of preclinical data.

<unk> 15 of speed compared with the best standard of care drugs and mouse models of all three major forms of inflammation, where it has been shown to have clinical activity ph one ph to the th 17, and every case Edp 18, <unk> and other emerging drug candidates and our pipeline are comparable to for instance, cocoa.

And then the Golar mode and dexamethasone these.

These are amongst the most potent small molecule anti inflammatories and all of which were affected the dose limited by toxicity, which does not appear to be an issue from <unk>.

To see any of these classes of drugs being used routinely across the full spectrum of inflammatory disease severity.

Mark Bodmer: EDP-1815 and EDP-1867 also compare favorably to mouse equivalents of anti-IL-17 and anti-IL-4 biologics. However, again, it's hard to see these in routine use in very large numbers of patients, given their costs and route of administration. These are remarkable, broad, and consistent effects of EDP1815, one drug that potentially can match all of these comparators with safety, convenience, and affordability. Finally, new data have been generated about how our syntax drugs work, the mechanisms by which a gut-restricted medicine can have systemic effects.

<unk> 50 of Edp $18 67 also compare favorably to the mouse equivalents of anti IL 17, and anti IL for biologics.

Again, it's hard to see the easily between you and some very large numbers of patients getting the costs and route of administration.

And you saw remarkable broad and consistent effects of Edp 18, and 15, one drug the potentially can match all of these comparisons with safety convenience and a.

Affordability.

And finally, new data has been generated about how of syntax drugs work the mechanisms by which of got restricted medicine can have systemic effects.

Mark Bodmer: We've identified the biological exchange mechanism, the contact point where immune cells in the gut, which see our drugs, transfer information to immune cells in the periphery, which have the therapeutic effect. This exchange takes place in the lymph nodes of the gut, which are the place where the gut and peripheral immunity meet. The ability of immune cells to travel through those lymph nodes that link the gut to the rest of the body can be blocked by administering antibodies for receptors that are required for the failure of trafficking.

Identified the biological exchange mechanism, the contact point, where immune cells and the cost would see all drugs transfer of information to the immune cells and the periphery, which have the therapeutic effect.

This exchange takes place and the lymph nodes of the cut which of the place where the cut.

Peripheral immunity meet.

The ability of the immune cells the traffic through those lymph nodes that make the cut.

So the rest of the body can be blocked by administering antibodies to receptors that are required for the cellular traffic.

When this is starting combination with edp $18 15, and Edp 18, and 15 does not exist its effects of the periphery.

Mark Bodmer: When this is done in combination with EDP1815, then EDP1815 does not exert its effects in the periphery. This inhibition has also been shown for EDP1867, the second anti-inflammatory microbe that has just started to be used in the clinic, and for EDP2939, the anti-inflammatory EV. It's a general property of anti-inflammatory syntax medicine. This is a formal proof of a mechanism which explains this new pharmacology. It's the linchpin to understanding that there is a defined system and cellular basis for this newly discovered biology.

And this inhibition of has also been shown for Edp $18 67, the <unk>.

And that the inflammatory microbe that has just started in the clinic and for ADP 29, 39, the ethane.

On a true E Z, it's a general property of anti inflammatory syntax medicines.

This is a formal proof of mechanism, which explains this new pharmacology its the linchpin to understanding that there's a defined system and cellular basis for this newly discovered biology.

This is all kind of a long way quickly improving what initially seemed and unreasonable idea.

Mark Bodmer: This has all come a long way quickly, improving what initially seemed an unreasonable idea. Simba and I have early history together from the mid-1980s on some of the very first therapeutic antibody projects. Conventional wisdom was that antibodies could not possibly be drugs. They wouldn't work, they wouldn't be tolerated, and they couldn't be made at scale.

Sundar and I have the early history together from the mid 19 eighties and some of the very first therapeutic antibody projects conventional wisdom was of antibodies could not possibly be drugs would work it would be tolerated there couldnt be made at the scale, we know how that turns out.

Mark Bodmer: We know how that turned out, and we've leant on that experience to build the Avalo platform for EDP1815 and all of the other candidate products in our pipeline for inflammation and oncology. Continuing research investment in formulation and extracellular vesicles will allow us to maximize their effects in patients. Continuing investment in manufacturing at scale and low cost of goods will enable us to make these new medicines widely available and affordable. Now over to John.

Rental and have experienced the build the of allo platform for Edp 18, 15, and all of the other kind of of the products and our pipeline for inflammation and oncology.

And with such investment and formulation and extracellular vehicles will allow us to maximize the effects of patients.

And I think of an investment and manufacturing at scale and low cost of goods will enable us to make these new medicines widely available and affordable.

Now over to John.

Thank you Mark and good morning, everyone.

Jonathan Zung: Thank you, Mark, and good morning, everyone. As Simba shared, we'll have readouts from several clinical studies in the second half of this year. We remain on track to report top-line data for the full cohort of study participants in our Phase 2 dose-ranging trial in psoriasis in the third quarter. As a reminder, this is a 16-week trial evaluating three doses of EDP-1815 in capsules versus placebo in approximately 225 patients with mild to moderate psoriasis.

A simple shared we'll have readouts from several clinical studies and the second half of this year.

We remain on track to report topline data for the full cohort of study participants and our phase two dose ranging trial in psoriasis and the third quarter.

As a reminder, this is the 16 week trial evaluating three doses of Edp, 18th 2015, and capsules versus placebo and approximately 225 patients with mild to moderate psoriasis.

Jonathan Zung: The primary endpoint is the mean percentage change in PASI score at 16 weeks. Secondary endpoints include a number of physician and patient-reported outcomes across different measures of clinical efficacy. Our Phase 1B trial evaluating tablet and capsule dosage forms using the higher concentration of EDP-1815 drug substance is underway in three cohorts of patients, two with capsules and one with tablets. The purpose of these three cohorts is to select the most appropriate dosage form, either capsule or tablet, for our Phase III program.

The primary endpoint is the mean percentage change and passing score at 16 weeks.

Secondary endpoints include a number of physician and patient reported outcomes across the different measures of clinical efficacy.

Our phase <unk> trial, evaluating tablet and capsule dosage forms using the higher concentration of Edp 18, 15 drug substance is underway and three cohorts of patients to with capsules and one with tablets.

The purpose of these three cohorts as the select the most appropriate dosage form either capsular tablet for our phase III programs.

Initial results from these three cohorts are anticipated in the third quarter, along with data from the phase two psoriasis study.

Jonathan Zung: Initial results from these three cohorts are anticipated in the third quarter, along with data from the Phase II psoriasis study. Together, this information will position us to go forward into Phase III trials with an optimized dose and dosage form of EDP1815. Moving on to EDP1815 and atopic dermatitis, we're planning to initiate the Phase 2 atopic dermatitis trial in the third quarter of this year. This will be a double-blind, placebo-controlled trial in participants with mild, moderate, and severe atopic dermatitis.

Together this information will position us to go forward into phase III trials with an optimized the dose and dosage form of Edp <unk> 15.

Moving on to ETP, $18, 15, and atopic dermatitis, we're planning to initiate the phase II atopic dermatitis trial and the third quarter of this year.

This will be of double blind placebo controlled trial and participants with mild moderate and severe atopic dermatitis. The trial, we've conducted and North America and Europe.

Jonathan Zung: This is a trial we conducted in North America and Europe. Our Phase 1B trial of EDP1867, Evaluating Safety and Tolerability in Healthy Volunteers in Patients with Moderate Atopic Dermatitis, is ongoing and progressing according to schedule. Dosing in the healthy volunteers is underway, and we will begin dosing of participants with moderate atopic dermatitis later this quarter. The moderate atopic dermatitis cohort will be dosed daily for 56 days with a 14-day follow-up. We will report results from this study in the fourth quarter.

Our phase one b trial of Edp, 18, and 67, and evaluating safety and Tolerability and healthy volunteers and patients with moderate atopic dermatitis is ongoing and progressing according to schedule and.

Dosing and the healthy volunteers is underway and we will begin dosing of participants with moderate atopic dermatitis later this quarter the.

The moderate atopic dermatitis cohort will be dosed daily for 56 days with a 14 day follow up.

We will we will report results from this study and the fourth quarter.

Jonathan Zung: Just a reminder that EDP1867 is from a different genus to EDP1815 and has been rendered non-live by gamma irradiation. EDP1867 has demonstrated robust anti-inflammatory activity in preclinical models of Th2 biology. By testing it in patients with atopic dermatitis, we will learn about its potential in treating Th2-mediated diseases.

Just a reminder, that Edp 18, and 67 is from a different genus to Edp 18, and 15 and has been rendered non life by gamma irradiation of <unk>.

<unk> and 67 has demonstrated robust anti inflammatory activity in preclinical models of th two biology.

By testing it and patients with atopic dermatitis, we will learn about its potential and treating th two mediated diseases.

Our two COVID-19 studies are ongoing and the first study tactically as the randomized parallel arm open label adaptive platform phase two three trial of potential disease, modifying therapies and patients with COVID-19 related diseases.

It is sponsored by Cambridge University hospitals, and the U K with joint funding and drug supply by of Belo and Astrazeneca the.

Jonathan Zung: Our two COVID studies are ongoing. The first study, TACTIC-E, is a randomized parallel-arm, open-label, adaptive-platform phase 2-3 trial of potential disease-modifying therapies in patients with COVID-19-related diseases. It is sponsored by Cambridge University Hospitals in the UK with joint funding and drug supply by Avelo and AstraZeneca. The planned review of interim data after the first 90 subjects enrolled, including 30 subjects treated with EDP-1815, was conducted by the Independent Data Monitoring Committee in accordance with the protocol. No safety issues for EDP-1815 were identified.

The planned review of interim data after the first 90 subjects enrolled including 30 subjects treated with Edp $18 15 was conducted by the independent data monitoring committee and accordance with the protocol.

No safety issues for Edp, 18th 15 were identified and.

The trial is therefore proceeded with continued recruitment.

The next review of safety and efficacy data will be after approximately 125 subjects have been enrolled into the ETP 18 15 arm.

The primary outcome measure is the incidents of any one of death invasive mechanical ventilation ecmo cardiovascular, Oregon support for renal failure. We've recently opened additional sites in Mexico, Brazil, and India, where hospitalizations continued to increase in order to increase enrollment.

Jonathan Zung: The trial has therefore proceeded with continued recruitment. The next review of safety and efficacy data will be after approximately 125 subjects have been enrolled in the EDP 1815 arm. The primary outcome measure is the incidence of any one of death, invasive mechanical ventilation, ECMO, cardiovascular organ support, or renal failure. We've recently opened additional sites in Mexico, Brazil, and India, where hospitalizations continue to increase, in order to increase enrollment. The second COVID study is being conducted at Rutgers Robert Wood Johnson University Hospital.

The second COVID-19 study is being conducted at Rutgers Robert Wood, Johnson and University Hospital.

This study is evaluating Edp, 18, 15, and adult patients newly hospitalized and on oxygen due to the COVID-19 infection.

Patients are equally randomize to receive Edp 18, 15, plus standard of care of placebo plus standard of care for 14 days. The primary outcome is changed from baseline to the lowest ratio of peripheral blood oxygen saturation. So fraction of inspired oxygen measured up to day 14.

Jonathan Zung: This study is evaluating EDP1815 in adult patients newly hospitalized and on oxygen due to the COVID-19 infection. Patients are equally randomized to receive EDP1815 plus standard of care or placebo plus standard of care for 14 days. The primary outcome is change from baseline to the lowest ratio of peripheral blood oxygen saturation, or the fraction of inspired oxygen measured up to day 14. Secondary outcome measures include overall survival, the WHO COVID ordinal scale score, duration of hospital stay, duration of oxygen therapy, and time to clinical improvement.

Secondary outcome measures include overall survival, who COVID-19 ordinal scale score duration of hospital stay and duration of oxygen therapy and time to clinical improvement.

While we continue to accrue patients of both trials during the quarter due to the increase and vaccination rates and the lower number of patients hospitalized with COVID-19, we expect both trials will take longer than originally planned.

Because we do not know when we will be able to report data from these trials, we will no longer provide guidance on timing for data readouts for either trial now I'll hand, it back to Simba for closing remarks.

Jonathan Zung: While we continue to accrue patients in both trials during the quarter, due to the increase in vaccination rates and the lower number of patients hospitalized with COVID-19, we expect both trials to take longer than originally planned. Because we do not know when we will be able to report data from these trials, we will no longer provide guidance on timing for data readouts for either trial. Now I'll hand it back to Simba for his closing remarks.

Thank you Jonathan.

We are at and exciting inflection point per kilo and half of catalyst rich few months ahead of us with multiple clinical readouts as we head towards later stage development.

I'd like to conclude by thanking the team out of value and our partners.

Passion and commitment makes all of this possible.

With that I will now open the call the questions.

Thank you as a reminder to ask a question you will need the press star one on your telephone.

Jonathan Zung: Thank you, Jonathan. We are at an exciting inflection point for Acelo and have a catalyst-rich few months ahead of us with multiple clinical readouts as we head towards later stage development. I'd like to conclude by thanking the team at Avelo and our partners, whose passion and commitment make all of this possible. With that, I will now open the call to questions.

The China question and pass the turnkey please standby will become part of the Q&A of Austin.

And the first question comes from Roger song with Jefferies. Your line is now open.

Great. Thanks can you guys hear me.

Yes, loud and clear Roger on.

Yeah. Thanks, Thanks for taking the question and I think.

Operator: Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the candidate roster. And our first question comes from Roger Song on Jefferies. Your line is now open.

And maybe the first question is related to agent and 15 phase two a profit in the tightest understanding your.

The planning to initiate the trial and so the clutter and just curious what are the staff share and prepare the initiation and the specifically.

Roger Song: Great. Thanks. Can you guys hear me?

Simba Gill: Awesome. Yeah, thanks. Thanks for taking the question, Simba.

What are the kind of expected it on point potentially different from the current to approve the driving and the mild to moderate patient population, which we know all most of the day with topical.

Roger Song: Maybe the first question is related to 1815 phase 2 atopic dermatitis. I understand you're planning to initiate a trial in the third quarter. And just curious, what are the steps to prepare for the initiation? And specifically, what are the kind of...

Thanks Roger.

The questions Roger So let me say, a few words and I'll, let Jonathan.

Jonathan and expand on the endpoint so in terms of steps are as.

As you know we bought Jonathan on board as the Chief Development Officer.

Simba Gill: current approved drug in the mild to moderate patient population, which we know are mostly Thanks. I appreciate the questions, Roger.

And it feels like a lifetime of COVID-19, it feels like yesterday as well.

And Jonathan It's just been a fantastic addition to the leadership team and.

Simba Gill: So let me say a few words, and I'll let Jonathan expand on the end point. So in terms of steps, as you know, we brought Jonathan on board as our Chief Development Officer. It feels like a lifetime ago, but it feels like yesterday as well.

On the Jonathan's leadership.

We've really built out clinical development capabilities together with the CRA partners, so what very well per pad already in terms of coal block.

Simba Gill: And Jonathan's just been a fantastic addition to the leadership team, and under Jonathan's leadership, we've really built out clinical development capabilities together with our CRO partners. So we're very well prepared already in terms of core blocking and tackling, linking to phase two in terms of site identification, etc. So all of the fundamental operational things are very much in hand. Obviously, the other key thing is drug supply and everything around tech ops and manufacturing. Chum Zhang, who heads up tech ops for us, is a magician and is constantly able to deliver what we need. And again, we're very much in a great position there.

Blocking and tackling.

And linked to the phase two in terms of site identification.

Et cetera.

So all of the fundamental operational things that very much and hand.

Obviously, the other key thing is as drug supply and everything around tech ops and the manufacturing Jun Zhang of heads up on tech ops for us.

As a magician and this comes at the able to deliver what we need and again.

With very much and of great position that so I think we're.

You would just moving forward on plan and should.

And you'll be in it and a great position to stop and.

Context steel.

Question.

In terms of what are the endpoints and what are we looking full on.

And let Jonathan talk some of the technical points of that but just to frame the unmet need and the market situation as you suggested Roger.

Simba Gill: So I think we're just moving forward on the plan and should be in a great position to start in that context. [inaudible] Essentially, for moderate and mild patients, there are no meaningful oral safe drugs, and so patients are limited to using topicals. You've heard us talk before, Roger, about the fact that whilst topicals have a role, and we expect they will always have a role, in treating patients with moderate and milder forms of dermatological disease, there's a huge desire on the part of patients and clinicians to have oral therapy.

Atopic dermatitis.

Essentially full moderate and mild patients has no meaningful world safe.

Safe drugs, and so patients are limited to using topical.

You've heard of all Roger about the fact that whilst pulp goes half.

Our role and we expect we'll wait and we'll have a role in treating patients with moderate and milder forms of dermatological disease.

There's a huge desire on the part of patients and clinicians to have oral therapies.

Simba Gill: As you know, Roger, you see the benefit of oral therapies on the psoriasis side in moderate disease, where Tesla's just rocketed to a multi-billion-dollar product, just because it's intuitively obvious patients want an oral tablet or capsule versus having to lather creams onto their bodies every day. So it's a wide open space.

As you know Roger you see the benefit of Rfps on the psoriasis side and moderate disease, where it has less risk.

Rocketed to a multibillion dollar product.

Just because of the it's intuitively obvious patients on oral tablet and what capsule.

And having to latter creams onto the body's every day, so it's a wide open space.

Simba Gill: The last meaningful topical to get approved was Crisabrol, Eucrisa, and we certainly expect to have a very competitive product versus Eucrystrol, Crifabrol, or indeed any of the other topicals, but the point is that we'll be the key oral, safe, effective, and affordable medicine in the atopic dermatitis space. So we're very excited about that, Roger, and really see a very clear path for us to have the key defining oral product in the whole atopic dermatitis space. I'll let Jonathan pick up on the technical points about the ending. Sure. Thanks, Simba.

On the last meaningful topical to get approved was the <unk> you Chris.

And.

And we certainly expect to have a very competitive product versus your crystal capital or indeed any of the of the topical but the point is the.

So it will be the key oral safe effective and affordable medicine, and the atopic dermatitis space. So we're very excited about that Roger.

And really see a very clear buffers, but having the the key.

The defining oral product and the whole atopic dermatitis space.

I'll, let Jonathan pick up on the technical points about the endpoint.

Sure, Thanks, Simba and Roger in terms of the endpoints, where we're looking at the conventional endpoints will be looking at.

Jonathan Zung: And, Roger, in terms of the endpoints, we're looking at the conventional endpoints. We'll be looking at change in EASY, change in IGA. We'll look at IGA and BSA. And then, in addition, we'll be measuring a slew of patient and physician-reported outcomes, including POEM, DLQI, SCORAD, ITCH, things of that nature. So, we'll be able to, you know, fully understand 18 and 15. Okay, great. Thanks for all the comments and questions.

<unk> and easy change and Iga, we'll look at Iga and BSA and then and in addition, we will be measuring a slew of patients and physician reported outcomes, including polo on <unk> score at things of that nature. So we will be able to fully understand 18 and 15.

Okay, great. Thanks for all of the comments.

Roger Song: Okay, and maybe just my next question is for you. You have two EV product candidates, 2339 and 1908. Knowing you will start a clinical trial next year, so just curious about what are the steps into the R&D filing, and given these are EV products versus the single-strain live-on replicating product, what are the key differences versus current pipeline products? So let me answer your specific questions in a moment, Roger.

Okay and then maybe just my another question is for you or you have two product candidates.

Any sort of the 39 and 19 of whole AIDS and <unk>.

Knowing the wells start.

Let's start at Canadian coal next year. So just curious of what are the debt.

Two of the IMD, finding and the given these are <unk> product versus the single stream.

On the LIBOR on the replicating.

What are the key differences versus the current type and product.

Yes.

So let me answer your specific questions and a moment Roger if you'd just bear with me.

Simba Gill: If you just bear with me, I'm very happy you've raised our EV, our extracellular vehicle program, so I just want to recap that aspect of what we're doing because it's something we're incredibly excited about. So, just to re-summarize, I know you understand this, Roger, but I suspect others on the call may not. So, EVs are naturally produced microbial extracellular VCs, which we have discovered can be delivered orally to drive very potent responses in oncology at a level that goes far beyond what we and others in academia and even other companies have seen in terms of oral delivery in oncology. And given that we're taking forward our first EVs, we absolutely are moving forward towards the clinic. I'll come back to the specific actions and things And as you know, Roger, there are three core pillars to the stool of modern IO therapy. Checkpoints have done a great job removing the breaks; that's largely sold.

Happy raced on EV.

And our extra cellular vehicle program. So I just wanted to recap.

That aspect of what we're doing because it's something we're incredibly excited about.

So just to.

Re summarize I know you understand this Roger but I suspect for others on the call may not so.

<unk>.

Naturally produce microbial extra city of vehicles.

Which we have discovered.

And can be delivered orally to drive the.

Very potent responses.

Quality of the level of it goes far beyond what we and others and academia and even other companies have seen in terms of oral delivery and oncology.

And given that we're taking forward on first Evs, we absolutely are moving forward towards the clinic and I'll come back to the specific.

Actions and things that need to happen in order to allow that and the moment Roger but our anticipation is that we have of real potential to have again the key foundational.

And orally delivered immune activating <unk>.

Agent and the oncology World and as you know Roger because the three core pillars to the school stool of modern Io therapy checkpoints have done a great job removing the breaks.

That's largely sold obviously it was.

Simba Gill: Obviously, there are a range of new products, including Tridelby, which are doing important things in terms of increasing exposure of neoantigen and antigen to the immune system. But the piece we haven't solved as a broad field is, how do we activate the immune system in the most optimal way? People use the analogy of cars. So you can take the brakes off the car, but the car's still not going to go anywhere if you don't have fuel in the car and you don't hit the accelerator.

The range of new products, including <unk>, what Youre doing and.

Important things in terms of increasing exposure of neo antigen and antigen to the immune system.

But the piece, we haven't solved as a broader field is how do we activate the immune system and the most optimal way people use the analogy of a cost. So you can take the break all of the call but of course still not going to go anywhere.

And you don't have fuel and the Com and you don't hit the accelerator and so that's really the key missing piece and all of you in immuno oncology, how do we make sure the immune system is ultimately activated and the preclinical data that we presented at Citi and November.

Simba Gill: And so that's really the key missing piece, in our view, in immuno-oncology. How do we make sure the immune system is optimally activated? And the preclinical data that we presented is quite remarkable. We're seeing results in preclinical and relevant in vivo models where we're activating at a level which is as strong as the best products that people have seen historically, but those other products are delivered intratumorally and or systemically, and they typically come with significant side effects and tolerability issues.

And it's quite remarkable we're seeing results pre clinically and relevant in vivo models.

We're we're activating the.

Systemic community at a level, which is the strongest.

The best.

The products that people see and historically, but those other products and deliberate and for tumor Lee and all of systemically.

And they typically come with significant side effects tolerability issues.

Simba Gill: The results are in line with the type of thing that people became very excited about with sting agonists, for example, a few years ago. So, the reasons why EV is more potent, Mark may perhaps touch on later, but fundamentally, because they're so small, they're about 1,000th the size of a microbe, they can penetrate through the mucous layer to get to the surface of the small intestinal wall much more efficiently than micro

Or in line with the types of things that people became very excited about with the Sting agonist for example, a few years ago.

So.

The reasons why EPS more potent.

And maybe perhaps touch on.

Later.

But.

Fundamentally because of that sort of small or about 1000 to the size of a microbe. They can penetrate through the mucus lag to get to the surface of the small intestinal wall much more efficiently with microbes and given that that allows them to be recognized.

Simba Gill: And given that it allows them to be recognized much more efficiently than microbes, we believe, than microorganisms. So that could well also translate to even more potent activity than we've seen with 1815 or any of the other things we've worked on pre-clinically. And we don't know how far that could go.

Much more efficiently we believe the.

The microbes.

With that.

Well also and inflammation translate to even more potent activity than we've seen.

With $18 15 or any of the other things we've worked on pre clinically.

And we don't know how far that could go on and the best case, and we could maybe get antibody like activity with Evs and inflammation, which all of them, obviously Roger would be.

Simba Gill: You know, in the best case, we could maybe get antibody-like activity with EVs and inflammation, which, obviously, Roger, would be beyond transformative. So we're very excited about EVs. We'll get the data next year on inflammation. We'll go into the clinic, we expect, with confidence in inflammation and in oncology. The steps are very much in line with what we just talked about in atopic dermatitis. As your question suggests, the challenge is to manufacture something which has never been manufactured for pharmaceutical use before.

The on transformative.

So we're very excited about evs.

And we'll get the data next year, and almost and inflammation and we'll go into the clinic, we expect with confidence and inflammation and.

Collagen and the steps are very much in line with what we just talked about and.

And atopic dermatitis as your question suggests that the the.

The challenge is to manufacture something which has never been manufactured with pharmaceutical east before the fundamental first part of the process is still to the government and produce microbes and then from the microbes.

Simba Gill: The fundamental first part of the process is still to ferment and produce microbes, and then from the microbes, essentially, we have a process that forces the production of microbial extracellular vesicles, and then those microbial extracellular vesicles are essentially, through filtration, isolated, and then, again, converted in a very similar way to drug substances, with the end product being a tablet or capsule containing Chan, again, who heads up TechOps, as he's always done, has done a great job developing the microbial extracellular vesicle manufacturing process, and with our partners, that tech transfer and scale-up are underway.

Essentially of a process, which of course is production of microbial extracellular vehicles and then those microbial iusacell and vehicles are essentially through filtration isolated and then again converted and a very similar way to drug substance with the end product being a cash.

But on the capital containing the <unk>.

Craig of extra sale and vehicles.

And again, who heads up tech ops.

And the Holy Stone and has done a great job on developing the microbial extracellular visco manufacturing process and with our partners.

The tech transfer and scale up is underway, we're already at a place where we're very confident.

Simba Gill: We're already at a place where we're very confident that there's not going to be any... unexpected issues there and we'll be able to... scale up and do the relevant PAC transfer. It'll take a little bit of time, Roger, so that's what we're going through right now, but it's already well underway. And then we obviously have to go through regulatory interactions and so on. Again, that's all anticipated for later this year. We're not anticipating any fundamental challenges. Again, these are very much linked to the microbes we've already. Talk with regulators and others.

There is not going to be any.

Unpredicted issues, there and we'll be able to.

To scale up and do the relevant backdrops above it.

Let's take a little bit of time, Roger and so and that's what we're going through right now.

But it is already well underway and the.

And we obviously have to go through regulatory interactions and so on again that simple anticipated later this year.

Not anticipating any any fundamental challenges again these are very.

Very much linked to the microbes we've already.

Talk with regulators and others about so those of the fundamental points on EPS I believe the answer to your question.

Roger Song: No, that's very helpful. Thanks for the answer and very informative background information. I believe. Thank you, thank you for taking the time to answer the question and

No that's very helpful. Thanks for the.

And out there and.

And the very informative and background information and good evening.

It's a matter of beneficial for the audience. Thank you think of I think the question and the congrats by the program.

Roger Song: Thank you. Thank you for taking the question and congratulations on the program.

Thanks, a lot Roger.

Operator: Thank you. Our next question comes from Matthew Luchini with BMO Capital. Your line is now open.

Thank you. Our next question comes from Matthew Luchini with BMO Capital. Your line is now open.

Hi, Thanks for taking the questions and congrats on the progress.

Matthew Luchini: Thanks for taking the questions and congrats on the progress. First, I guess, in the context of 1815 and the upcoming psoriasis data, where you've spoken about several months ago, Tesla is kind of being the best comp, but now we're in a post, and we've got the TIC-2 data. Just wondering if you could share your views, your latest views, your latest thinking on the competitive landscape and if you still view Tesla as the best or most relevant benchmark when that Phase IIb data comes out. And if so, why? And then I have a couple of follow-up questions.

First I guess.

And the context of 18, 15, and the upcoming psoriasis data where now you've spoken.

A lot over the past several months about the Tesla as kind of being the best comp and now we're in a post COVID-19.

And protect II data just wondering if you could share your views your latest views related thinking is on the competitive landscape and if you still view of Tesla as the best or most relevant benchmark.

When that phase <unk> data comes out and if so why and then I'll move on.

Couple of follow ups.

Yeah, Hey, Matt.

Good to the table.

Simba Gill: Hey Matt, good to hear your voice. So yes is the answer to your question, and let me explain why. Meaning, yes, we see TESLA as a key benchmark. Fundamentally, as you know Matt, the psoriasis space is segmented, from a conceptual perspective, into terms of mild, moderate, and severe patients. And we have always said, as an entry point, we want to tap into the moderate and milder forms of psoriasis. And then we'd expand over time into use and maintenance, potentially into more severe patients. Possibly, there's even standalone use there.

So yes, the see how does the your question and let me explain why I mean, and yes, we see of Tesla as the key benchmark funds.

Fundamentally.

As you know Matt.

The C suite.

Right the spaces is segmented.

From a conceptual perspective into the terms of mild moderate and severe patients.

And.

<unk>.

We have always said as an entry point, we want to tap into the moderate.

And milder forms of psoriasis, and then we would expand overtime into use and maintenance.

Essentially.

And most of the patients potentially of this even standalone use that and would expand and expand any of the direction to very model of patients.

Simba Gill: And we'd expand in the other direction to very mild patients. In the true moderate patients, and obviously the lines between mild, moderate, and severe are somewhat artificial, but the true moderate patient population, which is millions of patients in the U.S. alone, we do not believe in general will be the target of TTIP2s, actually, and we don't believe there'll be significant uptake. And the main reasons for that are, again, these are millions of patients, there are ongoing question marks around the safety of JAKs, and that includes TIK2s; there's potential for black box warnings, etc.

And the true moderate patients and the obviously the the lines between mild moderate and severe of somewhat artificial.

The true moderate patient population, which is millions of patients and the U S alone.

We do not believe.

In general.

Will be the target of take two's actually.

And we don't believe there'll be significant uptake of that.

And the the main reasons for that and ease of millions of patients.

Ongoing.

The question marks around the safety of Jacks and and that includes take two's.

And these potential black box warnings et cetera.

Don't know, what's going to obviously be defined by regulators, but what we do know and everybody knows and has a history of serious side effects.

Simba Gill: We don't know what's going to be defined by regulators, but what we do know, and everybody knows there's a history of serious side effects and treating patients with late-stage cancer. So safety and tolerability are absolutely key, and that's also true for the patient. So, you know, we'll see what happens with the TIC2s, but we don't see them as our core competitor. We think they're going to be used primarily in severe, moderate patients and in severe, as opposed to the broad, moderate class.

And on safety and Tolerability issues with.

The broad class.

Dermatologist.

Extremely conservative and that and the prescribing.

Practices.

And order situation one of treating patients who've got late stage cancer.

And so the safety and Tolerability is absolutely key.

And that's both of the truth of the patient.

So what's.

And we'll see what happens of particulars, but we don't see them as a core competitive we think theyre going to be used primarily in.

The board should be of moderate patients and into the of patients.

And as opposed to the broad moderate.

Clos.

And so that then.

Leaves us with Tesla and still the key oral drug and Tesla by the way still.

Simba Gill: [inaudible] also is used, despite the fact that it's already clearly on the path to being a multi-billion dollar drug, it's only used in a small fraction of patients, with moderate psoriasis, so two things. We do think a Tesla is the benchmark. It's established and has.., tolerability issues depending on which numbers you look at around 10 and 20 percent of patients have serious GI tolerability issues with the Tesla but you know it's it's reasonably safe in the mind of dermatologists and patients and they used to using it at some level right now so so we do think a Tesla is the benchmark but what I point out is the same comment I made about the tick who's a Tesla has a tiny fraction of the moderate psoriasis patient population that's true in the US and it's even more true as one goes globally and as you know that one of my favorite points this will soon be 10 billion people on the planet of which only a tiny percentage will be in the US and our strategy has always been to develop manufacture and, Distribute the patient on a global basis.

Sure.

Also is used despite the fact that it's already on.

Clearly on the path of being a multibillion dollar drug it's only used and a small fraction of patients with the.

With moderate psoriasis.

So two things, we do think of Tesla as the benchmark.

You have is established.

And.

Uh huh.

Has.

Tolerability issues, depending on which numbers you look at it around.

The 10 and 20% of patients.

Cirrus Gi tolerability issues with the Tesla.

But.

It's a reasonably safe on the mind of dermatologists and patients and.

And they used to using it at some of them right now. So so we do think of Tesla as the benchmark.

But what I'd point out is the same comment I made.

And that the TIK twos of Tesla has a tiny fraction of the moderate psoriasis patient population.

And that's true and the U S and it's even more true as one goes globally on.

And as you know one of my favorite points and it will soon be 10 billion people on the planet of which only a tiny percentage will be and the U S and and our strategy has always been to develop manufacture and.

Distribute the patient on the global basis, and we're able to do that we believe as we go forward.

Simba Gill: And we're able to do that, we believe, as we go forward because we can also produce on a very affordable basis, and that's part of our anticipated pricing model. So we expect we're going to get dramatically higher uptake from a volume perspective than Tesla has done. So I wouldn't think of us as taking share away from Tesla. I think about us as creating a massive new market where there's a huge unmet need for oral.

Because we can also produce and the very affordable basis, and Thats part of on anticipated pricing model and so so.

So we expect we're going to get dramatically higher uptake from a volume perspective, and a Tesla has done so I wouldn't think of us as taking share away from Tesla I think about it is creating a massive new market, where there's huge unmet need for all of them.

Okay, great. Thank you and that's helpful and on the face on the the formulation study.

Matthew Luchini: Okay, great, thank you, that's helpful. And on the Phase 1b, the formulation study, I guess, what do you expect to communicate and also in what kind of forum, meaning press release or medical conference, for that data, and what in particular do you want us to be focusing on?

Yes.

Why.

Do you expect to communicate and also in kind of what Forum meeting press release more medical conference.

Four of that data and what in particular do you want us to be focusing on.

Yes.

Simba Gill: Yes, so for the Phase 1Bs, I expect we'll release them in a press release, Matt. We'll probably release them as a combined, integrated set of data because those Phase 1Bs, as Jonathan mentioned, are integrated in a manner aimed at helping us define what's the best formulation, what's the best concentration together with phase two, and what's the best dose as we anticipate it moving towards phase three. And so what we want to do is just look at all of the different things across those parameters in the Phase 1B data together with the Phase 2 data.

As one piece I expect we will release it.

The press release math okay.

We'll probably release it as a as a combined integrated set of data because those phase one BS as Jonathan mentioned.

And an integrated manner and aimed at helping us define what's the best.

Formulation and what's the best concentration.

Together with the phase II is one of the best dose as we anticipate moving towards phase III studies.

And so what we wanted to do is just look at all of the different things across those parameters through the phase <unk> data together on the phase II data and so we expect we're reported out certainly the phase <unk> and then the integrated manner.

Simba Gill: And so we expect we'll report it out, certainly the Phase 1Bs, in an integrated manner so that we can clearly communicate to everybody why we're choosing whatever it is we're choosing to move forward towards Phase 3T.

So that we can clearly communicate to everybody why we're choosing whatever it is with choosing.

Before moving forward towards phase.

<unk> phase III types of studies.

Matthew Luchini: Great, thanks. One last one before I get back in the queue.

Great. Thanks, and one last one before I jump on from the queue.

So with AT&T and 65 and on a topic you've got the phase one b.

Matthew Luchini: So with 1867 and Atopic Derm, you've got the Phase I-B come in 4Q, assuming success there, just how should we be thinking about the development strategy between 1867 and 1815, specifically in Atopic Derm given that, obviously, 1815 will be just starting at phase two in the third quarter. So I guess what's the sort of mid to long-term plan for these two products?

Come in for Q.

Assuming success there just how should we be thinking about the development strategy between 18, and 67% and 18 15.

Specifically and atopic derm given that obviously 18 15 will be just starting the phase III and.

And the third quarter, So I guess, what's the sort of mid to long term plan from these two products.

Yes, it's got the data driven Matt.

Simba Gill: Yeah, it's going to be data-driven, Matt. You know, we sometimes talk internally about the fact that, you know, a lot of people will sometimes ask us, "What do you do if they both look great?" And the short answer is, we say, fantastic; what a wonderful position to be in.

We sometimes talk internally about the the.

The fact that.

A lot of people will sometimes asked us what do you do if they both look great.

And then and the short answers.

We say fantastic, what a wonderful position to be and.

Simba Gill: So we have to look at the data, Matt, and there are lots of different ways in which we can develop to the degree that both look good, or one of them looks good, and the other looks very good in atopic dermatitis. There are lots of different directions we can go, and we'll make that decision driven by the data. The one thing I'd emphasize is that, again, you know this, Matt, from my historical conversations, but we chose atopic dermatitis and psoriasis from our earlier strategic work as the key initial indications and information for a number of reasons.

And so we have to look at the day to Matt and there's lots of different ways and which we can develop.

To the degree that both look good on one of them.

It looks good the other looks very good and atopic dermatitis, there's lots of different directions and that can go and we'll make that decision driven by the data of the one thing I'd emphasize is that.

Again, you know this Matt from a historical conversations, but we chose atopic dermatitis and psoriasis.

From our early of strategic work as the key initial indications and information for a number of reasons. One is the point that I made linked to your original question, which is the majority of patients who have moderate disease.

Simba Gill: One is the point that I made linked to your original question, which is that the majority of patients who have moderate disease in psoriasis and atopic dermatitis do not take oral medicine today. That's true in the U.S., and again, it's even more true globally. So there is just a massive unmet need. So that was one reason.

And psoriasis and atopic dermatitis and do not take oral medicine to the day, that's true and the U S. Again, it's even more true globally. So it's just the massive unmet need.

So.

That was one reason the second was as we've demonstrated rapid path to clinical readouts.

Simba Gill: The second was, as we've demonstrated, a rapid path to clinical readouts and very informative clinical readouts, and you can literally see improvements in lesions. You know, straightforward things to look at, and then a rapid path to approval from about the stage we're at now. It's very rapid, predictable, and, you know, if we get positive Phase II data, it's hard to conceive of a situation where we're not likely to get approval.

And very important clinical Readouts and you can literally see improvements and the lesions.

Straightforward things to look at.

And then of rapid cost of approval from about the state of we're at now.

Very rapid predictable and.

If we get positive phase II data.

And it's hard to conceive of the situation, where we're not likely to get approval.

Simba Gill: So all of those things are particularly attractive, but the other reasons we went into psoriasis and atopic dermatitis are that they are rapid ways to read out on the different types of T-cell-driven information, so you cross Th17, Th1, and Th2, together with the experimental model of information, the human-delayed-type hypersensitivity model we looked at. So across atopic dermatitis and psoriasis and that human experimental model, we get insight into those different types of inflammatory disease, and again, depending on the data we generate, we can make decisions about where we want to push one product versus another, but don't think of it in terms of just atopic dermatitis and psoriasis, Matt.

And all of those things of that particularly attractive, but the other reasons, we went into psoriasis and atopic dermatitis that they are.

The rapid ways to read out on the different types of T cell driven inflammation, meaning cutting across th 17 tier one th two together with the experimental model of information the humans delayed type hypersensitivity and multi we looked at so across atopic dermatitis psoriasis and the human experimental modal get insight into those different types of <unk>.

Inflammatory disease and again, depending on the data we generate we can make decisions about where do we want to push.

And one product versus another but don't think about it instead of just atopic dermatitis and psoriasis Matt.

Simba Gill: You know, as you know, we expect our product will have broad utility across all inflammatory diseases and indeed diseases which have inflammation as a core underlying driver. So there are many different directions in which we can go. We'd love to have two products that are looking great. And, as I said, it will be data-driven.

No we expect that product will have broad utility across.

Oh inflammatory diseases, and indeed diseases, which have inflammation of the call underlying driver. So there's many different directions and we can go and we'd love to have two products that are looking great and.

And as you said it'll be data driven.

Great. Thank you for taking the questions.

Matthew Luchini: Thank you for taking the question.

Thanks, Matt.

Operator: Thank you. Our next question comes from Matthew Harrison with Morgan Stanley. Your line is now open.

Thank you and your next question comes from Matthew Harrison with Morgan Stanley. Your line is now open.

Matthew Harrison: Good morning. Thanks for taking the question.

Good morning, and thanks for taking the questions.

And I guess there are two from me just.

Matthew Harrison: I guess there are two from me. Just one question on COVID. Could you maybe comment?

One question on on COVID-19 could you just maybe comment on what the statistical bar is at the 125 patients and Jerome I realized given the questions around enrollment is going to be hard to say when we might get that but I'm. Just wondering what that is and then.

Matthew Harrison: Could you maybe comment on what the statistical bar is at the 125 patient interim? I realize, given the questions around enrollment, it's going to be hard to say when we might hit that, but I'm just wondering what it is.

Matthew Harrison: And then I guess the second question is on some of the questions you've already gotten on psoriasis. And I guess the real question here is, you've talked about looking at Tesla, you've talked about PIC2, obviously, in terms of data. I guess maybe just a very specific question in terms of what do you think is the right cross- trial comparison that people are going to look at? I realize there's issues with that, but people are clearly going to do it.

And I guess the second question is on some of the questions you've already gotten on on psoriasis.

And I guess the the real question here is you've talked about looking at Tesla and you've talked about two obviously and in terms of the data I guess, maybe just the very specific question in terms of what do you think is the right and cross trial comparison. The people are going to look at I realize there's issues with that but people are clearly going to do it so.

And maybe you could just give us your view on what you think is the right <unk>.

Simba Gill: So maybe you could just give us your view on what you think is the right comparison as we think about the various data sets that are out there. Thanks. Thanks, Matt.

Paris, and as we think about the various datasets that are out there yes.

Yes, Thanks, Matt.

So let me take the questions in reverse order.

Simba Gill: So let me take the questions in reverse order. I'll let Jonathan take the COVID question in a moment. But on the comparisons of what people should be looking at, you know, as you know, Matt, AAD was last week, and there was new data presented on the Tesla in mild and moderate. And let me just lead with that, because interestingly, there wasn't any data presented on PASI scores. What's the difference in PASI versus placebo?

Jonathan take the COVID-19 question in the moment, but on the.

And the comparisons of what people should be looking at.

As you know, Matt the AAD was last weekend.

There was new data presented on a tesla in mild and moderate.

Just lead with that because interestingly there wasn't any data presented on <unk> scores.

One can read whatever one wants to in that context, but that would be the normal thing.

One would be looking for it.

Whats the difference and patchy versus placebo.

And the latest data on a test of the Havent reported out on that which is which is interesting.

Simba Gill: In the latest data on TESDA, they haven't reported out on that, which is interesting. But that would be one thing to look at. The other is PGA, where I think people are increasingly very focused on. What percentage of patients have a 0 or 1, meaning clear or nearly clear skin? And then the last is...

But that would be one thing to look at the other is pega.

Increasingly I think people and very focused on.

What percentage of patients have of zero or 1% of clear or Neely clear skin.

And and then the last is.

Simba Gill: The key indicator is, I think, increasing focus on patient-reported outcomes and things like DQLI, which integrates itch scores as well as sleep scores, and I think those are the parameters, and I think it's looking at those..., three different parameters in an integrated way, together obviously with the safety and tolerability map. And as I said, we're intrigued with the fact that there hasn't been a readout on PASI from the latest Tesla data.

And so the key indicator I think increasing focus on patient reported outcomes.

On things like <unk>, which integrates H scores as well as the sleep schools.

And I think those of the parameters and.

It's looking at those.

Three different parameters and and integrated way to get the obviously with the safety and Tolerability Matt.

And as I said, what wet and treat with the past that that hasnt been the readout on patchy.

From the latest attached on the data.

Simba Gill: There is a readout on PGA, so I think that that would potentially put a little bit more emphasis on PGA, but we'll measure both. There is historical data on a Tesla in phase two, but we don't have it in phase three yet.

And there is a readout on on PTA.

So I think that that.

And would potentially put a little bit more emphasis on pega, but we'll measure of both the rate of historical readout on of Tesla and the phase II, but we don't have it in the phase III yet.

Nobody has any more debt to suit and then.

Simba Gill: I don't know. Please see the complete disclaimer at https://sites.google.com or at https://sites.google.com.au. Um... think that people will measure it as you know and will measure it stronger than all of those. It's going to be those three. Is that a helpful answer? Yes, thank you. And then, Jonathan, do you want to answer COVID? Yeah, I think, Matthew, the only thing I would add there, and we'd be happy to take it offline to talk with you, is that the TACTIC-E study is being run in the UK.

The has been readout on <unk>, which people are used to looking at so.

And so I think of those will be the three major blocks as the theories of additional.

The things that people measure as you know and we'll measure of storms is that all of those different things, but it's going to be those three main blocks.

Is that helpful answer.

Yes. Thank you.

And then Jonathan do you want on onto the COVID-19 question.

And I think bassi of the only thing I would I would add there and we'd be happy to take it offline to talk with you I mean, the tactic east studies being run and the U K.

Simba Gill: You know, in terms of the full type of analyses we'll be looking at, it's the data that I mentioned earlier on in terms of progression rate, you know, mortality, things of that nature. But, you know, we could go into that with you offline if you want to know a little bit more about the statistics behind that. Okay, got it. Thank you.

In terms of the whole type of analyses will be looking at the.

And the data that I mentioned early on in terms of progression right.

Mortality things of that nature, but we can go into that with you offline. If you want to know a little bit more about the statistics behind that.

Okay got it thank you.

Thanks, Matt.

Thank you and our next question comes from Jonathan on the Cowen and company. Your line is now open.

Jonathan Zung: Thank you. Our next question comes from Joe Thon with Cowen and Company. Your line is now open.

Operator: Hi there, thank you for taking the time to answer my questions. First one, on the atopic dermatitis data for 18-15, now that you've had some time to sit with these results, and I understand there's, you know, not a huge patient population here, but is there anything that you've been able to tease out in terms of those that maybe have a more robust response versus those that don't, and any implications that have on the enrollment criteria for Phase 2?

Hi, there. Thank you for taking my questions.

The first one on the atopic dermatitis data for <unk> and now you've had some time to sit with these results and and.

And I understand there's not a huge patient population here, but is there anything that you've been able to tease out in terms of those that maybe have a more robust response.

Versus those that don't and any implications that has to the enrollment criteria for the phase two.

Operator: And then the Phase 2 is going to have a small proportion of severe patients, I think. If I remember correctly, how are you thinking about potential background therapies in that study? So, again, I'll let Jonathan answer the question about details, including background therapy and so on. On your first point, Joe, in terms of teasing out additional information, we obviously continue to look at individual patient data exactly as you're suggesting, and we'll always look to see if there are learnings.

And then the phase two is going to have.

A small proportion of severe patients I think if I remember how are you thinking about potential background therapies and that study.

So again I'll, let Jonathan answer the question about details and COVID-19 background therapy, and and so on and on your first point Joe in terms of.

Teasing out additional information we obviously.

Continue to look at.

Individual patient data of exactly as you're suggesting and we'll always look to see if there are learnings, but I think fundamentally it's too small a number of patients.

Operator: But I think fundamentally, it's too small a number of patients that could lead to any shift in terms of thinking. We do absolutely look at the individual patient data and see if there are any directional things that one might interpret it. It's something we talk about a lot. But there's nothing, given the small size of the study, that we've thought of before.

The lead to any shift in terms of.

Thinking we do absolutely.

Look at the individual patient data and see if they are on directional things that one might interpret assets.

And something we talked about a lot.

But the.

There is nothing given the small size of the study that we see is changing.

Changing anything with total of before.

Joe Thon: And then Jonathan, do you want to talk about background therapy that we're anticipating in phase 2 and atopic dermatitis? Sure, so for the phase 2 atopic dermatitis study, in terms of background therapy, participants in that study will be on emollients. So we'll have a two-week lead-in on emollients where we'll have all the participants take their two weeks, we'll rescreen them, and then enter them into the trial. So we'll all be on the background of the emollients that we're looking at. And as you mentioned, we'll be exploring mild, moderate, and severe populations. Great, thank you.

And then Jonathan do you want on it.

Talk about background therapy, and that we're anticipating in the phase II and atopic dermatitis.

Sure so.

And so for the phase Iia topic dermatitis study in terms of background therapy.

Participants and that study will be on the <unk>. So we will have a two week leader on the moly and it's where it will we'll have all of the participants some take the two weeks will re screen them and then and throw them into the trial. So all the on the background of them Oems that we're looking at and as you mentioned, we'll be exploring mild moderate and severe popular.

<unk>.

Great. Thank you and maybe just one more just because of pruritus and.

Jonathan Zung: And maybe just one more, just because pruritus and, you know, I would say itch scores are important for atopic dermatitis. You did indicate there was benefit in phase one. Can you just give us a little bit more information there in terms of kind of how robust the itch response was in those patients? And once they were off therapy, we saw some, you know, well maintained responses on EZ and other measures. Was the pruritus measure maintained as well?

I'd say its tours of our importance for atopic dermatitis, you did indicate there was benefit and the phase one can.

Can you just give us a little bit more information there in terms of kind of how robust the the itch response was in those patients and.

And once they were off therapy, we saw some well maintained responses on easy and other measures was the pruritus measure maintained as well.

So.

Joe Thon: So, we've reported out on as much as we're going to say, Joe, so, you know, we reported out on the DLQI score and POEM. For more information, visit www.ncbi.nih.gov. It's too early, which is what we're doing, over-interpret, but we're very encouraged by what we've seen. Thank you very much.

The we've reported out one of as much as we go on to stay Joe.

So we reported out on the D. L P Y school and.

And and.

And that's complete scores and within those day they've got.

And and.

Pruritus related.

<unk> within them.

And there was a clear separation again full numbers go so.

So.

Too early which is why we're doing the phase III.

And tougher, but we're very encouraged by what we saw.

And there's no more detail on what we have reported that one of them.

Understood. Thank you very much.

Simba Gill: Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Simba Gill for closing remarks.

Thanks, Jeff.

Thank you and I'm not showing any further questions at this and I would now like to turn the call back over to Simba Gill for closing remarks.

Thanks very much.

Simba Gill: A couple of things. As I said at the beginning of the call, this is just an incredibly exciting time for us. And as Mark described in his opening remarks, a few years into this journey, we are extremely encouraged by the data, clinically and pre-clinical, that we've generated with 1815. We have now seen positive data in five separate cohorts of patients. That's consistent with the very striking data we've seen pre-clinically in multiple models where, again to repeat one of Mark's school points, we're seeing pre-clinical results consistently as good as best-in-class anti-inflammatories in multiple different models.

So.

Couple of things so as I said at the beginning of the call. This is just an incredibly exciting time for us and.

As Mark described in his opening remarks.

She is into this journey.

We are extremely.

And the encouraged by the data clinically and pre clinically that we've generated with the $18 15, we've now seen positive data and five separate cohorts of patients.

And that's consistent with the very striking takes the we've seen pre clinically and multiple models of inflammation.

Where again to repeat one of Mt School points of seeing preclinical results consistently as good as best in class anti Inflammatories and multiple different models and we've now also go to a much better understanding of.

Simba Gill: And we've now also got a much better understanding of the mechanism of action at the cellular level. As you put all of that together, and, you know, with confidence. We as leaders of Avelo believe we're now in a position where we've confirmed data-driven the existence of the small intestinal axis. I'm an immunologist by training, a more ancient immunologist by training nowadays, and even today, very, very few immunologists, I suspect very few Nobel Prize winners, my standard statement on that, in immunology, are aware of the existence of the small intestinal axis.

Of the mechanism of action at the cellular level.

And so you put all of that together and with confidence.

We as leaders of the value and I believe we are now in a position where we've confirmed.

They could driven the existence of the small intestinal axis.

And the normal just by training.

Some of the ancient immunologist by training nowadays.

And even today very very few Immunologists I suspect very few Nobel Prize winning as many of the standard statement on that and immunology are aware of the existence of the small intestinal axis.

Simba Gill: That's just a remarkable thing that we've uncovered, something fundamental to governing human systemic biology, but what's really exciting is we've essentially demonstrated now clinically that we can harness that newly uncovered area of the small intestinal axis to drive clinical signals, so we're just working through optimizing that in the way that one always does with classic drug development. Great to have Jonathan join us, great to be expanding the team more broadly, but Mark mentioned that he and I go way back to the very early days of antibodies, and what we've done to date has been much, much faster than what was required in the antibody world, which we're delighted about.

The remarkable thing that we uncovered some fundamental the government and human systemic biology, but what's really exciting and we've essentially demonstrated now clinically that we can harness.

That newly uncovered area of this more of intestinal axis to drive clinical signals and so we're just working through optimizing that and the way that won't always does on the classic drug development.

Great to have.

Jonathan joined on its great to be expanding the team.

More broadly but.

Mark mentioned that he and I go way back.

At the very early days of antibodies.

And what we've done to date has been much much boxes of what cook.

And what was required and the antibody well, which we're delighted about and we're going to have ups and downs, it's always that way and drug development per where really well positioned to get there and a very big and transformative way and.

Simba Gill: And we're going to have ups and downs in drug development, but we're really well positioned to get there in a very big and transformative way. So I just wanted to emphasize this incredibly exciting inflection point, and we go into 2021 with a lot of confidence. And then, as always, I wanted to thank all our investors and a great analyst for the coverage and the interest and the support. And no other comments from me. Thank you very much, everyone.

So I just wanted to emphasize the hard this incredibly exciting inflection point and we're into 2021 with a lot of confidence and then there's always wanted to thank all of our investors and.

Great analysts for the coverage.

And the interest and the sport and.

And now one of the comment from me. Thank you very much true.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

And then.

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And <unk>.

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